95-7-1

The staff presented a revised Proposed Report to the California State Legislature on the Motor Vehicle Registration Fee Program and recommended the Board approve submittal of the Report to the California State Legislature.

The ARB is required to submit a one-time report to the Legislature on the programs funded by the motor vehicle registration fees that are authorized by AB 2766 (Sher, 1990) and AB 434 (Sher, 1991).

Funds must be spent solely to reduce air pollution from motor vehicles and for related planning, monitoring, enforcement, and technical studies necessary for the implementation of the California Clean Air Act.

The authorizing statutes require the ARB to assess how the fees were used to support air pollution control and to provide any conclusions and recommendations that the analysis suggests.

Use of the funds statewide and by individual air districts was chronicled in the report. Information reported by the districts and the recipient local agencies in the South Coast and the Bay Area indicated that expenditure of the revenues generally complied with the requirements of State law.

ARB staff developed criteria and guidance for future use of the funds. The criteria emphasize implementation of the districts' clean air plans, cost-effectiveness, leveraging of other funds, and introduction and demonstration of new technology. Staff are committed to work with recipient agencies on implementation of the proposed criteria.

Staff also evaluated a selection of typical projects in a number of categories to determine cost effectiveness. The evaluation showed that there were cost-effective projects in each category and that cost effectiveness was based predominately on project design.

The staff did not recommend any major changes in the existing program. In the interest of future accountability in the use of the funds, the staff made several recommendations for administrative changes. These included an annual report of expenditures to ARB by all recipient agencies and the Sacramento Metropolitan Air Quality adoption by all recipient air districts and other agencies of ARB criteria and guidance for use of the funds; and preparation of an ARB project-specific guidance document in cooperation with interested parties.

ORAL TESTIMONY:

Dick Baldwin                                      Ventura County APCD

Bob Carr                                            CAPCOA

Norm Covell                                       Sacramento Metro AQMD

Ron Cagle, P.E.                                  City of Los Angeles

Steve Huffman                                    Cleaner Air Partnership

Judith LaMare, Ph.D.                         Cleaner Air Partnership

George Erdman                                  Northern Sonoma APCD

Cecile Martin                                     California Electric Transportation Coalition

Coleen McDuffee                               City of Woodland

Bonnie Carrion                                   Colusa County APCD

Edward Huestis                                  City of Vacaville

Craig Harris                                        Databases & Algorithms

Greg Vlasek                                       California Natural Gas Vehicle Coalition

Rick Cole                                           Local Government Commission

FORMAL BOARD ACTION:

Approved Resolution 95-32 by a vote of 9-0.

RESPONSIBLE DIVISION:  EO/OAQTP

STAFF REPORT:  Yes (120 pages)

SUMMARY OF AGENDA ITEM:

The purpose of the Air Resources Board's Innovative Clean Air Technologies Program is to support technologies that have not only the potential to improve air quality in California, but also offer promise for stimulating the State's economy through significant commercialization opportunities.

Staff described the review process for proposals received under ARB's Innovative Clean Air Technologies (ICAT) program. Fourteen proposals were evaluated for technical merit, business merit, and for their conformity with ARB policies and objectives. Six external reviewers from the State's university systems helped with proposal evaluations. Staff recommended that the Board approve four proposals for funding. These projects include:

"Cement Kiln NOx Control: Reburn and Enhanced Gas Reburn", submitted by Acurex Environmental Corporation. Acurex would develop enhanced gas reburn technology for use in the dusty environment of a coal-fired cement kiln. Cement kilns are among the highest NOx emitters and have few NOx control options. The technology is capable of 40 percent reduction with simple gas reburn and 70 percent reduction with enhanced gas reburn.

"Clean Air Two-Stroke for Utility Engine Applications", submitted by BKM, Inc. This technology could achieve substantial emissions reductions from small utility engines, which are one of the highest emitting classes of engines. The design features an electronically controlled fuel injection system, which BKM intends to develop at an attractive cost for equipment manufacturers.

"Ultra Low-NOx Gas-Fired Burner with Air Preheat", submitted by Coen Company. The Coen technology has good potential to provide NOx emission levels comparable to selective catalytic reduction technology, or SCR, at about 70 percent of the cost. Coen would develop and commercialize an ultra low-NOx gas-fired burner to address the large market sector of industrial air-preheat burners in California.

"High-Efficiency Catalytic Converter Prototype Demonstration", submitted by Ultramet. The Ultramet technology is expected to achieve lower cost emissions reductions than competing catalytic converters, technology uses a silicon carbide foam as the catalyst support, allowing smaller, more durable, and lower-cost catalytic converters to be built.

Board member Joe Calhoun stated that he would prefer to see some external reviewers from business or private industry, rather than only from universities. Chairman Dunlap responded that he had been working with staff to expand advisory and screening committees to add private sector expertise. A briefing on progress would be made available to interested Board members in 45 days or so. Mr. Boyd added that staff have found it difficult to get private sector participants due to the State's stringent conflict of interest and financial disclosure requirements.

Supervisor Vagim asked about a two-stroke engine proposal received earlier, outside of the ICAT program, and why a similar proposal is being recommended under ICAT. Staff clarified the difference between the two projects, and how ARB's needs changed since the approval of the initial project. Staff further pointed out how the extramural research budget will be used to fund research projects, while ICAT funds will be used for projects that are closer to commercialization.

ORAL TESTIMONY:  None

FORMAL BOARD ACTION:

Approved Resolutions 95-33 through 95-36,authorizing the Executive Officer to initiate contracts for the above four projects, by unanimous approval.

RESPONSIBLE DIVISION:  RD

STAFF REPORT:  No

SUMMARY OF AGENDA ITEM:

Chairman Dunlap stated that the document consisting of the annual update of the Board's planned air pollution research was reviewed by the Board's Research Screening Committee on May 11th.

Staff described the research planning process and highlighted the new projects for Fiscal Year 1995-96 featured in the Planned Air Pollution Research: 1995 Update. These projects include:

Motor Vehicle Emissions Controls - These research projects will: investigate the usefulness of the lithium-ion electric vehicle battery, assess emissions from fuel-cell reformers, demonstrate an automated electric vehicle autodocking recharge system, advance technology that uses radio transponders to transmit vehicle on-board diagnostic information to remote sites, and investigate technology to develop a diesel engine with very low NOx emissions.

Toxic Air Contaminants - The new research projects in this area are designed to develop air toxics emission factors by evaluating source test reports submitted by industry, and to develop emission information for nickel plating facilities.

California Clean Air Act - New projects in this area will: develop speciation profiles and ozone-forming reactivities for consumer products and industrial surface coatings, obtain ozone trends for meteorologically similar episodes in order to test airshed models, and develop a model to estimate emission factors as a function of plant species.

Air Quality Standards - The new projects in this area will extend monitoring for acid deposition effects in the high Sierras, and evaluate the long-term effects of pollutants on forests in California.

Staff described the next steps in the process after approval of the Research Plan Update. Staff will prepare either draft Requests for Proposals or draft Interagency Agreements that are based on the above proposed projects, which will be presented for comment and approval to the Board's Research Screening Committee.

After the Committee's approval, proposals will be presented to the Board in a resolution package consisting of a project summary, a outlines both direct and indirect costs.

In reviewing project budget information, ARB staff rely heavily on the indirect cost rates approved by federal audit agencies such as the Defense Contract Audit Agency. ARB pays the lower federal indirect rates, rather than commercial indirect rates, to contractors. Depending upon the type of study, overhead rates range from 80 to 216 percent. The highest rates are for studies that involve automotive testing, which requires a large investment in equipment, thus justifying a high overhead rate.

Staff strives to obtain the lowest possible overhead rates from contractors. Prospective contractors must either use federally-approved or lower rates for ARB studies, or provide justification.

ORAL TESTIMONY:  None

FORMAL BOARD ACTION:

Approved Resolution 95-37 by unanimous approval.

RESPONSIBLE DIVISION:  RD

STAFF REPORT:  Yes (163 pages)

The Board approved Resolution 95-22, which was held over from the May Board meeting, and 95-38 by unanimous approval.