1 CALIFORNIA AIR RESOURCES BOARD 2 3 4 BOARD MEETING Thursday, December 13, 2001 5 6 7 RE: 01-10-1 Public Hearing to Consider Amendments to Title 8 13 of the California Code of Regulations, Section 1969, and to adopt Title 17 of the 9 California Code of Regulations, Sections 60060.1 through 60060.34, Regulations for the 10 Availability of California Motor Vehicle Service Information. 11 RE: 01-10-3 12 Public Meeting to Consider Draft Recommendations on Guidance for Penalty Assessments at Petroleum 13 Refineries. 14 RE: 01-10-4 Public Meeting to Consider Approval of Proposed 15 Environmental Justice Policies and Actions. 16 17 18 AUDITORIUM 9530 Telstar Avenue 19 El Monte, California 20 21 22 23 24 Reported by: NEALY KENDRICK, CSR No. 11265 25 Job No.: 01-22777 1 1 APPEARANCES 2 Board Members: 3 Alan C. Lloyd, Ph.D., Chair Dr. William A. Burke 4 Joseph C. Calhoun Dorene D'Adamo 5 Dr. C. Hugh Friedman William F. Friedman, M.D. 6 Matthew R. McKinnon Barbara Patrick 7 Barbara Riordan Ron Roberts 8 9 Also Present: 10 ARB Staff Members 11 Representatives from state and federal agencies including, but not limited to, the State Senate, 12 the State Assembly, Cal-EPA, and US-EPA 13 Members of the Public 14 15 16 17 18 19 20 21 22 23 24 25 2 1 INDEX PAGE 2 01-10-1 3 Public Hearing to Consider Amendments to Title 13 of the California Code of 4 Regulations, Section 1969, and to adopt Title 17 of the California Code of 5 Regulations, Sections 60060.1 through 60060.34, Regulations for the 6 Availability of California Motor Vehicle Service Information. 7 Introduction 6 8 Staff presentation: Mr. Kenny 7 9 Mr. Hermano 8 10 01-10-3 11 Public Meeting to Consider Draft Recommendations on Guidance for Penalty 12 Assessments at Petroleum Refineries. 13 Introduction 176 Staff presentation: 14 Mr. Kenny 177 Mr. White 178 15 16 Dinner Recess 235 17 01-10-4 18 Public Meeting to Consider Approval of Proposed Environmental Justice Policies 19 and Actions. 20 Introduction 236 Staff presentation: 21 Mr. Kenny 240 Mr. Waugh 241 22 23 24 25 3 1 EL MONTE, CALIFORNIA; THURSDAY, DECEMBER 13, 2001 2 1:11 P.M. 3 4 CHAIRMAN LLOYD: Good afternoon. The December 5 13, 2001, public meeting of the Air Resources Board 6 will now come to order. 7 Dr. Burke, we're in your home 8 territory. Would you kindly lead us in the pledge of 9 allegiance. 10 (Pledge of allegiance recited.) 11 CHAIRMAN LLOYD: Thank you very much. Would 12 the clerk of the board please call the roll. 13 CLERK OF THE BOARD: Dr. Burke? 14 DR. BURKE: I'm sorry? Oh, present. 15 CLERK OF THE BOARD: Mr. Calhoun? 16 MR. CALHOUN: Here. 17 CLERK OF THE BOARD: Ms. D'Adamo? 18 MS. D'ADAMO: Here. 19 CLERK OF THE BOARD: Supervisor DeSaulnier? 20 (No audible response.) 21 CLERK OF THE BOARD: Professor Friedman? 22 PROFESSOR WILLIAM FRIEDMAN: Here. 23 CLERK OF THE BOARD: Dr. Friedman? 24 DR. C. H. FRIEDMAN: Here. 25 CLERK OF THE BOARD: Mr. McKinnon? 4 1 MR. McKINNON: Here. 2 CLERK OF THE BOARD: Supervisor Patrick? 3 SUPERVISOR PATRICK: Here. 4 CLERK OF THE BOARD: Mrs. Riordan? 5 MRS. RIORDAN: Here. 6 CLERK OF THE BOARD: Supervisor Roberts? 7 SUPERVISOR ROBERTS: Here. 8 CLERK OF THE BOARD: Chairman Lloyd? 9 CHAIRMAN LLOYD: Here. 10 Before we mention the first item, I 11 would like to say how good it is to be back in our El 12 Monte facility and also to compliment the staff here, 13 particularly Bill and John and all the staff here for 14 the wonderful job and welcome you've given us. This 15 is a -- you've done a wonderful job with this room. 16 So thank you very much. And I know this is 17 enticement to come back more often. And we'll make 18 every effort to do that. 19 I'd also like to recognize today the 20 birthday of Mike Scheible, one of the deputy 21 executive officers. So happy birthday, Mike. 22 I would like to remind anyone in 23 audience who wishes to testify on today's agenda 24 items to please sign up with the clerk of the board. 25 Also if you have a written statement, please give 30 5 1 copies to the board clerk. 2 Recognize we'll have the meeting in 3 two segments today. The first two items will be 4 discussed this afternoon. And then we will start the 5 discussion on environmental justice policies at 6:00 6 o'clock this evening. So hopefully we'll have a 7 break in between to allow people a chance to eat and 8 get ready for this evening. 9 The first item on the agenda today is 10 O1-10-1, "Proposed Regulations for the Availability 11 of California Motor Vehicle Service Information." 12 Service manuals, technical service 13 bulletins, and diagnostic equipment are routinely 14 used to repair vehicles and to design parts that are 15 compatible with today's emission-control systems. 16 Such service information is usually available to 17 franchise dealerships for motor vehicle 18 manufacturers. However, this same information has 19 not always been available to the independent service 20 and aftermarket parts industry. 21 The lack of access to service 22 information is troubling because a high percentage 23 of vehicle repairs, including emission-related 24 repairs, are performed by independent facilities. 25 Those mechanics need complete and accurate service 6 1 information to do the repairs correctly. Consumers 2 are also affected by the lack of access and may incur 3 costly repairs than if the service information were 4 open to everyone. 5 At this point, I would like to ask 6 Mr. Kenny to introduce the item and begin staff 7 presentation. 8 MR. KENNY: Thank you, Mr. Chairman. 9 CHAIRMAN LLOYD: It's on now. 10 MR. KENNY: Thank you, Mr. Chairman and 11 members of the board. The proposal before you today 12 is in response to Senate Bill 1146, legislation 13 enacted in September, 2000, that requires the Air 14 Resources Board to develop regulations that make 15 available emission-related service information on the 16 Internet to independent repair facilities and part 17 manufacturers. 18 The US-EPA is currently considering 19 similar requirements in its effort to revise federal 20 service information regulations. 21 In creating today's proposal, the ARB 22 and US-EPA staff have worked closely to harmonize the 23 respective requirements wherever possible. The ARB's 24 regulations would apply to 1994 and later cars 25 equipped with OBD2 systems. These sophisticated 7 1 diagnostic systems monitor numerous emission 2 components on a vehicle. The staff's proposal would 3 ensure that the service industry has the tools and 4 information necessary to effectively repair the 5 emission-related problems associated with OBD2. 6 The proposal would not create new 7 emission reductions but instead would further ensure 8 the realization of the emission benefits already 9 attributed to California's low-emission vehicle and 10 OBD2 programs. 11 This assertion is based on the 12 expectation that emission-related malfunctions will 13 be properly repaired due to the availability of 14 service information, thereby allowing vehicles to 15 remain close to their certified emission levels. 16 With that, I'd like to turn the 17 presentation over to Mr. Dean Hermano, who will 18 provide you with a summary of the proposal and 19 present the staff's recommendations. 20 MR. HERMANO: Thank you, Mr. Kenny. 21 And good afternoon to you, Chairman 22 Lloyd, and members of the board. 23 As part of this rule-making, I will 24 give a short presentation of the staff's proposal for 25 motor vehicle service information. The grounds for 8 1 this rule-making are based on the following: 2 Currently, independent repair 3 facilities service a high percentage of consumer 4 cars, especially older ones that represent a larger 5 share of the emissions inventory in California. 6 However, these independents don't have always have 7 the same access that franchise dealerships have to 8 the information needed to do these repairs. 9 As a result, some emission-related 10 repair work can be difficult or impossible for an 11 independent service provider to perform. In 12 addition, the lack of service information to 13 aftermarket part manufacturers can hinder the design 14 of compatible components for today's sophisticated 15 vehicles. 16 In response to these conditions, 17 Senate Bill 1146 was enacted in September, 2000. It 18 requires the ARB to adopt regulations, by the end of 19 the year, that direct vehicle manufacturers to make 20 emission-related service information available for 21 purchase over the Internet. 22 One of the main objectives of SB 1146 23 is to promote competition in the auto service 24 industry by making information readily accessible. 25 Federally, the United States 9 1 Environmental Protection Agency adopted comprehensive 2 regulations for service information in 1995. 3 Amendments to these regulations are currently being 4 considered in a Notice of Proposed Rule-Making that 5 was issued in June of 2001. 6 The amendments also require or would 7 require vehicle manufacturers to provide information 8 on the Internet. In the development of today's 9 proposal, ARB staff has worked cooperatively with the 10 US-EPA to ensure that our regulations are not in 11 conflict with each other. 12 Service-information regulations would 13 apply to all manufacturers of passenger cars, 14 light-duty trucks, and medium-duty vehicles and would 15 specifically affect 1994 model year and later 16 vehicles certified to meet California's second 17 generation on-board diagnostic requirements, also 18 known as OBD2. 19 Information would be made available to 20 all covered persons in California. A "covered 21 person" is defined as "anyone engaged in the business 22 of motor vehicle repair or the manufacture or 23 remanufacture of emission-related parts." This 24 includes independent service shops, aftermarket part 25 manufacturers, and companies that service their own 10 1 vehicle fleets. 2 SB 1146 requires that these 3 regulations address three main areas relative to the 4 service information and equipment. First, the 5 service information; secondly, descriptions of OBD2 6 systems; and, lastly, manufacturer-designed 7 diagnostic scan tools and reprogramming information. 8 For existing vehicles, all of this 9 information must be provided to covered persons no 10 later than 180 days after the effective date of these 11 regulations or January 1, 2003, whichever is later. 12 For all other vehicles introduced into 13 commerce after this date, the vehicle manufacturer 14 would have to make the service information available 15 180 days after their introduction or concurrently 16 with its availability to franchise dealerships, 17 whichever occurs first. 18 I will address each of the three 19 information areas separately on the following slides. 20 The service information that the 21 proposal requires includes the following materials: 22 The full content of service manuals provided to 23 franchise dealerships, technical service bulletins 24 which alert service technicians to common areas of 25 trouble or provide special servicing instructions, 11 1 wiring diagrams and other diagrams or charts that aid 2 in diagnosing and repairing problems, training 3 materials. Generally this includes all materials 4 that are made available to franchise dealerships. 5 All of this information must be made available to 6 covered persons on the Internet. 7 For OBD2 descriptions -- these would 8 be required for 1996 model year and later vehicles 9 only. These descriptions will generally define the 10 basic operation of vehicle OBD2 systems, including 11 how malfunctions are detected, the driving conditions 12 under which the system will operate, and the level of 13 component deterioration necessary for a malfunction 14 determination to be made. 15 The descriptions must also include 16 information on how to interpret diagnostic-system 17 data stored by the OBD2 system, which is also known 18 as Mode 6 data. Before moving on to diagnostic 19 tools, I will explain the requirements for 20 availability of service information on the Internet. 21 Although the use of the Internet for 22 dissemination of the information is a major component 23 of the regulation, staff's proposal provides vehicle 24 manufacturers with great flexibility in the overall 25 design and presentation of their websites. We fully 12 1 expect vehicle manufacturers to create websites that 2 are efficient and of high quality. 3 Having said this, staff believes that 4 some design guidelines are considered necessary to 5 ensure that all websites have a reasonable level of 6 performance. This will ensure that service 7 information is readily accessible as mandated by 8 SB 1146. 9 These guidelines include a requirement 10 for a comprehensive search engine, an assurance that 11 the server capacity is sufficient to handle 12 anticipated visits to the website, and an electronic 13 mail contact for questions concerning the website's 14 contents. 15 Staff further proposes that the 16 information on manufacturer websites be maintained 17 for at least 15 years, after which time it is 18 anticipated that most repairs shops will already have 19 purchased the information in their possession. After 20 the 15-year period, the vehicle manufacturer would 21 have the option to continue to retain the information 22 on its website or provide it in some other offline 23 format such as CD-ROM's. 24 So while the Internet is considered 25 the best medium for disseminating information, the 13 1 proposal also makes an exception for small-volume 2 manufacturers because the creation of 3 dedicated-information websites may be too cost 4 prohibitive. 5 For this regulation, a small-volume 6 manufacturer would be one that produces less than 300 7 vehicles for sale annually in California, based on 8 average sales from the previous three model years. 9 These vehicle manufacturers would have the option to 10 develop Internet sites or use some other business 11 means to make the required information available. 12 Several motor vehicle manufacturers 13 have already developed service-information websites 14 in advance of the proposal. Seen here is a screen 15 capture of the Volvo Independent Repair Application, 16 or VIRA, home page. The website requires password 17 access and is subscription based. 18 It includes separate sites, as shown 19 in the blue rectangles, for tech service information, 20 diagnostic codes, and vehicle software that is 21 directly downloaded into a car. These latter two 22 sites require the purchase of additional hardware. 23 Seen here is another existing 24 service-information website. This screen capture is 25 from the Ford Motor Company Professional Technician 14 1 Society Internet website. Ford's website also 2 requires password entry for access. Shown here is an 3 introduction page for accessing technical service 4 bulletins, including several methods for doing 5 searches, as shown in the light blue rectangle. 6 All vehicle manufacturers that create 7 websites must provide annual reports to the ARB 8 demonstrating that the websites are satisfactorily 9 making the requisite service information available to 10 all covered persons. 11 For diagnostic tools and reprogramming 12 equipment, motor vehicle manufacturers must make 13 available for purchase essentially the same 14 diagnostic scan tools that it makes available to its 15 franchise dealerships. 16 They must also make available to 17 diagnostic-tool companies all emission-related 18 information necessary to incorporate 19 manufacturer-specific capabilities into generic scan 20 tools. 21 For reprogramming of vehicle on-board 22 computers, manufacturers would be required to adhere 23 to the Society of Automotive Engineers J2534 24 standards by 2004 for vehicle models that can be 25 reprogrammed by dealerships. By standardizing the 15 1 programming protocol through SAE J2534, the 2 aftermarket will be able to design reprogramming 3 tools that can install vehicle-manufacturer software 4 on all vehicle makes and models. 5 SB 1146 specifically addresses another 6 issue relating to vehicle repair, and that is 7 immobilizer information. Vehicle manufacturers 8 currently use immobilizers as antitheft devices on 9 many models. 10 For most vehicles equipped with 11 integrated immobilizers, the key for the vehicle 12 contains a transponder chip that sends a unique 13 encryption code in response to a randomly generated 14 number from the vehicle's on-board computer. This 15 code is then validated by the computer before it 16 allows the vehicle's ignition and fuel-injection 17 systems to function. 18 Vehicle manufacturers have indicated 19 that this type of passive security system has proven 20 to be very effective in deterring auto theft. 21 When the on-board computer's replaced, 22 the immobilizer must typically be reinitialized so 23 that the key and the computer once again match up. 24 As directed by SB 1146, staff's proposal requires 25 motor vehicle manufacturers to provide information on 16 1 how to reinitialize these immobilizers systems when 2 the on-board computer is replaced or as necessary for 3 other emission-related repairs. 4 Without this information, independent 5 service providers would not have the capability to 6 perform certain on-board-computer-related repairs and 7 customers would have to be sent to dealerships for 8 service. 9 Some vehicle manufacturers, however, 10 have expressed concern that the release of 11 information needed to reinitialize these systems 12 outside of dealerships could result in misuse to 13 override the immobilizer for the purposes of vehicle 14 theft. 15 Recognizing these concerns, staff has 16 proposed a provision in the regulations that would 17 excuse vehicle manufacturers from this requirement 18 until the 2005 model year if they can demonstrate 19 that a significant vehicle risk exists. 20 However, in such cases, the 21 manufacturer must provide an acceptable interim 22 solution that would permit an independent technician 23 to replace the on-board computer without being 24 disadvantaged such as would be the case if it was 25 necessary to tow the vehicle to a dealership to get 17 1 it reinitialized. 2 Also related to this issue is whether 3 rebuilders of on-board computers should be allowed 4 access to additional immobilizer information. These 5 rebuilders would use information to temporarily 6 disable the immobilizer when testing a remanufactured 7 on-board computer on a workbench. 8 Recognizing the legislature's concerns 9 that on-board computers be treated differently from 10 other emission-related parts and that 11 reinitialization needs to only be provided for the 12 purposes of installing an on-board computer in a 13 vehicle, the regulation confines access to 14 initialization information only for that limited 15 purpose. 16 SB 1146 and the staff's proposal 17 permit manufacturers to charge fair, reasonable, and 18 nondiscriminatory prices for tools and information. 19 To evaluate whether or not a manufacturer's set 20 prices are fair, reasonable, and nondiscriminatory, 21 staff has proposed a number of factors that the 22 prices would be judged against. 23 Some of the eight factors specified 24 are the cost to the manufacturer to provide the 25 information, the cost to franchise dealerships for 18 1 the same information, a comparison of the cost 2 charged by other vehicle manufacturers for similar 3 information, and the ability of the average 4 independent shop to afford the information and tools. 5 Knowing that service information can 6 vary quite a bit in terms of content and detail, no 7 specific prices or price caps are set by the proposed 8 regulations. Instead, the factors will be used to 9 evaluate prices with respect to the product offered 10 for sale. 11 To ensure that the regulations are 12 complied with, an enforcement plan and procedures are 13 proposed. SB 1146 specifically requires the ARB to 14 develop an enforcement program. 15 Firstly, the ARB would be provided 16 with free unlimited access to all motor vehicle 17 manufacturers' websites. This access would give the 18 ARB the ability to conduct audits of the websites for 19 verification of compliance with the regulations. 20 Pursuant to SB 1146, vehicle 21 manufacturers are permitted to withhold service 22 information considered to be trade secrets as defined 23 by applicable law. Under the staff's proposal, 24 manufacturers and covered persons would be given the 25 opportunity to informally resolve a request for 19 1 information claimed to be a trade secret. If this is 2 not successful, the vehicle manufacturer would then 3 be required to petition the California Superior Court 4 to make a finding. 5 In instances of noncompliance with the 6 regulation, the vehicle manufacturer would be 7 notified. The manufacturer would then have the 8 option of either submitting a compliance plan that 9 must be implemented within 45 days or make a request 10 for an administrative hearing to contest the 11 noncompliance determination. 12 The procedures for administrative 13 hearings would set forth the rules under which the 14 hearing will take place, including rules for handling 15 evidence, discovery, and witness testimony. If, 16 after the hearing, the manufacturer's still found to 17 be in noncompliance and does not remedy the problem 18 within a specified time, it can be penalized up to 19 $25,000 per violation per day. 20 Besides the immobilizer issue, 21 stakeholders have expressed a few other concerns that 22 have been raised during the development of the 23 rule-making. The motor vehicle manufacturers have 24 asserted that several proposed provisions, including 25 requirements regarding use of the Internet and 20 1 procedures for determining trade secrets and their 2 needs for disclosure, violate the U.S. Constitution 3 and are not enforceable. 4 In making these claims, the commenters 5 are effectively asking the board to make a finding 6 that the requirements of SB 1146, which specifically 7 mandate the board to include these provisions, is 8 unconstitutional. 9 The California constitution -- 10 specifically Article 3, Section 3.5 -- prohibits the 11 board, as an administrative agency, from making these 12 findings unless an appellate court has previously 13 made such a determination. 14 To date, no appellate court has made 15 any such ruling regarding the issues raised by the 16 manufacturers. 17 In regards to information and tool 18 prices, the motor vehicle manufacturers assert that 19 the factors enumerated in the regulation do not allow 20 them to make a fair return on their investment. The 21 proposed regulation has set forth factors, the 22 purpose of which is to allow the ARB to consider, on 23 a case-by-case basis, a fair, reasonable, and 24 nondiscriminatory price. 25 This entails, among other things, the 21 1 need for the board to balance the different interests 2 of both the motor vehicle manufacturers who produce 3 the information and the covered persons for whom it 4 is to be made available. The factors attempt to do 5 this in a way that meets the specific directives of 6 the legislation. 7 The aftermarket industry has commented 8 that the regulation should be extended to heavy-duty 9 vehicles. Staff has not included this request in its 10 proposal because SB 1146 limits applicability to 11 OBD2-equipped vehicles, which does not include 12 heavy-duty vehicles at this time. 13 The staff believes that service 14 information for heavy-duty vehicles should be 15 considered once OBD requirements apply and after 16 consideration of the differences in the methods by 17 which light-duty and heavy-duty vehicles are 18 serviced. 19 Implementation dates. The ARB has 20 proposed an implementation date that occurs 180 days 21 after the approval of the regulations by California's 22 Office of Administrative Law or January 1, 2003, 23 whichever's later. 24 The fixed date was chosen to give 25 manufacturers an absolute date to use for planning. 22 1 Although some manufacturers have argued that this is 2 not enough time to get online, staff believes that 3 manufacturers have had adequate notice, especially 4 given the fact that several manufacturers already 5 have operational service-information websites. 6 Training materials. The US-EPA's 7 proposing the videotaping or satellite transmission 8 of training classes in its service-information 9 amendments. The ARB believes that required creation 10 of training materials is outside the scope of ARB's 11 authority but will require manufacturers to make 12 available any videotapes that they have already made. 13 By making service information 14 available to covered persons, emissions will be 15 reduced as service technicians statewide will be 16 better equipped to diagnose and remedy 17 emission-related problems. The air benefits of this 18 proposal come not from the direct application of 19 technology to vehicles but rather the service and 20 repair of vehicles with such technology. 21 In this regard, the 22 service-information regulations help ensure that the 23 State will obtain the emission benefits estimated for 24 the ARB's low-emission vehicle and OBD2 programs. By 25 maintaining vehicles to their certified emission 23 1 levels, it is expected that the low-emission vehicle 2 reductions of 9 tons per day reactive organic 3 compounds, 337 tons per day of carbon monoxide, and 4 146 tons per day of oxides of nitrogen will be 5 realized by 2010. 6 Staff has also considered the economic 7 impacts of the proposal on effective parties. The 8 main burden for complying with the regulations falls 9 on the motor vehicle manufacturers. Based on several 10 industry estimates, it is anticipated that the 11 initial cost to comply with the regulations will 12 range between 600,000 and $5 million, while annual 13 maintenance of Internet websites can vary between 14 150,000 and $450,000. 15 Dealerships may lose some business to 16 the extent that servicing shifts to independent 17 service providers more. But since the main objective 18 of SB 1146 is to encourage such competition, this 19 impact was anticipated when the bill was drafted. 20 Independent-service facilities and 21 aftermarket part manufacturers will only incur costs 22 when it is necessary for them to purchase service 23 information. But these costs will be justified by 24 the likelihood of these independents making a profit 25 from utilizing the information. 24 1 Employment, as a result of these 2 regulations, is not expected to change significantly. 3 But some jobs may be created, based on the need to 4 develop Internet websites and also the need for more 5 service technicians at independent facilities. 6 In conclusion, the proposed 7 service-information regulations will fulfill all of 8 the requirements of SB 1146. In addition, the 9 regulations will ensure that independents can fairly 10 compete with franchise dealerships which, in turn, 11 will provide consumers a wider choice in who services 12 their vehicles. 13 Since the regulations are 14 significantly similar to the federally proposed 15 amendments, California will not be adding any 16 significant additional compliance burden to motor 17 vehicle manufacturers. Therefore, it is recommended 18 that the board adopt the service-information 19 proposal. Thank you. This concludes my 20 presentation. 21 CHAIRMAN LLOYD: Thank you very much. 22 Board members have any questions at 23 this time? 24 DR. BURKE: I do. 25 CHAIRMAN LLOYD: Dr. Burke. 25 1 DR. BURKE: I assume that, when you talk about 2 the reinitialization, that's similar to a reboot? 3 MR. LYONS: Yeah. The way it is, it's 4 basically allowing the key with the immobilizer in 5 the computer to be resynced up so that the car will 6 start. 7 CHAIRMAN LLOYD: Could you, for this court 8 reporter, could you also identify yourself? She 9 asked -- and thank you. 10 MR. LYONS: I'm Allen Lyons. 11 CHAIRMAN LLOYD: Need for training materials. 12 MR. LYONS: Okay. There we go. I'm Allen 13 Lyons, by the way. The answer to the question is 14 yeah. It's a way of reinitializing the relationship 15 between the key and the computer. 16 DR. BURKE: What happens if the reboot doesn't 17 work and you only got one shot? 18 MR. LYONS: Well, the dealerships currently 19 have a process by which to reinitialize the computers 20 once they put a new computer in the car. If it 21 doesn't work, it's probably because the key is bad or 22 the computer is bad. Then you'd have to replace one 23 or the other. 24 DR. BURKE: My understanding from his briefing 25 was that we don't -- that they only get one -- 26 1 CHAIRMAN LLOYD: Speak up. 2 DR. BURKE: You have to learn to do mumbling. 3 It was my understanding from his 4 presentation that they only get one shot. If it 5 doesn't work -- was I right or wrong on that? 6 MR. LYONS: No. That -- 7 DR. BURKE: So if it -- it could be the key. 8 It could be in the computer in the car. It could be 9 any number of things. But if you only get one shot 10 and that doesn't work -- 11 MR. LYONS: We didn't mean to communicate 12 that. It's not a one-shot deal. 13 DR. BURKE: Okay. That's fine. 14 CHAIRMAN LLOYD: Okay. Thank you. 15 Any other questions? 16 MR. CALHOUN: Yes. 17 CHAIRMAN LLOYD: Mr. Calhoun? 18 MR. CALHOUN: I note, in your opening remark, 19 Mr. Chairman, something to do with the effect that 20 service information has not been available to the 21 aftermarket. And I wonder if it would be more 22 appropriate to say that the service information 23 wasn't available to them at the time that they wanted 24 it because I think eventually the service information 25 is released. I think the big issue in the past has 27 1 been the timing of the availability of the 2 information with -- for the aftermarket. 3 For example, whenever a new model 4 comes out, the dealerships get the information almost 5 immediately. And the aftermarket may get it several 6 months after that. And the thinking that went into 7 that was that most people would take their car back 8 to the dealership, anyway, for the first period of 9 time. 10 But there are a few other issues here 11 that are a little more important, I think, than that 12 one. And you touched on one -- the reprogramming of 13 the computer and the possibility of the tampering and 14 theft. You didn't place a lot of emphasis on the 15 tampering, but I'm sure that's going to come out. 16 CHAIRMAN LLOYD: Staff concurs. And I bow to 17 Mr. Calhoun's expertise on this matter. 18 MR. LYONS: Yes. I think there's going to be 19 a lot of testimony about the tamper issues and the 20 remanufacturing-of-computer issues as it relates to 21 immobilizing. 22 CHAIRMAN LLOYD: Any other questions from the 23 board? Thank you. 24 With that, I'd like to call up the 25 first three witnesses who have signed up to speak on 28 1 the item -- Aaron Lowe, John Cabral, and Jeff Trask. 2 And, again, the court reporter's asked me to make 3 sure you identify your name and speak at a reasonable 4 speed. 5 MR. LOWE: Just start? 6 CHAIRMAN LLOYD: Thank you. 7 MR. LOWE: My name is Aaron Lowe. And I am 8 testifying on behalf of the Automotive Aftermarket 9 Industry Association and the Automotive Warehouse 10 Distributors Association. 11 First, I want to thank the California 12 Air Resources Board for the opportunity to testify 13 regarding this proposed regulation to implement 1146. 14 I especially want to thank ARB staff for their hard 15 work and openness during the development of this 16 proposal. 17 While we are not satisfied with every 18 aspect of the proposal you are considering today, 19 AAIA and AWDA feel that the staff went beyond the 20 call of duty to listen to our concerns and to work 21 with all stakeholders in order to resolve issues. 22 We want to particularly thank Allen 23 Lyons, Dean Hermano, and Michael Terris for their 24 efforts in this regard. 25 On whole, AAIA and AWDA believes that 29 1 the proposed rule will go a long way toward ensuring 2 California car owners will continue to enjoy access 3 to a competitive vehicle aftermarket for critical 4 emission parts and service. 5 I want to emphasize "should" because 6 the real proof will be whether the car companies 7 comply with the regulations mandates and whether the 8 board puts the same effort into enforcement as 9 they've thus far invested in developing this 10 proposal. 11 Specifically, we are satisfied with 12 the guidelines included in these regulations 13 regarding the price that vehicle manufacturers can 14 charge for service information and tools that are 15 required to be provided under this proposal. 16 However, the cost of information will 17 continue to be a major issue for our industry. 18 Unless both information and tools are affordable to 19 the small businesses that comprise our industry, the 20 specific information availability requirements in 21 this regulation will be worthless. 22 We urge that CARB put the necessary 23 enforcement resources in place to ensure that its 24 regulation -- and, in particular, the reasonable cost 25 requirements -- are properly met by the car 30 1 companies. We further are concerned about provisions 2 and proposals that provide vehicle manufacturers with 3 the ability to restrict access to information and 4 tools they consider trade secrets. 5 While AAIA and AWDA are comfortable 6 with the process for protecting trade secrets that 7 was developed in this proposal, we continue to be 8 concerned that car companies will take advantage of 9 this process by attempting to protect as much 10 information as possible under the guise of trade 11 secrets. 12 Therefore we will be closely 13 monitoring the process as it's implemented to ensure 14 that the bill's aim of ensuring competition in the 15 aftermarket is not thwarted by abuse of this 16 provision. We urge the staff to do the same. 17 As I stated at the outset -- 18 THE REPORTER: Can you slow down just a 19 little, please. 20 MR. LOWE: Sure. 21 CHAIRMAN LLOYD: Remember. He's just reading 22 what you've got there so -- 23 MR. LOWE: Okay. Yeah. 24 CHAIRMAN LLOYD: -- as far as I know. 25 MR. LOWE: I'm from the East Coast. You know 31 1 all how fast we all talk back there. 2 CHAIRMAN LLOYD: I think, for the court 3 reporter, it's all written. So you're not deviating 4 from that at this time. 5 MR. LOWE: Not so far, no. 6 UNIDENTIFIED VOICE: Don't deviate. 7 MR. LOWE: What was that? 8 As I stated at the outset, we support 9 most of the rule-making as drafted by the board 10 staff. However, there is one issue of particular 11 importance where we strongly disagree with staff. 12 Over the past several model years, the 13 car companies have been installing these integral 14 vehicle security systems on vehicles such that any 15 repair to the vehicle electronic control unit 16 requires that the unit be reinitialized by the 17 service repair facility. 18 In the past, this capability has only 19 been available to the dealer community. The bill and 20 now the regulations correctly require that the 21 ability to reinitialize these units also be given to 22 the independent repair shops, thus ensuring that car 23 owners will have a choice of service facilities, 24 independent or dealer, when obtaining this expensive 25 repair. 32 1 As anyone who has had this repair 2 recently surely remembers, it is not an inexpensive 3 item. Depending on the make and model of the 4 vehicle, motorists will pay from $200 to well over a 5 thousand to obtain replacement. Nearly all of these 6 replacements, whether sourced from the car company or 7 the independent, are remanufactured. 8 A remanufactured unit is the same as 9 an original unit only that the unit was sent to a 10 remanufacturer to be refurbished, where the defect in 11 the device was corrected. The rebuilding process is 12 expensive and is only performed by a few companies. 13 It is important to note that, during the 14 remanufacturing process, the actual computer software 15 codes are not changed in any way. 16 The goal of the rebuilder is to ensure 17 that the car owner obtains a unit that in all 18 circumstances works the same as the unit first placed 19 on the vehicle in the factory. 20 In order to accomplish this goal, 21 vehicles equipped with integral vehicle security 22 systems -- the ECU remanufacturers must have access 23 to the ability to reinitialize the system in the 24 factory so that they can properly test the ECU prior 25 to being shipped back to the service bay for 33 1 installation. 2 The rebuilder has no desire to see or 3 use the codes, only to do what is necessary to test 4 the unit. 5 Since car companies also are in the 6 business of rebuilding ECU's and selling into the 7 aftermarket, they must also get around this problem. 8 We understand that many of them use a black box 9 whereby the person performing the initialization does 10 not see the codes but can fully and cost-effectively 11 test the unit in the factory. 12 However, the vehicle manufacturers 13 have been so far unwilling to share this capability 14 with their competitors. If the board looks at the 15 prices charged by car companies for their 16 remanufactured units, which are on the charts 17 attached to my testimony, compared to the competition 18 from independent remanufacturers, one can understand 19 why. 20 The prices in some cases are nearly 21 double. While we recognize the security concerns 22 related to initialization procedures, it also must be 23 recognized that these concerns can be rectified. In 24 fact, the aftermarket has offered a proposal whereby 25 remanufacturers which need this ability would submit 34 1 to extensive measures that we believe would 2 adequately safeguard the information and ensure that 3 it is only provided to legitimate rebuilders. 4 These measures include signing 5 confidentiality agreements that would require 6 limiting access to the black box at the rebuilder's 7 facility, providing proof that the rebuilder is a 8 legitimate entity, and permitting inspection of the 9 facility by car companies or CARB representatives. 10 We think that these measures 11 demonstrate our commitment to ensure security of the 12 antitheft systems. Despite our efforts, the board 13 staff maintains that, based on their reading of the 14 statute, they are prohibited from providing the 15 ability to reinitialize integral security systems to 16 rebuilders by Section 43105.5-A5 of the bill. 17 This provision prohibits any 18 encryption or other entry codes that would restrict 19 use by the car owners in nonoriginal equipment 20 emissions-related components. The section 21 specifically exempts the ECU from the encryption 22 prohibition. The exemption in this part was solely 23 intended to prohibit the production of new 24 replacement ECU's that might include a change in the 25 software code. 35 1 Indeed, vehicle manufacturers were 2 urged by CARB during the design process to restrict 3 access to the actual codes in order to deter 4 tampering with the emission system. This provision 5 was not intended to prohibit the remanufacture of the 6 original ECU where the software codes are maintained 7 as they were. 8 Further, 43105.5-A6 specifically 9 mandates that covered persons, which specifically 10 include rebuilders, are provided with information 11 regarding initialization procedures related to 12 immobilizer circuits or other lockout devices to 13 reinitialize vehicles' on-board computers that employ 14 integral security systems, if necessary, to repair or 15 replace emission-related parts or, if necessary, for 16 proper installation of a vehicle on-board computer 17 that employs the security systems. 18 Clearly the ECU is an 19 emissions-related component, and rebuilders need the 20 initialization capability in order to repair and 21 replace the part. Further, the entire purpose behind 22 passage of SB 1146 by the state legislature was to 23 ensure competition in the replacement and parts 24 market for car owners. 25 Therefore the board appears to have 36 1 little option but to comply with both the language 2 and the intention of the statute providing for access 3 to reinitialization capability for rebuilders. 4 I have attached an issue paper to my 5 testimony on behalf of the California Automotive Task 6 Force composed of both national and California 7 aftermarket groups, summarizing this issue and which 8 provides substitute language which, we think, 9 resolves the problem. 10 Thank you again for the opportunity to 11 testify. And I am available to answer any questions 12 you might have. 13 CHAIRMAN LLOYD: Thank you very much. 14 Do we have staff response to -- 15 MR. TERRIS: Hello. My name is Michael Terris 16 with the legal office. We -- from the start, we'd 17 like to say that the statutory language is not a 18 picture of total clarity and but that what the staff 19 did was look at the issues involved and try to 20 balance the competing interests of the manufacturers, 21 who are concerned about vehicle security, and the 22 interests of the aftermarket parts remanufacturers 23 and their need to be able to bench-test computer 24 systems. 25 Our reading of the statute is not 37 1 limited to just Paragraph 6. We looked at the 2 statute as a whole and note that the statute 3 basically tried to carve out special exceptions for 4 computer systems. If -- could we put up that slide? 5 We're going to go to be putting up a 6 copy of the legislation on the overhead so that -- 7 CHAIRMAN LLOYD: Dr. Burke? 8 DR. BURKE: While he's doing that, did you 9 contact the authors of the legislation to inquire as 10 to what their intent was? 11 MR. TERRIS: We've talked to the -- Senator 12 Burton's staff personnel that worked on the bill. 13 And we got concurrence with the interpretation, the 14 direction that we're going. 15 CHAIRMAN LLOYD: In the interim, Ms. D'Adamo 16 has a question. 17 MS. D'ADAMO: Well, while you're pulling it 18 up, I just have a question and perhaps would like to 19 give staff an opportunity to clarify. 20 My reading of the statute is a little 21 bit different from the staff's earlier presentation 22 in which -- and I'm sorry; I don't recall your name. 23 It wasn't Mr. Lyons, but the gentleman that's at the 24 overhead -- that indicated that the statute actually 25 prohibits this information being provided to 38 1 remanufacturers. 2 My read is that it could actually be 3 interpreted in a different manner. So, as I 4 understand it, Mr. Terris, the position that you're 5 taking is that it really gets down to a policy call. 6 I just want to make sure that the record is clear -- 7 MR. TERRIS: Right. 8 MS. D'ADAMO: -- that the statute doesn't 9 prohibit -- 10 MR. TERRIS: There's no express -- 11 MS. D'ADAMO: -- this information being 12 provided -- 13 MR. TERRIS: Right. 14 MS. D'ADAMO: -- to the remanufacturers. And, 15 in fact, if we came up with a different read, that it 16 actually allowed or requires that. That's within the 17 plausibility of the read of this statute as well; 18 correct? 19 MR. TERRIS: Correct. There is no express 20 prohibition. 21 MS. D'ADAMO: All right. And I see you're 22 going to go through it anyway. 23 MR. TERRIS: Yeah. 24 MS. D'ADAMO: But I understand that you had a 25 conversation or that someone from ARB staff had a 39 1 conversation with the author's office yesterday. 2 MR. TERRIS: Right. 3 MS. D'ADAMO: Perhaps after you go through the 4 statute, if you could advise us as to the conference 5 call or the meeting that you had and the language 6 that you worked out at that meeting. Thank you. 7 MR. TERRIS: Okay. Will do. 8 What we put up on the overhead are two 9 different versions of the bill. The first -- the one 10 on the right side is the first amendments that were 11 made to the bill on June 14, 1999. On the left is 12 the final bill that was chaptered and signed into 13 law. 14 I'd like to point out specifically 15 Paragraphs 5 and 6. Paragraph 5 basically is there 16 to basically say that manufacturers shall not use 17 access codes or encryption codes on any parts of 18 the -- that are emission-control parts. 19 But it has -- initially, it was 20 proposed that it would -- you couldn't use them on 21 any emission-control part on the vehicle. 22 That subsequently was amended in the 23 final bill, which basically carved out an exception 24 for computer systems, which allow the motor vehicle 25 manufacturers to provide access codes and encryptions 40 1 that would prevent the owner of motor vehicles from 2 using parts other than original equipment 3 manufacturer parts for -- so they can basically 4 prohibit -- it basically prohibits motor vehicle 5 owners from using anything but OEM computer systems. 6 Paragraph 6 then goes on to say -- and 7 it has -- initially it was drafted in the first 8 amendments to say that -- and it only dealt with 9 computer systems -- said that you could -- you 10 need -- manufacturers need to provide initialization 11 information for the purpose of repairing, rebuilding, 12 installing, or otherwise reinitializing vehicle 13 on-board computers that employ integral vehicle 14 security systems. 15 That was subsequently amended to drop 16 out "rebuilding." And it specifically broke it down 17 into two parts. And it treats computers differently 18 from other emission-related parts. It says that 19 "Manufacturers shall provide integral -- shall 20 provide initialization information, if necessary, to 21 repair or replace emission-related parts" and then 22 to -- "or, if necessary, for the proper installation 23 of vehicle on-board computers that employ integral 24 vehicle security systems." 25 The aftermarket would like us to 41 1 basically strike out of the final bill the language 2 that states "or, if necessary, for the proper 3 installation of vehicle -- of vehicles" and would 4 just basically read it to be that they should -- 5 "Information shall be provided to repair or replace 6 an emission-related part or an on-board computer." 7 We are not in a position to let -- we 8 have to interpret the law to mean that the -- to 9 understand that the -- to presume that the 10 legislature meant every term that it put forth in the 11 legislation. And for to us read out this clause 12 would basically make it meaningless because replacing 13 an emission-related part is really installation -- 14 taking it out and reinstalling that part. 15 And the legislature clearly did not 16 want to distinguish "repairing" and "replacing" other 17 emission-related parts from the installation of 18 computer systems. And so that's basically our 19 reading of the statute. 20 I think primary emphasis needs to be 21 placed on the fact that the legislature struck out 22 "rebuilding" from the language in Paragraph 6 and 23 limited it to just "repairing and replacing other 24 emission-related parts," and as far as computer 25 systems are concerned, just to the installation of 42 1 the computer systems, which is a service-performance 2 task and not a rebuilding task. 3 CHAIRMAN LLOYD: Thank you. 4 MS. WALSH: If I could just clarify, I think 5 what you've got here is a situation where we have a 6 statute, that as Mr. Terris indicated, is not a model 7 of clarity. It does create some difficulties for us 8 in terms of trying to make a final determination of 9 what the legislature intended. 10 It's clear that the legislature 11 intended to carve out and deal with computers in a 12 fashion that was somewhat different from other 13 emission-related parts. But the statute -- what 14 we've got is a statute here where we have two 15 competing legal interpretations, one from the 16 aftermarket industry that's diametrically opposed to 17 the one that you'll hear from the automakers who will 18 be testifying later today. 19 We have tried to make a call, based on 20 our best take on the policy balance here. But as you 21 indicated earlier, Ms. D'Adamo, I think there is some 22 room here in terms of the interpretation of the 23 statute for the board to look at and consider these 24 policy issues. 25 Staff has looked at those, made a 43 1 recommendation about how we believe you can move 2 forward in terms of clarifying or implementing that 3 admittedly unclear legislative language. But we do 4 not think and are not suggesting that it would 5 preclude an interpretation that would allow a bit 6 broader access if that were the board's ultimate 7 determination. 8 THE REPORTER: Mr. Chairman, could the speaker 9 please identify herself? 10 MS. WALSH: Excuse me. My name's Kathleen 11 Walsh. 12 MR. TERRIS: I'd like to just complete the 13 answer to Ms. D'Adamo's question regarding our 14 conversations with the author's staff. 15 And basically they indicated, after we 16 explained our interpretation of the statute, they 17 basically did not have disagreements with it but 18 asked that the board -- if the board could direct 19 staff to continue to work with both the automobile 20 manufacturers and the aftermarket parts industry to 21 see if they can potentially resolve the issue and so 22 that that information can be gotten out to the 23 remanufacturers and that vehicle -- motor vehicle 24 manufacturers' security concerns can be properly 25 addressed. 44 1 MS. D'ADAMO: Yes. I'd be comfortable with 2 that as long as we have a time certain at which staff 3 would be reporting back and that we work toward the 4 goal of getting the information out. I think 5 basically it does get down to a policy call. I 6 certainly realize the concern about theft. 7 But if there is a way to address that 8 concern and at the same time get the information out 9 to the remanufacturing industry that we could work 10 through that goal to the point that we could get the 11 remanufacturing industry included. I just wanted to 12 underscore, though, I agree with Miss Walsh that the 13 statute wouldn't necessary preclude us from allowing 14 that to occur should we be successful in working out 15 the competing concerns. 16 MRS. RIORDAN: Mr. Chairman, if I might -- 17 CHAIRMAN LLOYD: Yes. This is Mrs. Riordan. 18 MRS. RIORDAN: Yes. In thinking about this -- 19 and I recognize, particularly after I had spoken to 20 the staff, that this is a real issue because a lot of 21 us are concerned about theft. And in the wrong 22 hands, this information could be misused terribly. 23 It occurred to me that there maybe 24 needs to be one more step and that the auto 25 manufacturers would have to be very generous perhaps 45 1 with their time. But if indeed they want to keep 2 that information to themselves, would it be possible 3 to have the instruments sent back to the automobile 4 manufacturers for testing and then returned? 5 It seems, if I understand this 6 correctly -- it's a matter of understanding -- after 7 it's rebuilt, that it is functioning, that it will 8 function. And you have to have the formula to know 9 whether or not that's functioning. Am I correct in 10 thinking that? Is that about right? 11 MR. LYONS: Right. 12 MRS. RIORDAN: So it's a matter of the person 13 who's doing the test and knowing that information. 14 And it seemed to me that, perhaps, in working and the 15 idea of us working with the two entities, maybe there 16 could be some cooperative effort there to preserve 17 the, you know, the formula or the information and yet 18 allow for the testing so that the product will be 19 acceptable in terms of purchase or use by somebody 20 after it's been rebuilt or reconditioned or whatever 21 the terminology is. 22 MR. LYONS: I think, in concept, that would 23 work because you'd have a situation where the ECU 24 rebuilder remanufactures the computers. And really 25 the issue here is how does that remanufacturer know, 46 1 once they've done their work, whether or not the 2 computer is functioning so they can resell it? 3 In a situation where they sent that 4 computer to the manufacturer for the manufacturer to 5 sort of tell them whether it's working or not, in 6 concept, would get around all these security concerns 7 because no information would have to be transmitted 8 back to the remanufacturer. 9 Probably a timely point to bring up 10 that suggestion since we will have the manufacturers 11 and a rebuilder coming up to testify on whether or 12 not that's practically possible. 13 MRS. RIORDAN: And there would have to be some 14 cooperation. It has to be done in a timely manner 15 and obviously in a honest manner, but at least they 16 would preserve their technical information. And that 17 might be an incentive to do the other. 18 UNIDENTIFIED VOICE: We have a rebuilder, one 19 of the rebuilders here. Could we allow a chance for 20 him to comment? 21 CHAIRMAN LLOYD: You are speaking next? 22 UNIDENTIFIED VOICE: Yes. 23 CHAIRMAN LLOYD: Maybe you could respond in 24 part of your testimony. 25 UNIDENTIFIED VOICE: Now or? 47 1 CHAIRMAN LLOYD: No. 2 UNIDENTIFIED VOICE: Oh, after my testimony, I 3 will. 4 CHAIRMAN LLOYD: Okay. Any other questions 5 from the board? 6 Thank you very much. 7 John Cabral, Jeff Trask, and then 8 Lieutenant Greg Williams. 9 MR. CABRAL: My name is John Cabral of Blue 10 Streak Electronics, on behalf of Blue Streak 11 Electronics and other automotive rebuilders. I want 12 to state our strong support for the vast majority of 13 the board's staff proposed regulations for 14 implementing SB 1146. 15 However, as a remanufacturer of 16 electronic control units, we have very serious 17 concerns with proposals regarding integral vehicle 18 security systems. Blue Streak Electronics was 19 established in 1987 and was one of the first 20 aftermarket remanufacturers of automotive control 21 modules in North America. 22 In 1992, Blue Streak Electronics 23 became affiliated with Standard Motor Products, one 24 of the largest and most respected automotive 25 corporations in the world. Blue Streak Electronics 48 1 employs over a hundred employees at our main 2 remanufacturing facility and close to 150 employees 3 worldwide. We currently supply approximately 150,000 4 electronic control units annually throughout North 5 America, covering 11,000 part numbers, spanning all 6 makes and models. 7 Our remanufacturing process consists 8 of a functional input-output test. All ECU's are 9 connected to a test bench where output responses such 10 as timing, injector pulse width, and other output 11 devices are measured in response to various sensor 12 inputs, not unlike the actual operation of a vehicle. 13 If a defect is found, repairs are 14 made, ensuring the intended operation of the ECU is 15 maintained. Under no circumstances is the original 16 calculation changed in any way, with the exception of 17 factory-authorized manufacturer updates. 18 Increasingly many vehicles are being 19 produced with antitheft systems that are integrated 20 with the vehicle on-board computer. These antitheft 21 systems disable key engine control functions such as 22 fuel injectors, thus preventing the vehicle from 23 starting if the correct key is not used. 24 There are many variations in antitheft 25 hardware technology between manufacturers. However, 49 1 one comment element seems to be the encrypted 2 commands sent by the antitheft module via the serial 3 data "buss," either enabling or disabling the 4 engine-control units. 5 Unfortunately while the ability to 6 reinitialize these antitheft systems and thus enable 7 the ECU is provided in the staff proposal for service 8 bays, the current proposal would not permit us to 9 effectively reinitialize these systems in our plant. 10 A disabled ECU will mean that we cannot test vital 11 ECU functions such as injectors, rendering our test 12 inconclusive and the ECU unsellable. 13 Incorporating all of the peripherals 14 necessary to duplicate the entire antitheft system is 15 not an option, due to the vast number of different 16 systems, not to mention the fact that we would not be 17 able to obtain all the necessary keys. 18 We understand that vehicle security is 19 an important issue, and we stand behind the need to 20 protect the integrity of the vehicle antitheft 21 systems. We also understand the manufacturers' 22 concerns about divulging sensitive codes to the 23 aftermarket. 24 However, we are also aware that some 25 manufacturer-authorized rebuilders utilize a black 50 1 box that permits the antitheft system to be 2 efficiently initialized without disclosing any of 3 these codes. We believe that this is a solution that 4 should be acceptable to all parties. 5 As rebuilders, we are willing to 6 submit to certain criteria, as previously proposed to 7 the staff, such as confidentiality agreements and 8 demonstrating to the manufacturers that we are bona 9 fide rebuilders. We welcome any suggestions by the 10 manufacturer in order to work together with 11 manufacturers rather than against them. 12 In closing, I would like to thank the 13 board and its staff for its cooperation and hard work 14 in the development of this rule-making. And we 15 believe this last issue will go a long way toward 16 ensuring that competition exists, ensuring consumer 17 interests are protected. Thank you. 18 CHAIRMAN LLOYD: Thank you very much. 19 Did you want to answer the question? 20 MR. CABRAL: As far as sending the unit back 21 to the manufacturers, it would be very difficult to 22 send, you know, a few thousand out to the 23 manufacturers. Actually they have their own 24 rebuilders. And who would pay for that? I guess 25 that would be kind of them doing the job instead of 51 1 us. So I don't believe that that would be a 2 solution. 3 MRS. RIORDAN: I don't know how big your units 4 are. How large are you talking about? 5 MR. CABRAL: Well, maybe 12 inches by 8 6 inches. Some of the modules -- they vary in sizes. 7 But the fact of the matter remains that they would be 8 doing half the work. And we would have to pay them, 9 I guess, to do that. 10 CHAIRMAN LLOYD: Where is your main 11 remanufacturing facility? 12 MR. CABRAL: Our main one is up in Toronto, 13 Canada; and we have a facility in Boca Raton, 14 Florida. But we are affiliated with Standard, which 15 is in Long Island, New York. 16 CHAIRMAN LLOYD: Any other questions from the 17 board? 18 MR. CALHOUN: Yes. I guess I'd like to ask 19 the staff to comment on the implication of the black 20 box as it may apply to tampering. 21 MR. LYONS: We've, again -- sort of being in 22 the middle of this issue, we've talked to the 23 manufacturers about the concept of the black box. 24 And I think they'll testify later to 25 this fact. But the feedback we got back was that, 52 1 once these black boxes are in the hands of the 2 rebuilders, it's possible for those black boxes to be 3 reverse-engineered to figure out how they work. And 4 then that information can, in turn, be misused; or I 5 suppose it's possible, depending on how the black box 6 is actually designed, for the black box to be used 7 directly to steal vehicles just by initializing the 8 immobilizer on a vehicle in a parking lot as opposed 9 to a computer on a bench. 10 MR. CALHOUN: Thank you. 11 CHAIRMAN LLOYD: Any other questions from the 12 board? 13 Thank you very much. 14 MR. CABRAL: Thank you. 15 CHAIRMAN LLOYD: Jeff Trask. Lieutenant Greg 16 Williams. Chuck Herr. 17 MR. TRASK: Good afternoon, Mr. Chairman and 18 board members. My name's Jeff Trask. I'm the Vice 19 President of Government Relations for the Motor and 20 Equipment Manufacturers Association. I'm very 21 pleased to be before you again to have the 22 opportunity to work with you and your staff. 23 MEMA represents more than 700 North 24 American manufacturers of motor vehicle components, 25 tools, and equipment; automotive chemicals; and 53 1 related products. MEMA's comments about the 2 regulations ARB is proposing to implement -- the 3 terms of SB 1146 -- focus on how well the proposed 4 regulations will ensure that multiple automotive- 5 parts manufacturers and remanufacturers will have the 6 ability to participate in the market for automotive 7 parts. 8 With only one major exception, we 9 believe that these proposed regulations will 10 encourage the competition that was envisioned by the 11 legislation. 12 Mr. Chairman, I'd liked to summarize 13 the testimony you have before you and request that 14 our written statement be included in the record for 15 the proceeding. 16 CHAIRMAN LLOYD: Appreciate that. 17 THE WITNESS: Thank you. Before addressing 18 some specific issues, I would like to thank the staff 19 for the significant amount of time and attention they 20 spent on all aspects of this proposed rule. Staff 21 met with aftermarket representatives on a number of 22 occasions and considered and incorporated numerous 23 comments made by the aftermarket businesses and their 24 trade associations. 25 I would also note that MEMA is a 54 1 member of the California Automotive Task Force, some 2 of the members who will be participating today. And 3 we, in general, support the comments of the CATF. 4 MEMA's first issue relates to the 5 proposal's limitation on necessary information for 6 remanufacturers of OBD computers. Rebuilders of 7 on-board computer systems can provide consumers with 8 greater choice and lower cost for 9 emission-control-related repairs. However, the staff 10 report indicates that, under the proposal, such 11 entities would not be provided with ready access to 12 the information needed to initialize the computers. 13 This approach is not consistent with 14 the findings or statutory provisions of SB 1146 and 15 could lead to higher costs and greater inconvenience 16 for California motorists. 17 First, I'd like to discuss the 18 findings and declarations in SB 1146. By denying 19 access to initialization codes to computer 20 rebuilders, the proposal is at odds with the clear 21 intent of the legislature expressed in Section 1 of 22 SB 1146. 23 You have several examples in the 24 testimony. I'll just read one. Section D states, in 25 part, that "the withholding of essential service 55 1 repair and parts information from independent 2 automotive repair technicians and independent 3 aftermarket parts manufacturers may result in 4 improper and needlessly costly repairs that could 5 also endanger the public and result in 6 anticompetitive effects to the best interests of the 7 State." 8 From this provision and others in our 9 written testimony, it's clear the legislature 10 intended SB 1146 to provide consumers with repair and 11 equipment choices beyond those provided by the 12 vehicle manufacturers and their dealers. 13 Now I'd like to discuss the statutory 14 provisions. The legislature's desire to encourage 15 competition by providing independent parts 16 manufacturers with the information they need to 17 manufacturer or remanufacture emissions-related parts 18 is also clear in the statute itself. 19 Section 43105.5-A6 of the Health and 20 Safety Code requires ARB to adopt regulations that 21 require a motor vehicle manufacturer to -- quote -- 22 "provide to all covered persons information regarding 23 initialization procedures." 24 SB 1146 defines "covered person" to 25 include "any person engaged in the manufacture or 56 1 remanufacture of emission-related motor vehicle 2 parts." And this includes rebuilders of on-board 3 computers. 4 The proposed regulations limit the 5 universe of covered persons entitled to 6 reinitialization information by excluding the 7 manufacturers, as we've already heard this morning. 8 But where the legislature intended to exclude 9 entities from receiving information, it clearly did 10 so. This can be seen in Section 431105.5-A3. This 11 provision requires that certain information related 12 to reprogrammable computer chips be provided only to 13 equipment and tool companies as opposed to covered 14 persons more generally. 15 So had the legislature intended to 16 deny on-board-computer remanufacturers information 17 regarding initialization procedures, it could have 18 included such a provision in 43105.5-A6. 19 Contrary to staff's comment in the 20 initial statement of reasons, the request of the 21 California Automotive Task Force to provide 22 reinitialization information is not inconsistent with 23 the language of SB 1146. Our request applies to 24 rebuilt and remanufactured on-board computers, which 25 is not inconsistent with the Health and Safety Code 57 1 Section 43105.5-A5. 2 And providing initialization 3 information to all covered persons is also consistent 4 with a straightforward reading of the Statute Section 5 43105.5-A 6. 6 Now I'm glad that we've got the 7 statutory language up here. And for those of you who 8 can't see it, I think the discussion that we've had 9 today, about how unclear it is, is pretty clear from 10 just what you have up here because it can be 11 interpreted different ways. 12 Our point is that, when you read the 13 entire statute, you look at the intent of the 14 legislature, and you look at the interpretation that 15 we give to the provisions in the statute, without 16 dismissing the meaning of any of the statutory 17 provisions, we believe that ECU rebuilders are 18 entitled to receive the information. 19 Allowing vehicle manufacturers to 20 withhold initialization information from on-board- 21 computer rebuilders ignores the statute's directive 22 for vehicle manufacturers to provide this information 23 to covered persons, including on-board-computer 24 rebuilders. 25 Also the proposed regulatory 58 1 provisions imply the legislature somehow intended to 2 override its clearly stated goal of increasing 3 competition in emission-related components to address 4 vehicle security. 5 Just one last point on the vehicle 6 security issue. We do believe that, per our 7 recommendation of the California Automotive Task 8 Force, that there is a process by which we can come 9 to an adequate balancing of interests here. And we 10 would encourage that, in some way -- through a board 11 resolution perhaps -- that we can pursue that type of 12 approach. 13 So again the specific recommendation 14 is included. And I'd ask that that be incorporated 15 into the record as well. 16 MEMA's next issue is under Heading 17 Number 2 on Page 5 of the written testimony. It's 18 the availability of the format of emissions-related 19 information. MEMA generally supports provisions in 20 the proposal that would require vehicle manufacturers 21 to provide equipment and service-related information. 22 These are discussed in our written comments. 23 However, I'd like to point out that we 24 are concerned about the suggestion in staff statement 25 that there are -- no additional information is needed 59 1 to be disclosed by motor vehicle manufacturers if 2 required specifically for the design and manufacturer 3 of replacement parts. 4 We believe staff and industry may need 5 to monitor this provision of the rule as it's 6 implemented and assure that all covered persons, 7 including parts manufacturers, are obtaining the 8 information required to conduct their business. 9 We encourage staff to continue to work 10 with us to ensure that parts manufacturers obtain 11 additional information, if needed, to continue to 12 independently produce automotive parts and 13 components. 14 Also we support proposed Provision 15 1969-H, which prevents manufacturers from utilizing 16 access or recognition codes or encryption to prevent 17 vehicle owners from using independently produced 18 aftermarket parts. While this section properly 19 implements California Health and Safety Code Section 20 43105.5-A5, we do not believe it goes far enough to 21 ensure the use of all aftermarket manufactured and 22 remanufactured parts and components. 23 Our third issue is under Heading 24 Number 3. It's the trade secret adjudication 25 process. MEMA supports the trade secret adjudication 60 1 process and believes that the section properly 2 imposes upon vehicle manufacturers the burden of 3 demonstrating that information needed by the 4 aftermarket is trade secret while allowing for an 5 analysis of any competitive effects of the 6 withholding of that information. 7 And our final issue is on 8 harmonization. While we support the concept of 9 harmonization, we do want to point out that it can't 10 be fully achieved, that EPA is still developing its 11 requirements. And we ask staff to be mindful, as 12 they consider harmonization with ARB and EPA's 13 requirements, to be mindful of the statutory 14 obligations in California under SB 1146. 15 In conclusion, we thank ARB staff for 16 all the hard work that they've put into this 17 proposal. And I would be pleased to try to address 18 any questions that the board may have on our 19 comments. 20 CHAIRMAN LLOYD: Thank you very much. 21 Questions from the board? 22 Professor Friedman. 23 PROFESSOR WILLIAM FRIEDMAN: Is it your 24 understanding that the legislation, in its definition 25 of "covered persons," excludes the aftermarket 61 1 manufacturers or repair people? 2 MR. TRASK: The short the answer is no. And I 3 think if -- 4 PROFESSOR WILLIAM FRIEDMAN: In other words, 5 are the people that you represent covered persons, 6 and is that agreed? 7 MR. TRASK: Yes. Certainly in term -- could I 8 read the definition? Perhaps that would clear it up. 9 PROFESSOR WILLIAM FRIEDMAN: Yes, please. 10 UNIDENTIFIED VOICE: Page 4. 11 MR. TRASK: This is Section 39027.3 of the 12 Health and Safety Code. Excuse me. "Definition of 13 covered person: 'Covered person' means 'any person 14 engaged in the business of service or repair of motor 15 vehicles who is licensed or registered with the 16 Bureau of Automotive Repair to conduct that business 17 or who is engaged in the manufacturer or 18 remanufacture of emissions-related motor vehicle 19 parts for those motor vehicles.'" 20 So our members would be covered under 21 the second provision. 22 PROFESSOR WILLIAM FRIEDMAN: Thank you. 23 CHAIRMAN LLOYD: Any other questions from the 24 board? 25 Thank you. 62 1 MR. TRASK: Thank you very much. 2 CHAIRMAN LLOYD: Lieutenant Greg Williams, 3 Chuck Herr, Paul French. 4 LIEUTENANT WILLIAMS: Thank you, Chairman 5 Lloyd and ladies and gentlemen of the board. I'm 6 Lieutenant Greg Williams from the California Highway 7 Patrol Investigative Services Section. The 8 California Highway Patrol's been requested to comment 9 on the proposed rule-making associated with Senate 10 Bill 1146. 11 CHAIRMAN LLOYD: Would you speak closer to the 12 mike? 13 LIEUTENANT WILLIAMS: Sure. The CHP has 14 carefully reviewed Air Resources Board proposal as 15 well as information presented by the automobile 16 manufacturers. Our comments are directed toward 17 antitheft measures that may be affected by the 18 proposed rule-making. California has experienced in 19 excess of 180,000 vehicle thefts last year with an 20 associated economic loss of approximately $1.2 21 billion. 22 Although this is a notable number of 23 thefts, it's a significant drop in the incidence of 24 theft from a high of more than 300,000 experienced in 25 1994. The advent of more sophisticated antitheft 63 1 devices along with parts market mandates have been 2 effective deterrents to economic auto theft. The 3 immobilization technology appears to be an effective 4 method of preventing thieves from targeting 5 vehicles. In general, the devices prevent a vehicle 6 being started without reinitializing the computer 7 module. This has effectively prevented the 8 traditional hotwire, "slide-hammer," and shaved-key 9 techniques used by thieves to bypass ignition 10 systems. 11 Vehicles employing these devices can 12 still be stolen by other methods. However, the 13 utility and thus their desirability is diminished. 14 In some instances, manufacturers have integrated 15 their antitheft -- 16 CHAIRMAN LLOYD: Can you speak a little bit 17 more into the mike? 18 LIEUTENANT WILLIAMS: Sure. 19 CHAIRMAN LLOYD: Thank you. 20 LIEUTENANT WILLIAMS: In some instances, 21 manufacturers have integrated their antitheft 22 technology into their emission control module. These 23 systems are of particular concern. 24 Widespread release of immobilizer 25 codes, which allow repair facilities to reinitiate 64 1 vehicle operations after an ignition system is 2 replaced, may adversely impact the effectiveness of 3 the immobilization antitheft technology. 4 Our concerns revolve around the 5 dissemination of this information and the security of 6 the information once released. The ARB-proposed 7 definition of a "covered person" would allow access 8 to any person engaged in the business of service or 9 repair of motor vehicles in California. Persons 10 falling under this definition will have access to 11 reinitiation procedure and codes. 12 The definition, as it applies to 13 antitheft immobilization information, appears overly 14 broad. Limiting the dissemination of the information 15 until such time as the manufacturers have redesigned 16 antitheft systems may ensure that disclosure of these 17 procedures would not compromise vehicle security. 18 In summary, I believe that the 19 proposed rule-making can be accomplished in such a 20 manner that it both complies with the new statute and 21 ensures for the security of antitheft systems. 22 CHAIRMAN LLOYD: Thank you. Thank you very 23 much. 24 Questions from the board? 25 Oh, Mr. Calhoun? Sorry. 65 1 MR. CALHOUN: One comment I would like to make 2 regarding the theft aspect of this particular 3 regulation: you talk about the -- 4 PROFESSOR WILLIAM FRIEDMAN: Joe, excuse me. 5 I want to hear this too. And I'm having trouble 6 hearing you. Could you bring your mike closer? 7 MR. CALHOUN: Okay. 8 Lieutenant Williams, you talked about 9 the theft aspect of this particular security system 10 on the automobile? 11 LIEUTENANT WILLIAMS: Yes, sir. 12 MR. CALHOUN: I just happened to be reading 13 yesterday in the "New York Times" where the auto 14 theft rises for the first time in a decade. And 15 unless these regulations are carefully drafted, I 16 think we're subject to see an increase in vehicle 17 theft. I don't know that. But I'm just certain it's 18 possible. There's no question about that. Thank 19 you. 20 CHAIRMAN LLOYD: Thank you, sir. 21 Next Chuck Herr, Paul French, Jim 22 O'Neill. 23 MR. FRECK: When you speak loudly into the 24 microphone, it blows your eardrums out. That's 25 probably why people aren't speaking up. I'll try 66 1 anyway. I'm hard of hearing. My name is Paul Freck. 2 I'm president of the Automotive Traders Associations 3 of California. We have hundreds of members 4 throughout the state and -- 5 CHAIRMAN LLOYD: So you're not Chuck Herr? 6 MR. FRECK: No, I don't. I don't know 7 everybody. 8 CHAIRMAN LLOYD: Okay. 9 MR. FRECK: I don't know every one of those 10 members. 11 UNIDENTIFIED VOICE: That's okay. 12 MR. FRECK: Of those members -- 13 CHAIRMAN LLOYD: So it's Paul "French"? Okay. 14 MR. FRECK: Paul Freck, actually. There's no 15 "N" in my name. 16 CHAIRMAN LLOYD: Oh, okay. It's down wrong. 17 Freck. Thank you. So we've jumped one. Thank you. 18 MR. FRECK: We have thousands of members that 19 work on cars every day. And as you can see by my 20 attire, besides being president of this association, 21 I also own a repair shop where I deal with 22 smog-related problems every day of the week. 23 And my concern today is the process by 24 which you'll determine or someone will determine the 25 price for the information that we'll have to pay to 67 1 gain access to the information we don't have right 2 now. Almost everybody in the smog program, by law, 3 has to have some sort of information process in 4 place. 5 It's usually on DVD or CD-ROM. We pay 6 approximately $1,500 a year for that information. It 7 is somewhat crippled. Approximately 90 percent of 8 the information is there. The other 10 percent 9 isn't, either by design or by omission, for whatever 10 the reason. 11 During this new process, when we have 12 access to the information on the Internet, I suspect 13 that a lot of that information's going to be 14 duplicated by the information we're already paying 15 for. So I think it might be prudent that whoever 16 looks at that process understand that an awful lot of 17 the information we're going to end up paying for 18 twice, which is something maybe nobody's talked about 19 yet. 20 And, as I will repeat again, by law, 21 those in the smog program have to have that 22 information. So what we're trying to do is to get 23 manufacturers to step up to the plate and give us the 24 rest of it. That's the whole intent of my section of 25 the law. 68 1 An awful lot of the manufacturers have 2 already done that. I think they're pretty noble in 3 their gesture. It's the long-term and the right 4 thing to be doing. The manufacturers we don't get 5 the information from -- those are the kinds of cars 6 we don't suggest people buy. We do have some input 7 on that sort of thing. 8 I think that's about it for me. 9 CHAIRMAN LLOYD: Great. Thank you very much. 10 MR. FRECK: All right. 11 CHAIRMAN LLOYD: Question here from Mr. 12 McKinnon. 13 MR. McKINNON: You alluded to the fact that 14 you may have less information or omissions from some 15 manufacturers and not others. What manufacturers do 16 you have more omissions from? 17 MR. FRECK: Most of the manufacturers that we 18 have omissions -- well, I shouldn't -- I'm not going 19 to pick a manufacturer because it depends on the 20 year, make, and model. But when we go into our -- 21 I'm going to name a brand now -- we have a product 22 called "Mitchell On Demand." It's a CD-ROM-based 23 information. They get the information from the 24 manufacturers. 25 If you -- I'm going to make up a car 69 1 now -- this may not be accurate -- but I'm going to 2 make up a '96 Oldsmobile. And if you look at their 3 stationwagon model and you look for the wiring 4 diagram when you're attempting to repair the 5 emissions system, it may say, "Information not 6 available from the manufacturer." 7 And you're pretty well sunk at that 8 point. If it's -- if you paid for the information 9 that's not there -- the last time I spoke, not before 10 you folks, but before the board before you, I brought 11 with me 10 or 20 pieces of paper that indicated that 12 information was not available from the manufacturer. 13 And it was from a broad spectrum. It wasn't just I 14 made up one for you. 15 One was from BMW. One was from Honda. 16 There's some information that just isn't available 17 through the channels we pay good money for that the 18 Bureau of Automotive Repair demands that we purchase 19 so that we can repair the cars. And we're hoping 20 upon hope that this will take care of that issue. 21 MR. McKINNON: Thanks. 22 CHAIRMAN LLOYD: Thank you. So we've made 23 progress since the last time you were here? 24 MR. FRECK: Yes. You certainly have. It is 25 getting better. Some of the manufacturers have seen 70 1 the writing on the wall, so to speak, or on the 2 screen. And they're beginning to release more and 3 more of the information. Thank you. 4 CHAIRMAN LLOYD: Thank you very much. 5 Now Chuck Herr, then Jim O'Neill, and 6 Will Woods. 7 MR. HERR: I guess he was just more anxious 8 than me. Mr. Chair and members, good afternoon. My 9 name is Chuck Herr. 10 And I'm chairman of the board of 11 directors of the California Automotive Wholesalers 12 Association, more commonly known as CAWA. We 13 represent over 750 businesses in the aftermarket, 14 mainly manufacturers and wholesale-parts 15 distributors. 16 I am also a longtime business owner, 17 as I own and operate multiple automotive-parts 18 stores, mainly supplying the wholesaler repair side 19 of the business as represented by my predecessor up 20 here. 21 CAWA was a co-sponsor of SB 1146. We 22 want to thank your staff for spending a significant 23 amount of time with the automotive aftermarket on 24 this crucial matter for our businesses and the 25 California motorists. Over the course of the last 71 1 year, following the eventual enactment of SB 1146, we 2 feel we've engaged in very productive decisions, 3 discussions about the regulatory scheme now before 4 you. 5 Obviously there remain some 6 challenging details which you've already heard about 7 today. And they need your attention and revision. 8 On the whole, however, CAWA looks forward to your 9 action on this package today. 10 From our perspective in the 11 aftermarket, the availability of critical parts and 12 system-repair information is what we would consider a 13 very basic necessity for us and the California 14 motoring public. 15 Bear in mind that the reality in 16 California is that well over 70 percent of the 17 motoring public is served by the automotive 18 aftermarket in over 37,000 service bays in the state. 19 That's why SB 1146 was needed. And that's why this 20 adoption of the regulation is needed. 21 The alternative network of original 22 manufacturers and dealer-affiliated service outlets 23 number something less than 8,000, and it's simply not 24 adequate to handle California's vehicle repairs. 25 Again we want to thank the ARB staff, 72 1 who recognize the priority that this project 2 warranted. We encourage you to adopt the proposed 3 regulations as possibly amended today. And we thank 4 you for your attention. 5 CHAIRMAN LLOYD: Thank you very much. 6 Questions from the board? 7 Thank you. 8 Jim O'Neill, Will Woods, Greg Dana. 9 MR. O'NEILL: Good afternoon, Mr. Chairman, 10 Members of the Air Resources Board. My name is Jim 11 O'Neill. I represent Automotive Service Counsels of 12 California, a member of the California Automotive 13 Task Force. And our association is comprised of 14 approximately 2,200 members, mostly independent 15 repair shops and their service providers. 16 In addition, I represent myself. Like 17 Paul, I'm the owner of an independent shop located 18 approximately 15 miles east of here. I've been a 19 California smog technician since 1967, when it was 20 under the administration of the California Highway 21 Patrol. 22 And I'm one who has not only witnessed 23 but actually participated in the beneficial changes 24 to air quality over the past 35 years. And I wish to 25 continue to do so. I'm a state contractor for the 73 1 Gold Shield Consumer Assistance Program of the 2 Department of Consumer Affairs, Bureau of Automotive 3 Repair. 4 And vehicles are required to be 5 smog-tested on transfer as well as biannually. 6 Therefore we do find it necessary to have the latest 7 information for vehicles. For instance, at our shop 8 we perform smog-check services for a local new car 9 dealer who sells many vehicles used right up to the 10 current model year. 11 We absolutely do need current 12 information and tools to operate at our level. And 13 thus we appreciate very much the efforts of staff in 14 formulating SB 1146 regulations. 15 I ask the board just one thing to keep 16 in mind -- that cost controls on information and 17 tools and also multiple sources for available and 18 affordable remanufactured emissions parts and ECU's 19 are vital to provide affordable and timely repair of 20 the consumers' vital daily transportation. 21 Thanks for providing us with the 22 opportunity to voice our concerns. 23 CHAIRMAN LLOYD: Thank you very much. I don't 24 see any questions. Thank you. 25 Greg Dana next. Then John Cabaniss. 74 1 MR. WOODS: Good afternoon. Will Woods, 2 Executive Director of the Automotive Trade 3 Organizations of California. We represent 500 4 service station and automotive repair facilities 5 statewide that employ over 10,000 employees in the 6 state. 7 First of all, I agree with the other 8 speakers here that the staff has been -- has gone 9 overboard to help us out. Whenever they had a 10 question, they were very open about it to work it 11 out. 12 And even on very contentious issues, 13 it was quite a pleasure to work with them. And I 14 truly appreciate it. It's a welcome and refreshing 15 change from other agencies in the State government. 16 We appreciate it. 17 The main thing, the point that I'd 18 like to bring up to the board here today is I think 19 you have to step back and look at the big picture. 20 SB 1146 was written for one reason. And that was to 21 maintain competition and increase competition in this 22 market. That is the big picture. That is the 23 objective of the legislation. 24 Mr. Hermano was very accurate in 25 stating that the main impact of this is to encourage 75 1 competition of this bill, and that's what the staff 2 has tried to impart in the regulations. And we agree 3 with everything that they've done except for 4 obviously the one issue on the immobilizers. 5 Right now, there's approximately 7 6 companies in the United States that remanufacture 7 parts. Some of them -- a couple of those companies 8 are contracted currently with the manufacturers to 9 remanufacture parts -- A. C. Delco, for example -- 10 with the major manufacturers. 11 Now, those companies currently provide 12 those products. And I -- we haven't heard of major 13 theft problems or widespread security breaches with 14 those companies. So obviously they have mechanisms 15 and security processes in place that are doing just 16 what we're trying to seek here is to maintain the 17 security. 18 There are other, four to five other 19 companies in the United States that obviously would 20 be prevented from performing these repairs and 21 replacements of these ECU units if the current 22 regulation is put into place. The questions I would 23 ask would be "What would cause the security to 24 suddenly deteriorate rapidly with the addition of 25 those other companies in the marketplace?" 76 1 I have to believe that the 2 manufacturers would mandate the same security 3 procedures and precautions that are currently in 4 place with the existing remanufacturing companies. 5 These are not companies that have 2 employees and 6 start up overnight. 7 These are companies that are 8 multimillion-dollar -- employees with hundreds of 9 employees -- companies with hundreds of employees. 10 They're not going to risk putting the company in 11 bankruptcy or going to jail. And they're going to 12 answer to the P and L, the balance sheet. 13 I think you have to realize that 14 that's going to be an objective. That doesn't 15 guarantee that there will be no security breach, 16 obviously. But we have to believe that the 17 manufacturers are going require strict and stringent 18 controls. And we're not asking anything less than 19 that. 20 The concern is that, if you do not 21 allow these remanufacturers to repair and replace 22 these parts, you place -- basically you reduce the 23 competitive effect in the market. And you are not 24 achieving the objective of the legislation therefore. 25 Owners' costs to repair these units 77 1 will increase, not remain the same. You will 2 basically be cornering the market for the 3 manufacturers and their contracted remanufacturers. 4 Therefore there is no competition, and there will be 5 no force to bring the price down or even keep it in a 6 reasonable range. 7 Right now, rebuilt products are as low 8 as $150 apiece for these units, when, if you get 'em 9 from the manufacturers, they're upwards of $800, in 10 many instances, for the same product. So you're 11 going to cost the consumer quite a bit of money in 12 the State of California by not allowing these parts 13 to be made. 14 And when you take a car in to be 15 repaired and the repair facility says, "Your ECU is 16 inoperative, or it's way out of whack, and the smog 17 emissions are not within tolerance. You must replace 18 this," you're not going to sit there and say, "Well, 19 we've got to send it back to the manufacturer, and 20 it'll take you 10 days to get you a new one. By the 21 way, park your car 'cause you can't drive it." 22 They're going to want one there to be 23 replaced immediately at whatever price you can. Now, 24 if the price is whatever the two manufacturers or 25 three manufacturers require, you're going to pay a 78 1 lot more money for that part. 2 And we're asking that you not limit 3 this market. You allow the competitive forces to be 4 at work here as the legislation intended and allow 5 the remanufacturers to do -- to make these repairs 6 and initialize these ECU's in their factories for 7 testing purposes. 8 Again, I'd like to thank the staff and 9 thank the board for your time and consideration here. 10 Otherwise we support all of the proposals in the 11 regulation. Thank you. 12 CHAIRMAN LLOYD: Thank you very much. 13 Any questions? 14 Mrs. Riordan? 15 MRS. RIORDAN: Mr. Chairman. 16 You mentioned that there are two who 17 have contracts with the automobile manufacturers. 18 Are you aware of the contractual arrangements? I 19 mean you say this, but do you have some pretty good 20 information that this is working and it is something 21 that has been working for a long period of time or -- 22 MR. WOODS: Well, no, ma'am. Each of the 23 major manufacturers has a remanufacturing contract to 24 make these parts. They don't do them themselves, to 25 my knowledge. I don't know if there's a manufacturer 79 1 that makes their own parts. They may. But most of 2 them contract with, for example, A C Delco to do 3 their parts -- remanufacturing. 4 And we're seeing -- as the gentleman 5 from the highway patrol has admitted, we're seeing 6 reductions in thefts. We're not seeing widespread 7 complaints about the electronic control units being 8 used as a method to steal cars. 9 I don't think anybody here has any 10 information that shows that. We're saying that the 11 market works. The manufacturers are succeeding in 12 doing the best they can to avoid theft of these -- of 13 the vehicles. So we're saying they've obviously got 14 processes in operation that seem to work. 15 MRS. RIORDAN: Okay. And that's the point 16 that I'm trying to raise. Do you have specific 17 knowledge about any of those arrangements? 18 MR. WOODS: No, ma'am. 19 MRS. RIORDAN: Okay. That's all I -- 20 MR. WOODS: I don't read the contracts and 21 don't -- and I -- hey, it's not my job. It's their 22 job. 23 CHAIRMAN LLOYD: Thank you. Greg Dana. John 24 Cabaniss. David Raney. 25 MR. DANA: Good afternoon, Chairman Lloyd and 80 1 members of the board. 2 CHAIRMAN LLOYD: Good to see you again. 3 MR. DANA: Thank you, Alan. 4 My name is Gregory Dana. I'm Vice 5 President of Environmental Affairs for the Alliance 6 of Automobile Manufacturers. With me today is John 7 Cabaniss, who's the director of Environment and 8 Energy for the Association of International 9 Automobile Manufacturers. Together we will provide 10 the auto industry's comments on the proposed rules 11 regarding on-board diagnostic-service information. 12 The auto industry strongly agrees that 13 the aftermarket repair industry needs access to 14 information and tools to properly service the complex 15 emission-control systems installed in today's 16 vehicles. OBD2, which monitors these systems, aids 17 technicians. Therefore, it is more important than 18 ever to provide independent repair facilities with 19 service information and tools. 20 Our comments today deal with specific 21 wording or implementation issues contained in the 22 proposed regulations, not the broad policy goals of 23 the regulations. We have provided the suggested 24 regulatory language below to the staff and discussed 25 it with them earlier. And, again, we'd like to thank 81 1 the staff for working with us very closely on this 2 rule-making. 3 We are pleased to see that the CARB 4 states its intent to harmonize whenever possible 5 these regulations with those of the US-EPA. Having 6 different federal and California provisions would 7 hinder implementational programs that would provide 8 proper equipment and service information to the 9 independent auto repair community. And we hope that 10 EPA shares CARB's views on the need for 11 harmonization. 12 With that, I'd like to turn it over to 13 John Cabaniss to summarize and make some further 14 points on the six items we've discussed with the 15 staff already. 16 CHAIRMAN LLOYD: Thank you very much. 17 MR. CABANISS: Good afternoon. I'm John 18 Cabaniss with the Association of International 19 Automobile Manufacturers. 20 We've worked closely, of course, with 21 the CARB staff as well as with EPA in their parallel 22 proposal. And the auto industry is also working in a 23 parallel cooperative process with the automotive 24 service industry and the equipment and tool industry 25 known as the National Automotive Service Task Force, 82 1 of which I have the privilege of being the chairman. 2 The task force's efforts are not 3 limited to just emissions-related information and 4 tools. The auto industry actually recently made a 5 voluntary commitment through the task force to make 6 all information and tools that they currently make 7 available to dealers to the independent aftermarket 8 service facilities, including the nonemissions 9 information and tools, by January of '03, the same 10 date that's in the staff proposal. 11 So I think -- and the reason I mention 12 that is just to make it clear that we support what 13 you're doing in this regulation and we support making 14 the needed information and tools available to the 15 aftermarket to better serve our customers. 16 We support the, as I say, the staff 17 proposal. We just have a few minor exceptions that 18 we would like to see addressed. We've identified six 19 items that are noted in the written remarks. 20 First is the definition of "covered 21 person." The staff proposal -- our issue basically 22 here is that the staff proposal definition does not 23 track the statutory definition. There is a 24 definition in the statute which Mr. Trask read 25 earlier. And we believe that the same definition 83 1 should be included in the staff proposal or in the 2 regulation. 3 We understand that, from talking to 4 staff, that the reason for the deviation was 5 basically to ensure that fleet operators are 6 included. We don't disagree with that. Fleet 7 operators are our customers too. And we want to be 8 sure they get information and tools. 9 Our main concern, however, is the 10 liability associated with the rights provided in 11 other provisions of the regulations to covered 12 persons. And we would frankly like to see that 13 liability limited. So we would like to see the 14 definition maintained that's in the statute. 15 The second item has to do with the 16 provisions to require the dealer tools be sold to 17 nondealers. Again, we have no concerns about making 18 available tools to nondealers that have the same 19 functionality and operate in the same manner as 20 dealer tools. 21 Our concern is that we have more 22 flexibility than the current provision would allow to 23 package nondealer tools to better fit the needs of 24 the nondealer shops. Dealership tools usually 25 contain functions that are specific to dealer 84 1 operations and thus have no use for nondealer shops. 2 Examples -- one example is the 3 hardware and software for satellite downloads or 4 manufacturer Internet access. Typically these are 5 only used for dealership tools. Nondealer tools are 6 generally updated in a different manner, perhaps, 7 probably in the future through the Internet. So it's 8 needless for these kinds of things to be included in 9 nondealer tools at an additional expense for the 10 nondealers. 11 Another example is the information and 12 functions related to warranty administration, which 13 is included in dealer tools. 14 The third provision, the third comment 15 is provisions related to our dealings with equipment 16 and tool companies. The staff proposal would require 17 manufacturers to make tool information available 18 to -- quote -- "all tool companies." 19 Manufacturers would like some 20 additional flexibility in this area. We believe 21 changing the provision to requiring manufacturers to 22 make information available to -- quote -- "three or 23 more," rather than all, tool companies would ensure 24 competition and provide manufacturers the flexibility 25 to decide which tool companies they wish to do 85 1 business with. 2 The fourth provision has to do with 3 the executive officer review of compliance. The 4 issue here is actually a very simple one. There's a 5 disparity between Subsection J8 and J9 with respect 6 to inclusion of some language, again, which would 7 provide the executive officer some flexibility in 8 administrating the section. We simply ask that the 9 two sections read -- contain the same language. 10 The fifth area is the provisions 11 related to disclosure of antitheft system 12 reinitialization procedures. The staff proposal 13 would require disclosure of this information, with 14 some limited exception, through the 2004 model year. 15 This has already been mentioned today. 16 Many of -- the manufacturers' systems 17 differ significantly between companies. Actually 18 many manufacturers already make reinitialization 19 information available to nondealers. And so they're 20 already really in -- you know, complying with the 21 intent of the provision. 22 Other manufacturers, because of the 23 differences in their systems, however, or because 24 they have a higher-theft product line, have more 25 concerns about the release of the information. 86 1 Because motor vehicle theft is a very 2 serious issue, both here in California and nationwide 3 and, in fact, throughout the world, and, in fact, 4 these same systems are used on vehicles throughout 5 the world, we believe it's important to maintain the 6 provisions in a way that won't endanger or allow the 7 unrestricted release of antitheft system 8 reinitialization information in those cases where it 9 could cause increases of theft. 10 These concerns are shared by the 11 insurance industry and law enforcement officials as 12 evidenced by their comments on the ARB proposal as 13 well as the EPA proposal in this area. 14 We certainly agree that nearly all 15 auto repair facilities -- nondealers, that is -- are 16 legitimate and law-abiding businesses. And we agree 17 that these -- that nondealer shops need access to 18 information and/or equipment for reinitialization of 19 the antitheft systems. 20 However, given the uncertainties of 21 the future, we believe it is prudent for ARB to 22 maintain some flexibility in the provision to deal 23 with any issues that may arise. We know that auto 24 theft will not end in the 2004 model year. Therefore 25 we recommend that the 2004-model-year limitation for 87 1 alternative solutions be eliminated. 2 We hope that ARB never needs to 3 exercise this discretion for an alternative 4 mechanism, but it is advisable for them to at least 5 have the authority as a safeguard. 6 The sixth provision that I wanted to 7 comment on is related to the response time for e-mail 8 requests for website support. The staff proposal 9 requires response within 48 hours, Monday through 10 Saturday. The manufacturers believe that such 11 requests will be very limited and would not warrant 12 major changes in the normal work schedules for 13 manufacturer personnel. 14 Therefore we request that the 15 provision be revised to require response within two 16 business days rather than 48 hours, Monday through 17 Saturday. 18 One last item that I would like to 19 mention was not covered in our written comments, but 20 it has been discussed at length today, and that is 21 the disclosure of antitheft system reinitialization 22 information to electronic-control-module 23 remanufacturers. 24 We agree with the staff's decision not 25 to include the requirements for the disclosure of 88 1 this to remanufacturers. And some have claimed, of 2 course, that this leaves so-called black boxes that 3 are available for authorized ECM manufacturers and 4 remanufacturers. 5 We've discussed this with our member 6 companies. And we can't seem to find the reality in 7 the current situation with our member companies. We 8 do know that some -- you know, there are a few 9 manufacturers that perhaps use black boxes. We know 10 of at least one. 11 But some manufacturers don't currently 12 authorize ECM remanufacturing at all simply because 13 there's no business case to support it due to the low 14 volume of ECM replacements. 15 Most manufacturers do not provide 16 black box systems for their ECM manufacturers or 17 remanufacturers. I believe there are several 18 witnesses from the actual individual auto 19 manufacturers. And you may wish to inquire about 20 their particular practices. But that's our general 21 findings in talking to our member companies. 22 I'd also like to point out that Mr. 23 Gasaway is another witness who will be providing some 24 additional testimony on legal, some of the legal 25 issues that Mr. Hermano mentioned earlier. Thank you 89 1 very much. 2 CHAIRMAN LLOYD: Okay. You asked a question. 3 Because I notice you got somebody else testifying. 4 Is he going to cover different points? 5 UNIDENTIFIED VOICE: He's going to cover, I 6 think, essentially, some of the constitutional issues 7 and legal issues that Mr. Hermano mentioned in his 8 briefing about release of -- the coverage of trade 9 secrets, for example, and a few other legal points. 10 CHAIRMAN LLOYD: So Professor Friedman and 11 then Dr. Friedman. 12 PROFESSOR WILLIAM FRIEDMAN: I have a few 13 questions. Actually I'd like to address them to the 14 staff. Allen, if you could tell me why the 15 regulations don't track the statutory definition of 16 "covered person." Is there any reason we've left out 17 the requirement that they be in this business and be 18 licensed to be in this business? 19 MR. LYONS: The reason is based on testimony 20 we got at our workshops from people who have -- 21 companies that have fleets of vehicles -- for 22 example, utility companies. They're not licensed 23 with the Bureau of Automotive Repair, yet they 24 service a large number of vehicles. 25 We didn't see a reason why those 90 1 companies should not get service information 2 necessary to diagnose and repair their 3 emission-related problems. So we made that exception 4 to the definition of "covered persons" to take out 5 the licensing requirement, again, because these fleet 6 service centers don't have to be licensed -- 7 PROFESSOR WILLIAM FRIEDMAN: So they're 8 in-house for themselves? 9 MR. LYONS: Right. 10 PROFESSOR WILLIAM FRIEDMAN: They're not 11 holding themselves out for a fee to charge. 12 MR. LYONS: Right. 13 PROFESSOR WILLIAM FRIEDMAN: So they're not 14 required to be licensed as such? 15 MR. LYONS: Right. And there are a large 16 number of vehicles in some cases. 17 PROFESSOR WILLIAM FRIEDMAN: That was the 18 reason? 19 MR. LYONS: Right. 20 PROFESSOR WILLIAM FRIEDMAN: And is there some 21 reason you object to that? 22 THE WITNESS: Oh, no, sir. 23 PROFESSOR WILLIAM FRIEDMAN: Other than the 24 purity of -- 25 THE WITNESS: No, sir. In fact, we have no 91 1 concerns at all about providing information, tools, 2 training information -- all of the things that will 3 be available on the Internet or through the 4 manufacturer websites for ordering such tools, for 5 example, to our fleet customers. 6 There's no concern there. As I said, 7 our concern is simply maintaining consistency with 8 the law itself and to keep as narrow as possible our 9 liability under the enforcement provisions and the 10 right afforded to covered persons in that. 11 PROFESSOR WILLIAM FRIEDMAN: Any response? 12 MR. LYONS: What he's saying there is that, if 13 a fleet owner somehow wanted to complain against a 14 vehicle manufacturer that they weren't meeting the 15 requirements in the regulation, our broadening the 16 definition would, you know -- they could bring a 17 complaint to us, as the staff, to investigate 18 because they're now technically covered people. 19 Again, we're not saying that the 20 manufacturers would exclude fleet operators from 21 having this information. However, the fleet owners 22 want their definition broadened because there's 23 nothing guaranteeing them access should the situation 24 change. 25 PROFESSOR WILLIAM FRIEDMAN: But you don't 92 1 limit it to fleet operators, as you've described it. 2 I mean, by "you," I mean the staff language is -- I 3 mean I guess I could not -- as an unlicensed person, 4 I could ask for this and be entitled to it -- 5 MR. LYONS: Under our current -- 6 PROFESSOR WILLIAM FRIEDMAN: -- if I started 7 in the business. I might be violating the law by not 8 being licensed. 9 MS. WALSH: Professor Friedman, I was just 10 going to suggest that maybe what we could do here 11 is -- 12 PROFESSOR WILLIAM FRIEDMAN: I don't think 13 your microphone is on. 14 MS. WALSH: Is it on? 15 PROFESSOR WILLIAM FRIEDMAN: Try it again. 16 MS. WALSH: -- Professor Friedman, that we 17 could take a look at the language and craft an 18 addition that would focus on the desire to make sure 19 that the fleet managers or mechanics who are not 20 required to be licensed, because they're in-house 21 service folks, would be covered but not everybody -- 22 not so broad as bringing in the entire world. 23 PROFESSOR WILLIAM FRIEDMAN: I think if you're 24 going to broaden it, it ought to be a limited 25 broadening to the purposes and intents, if you could 93 1 fashion that language. 2 MS. WALSH: We can do that. 3 PROFESSOR WILLIAM FRIEDMAN: What about the 4 suggested change in the diagnostic and reprogramming 5 equipment and information that the language tracking 6 the statutes seems to require the identical tools be 7 provided? 8 And the suggestion is that they might 9 want -- the OEM's might want to provide tools that in 10 some cases are the functional equivalent. They're 11 operationally effective but aren't the identical 12 tools. I don't know why they would want to do that, 13 but if they want, shouldn't they have that 14 flexibility? 15 MR. LYONS: I think they have the flexibility 16 to produce sort of an aftermarket-friendly version of 17 their dealer tools. 18 PROFESSOR WILLIAM FRIEDMAN: Actually the 19 words "the same" -- 20 MR. LYONS: Well, right -- 21 PROFESSOR WILLIAM FRIEDMAN: -- is what the 22 sticking point is. 23 MR. LYONS: Well, they really could do both. 24 They could -- under our current requirements, they 25 could offer the dealership tool and at the same time 94 1 make a sort of an aftermarket-friendly version, which 2 if it really is aftermarket friendly and cheaper and 3 easier to use -- there would really be no demand for 4 the dealership tool itself. 5 We seriously considered their proposal 6 in this regard. But we heard from the aftermarket 7 side and the tool companies, in particular, who say 8 that they want to reserve the right to buy the dealer 9 tool. It's sort of a gold standard by which they can 10 compare their aftermarket tools. And if we remove 11 that provision, they won't have the ability to buy 12 it. 13 PROFESSOR WILLIAM FRIEDMAN: Any -- 14 MR. DANA: I understand that the difference 15 between the dealer tool and the nondealer tool might 16 be just as John said -- warranty administration. It 17 wouldn't be any different in terms of its ease of 18 use, its information on emissions or safety or other 19 issues. But it would have -- 20 PROFESSOR WILLIAM FRIEDMAN: I'm having 21 trouble understanding you. Can you get a little 22 closer, please. 23 MR. DANA: Sure. The difference would be, as 24 John said, something like warranty administration, 25 which is not important to the nondealer. But the 95 1 tool would be similar in all other ways in terms of 2 its diagnostic equipment. But it would also be more 3 expensive because of the additional features for the 4 dealer. So we're only saying that the ability to 5 have a separation of that is important to us because 6 we think that allows to us buy tools cheaper -- 7 PROFESSOR WILLIAM FRIEDMAN: Are you saying -- 8 I want to be sure I understand. Are you saying that 9 some tools involved in this process would have 10 multiple purposes or serve multiple purposes and some 11 of which would be relevant and some of which would 12 not be? And so the multipurpose tool would have some 13 lack of utility? 14 MR. DANA: No. The dealer tool would have 15 additional functionalities -- 16 PROFESSOR WILLIAM FRIEDMAN: That's right. 17 That's what I thought -- 18 MR. DANA: -- that would be specific for the 19 dealer network that would not affect the functional 20 equivalence of the tool to what is needed by the 21 aftermarket. 22 PROFESSOR WILLIAM FRIEDMAN: I thought that's 23 what I was saying. 24 MR. DANA: Well, it may have been. 25 PROFESSOR WILLIAM FRIEDMAN: Maybe I wasn't. 96 1 MR. CABANISS: I think you're right, Dr. 2 Friedman. The other point, though, is that, to the 3 extent that the nondealer -- excuse me -- the dealer 4 tools are sold to the nondealers, there arises 5 another element of support and work. In some cases, 6 some of these functions because, for proprietary 7 reasons or whatever, may need to be blacked out or 8 blanked out in the machine when you sell it, again, 9 because they wouldn't have any particular use for it, 10 but just because of proprietary reasons, those kinds 11 of things may have to be done. 12 So, you know, selling the exact -- 13 having us to resell the same exact tool would require 14 extra work on our part, which we would like to avoid. 15 PROFESSOR WILLIAM FRIEDMAN: All right. I 16 understand now. Is there any reason -- does the 17 statute require the word "exact same" or "identical" 18 or can we -- what's the problem with substituting 19 "functional equivalent" or "their functional 20 equivalent"? 21 MR. CROSS: Dr. Friedman, I was 22 fortuitously -- yesterday I was reading General 23 Motors Shop manuals. And I think, if you look at the 24 typical shop manuals, you'll find that every section 25 of that manual is riddled with special tools for 97 1 doing diagnostic and special disassembly and 2 reassembly of components. 3 And I guess my concern is that, if you 4 give the industry the discretion to decide what they 5 do and don't provide to the mechanic rather than the 6 mechanic being able to decide what he or she is going 7 to buy, that may be a mistake. 8 So it seems to me like if -- it seems 9 to me like they should be available if the service 10 industry wants to buy them. 11 THE REPORTER: Mr. Chairman, would the speaker 12 please identify himself? 13 MR. CROSS: Yeah. I said, "Bob Cross from the 14 ARB staff." I mean we're talking probably 10 or 20 15 tools per chapter in many cases. 16 PROFESSOR WILLIAM FRIEDMAN: I only have one 17 other question, and that's of the staff again. 18 What's the problem with giving the executive officer 19 additional discretion to have additional time or 20 allow additional time? 21 MR. LYONS: Beyond 2004 -- 22 PROFESSOR WILLIAM FRIEDMAN: I'm sorry? 23 MR. LYONS: Beyond the 2004 deadline, which we 24 have -- 25 PROFESSOR WILLIAM FRIEDMAN: No. The 45 -- I 98 1 think we're talking about the 45-day compliance or 2 30-day compliance. 3 MR. LYONS: Oh, that's Item 4? 4 PROFESSOR WILLIAM FRIEDMAN: Yeah. Item 4. 5 MR. LYONS: Oh, we're in favor of making that 6 change. 7 CHAIRMAN LLOYD: Surprise. 8 PROFESSOR WILLIAM FRIEDMAN: Okay. I'm going 9 to quit while I'm ahead. 10 CHAIRMAN LLOYD: Dr. Friedman, then Mr. 11 McKinnon. 12 DR. C. H. FRIEDMAN: Mr. Cabaniss, in your 13 discussion of the diagnostic and reprogramming 14 equipment and information, you suggested that 15 manufacturers be allowed to limit to three the 16 companies to whom they release information. 17 As a consumer, can you explain to me 18 why I shouldn't be concerned that that's just a 19 potential mechanism to keep prices high? 20 MR. CABANISS: Can I request -- 21 DR. C. H. FRIEDMAN: I mean you said you would 22 like an opportunity to determine which good companies 23 you would share information with. And I'm looking at 24 you and saying, "Why should you have that ability to 25 make that determination? Those may be companies 99 1 that, with you, will keep the price to the consumer 2 at a level that I object to." 3 Why not convey that information to 4 everybody? Only the good companies are going to 5 succeed. 6 MR. CABANISS: Well, I think the actual 7 practice -- and I'm not sure how many companies there 8 are that make tools that, you know -- perhaps someone 9 that's on the -- that may be testifying for ETI may 10 be able to say -- but it's not, say, a dozen or 11 dozens. I mean it's somewhere it's neighborhood, 12 say, of 10 or 8 or whatever that make these kinds of 13 tools. 14 And in many cases, the auto 15 manufacturers provide the information to essentially 16 all of the tool companies through an information 17 clearinghouse that's run by the Equipment and Tool 18 Institute. 19 So in many cases, that is a common 20 practice today. And it would address, certainly 21 address any concerns about information being 22 available of that sort. 23 However, other companies may choose 24 for business reasons not to deal with the 25 clearinghouse method, and they may decide to choose 100 1 to deal with several companies in terms of licensing 2 their products, their tools to be sold. 3 I don't know how to answer your 4 question with respect to price fixing. But I 5 don't -- I think, when you have competition among 6 parties, several manufacturers -- "3" is the number 7 we just happened to pick -- I mean you could just as 8 easily say, "multiple," but I guess "multiple" could 9 even actually include 2. 10 But the point is we just don't believe 11 we need to force the manufacturers to uniformly, each 12 one of them have to deal with every single tool 13 company. They should be able to have some 14 flexibility in terms of who they choose to do 15 business with. 16 And that's the -- and by limiting it 17 to 3 or more, we believe that will provide adequate 18 ability for competition as well as to satisfy the 19 desires on the part of the companies to maintain 20 their own decisions about who they do business with. 21 DR. C. H. FRIEDMAN: Does staff have a comment 22 about that? 23 MR. KENNY: Yes, I do, Dr. Friedman. What 24 we're trying to do is essentially, you know, foster 25 as much competition as we can with this regulation. 101 1 We think that was the spirit of 1146. And so, 2 therefore, to the extent that you have the proposal 3 before you today, we think that, in fact, 4 distributing and disseminating the information to as 5 broad a audience as possible is the right way to go. 6 The one thing I would add also is that 7 this information is being disseminated at a fee, you 8 know. These are not free disseminations. 9 And so, you know, to the extent that 10 there are people out here or out there in the 11 industry world or in the aftermarket world who are 12 going take advantage of this, they still have to pay 13 for this information. And so there is that kind of 14 automatic check and balance in there. If they need 15 it, they want it, and they believe it's valuable to 16 them, they will be purchasing it. 17 DR. C. H. FRIEDMAN: Thank you. 18 CHAIRMAN LLOYD: Mr. McKinnon. 19 MR. McKINNON: My question is to staff, I 20 think; but I guess I seem to have some sympathy on 21 these two last points. We're talking about providing 22 an aftermarket version of a tool as opposed to the 23 whole dealership version that may include things that 24 are relevant only to the dealership. To me, that 25 does not sound unreasonable. 102 1 What could make it unreasonable or 2 make us need to do something is if everything isn't 3 there. And we had testimony a while ago that folks 4 are buying out of the aftermarket 10 percent -- I 5 think the one gentleman said 10 percent is missing or 6 something like that. 7 What's our enforcement mechanism? How 8 do we deal with figuring out that information is not 9 being provided? 10 MR. LYONS: I think the staff will, again -- 11 our position is that there's nothing at all in our 12 proposal which would prevent a manufacturer from 13 making an aftermarket-friendly version of the 14 product. 15 And we fully expect that, if that 16 drops out of a lot of things that are irrelevant to 17 the aftermarket and only suitable to the dealer, that 18 the product, the diagnostic tool is going to be a lot 19 cheaper and maybe in some ways easier to use than the 20 OEM tool, in which case there would probably be no 21 market at all for the OEM tool. 22 And, again, this is a point that we 23 did consider. But the aftermarket side is saying, 24 "Well, occasionally there is a need to buy the 25 dealership tool itself," basically just to make sure 103 1 that the aftermarket tools work in as efficient a 2 manner as the dealer tool does. 3 MR. McKINNON: Okay. And then we want to 4 provide all that information to all tool 5 manufacturers. Wow. Wow. 6 MR. LYONS: Well, no, actually -- 7 MR. McKINNON: I understand why they're here. 8 MR. LYONS: Well, let me make a clarification 9 to that. The rule says that you have to sell the 10 physical tool, not any information about it, to the 11 aftermarket. In terms of making the information 12 available, the statute in our regulation specifically 13 limits that to emission related by direction or 14 controls and emission-related information. 15 So there's no requirement for a 16 manufacturer to, in addition to selling the tool, to 17 make available information on how to do nonemission- 18 related functions in a generic tool. 19 MR. McKINNON: Well, you answered my question. 20 I don't think you've alleviated my sympathy. So 21 thank you. 22 CHAIRMAN LLOYD: Thank you. 23 Yes, Professor Friedman? 24 PROFESSOR WILLIAM FRIEDMAN: Am I on? 25 CHAIRMAN LLOYD: Yeah. 104 1 PROFESSOR WILLIAM FRIEDMAN: I just think the 2 record ought to reflect what, I guess, the staff is 3 indicating is their intent and the gloss on F-1, this 4 issue of the same tools. And as I understand it, 5 this is not to be read -- 'cause the word "same" is 6 not used. You're just suggesting that it should 7 be -- it might be implied from the regulatory 8 language. 9 And the fact is that -- and I'm 10 operating on the assumption that, with this record, 11 the thrust of F-1 is that OEM's will make available 12 for purchase diagnostic tools and information that is 13 used in such equipment. And that can be the same 14 thing they're using and providing the dealers, or it 15 can be something that's the functional equivalent, as 16 a staff put it, that's aftermarket friendly. 17 That should satisfy you, I would 18 think. 19 MR. CABANISS: Well, we still are left with 20 the requirement of selling the dealer tool, which 21 means we have to support -- 22 PROFESSOR WILLIAM FRIEDMAN: I don't see where 23 it says that. 24 MR. CABANISS: Well, the wording of the 25 provision, as I see it, is -- 105 1 PROFESSOR WILLIAM FRIEDMAN: Well, I'm just 2 rewording it in the light of what the staff has said 3 was intended. The actual wording does not say "the 4 tool." Obviously if every tool that the dealer gets 5 has to be instead sent to -- we're not talking about 6 the identical tool. We're talking about the same 7 kind or equivalent. That's what I'm hearing. 8 I believe that would take care -- at 9 least, it takes care of my concern arising out of 10 your concern. 11 MR. CABANISS: Well, I would just say that I'm 12 not hearing the same interpretation that you just put 13 on it, Professor Friedman. 14 What I was hearing them say is that we 15 did have to sell -- under this provision, they 16 intended us to have to sell the same tool that we 17 sell to dealers to nondealers if they have want it. 18 And we have the option, as they see it, to sell any 19 other tool that we want to, if we want to package it 20 differently. 21 But I don't see any allowance here for 22 us to simply not sell the dealer tool if someone asks 23 for it. And that's the thing that we're trying to 24 avoid, simply because of the reasons I stated. 25 PROFESSOR WILLIAM FRIEDMAN: You're not 106 1 objecting to providing tools that are needed? 2 MR. CABANISS: No, sir. We just want to -- 3 PROFESSOR WILLIAM FRIEDMAN: You just don't 4 want to sell the tools that might have uses other 5 than those that might be relevant here? 6 MR. CABANISS: We want to provide the tools 7 that the nondealers need to get the job done. And 8 we're committed to doing that. 9 At the same time, we would like the 10 flexibility to be able to do that in a way that will 11 allow us to package in a functionally and 12 operationally equivalent manner without being 13 required, per se, to sell the same tools that we sell 14 to the dealers because that will require us to go out 15 and do other engineering support functions with the 16 dealer tools to, you know, to disable some of the 17 functions that are there. 18 PROFESSOR WILLIAM FRIEDMAN: Well, how are you 19 going to make the functional equivalent? 20 MR. CABANISS: By including in that tool the 21 kinds of things that are needed in, you know, for 22 like reprogramming, for scan-tool operation -- those 23 kinds of diagnostics and so on -- the things that are 24 clearly needed to repair the vehicles but not include 25 the things that are more administrative, like 107 1 warranty administration and so on. 2 So we'd be essentially designing a 3 tool that would provide the scan tool and 4 reprogramming types of functions that are in the 5 dealer tool, operated essentially identically the 6 same way but limited to those things. 7 PROFESSOR WILLIAM FRIEDMAN: Well, what I'm 8 hearing the staff say -- that would be fine. 9 MR. CABANISS: Yes, sir. You're right. But 10 they're also saying, at the same time we make that 11 more consumer-friendly or shop-friendly one 12 available, that we're also required to sell the 13 dealer tool to them, if they want it. 14 PROFESSOR WILLIAM FRIEDMAN: No. I'm not 15 hearing them say that. 16 MR. LYONS: We were. 17 MR. KENNY: No, we were. We were saying that. 18 PROFESSOR WILLIAM FRIEDMAN: You are saying 19 that? 20 MR. KENNY: Yes. 21 PROFESSOR WILLIAM FRIEDMAN: Well, why? 22 What's the reason for requiring that? 23 MR. KENNY: What we were trying to do is make 24 sure that there was as much competition out there as 25 possible and basically, you know, kind of to, I 108 1 guess, to follow up a little bit on what Bob Cross 2 said, is we are trying to make sure that, in fact, 3 those people who have a need for the tools and who 4 are in the best position to define what tools they 5 need are making the decision here as opposed to being 6 told what tools they need to use. 7 And so we're trying to recognize that 8 there are people in the service industry who know 9 what they need and to give them the choice to 10 essentially purchase the tool that they need. 11 PROFESSOR WILLIAM FRIEDMAN: Even if it's one 12 that has functions that aren't related to this? 13 MR. KENNY: Correct. Even if it has basically 14 kind of similar -- even if there's another tool that 15 has similar functionality, again, we thought that 16 those in the aftermarket industry were in a better 17 position to define and to determine what they needed 18 as opposed to being told what they needed. 19 CHAIRMAN LLOYD: Okay. Thank you very much. 20 MR. CABANISS: Thank you, sir. 21 CHAIRMAN LLOYD: David Raney. John 22 Trajnowski. And Dan Dryke. 23 MR. RANEY: Thank you, Chairman Lloyd and 24 ladies and gentlemen of the board -- 25 CHAIRMAN LLOYD: Good to see you again, Dave. 109 1 MR. RANEY: Good to see you. 2 -- and members of the ARB staff for 3 the opportunity to comment on an issue that is very, 4 very important to my company. My name is David 5 Raney. I'm the senior manager of Environmental 6 Energy Affairs of American Honda Motor Company. I'm 7 here today representing both Honda R and D and 8 American Honda Motor Company, Incorporated. Our 9 sales and marketing are based here in Torrance, 10 California. 11 Honda supports the comments that you 12 just heard from our trade associations. We have 13 worked hard with ARB staff on, I think, crafting an 14 effective rule as the well the EPA in their parallel 15 activity. We believe we're developed an effective 16 regulatory proposal that has our customers' interests 17 foremost in mind and provides considerable benefit to 18 the independent repair industry. 19 We believe that the ownership 20 experience of our customers will be enhanced by the 21 majority of the proposal regulation's components. 22 And we respect the needs of the independent repair 23 facilities. 24 With that said, I am here today to 25 expression Honda's significant concerns with only one 110 1 component of the regulation. And that is the 2 component that requires the release to the general 3 public of reinitialization procedures for on-board 4 electronic control modules and security-code 5 information for antitheft systems. 6 This is an issue of loss of control of 7 very sensitive information. This is the focus of my 8 testimony. And I would like to say that we, as a 9 company, have no real concern with the issues you've 10 heard from the remanufacturers. 11 I should also say that we don't have 12 any relationships or associations with 13 remanufacturers. I don't believe our control modules 14 are associated with those companies. And we don't 15 have a black box. One thing, I think, in clarity of 16 lack of a concern with that is, if a relationship was 17 established with a remanufacturer, I think that that 18 relationship would be controlled in our significant 19 contractual agreement and relationship so the 20 security information could probably be protected. 21 But our concerns are significant, 22 again, with the public release in that we do not want 23 to risk any increase in vehicle theft whatsoever. 24 The proposed regulation does just that. But we have 25 a reasonable and effective solution to reduce this 111 1 risk that I will explain later, and we ask for your 2 consideration. 3 We are very concerned that making this 4 information publicly available will lead to an 5 increase in vehicle theft and a step backwards in the 6 considerable progress we've made in reducing theft 7 over the past 10 to 15 years. We have met privately 8 with the insurance industry and the California 9 Highway Patrol and they share our concerns as 10 reflected this morning from Lieutenant "Glenn" 11 Williams's testimony. 12 The auto industry, the federal, state, 13 and law enforcement agencies and the insurance 14 industry have collectively been in a race during the 15 past 10 to 15 years to outsmart professional auto 16 thieves. The most prevalent and problematic auto 17 thieves are knowledgeable. They're organized and 18 sophisticated individuals and not teenagers out for 19 an afternoon joyride. 20 It is my understanding, through 21 discussions with law enforcement agencies and the 22 professionals, that unscrupulous repair shops are the 23 focal points of this activity. If this 24 reinitialization information is made publicly 25 available outside of Honda, we are convinced these 112 1 thieves will gain access to it. 2 It is not just the release of the 3 programming and security-code access information but 4 release of Honda's diagnostic tool information and 5 release of the tool itself that increases the risk of 6 a security breach. 7 Thieves will be able to crack the 8 system through reverse engineering, and our theft 9 rates could return to levels that existed before 10 these sophisticated antitheft systems were installed. 11 Honda may have been the most vocal 12 auto manufacturer on this issue in recent months. 13 Our corporate position is that the risk of increasing 14 theft by even one vehicle is not acceptable. 15 Any risk at all of increase of theft 16 is something we want to avoid, primarily due to the 17 impact on our customers and their ownership 18 experience, as well as to protect the enormous effort 19 and investment we have committed during the past 20 decade to reduce theft rates. 21 In parallel with the development of 22 improved antitheft-system hardware and software, 23 Honda has put in place security firewalls internally 24 to protect our antitheft system information. 25 These systems include established 113 1 security protocols that Honda and Acura dealers must 2 follow to obtain passcodes to reinitialize an ECM 3 when it is in need of replacement, contractual 4 releases to our dealers of the computer systems and 5 protocols that they need to access the security codes 6 through Honda's secure corporate computer system, and 7 dealer-only access to the special tool needed to 8 reprogram and initialize the ECM's. 9 Honda has had a lot of experience with 10 high-theft vehicles. One might think it is an 11 enviable attribute to produce a product that people 12 want to steal. But I can tell you the honor is in 13 producing a popular product but not in the loss of 14 customer satisfaction associated with vehicle theft. 15 We were subjected to considerable 16 negative publicity because of high theft rates in the 17 late 1980's and early 1990's and a loss of sales. 18 You may recall an NBC "Dateline" program was highly 19 critical of my company, and that is not something we 20 took lightly. This is at a time when our vehicles 21 were rated as some of the highest-theft vehicles in 22 the country. 23 "Dateline" keyed off of actions from 24 the U.S. Congress and National Highway Traffic Safety 25 Administration, which, in response to the concern of 114 1 high auto theft in the United States in the 2 mid-1980's, adopted laws and regulations to classify 3 high-theft cars and to attempt to reduce theft. 4 We had several models classified as 5 "high-theft vehicles" based on federal crime data. 6 And if you're classified as such, you have to apply 7 "antitheft-parts marking labels" to all major vehicle 8 powertrain and body components and to install a 9 NHTSA-approved antitheft system. 10 In response to this, Honda has 11 committed significant company resources to try to fix 12 this problem and reduce theft. We needed to and have 13 restored consumer confidence. The technical 14 component of the solution was to develop improved, 15 robust, and more effective antitheft systems. 16 And equally important, we implemented 17 rigid corporate security measures to protect 18 information related to the structure of these 19 systems, how to access secure codes and security 20 codes, and how the systems are programmed. 21 Due to the necessity to tie theft 22 protection, as you've heard before, to the prevention 23 of the ability to start the car by a thief, those 24 prevention systems were integrated with the 25 fuel-control systems and ECM's on vehicles. 115 1 Replacing an ECM as part of an 2 emission-related repair requires that the ECM be 3 matched with the key set in the immobilizer device 4 that was originally installed on the car. 5 A security code is required by the 6 servicing technician to complete this match. And 7 this is what is called the reinitialization process. 8 The security code is obtained by a Honda dealer by 9 accessing the Honda corporate computer system through 10 a very secure process. No one else has -- currently 11 has access to this process, and access is even 12 limited within the dealership personnel. 13 This immobilizer system has been 14 extremely effective in reducing theft rates of Honda 15 and Acura products, as evidenced in the accompanying 16 chart in my comments. You'll note that, when we 17 installed them in the Acura RL, theft rates dropped 18 85 percent; and, in the Accord, we experienced a 19 50 percent drop in theft rates. They are effective. 20 The diagnostic scan tool that Honda 21 and Acura dealers use is only available to them and 22 not to the aftermarket. Honda does offer a 23 diagnostic tool for sale to the aftermarket, and it 24 contains the majority of all programs needed to 25 effect emissions-related repairs. But it does not 116 1 contain the hardware-software needed to reinitialize 2 an ECM and antitheft immobilizer systems. 3 We have a solution, though, to resolve 4 this limited availability -- limited ability of 5 independent repair facilities to reinitialize ECM's. 6 Honda's offered this solution the ARB staff. And we 7 understand that it has been reviewed and considered 8 reasonable by the independent repair industry as well 9 as the staff. 10 More importantly it has been 11 recognized by the ARB staff as a viable interim 12 solution. They've adopted it almost, I believe, as 13 an acceptable solution for the 2004 model year. We 14 believe if it is viable now, it should be viable in 15 the long term. 16 The solution is focussed on the intent 17 of the State of California legislation that is 18 driving this regulation which, as we understand it, 19 is to avoid the absolute necessity for a customer in 20 need of vehicle repair to visit a licensed dealer and 21 not be able to have repairs performed at an 22 independent repair shop. 23 We offer this solution because we 24 cannot possibly change the antitheft systems on our 25 products and the associated corporate security 117 1 systems to comply with the ARB staff's proposed 2 deadline of model year 2005 without a significant 3 risk to increased theft. 4 The solution we're talking about, we 5 can implement within the next six to nine months. 6 And it consists of the following basic attributes: A 7 legitimate independent repair shop would be able to 8 replace ECM's and reinitialize Honda and Acura 9 antitheft systems. Customers would not experience 10 delays in repairs. Customers would not be required 11 to return or be towed to Honda or Acura dealers for 12 repairs. And a risk to a breach of security and 13 increased theft would be minimized. 14 This solution entails the following: 15 Honda would lease a special tool 16 needed to reprogram the ECM and antitheft system for 17 a limited time to legitimate independent repair 18 facilities that needed to repair a specific Honda or 19 Acura product. 20 The tool would provide one-time repair 21 capability and would need to be returned after its 22 use. The delivery of the tools to the independent 23 repair facilities would occur at the same time as the 24 replacement ECM or even earlier. And the independent 25 would be subjected to a limited but effective 118 1 security clearance procedure. And it would not be 2 abusive. 3 In considering this, we ask that the 4 regulatory text be revised to allow for this type of 5 alternative solution to be accepted and kept in place 6 as an alternative compliance criteria indefinitely 7 beyond the 2004 model year but under the periodic 8 review of the executive officer. 9 In its consideration of this request, 10 we ask that the board seriously consider the risk to 11 increased theft that is posed by the proposed 12 regulation and its need to prevent this. We know 13 that increased theft was not the intent of the 14 legislation or this regulation being proposed to 15 support it. 16 Nevertheless, the risk does exist. We 17 believe we have offered a workable, acceptable, and 18 effective alternative and therefore ask that our 19 proposal be incorporated as a permanent alternative 20 solution in the regulation. 21 Thank you, Chairman. 22 CHAIRMAN LLOYD: Thank you very much, David. 23 I appreciate your constructive suggestion. 24 Staff have any comment on the 25 proposal? 119 1 MR. LYONS: David's right that we have 2 accepted basically the concept he was talking about 3 through the 2004 model year as a way of dealing with 4 this issue and giving Honda some lead time to sort of 5 redesign how the immobilizer's initialized so that 6 that method could be more directly translated to the 7 aftermarket. 8 Now, David's suggestion is that it go 9 out to 2007 or just unlimited amount of time for us 10 to accept this interim solution. And at the staff 11 level, we've been uncomfortable because we think the 12 bill does basically envision a situation where the 13 aftermarket is able to initialize these 14 immobilizers -- the independent repair providers, 15 that is -- in the same way that a dealership can. 16 And the proposal is less convenient 17 for the independent repair service people. They have 18 to basically re-lease this tool every time that they 19 want to replace a computer on a Honda, whereas the 20 dealer already has the tool and they have immediate 21 access to replace -- 22 CHAIRMAN LLOYD: But since, in fact, as I read 23 it, the resolution does require staff report back to 24 the board, we could actually see how this works out. 25 And so we can actually see how it works in practice. 120 1 MR. LYONS: Right. We could judge the level 2 of inconvenience in the time frame allowed. 3 CHAIRMAN LLOYD: Dr. Burke? 4 DR. BURKE: I'm confused, which is not normal 5 when I'm talking to staff, 'cause they give me the 6 facts. But, if it's good now and it's good to 2004, 7 you're uncomfortable because of what? 8 MR. LYONS: It's acceptable, but it's not 9 ideal. 10 DR. BURKE: Well, who said yours was ideal 11 either? 12 MR. LYONS: Well, again, we're working off 13 what we think the bill envisioned. And, in trying to 14 balance both the -- 15 DR. BURKE: Did you, in your research, talk 16 to the author of the bill on that issue? 17 MR. KENNY: Dr. Burke, if I might try? 18 DR. BURKE: Sure. 19 MR. KENNY: What we were trying to do is look 20 for a solution that actually worked both for the 21 auto manufacturers and for the aftermarket parts 22 industry. And actually I do want to compliment 23 Honda. I think this is a constructive approach. I 24 think the only difficulty for us is -- 25 DR. BURKE: Sounds very unique to me, Mike. 121 1 MR. KENNY: Actually I think it is a 2 constructive approach. And I think it actually is 3 one that actually is workable, obviously in the short 4 term. 5 The question becomes whether, from a 6 convenience standpoint to the aftermarket, it also 7 works in the long term. And so what we want to do is 8 at least go forward with it now; see if, in fact, it 9 is workable in practice; and if it is workable in 10 practice and everyone is happy with it, then it is 11 something that probably should proceed beyond 2004. 12 DR. BURKE: How are we going to do that? 13 MR. KENNY: Well, one of the things that we 14 were proposing to the board is that what they request 15 of us is that we report back to you within a one-year 16 time frame on how we are continuing to look at 17 these -- 18 DR. BURKE: -- utilizing the system which 19 Honda has suggested? 20 MR. KENNY: Yes. We are proposing to utilize 21 that system in the interim, between now and 2004. 22 And so what Honda's asking for is that we actually 23 utilize the system post-2004. And we haven't gone to 24 that particular point yet. 25 But we would have the time frame, 122 1 between now and when we report back to you, to see 2 whether it works for all the parties. And if so, 3 then we could propose it to you as a longer-term 4 measure. 5 DR. BURKE: I think it makes all the sense in 6 the world. My colleague was concerned about some of 7 the larger -- 8 MRS. RIORDAN: The larger manufacturers. 9 DR. BURKE: -- larger manufacturer and how you 10 work it out with them. And I think that's a 11 reasonable thing for us to look at too. But it sure 12 sounds awfully logical to me. 13 MRS. RIORDAN: Could the same principle work 14 for those -- what? -- seven or so manufacturers that 15 retool -- 16 MR. KENNY: It might. I don't know. But it's 17 one of those things we would be happy to look into 18 and see if we can make it work. I mean what we would 19 really like to have here is kind of a solution which 20 maximizes the competitiveness in the industry and 21 maximizes convenience for all parties. 22 MRS. RIORDAN: Sure. 23 CHAIRMAN LLOYD: Thank you. 24 MRS. RIORDAN: All are worthy goals. 25 CHAIRMAN LLOYD: Thank you very much. 123 1 MR. RANEY: Chairman Lloyd, if I could just 2 add one point of clarity, while we're up here, I 3 think it is our goal to make sure that the customer 4 gets back on the road. And traditionally a stock of 5 ECM's doesn't sit in a warehouse in the back of a 6 Honda or Acura dealer. When a repair has to be 7 initiated, it's ordered. Overnight shipment drops 8 the ECM at the dealer. 9 The same thing would happen with 10 independents. They have to go typically to a Honda 11 dealer to buy this part. So that would trigger the 12 shipment -- this is what we're talking about -- the 13 shipment of the tool. So they would arrive at the 14 same time. There's no downtime that we envision 15 so -- 16 CHAIRMAN LLOYD: Thank you. Thank you very 17 much. 18 MR. RANEY: Thank you. 19 CHAIRMAN LLOYD: John Trajnowski. Dan Dryke. 20 And Robert Gasaway. 21 MR. TRAJNOWSKI: Good afternoon, Chairman 22 Lloyd, distinguished board members. My name is John 23 Trajnowski. And I am a principal engineer with Ford 24 Motor Company's Vehicle Environmental Engineering 25 Staff. I'm here today to present Ford's position on 124 1 ARB's proposed service-information regulation. 2 I should point out that Ford supports 3 the comments presented earlier by the Alliance of 4 Automobile Manufacturers. And we participated in the 5 development of those comments. For the sake of time, 6 I do not plan to readdress these issues in my 7 testimony today. 8 CHAIRMAN LLOYD: Appreciate that. 9 MR. TRAJNOWSKI: I would like to start out by 10 saying that Ford understands the needs of both our 11 dealers and the automotive aftermarket to have the 12 proper service information and tools to make 13 emission-related repairs. 14 In fact, we have made tools and 15 service information available for some time now, both 16 emission related and nonemission related, long before 17 the Clean Air Act Amendments, California legislation, 18 and EPA regulations required it. 19 We continue to work with the service 20 industry through the National Automotive Service Task 21 Force to understand and address their tool and 22 service-information needs. And we've been praised by 23 the Equipment and Tool Institute for information that 24 we provide them, which allows them to incorporate 25 enhanced diagnostic capabilities in aftermarket 125 1 tools. 2 Ford took a very active role during 3 the negotiations and debates on Senate Bill 1146. 4 The bill, as originally introduced, would have been 5 very damaging to automobile manufacturers and would 6 have jeopardized the security and confidentiality of 7 our intellectual properties. 8 We worked with the sponsors of the 9 bill to amend the legislation such that it would 10 address the aftermarket's needs yet still protect our 11 intellectual properties. I personally attended those 12 negotiating sessions. I understand the true intent 13 behind the words in the legislation that was 14 ultimately adopted. I was there. 15 One of the issues discussed during 16 these meetings was antitheft system reinitialization 17 requirements. If a vehicle's computer is replaced, 18 the service technician must be able to reinitialize 19 the antitheft module with the new computer. And 20 those two components, along with a transponder chip 21 in the vehicle's key, must recognize each other. 22 Otherwise the antitheft strategy will 23 turn off the vehicle's fuel or ignition system and 24 the engine cannot be started. This procedure can 25 only be performed when the computer is installed on 126 1 the vehicle currently. 2 Consequently, the legislation requires 3 that manufacturers provider this reinitialization 4 capability to the aftermarket. 5 Now, the aftermarket is claiming that 6 the legislation was really intended to require 7 manufacturers to provide the ability for computer 8 remanufacturers to bypass or disable antitheft 9 systems off board the vehicle while the computer's 10 being checked out on a test bench during the 11 remanufacturing process. 12 I disagree. They never asked for this 13 during our negotiations. I attended those meetings. 14 Had they asked for it, we would never have agreed. 15 Providing off-board reinitialization capability would 16 render vehicle security systems to be totally 17 ineffective. 18 We would somehow have to give them the 19 strategy information to bypass the system. This 20 information could be misused with disastrous 21 consequences. A simple car thief tool could be 22 developed to bypass or disable a vehicle's antitheft 23 system. Knowing what the antitheft module needs to 24 see, the tool could feed the vehicle the proper 25 response so that it thinks a valid ignition key is 127 1 being used. 2 CHAIRMAN LLOYD: John, I am getting a little 3 bit concerned about time here. I think -- it's not a 4 dead horse, but I think the board has heard very 5 strongly on this particular issue. So if you've got 6 any, could hit any highlights, if you like, that 7 would be important -- 8 MR. TRAJNOWSKI: Okay. 9 CHAIRMAN LLOYD: -- and helpful to us. 10 MR. TRAJNOWSKI: Sure. I will -- 11 CHAIRMAN LLOYD: I think you've made your 12 point very, very forcefully. 13 MR. TRAJNOWSKI: Okay. Yes. I also wanted to 14 point out some points that have not been raised here 15 that there are requirements in Europe for antitheft 16 systems and that many of our vehicles use the same 17 system that we use in Europe -- the same antitheft 18 system used here is used in Europe. And that would 19 put us out of compliance with European requirements. 20 So you have a whole host of vehicles 21 in Europe that would all of a sudden no longer comply 22 with European requirements. Another thing is the 23 requirements that NHTSA has for going -- requirements 24 to mark the VIN on specific part numbers. If you 25 have an antitheft system, you don't have to put the 128 1 VIN information on parts. So that would jeopardize 2 compliance with that also. 3 One of the concerns that the 4 aftermarket raised and I think some of the questions 5 that you all had asked was, if we give it to our 6 remanufacturer, you know, how can we do that safely? 7 Well, first, I should point out that, 8 in Ford's case, we don't have a black box. Our 9 remanufacturer is our computer supplier -- "Visjin" 10 and Motorola. They own the technology to 11 remanufacture the ECM. 12 So computers that are replaced at the 13 dealer are returned back to our computer supplier. 14 They have developed a test bench that they use to 15 check out the proper function of that computer. That 16 test bench does not bypass -- we don't provide any 17 information to them to bypass the antitheft system. 18 And that technology is owned by them. So we have no 19 black box to give 'em. It doesn't exist. 20 And then, I guess, to save time, 21 the -- let's see -- another point, just to do a 22 little commercial here for our antitheft system, when 23 we introduced that, the Mustang GT in '95 -- 1995 -- 24 did not have our system and then in '96, when it was 25 introduced, thefts were reduced by 71 percent. So 129 1 this is effective technology. 2 Finally, the, you know, the 3 aftermarket says they need this, the off-board 4 capability to reinitialize. And, you know, we 5 believe that there are other solutions the 6 aftermarket computer remanufacturing industry can 7 pursue to resolve this concern. 8 You know, for example, they could 9 modify their test bench with the antitheft hardware 10 and wiring harness to replicate the setup on a, you 11 know -- replicate the setup that's on a vehicle. 12 They could then perform the 13 reinitialization right there on the workbench every 14 time they work on a computer. You know they do not 15 need the capability to bypass the antitheft system. 16 They will find a solution that will work for them. 17 They're not going to go out of business. 18 Also a couple of points I'd like to 19 make, just from some of the testimony I heard today. 20 One point that was never made here is that the 21 computer on the vehicle is warranted for 8 years, 22 80,000 miles. That's the federal emissions warranty 23 that also applies here in California. 24 How can -- another question was -- 25 CHAIRMAN LLOYD: Why not 15 years, 150,000 130 1 miles? 2 MR. TRAJNOWSKI: And 15 years, 150,000 miles 3 on a partial zero-emission vehicle. You are correct, 4 sir. Thank you. 5 Another comment was regarding the 6 Alliance testimony where we asked to provide or to 7 provide the tool information to just three companies 8 or three or more companies. The concern here is the 9 way the reg is currently written, it requires it 10 to -- it's going to require that we give this 11 information to everybody that comes to us and asks 12 for it -- every tool manufacturer. 13 And our concern is what if there's an 14 unscrupulous tool manufacturer, one that has had a 15 checkered history in the past of providing good 16 tools, that, in fact, may have provided tools that 17 damage our vehicles? Not purposely but they're you 18 know -- the regulation forces us to still give 'em 19 this information. 20 So what we're trying to do is look for 21 a way to allow us to not have to work with every 22 company that, you know, we may have concerns with the 23 quality. And so that's why we limited it -- we came 24 up with the idea of, well, 3 or more, thinking that 25 most manufacturers would probably work with more than 131 1 3. 2 But we want -- we need the ability to 3 not have to license with a company that we have major 4 concerns with. So that's what we were -- one of the 5 things we were trying to establish there. 6 CHAIRMAN LLOYD: Thank you. 7 MR. TRAJNOWSKI: And that's all I have. 8 CHAIRMAN LLOYD: Thank you very much indeed. 9 Questions from the board? 10 Thank you very much. Thank you. 11 We have Dan Dryke and then Robert 12 Gasaway and then James Gowan. 13 (Brief interruption.) 14 MR. DRYKE: Good afternoon. My name is Dan 15 Dryke. I'm the manager of aftermarket support 16 activities for General Motors. I also manage the 17 licensing activity for the corporation. But more 18 importantly, I've worked in this industry for in 19 excess of 35 years as a student trying to understand 20 the business of this business. 21 And to me, the business of this 22 business is fixing cars and trucks right the first 23 time. To that end, I've heard a great deal of 24 testimony and comments relative to repairing 25 vehicles. 132 1 And I would like to say that, as a 2 technician, I have worked both in dealership as well 3 as independents. And I support the statements -- 4 strongly support the statements that have been made 5 here by the Alliance for Automobile Manufacturers, 6 the AAIM, my colleagues both from Honda and Ford, in 7 that General Motors has gone overboard in terms of 8 making information, service information -- all of our 9 service information, access to training information, 10 access to tools, to all technicians, regardless of 11 where they work. 12 It is strategically important to 13 General Motors to make sure that we provide our 14 vehicle owners with a choice of where they want to 15 take their vehicle for service. Now, definitely we 16 want to support our franchise dealers as the 17 preferred provider. 18 But we recognize the marketplace, the 19 reality of the marketplace is such that vehicle 20 owners make that choice on a daily basis. And we 21 want to make sure that we empower every technician 22 with the ability to fix a GM vehicle right the first 23 time. 24 For GM, the immobilizer issue is a 25 nonproblem with a potentially very dangerous 133 1 solution. GM provides the tools, the information, 2 and training needed by a service technician to 3 successfully repair a GM vehicle with a 4 theft-deterrent system. And this can be used -- 5 these tools, information, and training information 6 can be used by a remanufacturer of computers to 7 successfully repair a remanufactured computer. 8 The service procedures are available 9 in print. They're available on CD. And they're 10 available now on the Internet. The tools are 11 available. We heard a comment earlier relative to 12 the technician should have the choice as to what 13 tools he needs or she needs to repair that vehicle. 14 I agree wholeheartedly. Every tool that's available 15 to a dealer technician is available to any technician 16 from General Motors. 17 The potential danger lies in the 18 solution offered up by the aftermarket due to the 19 possibility of leakage of this security information 20 to unscrupulous people. It also could lead to the 21 leakage of tampering or the issue of tampering. 22 That's something the board, as well as the ARB, as 23 well as General Motors, does not want to see happen. 24 We have alternative solutions. They're workable. 25 They're in place today. They are being used in the 134 1 marketplace today. 2 Also I may direct your attention to 3 the testimony provided in written form by my fellow 4 employee, Dr. Michael Winnahan. Dr. Winnahan has 5 concluded that the potential air-quality improvements 6 resulting from lower priced aftermarket price will be 7 negligible. It is clearly unwise to risk an increase 8 in vehicle theft and tampering for negligible 9 benefit. Thank you. 10 CHAIRMAN LLOYD: Thank you very much. 11 Questions? 12 Thank you very much. 13 Robert Gasaway. Then James Gowan. 14 Yes, Dr. Burke? 15 DR. BURKE: If you're using this Honda system 16 of sending the tool out, releasing the tool out, I 17 don't understand what the problem is with the 18 availability of the code to unscrupulous repair 19 people. There shouldn't be any, should there? 20 MR. KENNY: You mean because they have the 21 tool, so therefore they can basically get the code? 22 I think it's a special tool that's been devised by 23 Honda that essentially limits the access. 24 DR. BURKE: So it won't give them the code? 25 MR. KENNY: Yes. 135 1 DR. BURKE: So there is no real security risk; 2 right? 3 MR. KENNY: No. With the Honda solution, 4 there is not a security risk. 5 DR. BURKE: But that's what we're talking 6 about. 7 MR. KENNY: That's correct. 8 MS. D'ADAMO: Question -- Mr. Kenny. Would 9 you agree with that with regard to the 10 remanufacturers as well? 11 MR. KENNY: In terms of the Honda tool? 12 MS. D'ADAMO: Assuming that there were such a 13 tool that -- 14 MR. KENNY: It would be different. But if 15 there were such a tool, I would assume we could have 16 a similar solution. But it's not the same solution 17 with remanufacturers. 18 CHAIRMAN LLOYD: Yes. 19 MR. GASAWAY: Thank you, Chairman Lloyd. I'm 20 Robert Gasaway. Or -- I'm sorry -- were you giving 21 me the nod or somebody else? 22 CHAIRMAN LLOYD: Yes. 23 MR. GASAWAY: Okay. 24 CHAIRMAN LLOYD: I had one question, just at 25 beginning. The association for which you work 136 1 supports the regulation and you are neutral? 2 MR. GASAWAY: I wasn't sure. We have -- we 3 support the regulation in general. We have a couple 4 of specific modifications and legal issues that I 5 want to bring to your attention. So I was confused 6 as to which kind of card to fill out. But I'll 7 qualify and explain my position right now. 8 CHAIRMAN LLOYD: Smart move. 9 MR. GASAWAY: I am Robert Gasaway. I am with 10 "Kirkwood and Nullis," and we represent the Alliance 11 of Automobile Manufacturers and the Association of 12 International Automobile Manufacturers. So I'm an 13 attorney representing two trade associations that 14 account for virtually all of the vehicles that are 15 now sold in the California marketplace. 16 And in the interest of time, I am 17 going to focus on only two legal issues. That is 18 obviously a testament, as we have heard many times 19 today, to the staff, to Kathleen Walsh, and to Mike 20 Terris and to Alan Lloyd and to Dean Hermano, who 21 have walked through all of these legal issues and all 22 of these legal authorities in a very painstaking 23 fashion up to here. 24 I'm not going to cite cases. I'm just 25 going to talk about legal principles on two very 137 1 important policy issues and legal issues. 2 Issue Number 1 has to do with trade 3 secrets and trade secret protection for intellectual 4 property that's very valuable, and it's held 5 nationally and internationally. 6 And Issue Number 2 has to do with 7 pricing regulations. Pricing regulations go back a 8 very long time in our economy, almost a hundred 9 years. And there is an important departure from the 10 pricing rules that have previously been employed in 11 these regulations. 12 I'll begin with trade secrets. As a 13 legal matter, it's important that we all understand 14 that trade secrets are property. Supreme Court of 15 the United States has held that. Supreme Court of 16 the United States has, in fact, held that they're 17 property that's created under state law -- the law of 18 the 50 states. 19 It's also true that trade secrets are 20 property that are privileged against disclosure under 21 the California rules of evidence. So it's very 22 valuable property. 23 Now, what is a trade secret? There's 24 only two criteria that are necessary to have property 25 in a trade secret. One is that the information be 138 1 economically viable and economically valuable. The 2 second criteria is that you go to lengths to keep it 3 secret from potential competitors and other members 4 of the public. 5 Those criteria are met by information 6 for all the automobile manufacturers. Now, the 7 important thing to remember about trade secret is, 8 unlike other, what some people sometimes call 9 "incorporeal" or "intellectual property," it is a 10 very flexible system for creating a trade secret. 11 This is not a like patent. To get a 12 patent, you have to preregister. You have to go to a 13 government agency. You have to go to some 14 specialist. And you get a certificate that says, 15 "You have incorporeal or intellectual property." 16 Trade secret protection is 17 intellectual property protection with flexibility. 18 Many times they're just agreements by manufacturers 19 at research locations that says, "Anything that you 20 come upon, anything that's economically valuable 21 here, we own and you can't disclose." 22 Now, why is that important? It's 23 important because the proposal in the regulations 24 that we see today -- and this is one of the parts 25 where I disagree with the regulations -- turns that 139 1 normal process, the process that's used by all 50 2 states, on its head. 3 Instead of no preregistration, instead 4 of maximum flexibility, instead of blanket protection 5 for these valuable trade secret protections, it 6 requires preregistration. 7 And it requires preregistration of a 8 sort that's even more burdensome than usual in the 9 case of patents because, instead of going to a patent 10 and trademark office or something like that and 11 filing out an application, you actually have to go to 12 Superior Court and get a declaratory judgment, a 13 judgment as a matter of law from the court. 14 That's very unusual. And to my 15 knowledge, that's unprecedented under the law of any 16 other state. 17 Now, this would be understandable, I 18 guess, if the law that we're implementing here -- 19 namely, SB 1146 -- required it. But there's nothing 20 in SB 1146 that requires manufacturers to go to 21 courts in the first instance. 22 There is a provision that we've heard 23 quoted -- and it's Section B of 43105.5 -- which says 24 that the manufacturer must demonstrate to a court, on 25 a case-by-case basis, that it has trade secret 140 1 protection. 2 But that is exactly what happens on 3 the law of all 50 other states that do not require 4 preregistration. We say, "We have a trade secret." 5 Somebody might think we don't. They 6 go to court and say, "We can use this information. 7 We can compete with you." 8 And we have to demonstrate, on a 9 case-by-case basis, that the trade secret that we're 10 trying to assert is, in fact, a trade secret. So 11 there's absolutely nothing in the law of SB 1146 that 12 requires turning the normal procedures that all the 13 states have on their head. 14 Now, it's not only that -- and that's 15 our first argument having to do with trade secret 16 protection -- but the confusion about 17 unconstitutionality comes from the fact that we have 18 a second argument. And it's not an argument from 19 unconstitutionality. It's a second argument from 20 California law. 21 And that argument is, is if there were 22 any doubt, under Subsection B of the law, which I 23 just quoted from, it's resolved by Subsection A of 24 the law. Now, that's the law that directs ARB to 25 adopt regulations that require a motor vehicle 141 1 manufacturer to do all the following, all the 2 disclosures that we put forward, but only to the 3 extent not limited or prohibited by federal law. 4 That was put into SB 1146 specifically 5 to address this issue. We raised the problem of 6 national and international trade secrets with the 7 California legislature and their staff. And we were 8 told that this would provide protection. And the 9 protection that we were told and expected it to 10 provide was a carve-out for trade secret information. 11 Now, the confusion about 12 unconstitutionality comes from the specific source of 13 federal law. That is the commerce clause of the 14 United States Constitution in Article 1, Section 8. 15 And the commerce clause of the Constitution does 16 indeed say that Congress has the primary authority 17 for interstate commerce, not specific states. 18 And it has been interpreted by the 19 Supreme Court and other courts to have a strict 20 prohibition on what they call "extraterritoriality." 21 That means the law of one state governing economic 22 events in another state. 23 Why is the proposal that we have on 24 the table an extraterritorial regulation that's 25 prohibited by 1146's Subsection A? Well, the trade 142 1 secrets that I'm talking about typically would not be 2 California trade secrets. 3 This would be research that we 4 performed in, you know, Ohio or Michigan or Germany 5 or Japan or elsewhere. It would be protected under 6 law. If some member of the laboratory where this 7 information were discovered tries to misappropriate 8 it and use it for their own benefit, they could be 9 sued under local law. 10 What we're saying now, if this 11 proposal goes through, is, Number 1, in order to 12 protect that property right, we have to go to 13 California and get a declaratory judgment. 14 That would be exactly like telling a 15 Michigan homeowner that, "In order to perfect the 16 deed to your home in Michigan, you have to go to 17 California and get a declaratory judgment from a 18 California court saying, 'You have a deed to your 19 house in Michigan.'" 20 That's extraterritorial regulation. 21 Second important rule from the Supreme 22 Court is, when you're looking at extraterritoriality, 23 you don't look at legislative intentions. You look 24 at practical effects. And here, where the practical 25 effects would be to govern intellectual property 143 1 that's created, that's held, and that's used outside 2 of California, it's illegal under the commerce 3 clause. 4 So what I take away from this whole 5 discussion is, yes, the commerce clause is relevant. 6 Yes, the United States Constitution is relevant. 7 But we are not asking for the invalidation of any 8 provision of the bill. 9 We think there's two different 10 provisions of California law that say that California 11 should respect and model the trade secret protections 12 that are used in all the other states. That's my 13 first issue. 14 The second issue, I can cover, or we 15 can take questions on that, if you'd like. 16 CHAIRMAN LLOYD: Well, no. I don't want to 17 take questions. But you've got a whole manuscript 18 here. If you could just highlight your remaining 19 points -- 20 MR. GASAWAY: Exactly. One remaining point is 21 the affordability criterion having to do with 22 pricing. Section 1969 C-10-E says, "The ability of 23 an average covered person to afford the information 24 is one of the factors that is going to be taken into 25 account in setting prices." 144 1 Now, there are a couple of practical 2 problems that the board would probably recognize with 3 that. What is an "average covered person"? What 4 does "affordability" mean? The problems of applying 5 it. 6 But from a legal standpoint, what 7 jumps out at you is the fact that, in other 8 situations dating back a hundred years where you have 9 price-control regulation, affordability has not 10 usually been a concern. 11 All price-control regimes are designed 12 to benefits customers. There's no state agency that 13 comes in and says, "We want to have a cartel to drive 14 up prices to help the sellers." 15 But what they don't say -- and this 16 goes back a hundred years to the railroad days -- is 17 "Well, if we set a fair and reasonable price to the 18 seller and if we take in the legal factors that are 19 required to be taken into account for the sellers" -- 20 like the return to the equity owner and making sure 21 it's commensurate with returns on investments in 22 other enterprises having corresponding risks -- "what 23 if, after all that is taken into account and a fair 24 price is set, there's still one person who can't 25 afford to ride the train?" 145 1 And the answer is, is that, if it's a 2 fair price, then that's it. And the fair price 3 stands, under most pricing regulations that I'm 4 familiar with. So we would suggest that 5 "affordability" is not usually a criterion that's 6 used -- the protection is built into the 7 price-regulation scheme itself -- and that that be 8 deleted from the proposal of things that the 9 executive officer should consider in setting prices. 10 Thank you. 11 CHAIRMAN LLOYD: Thank you. 12 Any staff response to that? 13 MR. TERRIS: Yeah. I'd like to, first, 14 address the issue that they raised with regard to the 15 trade secrets. And basically what they are 16 challenging is not so much the regulations but the 17 statute itself. And under the constitution, as Dean 18 referred to in his slides at the beginning -- Article 19 3, Section 3.5 -- an administrative agency cannot 20 declare a statute to be unenforceable or to be 21 unconstitutional. 22 And so basically we're guided by the 23 constitution on this issue. 24 Two, their second issue, that 25 Subsection A, basically says that the legislature 146 1 handed it off to the Air Resources Boards to make a 2 determination of what is prohibited or limited by 3 federal law -- first, Subsection A, we think, needs 4 to be read -- that language in Subsection A applies 5 only to Subsection A and not to Subsection B. 6 And to the extent that it may apply to 7 Subsection B -- we have to harmonize what's in the 8 constitution with that language in the statute. And 9 basically that says that we will determine that a 10 language requirement under the statute is prohibited 11 or limited by federal law once an appellate court has 12 determined that issue. 13 And so therefore our hands are really 14 tied until an appellate court rules on the issue. 15 And to date, no one has -- no appellate court has. 16 On the second issue of pricing, 17 basically what we've tried to do is apply what's the 18 standard rule in setting rates and reasonable 19 pricing. We were directed by the legislature to 20 adopt fair, reasonable, nondiscriminatory pricing of 21 the information that's given out to the industry. 22 The criteria that we've set forth, the 23 factors, are all basically all looking to the 24 manufacturers and what -- to allow them to recoup 25 their operating costs and capital costs for supplying 147 1 information. 2 The one factor that we have in there 3 that deals with the aftermarket and the people who 4 purchase the information is whether or not it's 5 affordable. And that is necessary for us to 6 probably -- to make certain that the information is 7 available. If it's not affordable, it's not 8 available; and it would be defeating the entire 9 purpose of the legislation. 10 CHAIRMAN LLOYD: Thank you. 11 Any questions from the board? 12 Ms. D'Adamo. 13 MS. D'ADAMO: Did you refer to some sort of 14 federal standard that does not include the 15 affordability factor? And if so, could you reference 16 where you're receiving that information? 17 MR. GASAWAY: Well, in typical -- let me say, 18 if the question is, is have I seen the issue come up 19 at all of affordability of the consumer? I think 20 most frequently it doesn't come up at all. We've 21 shared some precedents back and forth with the staff. 22 A very seminal case was decided in 23 1947 having to do with natural gas, and that goes 24 through all the analysis that you would expect -- 25 looks at return on investment. 148 1 Another case that we shared had to do 2 with electricity and the rate base for electricity in 3 the mid-1980's in the District of Columbia circuit. 4 Again, very detailed accounting sorts of information. 5 Obviously either of those courts, 6 which are considered to be -- the Supreme Court of 7 the United States and District of Columbia Circuit -- 8 the most experienced administrative law courts -- 9 could have veered off into an inquiry in saying, 10 "Well, the natural gas consumers of Cleveland -- you 11 know, what is affordable or not affordable?" "The 12 electricity consumers of Pennsylvania in that case -- 13 what's affordable or not affordable?" 14 Justice Holmes's famous decision, that 15 we've discussed with the staff, having to do with 16 railroad and lumber in 1920 -- what is not affordable 17 to the citizens of Louisiana in having this railroad? 18 So the cases that they have put on the 19 table with their proposal -- we've looked through 20 them. We've gone through them very carefully. And 21 all of those cases recognize that there is a 22 community interest in lower prices. But in 23 recognizing that interest, they do not look to 24 affordability. And that's where we really differ 25 with the staff. If I may say so -- 149 1 CHAIRMAN LLOYD: Can you cut it short? 2 MR. GASAWAY: Yeah. I'll say so very quickly. 3 I do disagree that your hands are tied on this. I 4 think it's very clear that the first 10 or so words 5 of the Section B dealing with trade secrets say, "Any 6 information required to be disclosed pursuant to a 7 final regulation adopted under this section." 8 That presupposes all the limitations 9 on A. And A says, "No required disclosure of trade 10 secret information or other information that would be 11 violated by federal law." 12 That's exactly what the discussion was 13 before the legislature. They knew there was a huge 14 carve-out there. Whether there could be any possible 15 situation of a California-only vehicle manufacturer 16 with a California-only research center with a 17 California-only trade secret that this would be 18 applicable -- I don't know. 19 But they knew that the whole carve-out 20 was there, and they did ask this board to look at 21 this very seriously. And I would, as well. Thank 22 you. 23 CHAIRMAN LLOYD: Thank you. Thank you. 24 MR. TERRIS: If I may just add one thing, 25 we've looked at the cases cited by the Alliance in 150 1 great detail and note that the cases are in apposite 2 to what we're looking at here, for the most part, and 3 that there are clear distinctions with regard to the 4 case that he just referred to by Justice Holmes. 5 They're -- real briefly, it made it clear -- 6 CHAIRMAN LLOYD: Yeah. That's fine. Fine. 7 Thank you. 8 James Gowan, our last witness. 9 MR. GOWAN: Thank you, Mr. Chairman. And I'd 10 like to thank the board for the opportunity to speak 11 here today. My name is Jim Gowan. I represent 12 Crestec Corporation. 13 We're a global documentation company 14 with offices in North America, Asia, and Europe. We 15 have a long history of working with a number of 16 different manufacturers both in Japan and in the 17 United States on technical documentation in print 18 and, in recent years, in electronic media as well. 19 A number of our customers are 20 automobile manufacturers. I'd like to address the 21 issue of cost of the websites. We've heard today 22 about cost estimates of as much as $600,000 to over 23 $5 million to create sites that will meet federal and 24 California requirements. 25 At Crestec, we've already invested in 151 1 hosting and transaction capabilities that could be 2 shared by multiple manufacturers and combined with 3 efficient document-management techniques. We feel 4 these costs can be reduced to significant -- reduced 5 significantly actually to a fraction of the cost 6 ranges here we've heard quoted here today. 7 Additionally for "N" users being able 8 to access multiple manufacturers' data from a single 9 web resource would significantly increase the value 10 of the service to the "N" user and rather than paying 11 for data from multiple sources, the "N" user would be 12 able to access data from multiple manufacturers 13 through a single resource and gaining some economies 14 of scale. 15 We also heard mentioned cost of as 16 much as $1,500 to get CD-ROM-based data which is 17 often incomplete. CD-ROM publishing is akin to book 18 publishing. It's an all-or-nothing proposition: 19 Either you buy all the data at once or you buy none 20 of it at all. 21 A more appropriate pricing model for 22 the web would allow the N-user, the individual repair 23 person, the individual repair shop, to be able to buy 24 only the data they need when they need it to do a 25 specific procedure. 152 1 This could be done at an extremely low 2 cost and would allow them possibly even to pass the 3 cost of that information download along to the 4 consumer without significantly increasing the costs 5 of the repair. 6 We're making this investment now and 7 building a network that will allow us to create a 8 platform where these types of economies of scale can 9 be found. And hopefully we'll be able to lower the 10 initial cost of getting involved with this for the 11 manufacturers and provide a really flexible and 12 extremely cost-efficient payment method for the N 13 users as well. 14 We're working -- we're speaking with a 15 number of manufacturers about that now and hope to 16 begin actually doing some preliminary work with at 17 least one manufacturer early in the new year. Thank 18 you. 19 CHAIRMAN LLOYD: Thank you. Thank you very 20 much. Thank you. Thank you very much. 21 Mr. Kenny, do you have any further 22 comments? 23 MR. KENNY: No, I don't. 24 CHAIRMAN LLOYD: I will now close the record 25 on this agenda item. However, the record will be 153 1 reopened when the 15-day notice of public 2 availability is issued. Written or oral comments 3 received after this hearing date or before the 15-day 4 notice is issued will be not accepted as part of the 5 official record on this agenda item. 6 When the record is reopened for a 7 15-day comment period, the public may submit written 8 comments on the proposed changes, which will be 9 considered and responded to in the final statement of 10 reasons for the regulation. 11 Just a reminder to my colleagues -- 12 it's a regulatory item -- if there are any ex parte 13 communications prior to this? Seeing none -- 14 MS. D'ADAMO: Mr. Chairman. Mr. Chairman. 15 CHAIRMAN LLOYD: Yes, Miss D'Adamo? 16 MS. D'ADAMO: On December the 4th, I met with 17 a group of individuals representing the California 18 Automotive Task Force with regard to the 19 initialization issues that were raised today. Those 20 representatives were George Miller, Aaron Lowe, Rush 21 Schinzing -- S-c-h-i-n-z-i-n-g, Mike Conlin, and Tom 22 Ramos. 23 And then on December 10, I had a 24 conversation with another individual representing the 25 California Automotive Task Force -- Joe Lang. And 154 1 then today, earlier today, again spoke with George 2 Miller representing the California Automotive Task 3 Force. 4 CHAIRMAN LLOYD: Thank you very much. 5 I think we've got a resolution before 6 us. Obviously we need to have some discussion from 7 the board on how we want to address the resolution at 8 this time. 9 Yes, Professor Friedman. 10 PROFESSOR WILLIAM FRIEDMAN: I believe the 11 resolution -- I will move its approval. 12 I notice there's a further resolve on 13 Page 5, the next-to-the-last resolution or 14 next-to-the-last paragraph on that page, which 15 directs the staff to work with the motor vehicle 16 manufacturers and the rebuilders of on-board 17 computers to attempt to see if a way exists that 18 would allow remanufacturers to effectively bench-test 19 rebuilt computers with the immobilizer circuitry 20 without compromising motor vehicle security and then 21 asks the staff to report back to the board within two 22 years on the status of this issue. 23 I'm wondering if it would be 24 infeasible or would it possible for the staff to 25 report back on that question in one year and then 155 1 within two years on the service, other 2 service-information regulations in general, since 3 they don't go into effect for a year. 4 MR. KENNY: I think we could do that. 5 PROFESSOR WILLIAM FRIEDMAN: I'd just like an 6 earlier report. 7 DR. BURKE: In two years it's up, anyway; 8 right? In two years, it's over anyway 'cause we're 9 only approving this to 2004. 10 MR. KENNY: Well, what we're doing is we have 11 interim procedures essentially that we were talking 12 about with Honda through 2004. And we're trying to 13 look for long-term solutions that would then be 14 implemented post-2004. So to report back within one 15 year, we would be able to essentially present 16 something to you that we could then use in the 17 post-2005 time frame -- post-2004 time frame. Excuse 18 me. 19 MR. TERRIS: If I may, the 2004 interim 20 procedures apply to providing initialization 21 information to service facilities. That's the Honda 22 issue. The other issue is basically the rebuilder 23 issue and having the right to initialization 24 information. 25 MS. D'ADAMO: Mr. Chairman? 156 1 CHAIRMAN LLOYD: Yes, Ms. D'Adamo. 2 MS. D'ADAMO: Correct. However, I had asked 3 an earlier question, with regard to the Honda issue, 4 if it could be applicable to the remanufacturers. 5 And I'm assuming that that would be part of the 6 discussion and report as well. 7 MR. KENNY: We would make it all part of the 8 discussion. That's correct. 9 CHAIRMAN LLOYD: Any other questions? Sorry. 10 I'm sorry. 11 MRS. RIORDAN: Sorry, Mr. Chairman. I'm just 12 going to ask Professor Friedman if he had made that 13 motion with that amendment -- 14 PROFESSOR WILLIAM FRIEDMAN: Yes. That's what 15 I intended to do. 16 MRS. RIORDAN: Okay. And I will second that 17 because I think that's a very critical component to 18 making this all work, to secure the information and 19 the testing but to allow us to have the antitheft 20 still remain a property of the manufacturers. 21 CHAIRMAN LLOYD: Yeah. Any other discussion 22 from the board on that issue? 23 PROFESSOR WILLIAM FRIEDMAN: Are you seconding 24 it? 25 MRS. RIORDAN: Yes. 157 1 CHAIRMAN LLOYD: She seconded it. 2 PROFESSOR WILLIAM FRIEDMAN: On the 3 discussion, if I may, I just want to quickly state 4 that I'm not entirely unsympathetic to counsel, who, 5 on behalf of the original automotive manufacturers, 6 have raised, I think, some at least tenable questions 7 about the constitutionality of the legislation that I 8 believe we are obliged to follow. And that's what 9 we're doing today. 10 But this is not -- in my opinion, this 11 is not the place to raise it; or at least there's 12 nothing, in my opinion, that is appropriate for us to 13 do. The legislature has spoken. I'm sure that those 14 points were raised before the legislature. 15 And as far as I can see, the staff has 16 crafted regulations that don't stray from the 17 mandates of the legislation and are an attempt to, 18 again, as usual, to achieve that, I think, laudable 19 balanced tightrope that we often walk to balance the 20 varying interests here. 21 So I just -- I understand but -- and I 22 wouldn't be surprised, at some point, to learn that 23 there may be some other branch of government looking 24 at this. 25 CHAIRMAN LLOYD: I concur with you -- 158 1 PROFESSOR WILLIAM FRIEDMAN: But it's not for 2 us to do. We have a role to play, and I think we're 3 playing it. 4 CHAIRMAN LLOYD: Yeah. And clearly the major 5 issue was the safety issue here and security. And 6 that's been addressed. So any other discussion? 7 Mr. McKinnon? 8 MR. McKINNON: Yeah. I -- in collective 9 bargaining, as a union leader, I'm looking at the 10 legislation and the remanufacture work being missing. 11 And I -- if you put something forward and then you 12 take it out, it's out. And so I'm inclined to agree 13 with counsel's very early assessment of it. 14 My only other major concern is the way 15 that we're dealing with tools. And I guess I'll 16 simplify it to just the one issue of forcing 17 disclosure of tool information -- or a tool can be 18 soft -- I mean that it can be fairly complex -- 19 disclosure of it to anyone for manufacture. 20 And I have a difficult time with that, 21 and I can -- I really sympathize with some of the 22 tools I've seen that have been made. And I guess 23 what I would like us to maybe think about is some 24 ability for original equipment manufacturers to 25 decline a particular tool manufacturer, some process 159 1 for doing that. 2 If they have had some experience where 3 there's been misuse of that tool or the tool caused 4 harm to their vehicles or didn't do the job properly 5 or injured people, then the original equipment 6 manufacturers should have some process, either, you 7 know, with the executive officer or some process to 8 be able to decline and get out of that 9 responsibility. 10 CHAIRMAN LLOYD: So are you saying, 11 Mr. McKinnon, that that may be part of what the staff 12 would look at in the next year? 13 MR. KENNY: What I was asking essentially was 14 whether or not there was something in the regulation 15 right now that could essentially be utilized to cover 16 a situation in which a tool manufacturer was to 17 misuse or misappropriate in some fashion the OEM 18 information and whether we could, therefore, 19 establish a process, like you were suggesting, that 20 would remove the obligation of that manufacturer to 21 provide that information in the future to that 22 particular remanufacturer -- that particular tool 23 user. 24 And we don't have it in there 25 currently. But we can look at doing that. And if 160 1 the board's direction is to do so, I think we could 2 probably do it as part of our 15-day package. 3 CHAIRMAN LLOYD: So we'd like to include that 4 in our -- 5 PROFESSOR WILLIAM FRIEDMAN: I would agree 6 with that and include that as a further amendment 7 if -- 8 MRS. RIORDAN: Yes. 9 CHAIRMAN LLOYD: Yes. 10 MRS. RIORDAN: I would agree. 11 CHAIRMAN LLOYD: With that -- Supervisor 12 Roberts. 13 SUPERVISOR ROBERTS: That's not suggesting 14 that we go with the "three or more"? I feel very 15 comfortable with that -- 16 MR. McKINNON: No. I avoided that. 17 MR. KENNY: What I was going to suggest is 18 that, as we go forward with the 15-day package, what 19 we would do is simply provide a process where, if a 20 manufacturer believes that its tools have been 21 inappropriately used or have resulted in some kind of 22 harm or defect, that the OEM would, at that point, 23 have the opportunity to petition us to determine 24 that, in fact, it no longer needs to provide that 25 particular tool to a particular person who or a 161 1 particular company that has misused equipment. 2 So there'd be a burden on the 3 manufacturer to show that, in fact, this misuse has 4 occurred. 5 SUPERVISOR ROBERTS: I like the suggestion of 6 "three or more," which simplifies this whole thing. 7 MR. McKINNON: I kind of proposed this 8 amendment. I am also fine with "three or more." I 9 was just trying to give an alternative that hadn't 10 been considered. "Three or more" is fine with me. 11 It's very legitimate. 12 SUPERVISOR ROBERTS: If you want to offer that 13 as an amendment, Matt, I'd be glad to second that. 14 PROFESSOR WILLIAM FRIEDMAN: Would you explain 15 what "three or more" means? 16 CHAIRMAN LLOYD: Also if the staff could look 17 at the implications -- just refresh us on the 18 implications of that. 19 MR. KENNY: Yeah. I think the concern we had, 20 as the staff, with the "three or more" is that that 21 would simply limit the amount of the competition out 22 there. And so we're trying to maximize the 23 competition while providing the opportunity for 24 dissemination of tools to as many parties as 25 possible. 162 1 The "three or more" would probably 2 provide it but to obviously limit it to less than 3 three would also potentially limit it to only three 4 so -- 5 MRS. RIORDAN: Any time you set a number, 6 you've limited it in some way. 7 PROFESSOR WILLIAM FRIEDMAN: I don't think -- 8 I think I prefer to stick with the original, the 9 first suggestion, which provides a process but 10 doesn't have any numerical quantified limit or 11 restriction. 12 CHAIRMAN LLOYD: How strongly do you feel, 13 Supervisor? 14 SUPERVISOR ROBERTS: I would like to have that 15 as an amendment. And if there's -- in fact, I would 16 make that as an amendment, then. 17 CHAIRMAN LLOYD: Okay. Okay. 18 MR. McKINNON: I'll second it. 19 CHAIRMAN LLOYD: Okay. So let's vote on the 20 amendment, first of all. 21 PROFESSOR WILLIAM FRIEDMAN: Would you restate 22 what it is, please. 23 SUPERVISOR ROBERTS: Well, I think we've been 24 over it several times. But as I understand it, we 25 give the manufacturer the ability to select three or 163 1 more companies in which to deal with. 2 And you wouldn't have this ritual of 3 going through and trying to qualify which companies 4 they feel have done them wrong and then have to go 5 through a bureaucracy to help come to those 6 decisions; but in the natural course of their 7 business, they could decide that there are three or 8 more than they want to work with and to help to 9 develop these tools. 10 PROFESSOR WILLIAM FRIEDMAN: So this is for 11 the purpose of developing or making the tools that 12 are requested by the aftermarket parts suppliers or 13 aftermarket -- well, computer -- 14 MS. D'ADAMO: Mr. Chairman? 15 PROFESSOR WILLIAM FRIEDMAN: -- workers. Is 16 that it? The OEM's would have to provide the tools 17 to three or more or offer them to make them the three 18 or more? 19 MR. McKINNON: Yeah. 20 MS. D'ADAMO: Mr. Chairman, the concern that I 21 have -- I'd have to take a look at the statute again, 22 but it seems that we're limiting the statute. I 23 don't recall any language in that -- perhaps there is 24 a provision that would allow us to limit it in such a 25 way. 164 1 MS. WALSH: The statute provides for making 2 the tools available to the tool manufacturers. And 3 so, when you're talking about limiting it, you know, 4 we need to look at a sort of balancing there, as to 5 whether you're limiting it beyond the point that the 6 legislation speaks to -- that is, making it available 7 to the tool manufacturers. 8 "Three or more" is a fairly severe 9 limitation -- limitation on the provision that's in 10 this, the statute. The earlier suggestion to allow 11 the OEM's to establish that there is a specific 12 reason not to provide those tools to a company 13 certainly should survive scrutiny under the statute. 14 MS. D'ADAMO: I'm noting that the statute -- 15 actually, under A-2 -- "make available for sale to 16 all covered persons," which is the broader category 17 discussed earlier. 18 MS. WALSH: "All covered persons" -- looking 19 at -- 20 MR. TERRIS: Well, it says -- later on, it 21 says, "Make tools available to all covered persons," 22 but the data stream information, which is basically 23 used to make generic scan tools -- that has to be 24 provided just -- it says to tool manufacturers. 25 MS. D'ADAMO: Oh, right. Right. 165 1 MR. TERRIS: I guess the only thing I would 2 like to add in terms of -- it's our understanding 3 that we've been told that three manufacturers have, 4 right now, 85 percent of the market and that there 5 are more like two dozen manufacturers out there right 6 now. 7 You basically would be limiting the 8 availability of the information to the three largest 9 manufacturers right now. 10 CHAIRMAN LLOYD: Yes. So let's take a vote on 11 the amendment here. I guess all in favor -- I guess 12 we'll have a show of hands here. All in favor of the 13 amendment provided by Supervisor Roberts. 14 We have three, four -- 15 Well, there's a half-hearted Joe. 16 MR. CALHOUN: Well, it was a half vote. 17 CHAIRMAN LLOYD: Okay. That doesn't pass 18 here. What about going back to the original proposal 19 here by Professor Friedman, seconded by -- okay. 20 Just to refresh -- can we just refresh 21 ourselves on what we're voting for in this case? 22 MR. KENNY: I think the proposal before the 23 board at this point is to approve the resolution as 24 modified on Page 5 with a change from "two years" to 25 "one year" so that we can look at the immobilizer 166 1 issue and also that we should be looking at the 2 remanufacture issue and a further modification that 3 would reflect the fact that tools could be limited in 4 terms of their access to parts manufacturers to the 5 extent that there was a showing made by the original 6 equipment manufacturer that some kind of misuse was 7 demonstrated. 8 CHAIRMAN LLOYD: I'm being sensitive to 9 Supervisor Roberts's suggestion. Can the board -- 10 can the staff also do that next year -- look at the 11 issue he was talking about to see if there's any 12 merit to look at that limited "three or more"? 13 MR. KENNY: Yes, we can. 14 CHAIRMAN LLOYD: Thank you. 15 Yes, Mr. McKinnon? 16 MR. McKINNON: Mr. Kenny, I wanted to make 17 sure that that "misuse" term is very, very broadly 18 construed -- unsafe; it doesn't work right in the 19 car; causes errors in the repair work. I mean 20 very -- it should be a very broadly construed -- I 21 think it is a big deal to make them go to all tool 22 manufacturers. 23 And if there are problems that, even 24 if they're not very great, they should have the 25 ability not to have to do business with them. 167 1 CHAIRMAN LLOYD: So you would expect that to 2 be spelled out in the 15-day notice? 3 MRS. RIORDAN: Yes. 4 PROFESSOR WILLIAM FRIEDMAN: Well, just a 5 quick question. I don't want to belabor this; but 6 what if, for example, one of the OEM's had had, 7 already, difficulties with one of the parts 8 manufacturers? I mean assuming -- I don't know. Is 9 any of this presently being made by others? 10 If three of them have the bulk -- 85 11 percent of the business -- that tells me that 12 somebody's getting the business. And if there are 13 reasons why -- and on the other 15 percent, some of 14 'em are just -- have caused problems, if they're 15 it -- in the spirt that you've offered this, I think, 16 if there's any showing that satisfies the executive 17 officer that there are grounds, existing grounds, for 18 legitimate concern about use, misuse -- past or 19 future -- that are going to cause problems, then it 20 seems to me that, with respect to that particular 21 manufacturer, the requirement should be relieved. 22 MR. KENNY: What I'm hearing and, I guess, the 23 direction we would take from the board is that the 24 standard that the manufacturer would be -- the 25 original equipment manufacturer would have to 168 1 demonstrate would be a very low one. And so the 2 hurdle would not be that substantial. 3 CHAIRMAN LLOYD: Supervisor Roberts. 4 SUPERVISOR ROBERTS: Yeah. Let me ask a 5 question because it seemed like the nature of the 6 comments was that a manufacturer can prevent that 7 relationship only if they have had experience, direct 8 experience. And what if a manufacturer says, "Wait a 9 minute. I'm looking at work that this company does, 10 and I see it. And although we have not had a 11 contractual relationship, the quality of their work 12 is terrible. And the equipment they produce is 13 terrible"? 14 Are you saying they can't get out 15 unless they've had, sort of had a -- some type of 16 unfortunate relationship themselves? 17 MR. KENNY: I think that was actually how we 18 were interpreting the comments. 19 SUPERVISOR ROBERTS: Well, see. That's why 20 I'm having a problem with this. It's like you can't 21 do any screening, and you've got to turn over 22 everything to everybody unless you've had -- unless 23 and until you've actually had a problem, personally 24 had a problem. It isn't -- for me, it's not the way 25 I like to see business done. But then -- 169 1 MR. KENNY: I mean we could -- I mean, again, 2 we could essentially look at this fairly broadly and 3 to the extent that there is some demonstrable 4 evidence that the company is one that should not be 5 utilized, even if there was not a past business 6 relationship between the two companies, that could be 7 a justification. 8 But, you know, what we're trying to do 9 is make sure that we can maintain competitiveness in 10 the marketplace and that we don't limit the 11 marketplace to just simply a couple of names. And so 12 long as there is some rational basis for, you know, a 13 lack of a business relationship, we could rely upon 14 that. 15 CHAIRMAN LLOYD: And that's the intent of the 16 legislation, I guess. I guess we've got some 17 negotiations on the far right. 18 PROFESSOR WILLIAM FRIEDMAN: Well, I've think 19 we've got the intent. I think the choice is between 20 leaving the executive officer with broad discretion 21 and based on, you know, cogent evidence, however 22 little or much or little or arbitrarily limiting it 23 to two or three or five or taking an arbitrary limit 24 on competition. 25 And I think we've already voted once. 170 1 But I would move the question, in the interest of 2 time. 3 CHAIRMAN LLOYD: Did we reach any resolution? 4 MR. McKINNON: No. I understand that one of 5 the weaknesses of the way we're doing it, instead of 6 doing a three supplier or a five or a six -- one of 7 the weaknesses is that people could come up with 8 very, very -- fairly nebulous reasons for not wanting 9 to do business with someone. 10 And, you know, I think we really 11 should think about that. If we're going to put the 12 burden of supplying the information to everybody, 13 there's got to be an easy way out. 14 CHAIRMAN LLOYD: You mean "easy way out" -- to 15 limit that at this point? 16 MR. McKINNON: Yes. 17 MRS. RIORDAN: Mr. McKinnon, I think that, if 18 you were to bring that evidence before our staff -- 19 and I have a lot of confidence in the understanding 20 of our staff, both from a technical point of view and 21 from a legal point of view -- I think we've given a 22 lot of latitude to avoiding what you have -- what you 23 are concerned about. 24 If we were giving this to some staff 25 that had really no information before them when an 171 1 auto manufacturer comes in, then I would agree. But 2 we have highly trained staff here that I think can 3 ferret out whether or not there's a legitimate 4 concern about a manufacturer or not. 5 And I have a lot of confidence this 6 will work, without an arbitrary number. And I have 7 concerns about numbers because I don't know what 8 would be a realistic number to ask for. 9 MR. CALHOUN: They suggest three or more. 10 MRS. RIORDAN: Well, I don't know if the three 11 is good. I have no idea. 12 CHAIRMAN LLOYD: I think we're going to have 13 to move ahead. You're going to call this to a vote? 14 So we have the motion before us. So maybe we can 15 take a vote on that. I guess we'll have to go with a 16 show of hands again here. All in favor of the 17 motion? 18 DR. BURKE: Can we call for a roll call? 19 CHAIRMAN LLOYD: Okay. The roll call is fine. 20 All in favor of the motion here -- do you want to 21 call roll on this one? 22 MR. McKINNON: Mr. Chairman, what we're voting 23 on includes dealing with this process; right? 24 CHAIRMAN LLOYD: Yes. Yes. 25 MR. McKINNON: Okay. 172 1 CHAIRMAN LLOYD: Yeah. Can you just read it? 2 Dr. Burke isn't fully aware here. 3 MS. WALSH: The motion's that currently before 4 the board is the proposed resolution with the change 5 on the time on the report back regarding the 6 initialization procedures and also a direction to 7 staff to include language in the regulations before 8 we put 'em out for the 15-day notice that would allow 9 OEM's to petition the executive officer for relief 10 that would allow them not to provide information 11 regarding the diagnostic tools to an individual 12 company if they can demonstrate that there is some 13 rational basis for withholding that information. 14 CHAIRMAN LLOYD: And we're giving the 15 executive officer flexibility to define "rational"? 16 MS. WALSH: That's correct. 17 MR. TERRIS: Excuse me. Could I clarify one 18 thing? 19 CHAIRMAN LLOYD: Yes. 20 MR. TERRIS: I believe it's the data-stream 21 information and not the tools themselves. The tools 22 need to be made available to all covered persons. 23 CHAIRMAN LLOYD: Okay. 24 MS. WALSH: Yeah. The information. 25 CHAIRMAN LLOYD: Okay. Okay. So are we 173 1 clear? Thank you. So let's -- 2 DR. BURKE: Mr. Chairman, I'm waiving roll 3 call. 4 CHAIRMAN LLOYD: Oh, waive the roll? Okay. 5 So we'll go by a show of hands. All in favor -- 6 PROFESSOR WILLIAM FRIEDMAN: If we've got the 7 strength to raise our hands. 8 CHAIRMAN LLOYD: All in favor? 9 Against? 10 MR. McKINNON: I'm for it. 11 DR. BURKE: You're for it? 12 MR. McKINNON: Yeah. 13 DR. BURKE: But you held up your hand twice. 14 MR. McKINNON: No. It was coming down. 15 DR. BURKE: Oh, it was coming down? I just 16 didn't know that for a fact. Okay. 17 CHAIRMAN LLOYD: Dr. Burke, were you "for" or 18 "against"? 19 DR. BURKE: I was "for," if he's a "for." 20 CHAIRMAN LLOYD: And I think that Supervisor 21 Roberts -- you were consistent with -- 22 SUPERVISOR ROBERTS: I don't understand the 23 motion. 24 CHAIRMAN LLOYD: Do we -- just to make sure, 25 I think -- the motion we were voting on, Supervisor, 174 1 was the one -- Supervisor Roberts, was the one -- 2 SUPERVISOR ROBERTS: That would allow this 3 decision by -- I'm not going to support that. 4 CHAIRMAN LLOYD: So Supervisor Roberts is 5 against. So I think we've -- okay. So everybody 6 else was "for." So I think the motion passed -- 7 passes. 8 MS. WALSH: 8-1. 9 CHAIRMAN LLOYD: 8 to 1. 10 Well, thank you very much on this 11 item. Thank you. Thank you, court reporter, for a 12 marathon session. We will take a 10-minute break -- 13 no more -- and come back to the refinery item. 14 And thank you very much, staff. 15 (Break.) 16 \\\ 17 \\\ 18 \\\ 19 \\\ 20 \\\ 21 \\\ 22 \\\ 23 \\\ 24 \\\ 25 \\\ 175 1 CHAIRMAN LLOYD: The second agenda item today 2 is 01-10-3, recommended guidance to local air 3 districts regarding penalty assessments at petroleum 4 refineries. 5 We all know local air pollution 6 control districts have the primary responsibility for 7 adopting rules and regulations for stationary 8 sources. The districts have also developed 9 enforcement programs to ensure compliance with the 10 rules and regulations they adopt. 11 The Air Resources Board periodically 12 reviews these programs to make sure they're achieving 13 their intended objectives. Enforcement programs have 14 many elements, including training, compliance 15 assistance, and various types of inspections. 16 However, I think we can all agree that the penalty 17 structure is key. The ultimate success of 18 enforcement programs depends on the fair and firm use 19 of appropriate and meaningful penalties to address 20 violations of local, state, or federal air-quality 21 laws. 22 In recent years, concerns have arisen 23 from time to time that enforcement of petroleum 24 refineries is not consistent throughout the state. 25 We've also heard concerns that total quantity of 176 1 penalties assessed is not sufficient to achieve a 2 deterrent effect. 3 To address these concerns, staff 4 reviewed the enforcement programs and related penalty 5 assessments in all three districts where refineries 6 are located: South Coast, Bay Area, and San Joaquin 7 Valley. 8 I will ask Mr. Kenny to elaborate more 9 on the scope of the staff's presentation. Mr. Kenny? 10 MR. KENNY: Thank you, Mr. Chairman and 11 members of the board. Staff is here today to present 12 the agenda, this agenda item, because we believe that 13 enforcement programs in California's air districts 14 should be reviewed periodically and that such reviews 15 can frequently result in program improvements. 16 Board staff also want to ensure that 17 air districts are assessing meaningful penalties for 18 violations of local air-quality rules and 19 regulations. As a result, the board directed staff 20 to evaluate district enforcement programs and to make 21 recommendations on district enforcement practices, 22 including the levels of penalties being assessed. 23 ARB staff has begun work -- excuse 24 me -- with the air districts to evaluate enforcement 25 activities across the state. As a first step in this 177 1 process, ARB evaluated enforcement activities at 2 refineries. 3 Refineries were selected because they 4 are one of the largest and most complex sources of 5 emissions in this state and, compared to other 6 regulated or permanent and stationary sources, there 7 are relatively few facilities in the state. 8 While staff's current evaluation is 9 limited to enforcement activities at petroleum 10 refineries, the ARB staff will continue to work with 11 the air districts to strengthen enforcement 12 activities across the state for many more source 13 types. 14 We will also focus on community-level 15 concerns. ARB's ultimate goal is to work with the 16 air districts to ensure statewide compliance with all 17 applicable air-quality requirements from all air 18 pollution sources. 19 At this time, I'd like to ask Mr. Erik 20 White to make the staff presentation. 21 MR. WHITE: Thank you, Mr. Kenny. 22 Good afternoon, Mr. Chairman and 23 members of the board. 24 UNIDENTIFIED VOICE: Turn your mike on. 25 MR. WHITE: Thank you, Mr. Kenny. 178 1 Good afternoon, Mr. Chairman and 2 members of the board. Today I will present the 3 staff's draft recommendations on guidance for penalty 4 assessments at petroleum refineries. 5 I will provide background information 6 on why staff developed these draft guidelines and 7 discuss staff's evaluation and findings. And I will 8 conclude with a summary of our findings as well. 9 In the interests of time, I have 10 shortened my presentation; and I'm skipping a few of 11 the slides we had prepared. So I will not be 12 presenting any information on the other factors 13 evaluated. 14 CHAIRMAN LLOYD: Thank you very much. 15 UNIDENTIFIED VOICE: "A" for the day. 16 MR. WHITE: Staff's evaluation is part of our 17 continuing efforts to improve enforcement activities 18 across the state. 19 Refiners were selected to be our first 20 source category to look at because they're one of the 21 largest statewide stationary-source-emission 22 categories and there are only about 20 of these 23 facilities in the state, most of which are 24 concentrated within the Bay Area and the South Coast 25 air districts and the San Joaquin Valley. 179 1 In developing staff's guidelines, we 2 hold four workshops. Two were held in Los Angeles 3 area, and two were held in the Bay Area. These 4 workshops were held during the evening hours. And 5 staff made Spanish-translation services available. 6 Notification of those workshops was 7 sent to community groups, districts, industry, and 8 local cities. ARB staff worked very closely with the 9 staffs of the Bay Area and South Coast districts and 10 the San Joaquin Valley in the development of these 11 guidelines. 12 I would now like to discuss staff's 13 evaluation of district enforcement activities at 14 refineries. In evaluating the three enforcement 15 programs, several key components became apparent. 16 First, all three districts dedicate an inspector to 17 each refinery who is responsible for the enforcement 18 activities at that facility. 19 The inspector's duties include 20 verification of "upset breakdowns," source test 21 verification, investigation of citizen complaints, 22 routine inspections, and compliance audits as well as 23 the issuance of NOV's for violation of district 24 rules. 25 Based on staff's evaluation, we have 180 1 concluded that current programs are providing an 2 effective level of enforcement. By dedicating an 3 inspector to each refinery, the districts have 4 provided the minimum resources necessary to carry out 5 enforcement activities necessary. 6 In doing so, inspectors perform, at a 7 minimum, weekly inspections at these facilities. 8 And, in 2000, this resulted in between 50 and 150 9 inspections per refinery. Also all citizen 10 complaints received by the district are investigated 11 by these inspectors. 12 However, while staff believes that 13 refinery enforcement programs are providing an 14 effective level of inspections, we have identified 15 certain best practices that have been implemented by 16 one or more districts. As part of these best 17 practices, staff believes that more frequent 18 inspections and additional follow-up to citizen 19 complaints, including notifying the complainant on 20 the findings of the inspector's investigation are 21 necessary. 22 Ultimately, these best practices may 23 lead to better compliance with district rules and 24 regulations. And staff would encourage the district 25 to incorporate these components into their current 181 1 programs. 2 I will now present staff's findings on 3 their evaluation of district penalty assessments for 4 violation of air pollution rules and regulations at 5 refineries. Generally NOV's issued by district 6 enforcement staff are resolved by district legal 7 staff through a mutual settlement process. In 8 settling NOV's with refiners or any violator, for 9 that matter, districts rely on penalties and guidance 10 provided for in the California Health and Safety 11 Code. 12 While the Health and Safety Code 13 establishes maximum penalties, it does not establish 14 minimum civil penalties for these violations. In 15 assessing civil penalties, districts must take into 16 account such considerations as the extent of the harm 17 caused, the nature of the violation, frequency of 18 past violations, and the financial burden to the 19 violator. 20 And the penalties must be set at 21 levels that will serve as a deterrent in light of the 22 violator's conduct and financial ability. Case law 23 places the burden on the violator to justify a 24 penalty below the maximum. The Health and Safety 25 code establishes maximum penalties depending upon the 182 1 severity of the violation. 2 These penalties range from about -- 3 from $10,000 per day for violation of district rules 4 on a no-fault basis, even when the violations do not 5 involve the release of air contaminants. Ultimately 6 sources which, willfully and intentionally or with 7 reckless disregard for the risk of great bodily 8 injury, emit contaminants that cause great bodily 9 injury or death are liable for civil penalties of up 10 to a million dollars per day. 11 Even though the law does not establish 12 statutory minimum penalties, neither law nor practice 13 supports imposing inconsequential penalties. 14 In evaluating the district's NOV- 15 settlement practices, staff collected and reviewed 16 NOV-settlement information from the three districts. 17 Staff collected this information for the period of 18 about 1997 through 2000 for five refiners in the 19 state -- two in the Los Angeles area, two in the Bay 20 Area, and one in the San Joaquin Valley. 21 All told, we looked at 300 -- over 22 330 settled NOV's. In analyzing the data, staff 23 first grouped the NOV settlements by the type of rule 24 violation that occurred. We then categorized each 25 NOV settlement into two types: Emission related and 183 1 administrative. 2 For the purposes of allowing us to 3 compare the NOV settlements between the districts, we 4 calculated the minimum, maximum -- well, we 5 determined the minimum, maximum, and average penalty 6 assessment for each type of violation determined. 7 As staff began evaluating the data, 8 certain limitations to analyzing the data just 9 described became apparent. There are differences in 10 the stringency of similar rules between the 11 districts, which results in differences in the number 12 and severity of NOV's issued. 13 Additionally, we observed changes in 14 enforcement practices with time and the methodology 15 used by the districts in issuing their NOV's, which 16 also led to differences between the NOV's that were 17 issued. 18 It's important to recognize that, in 19 issuing NOV's, the districts sometimes issue a single 20 NOV for multiple violations of the same rule on a 21 single NOV or they might cite multiple-rule 22 violations on the same NOV. This provided difficulty 23 in analyzing the data as just described. 24 It is also important to note that the 25 NOV settlement practice is synergistic. The strength 184 1 of evidence associated with some NOV's may balance 2 the weakness of others. While staff believes that 3 their evaluation provided a good overall indicator of 4 the districts' programs, it does not reflect the full 5 spectrum of variables that comprise the complete 6 program. 7 However, staff believes their analysis 8 is a fair and equitable measure of these programs and 9 does provide for a comparison between the districts. 10 As you can see from this graph or from 11 this table, we've -- for a few of the categories that 12 we looked at, we've provided the minimum, the 13 maximum, and the average penalty assessments that 14 were determined. As you can see, there's quite a bit 15 of variability between the districts in the penalty 16 assessments that they used as well as within each 17 district for the similar rule category. 18 However, in all three districts, we 19 found that the minimum penalties should be higher. 20 And in some cases, they should be significantly 21 higher. 22 In general, staff believes that the 23 minimum penalties assessed should be increased. This 24 is because the ultimate success of any enforcement 25 program depends on the fair and firm use of 185 1 appropriate and meaningful penalties. 2 The use of meaningful penalties 3 provides a financial incentive for regulated 4 industries to comply with air pollution laws and 5 creates an environment where full compliance is the 6 most cost-effective option available and could 7 encourage and improve maintenance practices or the 8 installation of more effective control equipment. 9 In all cases, penalties should be 10 commensurate with the nature, scope, and seriousness 11 of the violations. 12 In summary, staff believes that 13 district enforcement practices at refineries are 14 generally adequate, however, that the minimal 15 penalties assessed for violations at petroleum 16 refineries should be increased. 17 Staff also found that refinery 18 operations have not been adversely impacted by clean- 19 fuels regulations. And while staff's evaluation was 20 limited to enforcement activities at refineries, 21 staff believes that other district enforcement 22 activities for other source types should be 23 evaluated. 24 And this concludes my presentation. 25 Thank you. 186 1 CHAIRMAN LLOYD: Thank you very much. 2 Questions from the board? 3 Mr. Calhoun? 4 MR. CALHOUN: These are guidelines that you're 5 proposing. Now, what happens if the district chooses 6 not to live by your guidelines? 7 MS. WALSH: Mr. Calhoun, ARB's -- our review 8 or evaluation is conducted as a part of our oversight 9 authority for the districts. And we often develop 10 these kinds of evaluations, guidance documents for 11 the districts. The district are not bound by this 12 guidance. And we certainly expect that they will use 13 it, take it seriously. 14 They've already indicated that just 15 the activity that's gone on, as we moved through the 16 process of doing the evaluation, has had some impact 17 on the way the districts settle cases; that is, we're 18 seeing penalties already moving up. 19 The ultimate authority that you have 20 as an oversight agency would be to exercise your 21 authority to take over district powers. We certainly 22 did not see anything in the evaluation that we 23 conducted that indicated that the districts are not 24 doing a pretty good job in this arena. 25 CHAIRMAN LLOYD: Yes. Miss D'Adamo? 187 1 MS. D'ADAMO: Miss Walsh, you indicated that 2 you are already seeing that some penalties are 3 increasing. Could you provide additional 4 information? Is it any district in particular? And 5 have they increased in such a manner that would be 6 commensurate with what staff is proposing? 7 MS. WALSH: Well, we're not in a position to 8 make that last determination. But what we have seen 9 is, as we've gone through this process -- and we 10 looked through a database that covered the period 11 from during the last decade of 1990 to 2000 -- that 12 the districts provided us with additional 13 information, as we went through this process, 14 indicating that they were looking at and were moving 15 ahead to increase the penalties in this sector. 16 This is primarily anecdotal type of 17 information. We're not in a position to do the same 18 kind of analysis that's done here. And we would 19 expect -- but we would expect to see that, if, in two 20 years down the road, for example, we went in and did 21 another step -- snapshot of data, that we would see 22 that the minimum penalties had moved up. 23 Another chart that you saw as a part 24 of Mr. White's presentation would show higher 25 minimums, maximums, and averages. 188 1 MS. D'ADAMO: And than I had an additional 2 question. Perhaps Mr. Terris would be the better 3 person to answer this, but why not utilize this 4 approach through individual air district plans that 5 come before us? 6 Are there certain air districts that 7 are -- quote -- unquote -- the "bad actors"? And if 8 so, is there a method by which we could achieve the 9 same goal through the air district plans, the 10 individual plans? 11 MS. WALSH: We haven't typically addressed 12 enforcement directly in air district plans, but 13 certainly the underlying rule-making and commitment 14 to reduce emissions is a foundation of those plans. 15 So it's kind of a two-step process. 16 In the plans themselves, we make sure 17 that we have the strongest possible requirements in 18 each district. And then the enforcement process is 19 actually independent of that. 20 CHAIRMAN LLOYD: Thank you. 21 Mr. Kenny. 22 MR. KENNY: Before we actually hear from the 23 witnesses, one of the things I did want to mention is 24 that there was at least some concern expressed by 25 some of the districts that, with regard to the 189 1 presentation we made to you, that although we did 2 provide at least some concern about the level of 3 penalties in the districts, we don't provide any kind 4 of "bright-line" specific guidance with regard to 5 what we do want for the future as they move forward. 6 And so one of the -- I think that's a 7 legitimate concern and potentially a legitimate 8 criticism. 9 One of the proposals that we think 10 will be a very good one is that, as we move into the 11 future -- we and the three districts in which there 12 are refineries -- should sit down and actually look 13 at kind of where these things should go. And I think 14 part of that should also include the industry as we 15 try to make sure that, in fact, we do have kind of a 16 uniform penalty approach for the future that really 17 does work smoothly and well for all three of the 18 districts and not just simply provide them with 19 general direction. 20 CHAIRMAN LLOYD: Okay. 21 DR. BURKE: I really appreciate that because 22 we at South Coast are always concerned as it relates 23 to where we are in the picture of whether, you know, 24 we're meeting your expectations or not. 25 And so we really -- I notice from the 190 1 chart that we're kind of the highest in most, if not 2 of all, the areas. But it's my feeling that we are 3 not high enough, even though we are currently the 4 highest -- we're not high enough because we obviously 5 have the worst attainment in the United States of 6 America. 7 But I just -- I'm concerned that we 8 meet the expectations of CARB in this particular 9 situation and -- but I don't want to go overboard. 10 I'm a little concerned about sitting down with 11 industry -- and, I mean, the criminal court system 12 does not meet with the criminal and talk to them 13 about the sentencing, you know. 14 So I'm not saying that the industry's 15 a criminal, but I'm just talking about the process, 16 you know. I don't quite understand that. But other 17 than that, we want to definitely participate in the 18 manner which satisfies yourself and our esteemed 19 chairman. 20 CHAIRMAN LLOYD: Thank you. 21 MS. WALSH: And if I might add just one quick 22 question, as a follow-up to Dr. Burke, during this 23 process, we had incredible assistance and cooperation 24 from all three of the districts in terms of going in, 25 collecting the data, understanding the data, working 191 1 through the process. And I would like to thank the 2 districts for that assistance. 3 CHAIRMAN LLOYD: Appreciate that. Yeah. 4 Seeing no questions, I'd like to call 5 the first witness, long in waiting. Ed Manning, 6 Craig Moyer, and Jeff Calender. 7 I would appreciate -- I guess I 8 learned from today, maybe, if that the witnesses 9 could limit their testimony to around three minutes 10 or so would be helpful, at the outside five, at least 11 for the first three witnesses representing the 12 petroleum industry. 13 MR. MANNING: Thank you, Chairman Lloyd and 14 members of the board. My name is Ed Manning with 15 advocates representing the Western States Petroleum 16 Associations. It's a pleasure to be here tonight. 17 First of all, I'd like to thank the 18 staff for -- on this side in their professionalism 19 and skill, as always. And even when we don't agree 20 on everything, they are nonetheless professional and 21 skilled so -- sometimes to our detriment. But we 22 appreciate that and all of your time and attention to 23 this matter. 24 Refineries, I think, are always a 25 lightning rod, in some respects the low-hanging 192 1 fruit. So I think, in a way, it's not a surprise 2 that this enforcement review started with refineries. 3 But I think many on this board 4 probably were surprised with the results of the 5 factual analysis and objective analysis part of this 6 report because, when you look at that part of the 7 report and then you look at the recommendations, 8 there's a fundamental disconnect. 9 The purpose of enforcement is not 10 enforcement. The purpose of enforcement is 11 compliance. And what this report tells you, in great 12 detail, is that refineries in California have a 13 better record than refineries in the United States 14 for environmental compliance and worker health and 15 safety. 16 It tells you, if you look at the OSHA 17 data, that refineries in California have a better 18 record on worker health and safety than local 19 governments and than virtually any other industry 20 sector. 21 What this report tells you is that 22 California has more requirements, environmental and 23 otherwise, on refineries than any place else in the 24 United States; that, at the behest of this board, 25 California refiners have invested billions of dollars 193 1 in the last decade in approving refineries, making 2 their processes more complex, and making the cleanest 3 gasoline in the world -- something you should be 4 proud of and certainly we are. 5 Yet at the same time, with those 6 complexities added, with an increasing regulatory 7 burden, the compliance rate and breakdown rate for 8 refineries has improved, if not stayed even, as has 9 worker health and safe levels and protection. That's 10 a pretty extraordinary outcome. 11 And what's difficult to understand is, 12 given that outcome, it would be just as relevant, I 13 think, or just as good a question tonight to ask the 14 question "Since the compliance programs are working 15 well; our regulatory program is working well; and, in 16 fact, emissions are going down from refineries, and 17 performance is up, should we not be reducing 18 penalties?" 19 Because I think the question is just 20 as relevant. If not that question, certainly the 21 question could be asked, "It's working. We should be 22 leaving it alone." 23 And at a time when we are asking 24 California refineries to yet again make another 25 version of gasoline, a cleaner version of diesel -- 194 1 which we're doing -- should we be heaping on them yet 2 again a higher level of penalties, when they seem to 3 be doing their part? 4 I think the answer to that is no. 5 The other part that we find troubling 6 about the report is that, if you look at the analysis 7 of the penalty scheme and the way it's enforced, 8 there are two statements in the report we think that 9 are both factually wrong and legally wrong. 10 One is a statement in the report that 11 says, "Notwithstanding whatever the facts or 12 equitable issues are in a particular case, in all 13 instances penalties for refineries should be 14 raised -- the minimal penalty." 15 And this is troubling for the reason 16 that, on Page 38 of your report, you'll look at the 17 statute in California, which was just amended last 18 year. It's the statute that governs civil penalties, 19 that governs district settlements. 20 And that statute says that, in every 21 case involving every source of emissions, there are 22 eight factors which you, the district, or you, the 23 prosecutor, or you, the judge, need to consider in 24 assessing the penalties. 25 It doesn't favor any particular of 195 1 those eight factors, and it's not a surprising list. 2 It looks at things like the extent of the harm, your 3 past record of compliance, nature and persistence of 4 the violation, et cetera. 5 One of those factors -- and it happens 6 to be the eighth -- is the financial burden to the 7 defendant. At best, the "financial burden to the 8 defendant" means "Will the penalty that you're 9 assessing, based on all these other factors, be an 10 undue burden on the defendant?" 11 At best, it's one eighth of the 12 equation. And the difficulty we have with the staff 13 report is it has disregarded the fact that it's, at 14 best, one eighth of the equation and basically said, 15 "In the case of the refineries, it's the predominant 16 factor that should be used in setting the penalty," 17 that their ability to pay should drive the penalty, 18 not the other seven equitable factors. 19 So we think it's contrary to the 20 statute and the specifics of the statute, Number 1. 21 And, by the way, the legislature heard 22 these arguments no less than a year ago, when it 23 raised the penalties for all of the categories, 24 virtually, in California of penalties, which is part 25 of the reason I think you will see penalties drifting 196 1 upwards is because the caps on the penalties were 2 raised the maximum amount. 3 But the legislature had the choice and 4 rejected the option of setting minimal penalties, 5 Number 1. Number 2, it did not single out refineries 6 for special treatment. And, Number 3, it left intact 7 all of these eight factors which it mandates district 8 prosecutors, the districts to look at in every single 9 case. 10 One of the other things that has been 11 raised in discussions and, as you'll see in the 12 report, is -- 13 CHAIRMAN LLOYD: You've had five minutes, Ed. 14 MR. MANNING: I have? Okay. I'll wrap up. 15 -- is the $11 penalty, this infamous 16 $11 penalty. You know the plural of "antidote" is 17 not "evidence." The fact that a district may have 18 made one bad decision -- and, by the way, there's no 19 discussion in this report of the facts surrounding 20 that case, what the legal issues were, et cetera; so 21 we don't know nor are there of any other of the cases 22 cited. 23 But we would ask you not to look at 24 the $11 case but to look at the compliances history 25 and the overall scheme and say, "Look. Maybe there 197 1 are instances where the districts could do better." 2 There are probably instances where the 3 refineries could do better. And we'll keep trying to 4 do that. And I'm sure the districts will too. Thank 5 you. 6 CHAIRMAN LLOYD: Thank you very much, Ed. 7 Questions from the board? 8 Mr. McKinnon and Dr. Burke and -- Mr. 9 McKinnon. 10 DR. BURKE: Please, go ahead. 11 MR. McKINNON: Okay. Okay. Thank you. 12 I'd like to ask staff what the facts 13 are around the $11 fine. 14 MR. WHITE: In that particular violation, 15 there was a CO exceedance for 38 days from a 16 particular refinery where the refinery was assessed a 17 penalty of, I think, about three or $400. So when we 18 tried to normalize it to a per-day basis, it came out 19 to $11. 20 MS. D'ADAMO: Mr. Chairman? 21 CHAIRMAN LLOYD: Dr. Burke and then -- 22 DR. BURKE: No. No. You can let her go. 23 CHAIRMAN LLOYD: Okay. Ms. D'Adamo. He's 24 very nice. 25 MS. D'ADAMO: Well, thank you. 198 1 Just as a follow-up, could -- do you 2 know enough about the case to apply the other 3 factors -- the extent of harm, the nature, and 4 persistence, et cetera? 5 MR. WHITE: No. It's difficult to try and go 6 back and recreate what happened in a particular case 7 or particular settlement. As I said a little 8 earlier, they're all -- they're unique. They're 9 synergistic. 10 And there are certain things that 11 apply to that particular settlement that may not 12 apply to others, and that's a difficult fact to take 13 into consideration in an analysis such as this. 14 CHAIRMAN LLOYD: Dr. Burke? 15 DR. BURKE: At South Coast, there are folks 16 who often come in and see me because they know that 17 my dad, for a period of his life, worked in a 18 refinery. So I have a fairly good working knowledge 19 of the refinery at the bottom of the level, not up at 20 those big executive offices, but way down there at 21 the bottom. 22 But let me share with you a 23 conversation I had about ten months ago in 24 Switzerland with the chairman of OPEC and the 25 president of the Saudi Arabian oil company. 199 1 The chairman of OPEC said, because 2 they were giving -- and I got to share this with you, 3 Doctor, because I don't think I ever told you this -- 4 he was giving compliments -- 5 CHAIRMAN LLOYD: Can you speak into the 6 microphone? 7 DR. BURKE: He was giving compliments to CARB 8 and to South Coast on their ability to regulate and 9 what they were doing with air quality. I was really 10 very impressed that the chairman of OPEC even knew we 11 existed, you know. But he went on for some time. 12 But the most relevant thing that he 13 said, as it relates to this matter, was -- and as you 14 can remember, about 11 months ago, oil prices were 15 going through the roof and gasoline prices were going 16 through the roof. Natural gas prices were going 17 through the roof. 18 And they were concerned that 19 refineries in California were ruining their 20 marketplace. They really didn't have a lot of 21 compassion for us consumers. But their marketplace 22 was being ruined. 23 And he indicated to me that OPEC 24 itself was considering establishing major offshore -- 25 offshore refining facilities to service California 200 1 because they -- as their major market in the world, 2 they didn't want the problems that they foresaw 3 coming to happen. 4 Well, fortunately for the drivers of 5 California, some terrible things happened to our 6 country but that were good for drivers. We argue a 7 lot. No matter what oil company you work for, 8 California is your largest market in the world. And 9 we have the worst air quality in the South Coast 10 Basin in the United States of America. 11 So we're your best customer; and you 12 know you're part of our problem. So I think you owe 13 us. If you mess up, you owe us 'cause we're a good 14 customer. And for a long time you got a free ride. 15 We can debate that all night. But from my 16 perspective, you got a free ride. 17 But now it's time to come up to the 18 table not, you know -- I almost threw up when you 19 told me -- told us, rather -- that you didn't want 20 the fines to affect profitability of oil companies. 21 That's, you know, that's -- that's insulting to my 22 colleagues and particularly insulting to me. 23 So I mean it's -- my sympathies, I 24 have for oil companies in some aspects. In this 25 particular case, you should just feel lucky that you 201 1 don't have me as, like, a czar so I could set the 2 fines and you don't just pick my numbers because I'd 3 be a partner 'cause you're killing me with emissions 4 or something that is equally devastating and we 5 really ought to share in the profits. 6 So, you know, I think your arguments 7 have a few holes in them. But that's just my 8 personal opinion. 9 CHAIRMAN LLOYD: Thanks, Dr. Burke. 10 DR. BURKE: Thank you. 11 CHAIRMAN LLOYD: Thank you very much, Ed. I'm 12 sorry it took so long, to keep you waiting. Thank 13 you. 14 DR. BURKE: I'm sorry I took so long. 15 CHAIRMAN LLOYD: I was talking about keeping 16 him waiting this afternoon. Craig Moyer. Jeff 17 Calender. Peter Meyers. 18 Craig, again, I'd appreciate if you 19 could -- 20 MR. MOYER: I'll keep it short. 21 CHAIRMAN LLOYD: Thank you. 22 MR. MOYER: No more than 20 minutes. 23 I'm Craig Moyer from the law firm of 24 Manatt, Phelps, and Phillips. I am here today 25 representing the Western Independent Refiners 202 1 Association. WIRA is a trade association of small 2 and independent refiners on the West Coast. These 3 are -- 4 DR. BURKE: How many of those are there? 5 MR. MOYER: There aren't very many left, Dr. 6 Burke. My membership is a lot smaller than it was 7 when I started. 8 DR. BURKE: What is it? Two or three? 9 MR. MOYER: No. There are nine still 10 operating in the State of California; about five, I 11 believe, in the South Coast Air Basin. 12 But they're still there, and they're 13 still a potent pro-competitive force. And they are 14 only refiners; that is, they make their money by 15 boiling oil -- turning crude oil into petroleum 16 products. 17 And they also supply other petroleum 18 products that aren't otherwise available in certain 19 areas. For example, small refiners manufacturer 100 20 percent of the California's Grade-80 aviation fuel, 21 aliphatic solvents, and JP4 jet fuel. Small refiners 22 also manufacturer most of the asphalt produced in 23 Southern California and much of it in Northern 24 California. 25 CHAIRMAN LLOYD: Can you focus on the 203 1 recommendations? It would be helpful. 2 MR. MOYER: Thank you. 3 The focus that -- I have two. The 4 main focus is the broad brush of the recommendation 5 about all small -- all refiners being financially 6 strong, essentially that financial -- having 7 significant resources. 8 These are family-owned businesses. 9 They have survived. They invest in the community. 10 They are a part of the community. They are not, 11 unlike the major oil companies, offshore. They make 12 their money here and only here. They are not, 13 however, sources with significant financial 14 resources. 15 And in the past, every fuel rules 16 making, your board has indeed noted -- provided 17 separate treatment for small refiners because your 18 board and staff have recognized the more difficult 19 financial condition of small refiners and their 20 important pro-competitive impact. 21 So I urge you not to turn your back on 22 that legacy by broad-brushing the refining industry 23 as being financial equals. I wish. 24 I also urge you not to send the wrong 25 message and, instead, reject the staff's 204 1 recommendation. I want to suggest to you that what 2 Ed mentioned earlier -- and I won't go over that 3 again 'cause I understand how anxious we are to move 4 on to other topics -- the staff has recommended 5 higher penalties -- and I quote -- "Whatever the 6 totality of circumstances is for a particular case." 7 I believe that that's inconsistent 8 with Section 42403(b). But, more importantly, it's 9 terrible public policy. As a parent, as a manager, 10 as an employer, I just think it's wrong and I suspect 11 you know it's wrong to respond to improved 12 performance with more severe punishment when the 13 inevitable imperfection occurs. 14 And punishment does already occur. We 15 can argue whether or not it's adequate. But I would 16 submit to you that it is adequately severe and 17 establishing minimum penalties is inappropriate 18 especially when based upon the premise that all 19 refiners are rich. That premise is simply false. 20 And with that, I'll allow you to move 21 on to other folks. I see I have three minutes. 22 CHAIRMAN LLOYD: Any questions any of you have 23 for Mr. Moyer? 24 Professor Friedman? 25 PROFESSOR WILLIAM FRIEDMAN: Mr. Moyer, I 205 1 don't -- I don't read the recommendations quite the 2 same way you do. As I understand what the staff has 3 said and is saying in writing, they're saying that 4 they ought to be punitive. If there's a violation, 5 it ought to be punitive. 6 And one of the factors to be taken 7 into account is the extent to which the violator has 8 ample financial resources. This is not unfamiliar to 9 us as lawyers at all. 10 And, obviously, a refinery, for 11 example, if they know, for $25-a-day fine or $11 or 12 $50 -- and I'm not saying this has ever occurred or 13 that they would do this -- but, hypothetically, a 14 minimal fine on a cost-benefit analysis which would 15 involve incurring many times more in costs not to 16 violate is an incentive to violate. It's a clear 17 incentive to violate. 18 And obviously one of the factors to be 19 considered among the eight is the recurrence of 20 violations, along with a number of other factors. 21 And I don't see that the staff is suggesting by the 22 phrase "whatever the totality of the circumstances 23 may otherwise be" that you don't take those into 24 account. 25 I think all the factors obviously have 206 1 to be considered. But there's no quantification 2 under the statute. 3 MR. MOYER: That's correct. And if there were 4 a penalty where somebody made a conscious decision, I 5 don't think we'd be talking about minimum penalties. 6 I think we'd be talking about intentional penalties. 7 The sentence at issue -- 8 PROFESSOR WILLIAM FRIEDMAN: Well, but 9 sometimes it's very hard to establish that there was 10 a deliberate collusive decision for a repeat 11 violation. But sometimes you have situations where, 12 without being able to establish it clearly, the 13 recurrence is such that, had it been avoided, it 14 would have cost a lot of money to avoid a violation. 15 MR. MOYER: But, recurrence, too, I agree -- 16 PROFESSOR WILLIAM FRIEDMAN: It seems to me 17 that, if the enforcing agency comes down real hard on 18 a violator that should have incurred expense upward 19 of, say, $100 a day to avoid a violation that emitted 20 poison in the air, maybe toxics, and then fines them 21 $20 a day -- they saved $80 a day. 22 And that's kind of an encouragement, 23 not a disincentive. So I think that's what the way 24 I'm reading this. It's just a rule of common or 25 ordinary sense. 207 1 MR. MOYER: The two concerns -- the sentences 2 at issue, as I see it, are that the reference in the 3 first paragraph on Page 11 -- the first paragraph 4 below "A" -- says, "The laws involved in these 5 violations protect the public health and welfare." 6 No question. 7 "And the violations cited at petroleum 8 refineries are committed by entities with 9 considerable financial resources." 10 I don't think that's the case. That's 11 our point -- 12 PROFESSOR WILLIAM FRIEDMAN: Are the smaller 13 refineries that are poorer and with limited, very 14 limited resources, committing the violations that 15 have been cited? 16 MR. MOYER: If they have committed violations, 17 there is no question but that they should be fined. 18 The question is whether -- and this 19 takes you to the second sentence -- "The staff 20 concludes that whatever the totality of circumstances 21 is for a particular case" -- whatever the totality of 22 circumstances is for a particular case -- "higher 23 minimum penalties are warranted where the violator is 24 a large source with significant financial resources" 25 having already defined all refineries as having those 208 1 significant financial resources. 2 PROFESSOR WILLIAM FRIEDMAN: Well, all right. 3 I think that's a little -- a little -- maybe there's 4 a little hyperbole in there, in that language -- 5 MR. MOYER: Well, I thank you for that. 6 PROFESSOR WILLIAM FRIEDMAN: Well, I think, 7 literally taken, I see what the concern is. Thank 8 you. 9 CHAIRMAN LLOYD: Thank you. 10 MR. MOYER: Thank you. 11 CHAIRMAN LLOYD: Yes. Sorry. Mr. McKinnon. 12 MR. McKINNON: I tend to be swayed for a 13 moment by -- there was an argument that you made that 14 Mr. Manning also made about making improvements in 15 health and safety, working on making clean diesel. 16 But I got to tell you, in listening to 17 your last argument with Professor Friedman, $11 fines 18 are $11 fines. There are poor people that pay $20 19 fines for parking; right? And they're expected to 20 pay them. 21 And so I think that we should reward 22 that there are less accidents. But I don't think I 23 can go so far as to justify $11 fines. That's a long 24 ways. 25 MR. MOYER: I don't know anything more about 209 1 the $11 fine than you do. I'll tell what. I've 2 negotiated with the South Coast Air Quality 3 Management District, San Joaquin Valley Air District, 4 your Air Resources Board and the San Francisco; and 5 I've never gotten an $11 fine. I've never been able 6 to get it that low so -- 7 DR. BURKE: If you ever get one from our 8 district, he's getting fired. 9 MR. MOYER: I guarantee I've never gotten one 10 out of Peter Mieras or Robert Kwong. So I can only 11 submit to you that that is an anomaly, at least in my 12 anecdotal experience. 13 CHAIRMAN LLOYD: Thank you. Thank you very 14 much. 15 MR. MOYER: Certainly. 16 CHAIRMAN LLOYD: Next, we have Jeff Calender, 17 Peter Mieras, Robert Kwong. 18 And, again, as a courtesy to the 19 people coming in for the 6:00 o'clock item on 20 environmental justice, I just want to let you know 21 we've been at it here since 1:00 o'clock. The board 22 is going to take about a half-an-hour break to eat 23 so, in fact, we've got the strength to sustain 24 through the evening and to give the next item the 25 attention it deserves. 210 1 So I just want to let you know. And 2 we'll probably shooting for close to 6:15, starting 3 the next item, if we can get to eat quickly. So 4 thank you. 5 MR. CALENDAR: Chairman Lloyd -- 6 CHAIRMAN LLOYD: Yes. 7 MR. CALENDAR: -- members of the board, my 8 name is Jeff Calendar. I represent Phillips 9 Petroleum Company. I want to thank you for the 10 opportunity to address you here today. 11 And I want to begin by commending your 12 staff. They've really made a great deal of effort to 13 get to know and understand more about our industry 14 and, in particular, Erik White. And we spent a lot 15 of time doing research. And we appreciate that 16 effort. 17 I am, however, here to say that we 18 oppose the staff recommendation in the report that 19 specifically says, "Higher minimum penalties are 20 warranted where the violator is a large source with 21 significant financial resources." 22 We consider that inequitable and 23 unnecessary. We are already one of if not the most 24 heavily monitored and regulated industries in this 25 state. 211 1 And I think we've made tremendous 2 progress in the last decade, by any number of 3 measures, in terms of our environmental performance, 4 whether you measure it by our toxic-release 5 inventory, our health-risk assessments, criteria 6 pollutants -- all of those have come down 7 significantly. 8 And we've made investments at one of 9 our facilities alone on the order of several hundred 10 of millions of dollars. And that hasn't been driven 11 by fines or the fear of fines. We are held to 12 increasing higher standards as the regulations and 13 monitoring have grown increasingly stringent. And 14 they continue to evolve. 15 Our regulators here locally are 16 vigilant, and they're growing more experienced and 17 better informed. And I think, as a result, we have 18 more efficient, better-informed enforcement today, 19 particularly here in the South Coast Air District, as 20 a result of their growing expertise. 21 When you look at our total fines and 22 settlements, particularly viewed on an annual basis, 23 they can be significant. But I can tell you, from 24 management's perspective, the thing they look at 25 first and most importantly is our notices of 212 1 violations and our breakdowns. 2 That's what we measure our performance 3 by. That's what our performance is measured by, 4 internally, within the organization. And that's of 5 paramount importance to us. 6 I know much has been made of this $11 7 penalty. We've heard a little bit more about it. 8 But I can tell you, from our own experience, we've 9 never had a fine that small. But there are plenty of 10 examples, with our company as well as others in our 11 industry, where we have been assessed significant 12 penalties for something that essentially had no 13 environmental impact. It was basically a paperwork 14 issue. 15 That said, we understand compliance is 16 our responsibility, whether it involves paperwork or 17 not. And we take that seriously. We comply because 18 it is the right thing to do. 19 And our employees, with the exception 20 of the one that drives home to Arizona every Thursday 21 night -- our employees all live here in Southern 22 California with their families. And they take air 23 quality and environmental compliance very seriously. 24 And it's part of our company's mission that we 25 embrace environmentally responsible operations. 213 1 With that said, we do not support the 2 staff's proposal for higher minimum penalties. But 3 we look forward to continuing to work productively 4 with our local air district and their enforcement 5 authorities to reach agreement on appropriate fines 6 based on the circumstances of individual violations. 7 Thank you. 8 CHAIRMAN LLOYD: Thank you very much. 9 Any questions? Mr. Calhoun? 10 MR. CALHOUN: Did we get a report from the 11 district on the fine that they're discussing? Or did 12 you have to go out and ask for that information? 13 MR. WHITE: Yes. We went out, and we worked 14 with the districts to collect that information. We 15 did not have already have that prior to our study. 16 MR. CALHOUN: So it isn't something that's 17 reported annually? 18 MR. WHITE: Not that I'm aware of. No. 19 CHAIRMAN LLOYD: Thank you. Thank you. 20 Peter Mieras and Robert Kwong, Bahram 21 Fazeli. 22 MR. MIERAS: Chairman Lloyd, members of the 23 board, good evening. My name is Peter Mieras. 24 And I'm the chief prosecutor for the 25 South Coast Air Quality Management District. My 214 1 office is responsible for resolving enforcement cases 2 initiated by our agency, which includes the 3 assessment of the civil penalties for violation 4 notices issued to regulated sources. 5 South Coast staff commends your board 6 for undertaking a review of field enforcement and 7 penalty assessments at petroleum refineries in this 8 state. This is certainly a worthy effort and an 9 important and timely topic, as reflected in the 10 proposed environmental policies and actions that will 11 be considered here later tonight. 12 While we believe that the draft 13 guidance strives to accurately represent the 14 penalty-assessment process for refinery violations, 15 other information not covered in the report would 16 show that our refinery penalties are consistent with 17 state law and act as a deterrent against future 18 violations. I will elaborate on this point shortly. 19 But, first, we would like to add our 20 support to the proposal that ARB staff work with the 21 staff at the three districts with refineries to 22 arrive at a common methodology for determining the 23 minimal sufficiency of the civil penalty for various 24 categories of stationary source violations. 25 As it stands now, the proposed 215 1 guidance lacks the certainty and consistency that 2 such a methodology could provide the penalty- 3 assessment process on a statewide basis. This is a 4 critical omission. 5 For if there is a perception that, on 6 a statewide basis, refinery penalties should be more 7 consistent and effective, then why stop short of 8 recommending the type of action that would 9 specifically and directly ensure that penalties for 10 refinery violations meet a minimum standard? 11 After the time and effort that has 12 gone into this study by your staff and the staff of 13 the three districts with refineries, it is not 14 helpful to be left with merely an audit of a few 15 selected enforcement files from a small number of the 16 total refineries in this state. So we support the 17 idea of working together to address this point. 18 Regarding the penalty discussion 19 contained in the report, we believe that the draft 20 guidance would benefit from further clarification as 21 to the penalties recovered in our district as being 22 described as too low. 23 For example, the report identifies 24 a -- quote -- "low" -- unquote -- $350 wastewater 25 penalty without mentioning that this notice of 216 1 violation was associated with a $514,000 settlement. 2 For another example, the report 3 identifies a "low" $500 excess-emission penalty 4 without mentioning that this notice of violation was 5 associated with a $31,000 settlement. 6 The omission of this information, as 7 well as the facts and circumstances of these 8 violations, eliminates the context that is critical 9 for evaluating the overall adequacy of refinery 10 penalties recovered in our district. 11 In closing, we recognize the 12 challenges involved with conducting a penalty-program 13 evaluation and developing useful recommendations for 14 the penalty-assessment process. We look forward to 15 working with your staff and the staff of the other 16 districts to further clarify ARB's views regarding 17 the discharge of this important responsibility. 18 Thank you for this opportunity to 19 comment on behalf of the South Coast Air Quality 20 Management District staff. 21 CHAIRMAN LLOYD: Thank you very much for 22 coming, Peter. 23 Dr. Burke? 24 DR. BURKE: I know everybody gets tired of me 25 bragging on the South Coast. But I have to say that 217 1 Dr. Wallerstein sent two of his best people tonight. 2 Peter is just an outstanding -- my nickname for him 3 is "Super Cop." And Carol Coy is here tonight. And 4 they just do incredible work. And I just wanted to 5 acknowledge my appreciation for their work this 6 evening. 7 MR. MIERAS: Thank you, Dr. Burke. 8 CHAIRMAN LLOYD: Good. Thank you. 9 Robert Kwong. And then Bahram Fazeli. 10 PROFESSOR WILLIAM FRIEDMAN: Could I ask you 11 something? 12 CHAIRMAN LLOYD: Sorry. 13 PROFESSOR WILLIAM FRIEDMAN: Did staff -- was 14 staff made aware, before now, of the -- about the 15 claimed associated settlement figures in reporting on 16 those low fines? 17 MR. WHITE: Yes. I mean most of the -- 18 PROFESSOR WILLIAM FRIEDMAN: Do you disagree 19 that that's relevant? 20 MR. WHITE: No. No. And we tried to -- while 21 it was difficult to quantify those types of impacts 22 on the overall settlement package or processes that 23 occurred, you know, we did try to qualitatively, you 24 know, recognize that, when a particular NOV is part 25 of an overall settlement package, that there are 218 1 strengths and weaknesses for all of the NOV's that 2 are a part of that that may have a bearing on the 3 overall settlement amount. 4 And the difficulties we had when we 5 tried to analyze the data such that we could look at 6 data between the districts, we needed to normalize 7 the data and try to determine an amount for each NOV. 8 And we did recognize, though, that 9 there are other factors that go into that, into the 10 settlement process that are difficult to quantify. 11 PROFESSOR WILLIAM FRIEDMAN: I didn't 12 understand that. I mean, if you report that this is 13 a low fine, for purposes of comparisons of fines -- 14 MR. WHITE: Uh-huh. 15 PROFESSOR WILLIAM FRIEDMAN: -- and if it's a 16 part, a small part, of an overall settlement that 17 generates $30,000 or hundreds of thousands for the 18 same violations, then I think maybe a footnote or 19 something to indicate -- I mean that's just -- I 20 don't know how those are arrived at and how these 21 negotiated settlements involve -- what part is going 22 to be allocated to -- quote -- "penalty" versus 23 something else. 24 UNIDENTIFIED VOICE: I don't think it's lost 25 in that this was a small part of a much larger fine 219 1 for exactly the same violation. 2 What happens is that multiple 3 violations get bundled into the same settlement. And 4 so you may have a $10,000 fine for one certain 5 violation bundled with a hundred $1,000 fines for a 6 smaller violation and then many $500 fines. 7 So we were looking at each time the 8 law was violated, which means there was a source and 9 a violation and that occurred for a day or multiple 10 days. 11 PROFESSOR WILLIAM FRIEDMAN: So the $11 fine 12 could have been part of a series of violations that 13 generated millions of dollars in penalties? 14 UNIDENTIFIED VOICE: Well, the $11 fine -- the 15 statistic was, for 38 days, it was a $450 penalty. 16 But that may have been part of a $30,000 settlement 17 with the refinery in which scores of violations were 18 settled. 19 So what we tried to do was break it 20 down. I think if you look at the average -- what was 21 the average in the district per violation day? That 22 should take all these factors in -- 23 PROFESSOR WILLIAM FRIEDMAN: What is the 24 guidance, then, that the districts are to take away 25 from this? They're supposed to consider upping the 220 1 minimums. 2 UNIDENTIFIED VOICE: Yeah. It was our finding 3 that we found many cases in which a violation day, 4 when we trace back, as best we could, how much the 5 fine was -- 6 PROFESSOR WILLIAM FRIEDMAN: For that day? 7 UNIDENTIFIED VOICE: -- for that particular 8 violation day was a low amount and did not seem, in 9 our view, given the resources of the refinery and the 10 economics of the refinery, to represent much of a 11 penalty. 12 PROFESSOR WILLIAM FRIEDMAN: But if that's 13 part of an overall negotiated package settlement, 14 that's somewhat artificial and arbitrary to simply 15 isolate it day by day. 16 MS. WALSH: Well, I believe, Professor -- 17 PROFESSOR WILLIAM FRIEDMAN: I guess I'm 18 not -- 19 UNIDENTIFIED VOICE: I guess that we would 20 agree with that in that we place language in the 21 report that indicates that. However, that's the 22 metric that the law uses for parcelling the penalty 23 out on a per-day basis. 24 And given that that is the legal 25 standard, we felt that it was a valid way or one 221 1 valid way to look at that. But when we say things 2 like the settlement process is synergistic, that the 3 numbers themselves don't speak to the strength of the 4 evidence or the other considerations that we all know 5 might go into a settlement package, we're trying 6 recognize that, that in the time in which we had to 7 do this report and the level of detail that we were 8 able to go into -- we felt the standard that we used, 9 since it was based on the statutory metric, was one 10 fair way of looking at it and gives you one sense of 11 comparison. 12 But we don't purport it's the final 13 word. And we hope that, when we do work with the 14 districts on this, that we do come up with a 15 consensus approach that takes into account these 16 other factors. 17 PROFESSOR WILLIAM FRIEDMAN: So this is an 18 analysis that's a work in progress with the 19 district -- 20 UNIDENTIFIED VOICE: Very definitely. 21 PROFESSOR WILLIAM FRIEDMAN: -- and it could 22 be a template, as indicated in the report, for other 23 industries, other areas, to achieve some kind of 24 standardization and or uniformity -- 25 UNIDENTIFIED VOICE: Most definitely. 222 1 PROFESSOR WILLIAM FRIEDMAN: -- where there 2 are similar or common factors. Okay. Thank you. 3 CHAIRMAN LLOYD: Thank you very much. 4 Robert, I would appreciate if you 5 could keep it pretty short. 6 MR. KWONG: We'll do our best. 7 CHAIRMAN LLOYD: We've got your letter. 8 MR. KWONG: Good evening, Dr. Lloyd and 9 members of the California Air Resources Board. 10 My name is Robert Kwong. I'm the 11 district counsel for the Bay Area Air Quality 12 Management District. In addition to my duties as the 13 chief legal counsel to the agency, my office is also 14 responsible for taking and resolving enforcement 15 actions and air-quality violations. 16 The district would like to first begin 17 by commending your board and the ARB staff for 18 tackling a complex and difficult task of reviewing 19 civil penalties assessed against petroleum refinery 20 facilities. The discussion that you've already had 21 indicates the level of complexity and the texture 22 involved in a lot of these settlements here. 23 I would like to give special thanks to 24 Chief Counsel Kathleen Walsh, Staff Attorney Kirk 25 Oliver, and staff members Dean Hermano and Erik White 223 1 for taking the extra step and time to work with the 2 Bay Area AQMD in gathering data helping to understand 3 how we try to put forth an effective enforcement 4 program. 5 The district supports the conclusion 6 that there should be an increase in civil penalties 7 assessed against petroleum refineries. This goal has 8 been a goal of the Bay Area AQMD as well as my own, 9 since at least 1997, when the EPA's inspector general 10 audit came out finding that our fines and penalties 11 in the State of California were too low. 12 It also is consistent with the 1998 13 ARB program evaluation of the Bay Area AQMD. And 14 this is a goal that we have made significant strides 15 in. 16 And the details of those strides are 17 indicated or at least detailed in my written comments 18 there. It is important to note that the legislative 19 analysts office -- in a January, 2001, report -- 20 specifically identified the Bay Area AQMD's civil 21 penalties program as a good model for increasing 22 civil penalties in all areas, not just petroleum 23 refineries. 24 Given all that, the district still has 25 a number of concerns -- concerns about the 224 1 statistical analysis and the rationale as well as the 2 characterization of certain larger settlements that 3 were made a part of this analysis. 4 Details of those concerns are, again, 5 in my written comments. I think it is also important 6 to look at the key table, which is the subject of a 7 lot of discussion here this evening. The table -- 8 Roman numeral one one -- "Summary of NOV 9 Settlements." 10 On Page 5 of my written comments, we 11 have redrafted that table to what we believe to more 12 accurately represent the amount and the types of 13 violations that are being settled by the districts in 14 this case. We have added a specific section dealing 15 with public nuisances. Public nuisances are those 16 violations that draw the most public and community 17 outcry, concern, and complaints. 18 And adding that into this picture is a 19 good analysis of how we are addressing community 20 concerns. And if you look at those numbers, there's 21 a great similarity between all three air districts 22 there. 23 If you look at emission-related 24 violations, you will notice that Bay Area AQMD has a 25 very robust NOV program in that we issue more NOV's 225 1 total than South Coast and San Joaquin. Now, this is 2 not to be a criticism of my fellow air districts. 3 But these levels of detail need to be 4 considered for the report to make sense and to 5 provide the appropriate guidance so that we know how 6 to do an effective air-quality program. 7 With all this, then, the district 8 welcomes and supports the executive officer of the 9 ARB's direction to have the ARB staff work with the 10 three affected air districts to create a mutually 11 acceptable methodology of measuring the effectiveness 12 of an air-quality enforcement program. 13 That way, we know specifically whether 14 we are succeeding or failing at deterring 15 noncompliance, promoting compliance, and punishing 16 the violators. And with that, I would welcome 17 working with the ARB staff. We have a good 18 relationship, and I think that the joint effort will 19 produce a program and some consistency across the 20 boards. 21 CHAIRMAN LLOYD: Thank you very much, Robert. 22 I appreciate that. 23 Dr. Burke, one question? 24 DR. BURKE: Professor Friedman always cranks 25 up my mind, you know. He starts me thinking. 226 1 Robert -- 2 CHAIRMAN LLOYD: Dr. Burke had a question. 3 DR. BURKE: -- before you go away, this chart, 4 as you say, is very similar. Now, I assume you had 5 some negotiated settlements also? 6 MR. KWONG: Yes. We have negotiated some 7 settlements. 8 DR. BURKE: What was the largest negotiated 9 settlement you had last year? 10 MR. KWONG: Last year? We have, in the last 11 year, settled with Chevron -- $500,000. 12 DR. BURKE: Okay, Peter. What was your 13 largest negotiated settlement last year? 14 MR. MIERAS: 17 million. 15 DR. BURKE: 17 million. There's a lot of 16 disparity there. 17 CHAIRMAN LLOYD: Same source? 18 Mr. McKinnon? 19 UNIDENTIFIED VOICE: It was a power company, 20 not a refinery. 21 DR. BURKE: It was -- in the Bay Area, was it 22 a power company or refinery? 23 MR. MIERAS: Refinery. 24 MR. KWONG: I think, if I might just add one 25 thing -- I think your question, Director Burke, is a 227 1 good question. And that points out the reason why 2 the joint effort from ARB and the local air districts 3 is so important so that we are measuring apples and 4 apples and oranges and oranges. 5 And being consistent that way, we have 6 no problem with the rubric being applied to us. 7 DR. BURKE: We're all for that, but we don't 8 want you to say that we're not keeping up -- 9 MR. KWONG: We're not saying that. 10 DR. BURKE: -- our end at the bottom of this 11 hill. 12 MR. KWONG: You've always kept up your end. 13 CHAIRMAN LLOYD: Well, remember. Robert was 14 trained at South Coast. 15 MR. KWONG: That's right. 16 CHAIRMAN LLOYD: Mr. McKinnon. 17 MR. McKINNON: Yeah. As someone who resides 18 downwind from the Bay Area, I would hope that the Bay 19 Area is going to take this guidance document to 20 heart. 21 MR. KWONG: We will. 22 CHAIRMAN LLOYD: Thank you. 23 I will recognize that you might use 24 just this time to give 'em the fact that I see your 25 colleagues assembling, and we have to take a break. 228 1 UNIDENTIFIED VOICE: Yeah. And I checked with 2 them. And they said it's okay. I can testify. 3 CHAIRMAN LLOYD: Remember. We have to eat 4 too. 5 MR. FAZELI: My name is Bahram Fazeli, a staff 6 researcher for the Southern California Region of 7 Communities for a Better Environment. 8 Our position is that a 9 health-protective regulatory formula is necessary for 10 an effective penalty policy. An effective penalty 11 formula against oil refineries should contain two 12 parts: First, the unfair economic benefit component 13 which accounts for the savings that a refinery has 14 incurred by violating its permit conditions; and, 15 second, an appropriate and effective punishment 16 component. 17 So the total penalty should be the 18 unfair economic benefit, to level the playing fields, 19 plus the punishment. The unfair economic benefit is 20 simply the savings that a refinery has enjoyed at the 21 risk of public health by not adhering to the permit 22 conditions. 23 For example, if a refinery has saved 24 $500,000 a year for the past four years from not 25 maintaining a pollution-control unit, they should be 229 1 charged $2 million in addition to the punishment 2 amount. 3 Now, the punishment amount should be 4 severe enough to deter the refineries from violating 5 their permits and increasing health risks to 6 community members. 7 And the punishment amount should be 8 measured based on the size of the facility, severity 9 of the pollution, and the harmful effects of the 10 pollution on the community members and especially 11 the sensitive receptors of the impacted zone -- 12 children, people with existing health conditions, and 13 others. 14 In addition, the punishment amount 15 should increase considerably for repeated violations 16 to increase the deterrent effect as it is suggested 17 in the staff recommendations. 18 You know, in driving, if you go 19 through the red light a certain number of times, the 20 DMV suspends your license. I want to emphasize the 21 fact that punishment and penalty has a very clear 22 purpose. The permit that the districts and the air 23 agency gives to the refineries is a trust. The 24 community has trusted the agency. 25 And as I said, we give you the trust 230 1 to issue a permit to a refinery. Now, if that trust 2 is violated, we think the punishment should reflect 3 that sense of violation. And it should be severe 4 enough so that the violation does not happen again. 5 If the notice of violations, for 6 example, in the Bay Area are larger than the South 7 Coast, that only indicates that the punishment amount 8 has not been large enough to deter from issuing 9 additional notices of violation. It actually serves 10 to the point we are discussing. 11 Another important aspect of penalty 12 money is planning for beneficial ways to spend it. 13 Penalty money should be applied directly to improving 14 the public health of the impacted communities. The 15 supplemental environment projects of U.S. 16 Environmental Protection Agency is a good model to 17 consider. 18 Impacted communities have expressed 19 this view repeatedly that the penalty money should be 20 allocated to relieving the environmental burden of 21 community that is being impacted by the penalized 22 refinery. In other words, the penalty money should 23 not go into some general fund. And it should not be 24 diverted to projects that may not directly benefit 25 the impacted community. 231 1 And we also hope to see similar 2 guidelines for other category polluters. And I also 3 want to make sure another point that Mr. Kenny 4 mentioned about sitting down with the districts and 5 the refineries and setting the penalties and I hope 6 the community and environmental groups will be part 7 of that discussion too. Thank you. 8 CHAIRMAN LLOYD: Thank you, Bahram. 9 Questions? Professor Friedman? 10 PROFESSOR WILLIAM FRIEDMAN: I think, from my 11 perspective, much of this derives from our meeting, 12 our outreach meeting in Richmond about a year ago or 13 so, where we heard complaints from the community that 14 there were violations that they didn't believe were 15 being enforced or detected or fined. 16 And it developed that the board felt 17 it was time to do a study, an analysis. And the 18 staff has done it. And we've now got their report. 19 On the one hand, I think it's very 20 useful to learn that there are enforcement mechanisms 21 and procedures in all of the districts that have 22 refineries. There are inspections that appear -- a 23 system that appears to be adequate and is 24 consistent -- consistently operating. 25 There is a differential in fines. And 232 1 I think there's some difficulty in doing an 2 apples-to-apples analysis of those. But -- and 3 there are recommendations. But, again, this is 4 leading to further dialogue and will further evolve 5 and be refined, I gather. And I think that's all to 6 the good. 7 So I think we're making progress. And 8 I think the communities really are being heard. 9 We're listening. We're learning. And, hopefully, 10 this will benefit everybody in breathing air, 11 particularly those closest to the refineries. But I 12 just wanted to say that because I wanted to put it in 13 kind of my context of how I see this having 14 developed. 15 And I don't think there's any action 16 to be taken, but I hope to look at a report of 17 further progress as you develop specific -- a more 18 specific matrix for doing the comparisons and doing 19 the reporting. 20 You asked earlier, Dr. Burke -- I 21 think it was -- or maybe it was Joe -- whether we had 22 any further -- prior information on these things. 23 Apparently there is no automatic reporting. There's 24 no annual district reports of enforcement. 25 And I don't know that there needs to 233 1 be, but I think it's high time that we've been doing 2 what we're doing. 3 CHAIRMAN LLOYD: Thank you. Thank you very 4 much. 5 I'd like to read a letter I got from 6 our colleague, Supervisor DeSaulnier. 7 "Dear Alan and my fellow Air Resources 8 Board colleagues: I regret that circumstances 9 prevent me from joining you today, but I wanted to 10 take this opportunity to share with you my position 11 on this important agenda item. 12 "I wish to express my strong support 13 of the draft recommendation on guidance for penalty 14 assessments of petroleum refineries. Clean air will 15 not be achieved without strict enforcement of air 16 pollution regulations. 17 "Adequate penalties are critical 18 incentives for compliance with clean air standards. 19 I am fully committed to the assessment and collection 20 of higher penalties for violations of air pollution 21 regulations at refineries." 22 Signed, "Mark DeSaulnier, Board of 23 Directors of the Bay Area Air Quality Management 24 District and member of the board." 25 I think it's -- oh, Joe -- 234 1 Mr. Calhoun. 2 MR. CALHOUN: I wanted to add one thing. I 3 think this is a very good report from the staff. And 4 I'd like to see this done, maybe not annually or -- 5 but periodically anyway. I think it would be very 6 informational, be very informative. 7 CHAIRMAN LLOYD: Thank you. 8 UNIDENTIFIED VOICE: Certainly, I agree. 9 CHAIRMAN LLOYD: Again, I think this is not a 10 regulatory item. It's not necessary to officially 11 close the record. I guess there's no resolution. So 12 we've no need to take a vote on this at all. I 13 think, again, I'd like to congratulate staff and 14 reinforce I think what Mr. Kenny said early on. This 15 is the start of a process here where we need to get 16 together with the districts and all the stakeholders 17 to move ahead on that. 18 So with that, I would close this 19 agenda item. And, again, for those people late 20 arriving, the board has not eaten yet and needs to be 21 fed to provide the fuel for the evening. We're going 22 to adjourn now till hopefully we'll be back at 6:30. 23 (Dinner recess.) 24 \\\ 25 \\\ 235 1 EL MONTE, CALIFORNIA; THURSDAY, DECEMBER 13, 2001 2 6:51 P.M. 3 4 CHAIRMAN LLOYD: Good evening. And welcome to 5 the continuation of the California Air Resources 6 Board December 13 public meeting. I'm pleased to see 7 so many community members in the audience tonight and 8 look forward to hearing all of your comments. 9 And let me extend a warm welcome to 10 Senator Romero, in whose district we are. It's a 11 pleasure to be here this evening. And I know we're 12 looking forward to hearing from the senator shortly 13 and also other representatives of the state 14 legislature. 15 Again, we're pleased that all of you 16 could join us on this very important occasional as we 17 consider environmental justice policies and actions 18 for the implementation of the Air Resources Board. 19 The bills that you and your colleagues 20 authored and that Governor Davis signed into law were 21 a tremendous inspiration to us and made it possible 22 to move the environmental justice agenda ahead. We 23 thank you all for your foundation and vision. 24 While I'm still on welcoming remarks, 25 let me express my gratitude to the members of the 236 1 Environmental Justice Advisory Commission or, as we 2 fondly call them, the "NAP" stakeholders group, many 3 of whom will be testifying tonight. 4 I know that each of you labored long 5 and hard over the proposed policies and that, without 6 your contribution, we could not be all where we are 7 today. Again, I thank you all for your comments. 8 Clearly environment justice is an important issue to 9 Governor Davis, the state legislature, the state 10 agencies, and all the affected stakeholders and 11 impacted communities. 12 But if you'll indulge me, for just a 13 moment, I would like to say a few words about why 14 this is very important to me personally. When I 15 first took this appointment in February of 1999, I 16 thought we needed to do a better job of understanding 17 all of the air pollution that people are breathing 18 where they live, work, play, and go to school. It 19 seemed that we weren't capturing all of these effects 20 because we tended to look at pollutants, one 21 pollutant at a time. 22 At that time, I created the office of 23 community health and hired Dr. Prasad and committed 24 ourselves to understanding cumulative health impacts 25 better and started working on technical tools to do 237 1 that. Since then, I've had the opportunity to 2 develop with far more personal perspective on what 3 these issues are all about. 4 I began going to town hall meetings, 5 the second of which was with Senator Romero, and 6 listened carefully to what people were saying. What 7 I heard was that there were still intensely polluted 8 areas despite all the progress we've been making on a 9 statewide or regional level. 10 And I heard people's deep concerns and 11 fear about what this meant for their families, for 12 their children growing up in such environments. 13 Then I had the chance, most recently, 14 to take the toxics tour led by Carlos Porras of 15 Communities for A Better Environment. I saw 16 firsthand what some of these communities are up 17 against on that tour. 18 And it made a big impression on me 19 because it's obvious that these communities are 20 exposed to higher levels of pollution and that 21 something needs to be done. The problem is figuring 22 out what it is and how to get started. 23 It's also complicated because we have 24 competing societal objectives in some cases. For 25 example, most of the egregious emission source in the 238 1 neighborhoods that we visited recently were various 2 types of recyclers. Clearly we want those businesses 3 to survive so we can reduce the burden on landfills, 4 recover valuable materials, and reduce emissions on 5 the production side. 6 But the recyclers also need to be 7 regulated so they aren't putting innocent nearby 8 neighbors at risk. It's a tough, tough problem. 9 Tonight, we're making a start by considering 10 environmental justice policies and actions for the 11 board and for the local air districts we oversee. 12 We each have an important role to 13 play, and a strong partnership with local districts 14 is key to meeting our environmental justice goals. 15 We're also working with our sister agencies 16 responsible for water quality, toxics waste, and 17 health-hazard assessment as part of the Cal-EPA 18 working group on environmental justice. 19 This group will provide 20 recommendations to Secretary Hickox, California 21 Secretary of Environmental Protection. One of the 22 goals of this effort is to coordinate environmental 23 justice efforts among the various Cal-EPA boards and 24 departments. I know we'll hear more from Nancy 25 Sutley this evening. 239 1 I know we've a number of people who 2 wish to testify, including, again, I'm pleased to 3 see, again, our agency lead with Cal -- with US-EPA 4 Region 9 and the local district -- the South Coast 5 AQMD. 6 Ask Mr. Kenny to begin the staff 7 presentation. 8 MR. KENNY: Thank you, Mr. Chairman and 9 members of the board. Proposed policies and 10 associated action items provide the framework for 11 incorporating environmental justice into our programs 12 consistent with the directives of state law. 13 These policies would apply to all 14 communities in California but recognize that extra 15 efforts may be needed in some communities due to 16 historical land-use patterns, limited participation 17 in public processes in the past, and a greater 18 concentration of both mobile and stationary sources 19 in these communities. 20 While these policies focus on the ARB 21 as an organization, we are committed to working as 22 partners with local air districts, local land-use 23 agencies, and all other stakeholders. We think that 24 we can successfully implement the environmental 25 justice policies and actions. 240 1 As is appropriate, these policies 2 touch virtually every ARB program. We want to have 3 an environmental justice perspective as we prioritize 4 and carry out our program activities. We have 5 already begun to do that. And the document before 6 you includes a number of actions that are currently 7 already underway. 8 With that introduction, I'd like to 9 ask Mr. Mike Waugh to make the staff presentation. 10 MR. WAUGH: Thank you, Mr. Kenny. Good 11 evening, Mr. Chairman and members of the board. 12 We're here to present to you, for your approval, the 13 environmental justice policies and actions. 14 These policies have been developed 15 over the past year with substantial input from 16 community groups, local air districts, environmental 17 organizations, business representatives, and other 18 regulatory agencies. 19 These proposed environmental justice 20 policies represent an institutional change at the 21 ARB, a new way of thinking about the impacts of our 22 actions. 23 Through these policies, the Air 24 Resources Board will be among the first agencies to 25 make environmental justice considerations a standard 241 1 practice in the way we do business. We've already 2 dedicated significant resources towards this effort 3 and will continue to do so through these policies. 4 The ARB's most important role is to 5 protect public health. As the state air pollution 6 control agency, we work to provide safe, clean air 7 for all Californians. Our primary responsibilities 8 are to reduce emissions from motor vehicles, fuels, 9 consumer products, and sources of air toxics. 10 In addition, we oversee compliance 11 with state and federal clean air laws. We also work 12 as clean air partners with local agencies. The 35 13 local air districts have the primary responsibility 14 of issuing and enforcing permits for local industrial 15 and commercial facilities. 16 Local land-use agencies and 17 transportation agencies are directly responsible for 18 the siting of facilities and transportation projects 19 such as new buslines, rail projects, and highway 20 expansion. 21 While air quality is improving 22 throughout California, the health effects of air 23 pollution are still of concern. More frequent and 24 severe asthma attacks and impaired lung-growth 25 function in children and even premature death are all 242 1 associated with one or more air pollutants in the 2 mixture we call "smog." 3 Most areas of California still exceed 4 health-based standards for ozone and particulate 5 matter; and public health risk from air toxics 6 remains too high. To meet our public health goals, 7 we must ensure that we focus our efforts to improve 8 air quality not only on a regional scale but also at 9 the community level. With that in mind, ARB 10 established its community health program in 1999. 11 In 1999, Chairman Lloyd identified 12 community health as an agency priority by appointing 13 Dr. Shankar Prasad as the community health advisor. 14 The goal is for all Californians to share in the 15 air-quality benefits of our programs. 16 The first special community-monitoring 17 effort began that fall in the Barrio Logan area of 18 San Diego. A couple of months later, the ARB invited 19 representatives from community groups, environmental 20 organizations, local air districts, the business 21 communities, and other regulatory agencies to work 22 with us to develop the neighborhood-assessment 23 program. 24 In the summer of 2000, ARB staff 25 released its community health agenda through the 243 1 "Clean Air for California Communities" document. We 2 began working on environmental justice policies about 3 a year ago. 4 And in the spring of this year, we 5 initiated an extensive outreach effort on the policy 6 concepts, culminating in the public release of the 7 "Proposed Environmental Justice Policies and Actions" 8 on November 13 of this year. That's what we have 9 before you for your approval. 10 The proposed policies and actions are 11 based on the definition of "environmental justice" 12 found in state law, which describes "environmental 13 justice" as "the fair treatment of people of all 14 races, cultures, and incomes with respect to the 15 development, adoption, implementation, and 16 enforcement of environmental laws, regulation, and 17 policies." 18 Our proposed environmental justice 19 policies establish a framework for incorporating 20 environmental justice into ARB's programs consistent 21 with directives of state law. We're also in lockstep 22 with other legislative initiatives. Bills offered 23 between '99 and this year by Senators Solis, Escutia, 24 and Alarcon require the California Environmental 25 Protection Agency to convene internal and external 244 1 working groups to address environmental justice. 2 Assembly Bill 1390, offered this year 3 by Assemblyman Firebaugh, directs 50 percent of 4 incentive funds such "Carl Moyer" and school bus 5 funds to communities heavily impacted by air 6 pollution. Under prior legislation, the Office of 7 Planning and Research was designated as the 8 coordinating agency in state government for 9 environmental justice programs. 10 AB-1553, authored this year by 11 Assemblyman Keeley, requires the Office of Planning 12 and Research to develop an environmental justice 13 element for county and city general plans. 14 The legislation also establishes 15 directives that we must follow. Specifically, our 16 regulatory activities must ensure the fair treatment 17 of people of all races, cultures, and income levels; 18 promote fair enforcement of environmental statutes 19 and regulations; ensure greater public participation; 20 and improve research and data collection. 21 In developing these policies, we 22 conducted an extensive outreach effort. We worked 23 with communities across the state, participating in 24 over 50 meetings. We listened to neighborhood 25 concerns and solicited input on the proposed 245 1 policies. We also worked closely with the 2 neighborhood assessment program stakeholders' group. 3 As a result of these efforts, we 4 developed seven proposed policies. Each one is 5 supported by specific action items. I'm going to 6 discuss each policy and give a few examples of the 7 action items associated with that policy. 8 These action items show how this new 9 environmental justice perspective is cutting across 10 all ARB program areas. 11 The first policy is an overarching 12 policy. And it reads, "It shall the ARB's policy to 13 integrate environmental justice into all of our 14 programs, policies, and regulations." 15 ARB programs are comprehensive and 16 include motor vehicles, consumer products, 17 air-quality planning, toxics, research, education, 18 enforcement, and air monitoring. 19 The proposed environmental justice 20 policy covers the full spectrum of these ARB 21 activities. In each program area, we will keep an 22 environmental justice perspective as we set 23 priorities and assess the impacts of our programs and 24 regulations. 25 For example, in our air-monitoring 246 1 program, we're currently conducting a number of 2 special monitoring studies to address community 3 issues. These unique monitoring studies supplement 4 our extensive statewide monitoring network by 5 focussing on communities where environmental justice 6 or children's health concerns have been expressed. 7 Using this data, we can determine if 8 our existing monitoring network accurately reflects 9 the levels of air pollutants that community members, 10 including children, are breathing. And as the 11 results become available, we'll have local 12 air-quality information to share with community 13 residents. 14 In addition, we'll be able to compare 15 the neighborhood data to the relevant regional data, 16 thus providing an indication of different exposures 17 among communities. 18 Our second policy deals with outreach 19 and education. And it reads as follows: "It shall 20 be the ARB's policy to strengthen our outreach and 21 education efforts in all communities, especially 22 low-income and minority communities, so that all 23 Californians can fully participate in our public 24 processes and share in the air-quality benefits of 25 our programs." 247 1 Underlying these proposed 2 environmental justice policies is a recognition that 3 we need to engage community members in a meaningful 4 way as we carry out our activities. We want to 5 enhance public participation in state and local 6 decision-making processes. 7 We need to make information more 8 accessible to community residents so they can take a 9 more active role in decisions affecting air quality 10 in their communities. 11 We'll work as partners with the local 12 air districts to enhance public outreach and 13 education in neighborhoods across the state. 14 To better understand the concerns of 15 community residents, we also propose to establish, 16 within the chairman's office, a specific contact 17 person for environmental justice issues. 18 Traditionally, we've not reached out to communities 19 as we've conducted our business. 20 However, as we developed our proposed 21 policies, we met with community groups across the 22 state. We'll continue to hold meetings in 23 communities affected by our programs and regulations 24 at times and places that encourage public 25 participation such as evenings and weekends at 248 1 centrally located community meeting rooms, libraries, 2 and schools. 3 We've made air-quality and regulatory 4 information available to the public in the past, but 5 we want to make that information more available to 6 communities in an easily understood and useful 7 format, including fact sheets, mailings, and 8 brochures in English, Spanish, and other languages as 9 needed. 10 We're redesigning our community health 11 website to make it more user friendly and powerful. 12 This website will include information on children's 13 health issues, neighborhood air-monitoring results, 14 pollution prevention, health-risk reduction, and 15 environmental justice activities. 16 Policy 3 addresses our commitment to 17 improve air quality in a variety of ways at the 18 community level. 19 It reads, "It shall be the ARB's 20 policy to work with local air districts to meet 21 health-based air-quality standards and reduce health 22 risks from toxic air pollutants in all communities, 23 especially low-income and minority communities, 24 through the adoption of control measures and the 25 promotion of pollution-prevention programs." 249 1 Permitting and reducing air pollution 2 is the ARB's highest priority. As we have discussed 3 before, we've made progress. But we need to do more 4 to reduce public exposure to air pollutants. 5 Much of our past efforts have been 6 focussed on programs designed to reduce air pollution 7 on a regional level. Now we're also looking at 8 specific air pollution reductions at the community 9 level. 10 Our proposed environmental justice 11 policies will change how we prioritize and develop 12 control measures and pollution-prevention measures in 13 the future, taking into account neighborhood impacts. 14 We'll focus our efforts on those pollutants that 15 account for the majority of public exposure and 16 public health risks. 17 For example, one of the major efforts 18 that we have is the ARB clean-air plan. The ARB 19 clean-air plan provides an overall framework for our 20 future efforts to improve air quality at both the 21 regional and community levels. It covers all sources 22 of air pollution. 23 For the first time, our clean-air plan 24 will have an environmental justice element that will 25 help prioritize our activities to reduce public 250 1 exposure to toxic air pollutants. Underlying the 2 clean-air plan is a push for zero and near-zero 3 technologies. 4 As we move forward with these 5 technologies, we'll look for new opportunities to 6 apply them in communities substantially impacted by 7 air pollution -- for example, converting existing 8 postal-delivery vehicles to electric vehicles. We 9 expect to bring the clean-air plan to the board late 10 next spring. 11 ARB's toxics program is a coordinated 12 effort to evaluate and reduce toxic air pollutants 13 from a variety of sources. Since 1990, the estimated 14 cancer risk from toxic air pollutants, measured 15 statewide, has been reduced 45 percent. 16 The board has adopted measures that 17 have resulted in cleaner cars and fuels, air-toxics 18 control measures that have reduced emissions of toxic 19 air pollutants from industrial facilities and 20 pollution-prevention measures that have reduced 21 emissions from consumer products and other sources. 22 We propose to focus more of our 23 efforts within the toxics program to tackling those 24 pollutants that are present in many neighborhoods 25 across the state and those pollutants identified as 251 1 potentially causing infants and children to be more 2 susceptible to illness. 3 Many of the comments we received, 4 during our outreach efforts for these policies, 5 express concern about diesel particulate. And it's 6 our most important priority for reducing toxic air 7 pollutants. We're reducing diesel particulate 8 through a combination of incentives, enforcement, and 9 rule-making. 10 Incentives will continue to be an 11 essential part of our diesel-risk-reduction efforts; 12 and, as I discussed before, Assemblyman Firebaugh's 13 initiative will direct incentive funds to communities 14 heavily impacted by air pollution. 15 As far as rule-making activities, the 16 first diesel-risk-reduction rules will be focussed on 17 refuse haulers, gasoline tanker trucks, and 18 stationary engines -- sources mostly located in 19 communities. 20 In addition to our efforts on these 21 diesel particulates, we're pursuing other measures as 22 well. The board recently approved a 23 pollution-prevention measure to remove chromium and 24 cadmium from auto-refinishing products. And we're 25 currently evaluating additional opportunities to 252 1 reduce emission from chrome platers and dry cleaners 2 to take into account the proximity of these sources 3 to neighborhood residents. 4 We're also looking at a pollution- 5 prevention measure for composite wood products, such 6 as plywood and particle board -- materials found in 7 portable classrooms as well as houses. 8 For the first time, through these 9 policies, we'll specifically evaluate environmental 10 justice considerations as part of the rule-making 11 process. 12 Policy 4 is concerned with fair 13 enforcement. It reads: "It shall be the ARB's 14 policy to work with the local air directs in our 15 respective regulatory jurisdictions to strengthen 16 enforcement activities at the community level across 17 the state." 18 We're committed to working with local 19 air districts to improve statewide compliance for all 20 air pollution sources, whether under ARB or district 21 jurisdiction. 22 We want to assure that all complaints 23 are promptly investigated and that feedback is 24 provided to the public on the actions taken in 25 response to those complaints. 253 1 Also community residents are 2 interested in local enforcement activities. So we're 3 going to work with the local air districts to improve 4 accessibility of information regarding those 5 enforcement activities, including notices of 6 violations, monetary penalties, and other settlement 7 of violations. 8 And we'll review our own enforcement 9 activities and redirect efforts where we can achieve 10 a more direct community benefit. 11 For example, earlier this year, we 12 expanded our roadside heavy-duty diesel-vehicle 13 inspection program to include vehicles travelling 14 through low-income and minority communities across 15 the state, not just those travelling on the highways. 16 This is an example of identifying an opportunity in 17 an existing program to reduce air pollution at the 18 neighborhood level. 19 In addition to enforcement activities, 20 we're committed to improving the process for dealing 21 with public air pollution complaints. We recognize 22 that the local air districts are the primary contacts 23 for air pollution complaints because they enforce air 24 pollution rules on local facilities. 25 We're proposing to work with local air 254 1 districts to develop an enhanced protocol for all of 2 us to more effectively and efficiently resolve air 3 pollution complaints. As part of that process, we'll 4 continue to maintain our complaint lines in English 5 and Spanish. 6 The four previous policies have 7 focussed on how we've expanded our existing programs 8 by incorporating environmental justice. 9 Policy 5 reads, "It shall be the ARB's 10 policy to assess, consider, and reduce cumulative 11 emissions, exposures, and health risks when 12 developing and implementing our programs." 13 To reduce cumulative health risks, we 14 must consider impacts from all sources of air 15 pollution. We'll look for new opportunities to 16 reduce cumulative health risk in all communities and 17 to achieve emissions reductions where such reductions 18 are shown to benefit public health. 19 We'll need to prioritize and focus our 20 resources accordingly. Since much of this effort 21 will depend on information available at the local 22 level, we'll work closely with the local air 23 districts on these activities. 24 We've used the term "emissions 25 exposure and health risks" in this policy to 255 1 acknowledge that all three are inextricably linked. 2 Reducing emissions reduces public exposure which, in 3 turn, reduces public health risks. As I just 4 mentioned, we'll continue to focus our efforts on 5 emissions reductions that result in the greatest 6 public health benefit. 7 As a first step in considering 8 cumulative health risks, we've just placed, on the 9 ARB website, maps showing estimated cancer health 10 risks on a regional basis, using best available 11 scientific methodologies. 12 When you first click on this web page, 13 it will look like this. Then scroll down to see the 14 whole map. This map shows where current data 15 suggests areas of higher cumulative health risks. 16 This map and others to follow is primarily driven by 17 diesel particulate and by benzene and "one three 18 butadiene" from gasoline-powered motor vehicles. 19 The map also gives a relative idea of 20 how some areas of the state compare to others. The 21 purple areas are areas where the cancer risk is 22 estimated to be above 250 in a million, assuming a 23 70-year exposure. The teal areas are less than 250 24 in a million, and the white areas are undergoing 25 modelling at this time. 256 1 This is 1990. If you click on other 2 years, you'll get an idea how cumulative health risks 3 are expected to decrease over time, especially when 4 diesel particulate is substantially reduced. Here's 5 1996, 2010 without diesel controls, and 2010 with 6 diesel controls. 7 You can see the high-risk areas 8 shrinking considerably. You can also look at a 9 regional scale -- in this case, 10 Southern California -- 1990, '96, 2010, 2010 with 11 diesel controls. Finally, you can look even more 12 closely at some cities. Here's Central Los Angeles. 13 Again, 1990, '96, 2010, and 2010 with diesel 14 controls. 15 But this is just the start. We're 16 moving beyond a regional scale and developing 17 technical tools for performing cumulative assessments 18 on the neighborhood scale through our Neighborhood 19 Assessment Program. 20 Much of our assessment work to date 21 has been related to the neighborhood program efforts 22 in the Barrio Logan area of San Diego. But we've 23 just begun another neighborhood assessment in 24 Wilmington here in the South Coast. 25 We'll use information gathered in this 257 1 Neighborhood Assessment Program to jointly develop, 2 with local agencies, technical tools that will allow 3 cumulative public health impacts to be assessed in 4 any California community. These tools will allow us 5 for the first time to assess neighborhood-level air 6 pollution impacts and will include enhanced-emissions 7 inventory and modelling techniques. 8 It will be state of the science. And 9 because these tools will be unique and precedent 10 setting, we'll have them peer reviewed. 11 This slide shows one of the modelling 12 tools. The lines represent how air pollution moves 13 through a community. Together these new tools will 14 map out cumulative risk at the community level and 15 will provide information that will lead to better 16 public health decisions, which brings us to our next 17 proposed policy. 18 Policy 6: "It shall be the ARB's 19 policy to work with local land-use agencies, 20 transportation agencies, and air districts to develop 21 ways to assess, consider, and reduce cumulative 22 emissions, exposures, and health risks from air 23 pollution through general plans, permitting, and 24 other local actions." 25 We're proposing to work with local air 258 1 districts, land-use agencies, school districts, 2 transportation agencies, and others to develop ways 3 to incorporate cumulative-air-pollution-impacts 4 analyses into local air district and land-use agency 5 processes. 6 We'll use the new technical tools 7 jointly developed under Policy 5 as a basis for this 8 effort. In this process, we want to make sure that 9 local permitting and land-use issues are addressed 10 from a broad programmatic perspective rather then a 11 case-by-case analysis. 12 Our goal is to provide certainty to 13 the local agencies, the business community, and the 14 public that decisions regarding cumulative impacts 15 are addressed fairly and consistently. 16 The last of the 7 proposed policies 17 recognizes the need for more research on cumulative 18 health impacts at the neighborhood level. It reads, 19 "It shall be the ARB's policy to support research and 20 data collection needed to reduce cumulative 21 emissions, exposure, and health risks as appropriate 22 in all communities, especially low-income and 23 minority communities." 24 The ARB's health-research program 25 continues to advance our ability to identify and 259 1 understand air pollution's health effects. However, 2 more research is needed to better characterize the 3 variety of potential air pollution exposures within 4 specific communities and people's health status as it 5 relates to air pollution. 6 As you're aware from previous 7 briefings, there are a number of important ARB 8 research activities taking place today investigating 9 the link between air pollution and health. But 10 additional research needs to be conducted for us to 11 better understand cumulative exposures and health 12 impacts caused by air pollution. 13 We propose to support additional 14 research to further investigate the health effects of 15 short-term exposures to air pollution, develop 16 better methods to measure community and personal 17 exposure to air pollutants through new monitoring 18 techniques and the use of biomarkers, and investigate 19 relationships between exposure and community health 20 effects. 21 Obviously these efforts are 22 particularly dependent on the availability of 23 research funds. 24 As we move forward to incorporate 25 environmental justice into our programs and policies, 260 1 we face a number of challenges. There's a lot of 2 work to be done. To prioritize that work, we'll 3 develop an annual work plan to identify our 4 environmental justice priorities for the coming year. 5 In addition, we'll present annually, to the board, a 6 status report on our progress. 7 We understand the effort involved in 8 incorporating environmental justice into ARB 9 programs. However, we acknowledge that it's our 10 responsibility to communities across the state to 11 ensure fair treatment for all Californians as we 12 conduct our business as a public health agency. 13 Therefore, we recommend that the board 14 approve the proposed environmental justice policies 15 and actions. Thank you. 16 I believe Mr. Kenny has a few other 17 comments. I would like to turn it back over to him 18 if I may. 19 MR. KENNY: I do have just a couple of 20 comments. One of the things I wanted to highlight 21 for the board is probably one of the significant 22 issues that will be presented to you tonight. 23 Throughout our policies, what we refer to quite 24 routinely is the phrase "all communities, especially 25 low-income and minority communities." 261 1 We use that phrase because these are 2 environmental justice documents. And we also believe 3 that it was relevant and important to provide a focus 4 to specific communities that we believe needed some 5 additional attention. 6 At the same time, you will hear 7 testimony, I believe, throughout the evening that the 8 statutory language uses the word "'including' 9 low-income and minority communities" as opposed to 10 "especially." And so I wanted to highlight that 11 because I do believe a number of witnesses will 12 comment on that specific issue. 13 CHAIRMAN LLOYD: Thank you very much. 14 And thank you for an excellent staff 15 presentation. Very good. 16 I think, Dr. Burke, if you just -- 17 DR. BURKE: Well, can we get out of the box 18 here? 19 CHAIRMAN LLOYD: Well, I know that I would 20 like to make sure that Senator Romero and Assemblyman 21 Firebaugh -- I know Senator Romero has some time 22 constraints. So I would like you to make comments 23 and then followed by Assemblyman Firebaugh and then 24 Dr. Burke. Sorry. 25 DR. BURKE: I was just going to say, for our 262 1 legislators and people in the audience, I think they 2 might be interested in knowing who these people are 3 that are sitting at this table, you know, what they 4 do for ARB. 5 CHAIRMAN LLOYD: That may be after. 6 Senator Romero. 7 SENATOR ROMERO: Thank you very much. 8 As you can tell, I have laryngitis. 9 And I'm at this meeting tonight. So that tells you 10 how closely I'm watching this and how important this 11 issue is. 12 Also a lot of folks here have waited 13 almost an hour to hear the presentation, including 14 myself. So, again, that reiterates how important 15 this particular hearing is and the implications of 16 the policies that you will adopt this evening. 17 I'm here this evening for a number of 18 reasons including, of course, this is my Senate 19 district. This is the 24th Senate District. El 20 Monte is the hub of this district. And in that map, 21 we're in the purple section, most of the time. 22 I think it's very fitting the issue of 23 environmental justice be addressed and discussed here 24 in El Monte. More than 92 percent of El Monte's 25 population is made of up individuals from different 263 1 ethnic groups. 2 Latinos, alone, account for 73 percent 3 of El Monte's population and another 19 percent are 4 Asians. And when we talked about the language 5 materials, I would urge you to not only include in 6 Spanish but also Mandarin and Vietnamese, Laotian. 7 We've got a number of languages here in the San 8 Gabriel Valley. 9 So this community especially will be 10 very heavily impacted by decisions you make here this 11 evening. I'm in support of the proposals as they've 12 been generated. I was actually quite surprised when 13 I arrived this evening and learned that there was 14 some debate and discussion and even some negotiations 15 going on to -- in my view, to diminish and to dilute 16 the strength of these policies that have been brought 17 forward. 18 I urge you to keep the language 19 intact, to keep the attention on "especially," and to 20 not dilute the significant work that we have done in 21 moving the issue of environmental justice in 22 California to really be the true, I think, standard 23 bearer for the rest of the nation. 24 So I urge you to adopt the policies as 25 is and to resist the effort to dilute and take us 264 1 back a few steps, I believe. 2 The San Gabriel Valley that I 3 represent in East Los Angeles has unique air issues 4 that deserve your attention and sensitivity to 5 environmental justice issues. 6 This area is home to several air toxic 7 hot spots, as I call them, including large urban 8 landfills. And I'm very pleased to learn that you 9 did talk about -- mention the landfills, Dr. Lloyd, 10 in your presentation -- the recycling plants. 11 Here, in my area, just a few minutes 12 from where we are sitting, indeed, the issue of 13 landfills is real. The Puente Hills landfill is the 14 largest operative landfill in the nation. And that's 15 just minutes from where we sit this evening. 16 We could take a look at a number of 17 recycling centers and other landfills in this area, 18 including, of course, the closed but still polluting 19 BKK site in West Covina -- also in my Senate 20 district. 21 So I'll talk a little bit more about 22 that in a moment. But these challenges that are 23 brought forward do present very unique opportunities 24 for the board to assure that environmental justice 25 exists in the San Gabriel Valley and the rest of L.A. 265 1 County -- and, of course, the rest of the state -- 2 and that no minority or low-income community is 3 disproportionately negatively affected by actions of 4 the board of the South Coast Air Quality Management 5 District. 6 I want to comment this evening briefly 7 on your proposed policies and actions for 8 environmental justice. And I am very encouraged by 9 your environmental justice proposal as is without the 10 dilution. I think it seems to be a well-thought-out 11 document. And I look forward to working with you in 12 its full implementation. 13 I think it's critical that this 14 proposal includes the following: The enhanced 15 enforcements that you seek. Where there are air 16 violations, the board and the South Coast AQMD must 17 pursue enforcement actions, especially to protect 18 low-income and minority communities that do feel the 19 brunt of the effects of these violations. 20 Secondly, I applaud and support 21 increased research and data collection. I'm a 22 university professor myself and know well the meaning 23 of having meaningful data upon which we can make a 24 good policy and the implications that draw from it. 25 There's a need to incorporate environmental justice 266 1 into all policies and programs of the board. 2 The board must aggressively look at 3 all of its programs and policies on an ongoing basis 4 because these do change and objectively determine an 5 act on potential environmental justice issues. The 6 reduction of cumulative emissions exposure and health 7 risks in low-income and minority communities -- this 8 must overall be the objective of the proposal. 9 So I'm glad to see these proposals 10 addressed in your document this evening. However, as 11 chair of the Senate Select Committee on Urban 12 Landfills, I do ask that you also seriously consider 13 the landfill issues and the recycling issues relative 14 to environmental justice. Take a look at my Senate 15 map, and you're going to find a whole lot of 16 landfills and a whole lot of recycling centers. And 17 then take a look at the demographics of this area. 18 And environmental justice will be right up there. 19 That, you cannot negate. 20 As I indicated, Puente Hills is only 21 minutes from where we meet tonight. Within a few 22 miles of us tonight, there are hotels and golf 23 courses built on top of closed landfills. These are 24 minutes from this meeting place tonight. I 25 mentioned, of course, BKK in West Covina. And all of 267 1 these present potential threats to air quality. 2 The Los Angeles basis is a crowded 3 urban area like no other in California or the world. 4 And this creates unique challenges for how we handle 5 our municipal solid waste. 6 In the LA area, as you probably know, 7 we have landfills located immediately adjacent to our 8 homes and schools and places of worship. We have 9 refuse-collection trucks driving our streets and 10 highways and neighborhoods, putting extraordinary 11 emissions into the air. 12 Landfills generate incredible amounts 13 of methane -- methane which creates greenhouse risks 14 and other risks to all others near landfills. And 15 landfill odors, of course, are a very common 16 complaint filed by residents whose homes are near 17 landfills. 18 As you well know, those trucks that 19 carry and go through our streets -- those are diesel. 20 And I urge you to continue working on environmental 21 justice issues, when we take a look at the siting of 22 landfills in California, especially in urban 23 communities, and find that these are 24 disproportionately located in low-income 25 neighborhoods. 268 1 So I'm eager to work with you on how 2 we can also begin to convert these big 3 garbage-hauling trucks to zero-emission vehicles. 4 I support the board committing to 5 these principles by taking a public vote of support 6 on these principles this evening. However, this is 7 just the beginning. You must then commit the 8 resources needed to accomplish the policies and 9 actions laid out this evening. And these resources 10 involve appropriate levels of staffing and 11 appropriate funding. 12 To fully implement this proposal, I 13 would ask you to identify opportunities for action as 14 well as environmental justice potential risks that 15 come before the ARB. You must also aggressively 16 pursue statewide implementation. Every air district 17 in California has to make these policies and actions 18 a top priority. 19 Implementation of an environmental 20 justice proposal like this will inevitably involve 21 some level of subjective bias. Therefore, I believe 22 it is very critical that the board aggressively work 23 to develop a work force within the board and all air 24 districts that is more ethnically and linguistically 25 representative of the population of this great state. 269 1 Underrepresented groups must be 2 greater employed in positions of administration, the 3 sciences, and the technological fields which brief 4 and staff you and guide and advise you. Whenever the 5 board engages in subjective analysis of policy 6 decisions affecting minority and low-income 7 communities, it is essential that the board have an 8 understanding of the perspective of these 9 communities. And having a diverse work force within 10 the boards, I believe, helps us to accomplish this. 11 Let me give you one concrete example. 12 This year, the board sponsored legislation -- Senate 13 Bill 1172 -- to delete the smog-check exemption for 14 vehicles that are 30 years old or older. 15 Fortunately, this legislation was dropped 16 immediately, and I think the board soon learned there 17 was not going to be support in the legislature for 18 this bill. 19 Nonetheless, I was quite surprised to 20 see a board committed to environmental justice 21 sponsor such a bill. I understand that these 22 vehicles are, for the most part, found in low-income 23 communities and have terrible emission problems. 24 One solution is to subject these 25 vehicles to the smog-check requirements. But let's 270 1 not forget that these vehicles are relied upon for 2 essential transportation in low-income communities. 3 If you subject these vehicles to smog check, these 4 motorist will have to spend an incredible amount of 5 money -- which, I represent them, they do not have -- 6 to pass the smog check or they will have to stop 7 using these vehicles. 8 For most low-income minority families, 9 neither of these options is really acceptable. In 10 retrospect, perhaps, a diverse set of opinions from 11 differing backgrounds might have helped the board to 12 recognize the injustices within a bill like this and 13 to decide on a different solution to such a problem. 14 Perhaps creating a loan program or a buy-back program 15 for these vehicles might have been a more appropriate 16 and realistic approach. 17 And I cannot stress it enough how 18 important it is for the board to employ a diverse 19 staff and work force to help us create these policies 20 from the bottom up. 21 To achieve this, I highly recommend 22 that the board initiate an outreach program in our 23 inner-city urban schools. As a former teacher, I 24 would welcome the opportunity of facilitating the 25 development of opportunities to have your information 271 1 received in Los Angeles area and San Gabriel Valley 2 schools. 3 Before closing, I ask that the board 4 provide the legislature with periodic updates on 5 implementation of this proposal. Our actions on 6 zero-emission vehicles, budget allocations, and 7 participation this evening show our commitment to 8 this issue. 9 Periodic updates of information will 10 keep the lines of communication open and assure a 11 positive working relationship between the board and 12 the legislature. 13 I also am very pleased that 14 Assemblyman Marco Firebaugh is here, who is the 15 chair-elect of the Latino caucus. Certainly many of 16 the authors who have written environmental justice 17 bills are Latino. 18 And I urge you to develop a strong 19 working relationship with all of the caucuses within 20 the legislature, especially the ever-growing Latino 21 caucus. And I think Assemblyman Firebaugh will speak 22 more to the Latino caucus positions on these issues. 23 So I want to thank you again for the 24 opportunity to speak with you, albeit quite hoarsely, 25 this evening. I do urge you to adopt the policies as 272 1 presented, as worked out, I think, very tediously 2 over time. They are good policies. I urge you to 3 not dilute the language or the intent of the policy 4 but to keep the language as is. 5 And let's truly become a beacon for 6 the rest of the nation in terms of our strong 7 commitment to environmental justice. Welcome to the 8 24th Senate District. And thank you for allowing me 9 to speak to you this evening. 10 CHAIRMAN LLOYD: Thank you very much indeed, 11 Senator. 12 Good to see you again, Assemblyman 13 Firebaugh. It would be helpful, I think, for my 14 colleagues -- and I know I didn't ask Senator Romero, 15 since I know she's struggling with her voice at 16 times -- but part of the discussion we've had, I 17 think, as Senator Romero characterized it, is trying 18 change "especially" for "including" was, in fact, the 19 information provided us that the legislature had 20 actually approved "including" and that, if we were 21 going to use "especially," then we might incur some 22 wrath from the legislature. 23 So you had that debate over there. 24 it would be helpful, I think, to give us some 25 guidance and wisdom, as you see it, from the 273 1 legislative side, because we were trying to follow 2 the guidance and now we're being accused and that's 3 the reason why that debate even arose. 4 UNIDENTIFIED VOICE: Where was Escutia? Give 5 us a little rundown on that, please. 6 ASSEMBLYMAN FIREBAUGH: Thank you for the 7 opportunity to be here. A few -- I guess about a 8 week ago, the board received a letter from members of 9 the Latino caucus where we articulated our strong 10 support for the adoption of the proposed 11 environmental justice package. 12 I would like to join with my colleague 13 and our friend, Senator Romero, in urging you to 14 maintain the language that says "especially" 15 communities of color. 16 You know, it's been a -- it's been a 17 long year. And we've had a number of debates and 18 discussions, I think, generally positive about the 19 direction that we're going here. 20 The environmental justice bill was 21 authored and approved and signed some two years ago. 22 If you remember, it was SB 115 by Senator -- 23 then-Senator Hilda Solis, who, of course, is now a 24 member of Congress. 25 And it's taken, I think, a long 274 1 time -- I'm out of time, I think -- to get to this 2 place. In that regard, I think it's important to 3 commend this board as well for being at the 4 forefront. I know that members of the ARB have been 5 champions on environmental justice questions for a 6 long time preceding, certainly, my work; and I think 7 that of many of us. 8 But I think we really need to take 9 those next steps now. One is, of course, adopt the 10 environmental justice policy today. Two is ensure 11 that it is as strong as possible. Now, if there is 12 conflict in state law, perhaps the best response is, 13 rather than weaken the language in the proposal 14 before you today, instead we perhaps ought to 15 strengthen the statute. 16 And if modifications need to occur, I 17 think Senator Romero and myself and I know many 18 others -- certainly the 12 signatories of the letter 19 that we sent to you -- would be willing to work in 20 that direction. So you have friends for the 21 strongest possible language. We will support you and 22 support action taken today that approves that 23 particular proposal. 24 Let me just say two brief things with 25 respect to the proposal today. One is I think that 275 1 there needs to be a clear articulation of commitment 2 of resources -- staff resources, dollars for outreach 3 and for implementation. I understand that there has 4 been some dialogue and that, Dr. Lloyd, yourself and 5 others have committed to the requisite resources to 6 implement an effective way. 7 Know that, you know, absent sufficient 8 resources, this is policy on paper. 9 And then, secondly and finally, you 10 know I think there are many organizations in 11 government, many air resource -- air boards that 12 would benefit from leadership and guidance and 13 collaboration with this Air Resources Board. 14 It seems to me that local districts 15 would benefit from outreach from you in collaboration 16 from this board in order that they might develop 17 effective environmental justice policies as well and 18 in order that there may be some symmetry in terms of 19 what we adopt at a state level and what local air 20 boards are doing in local communities. 21 So I encourage you to communicate with 22 air districts and to help them. Some need less help 23 than others, of course. But, particularly in, I 24 think, rural areas and smaller districts who lack 25 sufficient resources to develop policies that are 276 1 comprehensive, that are effective, support from this 2 board, I think, would be tremendously helpful. 3 Thank you for your attention, and 4 thank you for your willingness to take on this issue. 5 I know that environmental justice will run through 6 our policy debate for, I think, forever now. I think 7 we've really changed the dynamic of this debate. 8 Many of us support innovative 9 strategies, but we think that we also have to go back 10 to bread-and-butter strategies and go back to 11 programs that work and that are effective, that are 12 proven effective and make sure they're targeted 13 appropriately. 14 So I think this policy goes a long way 15 in that direction and encourage you to adopt it with 16 the "especially" minority-communities language. 17 Thank you. 18 CHAIRMAN LLOYD: Thank you very much, 19 Assemblyman. 20 Now we have Adolfo Chaidez, 21 representing Congresswoman Hilda Solis. Then we have 22 Denise Ng for Assemblymember Judy Chu. 23 MR. CHAIDEZ: Good evening. I'm here on 24 behalf of Congresswoman Hilda Solis. I'm here to 25 read a letter that she submitted today to Chairman 277 1 Lloyd. It's brief. It has the address. 2 "It is fact that the communities of 3 color and low-income communities are more likely to 4 suffer from environmental neglect. Each day, 5 neighborhoods are prey to large industries looking 6 for bigger profits. Many of these companies assume 7 their environmental justice areas are filled people 8 who don't care or are too busy to notice the 9 destruction of their environment. 10 "Fortunately they are wrong. And 11 today the California Air Resource Board should 12 recognize these communities have the right, by 13 passing these environmental justice policies. The 14 proposals are long overdue and are certain to address 15 inequities in the air quality and public health 16 protection programs experienced by the communities 17 around the state. 18 "As a California State Senator, I" -- 19 Congresswoman Hilda Solis -- "have the privilege of 20 sponsoring the first environmental justice law ever 21 to be signed in the United States. In the House of 22 Representatives, I will continue to fight on a 23 national level; but I realize that the fundamental 24 difference is made one community at a time. 25 "I strongly believe that a 278 1 well-coordinated and funded environmental justice 2 program will go a long way toward improving health, 3 air quality, and the quality of the life for 4 low-income communities and communities of color that 5 have experienced these problems. 6 Signed "Sincerely, Hilda Solis, Member 7 of Congress for the California 31st District." 8 CHAIRMAN LLOYD: Thank you very much indeed 9 for coming and please pass on our thanks to the 10 congresswoman for her vision that started a lot of 11 this going. Thank you very much. 12 MR. CHAIDEZ: Thank you. For anybody who 13 wants an additional copy, I'll leave a press 14 statement in the back. Thank you. 15 CHAIRMAN LLOYD: Thank you. Denise Ng for 16 Assemblymember Judy Chu. 17 MS. NG: They're actually making a copy of my 18 statement. 19 CHAIRMAN LLOYD: That's fine. Oh, so you 20 have -- they're copying the only one you have? Oh, 21 okay. 22 MS. NG: If you want to let somebody go before 23 me -- 24 CHAIRMAN LLOYD: One of the things I would 25 say, by the way, for the succeeding speakers, is that 279 1 we have about 50 people signed up, as of this time. 2 So it's very clear, given the time we have here, I'm 3 going to ask the help of you all to try to limit your 4 statements to the three minutes. 5 And if, in fact, you can avoid 6 repetition, it would be helpful. Or, if you have 7 written statements, the board reads pretty well. And 8 I think that those are the key things to focus on. 9 So I am going to be using a timer here. I'm not 10 going to drop a guillotine, but I would hope that you 11 would, again, because it's going to help us all for 12 the tough task tonight. 13 The consequence if we don't, by the 14 way, help each other here is that we may go to a long 15 evening and I lose a quorum here and we don't have 16 action. I think none of us want that. We want to 17 get this program under way as soon as possible. 18 Thank you. You have your copy? 19 MS. NG: Yes. 20 CHAIRMAN LLOYD: Thank you. 21 MS. NG: Thank you. 22 CHAIRMAN LLOYD: And thank you for coming. 23 MS. NG: Thank you for having me. Chairman 24 Lloyd and members of the board, thank you for the 25 opportunity to speak about this very important issue. 280 1 My name is Denise Ng, and I'm here representing the 2 California State Assemblymember Judy Chu. 3 Assemblymember Chu has prepared this 4 statement in support of the ARB environmental justice 5 efforts. 6 "I would like to express my strong 7 support for the environmental justice policies and 8 actions being considered here tonight. They 9 represent an important step forward in the quest to 10 achieve environmental justice in California. 11 "Too often, low-income communities and 12 communities of color face unfair and unhealthy 13 environmental burdens. In my district, which is the 14 49th Assembly District -- it includes Alhambra; City 15 Terrace; El Sereno; Monterey Park; Rosemead; and San 16 Gabriel; and, of course" -- 17 CHAIRMAN LLOYD: Excuse me, please. Can we 18 have some quiet over here 'cause I'd like to pay full 19 attention to the witness. Thank you. 20 MS. NG: -- "and a portion of East L.A. -- 21 this burden is especially troubling. Air quality 22 gets progressively worse as it moves east across the 23 Los Angeles Basin. Diesel trucks on our freeways and 24 our neighborhoods expose our community members to 25 dangerous toxic air contaminants. 281 1 "The Air Resources Board deserves our 2 support and recognition for moving forward with 3 policies and actions aimed at addressing these 4 problems. 5 "I am particularly interested in 6 assuring that the Air Resources Boards implements 7 these policies and actions in a timely and effective 8 manner as we move from a discussion of environmental 9 justice in theory to focussing on making sure that 10 comments made here tonight will be fulfilled. 11 "This will require nothing less than a 12 team of full-time staff dedicated and working hard 13 toward implementation of these policies. I encourage 14 the board to make the timely and effective 15 implementation of these policies one of the highest 16 priorities. 17 "And in my role as a California 18 legislator, I commit to helping the board in these 19 efforts. 'Environmental justice' means communities 20 of color and low-income communities get to share 21 equally in the benefits of our efforts to protect our 22 environment. 23 "These policies and actions will move 24 California forward towards the goal of environmental 25 justice. They deserve your support. Thank you." 282 1 And I'd also like to add that, after 2 redistricting, El Monte will be part of the 49th 3 Assembly District as well. 4 CHAIRMAN LLOYD: Thank you very much. It 5 sounds, from Senator Romero, you have some challenges 6 as well. Thank you coming very much. 7 Now we have the first nonpublic 8 elected officials. First is Nancy Sutley, our 9 colleague at -- family at Cal-EPA -- Dr. Barry 10 Wallerstein, and Peter Hess. And, again, I know I'm 11 with friends here. And I know that Nancy will help 12 me along in setting an example. 13 MS. SUTLEY: Thank you. And I will keep my 14 comments brief. 15 Good evening, Chairman Lloyd, members 16 of the board, the ARB staff. I'm very pleased to be 17 here on behalf of Secretary Winston Hickox. I'm 18 Nancy Sutley, deputy secretary for the California 19 Environmental Protection Agency. 20 And it's a little unusual for us to 21 appear before the board, but we felt this was an 22 important-enough issue to come and speak before you 23 tonight. And I will be short in my remarks. You 24 need to hear from all of these other people. 25 But environmental justice is a 283 1 priority for Cal-EPA. In our strategic vision 2 published in July of 2000, we articulated a goal of 3 environmental justice to reduce or eliminate the 4 disproportionate impact of pollution on low-income 5 and minority populations. 6 When Governor Davis signed SB 115 in 7 1999, California became the first state in the nation 8 to enact environmental justice legislation. Since 9 then, the legislature has passed and the governor has 10 signed a number of other EJ-related bills. 11 Our environmental laws are intended to 12 protect all Californians. It's not supposed to 13 matter who you are or where you live. And now we 14 have to make that true. Many people in this room 15 have worked for many years to make sure we remember 16 how important that obligation is. 17 You'll hear a lot of public comment 18 tonight. But I have to say, based on the feedback 19 that we've gotten, there's a remarkable amount of 20 agreement on these policies. And that is in no small 21 measure to the extremely excellent work of the staff 22 of the Air Resources Board and of all the people who 23 participated -- I mean many, many hours of discussion 24 in developing these policies. 25 And you've set an example, I think, 284 1 for all the boards and departments at Cal-EPA that 2 everyone needs to follow. Environmental justice is 3 such an important issue and the actions that we take 4 will be groundbreaking ones. There's no simple 5 pollution to environmental justice. But there is a 6 number of things that we need to keep in mind. 7 We need to develop mechanisms for 8 public involvement and input in the decision-making 9 process, invest in capacity development, create 10 partnerships with those affected by the decisions, 11 and let them help us make the decisions. And look at 12 all of the things that we can do, including pollution 13 prevention and risk assessment and those things that 14 can minimize or eliminate the pollution to 15 communities most at risk. 16 And even in these tough economic 17 times, we need remember this is a priority for us. 18 The guidelines do a lot to move those -- that agenda 19 forward. You've laid out specific actions. And 20 you've undertaken a very good process to develop 21 these guidelines and these actions. 22 We're here to lend our thanks to the 23 board and to the staff of the ARB for moving forward 24 with this and our assistance from Cal-EPA as you move 25 forward. All of our boards, departments, and offices 285 1 must develop environmental justice strategies. 2 You've laid down a very good marker. And I'm very 3 pleased to be here tonight on behalf of the secretary 4 and the entire Cal-EPA family. Thank you very much. 5 CHAIRMAN LLOYD: Nancy, I'd like to thank you 6 again for your personal dedication and leadership and 7 "Romal" as well -- I notice him sitting over there -- 8 the many hours that he's put in working with us and 9 for the support of Secretary Hickox. 10 We're going to have a change in order. 11 We're looking at the lineup here. So we're going to 12 go with Marlene Grossman, Julia Lopez, Dale Tatum -- 13 first three. 14 We're trying to recognize some of the 15 people who have come here, and we wanted to get an 16 opportunity to also hear, before the evening gets on 17 too long and we won't get crammed so -- 18 MS. GROSSMAN: Thank you, Dr. Lloyd. The 19 reason that I wanted to speak early is because we 20 have some youth who came with us. Unfortunately, 21 some of them had to go home because they have 22 homework and they have to get up early. But we 23 really -- 24 CHAIRMAN LLOYD: We appreciate it. 25 MS. GROSSMAN: Thank you. Thank you very 286 1 much. My name is Marlene Grossman. I'm the 2 executive director of Pacoima Beautiful, which is an 3 environmental organization in Pacoima. I want to 4 introduce you to our youth here who are high school 5 students from Pacoima who are documenting the assets 6 and deficits in our community. And we felt that a 7 hearing like this would be very valuable for them to 8 attend. So thank you. 9 This is Juan, Judy, and Rashina. 10 CHAIRMAN LLOYD: Thank you very much. 11 MS. GROSSMAN: Pacoima is a low-income 12 community of color in the Northeast San Fernando 13 Valley. 14 CHAIRMAN LLOYD: We became acquainted with 15 Pacoima earlier in the year. 16 MS. GROSSMAN: Yes. I know you did. And it's 17 surrounded by three freeways. On a fourth, we have 18 an airport. We have automotive businesses, and the 19 area's bisected by a railroad line. It is an area 20 with high levels of lead and a very high rate of 21 asthma and other respiratory problems. 22 Pacoima Beautiful and the Pacoima 23 community have been the recipient, as you alluded to, 24 of the services and the goodwill of the ARB. The 25 staff has been very supportive of us. And we're very 287 1 grateful. Therefore we strongly support the proposed 2 ARB policies and actions for environmental justice. 3 Last year, a meeting was held in our 4 office with three of your staff and Pacoima community 5 members to discuss the air-quality problems in 6 Pacoima. Elizabeth Romero Martinez, our program 7 manager, mentioned the fact that many residents have 8 older cars without proper smog devices. And there's 9 also a large market in forged smog certificates. 10 In response to that discussion, last 11 summer, ARB and the Bureau of Automotive Repair put 12 together a pilot project to test 40 cars owned by 13 Pacoima residents for smog compliance. Pacoima 14 Beautiful did the outreach by preparing and 15 distributing environmental fliers and by talking with 16 residents. 17 Because of the need and because people 18 were lined up, ARB and BAR wound up testing 46 cars 19 instead of the 40 they'd agreed upon. Of the 46 20 cars, 35 failed the smog test. For those cars that 21 failed, ARB and BAR provided vouchers for the cars to 22 be repaired. And most of the cars have been 23 repaired, and they're now functioning. 24 The project was very successful on a 25 number of levels. The ARB staff listened to the 288 1 community, who identified a specific need that was 2 addressed, albeit on a limited scale, but it 3 definitely was addressed. The project demonstrated 4 that there is obviously a large need to deal with the 5 problems, such as older cars, on both the community 6 as well as the State level. 7 And it also demonstrated that, if one 8 issue could identify such a potentially large need, 9 there are obviously many other issues that need to be 10 addressed. Amazingly, in our community, they haven't 11 been. But with the partnership that's been 12 established, we look forward to things really being 13 looked at and issues being resolved. 14 I therefore, on behalf of the 98,000 15 residents in Pacoima -- I urge you to consider that 16 pollution prevention be central to your environmental 17 justice program. We really need that in Pacoima. 18 And Pacoima Beautiful and the Pacoima 19 community volunteers offer to work with the ARB to 20 develop community specific education programs that 21 can be used in communities such as Pacoima throughout 22 the state. We know that much can be done if we all 23 work together. Thank you so much for your time. 24 CHAIRMAN LLOYD: Thank you very much indeed. 25 Do we have Julia Lopez there? Or was 289 1 this all together? 2 Could you identify yourself and then I 3 can -- 4 MS. LOPEZ (Through Interpreter): My name is 5 Julia Lopez. And I'm in the community of Pacoima. 6 Our problem really is about the schools for our 7 children. If we took a look at what the City of 8 Pacoima is, we are surrounded by three freeways, 9 which is 118, 210, and 5. 10 Our schools are practically surrounded 11 by factories, dump fills. We also have the railroad 12 tracks. And if we were to make a study with our 13 children, our children get sick quite often. And we 14 really don't have an environment free from all this 15 pollution. 16 It's really a circle, formed by the 17 freeway, the dump fills, and the railroad track. And 18 that's our concern for our children. And we request 19 a profound study. Thank you. 20 CHAIRMAN LLOYD: Thank you very much. 21 Dr. Tatum. Theodis McLeod. 22 Jacqueline Hamilton. 23 DR. TATUM: Good evening, Chairman Lloyd and 24 the other members of the board. My name is Dr. Dale 25 Tatum. I am a lifelong resident of South-Central 290 1 Los Angeles and a member of the board of directors of 2 the Community Coalition for Change. 3 I am here this evening to testify on 4 behalf of the proposed policies and actions for 5 environmental justice. I believe that they are a 6 very good beginning but they need some modifications 7 in order to strengthen it. 8 With respect to Policy 1, the 9 South-Central-Athens area should be included in the 10 special monitoring studies. This is a community that 11 has many freeways running through it and many 12 industries that have released toxic substances into 13 the air. 14 With respect to Policy 2, there needs 15 to be some additions regarding access to information. 16 Information regarding volatile organic compounds in a 17 community should be available in that community's 18 local library and on the Internet rather than housed 19 at AQMD headquarters in Diamond Bar. That's a long 20 trip for many people. 21 In addition, there should be an 22 interactive website where questions regarding toxic 23 substances can be sent via e-mail and answered in a 24 timely manner. 25 With respect to Policy 3, further 291 1 additions need to be made. Exposure levels need to 2 be adjusted for children and the elderly because they 3 are at greater risk from pollutants. 4 Also, modifications need to be made 5 with respect to Policy 4. Mitigation fees should be 6 returned to impacted communities. These communities 7 face an increased risk from health costs, birth 8 defects; and they also have high legal fees. 9 Also the complaint process needs to be 10 streamlined. One should not have to obtain a 11 mountain of documents in order to know what one is 12 being exposed to nor should one have to be able to 13 work a quadratic equation in order to figure out the 14 level of toxins in one's community. 15 With respect to Policy 5, there needs 16 to be the adoption of a cumulative-emissions policy. 17 With respect to Policy 6, the Air 18 Resources Board needs to step in and to prevent the 19 use of negative declarations. Very often negative 20 declarations are used as a means of moving toxic 21 substances into a community. Rather, an 22 environmental impact report should be done so that 23 the people of that community know which toxins they 24 are being exposed to. 25 Also, the ARB needs to come up with a 292 1 time line and a measurable action plan to reduce the 2 emissions of toxic substances into the air that we 3 all breathe. This will create a livable environment 4 for all of us. 5 Thank you very much for your time. 6 CHAIRMAN LLOYD: Thank you. 7 Dr. Burke has a question. 8 DR. BURKE: Where's your office located? 9 DR. TATUM: Pardon? 10 DR. BURKE: Where's your office located? 11 DR. TATUM: My office? 12 DR. BURKE: Yeah. 13 DR. TATUM: Oh, I don't have an office. I am 14 a college professor. Okay? 15 DR. BURKE: What was it that you wanted to be 16 made available to the community? What documents? 17 DR. TATUM: Pardon? 18 DR. BURKE: What documents was that that you 19 wanted made available by AQMD to the district? 20 DR. TATUM: Information regarding the toxins 21 in a particular community. Very often now, a trip is 22 required to AQMD. 23 DR. BURKE: So what you wanted to see -- what 24 you want is more information? 25 Is that what he wants? 293 1 DR. TATUM: Access -- better access to 2 information. 3 DR. BURKE: Here's what I'm going to do. 4 Here's what I'm going to do. Today's Thursday. 5 DR. TATUM: Uh-huh. 6 DR. BURKE: By Monday, those documents will be 7 available at Supervisor Burke's district offices in 8 Inglewood, Compton, Hawthorne so that there'll be a 9 half a dozen different places where you can get 10 those. 11 DR. TATUM: Thank you very much. 12 DR. BURKE: You're welcome. 13 CHAIRMAN LLOYD: Jacqueline Hamilton, 14 MS. HAMILTON: Good evening. My name is 15 Jacqueline Hamilton. I direct the Environmental 16 Justice Project Office of Environmental Defense here 17 in Los Angeles. 18 Environmental Defense is a nationwide 19 environmental organization of some 30 years standing 20 with a half-million members around the country and 21 the largest concentration of them here in Southern 22 California. 23 I want to thank the staff very, very 24 much for an outstanding document. If fully 25 implemented, this could really set a tremendous 294 1 precedent for not only government in California and 2 air quality in California but elsewhere. It won't 3 become a realty, however, without the assignment of 4 people and resources to its implementation. 5 We really laud placing the full 6 integration of environmental defense -- excuse me -- 7 environmental justice into all programs, policies, 8 and regulations. But unless it's somebody's job -- 9 hopefully more than one somebody -- to wake up in the 10 morning and think those thoughts of "How are we going 11 to turn this from paper into action?" it's not going 12 to happen. So we strongly urge you to assign people. 13 And, likewise, unless there are 14 resources available to implement the changes 15 represented in this document, then the natural human 16 tendency to keep doing what you're already doing is 17 going to prevail and that inertia will again stop the 18 progress that's promised in this wonderful document. 19 In the December 6 letter that several 20 groups -- nearly 50 community, environmental, and 21 other civic groups -- sent to Dr. Lloyd, including 22 Environmental Defense -- it was also signed by 23 Pacoima Beautiful and many of the other organizations 24 that you're going hear from this evening -- we urge 25 five specific actions and soon, to keep this positive 295 1 momentum coming out of what we hope will be the 2 board's resounding adoption of the proposed document. 3 Specifically, we urge that the staff 4 develop an initial environmental justice work plan by 5 January, 2002. It doesn't have to be in 6 extraordinary detail, and it doesn't have to cover 7 everything. But coming up with a work plan to at 8 least cover the first six months, again, will keep 9 the momentum going. Likewise -- 10 CHAIRMAN LLOYD: You realize that's next 11 month? 12 MS. HAMILTON: Yes, I do. But we're only 13 asking for six months, you know. After that, what 14 we'd like to see is the adoption of an annual work 15 plan. But just that little bit -- let's not slow 16 down the momentum. I mean, as you can see, there's a 17 tremendous energy both from people who support this 18 and, I think, coming out of the staff. 19 Okay. It's being ambitious. 20 DR. BURKE: You and I talk all the time. And 21 we talk straight; right? So let me tell you the 22 problem with that. They can give you a work plan in 23 January. If Dr. Lloyd decides he can go, he'll do 24 that. 25 But let me tell you: You're going to 296 1 have some people who are not going to have the same 2 life experience that is necessary to make an 3 effective document. 4 What this agency first must do is deal 5 with the problem of putting together a task force or 6 an implementing arm so that it's people who share the 7 experience with the people who face this problem 8 every day. 9 Because if you have the people doing 10 it who have been doing it, it's going to be the same 11 thing as they were doing before because blacks, 12 browns, and yellows just did not arrive in 13 California. They've been here a minute. Okay? 14 And this problem just didn't arise 15 this minute. So five years ago, I offered the first 16 formal environmental justice document. That was five 17 years ago. And we're getting it tonight here. 18 MS. HAMILTON: We're just -- 19 DR. BURKE: Now, it's not these people's 20 fault. I'm not blaming any of these people because 21 they have to live, you know -- they work for 22 somebody. But whoever's been in charge -- it wasn't 23 important enough to lift it up to their level in five 24 years. Now, everybody looked at us when we did it at 25 South Coast and thought we were nuts. 297 1 I heard the senator talk about 2 community outreach programs. We just -- we spent a 3 million-and-a-half dollars on community outreach. We 4 approved that and were criticized by those people 5 from Palm Springs and Indio and places like that 6 because, you know, they couldn't forgot out why we 7 wanted to reach out to people that had been affected 8 by these issues all this time. 9 So if you want a plan, I think you 10 ought to have a plan. But you need a plan that's put 11 together by people who understand what the problem 12 is. And one of the first things I did here was I 13 said, "You know, if you all moved CARB down to Indio, 14 all the problems would be over in a minute 'cause, 15 you know, you'd have to do it to breathe." 16 But if you look at this executive 17 staff here -- same one I've been looking at for a 18 couple years almost -- there was no one at this table 19 regularly -- and I'm excusing that lady at the end 20 'cause she's normally not there -- there's no one at 21 this table who has the same life experience you do 22 and you don't have the same life experience they 23 have. 24 So if you really want them to cure 25 something which is designed to do something for 298 1 people who live in certain areas, it can't always be 2 from the science side. It's got to be from the human 3 side. 4 MS. HAMILTON: Well, I live in 5 South-Central LA, and I'm raising a four-year-old 6 daughter there. And I have a sense of urgency 7 because I've got her young lungs to consider as well. 8 So I appreciate that January's extraordinarily 9 ambitious. 10 And you ask for what you want. And 11 then sometimes you have to wait a little longer. But 12 just because my time now has been -- has ticked away, 13 I just want to -- I do want to get through the other 14 four recommendations, if you don't mind, Dr. Burke. 15 CHAIRMAN LLOYD: Make sure, next time you 16 testify at the South Coast AQMD, you remind Dr. Burke 17 that he stole your time here so you can get it back. 18 MS. HAMILTON: Well, to go with that ambitious 19 plan of creating at least a six-month work plan, we'd 20 also like to see an initial staff and 21 funding-allocation plan, again, to just -- let's get 22 something out there for the first period and let's 23 not let the perfect be the enemy of the good but keep 24 the momentum going. 25 The other thing that we've asked 299 1 for -- these five documents -- there's those two 2 things and then three guidance documents. 3 We hope that they could be developed 4 within 12 months, by December of 2002 -- specifically 5 a land-use planning document to assist local 6 air-quality districts and land-use agencies in 7 evaluating the air-quality impacts of proposed 8 projects and to highlight problems with incompatible 9 land uses and strategies for avoiding incompatible 10 uses. 11 Something that would never happen in 12 Beverly Hills 90210 is the siting of, for example, 13 emitting facilities like chrome-plating plants, bus 14 depots, waste-transfer stations, and 15 vehicle-maintenance yards next to schools. And we 16 need to make sure that that doesn't happen. 17 We'd like to see the development of a 18 complaint-resolution guidance document. One of the 19 most common complaints that you'll hear from some of 20 the people here and anyone who works with local 21 community is that it's extraordinarily difficult to 22 figure out "Who do you complain to?" "How do you 23 find out whether they acted on your complaint?" and 24 "If any action was taken, tell me what it was." 25 And we'd like to see that developed. 300 1 Finally, as Dr. Lloyd very well 2 pointed out, because of the historical regulation of 3 toxins, one by one, we really don't adequately take 4 into effect cumulative emissions and their effects. 5 And so we'd like to see a guideline document on 6 cumulative-emissions exposures and impacts assessment 7 and reduction. 8 If that were the case, then we think 9 you'd much more accurately reflect the experience of, 10 for example, the folks in Inglewood who are like the 11 folks in Pacoima, as they were describing, or the 12 folks in Inglewood who are surrounded by two 13 freeways, an oil refinery, at least one sewage 14 treatment plant, and the third-busiest airport in the 15 nation. 16 CHAIRMAN LLOYD: Thank you. Finally? 17 MS. HAMILTON: Finally, we pledge our help. 18 So as you go through, creating all of these 19 documents, we will be working with you side by side. 20 We will be helping to reach out to communities that 21 we work with. And we thank you very much for all 22 your hard work. 23 CHAIRMAN LLOYD: Thank you very much. Is this 24 Theodis McLeod? 25 MR. McLEOD: Yes, it is. 301 1 CHAIRMAN LLOYD: Good. We jumped -- yeah. 2 Thank you. And then -- excuse me -- and then after 3 that, we have Robina Suwol and her son and Cynthia 4 Babich and then Martha Arguello. 5 MR. McLEOD: Thank you to the board and to 6 Chairman Lloyd. My name is Theodis McLeod. I'm with 7 the CCC, which is the Community Coalition for Change, 8 which is the umbrella group that takes in account of 9 all the block clubs. And we deal with toxics in our 10 area. 11 Already you've answered one of our 12 questions, concerns that we had as to getting 13 information out in Ms. Burke's district. And that's 14 good that we don't have to go to Diamond Bar. Thank 15 you. 16 DR. BURKE: Of course, I'm liable to be 17 sleeping in the garage tonight but -- 18 MR. McLEOD: Responding to proposed policies 19 and action of environmental justice, I read your 20 proposal and found it addressed many of the concerns 21 that the community have. 22 However, our community and our 23 children's health needs to be protected against those 24 who move in our neighborhoods and establish 25 businesses that endanger the health and the safety of 302 1 our children. 2 In the last 15 to 20 years, we have 3 seen business increase in production and increase in 4 fleet size, thus increasing in causing toxic air 5 polluting. An example is we're dealing now with a 6 spray booth that has just moved into our area, as if 7 we didn't have enough emitting already. 8 Also it states in your proposal, 9 "Effective enforcement of air-polluting control 10 required in all communities." But it fell short on 11 spelling out specific goals to achieve these emission 12 reductions. 13 We, the community, welcome the 14 opportunity to enforce and to participate with the 15 state and local decision making. However, how often, 16 when we find that the ARB meeting is to take place -- 17 the community is unable to request a meeting. We 18 want to know is that possible? When information is 19 not available, can we, as a community, request 20 meetings? 21 DR. BURKE: Of course. 22 CHAIRMAN LLOYD: Yes. 23 Mr. Kenny? 24 MR. KENNY: Absolutely. Absolutely. 25 MR. McLEOD: Thank you. 303 1 DR. BURKE: Call me. 2 MR. McLEOD: Call a meeting? 3 DR. BURKE: I'll get you a meeting. 4 MR. McLEOD: Oh, okay. 5 The community would like to establish 6 an air-monitoring station in an area where schools 7 and churches and businesses are located. 8 When a facility is found to be in 9 noncompliance -- and I think you talked about this or 10 someone spoke about that earlier, about mitigating 11 fees that are imposed -- we're concerned about how 12 these fees are going to be utilized. 13 Can these fees be filtered back into 14 the community as to cleaning up toxic waste or dumps 15 or storage areas? Since these studies are underway 16 in Wilmington, California, how is this information 17 fed back to the community? 18 Is it ARB's community -- do they 19 have -- I understand that there's going to be a 20 website that's available. But we find, you know, 21 that there are a lot of people that does not have 22 computers. So is this information going to be 23 available in libraries, et cetera? 24 I think that was the point in the 25 first portion that you said in the district, but what 304 1 about libraries? 2 DR. BURKE: I'll have to check and see how 3 you -- that's the city. Now, you know, you asked a 4 very interesting question. Where do you live? 5 MR. McLEOD: Los Angeles. 6 DR. BURKE: Right. But where in Los Angeles? 7 MR. McLEOD: South-Central. 8 DR. BURKE: So who's your councilman? Nate or 9 Mark or -- 10 MR. McLEOD: Burkes. I'm in the County. 11 DR. BURKE: Oh, you're in the County? 12 MR. McLEOD: Yes. 13 DR. BURKE: Because, for the first time in the 14 history of the City of Los Angeles, they affirmed a 15 person of color as Chairman of the Environmental 16 Committee for the City of Los Angeles. And so he's 17 going to be putting out a lot of stuff in the next 18 year sometime. Didn't mean to interrupt. I'm sorry. 19 MR. McLEOD: I'd like to commend the board and 20 the staff. You've done a wonderful job in putting 21 this together. Thank you for listening to me. 22 CHAIRMAN LLOYD: Thank you very much. 23 Robina Suwol. Cynthia Babich. Martha 24 Arguello. 25 MS. SUWOL: Thank you very much. Again, 305 1 congratulations and thank you for your sincere 2 efforts about protecting the health and safety of all 3 the citizens. 4 I'm the mother of an asthmatic child. 5 This is my son Nicholas, who's here today. He wanted 6 to see how our government worked. And I told him 7 that our government's very interested in the opinion 8 of children. And so he's here with me tonight. And 9 he has a few words he might like to say at the end. 10 Unlike others that you may hear from 11 tonight, I have no invested financial outcome of 12 today's hearing or the policy proposal. And as all 13 of you are well aware -- and we've heard other people 14 talk about that asthma and nongenetic cancer and 15 neurologic disorders and lung disease -- they're on 16 the rise, particularly with our children. 17 There are no standards that are set 18 for our children. And over a thousand studies in 19 over about 20 countries show that you can predict a 20 certain death rate based on the amount of pollution 21 in a certain area. So the accumulative effects, 22 which we've all talked about earlier, both high-level 23 and long-term, low-level exposure are really of great 24 concern. 25 Children are developing more quickly. 306 1 They're growing. They eat more food. They drink 2 more water. They breathe more air. And so 3 consequently they're at a greater risk. 4 For the past 20 years, I've had the 5 pleasure of working with an organization that 6 presents Christmas plays at Shriners hospital and 7 Ronald McDonald House. And each year I go, hopeful 8 that the numbers are going to decrease. But 9 unfortunately I'm seeing more terminally ill 10 children -- children who never make it home, children 11 whose lives could be saved if only more stringent 12 policies were passed and implemented. 13 And I think the implementation is 14 something we've also talked about that's crucial and 15 having assistance. Currently we have, as you all 16 know as well, incinerators, freeways, and other 17 polluters adjacent to schools and communities 18 throughout California. 19 There's toxic releases in Carson, 20 Wilmington, Maywood, Torrance, Boyle Heights -- I 21 could name so many more -- and these communities -- 22 the air is not stagnant there. It affects all of us. 23 And scientific studies also show an 24 inequitable distribution of air pollution burdens 25 among different communities. And this is 307 1 inconsistent with our constitutional right to equal 2 protection under the law. 3 Now, it's wonderful. Nicholas is 4 learning all about our Constitution. And it was he 5 who said, "Mom, what about the 14th Amendment?" 6 And it says that "No state shall make 7 or enforce any law which shall deny to any person 8 within its jurisdiction the equal protection of the 9 laws." 10 Congratulations, Nicholas and 11 Mrs. Litton, his teacher, for bringing that up. But 12 I wanted to mention that, if I might. 13 This policy is a great beginning, I 14 think, especially for our children. Therefore, I am 15 asking you today to please adopt this policy and 16 onward and upward. And my -- 17 Nicolas, did you want to say 18 something, sweetheart? If you feel like it, you can. 19 NICHOLAS BAKER: My name is Nicholas Baker. I 20 have asthma. Kids want to live, not die. These 21 environmental justice policies will protect the kids 22 who need it the most. Thank you for doing this 23 before it's too late. 24 CHAIRMAN LLOYD: Thank you. Thank you for 25 coming, Nicholas. I appreciate it. And thank you 308 1 for your letter. 2 MS. BABICH: My name is Cynthia Babich. And 3 I'm the director of the Del Amo Action Committee. 4 Our community is predominantly Latino and is in the 5 unincorporated L.A. County area newly named the 6 Harbor Gateway. 7 My community is in support of adopting 8 these policies and actions as proposed undiluted. We 9 are downwind of Mobil-Exxon, Jones Chemical, Allied 10 Signal, and -- and -- and -- and -- I could probably 11 go on for the rest of this meeting tonight. 12 Our involvement and awareness of the 13 importance of adopting strong environmental policies 14 began with trying to understand the frequency of the 15 bloody-nose episodes plaguing our community. We want 16 to see the precautionary principle applied to the 17 issues of cumulative risk. 18 Finally, we want to see an expedited 19 time line to incorporate these policies as quickly as 20 possible. Thank you. And we will be watching. 21 CHAIRMAN LLOYD: Thank you very much. Martha 22 Arguello. Hi, Martha. Welcome. 23 MS. ARGUELLO: Hello, Dr. Lloyd. Good 24 evening, Dr. Lloyd and other members of the board. 25 My name is Martha Arguello. And I'm 309 1 the environmental coordinator for Physicians for 2 Social Responsibility. We're a 20-year-old 3 organization committed to the concept that we must 4 prevent what can't be cured. 5 And I'm here to say that you've taken 6 a good first step in making sure that environmental 7 justice and environmental health of all Californians 8 are protected. And so we urge you to support the 9 guidelines as written. 10 Prevention and precaution are a 11 win-win situation for affected communities and for 12 the California Air Resources Board and other public 13 entities charged with protecting the public health. 14 Communities will breathe in less pollution and suffer 15 less from the negative health impacts of air 16 pollution. 17 We further urge the board to ensure 18 that within these environmental justice guidelines, 19 the process for making decisions about the air we 20 breathe are participatory and democratic. 21 The guidelines on public participation 22 must acknowledge that, when we talk about 23 stakeholders, we recognize that there is no more 24 important stakeholders than the individuals who bear 25 the heaviest burden of poor air quality and the 310 1 related health impacts. 2 While we have much to learn about the 3 disproportionate impacts of environmental toxins, 4 then we encourage the board to continue with this 5 study on the cumulative impacts and exposures to air 6 toxins. We have to look at the -- we still must take 7 precautionary measures. 8 Let us take a look just at 9 Los Angeles's asthma rates. And what we see it 10 starting -- we just see how much of a 11 disproportionate impact it has, asthma is having on 12 the African-American community and low-income 13 communities. 14 Can we have the next slide? And so 15 while we see that asthma rates are disproportionate 16 in the African-American communities, the other issues 17 that escalate, make asthma worse is access to health 18 care. And here you see Latinos and African-Americans 19 pretty much the same in terms of emergency room for 20 asthma, which means we're not getting the primary 21 care. 22 So when this is combined with our 23 inability to clean up the air and make these safer 24 and folks who don't have health insurance -- again, 25 these communities are bearing disproportionate 311 1 impacts and paying lots of out-of-pocket expenses for 2 health care because we don't have a health-care 3 system that's a safety net for them. 4 So we don't want to wait for more 5 studies that will tell us about the intricacies of 6 the relationship between lung health and air 7 pollution. The only correct response to the alarming 8 statistics is to move quickly to do no further harm. 9 If we do not do this, we will be 10 responsible for handicapping yet another young 11 generation of young people of color. New research 12 trends shows that exposure at a very young age to air 13 pollutants can mean a lifetime reduction in lung 14 capacity. If we do not move quickly and decisively, 15 these health disparities will only grow larger. 16 Will industries that are using their 17 financial resources to cloud the science and their 18 political resources to stand in the way of these 19 policies, pay the economic, social, and human costs 20 of allowing environmental justice to continue? 21 As public health advocates, we believe 22 it's extremely important that the Air Resources 23 Boards develop a pollution prevention plan. And we 24 encourage the board to direct staff to develop this 25 report to address environmental justice needs for 312 1 affected communities. 2 We encourage the board to schedule a 3 report consideration at another board meeting in the 4 coming months. In this follow-up report, we 5 encourage that you do -- that you, that the board 6 look at current pollution-prevention activities at 7 CARB, Cal-EPA, and other agencies and air districts; 8 that you identify other organizations and academic 9 institutions working on pollution prevention that 10 could assist efforts by CARB and local air districts 11 on pollution prevention -- groups like UCLA's 12 Pollution-Prevention Institute. 13 We encourage the board to identify 14 potential new approaches that could be taken by CARB 15 to assure that pollution prevention and alleviating 16 disproportionate impacts is a priority of all CARB 17 activities. Thank you. 18 And also, on behalf of another very 19 good partner of PSR -- I'm submitting their statement 20 on environmental health from their Sacramento office. 21 Thank you. 22 CHAIRMAN LLOYD: Thank you very much. 23 I have a question. I have a question, 24 Martha. Before you step down, Martha, I have a 25 question. 313 1 MS. ARGUELLO: Yes. I'm sorry. 2 MS. D'ADAMO: Do you have extra copies of 3 those charts that you would make available? 4 MS. ARGUELLO: Yes. And actually those are 5 from an L.A. County study on asthma. It's available 6 on-line, if you look at the bottom of the slide. I 7 believe those -- on the bottom of the slide is the 8 website. And that's actually put out by the 9 Department of Health Services. 10 CHAIRMAN LLOYD: Next, we have "Luis" 11 Palomino, Roy Abadi, and Janie "Auirre." And then 12 Enrique. 13 MS. PALOMINO (Through Interpreter): Good 14 evening. My name is Luz Palomino. I'm "Luz," not 15 "Luis," Palomino. And I'm a resident of the 16 community of Sherman Heights in San Diego. 17 I support all these policies regarding 18 the participation of the public because they are very 19 important. All of the residents should know and 20 should have the information as to where to call in 21 order to file a complaint. 22 And one of the forms in which the 23 officials could respond to the claims of the 24 residents is to have bilingual personnel in their 25 offices. We know they have two or three people who 314 1 speak Spanish in the local district. But this is not 2 enough in a county where we have a majority of 3 Spanish-speaking people. 4 I've experienced this problem 5 firsthand that I've called to file a complaint and 6 they don't have personnel who speak Spanish. I speak 7 some English. And I was able to make my complaint, 8 and that's the way I was helped. 9 My complaint was very important. It 10 had to do with the remodelling of a very old building 11 with lead-based paint, and they were doing it in a 12 fashion totally inappropriate. They were damaging 13 public health. 14 And these type of complaints are many 15 that my people -- the people in my community want to 16 file. They should have, permanently, people in their 17 offices who speak Spanish so that people may file 18 their complaints. I know a lot of people in my 19 community who have told me that they're not able to 20 file their claims because there is no one who speaks 21 Spanish. 22 That's why we need this commitment 23 from you that you will make this guideline to file 24 complaints for all the districts and also a form in 25 which we can file appeals before you if the district 315 1 does not respond to our claims. Thank you. 2 CHAIRMAN LLOYD: Thank you very much. Roy 3 Abadi? 4 MR. ABADI: Yeah. Good evening. My name is 5 Roy Abadi. I'm a South Gate, City of South Gate 6 resident. And I would like to talk to you about a 7 letter I received or a meeting I attended on May 13, 8 1998. I received a letter from the AQMD. And they 9 warned me that a factory that paints airplane parts, 10 contaminating my -- the air and my chances to get 11 cancer are 804 in a million. And they allowed -- no 12 action will be 10 in a million. 13 So then I realized that this is 14 extremely important. I attended the meeting. And 15 the person from -- the AQMD staff basically were 16 trying to calm the residents. There were not a lot 17 of residents there. And they said that Anodyte would 18 correct that problem. And basically that was it. 19 I waited two years. And I called the 20 AQMD; asked them, "What was the follow-up?" 21 And I received nothing. I received 22 basically no answer. 23 I asked, "Did you monitor the air 24 again?" 25 I received no answer. So they asked 316 1 me, "All we can do is send you a package regarding 2 Anodyte." 3 I received the package, and I read the 4 package very carefully, even though it seems like I 5 had to be a lawyer to understand it. And the package 6 said that they, basically, according to AB 2588, they 7 were relying on Anodyte to correct this problem. 8 They are the polluters, and they also correct the 9 problem? 10 And there were no reading after this 11 incident. And my question basically to you is what, 12 as a resident, that I reside at -- my house is about 13 few hundred yards away from that factory. What 14 should I do? Should I think that I still have my 15 chance to get cancer are 804 in a million or my 16 chance are now 10 in a million? 17 And also I have another concern that, 18 recently we had a problem with somebody wanted to 19 build a power plant, on the other side, less than 20 half a mile away from that site. Now, you're talking 21 about accumulative pollution. 22 Now, in one hand, there is a factory 23 that's polluting my air; and I don't know what's the 24 situation there. And another hand, they want to 25 build another polluter. So, basically, I'm asking 317 1 you, you should address this situation. 2 CHAIRMAN LLOYD: See Dr. Burke. 3 MR. ABADI: Thank you. 4 DR. BURKE: Well, the question -- 5 CHAIRMAN LLOYD: No. No. No. No. I was 6 being serious because I think it is -- 7 DR. BURKE: Right. 8 CHAIRMAN LLOYD: -- Dr. Burke who is 9 addressing these questions. 10 DR. BURKE: I was going to ask you where do 11 you live? 12 MR. ABADI: I live in South Gate on Reno 13 Avenue. I'm a couple of hundred yards away from 14 Anodyte. 15 DR. BURKE: The head of the complaint 16 department is sitting back there in the -- yes. See 17 him there? 18 Raise your hand. 19 That's the head of the complaint 20 department. If he doesn't give you satisfaction, 21 call me. 22 MR. ABADI: I will. Thank you. 23 DR. BURKE: Okay. 24 CHAIRMAN LLOYD: Thank you very much. 25 Janie "Auirre" -- I'm not sure if I've 318 1 got that -- I'm sure I haven't got that pronunciation 2 correct. And then Enrique Manzanilla and then Jane 3 Williams. 4 MS. AGUIRRE: I am Janie Aguirre. 5 CHAIRMAN LLOYD: Ah. 6 MS. AGUIRRE: You roll the R's. 7 CHAIRMAN LLOYD: Yes. Sorry. 8 MS. AGUIRRE: And I'm a resident of Santa Fe 9 Springs. And I bring some concerns because Santa Fe 10 Springs has been polluted for long time because an 11 oil refinery we used to have there. 12 And now there's another one that's 13 trying to come in with AQMD permission, city council 14 people's permission to reopen the refinery with the 15 same permits that the old refinery had before. 16 And there's a lot of community 17 residents around the refinery -- schools and older 18 residents, senior citizens that live around the 19 community. We're surrounded by the refinery, and 20 that's a big concern especially all the schools that 21 are surrounded by it. 22 And I can't understand why somebody 23 like AQMD and the city council people would go ahead 24 and give an old permit for a new refinery to reopen 25 when that old refinery was nothing but contamination. 319 1 And, of course, once, if the new one ever opens, it's 2 going to create the same problems. 3 So this is a big concern among the 4 residents. 5 CHAIRMAN LLOYD: Again, I think that Dr. 6 Burke's -- 7 DR. BURKE: It's not going to open. 8 CHAIRMAN LLOYD: -- on top of this. 9 DR. BURKE: It's not going to open. 10 MS. AGUIRRE: It's not going to open? 11 DR. BURKE: Doesn't that make you feel good? 12 MS. AGUIRRE: It sure does. And I hope I can 13 take your word for that. 14 DR. BURKE: And the guy in South Gate -- it 15 took me a second to think about it -- they're not 16 going to build that plant there either. Yeah. He 17 came over and told you? He's a good guy. 18 MS. AGUIRRE: I hope it is true and the 19 residents will appreciate that. 20 DR. BURKE: Oh, guarantee it's true. 21 MS. AGUIRRE: Okay. Thank you very much. 22 CHAIRMAN LLOYD: Thank you. Thank you very 23 much. 24 Thank you for coming, Enrique. And 25 thank you, Jack. Very much in support of Region 9 320 1 and -- 2 MR. MANZANILLA: Good. Thank you. Good 3 evening, Dr. Lloyd. Good evening, members of the 4 board, our colleagues at the California Air Resources 5 Board. My name again is Enrique Manzanilla. I'm the 6 director of the "cross-media division" at US-EPA's 7 office in San Francisco, which includes the 8 environmental justice program. 9 I'm joined today by Jack Broadbent, 10 who's the director of our air division. We are 11 submitting formal comments to you and would like to 12 take this opportunity to just highlight some of the 13 themes in your policies that particularly resonate, I 14 think, with the agency that Jack and I represent. 15 First, we fully and enthusiastically 16 support your proposed policies and applaud your 17 agency's leadership. US-EPA's keenly aware that, 18 without the leadership that you have exhibited at the 19 state level, environmental justice issues will not be 20 adequately addressed. 21 As directed by our administrator -- 22 Christine Todd Whitman -- in an August memorandum, 23 which is attached to our comment letter to you, we 24 are committed to working very closely with your 25 agency and our colleagues throughout the Cal-EPA 321 1 family as you work to integrate environmental justice 2 into your programs. 3 There are three elements of your 4 proposed policies that we would like to highlight and 5 reinforce. The first one is the concept of 6 integration. We believe environmental statutes 7 provide many opportunities to address environmental 8 risk and hazards in minority communities and/or 9 low-income communities. 10 Over the last two years in particular 11 US-EPA has worked hard to amplify on this basic 12 concept. Our comments append and reference several 13 documents that speak to the issue of how 14 environmental justice can be addressed under existing 15 environmental statutes. 16 Second, we clearly endorse your 17 proposals for improved public engagement and 18 community empowerment. Your work with us on the San 19 Diego Barrio Logan project is a clear example of your 20 commitment to a higher level of public engagement and 21 a model that can hopefully be transferred to other 22 communities. 23 Finally, we highlight and support your 24 policy's emphasis on the use of pollution prevention 25 as an approach -- the pollution-prevention approach 322 1 to address environmental justice issues. We thank 2 you for the opportunity to comment this evening. And 3 we look forward to working with you on the 4 implementation of your policies. Thank you. 5 CHAIRMAN LLOYD: Thank you very much, Enrique. 6 And I appreciate your work. 7 DR. BURKE: May I ask you one question? 8 CHAIRMAN LLOYD: Yes. Dr. Burke. 9 DR. BURKE: Do you have a Spanish-speaking 10 hotline? 11 MR. MANZANILLA: In the regional office, no. 12 But we have Spanish-speaking staff on the 13 environmental justice program. 14 DR. BURKE: So you don't have a hot line -- 15 MR. MANZANILLA: No. No. 16 DR. BURKE: -- that they can call? 17 MR. MANZANILLA: No. 18 CHAIRMAN LLOYD: Thank you very much. 19 Welcome, Jane. 20 MS. WILLIAMS: Thank you very much, Dr. Lloyd. 21 Thank you for allowing me to speak tonight. I'm Jane 22 Williams, the executive director of California 23 Communities Against Toxics. California Communities 24 Against Toxics was formed in 1989 at the Santa Isabel 25 Church in East L.A. after the march on the proposed 323 1 Vernon hazardous-waste incinerator. 2 I've been the executive director since 3 1996, when my mother, who was the previous executive 4 director, died. California Communities Against 5 Toxics represents people of color. It's an 6 environmental justice network in California. 7 I was pleased to see Marc Antonio 8 Firebaugh here. We worked in his district just a 9 couple years ago to shut down an incinerator. And a 10 couple of the other staff members here worked with 11 now Congresswoman Solis on the Puente landfill. And, 12 of course, we've worked in this district as well. 13 My mother was the only public member 14 on the original AB 2588 mailing list. All the other 15 members were members of industry. And we would love 16 to see that program finally do its job and work. 17 We think that these principles and 18 these guidelines that you've put forth today might 19 help us achieve that and really get at the issue of 20 cumulative risk and underrepresented communities and 21 communities of color as well as some rural 22 communities that, quite frankly, are also affected. 23 It's not just an urban air toxics 24 problem. It's also some rural communities where 25 you've got disenfranchisement, a lack of access to 324 1 political power, and problems with overexposure to 2 hazardous air pollutants. 3 So we applaud the proposed policies 4 and actions for environmental justice. Of course, we 5 know that the proof is in the pudding. And I know 6 that I'll be spending a lot more time with Dr. Lloyd 7 and Dr. Prasad and other members of the staff and the 8 board, as we have been over the last many years. 9 And I look forward to really looking 10 at a day when my son, my new son, who's not even a 11 year old, can come down to Los Angeles and I don't 12 have to worry about the CEP data and the national 13 air-toxics assessment data exposing him to an above 14 average or any kind of cancer risk. 15 So in closing -- and I know you have a 16 lot more community members, many of them members of 17 my coalition -- and I hope that you will listen to 18 the stories of people who are actually living in the 19 trenches, living in these districts, living in areas 20 where we know they are being exposed to health 21 threats. 22 And I look forward to working with the 23 Air Board also on the "Healthy People 2020" goal of a 24 75 percent reduction in "HAPS" by the year 2020. 25 Thank you. 325 1 CHAIRMAN LLOYD: Thank you very much. 2 Dr. Wallerstein, Peter Hess, Barbara 3 Lee, Marilyn Solomon. 4 MR. EICHWALD: Let the people, instead of the 5 bureaucrats, speak first. This guy's just going to 6 defend all the bad record that South Coast Air 7 Quality Management District has done to our people. 8 We want our people to speak first -- the community 9 people that are here from Wilmington, mothers and 10 children. And it's almost 9:00, and they haven't had 11 a chance to speak -- 12 CHAIRMAN LLOYD: Do you mind -- 13 MR. EICHWALD: -- not just the bureaucrats. I 14 want these parents that are going to speak from 15 Wilmington to come up next. The guy who's going 16 speak -- wait in the back. He's just going to defend 17 what you guys, especially Mr. Burke -- 18 CHAIRMAN LLOYD: Do you mind, sir? We will 19 try to get everybody. But I'm trying to mix the 20 people up here to -- 21 MR. EICHWALD: The children have to go back to 22 school in the morning at 8:00. By the time we go all 23 the way to Wilmington, it will be 10:00, 10:30. 24 CHAIRMAN LLOYD: I understand. 25 MR. EICHWALD: Please -- 326 1 CHAIRMAN LLOYD: Okay. Next. 2 MR. EICHWALD: -- consider the children that 3 are here. 4 CHAIRMAN LLOYD: Next. Please, next. 5 We'll -- I'll take you next. Dr. Wallerstein. 6 DR. WALLERSTEIN: Good evening, Dr. Lloyd and 7 members of the board. I'll be very brief this 8 evening. I'm Dr. Barry Wallerstein. Actually I'm 9 here this evening on behalf of the California Air 10 Pollution Control Officers Association, the 35 local 11 districts up and down the state. 12 We're before you tonight to urge your 13 approval of the policies and the action items. We 14 support them strongly. And we're prepared to roll up 15 our sleeves, as local districts, and work with you on 16 the implementation. So it's an important first step 17 tonight, and we're there the rest of the way with 18 you. So we urge your approval. 19 CHAIRMAN LLOYD: Thank you. Barry, I would 20 like to, again, express my personal appreciation for 21 all your help both here and at CAPCOA. So appreciate 22 very much. 23 So, Peter, I'll take you. I know you 24 have a plane. Then we'll take the people from 25 Wilmington. 327 1 MR. HESS: Good evening, Dr. Lloyd and members 2 of the Air Resources Board. I'm staying overnight; 3 so I'm here for the long haul, stay for the whole 4 thing. 5 CHAIRMAN LLOYD: That's not a helpful comment 6 to me. 7 MR. HESS: Well, if you're going stay, I'm 8 going to stay. The Bay Area Air Quality Management 9 District is pleased to offer our strong support for 10 the approval of the proposed environmental justice 11 policies before you tonight. Your approval of these 12 policies and actions will integrate the statewide 13 environmental justice program with California's 14 leadership role in air-quality improvement programs. 15 We commend your staff for creating 16 such a diverse and forward-thinking roundtable 17 stakeholders to review the proposed policies. We 18 also commend the stakeholders for their innovative 19 proposals and for their openness to the new ideas 20 contained in these environmental justice policies and 21 actions. 22 The proposals, when approved, will 23 provide the guidance needed for advancing the state 24 air-quality program to further protect the health of 25 residents in low-income and minorities communities. 328 1 Your proposed program also dovetails with the Bay 2 Area Air Quality Management District's guiding 3 principles for environmental justice that was 4 established in 1999. 5 Please count on the Bay Area's support 6 in the implementation of the program and the rules 7 that will result as we move these policies into 8 concrete action items. The adoption of this program 9 will greatly assist all communities towards the 10 attainment of the health-based ambient air-quality 11 standards, the reduction of toxic risks, and will 12 facilitate environmental justice for all 13 Californians. 14 We urge your approval tonight. And 15 thank you. 16 CHAIRMAN LLOYD: Thank you very much, Peter, 17 for coming. Thank you. Thank you for your help. 18 What I'd like to suggest -- and I 19 can't see from here how many people have children. 20 What I would like to suggest is that those with 21 children, actually if you could line up and then come 22 to the witness stand, identify yourselves so, in 23 fact, we do, do that because I think that the 24 gentleman from Wilmington had a good point. 25 So you if could just identify yourself 329 1 for the court reporter -- 2 THE WITNESS: (Speaks in Spanish.) 3 MR. EICHWALD: Can we have a translator, 4 please? 5 CHAIRMAN LLOYD: Then after the group of 6 witnesses, we were going to give the court reporter a 7 break. 8 MS. RIVAS (Through Interpreter): Good evening 9 to all. Thank you for having this very important 10 meeting. For us, especially the residents of the 11 City of Wilmington -- 12 CHAIRMAN LLOYD: Could you just, please, have 13 her name. 14 MS. RIVAS (Through Interpreter): Excuse me. 15 My name is Dionesia Rivas, and I live in the 16 community of housing authority in Wilmington. And we 17 have the highest incidences of children with asthma 18 and cancers. And I'm really happy to see that you 19 are concerned for the well being of all the 20 community. 21 But I'd also like to request that more 22 assistance come to this community that has been 23 really damaged. And thank you very much. 24 And I also want to thank the people in 25 Sacramento because, thanks to them, we have been able 330 1 to get to this forum because we were not aware that 2 there were laws that could regulate the air and we 3 were dying because we have five refineries and the 4 port that pollutes quite a bit and factories also. 5 And that's why I request that you 6 implement the law as soon as possible. Thank you. 7 Thank you to all and good night. 8 CHAIRMAN LLOYD: Thank you. Thank you very 9 much for coming. 10 KARINA HERNANDEZ: Good evening. My name is 11 Karina Hernandez, and I'm 11 years old. And I come 12 from the city of Wilmington. 13 And I would like to tell you that, if 14 you lived there, in Wilmington, you will know how 15 hard and unhealthy it is to live there because my 16 little sister was just about 7 years old. She was -- 17 she had bronchitis, and she was born healthy. 18 And then there's -- like my mom said, 19 there's five refineries that made her very unhealthy 20 and so did the port 'cause they have these 21 contaminations and all these gases -- all those gases 22 of the refineries and the port made her unhealthy. 23 Well, well, my point is, if anybody 24 can help us, maybe it's you. Maybe you can help us 25 by putting, like, a clinic or something in our city 331 1 because we need something like that, you know. Like 2 we need help from people. And we can't -- we didn't 3 really know that these -- there was laws, like, we 4 could fight for our air and stuff. 5 Well, we just want you guys to help 6 us. Well, thank you for listening. 7 CHAIRMAN LLOYD: Thank you. 8 KARINA HERNANDEZ: Thank you very much. 9 CHAIRMAN LLOYD: In fact, I think several of 10 the board members here, maybe most of them -- thanks 11 to Carlos Porras -- have actually gone down to 12 Wilmington and seen firsthand some of the issues 13 there. 14 UNIDENTIFIED VOICE: Carlos. Carlos. 15 MR. EICHWALD: I'd just like to say I'm here 16 with the people from Wilmington. We came. We had a 17 two-hour drive out here. It's tough for us too. I 18 know it's tough for you, the board members. And I 19 hope we're going to keep quorum tonight. 20 First of all -- 21 CHAIRMAN LLOYD: Could you just give us your 22 name. Sorry. 23 MR. EICHWALD: My name Agustin Cheno Eichwald 24 from Communities for a Better Environment. And I'd 25 like to say a few things as far as this guideline. I 332 1 applaud the ARB for putting forth these guidelines. 2 And I'd like to see the ARB even make them stronger. 3 I have a couple of points that I'd 4 like to bring out. Accountability: We want, in 5 Wilmington, we want accountability for pollution 6 coming from refineries, as you just mentioned, 7 Karina. 8 We want accountability for the port. 9 The port does not fall under jurisdiction of the ARB 10 or the AQMD. And this is an extremely serious amount 11 of pollution that's coming from the port. You have 12 the diesel trucks -- thousands and thousands of 13 diesel trucks coming every day, passing through 14 Wilmington. 15 Toxics reduction: I've heard, from 16 the presentation that the gentleman gave from the 17 ARB, that we want toxic reductions by 2010. And I 18 think that's too late. We have people dying. We 19 have children with cancer in Wilmington and all over 20 California. And we shouldn't wait 10 years for these 21 guidelines to go through and for these reductions to 22 go through. They should start happening now. 23 Meaningful outreach and participation: 24 We want more outreach, and we want more public 25 participation in the environmental impact report 333 1 process, CEQA process. 2 We want more prior notice. There was 3 a couple of meetings of the ARB where I was given 4 one-week notice. We want more notice. We want two 5 weeks' notice so that more people can show up, more 6 people can have the opportunity to participate in 7 democracy. 8 There was a situation in Wilmington 9 where the Port of Los Angeles was going to build a 10 20-foot wall and 6-lane diesel highway for the use of 11 diesel in Wilmington. 12 And the people who lived on C Street, 13 which was right across from where this diesel highway 14 and 20-foot wall were going to live -- didn't even 15 know about it. They didn't even know. 16 I went and talked -- I went myself, 17 door-to-door talking to the gentlemen, to the people. 18 And they didn't even know about it themselves. 19 Effective penalties and revoking 20 permits. Fines. We want fines for the polluters in 21 Wilmington and all polluters. I heard that -- I got 22 from a workshop of the ARB that was presented in 23 Wilmington -- we found out there was a fine of $11 on 24 a refinery in the Bay Area. This is ridiculous. $11 25 is about a third of my parking ticket that I just got 334 1 today. This is totally ridiculous. 2 If you talk about a huge refinery 3 right next to a neighborhood, $11 is nothing. In the 4 South Coast there was one -- there was fines as 5 little as $500. That is outrageous. That is not 6 even a drop in the bucket for the pollution and the 7 absenteeism and the money that the communities have 8 to pour into health every day. 9 Also, we want more resources. We want 10 more personnel in Wilmington. We already have one 11 monitor. And we applaud you for having that one 12 monitor in Wilmington to study. And hopefully the 13 AQMD can follow with more monitors. 14 And hopefully we can have monitors at 15 Hawaiian Avenue Elementary school, where we have a 16 Tosco refinery that exploded twice. And I hope that 17 we can see these changes. And I hope that we can see 18 those resources in Wilmington. Thank you very much. 19 CHAIRMAN LLOYD: Thank you. 20 MR. CEBADA: Augustine Cebada, Brown Berets. 21 And I'm here tonight to speak about the illusion that 22 we're casting on the people by these proposed 23 regulations. I remember when the South Coast Air 24 Quality Management District was formed some 30-odd 25 years ago. And it was a great breakthrough. And we 335 1 thought, because of that, we would have clean air 2 here in the L.A. Basin. 3 And what's happened? Why don't we 4 have it? And I'll point to the example of a person 5 who gave testimony here earlier -- Mr. -- 6 Representative, State Representative Firebaugh. He 7 comes here. And he says, "I'm in favor of these, 8 these regulations." And he's the head of the Latino 9 caucus. 10 But does Mr. Firebaugh tell you what 11 he was doing six, seven months ago, backing up the 12 "Nueva Azalea" power plant in South Gate? What is 13 this? Is this an illusion? How many of you here are 14 putting these regulations out because the people have 15 been organizing marches in Santa Fe Springs against 16 Cenco, marches in Wilmington, demonstrations in South 17 Gate? Is that why you're responding? 18 That's good. The people need to be 19 out in the street ever vigilant because we cannot 20 trust bureaucrats. Give you an example. "Suva" 21 Elementary School, right next to Chrome Craft -- 22 Chrome Crankshaft Plating Company. Over some 20, 30 23 years, that plant was there, and it was documented up 24 to 1988. 22 children lost their lives of cancer plus 25 8 staff members in that elementary school. 336 1 We started working -- the Brown Berets 2 and the community of Bell Gardens to shut this plant 3 along with Carlos Porras and CBE -- CBE, La Causa. 4 And we were told by staffer from South Coast Air 5 Quality District, when we went to testify at the 6 Montebello Unified School District -- he was sitting 7 there. 8 He says, "Ah, you guys will never do 9 anything." That's the attitude that has permeated 10 so-called regulators, taken over by countervailing 11 power, economic power. If you were to fine Tosco 12 Refinery, which sits less than half a mile from Dana 13 Strand Housing Project, where most of these people 14 live, you fine them $500, that's nothing. 15 They made -- in the second quarter of 16 this year, they made $3 billion profit. 500,000 is 17 nothing. We want some heavy fines on these polluters 18 and mitigation. 19 Patricia Perez lived in Dana Strand. 20 She died of cancer. Her poor family had to foot all 21 the bill. All the people in the neighborhood took up 22 a collection to bury her. Did Tosco put in one cent? 23 Did South Coast Air Quality Management District come 24 down there and say, "Oh, poor Patty. Poor Patty 25 Perez"? 337 1 No. We didn't even see them. The 2 attitude was "Hey, your guys will never do anything. 3 You're too small. You're too insignificant." 4 Not only that. Hablo Espanol. And 5 none us up here on the board speak Spanish. Look at 6 this board. 7 Quien habla Espanol? No entiendo. No 8 entiende. Ninguno ustedes. 9 How can we trust you when none of you 10 speak the language of the majority of the 11 Spanish-speaking people in L.A. County? You know 12 that, don't you? The vast majority of the people in 13 L.A. County speak Spanish, not English. 14 And yet what are you doing to have 15 your staff have these Spanish-speaking hotlines, to 16 have a Spanish-speaking board member? To have, you 17 know, good translation. You have these poor ladies 18 over here overworked. 19 How come that's -- how come you can't 20 see that? That's one of the environmental justice 21 issues that we can't even communicate to you because 22 you shut us out. We're tired of it. 23 And we will be ever vigilant on you to 24 make sure, once these guidelines are passed, that you 25 stick to 'em and you start fining these polluters; 338 1 these killers; these genocidal, power-hungry, 2 money-hungry people who are killing our people on a 3 daily basis. So do your job. 4 MR. MARQUEZ: My name is Jesse Marquez. I am 5 the Chairman of the Wilmington Coalition for a Safe 6 Environment. I've also forwarded you information 7 regarding our recommendations on these environmental 8 justice policies and procedures and guidelines. 9 I want to applaud and thank all of you 10 and your staff for an excellent job in the 11 preparation of this document. It is badly needed in 12 order to defend our community and protect our health 13 and safety interests. That why is we prepared our 14 recommendations. 15 We would like you to, however, make 16 sure that you do include all recommendations from the 17 community. These have been drafted over the past 18 year and a half. I understand that. But since this 19 time this document has come out, there may have been 20 other organizations such as ours who has had the 21 opportunity to now review it and to make some 22 concrete recommendations. 23 One of our biggest concerns are what 24 we call the loopholes in the laws. The loopholes in 25 the laws is what's killing our Wilmington 339 1 Harbor-South Bay Community. What is the loophole? 2 One of those loopholes is the Port of Los Angeles. 3 They are not regulated by AQMD. They are not 4 regulated by the ARB. 5 Since they're considered their own 6 governmental agency, for example, they prepare their 7 own environmental impact reports. They approve their 8 own environmental impact reports. 9 Anytime the community in Wilmington 10 and San Pedro and the Harbor area has come forward 11 and made concrete recommendations and changes to 12 those documents, not one page has been changed. In 13 fact, in one of the ER reports, there is only one 14 page in the whole document regarding negative 15 environmental impacts -- one page. 16 So we want to make sure that your 17 wording includes all state commissions and any type 18 of agency of California -- that this law will be 19 implemented on them as well. 20 We want to make sure that there is 21 established standardized environmental compliance 22 guidelines criteria and checklists. Why? Because 23 the Port of Los Angeles does not have this. 24 You can look at any of their 25 documents. There is no environmental documents. 340 1 There is no environmental checklists. They get away 2 with literally murder. 3 I do applaud the ARB for the 4 Wilmington study that's currently being performed in 5 Wilmington. I have taken a tour through the courtesy 6 and help of Mr. Dale Shimp. He has helped our 7 communities take a tour and understand the mechanism 8 of the testing. I also received a preliminary copy 9 of the test data from Dr. Linda Murchison. 10 I had also asked when a report would 11 come out regarding the data. Since the test is 12 going to take one year, it will be approximately 13 1 1/2 years from now for that test data to become 14 known into the community. We can't wait a year and a 15 half. 16 However I do have an IQ above zero, 17 and I was able to read that test data. And out of 18 that test data, I was able to put together a list. 19 26 carcinogenic chemicals were found in Wilmington's 20 air. 39 toxic chemicals were found in Wilmington's 21 air. 22 Now I have a problem. To what level 23 do these affect us? How serious are these levels? 24 In many cases, there aren't even standards in the 25 state or the federal government for some of these 341 1 chemicals listed here. Someone needs to come to our 2 communities to protect our communities, to regulate 3 these polluters from doing the damage that they're 4 doing. 5 There is no accountability by the Port 6 of Los Angeles or the Port of Long Beach because of 7 these loopholes. And that's what we want to close. 8 I would also like to show you 9 something. This is a sample air filter of 4 days of 10 air in Wilmington. On the left here, you see a white 11 filter. On the right, you see a gray filter. This 12 is 4 days of air in Wilmington. 13 This is what's in our lungs. This is 14 what's in our children's lungs. Imagine 365 days and 15 imagine that times every year. That's how serious 16 the problem is in our community. 17 I attended a conference this past 18 weekend where there was different health-department 19 officials. There has never been one city, county, 20 state, or federal health agency in Wilmington to 21 investigate any of the health problems. 22 We did an informal survey in 23 Wilmington and found out that over 20 percent of our 24 children have asthma and respiratory problems when 25 there has never been a history of any asthma or 342 1 respiratory problem in the history of their families. 2 So I urge you strongly and we beg you 3 to please review our document and to look at our 4 considerations and our recommendations because we 5 just don't yell and scream. We do look for solutions 6 to the problems. And that's why, in our letter to 7 your staff, you see our recommendations in there. 8 And we allow ourselves at any point in 9 time to be contacted by any of your staff so that we 10 can contribute any type of information to you. And 11 we thank you for this time. 12 CHAIRMAN LLOYD: Thank you very much for 13 helping. 14 You're from Wilmington? 15 MR. PAIGE: I'm from San Pedro. But I rode in 16 with the Wilmington group -- 17 CHAIRMAN LLOYD: Well -- 18 MR. PAIGE: -- and I'd like to leave with 19 them, if that's all right. 20 CHAIRMAN LLOYD: There are two criteria -- 21 children and Wilmington. And I didn't see you 22 qualify for either. But you go ahead. 23 MR. PAIGE: My name is Rodger Paige. I live 24 in San Pedro. I'm a retired executive of Air 25 Products and Chemicals and have about 30 years, 343 1 30-plus years of operating experience in process 2 plants. In my experience, I've had plants shut down 3 temporarily by the EPA for the slightest infringement 4 of operating permits. 5 Air Products built its first 6 co-generation plant in California in 1986. That 7 plant was very successful. It made a lot of money. 8 And it produced energy at far below an equivalent 9 conventional power plant. 10 However, Air Products shelved all of 11 their future plans for future co-generation plants 12 because of the difficulty in getting permits to 13 operate these plants. 14 California has just gone through a 15 very critical electricity crisis caused, reportedly, 16 by the lack of building plants over a 10-year period, 17 which was caused by the difficulty in getting through 18 the permitting system. 19 Now, I'm not trying to be critical of 20 the permitting system. I think it's a great system. 21 What I'm here to propose is that the Ports of Los 22 Angeles and Long Beach be included in the permitting 23 system. The "Mates 2" report would indicate that the 24 South Bay Basin is the most highly polluted area or 25 among the most highly polluted areas in California. 344 1 The port is planning expansions of 2 doubling the port size every 5 years for the next 20 3 years -- all of this without any oversight. 4 In my opinion, this excellent document 5 you've produced is going to be seriously flawed if 6 there isn't a permitting, environmental-permitting 7 system required for these two ports. Thank you very 8 much. 9 CHAIRMAN LLOYD: Thank you very much. 10 What I'd like to do is take a break 11 here till 9:15 -- break for the court reporter. 12 UNIDENTIFIED VOICE: Sir, I'd like to thank 13 you for taking into account the children and the 14 women from down in the most polluted area in L.A. 15 CHAIRMAN LLOYD: Thank you for bringing it to 16 my attention. Thank you. 17 You come from Wilmington? As I 18 mention, line up after the break. Yeah. Please, 19 what is your name? So we can get -- sorry. Okay. 20 Yeah. Wilmington? A lot of Wilmington. 21 (Break.) 22 CHAIRMAN LLOYD: There are many other people 23 who also have to travel a distance or have some 24 constraints -- if you could also line up. Thank you. 25 Thank you for your patience. 345 1 MS. SCHWAB: Thank you. Good evening. My 2 name is Gertrude Schwab. And I'm a lifelong resident 3 of the community -- it's not a city -- the community 4 of Wilmington in the City of Los Angeles. 5 First of all, I'd like to thank 6 Mr. Burke for helping us cover the LAXT petroleum 7 coke piles. I was one of the first instigators of 8 that. And -- Thank God -- they covered it. They 9 were silver or white to start with. And now they're 10 perfectly black. So that coke material was going 11 somewhere. 12 First of all, I'd like to ask, did I 13 missing something? Or did the document include 14 container trucks and trains? It's unbearable right 15 now in our community. And with the opening of the 16 Alameda Corridor in April of 2002, we will be having 17 more trucks and up to a hundred unit trains a day 18 going through our community. 19 An overpass is planned, which should 20 have been the first one in the Alameda corridor. But 21 an overpass is finally being -- is going to be built 22 at Alameda and Pacific Coast Highway in Wilmington. 23 This is adjacent to the Equilon Refinery. 24 Now, when they start this project, PCH 25 is going to be shut down for at least a year. That's 346 1 a heavily travelled state highway. Where are these 2 people going to go? All those container trucks. I'm 3 sure that Wilmington is going to be ripped wide open 4 with all these container trucks and extra vehicular 5 traffic. It's unbelievable. I don't know if you're 6 aware of what's going on. 7 Hawaiian Avenue school. I feel sorry 8 for that school. It's adjacent to Harry Bridges 9 Boulevard. That's what they were talking about -- 10 this wall and this six-lane truck highway. It's 11 about a block away. They put this monitor up at 12 Wilmington Park elementary school, but a monitor 13 should be placed at Hawaiian Avenue school. I don't 14 know how those children survive with all those diesel 15 pollutants. They say it's the Number 1 carcinogenic 16 is the diesel pollutants. And they live with this, 17 with these horrendous trucks going daily, daily. 18 And I believe monies for fines, 19 whether it's refineries or this program you're 20 proposing -- I think the money should stay in the 21 affected communities. It's just like that program 22 you had for cars. What -- I forgot the name. 23 DR. BURKE: Recycling -- 24 MS. SCHWAB: Yeah. But -- okay. They were 25 getting credits, air credits all over. But they were 347 1 recycling cars out in the San Fernando Valley, and we 2 still had the dirty air. I couldn't see the sense in 3 that. 4 Also, when CBE gets money for lawsuits 5 or wherever, where does this money go to? I don't 6 see anything going back into the community of 7 Wilmington. I don't know what they have received in 8 for lawsuits and things. But I don't see anything 9 going back into the community. 10 And also they say there's equal 11 protection under the law. Where is our protection 12 against these container trucks and diesel trains? I 13 don't see it in our community. They talk about -- 14 the previous people -- about problems in their 15 community. You ought to come to Wilmington and see 16 our problems. 17 We've got a sanitation facility. They 18 put in another generating plant down at our 19 waterfront. We already had one. Now we have two, 20 and they didn't even notify the people that this was 21 coming in. This is how Wilmington is being treated. 22 And also you had a meeting last 23 Thursday with CARB. It was -- the meeting notice I 24 received said it was going to be at Carson city 25 council. Well, there was no meeting at Carson city 348 1 council. It was held at the Wilmington library. But 2 nobody received a notice that it was going to be 3 changed. I guess they didn't want anybody to show 4 up. 5 Also I told 'em, you know, "We have a 6 perfectly good building." The port finally, after 7 they took it away from us twice, finally built our 8 Bannings Landing community center. It is a city 9 building, and it can be used for any of these 10 purposes, for meetings like this. 11 So, you know, coming to El Monte -- it 12 took us -- I don't know -- over an hour, almost an 13 hour and a half to get here. Look at all those extra 14 pollutants on the freeway. My God. The traffic was 15 bumper to bumper. It's terrible to have to come to a 16 meeting like this way out in -- 17 CHAIRMAN LLOYD: Can you bring it to a close? 18 You've already got 4 minutes and a lot to do -- the 19 other people -- 20 MS. SCHWAB: But, you know, I would like to 21 say, you know, there's a good side of the refineries 22 too. You always hear the bad side. Our local 23 YMCA -- if it wasn't for the refineries in the area, 24 this building would not have been opened. They 25 contribute to the Boys and Girls club, the "Wonder of 349 1 Reading" for all the elementary schools. They 2 contributed to our Bannings Landing community 3 building and numerous programs for youth. 4 I attend their meetings. They have a 5 quarterly meeting at the refinery. And they don't 6 keep secrets. They come out in the open and tell us 7 what's going on. So I want you to hear the good 8 sides of the refineries too. Thank you. 9 CHAIRMAN LLOYD: Thank you. Thank you. 10 DR. BURKE: I have one, just one quick 11 question. 12 CHAIRMAN LLOYD: Question. 13 DR. BURKE: I have one quick question. If you 14 remember when I first came down and held the hearing 15 in Wilmington about the coal dust -- 16 MS. SCHWAB: Over at the park. 17 DR. BURKE: Exactly right. Do you remember 18 Janice Hahn came down and testified? Do you remember 19 that day she came? Well, you see, I don't understand 20 why Janice Hahn -- now she's on the city council -- 21 allows those kinds of things to happen in Wilmington. 22 MS. SCHWAB: She's working on 'em. 23 DR. BURKE: Well, she needs to get her heels 24 clicking pretty good because -- 25 MS. SCHWAB: We have stored containers all 350 1 over our community, four or five high. 2 DR. BURKE: Fine, you know. And tell her 3 we'll help as much as we can like we did last time. 4 MS. SCHWAB: Thank you. 5 CHAIRMAN LLOYD: Dr. Murchison, would you like 6 to comment on placing of the monitors? 7 DR. MURCHISON: Yeah. We've been -- oh, 8 excuse me. There. Can you hear me? Okay. 9 We've been working with community 10 members to try to identify additional locations for 11 monitors. And we are going to be placing one at the 12 Hawaiian Avenue school. 13 CHAIRMAN LLOYD: Great. Great. Thank you. 14 MS. BUENO: Good evening. My name's Alina 15 Bueno. And I work for a nonprofit group that has 16 been working in the Harbor area of Los Angeles for 17 the past six years. 18 And primarily we've been in Wilmington 19 doing a variety of programs. Our primary goal is to 20 create safer environments to prevent unintentional 21 injuries for kids which, as you may or may not know, 22 by the CDC, they've shown that that's the Number 1 23 killer for kids ages from 1 to 4. 24 With having a master's in public 25 health, I do appreciate and support environmental 351 1 justice policies that are fairly and unbiasedly 2 enforced and, as Gertrude mentioned, where the fees 3 from the fines are given back, at least partially, to 4 the community to improve those communities. 5 However, I'm here today to speak to 6 and address any myths that have been stated at 7 previous hearings to the board regarding the lack of 8 community involvement and concern by the refineries 9 in Wilmington including Phillips, which was formerly 10 Tosco, Ultramar and Equilon. 11 Unfortunately the Wilmington group 12 left. But those are the moms -- I know all of 'em. 13 I work with 'em on a weekly basis. The little 14 kids -- Karina, Carla, and Michelle Lopez -- they're 15 all students I work with on a weekly basis. And 16 their families have benefited from programs that are 17 existing and supported by the refineries in 18 Wilmington. 19 These include "Kick Back and Read," a 20 weekly afterschool program; Bannings Landing 21 community center; the "Wonder of Reading" libraries, 22 and afterschool bicycle safety club for kids. So 23 they are out there -- and I personally know this -- 24 supporting these programs that are decreasing 25 injuries in the community of Wilmington for these 352 1 children. 2 So basically, bottom line, I just 3 wanted to share that with you so that you are aware 4 of the support that the refinery does have. They 5 have staff who are from the community, who know the 6 community's concerns, and who are out there making 7 sure that these children have a safer environment in 8 which to live. Thank you. 9 CHAIRMAN LLOYD: It shows here that you're 10 opposing our policy, the policies? 11 MS. BUENO: I -- and actually to be honest 12 with you, I have not read everything, you know -- all 13 the policies existing. So I just wanted to come here 14 today to give the other side of what other people 15 have said. 16 CHAIRMAN LLOYD: So you're not opposing the 17 policies because you don't know what they are yet? 18 MS. BUENO: Right. So I don't -- 19 CHAIRMAN LLOYD: But you put a check mark 20 here? 21 MS. BUENO: Right. 22 CHAIRMAN LLOYD: Thank you. 23 MS. BUENO: Thank you. 24 CHAIRMAN LLOYD: Next is Bill Schwab. 25 MR. SCHWAB: My name is Bill Schwab, a 353 1 lifelong resident of Wilmington. As a youngster, I 2 remember I used to lay on the ground at night, in the 3 evenings, and see the falling stars. But I don't see 4 'em anymore. I don't think any of these other people 5 see any of these falling stars. But I'm not here to 6 say that I oppose this bill that you have made up. 7 But I do have things that I want to 8 look at. Tell you people that the law is just as 9 good -- that I should say it should be implemented. 10 And you can't implement that law that you're making. 11 It's no good because we have so many laws in the City 12 of Los Angeles that are never implemented. 13 They say it's against the law. But 14 there's nobody there to implement it. They say we 15 don't have the people to implement things. So what 16 good is it? 17 In my community, we have oodles and 18 oodles of car dissemblers. About 10 years ago, I 19 counted them in the telephone book. It was 48. And 20 it must be 148 now. They're scattered all over the 21 place. They take cars apart. They spray -- they fix 22 cars. They spray 'em with lacquer. There's nobody 23 to implement the laws. And that lacquer gets in the 24 air. It also gets in the lungs. 25 So it's not only the poor, the 354 1 refineries, and all these other things. We've got 2 many other little things that are there. In the east 3 part of Wilmington, we have a staging area for trash. 4 They pick up. They store it there until they have 5 time to pick it up and take it somewhere else. 6 I don't know if an inspector's ever 7 been there to check it all out. But we have all 8 these different problems there. 9 I know we have a new mayor in the City 10 of Los Angeles and his sister Janet Hahn -- I've 11 known 'em both for quite a while. And I think 12 they're -- when Mr. Hahn, the mayor, was city 13 attorney he said it was the greatest thing we ever 14 did to get those coke piles covered. And that's when 15 he was a city attorney. 16 I spent 8 hours with him, taking him 17 around Wilmington 2-and-a-half years ago. And he 18 said this community needed lots of loving. 19 I also took California Air staff, I 20 guess, first part of the year, around Wilmington; 21 spent 6 hours with them. We took them all over San 22 Pedro and Wilmington. And my area of Wilmington, as 23 an old merchant seaman of 43 years -- we used to call 24 some of these old ships, you know, that I sailed on, 25 three pots -- two-pot ship. 355 1 And if you don't know what a two-pot 2 ship is, the offices got the better food and the crew 3 got the -- what do you call it? 4 So between Wilmington and San Pedro, 5 San Pedro always got the best -- and I think Mr. 6 Burkes can tell you that -- and Wilmington always got 7 leftovers. And we were the big money-makers for the 8 City of L.A. 9 So anyway, I want to thank you and, 10 Mr. Burkes, again I want to thank you for coming to 11 Wilmington and helping us. And I think it was 12 Senator -- senator from the Valley now. He was a 13 councilperson -- 14 DR. BURKE: Yeah. It was Richard -- Richard 15 Alarcon. 16 MR. SCHWAB: Yeah. And if you ever see him 17 again, tell him thanks. 18 DR. BURKE: Okay. 19 MR. SCHWAB: Thank you. 20 CHAIRMAN LLOYD: Thank you. 21 Paula Forbis. Hi, Paula. I 22 understand you have to go back tonight so -- 23 MS. FORBIS: That's right. And if -- 24 MR. SCHWAB: Excuse me. There was one more 25 thing. I forgot about that airport -- the jets 356 1 flying over in the air. They put a lot of pollutants 2 out too. 3 MS. FORBIS: Thank you very much for taking us 4 out of order. I'm Paula Forbis with the 5 Environmental Health Coalition from San Diego. And I 6 want to congratulate you on the historic action that 7 you have set for yourselves tonight. And I'm hoping 8 that you'll be able to complete that action tonight. 9 Environmental Health Coalition is in 10 very strong support, as you can see. We signed onto 11 the letter that was signed by more than 43 groups 12 from around the State of California. We're in very 13 strong support of the policies you've laid out before 14 you. And we're in support of the language as it 15 currently is and are not excited to see it change. 16 But I think the bottom line, the most 17 important thing for us, is that your actions are 18 going to speak much louder than your words. And so 19 what we are really wanting to see from you tonight is 20 a commitment to action. 21 And I want to also thank you for the 22 action that you've taken in Barrio Logan. And I want 23 to have some of the folks from San Diego stand up, if 24 they would. We've got some in the back here and then 25 a couple along the side, on the wall here. 357 1 These are the faces of the folks that 2 many of your staff know because they have walked the 3 streets with your staff, identifying sources of air 4 toxics in the Barrio Logan and Logan Heights 5 communities. They have become monitoring-siting 6 experts alongside your staff in these communities. 7 Francisca Jimenez in the pink here -- 8 I want to give special recognition to -- and Sonia 9 Rodriguez. They've just completed a process with 10 your staff in which they sited or assisted your staff 11 in siting more than 50 monitoring locations in that 12 community, looking for tracer gas, Chromium-6, and 13 several toxics monitors. 14 We're very, very thankful for all of 15 those efforts. And it's been quite a two years. And 16 we're hoping to see that level of commitment 17 continue. 18 I really want to focus your attention 19 on what I think are some of the most important 20 additional steps that we feel you need take tonight 21 in order to make these policies really something that 22 become implemented and turn into action in the 23 future. And those are the guidance documents that 24 have been laid out in the coalition letter. 25 First and foremost, at least for us, 358 1 is the land-use-planning guidance documents. We all 2 know that land-use problems and historic 3 disproportionate siting of toxic facilities in these 4 communities are at the root of a lot of these 5 problems. 6 And the folks that travelled here 7 tonight that took time away from their families, from 8 their schedules, and sat in a van or on a bus for 9 hours to come talk to you tonight are not here 10 because of a facility that's many miles down the road 11 or an auto body shop that's in the middle of an 12 industrial park. 13 They are here because those facilities 14 are sited directly next to their homes or their 15 schools. And that is not acceptable. 16 And until we get the information that 17 ARB has in terms of the toxic risks that go along 18 with putting a plater next to a home or a school next 19 to a freeway -- until we get that into the hands of 20 the land-use agencies and the other local agencies 21 that are making permitting decisions, those problems 22 are going to persist. 23 And we all know that it's much easier 24 to prevent these problems from continuing to occur in 25 the future than it is to fix the problems we're 359 1 currently got on the ground right now. 2 The two other guidance documents are 3 also critical -- and I see that my time is coming 4 short, and I know we're running very late tonight, 5 and I know there's other folks that want to talk 6 about them -- but those are dealing with complaint 7 resolution. You heard from Luz Palomino, from our 8 community. We also have a lot of problems getting 9 complaints addressed in these communities. 10 And then cumulative emissions. 11 Really, if what we're doing tonight doesn't result in 12 the reduction of toxic emissions in these 13 communities, then we've wasted an inordinate amount 14 of time. So really cumulative emissions and 15 reduction of those emissions is going to be where 16 it's at. 17 Finally, again, I want to thank you 18 for your Herculean effort, that of a lot of your 19 staff over the last couple of years in pulling this 20 together and in their work on the neighborhood- 21 assessment project. 22 It is not easy, we're well aware, to 23 be the first agency out of the box on these issues. 24 And the fact that you have so much interest from all 25 sides of the issue tonight, I think, is very symbolic 360 1 of the fact that you are heading in the right 2 direction. 3 So I urge you to adopt the policies 4 tonight in addition to the additional recommendations 5 that were in the coalition letter. Thank you very 6 much. 7 CHAIRMAN LLOYD: Thank you, Paula. 8 Yes. Yes, Dr. Burke. 9 DR. BURKE: This is not the first organization 10 to formally approve an environmental justice issue. 11 South Coast was. 12 CHAIRMAN LLOYD: Statewide, I think she told 13 us. 14 DR. BURKE: Statewide? 15 MS. FORBIS: That's right. Thank you. 16 DR. BURKE: Just wanted the record to be clear 17 on that. 18 MS. FORBIS: Thank you. 19 CHAIRMAN LLOYD: Well, Paula, and your cogent 20 arguments clearly indicate you had a very good 21 teacher. 22 MS. FORBIS: Oh, yes. 23 MS. RODRIGUEZ (Through Interpreter): My name 24 is Sonia Rodriguez, and I live in Barrio Logan. It's 25 easy to give an opinion or to recommend when one 361 1 doesn't live there. And the reason is that I have a 2 different opinion. Maybe it's because I live there. 3 I support these recommendations. If there were true 4 democracy in land use, industries and residences 5 would not be mixed in Barrio Logan. 6 We wouldn't be exposed to so many 7 emissions into the air and to the risks that the -- 8 health risks that the community faces. Community has 9 to have the last word. And it is critical for you to 10 get involved in the decisions for land use when you 11 know the health risk these pose. 12 I had a long list about the same 13 things, but I'm really impressed about the fact that 14 all of the communities go through the same. And my 15 question today is who is not doing their homework? 16 Thank you. 17 CHAIRMAN LLOYD: Thank you. 18 I missed the last speaker's name. 19 What's the last speaker's name? 20 THE INTERPRETER: Sonia Rodriguez. 21 CHAIRMAN LLOYD: Thank you. 22 MS. JIMENEZ (Through Interpreter): Good 23 evening. My name is Francisca Jimenez. I'm here 24 from San Diego, also from the Logan community. I 25 want to thank all of you who have made all of these 362 1 policies possible. And I'm in support of them. And 2 it seems that all of you have done a great job. 3 Unfortunately, I cannot say the same 4 thing about APCD who in is the charge of the 5 pollution, air pollution, in San Diego. I believe 6 that just as you are, Supervisor Roberts should have 7 been here in order to hear what I want to say about 8 my community in San Diego. 9 And this has always happened when one 10 wants to go and talk about some issue at the APCD in 11 San Diego. That is why I believe that, as my friend 12 says, someone is not doing their homework. And 13 that's what's happening. 14 And thank you to all of you again. 15 I'm in support of these policies. And as we have 16 everything that has been mentioned and as the friends 17 from Pacoima said, we have everything, all the 18 pollutants. We just don't have refineries. 19 CHAIRMAN LLOYD: Thank you. 20 MS. JIMENEZ (Through Interpreter): Thank you 21 very much for your time and good night. 22 CHAIRMAN LLOYD: Thank you very much. 23 MS. LOPEZ: Good evening, members of the board 24 and audience. My name is Rosia Lopez, and I reside 25 at 6822 San Luis Avenue in the City of Bell. For 363 1 those of who you that may not know where Bell is, 2 Bell is adjacent to Huntington Park, Bell Gardens, 3 South Gate. 4 And I'm right off the 710 freeway. As 5 a matter of fact, I drive the 710 freeway every 6 morning on my way to work, toward the refineries 7 cities in which I work. And I can tell you that 8 driving the 710 freeway is horrendous in the 9 mornings. 10 Any time of the day, there's always 11 diesel trucks going to and from. I can't even turn 12 on my heater in the morning, can't even roll down the 13 window without having to breathe the pollution of 14 these trucks and these other contaminating vehicles 15 that are on our roads. 16 And this actually goes -- it's a note 17 to the AQMD that you need to really fix our 1-800- 18 CUT-SMOG phone call 'cause I call in. I make my list 19 every morning, call it in, and ask what the penalties 20 will be to those polluters. 21 And the person on the other phone or 22 on the other line of the phone basically states, 23 "Well, we'll get ahold of the property owner" -- or 24 not the property -- "but we'll get ahold of the 25 vehicle owner, make 'em aware of the problems, and 364 1 that's pretty much it." 2 I said, "Well, do they not get fined? 3 What is the penalty?" 4 "Oh, well, there is no penalty. We 5 just give 'em a friendly letter and a friendly 6 notice." 7 So I think that aspect or that part of 8 the complaints calls really needs to be taken care of 9 and really needs to be addressed and looked at. 10 What's the point in calling if people are going to 11 get a friendly letter and they're going to throw it 12 away anyway? 13 And a lot of these truck or these cab 14 big rig drivers -- they don't even -- a lot of 'em 15 are not even licensed. And they're the worst 16 polluters out there that we have. 17 Another thing I'd like to see is a 18 monitoring station in Southeast L.A. I recognize 19 that Wilmington has a lot of problems as well as 20 Boyle Heights and the other areas. But in the 21 Southeast L.A. area, we have a high concentration of 22 chrome-manufacturing plants, hazardous-waste 23 incinerators -- 24 DR. BURKE: Where is that specifically? What 25 street? 365 1 MS. LOPEZ: Our city borders Vernon, the City 2 of Vernon, which is, as we all know -- 3 DR. BURKE: I know Bell. I'm sorry. I lost 4 my head. 5 MS. LOPEZ: So if we can see Dr. Burke down 6 there or some other members of the AQMD, I'd be happy 7 to give you guys a tour of some of the polluting 8 areas that we do have. And I think CBE as well as 9 some of the organizations have done a really 10 tremendous job in trying to educate the public. 11 What I would like to see is monitoring 12 stations in Southeast L.A., whether that's in 13 Huntington Park, maybe South Gate, Bell -- some of 14 the affected communities there. I would really like 15 to see something there. 16 And I can tell you, as well, just 17 driving down the freeway, the 710 freeway, there's 18 many properties, whether they're mobile home parks or 19 schools where children play or parks where children 20 play and communities in general where there's just a 21 chain-link fence separating the diesel fumes from 22 those communities. 23 And it's very sad when Disneyland and 24 Anaheim and Tustin and Irvine are getting these nice 25 beautiful block walls and 710 freeway residents can't 366 1 again even get a darned wall to prevent 'em from 2 getting polluted. I think that's pretty sad. 3 But, anyway, I just thought I'd 4 express my opinions. And I am in favor of the 5 policy. And I think we're making good progress. 6 Thank you. 7 CHAIRMAN LLOYD: Thank you. Thank you. 8 Can we take Cindy Tuck, Catherine 9 Reheis-Boyd, Curtis Coleman, Patti Krebs, Joe Lyou. 10 Hi, Cindy. 11 MS. TUCK: Good evening. Thank you, Chairman 12 Lloyd and members of the board. My name is Cindy 13 Tuck. I'm the general counsel for the California 14 Council for Environmental and Economic Balance. 15 I'd like to start this evening by 16 saying that CCEEB believes that the state's 17 environmental programs, including ARB's programs, 18 must treat people of all races, cultures, and incomes 19 fairly. 20 CCEEB has participated in the 21 development of the state law in this area. At ARB, 22 we have supported your staff's work that they're 23 doing now to develop the technical tools to assess 24 air quality in the neighborhoods to be able to 25 compare it with that in the region. 367 1 Regarding this proposal that's before 2 you tonight -- there are many parts of this document 3 that CCEEB supports. We're very close to being in 4 support of this document. Your staff has worked 5 incredibly hard with the air districts, environmental 6 groups, community groups, business groups -- 7 including CCEEB -- over many months this year to 8 resolve the issues. 9 And we really commend them for their 10 work with everybody including CCEEB. Tonight there's 11 just -- there's one issue that I'd like to highlight 12 for the board and ask you to consider it tonight. 13 And this is the use throughout the document of the 14 word "especially," in the phrase "especially 15 low-income and minority communities." 16 Now, you've heard tonight, in the 17 staff presentation, that the state legislature has 18 passed several bills in this area. There are bills 19 authored by Senator Solis, Senator Escutia, Senator 20 Alarcon, and by Assemblyman Firebaugh. 21 They're all based on the state-law 22 definition, which you heard tonight, which was 23 enacted by Senator Solis in SB 115. And that's the 24 state -- that's the definition of "environmental 25 justice," which says that the State must provide fair 368 1 treatment of all people -- people of all races, 2 cultures, and income -- in its environmental 3 programs. 4 Now, what I'd like to emphasize 5 tonight is that, in all these laws, when they get 6 into the detailed provisions, when they want to 7 emphasize making sure that the State protects 8 low-income and minority communities, in every one of 9 these bills, the state legislature has used the word 10 "including." 11 And these new laws, that include the 12 bills that apply to Cal-EPA, set the requirements for 13 Cal-EPA and environmental justice. They also 14 included a bill by Assemblyman Firebaugh that was 15 signed just this fall that has to do with cleaning up 16 mobile sources. And CCEEB supported that bill this 17 year at the legislature. And we're very proud of 18 that. 19 Our concern, getting right down to the 20 issue, is the use of the word "especially." And to 21 highlight the concern, if you look at Policy 3, which 22 is on Page 6, this is an example of where the word 23 "especially" pops up. 24 And in Policy 3, it's saying that "It 25 shall be ARB's policy to work with the local air 369 1 districts to meet the standards, reduce health risks 2 from toxic air pollutants in all communities, 3 especially in low-income and minority communities." 4 And the concern is that a plain 5 reading of that language and the other places in the 6 document would have ARB working harder in low-income 7 and minority communities without regard to the air 8 quality in the community. 9 We have no problem with doing more 10 where there is a greater air-quality problem. But 11 the language doesn't do that. So we ask the board: 12 Is that the approach that the air board wants to be 13 taking, particularly when the legislature has acted 14 in this area and used the word "including"? 15 To address the issue, we'd like to 16 suggest two ideas. Sometimes it's good to think in 17 terms of options. One option would be to change the 18 word "especially" to the word "including," and that 19 would make it consistent with the statute. 20 Another idea would be to keep the word 21 "especially" to provide the extra emphasis that the 22 board may want to provide but tie it back to air 23 quality so you're actually looking at whether there 24 is a greater air-quality problem in that community. 25 So an alternative would be to use the 370 1 following clause: "Especially low-income and 2 minority communities that bear the most significant 3 exposure and risk." 4 That's the issue that we wanted to 5 highlight for the board's consideration. Again, I 6 want to give credit to your staff, particularly 7 Shankar Prasad, Bob Fletcher, and Linda Murchison. 8 They have done a noble effort on this whole document. 9 CHAIRMAN LLOYD: Thank you. And thank you for 10 your efforts, pretty much, Cindy, too. I know you've 11 put in many hours on this and been most helpful. 12 Thank you. 13 MS. TUCK: Thank you. 14 CHAIRMAN LLOYD: Thank you. 15 MS. REHEIS-BOYD: Good evening. Thank you, 16 Chairman Lloyd and members of the board. My name is 17 Catherine Reheis-Boyd, and I'm vice president of the 18 Western States Petroleum Association. 19 I appreciate being here this evening. 20 It's been a long night for all of us. I'll try to 21 make this brief. I did work, I think, for the last 8 22 hours in getting it down to 5 minutes. So I'll try 23 to shorten it now to 3. 24 For many years, WSPA has worked very 25 cooperatively with your board on a variety of issues 371 1 that affect California's air quality. And this 2 State, and certainly with the help of your board and 3 others, has posted impressive gains to protect the 4 environment over the last 20 years. 5 And we feel -- and we hope you do 6 too -- that our long-standing relationship with you 7 has contributed to the improved air quality and the 8 improved public health. 9 As you are aware and you heard 10 earlier, the California refineries have made, in my 11 opinion, very tremendous strides in improving the air 12 quality and providing the cleanest gasoline and the 13 cleanest diesel fuel in this nation and have also one 14 of the highest compliance rates, definitely 15 exceptional safety records, and also continue to work 16 on a lot of the emission-control-reduction 17 technologies that your board is very involved with us 18 on. 19 Another point worth noting relative to 20 the environmental justice area is our efforts in 21 community outreach. And the refineries have long 22 recognized that, because the success of our industry 23 relies upon the goodwill and cooperation with our 24 neighbors, we in turn have an obligation to educate 25 our local communities about our facilities, our 372 1 products, our operations, and our efforts to protect 2 them and their communities. 3 We also share our resources, our 4 experience, and time to benefit the communities where 5 we live and work. You heard some of the programs 6 that the refineries have in place today by some of 7 the other speakers. And these include, of course, 8 charitable contributions, a lot of the employee 9 volunteer efforts, a lot of our contributions to 10 local communities. 11 And I mention that because really I 12 think these efforts taken by the industry throughout 13 the state are notable. They are not just token 14 gestures. And I think they're very, very valuable to 15 the local community. As you know, we're working with 16 your staff on the whole community outreach program as 17 well. 18 To be specific on the EJ topic, I 19 won't duplicate with the comments from CCEEB, to make 20 this brief; but we understand your desire to make the 21 achievement of environmental justice an integral part 22 of all of your programs. And we also support your 23 activities with the local air districts and the local 24 communities in this regard. 25 So we do support, obviously, an 373 1 environmental justice proposal that treats people of 2 all races, cultures, and incomes fairly. There's two 3 principles that Cindy was, because of time, could not 4 highlight. And I would like to just briefly point 5 them out. 6 One is that emission reductions sought 7 under this program must be consistent with existing 8 statutory framework based on ambient air quality 9 standards and reducing air toxics. The second is 10 that cumulative-impact issues should be addressed 11 from a very broad programmatic basis, not a 12 permit-by-permit perspective, to provide certainty to 13 the local agencies, the business, and the public. We 14 agree with both of those. 15 We do understand that your staff's 16 intent is to work to ensure that low-income and 17 minority communities are treated fairly. However, 18 staff's change from the statutory wording can be read 19 to mean that ARB plans to provide more protection for 20 low-income and minority communities than for other 21 communities. 22 And certainly we believe that, if 23 there's a demonstrated concern, much as reflected by 24 Cindy's comments, that those regions do deserve some 25 additional attention. So, with that, I'd just like 374 1 to urge you to consider CCEEB's proposed language 2 changes and certainly not as a point of dilution, as 3 some might have suggested, but really as a point of 4 clarity, consistency, and fairness for all of the 5 communities involved. Thank you. 6 CHAIRMAN LLOYD: Thank you very much, Cathy. 7 And thanks for keeping the time. We have a question. 8 Sorry. Mr. McKinnon. 9 MR. McKINNON: First of all, I want to thank 10 you for working with staff to get there. And we're 11 getting to this discussion about "including" versus 12 "especially." And I guess, while I understand your 13 concern, it is a guidance document. And there are 14 communities that are especially impacted now. 15 (Applause.) 16 MR. McKINNON: So I don't want to -- this is 17 respectful. Everybody's been respectful tonight. 18 And I don't want to do that kind of thing. 19 I want to be very clear that we don't 20 have the resources to go after problems that don't 21 exist. So I would ask you and CCEEB to, you know, to 22 give some thought to that -- that really there are 23 communities that have had an overbearing impact. 24 It is not our intention to waste 25 resources needlessly somewhere where they don't need 375 1 to be. And what's difficult about putting a burden 2 in an additional language -- and I've thought about 3 this all week 'cause I think CCEEB -- I talked to 4 CCEEB about it -- I really, really have struggled 5 with it -- if we add language to the "especially," 6 then we've put burden on a community to prove that 7 that's a problem. 8 And I think probably the limits on 9 resources take care of that problem for a long, long 10 time. We don't have enough resources to deal with 11 all the problems we have. 12 So I would ask to you kind of take 13 that. And I also appreciate that everybody has kind 14 of treated each other respectfully tonight, even with 15 very different opinions on this point. 16 MS. REHEIS-BOYD: I appreciate that. 17 CHAIRMAN LLOYD: Yes, I agree. 18 Thank you very much, Cathy. 19 Curt Coleman. Welcome, Curt. 20 MR. COLEMAN: Thank you. My name's Curtis 21 Coleman. I'm here tonight speaking for the 22 California Manufacturers and Technology Association. 23 We have been a participant at the NAP stakeholders 24 group. I've attended a number of those meetings. 25 And I think it is a testament to the 376 1 good work and tenacity of your staff that we have 2 arrived at this point with so few areas of 3 disagreement in an area that is so broad and so 4 important and has so many potential ramifications. 5 Like -- we share the concern that 6 Cindy raised. And we think it's precisely because of 7 the resource issue and the recognition that you need 8 to concentrate resources in the areas where the risks 9 are the highest, the pollution levels are the highest 10 that we think some language needs to be in there 11 tying the -- focussing the direction on those areas 12 with high pollution impacts. 13 And we think that the option that 14 CCEEB suggested would allow you to keep the 15 "especially" language in there for the emphasis that 16 these are the communities that have historically, 17 shall we say, been left behind or not been heard and 18 we agree that they should be heard and that they are 19 entitled to the same protection as everyone else. 20 But we think we need to tie it to 21 air-quality problems in communities. And we would 22 like nothing better than to change that bland sort of 23 white, off-white card that I gave to you a blue 24 support card. And if either of CCEEB's options were 25 approved by the board, you can put us down as 377 1 wholeheartedly supporting the staff recommendation or 2 the action you take tonight. 3 We supported Chairman Burke's 4 initiative at the South Coast District. It has been 5 very successful. We continue to work on 6 implementation of that. And we look forward to 7 working with ARB and the staff in implementing your 8 environmental justice policies. Thank you. 9 CHAIRMAN LLOYD: Thank you, Curt. Thank you 10 very much. 11 Thank you. 12 Patti Krebs? 13 MR. FAZELI: Excuse me, Dr. Lloyd. I ask -- 14 two members of the youth have early class tomorrow 15 morning -- if they may testify so they can go? 16 CHAIRMAN LLOYD: Can I just take Patti and 17 then -- 18 MR. FAZELI: Sure. 19 MS. KREBS: They can go ahead. 20 CHAIRMAN LLOYD: Are you sure it's okay? 21 You're not travelling back tonight. 22 MS. KREBS: No, I'm not. 23 CHAIRMAN LLOYD: I appreciate your honesty. 24 Okay. Thank you. 25 If you could, please identify 378 1 yourself. 2 MS. DEL CALLEJO: Oh, hi. My name is Nadia 3 del Callejo. I'm from Communities for a Better 4 Environment -- slash -- Youth for Environmental 5 Justice. And, well, okay. I just want to say that 6 I'm 17. And that's 17. That's not very old. But 7 think about it. That's 17 years of pollution, 17 8 years of breathing toxins. 9 And I want all of you to listen to me 10 because this is going to affect me more than it's 11 going to affect anyone else in this room, and 12 especially the younger ones that have left, that 13 already left. 14 That's 17 years of being exposed to 15 chemicals in the water, in the ground, and in the 16 air. That's 17 years of breathing the very air that 17 is supposed to give me life but will instead probably 18 give me asthma, kidney disease, or cancer. That's 17 19 years of not being sure if I can go outside and play 20 because the air might be too contaminated. 21 And yet these industries that are 22 causing all of this pollution keep coming. And I ask 23 myself, "Why? Why do they keep coming? Why do they 24 keep coming if there is already a major polluter next 25 to my home, my school, the parks, the elementary 379 1 schools, the nursing homes? Why?" 2 Because it's cheaper to build in 3 low-income communities. That's why. These polluters 4 don't care about our house, our community, our 5 concerns. They don't care that we are here because 6 our communities are being suffocated by pollution. 7 And then these laws -- the law isn't 8 doing much to protect us either. The law only 9 regulates individual polluters. But what about 10 communities that harbor not just one or two or three 11 polluters but hundreds? 12 Do you really think it's fair that, 13 just because a facility meets regulations, that one 14 city have hundreds? And if you do, then you must 15 also think that pollution is confined to property 16 lines and city limits. 17 Well, to tell you the truth, it's not. 18 And pollution travels. It accumulates. That's why 19 we need to look at all the facilities together, not 20 just one at a time. 21 This woman shared that no one 22 community bear more than any other. And I am tired 23 of having to smell, to hear, to look at all these 24 facilities near my house, near my school, to not be 25 able to go outside and play during PE because the air 380 1 is too contaminated or there is too much smog in the 2 air. How do you feel? 3 I'm going to have to live with this 4 for the next 50, 60 years of my life. And I don't 5 want to have to live with this anymore. And I am 6 tired. And I want everyone to hear me right now 7 because everybody's tired in this room and everybody 8 wants to go home. 9 Why don't you just pass these 10 resolutions? It's as easy as that. And not only 11 that, continue with these resolutions -- with these 12 policies. Make sure they happen and continue to do 13 the good things that we need you guys to do. 14 And so that's it. I guess that's all 15 I have to say. Just make sure that you pass these 16 policies, take action, and make sure that community 17 exposure is addressed. Thank you. 18 CHAIRMAN LLOYD: Thank you. 19 MS. DEL CALLEJO: Oh, one more thing. Just to 20 go back to Roy and Janie's comment way, way back 21 about the power plants and the incinerator and the 22 refinery -- that wasn't ARB or AQMD because they 23 approved those, the permits to go through that. 24 It was the people. And it was CBE and 25 the people together that worked to get those out of 381 1 our cities. So help us out. Don't make us keep 2 coming back here to tell you what we need. Thank 3 you. 4 CHAIRMAN LLOYD: Thank you. 5 MR. ARROYO: Yeah. My name is Horacio Arroyo. 6 I'm also with Youth for Environmental Justice. 7 And throughout all of this time that 8 I've been a volunteer for CBE, I've asked myself 9 these questions over and over again: "Why is it that 10 our health is being jeopardized by today's hazardous 11 industries? Shouldn't there be stronger laws to 12 protect our lives and environment? Why is it that 13 countless factories surround my home, school, and 14 community? Why?" 15 Because Southeast L.A. is one of the 16 many places of low-income communities. And because 17 of this, it is not hard to find many examples of 18 incompatible land uses. 19 Everywhere I go, I see, every day, 20 people just trying to go about their daily lives -- 21 shopping, going to school, going to work. But this 22 can be hard because our communities have been greatly 23 impacted by all these greedy polluting facilities 24 just trying to make money and not caring anything 25 whatsoever about our community or about the 382 1 community's health. 2 That's why we have a high rate of 3 people with cancer, asthma, as well as other 4 illnesses. That's why our students find it hard 5 every day. And it's gets harder and harder to 6 breathe when you have to go play outside. Is this 7 right? 8 Because of present environmental laws, 9 these facilities assume they can do whatever they 10 want and because of this, our communities are being 11 impacted by all these hazardous industries. You go 12 to one of our schools, and you see kids playing 13 outside right next to big polluting facilities and 14 incinerators, not knowing that their health is being 15 jeopardized. 16 And to make things even worse, one of 17 our elementary schools is standing feet away from a 18 paper mill with a huge, huge 300-feet smokestack 19 throwing all its pollution into these elementary 20 kids, with a hazardous communication placard reading 21 "ORS" on all its sides. This is the truth about 22 what's going on in our communities. Is this supposed 23 be the ideal education atmosphere for your sons and 24 daughters? 25 I don't think so. Hey, this is just 383 1 my side of the story. I know that there are, like -- 2 everybody here in this room has their own story to 3 tell. We need stronger environmental laws to protect 4 our health, community, and environment. That's why 5 we need you to pass these policies that can keep air- 6 quality agencies analyzing and improving the 7 incompatible land uses that we have today. 8 We also need you to give more voice to 9 our communities and improve the communication between 10 local air districts and community members so people 11 with concerns don't just get ignored. Let's make 12 stronger policies that lower the amount of emissions 13 that these industries pollute. Let's put monitoring 14 stations on Bell, South Gate, HP, Vernon especially. 15 We need to stop these industries from 16 assuming they can do whatever they want. We need 17 community health over corporate wealth. Thank you. 18 Have a good night. 19 CHAIRMAN LLOYD: Thank you. 20 Patti Krebs. Then we're going to take 21 Tim Carmichael and then Joe Lyou. 22 DR. BURKE: -- something terrible. 23 CHAIRMAN LLOYD: Talk to Tim. No. There's a 24 reason, I think. 25 DR. BURKE: Tim said he had a class early 384 1 tomorrow. 2 MS. KREBS: I'm Patti Krebs. 3 CHAIRMAN LLOYD: Hi. Thanks. 4 MS. KREBS: I'm with the San Diego Industrial 5 Environmental Association. We're a regional 6 manufacturers group. And actually our members are 7 made up of the environmental managers, the people who 8 every day have to get their permits figured out, how 9 to comply. So I'm going to have some questions to my 10 comments tonight. 11 CHAIRMAN LLOYD: Thanks for coming. 12 MS. KREBS: We have been an active participant 13 in the neighborhood assessment program and the 14 community health modelling group and the Barrio Logan 15 air-monitoring stakeholders group. And we want to 16 commend the ARB for their efforts to provide more 17 definition to California's environmental justice 18 program. 19 IEA supports local, state, and federal 20 initiatives to evaluate and mitigate health risks 21 posed by environmental hazards on the basis of proven 22 scientific methods and peer-reviewed analytical 23 procedures. And generally we want to express support 24 for the aspects of the guidelines that encourage 25 community outreach and compliance with rules and 385 1 regulations. 2 However, while we realize this 3 guidance document is one step in an ongoing process, 4 we think there are a number of uncertainties and 5 questions. And some clarifications would be helpful. 6 First, we would like to see language 7 added that specifies the documents, sets forth 8 guidelines to be used as guidelines, and don't become 9 de facto regulation. 10 Number 2, the differentiation between 11 real problems versus perceived problems. We hope 12 staff could provide more definition to help 13 businesses understand how these guidelines will be 14 used in the real world on a day-in, day-out basis. 15 In San Diego, for example, the best 16 data available to date from the barrio air-monitoring 17 project has shown that air quality in that community 18 was not significantly different from other urban 19 areas in San Diego, yet the public perceives there is 20 a problem. 21 We think more specifics are necessary 22 to identify how the guidelines will be used, 23 particularly in the permit programs and land-use 24 decision making. 25 I just also wanted to add a quick 386 1 note. The physicians group, I believe, from 2 Los Angeles talked about their public health officer 3 conducting an asthma study in the schools. It's been 4 two or three years ago now, but the San Diego County 5 public health officer did conduct a survey of 6 respiratory-illness absences in elementary schools in 7 Barrio Logan and compared that rate to the rest of 8 the county. 9 Barrio Logan's absentee rate was just 10 slightly lower than the countywide average. I did 11 submit that as part of the neighborhood-assessment 12 program. And I will resubmit that to the board. 13 Then the next point was 14 prioritization. We feel the guidelines don't 15 adequately address the prioritization of issues as 16 they relate to health risk. Again, in the case of 17 Barrio Logan, the vast majority of the air-quality 18 problems come from the surrounding freeways and the 19 Coronado Bay Bridge. 20 The people involved in my organization 21 would ask, "What is going to happen when a company in 22 that community comes forward, for example, with a 23 permit application which will have only a de minimus 24 impact?" Other ARB programs, such as 2588, have 25 successfully prioritized facilities for further 387 1 evaluation with clear criteria and regulations 2 established for performing health-risk assessments, 3 providing public notices, and implementing 4 risk-reduction strategies. 5 When these new guidelines hit the 6 streets, if you have a business in an area that is 7 impacted, how will they be used? And if the major 8 problem is for mobile sources, how will a stationary 9 source be evaluated? The guidelines, we feel, are 10 devoid of how the agency should prioritize sources. 11 And, just real quickly, lastly, 12 cumulative impacts -- you've heard about that from 13 other groups. From our reading of the guidelines, it 14 does not seem clear that cumulative-impact 15 assessments will be addressed in a programmatic 16 manner rather than on a permit-by-permit basis. 17 We thank the board for the time to 18 hear our comments. 19 Dr. Lloyd, we thank you personally for 20 coming to San Diego for our annual conference to 21 present those guidelines to us. And we look forward 22 to continuing to participate. Thank you. 23 CHAIRMAN LLOYD: Thank you very much for 24 coming up. 25 Now, has Tim negotiated with Joe? 388 1 MR. CARMICHAEL: Another fine example of the 2 collaboration between the environmental and the 3 environmental justice community. I'm Tim Carmichael 4 with the Coalition for Clean Air. I thank you for 5 bumping me up a little bit. 6 I look forward to the day when our 7 society no longer depends on toxic chemicals to move 8 people or to produce goods and a day when we no 9 longer debate whether one pollution -- one community 10 has more pollution than the other or debate what's an 11 appropriate word to categorize a community or the 12 needs of a community. I believe that that's possible 13 in my lifetime. And I hope that you share that 14 belief. 15 I'm going to spend just a minute with 16 some "Thank you's" that I think are very appropriate, 17 some clarifications to the record. 18 The ARB management has been wonderful 19 on this issue. It's been a long 18 months or two 20 years that we've been engaged with them. And they've 21 already been recognized, but Bob Fletcher and Linda 22 Murchison and Shankar Prasad have really worked their 23 tails off on this. And we greatly appreciate it. 24 Chairman Lloyd, for the record, the 25 environmental community knows well that you were 389 1 engaged with this issue and concerned about 2 environmental justice long before some members of the 3 legislature asked you to accelerate your interest or 4 increase your interest. 5 But I was at your confirmation 6 hearing. And I remember well that you raised this 7 issue as a priority. 8 CHAIRMAN LLOYD: Thank you. 9 MR. CARMICHAEL: On that same note, Dr. Burke 10 and Dr. Wallerstein also deserve credit for their 11 leadership at the South Coast. The major groups, 12 environmental groups -- Communities for a Better 13 Environment, NRDC, and the Coalition -- were very 14 engaged in that. 15 And we see this as a continuation of 16 that effort and certainly don't look at this as the 17 last step in the effort to address these problems. 18 DR. BURKE: I appreciate that. Thank you. 19 MR. CARMICHAEL: Then environmental justice 20 and environmental organizations have worked more 21 closely on this campaign and on these issues than any 22 other campaign that I've been involved with in the 23 six years or almost seven years that I've been 24 working on environmental issues. 25 I truly am inspired by the community 390 1 activists and the environmental justices activists 2 that I've had the opportunity to work with. 3 And, as you've heard from much of the 4 testimony today, these are, you know -- we have the 5 opportunity, on a daily basis, to try and represent 6 communities. But it is almost impossible to 7 represent them as well as they've represented 8 themselves today. 9 With that, our letter, I think, 10 conveys our key points very well. Two things that 11 I'll leave you with: The environment community and 12 the environmental justice activists that are tracking 13 this issue are going to be paying attention to what 14 happens over the next year. 15 And though we think this is a 16 wonderful policy statement, it's the implementation 17 and the action over the coming years that is really 18 going to be the measure of this agency's commitment 19 to this issue. 20 And we look forward to monitoring your 21 activities and supporting them in any way we can, 22 including securing additional resources for this 23 agency to do more to protect communities from toxic 24 air pollution. 25 Final thing: Not one of the key 391 1 things in our letter, by any means, but since it's 2 been raised, I think it's important to mention it. 3 I believe that the absolute worst 4 thing -- absolute worst thing that this board could 5 do tonight is modify language that would put on 6 additional burden on these communities to prove that 7 they've got the problems that you've heard how many 8 people testify to tonight? 9 The absolute worst thing to do would 10 be to create an additional hurdle for these 11 communities. And so I strongly encourage you, you 12 know, to the extent that you're going to continue -- 13 you're going to discuss this language issue that's 14 been raised, don't put an additional burden on 15 communities that we know and everybody here knows 16 have serious problems. 17 With that, thank you very much for 18 your time. 19 CHAIRMAN LLOYD: Thank you, Tim. 20 DR. BURKE: Don't go away, Tim. 21 CHAIRMAN LLOYD: Tim. Dr. Burke. 22 DR. BURKE: Don't go away. You know, it's 23 amazing how people's recollections differ. And I 24 know I'm old, and my recollections may not be quite 25 clear. But let me play this back to you from my 392 1 recollections. 2 I don't remember you or your 3 organization saying one word about environmental 4 justice prior to my issuing the statement in my 5 inauguration speech at South Coast as Chairman -- not 6 one word. 7 In the many years that I have sat on 8 South Coast District, I have never seen you bring a 9 person of color with you to one meeting. I may be 10 wrong. Maybe you brought one to one meeting. 11 Now, for you now to be so concerned 12 about the language of this proposition that we're 13 going to vote on, I find specious because, it seems 14 to me, that the community members wanted the 15 language. 16 And is this a continuation of some 17 kind of paternalistic "I'm going to tell you what's 18 good for you" attitude by the environmental 19 community? That's a question. 20 MR. CARMICHAEL: To be clear, I was 21 complimenting you on your leadership on the issue of 22 environmental justice -- 23 DR. BURKE: I don't need the compliments. I 24 know what I did. 25 MR. CARMICHAEL: -- and said that our 393 1 organization supported those efforts. That's what my 2 comment was. Relative to the language, there's no 3 paternalism; no, you know, patronizing going on here. 4 I've worked very closely and my organization's worked 5 very closely with the environmental justice 6 community. 7 And I think everyone that's going to 8 testify after me is going to agree that we don't 9 believe that an additional hurdle for these 10 communities is appropriate. 11 DR. BURKE: Why didn't the communities tell us 12 that? 13 MR. CARMICHAEL: The language issue was only 14 brought up in the last 5 or 10 minutes. 15 DR. BURKE: I've been sitting here for five 16 hours listening to testimony. Not one person from 17 the communities said that. 18 MR. CARMICHAEL: Because it's not a priority 19 relative to the issues that we've put in our letter 20 which we believe are substantive implementation 21 issues to ensure the -- 22 DR. BURKE: Mr. Kenny, has the minority 23 community been in touch with your office about the 24 legislature and various ethnic groups about this 25 language? 394 1 MR. KENNY: We have talked with -- we have 2 talked with a number of the environmental 3 representatives about the language over the last 4 several days. 5 DR. BURKE: Has -- my question was has the 6 minority legislators and minority ethnic groups been 7 in touch with you over this language. 8 MR. KENNY: We have talked with the Latino 9 caucus representatives, actually, as recently as this 10 evening. 11 DR. BURKE: And their request was what? 12 MR. KENNY: Their request was that we 13 essentially use the word "especially." 14 DR. BURKE: So that doesn't jibe with what 15 you're saying, Tim. But I don't want to get into an 16 argument with you -- 17 MR. CARMICHAEL: Yeah, I think -- I think you 18 actually -- 19 CHAIRMAN LLOYD: I think it does. I don't 20 think there's any -- 21 DR. BURKE: You have some thoughts, Mr. 22 McKinnon? 23 CHAIRMAN LLOYD: I think it does. I think it 24 does. I don't think there's any -- 25 MR. CARMICHAEL: Just to be clear on what I 395 1 was saying -- and I'm sorry I wasn't clear enough -- 2 the point I was making is there was a suggestion that 3 was made, before I testified, that an additional 4 clause be inserted into the language, which I read as 5 putting on additional burden on the communities to 6 prove that they have a problem. 7 That's what I was opposing. I'm not 8 at all opposing the language that this staff has 9 proposed. In fact, we worked on that language 10 collectively. 11 CHAIRMAN LLOYD: Would you like to comment 12 on -- 13 MR. CARMICHAEL: Sorry about the confusion on 14 that. 15 CHAIRMAN LLOYD: Would you like to comment on 16 that letter? 17 MR. KENNY: Yes. Actually, I guess one point 18 of clarification in terms of Mr. Carmichael's 19 comments -- I think what Mr. Carmichael was 20 suggesting was that the word "especially," which is 21 being currently proposed by the staff, is a word that 22 should actually be retained. 23 There was a proposal by some of the 24 previous witnesses that the word "especially" should 25 be modified. And I think Mr. Carmichael was opposing 396 1 the modification of the word "especially." 2 Am I right? 3 But the comments that I wanted to make 4 were in response to the letter that was signed by 5 quite a number of environmental justice and 6 environmental organizations. And there were a number 7 of requests that were made in that letter to this 8 board. 9 And so I want to, at least, give the 10 staff's perspective on those requests. As you look 11 through the letter -- this is the letter that was 12 addressed to Chairman Lloyd and to the board members, 13 and it's dated December 6. 14 The first issue in there was 15 essentially the initial environmental justice work 16 plan by January, 2002, which I think the previous 17 witness requested of us. 18 As a staff, we would have some 19 concerns with trying to respond that quickly. We 20 think it is a little too hasty. 21 There are other things, however, that 22 we can respond, I think, a little bit more positively 23 on. There are a number of guidance documents that 24 were requested in this letter. 25 The first one was a land-use planning 397 1 guidance document. That is actually something that 2 we think is a good idea. We would actually like to 3 try to put that together. It's been our intention 4 all along to put something like that together so that 5 officials who are making land-use decisions have, at 6 least, the best information possible with regard to 7 air quality. 8 And so we do plan to do that. Our 9 time frame -- our timetable for doing that is 10 essentially within the early 2003 time frame that we 11 plan to bring that back to you. 12 Complaint-resolution guidance document 13 was also requested. We do have -- 14 CHAIRMAN LLOYD: Do you have a cell phone? 15 Stop the phone. 16 MR. KENNY: We do a desire to try to put 17 together a complaint-resolution protocol. I mean we 18 do basically recognize that primary jurisdiction for 19 many of these issues lies with the local districts, 20 and we would like to work with the local districts. 21 But we don't think it's appropriate that we should 22 usurp the authority of the local districts. 23 And so our plan here was to, again, 24 work with the local districts with regard to a 25 protocol on how complaints should be handled. 398 1 The third request for a guidance 2 document was a cumulative-emissions exposure-and 3 impacts assessment-and-reduction guidance document. 4 This is one that we've heard a lot of requests for. 5 At the same time, we are concerned 6 about this. It is something we would very much like 7 to do. However, the technical tools necessary to do 8 this well are difficult and need to be developed. 9 Our goal here -- and it would be a 10 goal -- would be to try to do such a thing and to 11 bring it back to you by the end of 2003. And that is 12 a fair amount of time. We are looking at essentially 13 close to two years. 14 But this is something that we have a 15 lot of questions about how we would actually do this. 16 And so we want to make sure that, as we go forward, 17 we do it right and that we also don't raise the 18 expectations to such a point that we cannot meet 19 them. 20 And so our target goal would be to try 21 to bring it back to you within that time frame. 22 There is also a specific request by 23 some of the witnesses and also in this letter that 24 specific CARB staff and funding be allocated to carry 25 out the policies that are being proposed to the board 399 1 and the action items associated with those policies. 2 We do believe that, for us to carry 3 this out and to make sure that, in fact, we can do so 4 within a reasonable time frame, that we do need 5 specific staff associated with these particular 6 policy guidelines and the action items associated 7 herein. 8 Our plan is actually to create a 9 discrete unit inside the Air Resources Board whose 10 responsibility, on a 8-hour-a-day, 40-hour-a-week 11 basis is to go forward and implement these policies 12 in the action items so that, in fact, we would have 13 individuals who do have this obligation as part of 14 their daily duties. 15 It is not an easy thing for to us 16 create because, what we're going to have to do is to 17 pull resources from existing locations inside the Air 18 Resources Board. We do have not have new allocations 19 for this. But we do think we can reallocate some 20 resources to make sure that we have individuals 21 focussed on these issues regularly. 22 The second part of that was funding. 23 And obviously the funding is not something within our 24 control. I mean, in fact, the contrary. We are 25 looking at budget cuts. However, we do think that, 400 1 by dedicating the resources, we would be able to try 2 to address a lot of these issues and make sure we 3 have staff that are focussed on these things. 4 The last request was for pollution 5 prevention being made kind of central to the things 6 we do. We think that's a very good idea. In fact, 7 that's very consistent with what Cal-EPA has been 8 trying to do throughout the agency. 9 So we have every intention of moving 10 forward with a pollution-prevention effort. One of 11 the big difficulties always with pollution prevention 12 is providing more definition to it and specifically 13 talking about what we mean when we say "pollution 14 prevention." 15 And one of the proposals, I think, 16 that we, as a staff, would like to pursue would be to 17 work with the environmental community and others to 18 ensure that, in fact, we are talking about pollution 19 prevention specifically and in trying to move forward 20 with specific pollution-prevention measures. 21 And then, I guess, the last thing I 22 would mention -- and it's not specifically requested 23 in the document -- but in order to essentially ensure 24 that we are, you know, pursuing these policy 25 objectives that the board was comfortable with them, 401 1 that what we would do is report back to the board. 2 And our initial idea would be that we 3 would report back to the board on a six-month time 4 frame so we can give you a status report on what we 5 would be doing to try to move forward. 6 CHAIRMAN LLOYD: Thank you very much. 7 Hopefully, Tim, that responds to some 8 of your concerns. 9 MR. CARMICHAEL: Thank you. 10 SUPERVISOR PATRICK: Mr. Chairman? 11 CHAIRMAN LLOYD: Yes. 12 SUPERVISOR PATRICK: I'm sorry to ask this 13 question right now. But Mr. Carmichael brought 14 something up about presumably the changing of the 15 word from "especially" minority and low income versus 16 "including" minority and low income. 17 CHAIRMAN LLOYD: Yes. 18 SUPERVISOR PATRICK: How -- and it's 19 apparently gone right over my head. How does this 20 require an additional burden of proof by the 21 citizens? I don't understand that. 22 MR. CARMICHAEL: The third option that was 23 floated by a previous speaker was that we add a 24 clause which would require -- I can't remember the 25 exact wording -- but communities bearing a 402 1 disproportionate impact -- something to that extent 2 or to that effect. And that -- I believe that 3 additional phrase that was proposed would require 4 communities, I think, to go another step, clear 5 another hurdle to prove that they've got a problem. 6 SUPERVISOR PATRICK: Okay. Okay. Thanks. I 7 appreciate it. 8 Thank you, Mr. Chairman. 9 CHAIRMAN LLOYD: Dr. Burke? 10 DR. BURKE: -- that says "especially"? Is 11 that it? 12 CHAIRMAN LLOYD: Yes. That's the words. Yes. 13 Thank you. 14 Thank you, Tim. And hope you're 15 feeling better. 16 MR. CARMICHAEL: Thank you. 17 CHAIRMAN LLOYD: Joe Lyou. 18 No. Sorry. I didn't -- I meant he 19 was not feeling well before he testified at the 20 hearing tonight. 21 Mr. McKinnon. I'm sorry. 22 MR. McKINNON: Yeah. Through the chairman -- 23 I don't want to take a lot of time -- but, Member 24 Burke, I sort of started that discussion. And it 25 came out of CCEEB and WSPA's testimony. And I 403 1 apologize for getting us off track. I've been trying 2 to be real quiet tonight so that we could get through 3 the speakers. But thank you. 4 CHAIRMAN LLOYD: Thank you. 5 MR. LYOU: My name is Joe Lyou. I am director 6 of programs at the California League of Conservation 7 Voters Education Fund. 8 Chairman Lloyd, members of the board, 9 thank you for having us here tonight. I do think 10 that Member McKinnon hit the nail on the head when he 11 said it would be an extra burden on communities to 12 prove that there was a disproportionate impact upon 13 them if you added that language. And we do not 14 support the addition of such language. 15 And we do support the staff 16 recommendation; and we suggest that you could keep 17 with the staff recommendation, which was the result 18 of a very hard tortuous process in which we 19 negotiated language that was mutually acceptable. At 20 least, at the time, we thought it was mutually 21 acceptable to all. 22 And it was as close as we could get, 23 in terms of language. It wasn't perfect. It was 24 something where we came away from a position that we 25 thought should deal exclusively on low-income and 404 1 minority communities because that's what 2 environmental justice is all about. But we are 3 willing to endorse and support the language that says 4 "especially." 5 I do think Tim is probably not feeling 6 any better after that endeavor. But a wise person 7 once said that "No farmer ever plowed a field by 8 mulling it over in his mind." 9 We've been mulling this over for quite 10 some time this evening, and I think we're getting 11 ready to start plowing that field. I'm hopeful that 12 we can, at least, accept the staff's position on the 13 this document. And I was very grateful to hear the 14 commitments from Mr. Kenny with regard to our -- the 15 responses to your letter. 16 And I hope that the transcriber, who 17 has been working so hard this evening, got it all 18 down for us to refer back to. 19 I'm going to -- 20 CHAIRMAN LLOYD: We also have memories. 21 MR. LYOU: That's good. We'll try to keep you 22 to it. 23 I think that the "especially" language 24 does represent the need to establish narrowly 25 tailored remedies to problems that we know exist. 405 1 And that language is in the document before you, and 2 it is spelled out clearly that you recognize there is 3 a problem and a need to address it. 4 I think I'm just going to wrap up 5 because it's been such a long evening. I'd like to 6 thank you for your patience and thank you for the 7 respect that you've shown all the members of the 8 public -- the community members, the parents, the 9 children, and the members of the other stakeholders 10 who were here this evening. Thank you. 11 MR. McKINNON: Joe? 12 CHAIRMAN LLOYD: Joe? Mr. McKinnon has a 13 question for you. Also, I would like to thank you 14 for all the efforts you've put into this thing and 15 working with staff and the community. You've done a 16 tremendous job. 17 MR. LYOU: It's been remarkable and very 18 productive process. 19 CHAIRMAN LLOYD: Mr. McKinnon, I think, has a 20 question. 21 MR. McKINNON: Joe, I just -- I want to 22 reaffirm, in the same way I talked to WSPA -- and 23 that is "especially" is in here as part of a guidance 24 document; right? That doesn't mean that, where we 25 find that there is not a problem in a community, that 406 1 we're going to spend resources there. And I just 2 kind of, like, up front, everybody -- 3 MR. LYOU: I can assure you that the groups 4 that we work with would never want you to spend money 5 on where there isn't a problem. 6 MR. McKINNON: Right. Thank you. 7 CHAIRMAN LLOYD: Then, I think, we take 8 Barbara Lee, Marilyn Solomon, Luis Cabrales. Do you 9 need someone else to help you -- 10 MR. CABRALES: I'm great at speaking English 11 or Spanish, sir. It's up to you. It's been a long 12 evening. If you want to hear my testimony -- 13 CHAIRMAN LLOYD: After that, and then we'll 14 have Carlos Porras and Bahram Fazeli. 15 MS. LEE: Good evening, Mr. Chairman, members 16 of the board. My name is Barbara Lee. I'm the air 17 pollution control officer in Northern Sonoma County, 18 far north from here, in one of the rural areas that 19 has been mentioned several times much in need of your 20 assistance. 21 Rather than going into all of the 22 reasons I think this is an important action you're 23 taking tonight, I would like to thank you for the 24 opportunity to work with you and your staff on the 25 development of these proposed policies and actions, 407 1 to commit to continue to work with you in the future, 2 and to urge you to take your vote and approve the 3 document. 4 CHAIRMAN LLOYD: Thank you very much. And, 5 again, thank you for your help and CAPCOA's. Very 6 much appreciate it. Thanks, Barbara. Hopefully 7 you're staying this evening. 8 MS. LEE: Yes. 9 MS. SOLOMON: Good evening. My name is 10 Marilyn Solomon. I'm the deputy executive officer of 11 public affairs and transportation for the South Coast 12 Air Quality Management District. 13 AQMD staff stands in full support of 14 ARB's proposed environmental justice policies and 15 actions. And we commend the leadership role you're 16 taking to ensure that fair treatment is made 17 available to all Californians regardless of ethnicity 18 or economic standing as it relates to the State's 19 environment rules, policies, and programs. 20 AQMD is a leading proponent of 21 environmental justice. And under the leadership of 22 our Chair, Dr. William Burke, our governing board 23 adopted a 10-point environmental justice initiative 24 program in 1997 to ensure that every resident within 25 our 4-county region is equally protected from air 408 1 pollution. Not only was that adopted, but staff and 2 resources have been made available to what we 3 consider to be a successful, yet still developing 4 and emerging, program. 5 Your approval of these proposed 6 environmental justice policies and actions will raise 7 the bar in terms of ensuring a better quality of life 8 for the more than 34 million men, women, and children 9 living in California. This adoption will also 10 inspire other state regulatory agencies to place the 11 highest priority on environmental justice. 12 AQMD looks forward to working closely 13 with the state as it moves forward to integrate these 14 proposed policies and actions into its activities. 15 Our collaboration, I'm sure, will help strengthen our 16 own initiatives and programs. We look forward to 17 working with you. Thank you. 18 CHAIRMAN LLOYD: Thanks, Marilyn. Thanks for 19 coming and thanks for your help. 20 Yes. Carry on. This is Luis 21 Cabrales? 22 MR. CABRALES: Yes, sir. Thank you very much. 23 I appreciate the time. I'll be very brief. I'm 24 usually ready to speak both English and Spanish. So 25 that makes my testimony half the length that it would 409 1 be otherwise. We don't have any monolingual 2 Spanish-speaking community members. So I'll just 3 speak in English. 4 I want to express my support to the 5 proposed policies and actions for environmental 6 justice because if adopted promptly and effectively, 7 these policies will have a very positive impact on 8 air pollution and health-related problems in 9 communities of color. 10 Moreover, if it is designed especially 11 to protect air quality in such communities, these 12 policies will have the effect intended by SB 115, 13 when it was approved 2 years ago. 14 Now, there's already a long list of 15 independent studies on the impact of pollution on 16 communities of color. And there's also independent 17 studies on the unequal distribution of this pollution 18 on these communities. 19 There is also a study that we -- a 20 poll actually, that we have. It was released in May 21 of this year. And in this poll, among voters in the 22 State of California, the majority of these voters 23 believed that public officials are more likely to 24 allow polluters to operate in communities of color 25 and low-income communities and less likely to enforce 410 1 existing laws in those communities. 2 I think tonight we will have an 3 opportunity to prove California voters that it's -- 4 that voters are somehow wrong. By adopting these 5 policies, that will improve the air quality in 6 communities of color. 7 And so I hope that you will show 8 everyone that you are no longer willing to allow air 9 pollution to impact these communities of color. 10 Thank you very much. 11 CHAIRMAN LLOYD: Thank you very much, indeed. 12 Carlos Porras. Thanks for your 13 patience, Carlos. 14 MR. PORRAS: Thank you for yours. 15 Of course, I'm sure everyone here 16 knows that I am in support of the environmental 17 justice guidelines as they have been recommended to 18 you by the staff. 19 So I wanted to take this opportunity, 20 first of all, to thank both tables here and, in 21 particular, for your willingness and participation to 22 come into our communities. 23 Those of you that -- the majority on 24 both tables have participated in visiting our 25 communities through the toxic tour. And I think that 411 1 that is commendable. It is the firsthand experience 2 by which I think you can understand some of the 3 challenges that we face. 4 And I think all of you know that, 5 certainly, if the power were within me and my 6 organization, certainly we would be going much 7 further than what is presented here. But we 8 certainly understand the difficulties of moving 9 progress. And we feel that this is a step in that 10 direction. 11 I don't really care to get too 12 concerned over semantics, but I do want to comment on 13 the language question. And that is, if the language 14 were to add a level of burden of proof in the 15 community, certainly, given the amount-of-resources 16 question, that you can understand that, you know, 17 problems would persist and communities would continue 18 to suffer disproportionately and unfortunately. 19 And so we feel that the language that 20 is proposed to you is adequate to move -- move our 21 concerns forward, to begin to work with the Air 22 Resources Boards on some of the tougher ones because, 23 after all, as was said before, this is a guidance 24 document. 25 This is not regulation. This is not a 412 1 permit. No one is losing anything by the adoption of 2 this guidance document. 3 And so it's a bit scary in the context 4 that, if we're fighting this much over a guidance 5 document, what we'll be doing when we get down to 6 pollution prevention, toxic-use reduction, 7 precautionary principle, and some of the other very 8 important substantive policy matters that we would 9 like to pursue in the future with the Air Resources 10 Board. 11 So I want to, again, thank the staff 12 and the board for the long work that has gone on into 13 getting to the proposal that you have before you. 14 Emphasize that we are optimistic that the board has 15 taken the leadership in this very controversial issue 16 to attempt to address some serious concerns in our 17 communities, and we look forward to working with you 18 in the future as well. Thank you. 19 CHAIRMAN LLOYD: Thank you very much, Carlos. 20 I really appreciate your tremendous help in this area 21 and for conducting the tours for the board members. 22 We appreciate it very, very much. 23 Now, we have Bahram Fazeli. And, 24 then, after that, I don't know who else has not 25 testified. 413 1 MR. GARRETT: T. L. Garrett. T. L. Garrett. 2 The Port of L.A. 3 CHAIRMAN LLOYD: But -- oh, yes. The Port of 4 L.A. After that, T. L. Garrett. 5 MS. MASTERS: You should have a card from 6 Julie Masters of NRDC. 7 CHAIRMAN LLOYD: Yeah. That's fine. Yes, I 8 do. So feel free. 9 MR. CHIOCK: Do you have a card for the 10 American Lung Association as well? 11 CHAIRMAN LLOYD: Yes, we do. So if you will 12 line up there because we're jumping through the order 13 here. So we'll make sure everybody will be heard. 14 And then I think Cindy Tuck has some clarifying 15 comment at the end. You're signed up too? Okay. 16 UNIDENTIFIED VOICE: I have to go down the 17 line, but there was a card for her. 18 CHAIRMAN LLOYD: Well, no problem. Yes. 19 Sorry. 20 MR. FAZELI: Yeah. My name is Bahram Fazeli, 21 staff researcher for the Southern California Region 22 of Communities for a Better Environment. I'm just 23 going to cut my testimony short. 24 And, briefly, two important aspects of 25 environmental justice guideline or document policy 414 1 and statements is the cumulative-impact assessment. 2 And we ask that a cumulative-emission exposure- 3 and-impact assessment-and-reduction guidance document 4 be adopted by December of 2002. 5 And we just want to make sure that 6 that is introduced either -- I don't know whatever 7 format -- either as an amendment or a motion so that 8 is actually something that the staff will commit to 9 by a specific target date. 10 And I know that Mr. Kenny indicated 11 the willingness of the staff to do that. And we are, 12 of course, willing to work with the agency on a good 13 target date. 14 And the second is a 15 complaint-resolution process. And we ask for a 16 complaint-resolution guidance document by December of 17 2002, again, in our letter. And, again, we are 18 willing to work with ARB on the target date that is 19 good for the agency and, you know, work out a whole 20 lot of specifics, like the stakeholder process that 21 we had in developing these policies and action items. 22 I just want to -- whatever the format 23 is introducing those into the guidelines, just want 24 to make sure that, besides this allocation of 25 resources and assigning a core group of people, that 415 1 is formally actually introduced into the guidelines 2 tonight. Thank you. 3 CHAIRMAN LLOYD: Thank you very much. 4 Julie Masters. Sorry. Julie. You're 5 definitely here. And then, Enrique, you're also 6 here. 7 MS. MASTERS: Good evening. 8 CHAIRMAN LLOYD: Good evening. 9 MS. MASTERS: My name is Julie Masters, and 10 I'm here on behalf of the Natural Resources Defense 11 Council. We are a national nonprofit environmental 12 organization with 500,000 members nationwide and over 13 80,000 members in California. 14 NRDC strongly believes that one of the 15 most important issues the ARB needs to address is 16 environmental justice. We therefore greatly 17 appreciate and support all the work that ARB staff 18 has put into these proposed policies. And we 19 strongly urge this board to adopt the policies as 20 they have been proposed by staff and without 21 weakening them in any manner. 22 In addition, we strongly urge this 23 board to adopt all of the additional recommendations 24 that were made in the letter of support submitted to 25 you by the nearly 50 different community, 416 1 environmental, and public health organizations 2 including the NRDC. 3 And given the time, I won't go into 4 all of those. But I'd just like to highlight one 5 point. It is true that the words of this proposed 6 policy are strong. And by adopting them today, this 7 board will take an important first step towards 8 environmental equity. 9 But the real test for ARB will be how 10 you take those words and put them into action. And 11 you have a big job ahead of you and one that will 12 take a real investment of resources to do it right. 13 We therefore urge you to develop a 14 staff and funding allocation plan that designates a 15 team of staff members that are specifically 16 responsible for the execution of these policies with 17 an adequate budget and resources to make this program 18 a reality and to adopt such a plan soon. 19 And we're pleased to hear that staff 20 supports this recommendation because we believe that 21 a focussed effort with a specific team of individuals 22 is necessary to ensure that quick and real progress 23 is made. 24 And just as importantly, this board 25 must continue to oversee the implementation of these 417 1 policies on an ongoing basis. Thank you very much. 2 CHAIRMAN LLOYD: Thank you very much. 3 Is Enrique Chiock -- yes. And then we 4 have Anita Mangles. And I apologize, Anita. Your 5 card was not on here. We do have your card. I 6 apologize. And then we have T.L. Garrett. 7 MR. CHIOCK: Chairman Lloyd, members of the 8 board, good evening. My name is Enrique Chiock. I 9 am the president and C.E.O. of the American Lung 10 Association of Los Angeles County. 11 The American Lung Association of 12 Los Angeles County is a public-benefit corporation 13 whose mission is to prevent lung disease and to 14 promote lung health. As a public-health advocate, 15 we're highly interested in advocating and supporting 16 policies designed to reduce pollution emissions, 17 exposures, and health risks in minority communities. 18 I'm here today to support the CARB's 19 proposed policies and actions for environmental 20 justice. The American Lung Association of 21 Los Angeles County supports these proposed policies 22 on behalf of the communities we represent, including 23 children, asthmatics, patients with lung disease, and 24 those in the community who may have a special 25 sensitivity to air pollution. 418 1 We support the proposed policies and 2 actions because they are designed to empower people 3 to take an active role in the decision making 4 affecting air pollution in their own communities. We 5 support the policy because it will require CARB to 6 set quantitative goals for emission reductions. 7 We support them because it 8 incorporates A.B. 1390 -- Assemblyman Firebaugh -- 9 which requires funding and incentive programs to 10 directly reduce contaminants or public health risks 11 associated with contaminants. 12 The policies acknowledge that minority 13 and disadvantaged populations are significantly 14 subjected to a variety of environmental hazards. 15 They embrace zero- and near-zero-emission 16 technologies, not just set mandates. That are a 17 serious effort to improve environmental conditions 18 for poor and minority communities. 19 In my opinion, it validates a recent 20 study done by the UCLA Institute for the Environment 21 that found that communities surrounding the 100 22 largest industrial toxic emitters in Los Angeles 23 County tend to be mainly Latino communities and poor 24 people. 25 The policies, as proposed, show an 419 1 important commitment on behalf of the CARB to 2 promoting environmental justice. We would urge the 3 board to take prompt action in adopting these 4 policies. The policies are important and 5 groundbreaking. 6 At the American Lung Association, we 7 will remain committed to work with the board and any 8 other agency to assist in reaching out to communities 9 and engaging them in the process of making the air 10 cleaner for everyone. 11 Once again, we urge the board to adopt 12 the policies. These policies considerably will help 13 us all breathe easier. After all, as we say at the 14 American Lung Association, "If you cannot breathe, 15 nothing else matters." Thank you. 16 CHAIRMAN LLOYD: Thank you very much indeed, 17 again, for your strong support. 18 MS. MANGLES: Thank you very much and thank 19 you for your courtesy, Chairman Lloyd. My name is 20 Anita Mangles. I represent the Western States 21 Petroleum Association. You've already heard from one 22 of our folks, and you have our written comments. So 23 I'll make it brief. 24 But I wanted to say that I've 25 participated in the workshop process on this issue 420 1 and found it to be incredibly helpful and 2 instructive. It was very participatory. I applaud 3 the staff, particularly, for doing yeoman's work on 4 that. I think it was an incredibly useful exercise, 5 and hopefully we'll see more interaction with the 6 community as we go forward. 7 I happen to have bronchitis this 8 evening. And, as I was sitting there, watching the 9 clock, saying, "When can I go home and go to bed?" it 10 occurred to me. I've got bronchitis, and it's not 11 attributable to any environmental injustice. 12 People get sick. People have asthma. 13 People get cancer. It's unfortunate. 14 And I think one of the most important 15 things that we can say about the process going 16 forward and implementation is that, yes, if there are 17 disparate concentrations of disease and other health 18 problems in certain communities, I think we need to 19 be intellectually and scientifically honest and very 20 thorough in determining exactly what the causes of 21 those diseases are. 22 There seems to be a perception -- this 23 has come out in the workshops and some things in the 24 press -- that it must be because of their proximity 25 to pollution sources. 421 1 However, we haven't seen any evidence 2 of that, notwithstanding the comments that one 3 gentleman made that there were studies that proved 4 it. I know the UCLA study that was published a 5 couple of months ago actually said, "Yes. There are 6 greater concentrations in certain neighborhoods, but 7 there aren't -- there is no evidence that there are 8 disproportionate harmful health impacts." 9 So we would hope that -- and we would 10 like to work with you on this, of course -- going 11 forward, that we really make an effort to identify 12 the links, you know. Are there areas that are 13 suffering, you know, from pollution that is 14 industrial related, whatever? And, if so, let's 15 address them. And, if not, let's try and address 16 wherever else that's coming from. 17 I think it's instructive that CARB 18 staff has already published numbers that say that 90 19 percent of the pollution problems come from mobile 20 sources -- 70 percent diesel, 20 percent other 21 mobile -- and then 10 percent from stationary. So it 22 would be very instructive to know if those 23 percentages hold true in the communities in question 24 here. 25 Clearly there's a lot of perception 422 1 out there that there's a problem in certain 2 communities. And where there's smoke, you may find 3 fire. I think we are all very supportive of the 4 concept of identifying exactly where those fires are, 5 what caused them, and how we can best marshal our 6 scarce resources, both financial and human, to 7 address those situations. 8 So we look forward to working with 9 you, going through the process. We're happy that our 10 refineries have been proactive in the community, with 11 community advisory panels, quarterly meetings, and 12 other outreach activities to include the community. 13 We hope we can do better in the future on that. 14 And we look forward to going forward 15 on a realistic basic to ensure that we have clean air 16 for all Californians regardless of where they live, 17 what color, what creed, or what income level they're 18 at. And I thank you very much for your time and 19 patience. 20 CHAIRMAN LLOYD: Thank you very much. 21 The Port of Los Angeles. Mr. Garrett. 22 MR. GARRETT: Good evening and thank you very 23 much. My humble congratulations and extreme 24 admiration for your stamina. I'll be exceedingly 25 brief. The City of Los Angeles and the Port of 423 1 Los Angeles fully and strongly support the policies 2 and actions of the Air Resources Board for 3 environmental justice. 4 Recently our Board of Harbor 5 Commissioners adopted a policy or a goal of no net 6 increase, neither air emissions or transportation 7 impacts, on the local communities and directed staff 8 to undertake baseline air-quality and traffic 9 studies. 10 We see the action items included in 11 this environmental justice policy and actions as 12 being directly in line with those that we have been 13 directed by our own board and look forward to working 14 closely with the staffs of AQMD and CARB on 15 implementing these measures. 16 And we've got a bit of a history. As 17 you well know our executive director Mr. Larry Keller 18 served on the Carl Moyer Advisory Committee. We've 19 been a strong supporter of the Carl Moyer program and 20 have participated in a number of their innovative 21 air-quality measures, like the vessel-speed- 22 reduction that is the first measure of its type in 23 the United States and in the world, for that matter. 24 So, again, congratulations on this 25 very innovative policy. And thank you very much. 424 1 CHAIRMAN LLOYD: Thank you very much indeed. 2 I think -- do we have anybody else 3 who's not testified? Except Cindy wants to be 4 recalled; is that correct? 5 Yes. Thank you. For the record, 6 CCEEB is testifying twice. 7 MS. TUCK: Thank you for your indulgence. 8 Cindy Tuck with CCEEB. I did want to have a chance 9 to respond to the question that Ms. Patrick had. And 10 this had to go to whether our suggested language 11 would have added a burden on the communities. 12 Wanted to clarify for the record, that 13 was certainly not our intent. And we don't think the 14 language does that. The language that I suggested in 15 the alternative to just going to "including" would be 16 "especially low-income and minority communities that 17 bear the most significant exposure and risk." 18 That ties it to air quality, not just 19 who the community is. Our thought and intent all 20 along there was that it would be the district and ARB 21 that would work together on what is the status of the 22 air quality for the area. 23 SUPERVISOR PATRICK: Thank you. 24 MS. TUCK: Thank you. 25 CHAIRMAN LLOYD: Thank you very much indeed, 425 1 Cindy. 2 So seeing no one else to testify, I'd 3 like to say a few comments, I guess. One thing we 4 should do first of all -- does the ombudsman want to 5 say anything here? I know it's not officially in -- 6 I should clarify, Dr. Burke, Ms. -- 7 DR. BURKE: I'll tell her afterwards. 8 CHAIRMAN LLOYD: -- Tschogl had to leave and 9 so, yeah, as, you know, Terrel is stepping in. And 10 so, if you feel you want to say something, Terrel, or 11 if you don't, it's entirely up to you. 12 Recognize that this is not a 13 regulatory item, but we thought it would be useful to 14 explain the extent of outreach here. 15 And welcome. Get closer. 16 MS. FERREIRA: Mr. Chairman and members of the 17 board, even though the proposed environmental justice 18 policies and actions document before you is not a 19 regulatory item, I feel that it is important to share 20 with you the outreach that staff undertook to develop 21 it. 22 Staff undertook a broad and thoughtful 23 effort to obtain comment and input from all affected 24 parties. This effort included 200 conference calls; 25 165 e-mail discussions; attendance at 50 meetings 426 1 with community, environmental, businesses, and 2 government groups; two formal workshops; and 3 distribution of information in both Spanish and 4 English. 5 Staff actively sought opportunities to 6 attend community group meetings in low-income and 7 minority community in order to share the proposed 8 policies with them. These groups included homeowners 9 and community associations, industry associations, 10 traditional environmental organizations, and 11 government agencies. 12 Many of these meetings were community 13 sponsored. Many of them were held at hours that 14 facilitated public attendance. Staff took this 15 lesson to heart and held most of their meetings in a 16 similar fashion. 17 The result of this allowed staff to 18 interact with nearly 800 individuals throughout 19 California. Staff also distributed fact sheets in 20 Spanish and English at many ARB workshops. These 21 materials explain what the proposed policy goals are 22 and how the public could become involved in the 23 process. 24 Finally, staff held two workshops to 25 discuss the draft guidance document. These workshops 427 1 were held in Oakland and in Carson on November 13 and 2 15, respectively. The workshop notices were sent to 3 more than 2,200 individuals. They were also sent to 4 media outlets in the form of news alerts. 25 people 5 attended the work -- sorry -- the workshop in 6 Oakland, and 50 people attended the workshop in 7 Carson. 8 All of these efforts led staff and the 9 community to tonight's hearing. That concludes my 10 comments. Thank you. 11 CHAIRMAN LLOYD: Thank you very much. 12 Before I turn to my colleagues, I'd 13 like to thank the staff -- a personal thanks here -- 14 for the outstanding efforts all the way from Mr. 15 Kenny, Lynn Terry, Bob Fletcher, Dr. Linda Murchison, 16 Mike Waugh. I thank Randy "Passig," Dave Shimp, and 17 Leslie "Krent" and, on my staff, Dr. Prasad. I thank 18 Brent Takemoto and Steve Hui. 19 I know we've all -- Kathleen, Jerry, 20 Terrel -- again, we've all put a tremendous amount of 21 effort into this. So I'd like to express my thanks 22 for this very important program. It's clearly a 23 start of a program, as we've heard this evening. 24 And I think also we've heard issues 25 here where we clearly don't know all the 428 1 implications. We don't have the tools. But I think 2 it's important to recognize that we should not let 3 our lack of technical tools impede our will to 4 proceed because clearly, if we knew all the answers 5 on the air-quality issues, we wouldn't move ahead. 6 So I think it's particularly important 7 here. And I was delighted to hear the commitment of 8 Mr. Kenny. And I know how tough this is to, again, 9 to give increasing and continued attention to this 10 issue. But that's very, very important. 11 The other one I'd like to add, again, 12 before I turn it over to my colleagues is that, what 13 I've seen also come together, particularly over the 14 last several months, is the outstanding work done by 15 the stakeholder group because I saw, when we started 16 early in the year, there was quite a divergence here. 17 And I've seen the convergence coming together. 18 And in addition to the outstanding 19 work from our staff, the outstanding work from all 20 the stakeholders to bring us where we are today. So 21 though, in fact, we may have minor disagreements -- I 22 see it minor disagreements -- but there's a 23 commitment here to move ahead on this issue. 24 So I would like to, in fact, make sure 25 that the stakeholder group continue because I think 429 1 it's a very important piece of the program. And I 2 think to demonstrate the commitment, I think that we 3 should devote to this -- that we should continue 4 this. 5 And I would like to ask Mr. McKinnon, 6 who has attended many of the evening meetings and is 7 a public member located in Sacramento, to, in fact, 8 chair the stakeholder group, working with staff. But 9 I think in this way, also, it will express, I think, 10 the board's continuing concern and commitment to 11 making sure this issue moves ahead and also to 12 continue what I heard from the industry as well -- 13 that they would like to work with us. 14 And in this way, also, we will try to 15 work through the guidelines. So I would like to 16 propose that, with the support of my colleagues, in 17 addition to commitment there. And clearly I'd like 18 to throw it open to the rest of my colleagues for any 19 other discussion. 20 MRS. RIORDAN: Well, Mr. Chairman, if I 21 might --- 22 CHAIRMAN LLOYD: Yes, please. 23 MRS. RIORDAN: -- I would like to express my 24 appreciation to Carlos Porras, simply because I think 25 the tour that I took made me begin to really think 430 1 through this whole idea of environmental justice. 2 And, before, I'd not really understood all of the 3 implications. And I thank you for that tour. 4 I'm very supportive of the staff 5 recommendations, Mr. Chairman. And -- but I just had 6 to acknowledge that tour as a very important aspect 7 of my support of this. 8 CHAIRMAN LLOYD: I would just, again, 9 reiterate that but -- and I also wanted to 10 congratulate all the attendees tonight from all the 11 stakeholders and particularly the communities. 12 And, Carlos, I think you set the -- 13 you set a standard here. The conduct and civility in 14 which the meeting was conducted, I think, is a real 15 tribute to all the communities there. So I really 16 appreciate that very much. 17 Dr. Burke? 18 DR. BURKE: Yeah. Well, she needs to put 19 another package of paper there. No seriously, I'm 20 going to make this short. I'm going to make this 21 short. 22 CHAIRMAN LLOYD: Well, as you heard, the 23 congratulations to your starting this effort years 24 ago on this issue. 25 DR. BURKE: Well, and the civility thing, you 431 1 know. I know I've violated that but, you know, 2 it's -- I can't help myself. 3 I remember very clearly where I was 4 when someone came up to me and said that you had been 5 nominated for the chairmanship of CARB. And I turned 6 to that person; and I said, "He's a good man." 7 Tonight, you're on your way to being a 8 great man because this kind of thing makes a 9 difference. And I know, without your leadership, no 10 matter what we did at South Coast wouldn't have made 11 a hill of beans here if you hadn't let 'em go. 12 And to Mr. Kenny -- you know you and I 13 have had a few rounds. But I got to tell you, you 14 rose to the occasion. You did a great job on this. 15 I think that all the staff is to be complimented on 16 the work that they have done. 17 Now, Carlos, you, hey, man, you 18 know -- should kiss your butt. 19 CHAIRMAN LLOYD: Not -- not -- don't go that 20 far. 21 DR. BURKE: But I think that why it's so 22 important about the semantics -- and I'm willing to 23 go along with the staff recommendation of what's so 24 important about the semantics here -- is that this is 25 historic. This is when people say things -- you 432 1 know, I've been around a lot of things. And people 2 go, "Oh, this is historic." 3 Now, this is historic because, for the 4 first time people of color -- and I mean every color, 5 including the white lack of color, the 50 percent of 6 the black caucus up here -- will get a peep inside 7 for real -- for real, only if you keep pushing. 8 You can't get sick. You can't get the 9 flu. You can't get bad feet. You can't get nothing. 10 You got to keep on pushing because that -- that's 11 what. 12 Now, I'd like to say to Mr. McKinnon, 13 my brother. I would only implore you, in your task 14 ahead -- I know that you had -- I know that you are a 15 soulful man. I know that for a fact -- that you 16 continue to reach out in that sensitivity that you 17 have for people. And remember that these -- 18 everybody's way of doing it may be different. But 19 there's no right and no wrong way. 20 But, you know, there's a lot of people 21 here that didn't agree with us tonight, but they're 22 okay too. Okay? 23 But, once again, Mr. Chairman, my 24 congratulations and my gratitude, as a person of 25 color. 433 1 CHAIRMAN LLOYD: Well, we got great training 2 at South Coast AQMD. Thank you. 3 Supervisor -- sorry. 4 MR. CALHOUN: I want to -- very brief 5 statement. 6 DR. BURKE: The chairman of the black caucus. 7 MR. CALHOUN: A lot of effort has gone into 8 developing this proposed policy. And I'd like to see 9 the same enthusiasm shown in the implementation of 10 the policy because the policy will only be worthwhile 11 if it's implemented. So I'd like to see it 12 implemented with the same type of enthusiasm that was 13 used in the development of the policy. Thank you. 14 CHAIRMAN LLOYD: Thank you. 15 We've got Supervisor Patrick and 16 then -- 17 SUPERVISOR PATRICK: Thank you. I just wanted 18 to make a brief comment. I too would like to thank 19 everyone that came this evening. Unfortunately most 20 of them are gone home now. But I think it has been a 21 very worthwhile exercise to have so many folks here. 22 And about an hour and a half ago, 23 somebody says, "Why don't you just vote on this 24 thing?" 25 Well, because we needed to listen to 434 1 all of you first before we did that. I am very 2 supportive of this policy, but I am not supportive of 3 using the word "'especially' low income and 4 minority." And I'll tell you why. 5 About three hours ago, we had two 6 kids, who I assume are in elementary school, come up 7 and speak. One of them -- Nicolas -- has asthma. 8 He's from Van Nuys. I don't know anything about his 9 family circumstances. A young lady named Karina 10 Hernandez -- who probably's in elementary school, 11 maybe in junior high school -- she's Hispanic. She's 12 from Wilmington. 13 It's really difficult for me to say 14 that one of those children is especially in need of 15 our help. That's my comment. 16 CHAIRMAN LLOYD: Miss D'Adamo. 17 MS. D'ADAMO: I'd like to begin by asking 18 those in the audience that remain from the community 19 groups to please send our "Thank you" to the many, 20 many people that came out tonight, especially those 21 who came long distances, brought their children out 22 here. 23 I know we were trying to keep this 24 hearing going. But, after each one of them, I felt 25 like saying, "Good. This is great. Thank you for 435 1 coming out here." 2 I knew very little about this issue 3 prior to being appointed to this board. And staff 4 has educated me. The chairman, through his 5 leadership, has just been phenomenal. 6 But most of what I've learned, I've 7 learned from community members that have come to 8 hearing after hearing and have educated us. And I 9 just really want to thank you all for what you've 10 done. I really appreciate it. 11 The work is just beginning. And we've 12 got a long way to go here. I have a couple of 13 comments that I'd like to make and feel compelled to, 14 again, raise the issue that Supervisor Patrick just 15 raised regarding the issue of "including" versus 16 "especially." 17 Mainly, not because I disagree with 18 any of the comments that were made tonight by the 19 people of color and people of low-income communities 20 that have come here tonight, but I feel compelled to 21 raise my concerns because I think that words have 22 meaning. 23 And, in this case, where we included 24 some language that, perhaps, we may have initially 25 included through the process of compromise in order 436 1 to bring people on board and to satisfy concerns that 2 many may have, my concern is that we may be raising 3 the expectation beyond that which we can provide. 4 I also have a concern of any 5 unintended consequences with the use of the word 6 "especially." 7 I keep putting myself in the situation 8 where, if I lived in a community and maybe I'd lived 9 there for a couple of generations and I want to stay 10 in the community and I've got children and I'm 11 concerned about any children, but there's a factory 12 nearby, do I now have a label on me because I'm in a 13 low-income community or because I happen to be a 14 person of color? Does that automatically mean that I 15 am environmentally deprived? 16 I hope that's not the case in every 17 instance. And I think we need to do more to find out 18 whether or not that is, in fact, the case. But for 19 us to actually use the word "especially" -- the 20 concern that I have is that we may be putting a label 21 on areas where there may be instances where it 22 doesn't rise to that level -- transported pollutants, 23 the wind blows in the opposite direction, maybe 24 you're okay. I don't know. 25 I do think, however, there are a 437 1 couple of places where the word "especially" is used, 2 in Policy Number 2, with regard to outreach and 3 education efforts -- I think it's important to say, 4 "'especially' in minority and low-income 5 communities," because the whole point here is to get 6 the information out and collect the data. 7 We need to do more monitoring, 8 especially in those communities. With regard to 9 action, I think action, in responding to public 10 health concerns, needs to be based on science. 11 So I think we need to do a better job 12 of getting the word out; focussing on the communities 13 that already have demonstrated to us that there is a 14 problem out there; collecting the data; doing more 15 with regard to monitoring; and then, of course, 16 basing it on science. 17 With regard to science -- a couple of 18 other comments. I support and am pleased to hear Mr. 19 Kenny's remarks on the environmental document or the 20 letter. I think that we do need to have a work plan, 21 and we need to have periodic reports. 22 The guidance documents -- land use and 23 cumulative assessments. Science. Science. Science. 24 That's what we need more of. And I think that, if we 25 can collect that data, it's just going to make our 438 1 job so much easier. We're not going to have these 2 long hearings. Once the science is there, it's going 3 to tell us where we need to go from there. 4 A couple of other things -- the 5 comments that kept coming about the port and the 6 airports -- I realize we have limited jurisdiction. 7 But just implore staff, if there's any 8 area where we've got a hook -- through our clean-air 9 plan -- I was talking with Miss Walsh earlier -- 10 forklifts, out in the guidance document -- I guess 11 most of it is land-use decisions -- if there's 12 anything at all we can do -- additional monitoring -- 13 I think we need to do what we can in those areas. 14 Couple of comments were raised by 15 several witnesses regarding monitoring in 16 South-Central Los Angeles and Southeast 17 Los Angeles -- can we do that? A question of staff. 18 MR. KENNY: The answer's probably "yes." The 19 question becomes really more "When?" And the 20 difficulty for us is that, as we basically try to 21 target particular areas for monitoring, we do run 22 into a resource limitation. 23 So we try to prioritize them and 24 provide almost a triage effort in which we look at 25 those that we think actually the monitoring will 439 1 provide us the greatest value the soonest. 2 But it would be hard -- it's hard -- 3 and I don't want to raise the expectations here -- to 4 say, "Yes," to all requests because we simply don't 5 have that level of resources. 6 DR. BURKE: Mr. Kenny, if I could jump in 7 here, I'd like to offer the assistance of South Coast 8 in some of these monitoring stations since they're in 9 our area, especially Bell and South Gate, you know -- 10 MR. KENNY: That would be great. 11 CHAIRMAN LLOYD: That would be very helpful. 12 Yeah. Great. 13 DR. BURKE: -- since those are in my wife's 14 district too. 15 CHAIRMAN LLOYD: Thanks. Thanks. 16 MS. D'ADAMO: Great. And then just two more 17 final comments. I know, Dr. Burke, you were great 18 about whenever someone would come up and say, "Well, 19 but how do I get that information without having to 20 go to South Coast?" and you said, "I'll get you the 21 report." 22 I'm concerned about other areas of the 23 state. I think we ought to have a requirement that 24 documents be located in public repository -- a local 25 library or whatever makes the most sense -- if that's 440 1 not already included in the document. 2 And good luck to my colleague here, 3 Mr. McKinnon. I know you're going to do a great job. 4 I'm real pleased to see that you'll be heading up the 5 committee. Thank you. 6 CHAIRMAN LLOYD: Thank you. Thank you very 7 much. 8 Mr. McKinnon. 9 And, again, I appreciate -- I know we 10 had discussed this briefly, but I know you'd 11 expressed an interest. And you show that interest by 12 going to a lot of these meetings. So I know that you 13 will do a great job. 14 MR. McKINNON: I want to start out by 15 recognizing the chair. And I think the first step 16 the chair took was to appoint Shankar, who I've spent 17 quite a bit of time with, right up at the beginning, 18 when he was first appointed. And he made an 19 appointment and started moving community health as 20 his priority. And here we are. 21 And staff worked exceptionally hard 22 and went through all sorts of bumps along the way, 23 making sure that there were good forums to discuss 24 this issue. And I would love to stay involved in 25 that, and that's out of respect, also, for the work 441 1 staff's done. It's not to -- it's compliment and to 2 help. 3 On the issue including the -- Carlos 4 put it pretty well. And I can count votes here 5 pretty well. And I said my piece on this earlier. I 6 don't think it's worth holding up this policy over. 7 And I think there are issues of greater substance 8 that were discussed tonight that really need to be 9 moved. 10 And one is making sure that there is 11 good policy moving forward so that, if people have 12 complaints in the community and somehow those 13 complaints are not being heard, that there's a way of 14 dealing with that. I think that's just, right up 15 front, something of substance that needs to be moved. 16 I guess the second most substantive 17 thing -- and I think Mike alluded to this earlier -- 18 is beginning to make sure that we have good science, 19 that the environmental justice doesn't come at the 20 expensive of villainizing certain industries or 21 certain people or looking for deep pockets or -- that 22 it's based upon good science and that we move that 23 science. And from that, I think would flow land-use 24 policy. 25 And certainly there are elements of 442 1 land-use policy that, if we begin the discussion 2 pretty soon, are just obvious in, like, putting 3 schools next to freeways and things like that. 4 So I really look forward to it. I 5 think people have done a really good job. I don't 6 want there to be work done by January 1st. You have 7 a week. And then you're on vacation. I'm a good 8 union guy. I believe in vacation and -- 9 DR. BURKE: Good union guy. 10 MR. McKINNON: -- but we do have to move -- 11 and that was the point -- and not lose momentum. 12 And so thank you, Mr. Chair. 13 CHAIRMAN LLOYD: I presume -- and thank you 14 for those kind words -- I presume, Mr. McKinnon, you 15 meant, by sticking with the staff language -- 16 MR. McKINNON: Yes. 17 CHAIRMAN LLOYD: -- yes -- thank you. 18 The only other point, before I guess 19 we all call for a vote here -- the other one I should 20 mention on my staff also is that we've had some 21 really spirited discussions this last year. 22 And my senior policy advisor, 23 Catherine Witherspoon, has been invaluable in keeping 24 me on track. And Jerry -- Jerry Martin -- his 25 comments to me were very compelling when he said that 443 1 "This governor's committed to this. And if this 2 governor and we, serving the governor here, cannot 3 help these communities, then who can?" 4 So, Jerry, I really appreciate that 5 part of it. 6 And Rob, who has done a fantastic 7 job -- Eaton -- was till tonight, our liaison with 8 the legislature in pointing out where we should, 9 should not be going and help. And so, again, on my 10 staff there, I appreciate that very, very much 11 indeed. 12 And I -- clearly I agree with your 13 comments with Dr. Prasad. Having hired him from ARB 14 down to South Coast where he got -- actually he got a 15 lot of training in this from Dr. Burke and 16 Dr. Wallerstein. Then we hired him back to come 17 there. So I appreciate that very much. 18 Anyway, with that, I guess, we're 19 not -- Mr. Kenny did make a -- was willing to make a 20 bet with me about a week ago, but I didn't like, in 21 all honesty, to take his money because I knew I could 22 control the agenda. But neither of us would have 23 expected to go quite this long. 24 Anyway, we will go a while -- 25 DR. BURKE: You talked so long, you fell off 444 1 the pedestal. 2 CHAIRMAN LLOYD: Give me a enough rope. Give 3 me enough rope. 4 So do I have a motion here? 5 DR. BURKE: Yes. 6 MRS. RIORDAN: I'll second it. 7 CHAIRMAN LLOYD: The motion presumably is with 8 the staff language here to include the commitments of 9 Mr. Kenny, to include my suggestion of the 10 stakeholders, Mr. Kenny. We may need two here 11 because I know that Supervisor Patrick expressed 12 concern about the "especially" language. 13 SUPERVISOR PATRICK: Mr. Chairman, I will vote 14 for it. 15 I too can count, Mr. McKinnon. I just 16 think that it's unfortunate. And I think that this 17 policy will not be as accepted throughout the state 18 because of the inclusion of that word. But as I 19 said, I don't have any problem with the policy 20 itself. I just think that the use of the word 21 "especially" is misguided. 22 CHAIRMAN LLOYD: And, again, I think that 23 here, as we said, I don't think that we should let 24 one word cloud the importance of this program. And I 25 think this is what Dr. Burke was saying and, I think, 445 1 several of us were saying. 2 And, again, the proof of the pudding 3 here is going to be implementation. And, again, I 4 think the continuing involvement of the stakeholders, 5 as we move ahead, I think will ensure that we'll come 6 up with a very sound policy. So with that -- I got a 7 second -- so all in favor? 8 BOARD MEMBER VOICES: Aye. 9 CHAIRMAN LLOYD: Anybody against? 10 (No audible response.) 11 CHAIRMAN LLOYD: Unanimous there. 12 And thank you all so much for that. 13 Thank you. 14 (Proceedings concluded at 11:26 P.M.) 15 16 17 18 19 20 21 22 23 24 25 446 1 STATE OF CALIFORNIA ) ) ss. 2 COUNTY OF LOS ANGELES ) 3 4 I, NEALY KENDRICK, CSR No. 11265, do hereby 5 certify: 6 That the foregoing transcript of proceedings 7 was taken before me at the time and place therein set 8 forth and thereafter transcribed by computer under my 9 direction and supervision, and I hereby certify the 10 foregoing transcript of proceedings is a full, true, 11 and correct transcript of the proceedings. 12 I further certify that I am neither counsel 13 for nor related to any party to said action nor in 14 anywise interested in the outcome thereof. 15 IN WITNESS WHEREOF, I have hereunto subscribed 16 my name this 3rd day of January, 2002. 17 18 _______________________________ NEALY KENDRICK, CSR NO. 11265 19 20 21 22 23 24 25 447