BOARD MEETING DATE: July 10, 2009
AGENDA NO. 29

REPORT:

Legislative Committee

SYNOPSIS:

The Legislative Committee held its regular meeting on Friday,

June 12, 2009. The next Legislative Committee meeting is scheduled for Friday, July 17, 2009 at 8:00 a.m. in Conference Room CC8. The Committee deliberated on agenda items including the following federal legislation for Board consideration:

Bill/Title	Recommended Position
H.R. 1835 Boren (OK) New Alternative Transportation to Give Americans Solutions (NATGAS) Act of 2009	Support
S. 849 Carper (DE) To require the Administrator of the US EPA to conduct a study on black carbon emissions	Support with amendments
H.R. 1329 Blumenauer (OR) Clean, Low Emission Affordable New Transportation Efficiency Act (CLEAN TEA) Supporting Extension of Energy Independence and Security Act of 2007 Provision on CMAQ	Support with amendments Support

RECOMMENDED ACTION:

Receive, file this report, and approve positions on the bills specified in this letter.
 

Jane W. Carney, Chair
Legislative Committee

Attendance [Attachment 1]

The Legislative Committee met on June 12, 2009. Committee Chair Jane Carney and Dr. Joseph Lyou were present. Committee Members Michael Antonovich, Jan Perry, and Dr. Roy Wilson were present via videoconference. Chair Carney appointed Board Member Mayor Dennis Yates to serve on the Committee for today’s meeting.

Chair Carney informed the Committee that SB 696 (Wright) was going to be discussed under the Update on State Legislative Issues.
 

Update on Federal Legislative Issues

Mark Kadesh, AQMD federal legislative consultant, reported that on May 21, the Energy and Commerce Committee approved H.R. 2454, “The American Clean Energy and Security Act” by a vote of 33-25. The bill was sequentially referred to eight other committees, none of whom have marked up the bill yet. The Speaker has set a June 19th deadline for committee action on the bill. Eight other committees with jurisdiction must either mark up the bill by the deadline or give up jurisdiction. Mr. Kadesh added that the expectation is that the Speaker will move the bill to the House Floor possibly before the July 4^th recess.

Chris Kierig, AQMD federal legislative consultant, reported that the roll out of the House Transportation and Infrastructure reauthorization package has not occurred, as expected. Mr. Kierig reported that Congressman Oberstar plans to roll out the reauthorization package by June 17^th, have a subcommittee markup by June 24^th, and a full committee markup at some point after the July 4^th recess. Mr. Kadesh added that on the Senate side, Senator Boxer has indicated that she may move the climate change bill before the transportation reauthorization bill.
 

Recommend Positions on the following federal bills [Attachment 1]

Dr. Pom Pom Ganguli briefed the Committee on H.R. 1835 Boren (OK) and S. 849 Carper (DE).
 

H.R. 1835 by Rep. Dan Boren (OK) is known as the NAT GAS Act of 2009.

This bill seeks to encourage alternative energy investment and job creation by extending the excise tax credit for natural gas and other alternative fuels. Specifically, this bill extends through 2027 existing tax credits to purchase natural gas-fueled vehicles (NGVs) and to install commercial or residential natural gas refueling pumps, and it also modifies the tax credit percentage for the purchase of natural gas-fueled vehicles and establishes a new tax credit for the production of NGV’s and bi-fueled vehicles. Staff recommended a Support position

The Legislative Committee recommended to Support H.R. 1835 Boren (OK).
 

S. 849 Carper (DE): This bill by Senator Carper would require U.S. EPA to conduct a four-phase study on black carbon emissions, and to report its findings to Congress.

Staff recommended supporting this bill with amendments, as shown in the staff analysis.

Dr. Lyou suggested also adding the following amendment on page 5, line 18: Section 3(a)(2) - insert “and (G) the potential for disproportionate community-level air quality and public health impacts if the United States includes black carbon in a cap and trade regulatory program.”

Dr. Lyou commented that he would like to see a study similar to the one required by

S. 849 conducted on ultrafine particles.

The Legislative Committee recommended to Support S. 849 Carper (DE) with Amendments.
 

Mr. Marc Carrel briefed the Committee on H.R. 1329 Blumenauer (OR) and the Extension of Energy Independence and Security Act of 2007 Provision on CMAQ.

H.R. 1329 by Rep. Earl Blumenauer (OR) is the Clean, Low Emission Affordable New Transportation Efficiency Act (CLEAN TEA). This bill links climate change and transportation policy by allocating ten percent of funds raised through a cap and trade program in a more efficient transportation system. The funds would be used to increase mobility options, reduce VMT, and reduce the use of petroleum-based fuels by funding transit and passenger rail; supporting development around transit stops; and making neighborhoods safer for bikes and pedestrians.

Staff recommended supporting this bill with amendments, as shown in the staff analysis.

Dr. Lyou asked if the funding is limited to only ten percent for transportation. Mr. Carrel replied that he believes it is not. Dr. Lyou further inquired whether “equivalent to U.S. EPA’s models,” would also allow for models stricter than the U.S. EPA model. Marc Carrel affirmed this.

The Legislative Committee recommended to Support H.R. 1329 Blumenauer (OR) with Amendments.
 

Extension of Energy Independence and Security Act of 2007 Provision on CMAQ. CMAQ, which is the only federal funding source dedicated to addressing the air quality impacts of the transportation sector, required a 20% state funding match until a provision was included in the 2007 Energy Independence and Security Act which allowed a 100% federal share for 2008 and 2009. There is currently an effort to extend the 100% federal share provision through 2010. Staff recommended a Support position.

The Legislative Committee recommended to Support the Extension of Energy Independence and Security Act of 2007 Provision on CMAQ.
 

Update on State Legislative Issues

Chair Carney reported that there have been some recent developments on SB 696 (Wright) and suggested taking this as a discussion item first, and then consider whether this should be added as an urgency item.

Chair Carney and Dr. Lyou expressed concern over the short notice received regarding the bill amendments, given the magnitude of the changes.

Dr. Barry Wallerstein reported that amendments to SB 696 were in print on June 9, set for hearing on June 11 – to be heard at the Senate Energy, Utilities and Communications (EU&C) Committee on June 16. Dr. Wallerstein explained that the bill, as amended now, establishes an operating account sufficient to resolve the crisis for all permits presently on hold and for the anticipated offset needs for the next four years. A narrow CEQA exemption is granted to the use of those offsets in the operating account. The bill also establishes a set-aside account from which offsets cannot be transferred to the operating account, absent a full CEQA analysis. Additions to the offset accounts are also subject to full CEQA review. In addition, the bill drops the explicit call for a new needs assessment requirement, but instead references a series of existing CEC, PUC & Cal-ISO requirements, that include a determination of the energy requirements for the region, the appropriate mix of energy generation, and the appropriate levels of energy to be produced within the region.

Ms. Carney asked for the breakdown of what the anticipated draw on the operating account would be for the power plants for which we have already issued our first level of approval, and the breakdown of the amount of credits in the different accounts.

Mohsen Nazemi reported on the tons per day of PM10 required for power plants that are affected by this legislation. He stated that a total of 1.33 tons per day of PM10 credits is required for power plants that have not been approved and do not have contracts with Edison, and 0.837 tons per day of PM10 credits is required for plants that have contracts with Edison. The number of power plants that are in the mix, however, includes the Vernon and AES Highgrove projects, that have been denied permits by the District. Therefore, the total for all power plants that have applied for permits is close to 2.17 tons per day, but the credits actually needed, excluding the Vernon and AES Highgrove projects which have been denied permits, is 1.71 tons per day of PM10.

Chair Carney then inquired if the Board would have further input into the process of approval of these power plant projects, if the legislation is enacted. Dr. Wallerstein and Mr. Wiese affirmed this and stated that the Board could amend existing District rules if they were considered inadequate, and put additional requirements in place. Furthermore, a hearing could be requested in front of the Governing Board by a member of the public prior to permit issuance pursuant to District Regulation XII. Chair Carney maintained that the amount of credits in the operating account is problematic, with regard to this bill, and felt that the safeguards being proposed are not enough to address the power plant access issue.

Chair Carney further stated her concern about the lack of an adequate needs assessment to determine the amount of power generation necessary within the South Coast Basin area. Dr. Wallerstein responded that the CEC and PUC conduct a similar analysis, as required by state law, to determine the amount of power generation necessary within the basin, and the bill would defer to such analysis. Chair Carney stated that the location of the power plants, whether they were needed in the basin, and the amount of power generation from such projects, was not addressed to her satisfaction in the bill amendments.

Dr. Lyou raised an issue concerning the establishment of an operating account and a set-aside account and whether such major policy consideration had ever been discussed with the Governing Board. Dr. Wallerstein responded that the Governing Board was made aware of such option but Dr. Lyou was not present during those discussions.

Dr. Wallerstein stated that staff would be happy to schedule a full discussion with the entire board on the bill.

There was some discussion on whether or not to add this as an urgency item. Kurt Wiese stated that the motion would be to find that there is a need to take immediate action regarding SB 696 and that the need came to the attention of the Committee subsequent to the posting of the agenda. After further discussion, the item was added as an urgency item to the Legislative Committee agenda in order to give staff direction for the June 16^th Senate EU&C Committee hearing, and since action is required prior to the next legislative committee meeting.

The Legislative Committee directed staff to agendize the item for the July Governing Board meeting and directed staff to maintain AQMD’s current position (support) on the bill, with Dr. Lyou voting no on this motion.

Due to lack of time, the state bills were tabled to the next Legislative Committee meeting on July 17, 2009.
 

Public Comments

Faramarz Nabari of CalWEA (via videoconference, Los Angeles) urged the Committee to support AB 1404.
 

Attachments (EXE, 293k)

1. Attendance Roster
2. Federal Bills:
   - H.R. 1835 Boren (OK)
   - S. 849 Carper (DE)
   - H.R. 1329 Blumenauer (OR)
   - Extension of Energy Independence and Security Act of 2007 Provision on CMAQ
3. Report from AQMD Home Rule Advisory Committee
4. AB 1404 Fact Sheet
5. Addendum to Home Rule Advisory Committee Report
6. SB 696 (Wright) Bill Language