This measure would thank the State Air Resources Board for its exemplary work and tenacity in uncovering the emissions control defeat devices on certain diesel-fueled Volkswagen motor vehicles and would express the Legislatures support for specified future emissions test-related actions by the board.

This measure would thank the State Air Resources Board for its exemplary work and tenacity in uncovering the emissions control defeat devices on certain diesel-fueled Volkswagen motor vehicles and would express the Legislatures support for specified future emissions test-related actions by the board.

This measure would thank the State Air Resources Board for its exemplary work and tenacity in uncovering the emissions control defeat devices on certain diesel-fueled Volkswagen motor vehicles and would express the Legislatures support for specified future emissions test-related actions by the board.

This measure would thank the State Air Resources Board for its exemplary work and tenacity in uncovering the emissions control defeat devices on certain diesel-fueled Volkswagen motor vehicles and would express the Legislatures support for specified future emissions test-related actions by the board.

This measure would thank the State Air Resources Board for its exemplary work and tenacity in uncovering the emissions control defeat devices on certain diesel-fueled Volkswagen motor vehicles.

WHEREAS, The Legislature established the State Air Resources Board in 1967 to attain and maintain healthy air quality; and

WHEREAS, In 2012, the State Air Resources Board initiated a testing campaign focused on light-duty diesel vehicles and agreed to provide in-kind support to the International Council on Clean Transportation and to West Virginia University for their light-duty diesel vehicle studies, which led to the discovery that two Volkswagen diesel-fueled motor vehicles emitted significantly higher levels of oxides of nitrogen in onroad tests than in standard emissions tests; and

WHEREAS, Emissions of oxides of nitrogen have been linked to ozone formation, smog, and acid rain; and

WHEREAS, The concerns raised by the study prompted the State Air Resources Board to open an investigation and discussions with Volkswagen Group of America (Volkswagen) in 2014; and

WHEREAS, In December 2014, Volkswagen issued a voluntary recall in the United States of some of its diesel-fueled motor vehicles from model years 2009 to 2014 after conducting its own tests and identifying a recalibration fix that Volkswagen claimed would address excess emissions; and

WHEREAS, The State Air Resources Board, in cooperation with the United States Environmental Protection Agency, conducted confirmatory testing in 2015; and

WHEREAS, The State Air Resources Board notified Volkswagen in July 2015 that the test vehicles, despite having completed the recalibration fix under the voluntary recall, still showed emissions that exceeded state and federal limits; and

WHEREAS, In September 2015, the United States Environmental Protection Agency and the State Air Resources Board demanded an explanation from Volkswagen and were prepared to withhold certification that Volkswagens 2016 diesel-fueled motor vehicles complied with applicable emissions standards; and

WHEREAS, Volkswagen then admitted defeat devices were installed on the emissions control equipment on certain Volkswagen diesel-fueled motor vehicles; now, therefore, be it

Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature acknowledges and praises the State Air Resources Board for its unwavering diligence and dedication to preserving the air quality in the state and its exposure of Volkswagens circumvention of emissions standards on certain diesel-fueled motor vehicles; and be it further

Resolved, That the Legislature thanks the State Air Resources Board for its exemplary work and tenacity in uncovering Volkswagens emissions control defeat devices; and be it further

Resolved, That the Legislature supports the State Air Resources Board increasing the use of real-world emissions verification testing; and be it further

Resolved, That the Legislature supports the State Air Resources Board enhancing its penalty authority for cheating emissions tests to deter future efforts to circumvent emissions standards; and be it further

Resolved, That the Chief Clerk of the Assembly transmit sufficient copies of this resolution to the author for appropriate distribution.

WHEREAS, The Legislature established the State Air Resources Board in 1967 to attain and maintain healthy air quality; and

WHEREAS, In 2012, the State Air Resources Board initiated a testing campaign focused on light-duty diesel vehicles and agreed to provide in-kind support to the International Council on Clean Transportation and to West Virginia University for their light-duty diesel vehicle studies, which led to the discovery that two Volkswagen diesel-fueled motor vehicles emitted significantly higher levels of oxides of nitrogen in onroad tests than in standard emissions tests; and

WHEREAS, Emissions of oxides of nitrogen have been linked to ozone formation, smog, and acid rain; and

WHEREAS, The concerns raised by the study prompted the State Air Resources Board to open an investigation and discussions with Volkswagen Group of America (Volkswagen) in 2014; and

WHEREAS, In December 2014, Volkswagen issued a voluntary recall in the United States of some of its diesel-fueled motor vehicles from model years 2009 to 2014 after conducting its own tests and identifying a recalibration fix that Volkswagen claimed would address excess emissions; and

WHEREAS, The State Air Resources Board, in cooperation with the United States Environmental Protection Agency, conducted confirmatory testing in 2015; and

WHEREAS, The State Air Resources Board notified Volkswagen in July 2015 that the test vehicles, despite having completed the recalibration fix under the voluntary recall, still showed emissions that exceeded state and federal limits; and

WHEREAS, In September 2015, the United States Environmental Protection Agency and the State Air Resources Board demanded an explanation from Volkswagen and were prepared to withhold certification that Volkswagens 2016 diesel-fueled motor vehicles complied with applicable emissions standards; and

WHEREAS, Volkswagen then admitted defeat devices were installed on the emissions control equipment on certain Volkswagen diesel-fueled motor vehicles; now, therefore, be it

Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature acknowledges and praises the State Air Resources Board for its unwavering diligence and dedication to preserving the air quality in the state and its exposure of Volkswagens circumvention of emissions standards on certain diesel-fueled motor vehicles; and be it further

Resolved, That the Legislature thanks the State Air Resources Board for its exemplary work and tenacity in uncovering Volkswagens emissions control defeat devices; and be it further

Resolved, That the Legislature supports the State Air Resources Board increasing the use of real-world emissions verification testing; and be it further

Resolved, That the Legislature supports the State Air Resources Board enhancing its penalty authority for cheating emissions tests to deter future efforts to circumvent emissions standards; and be it further

Resolved, That the Chief Clerk of the Assembly transmit sufficient copies of this resolution to the author for appropriate distribution.

WHEREAS, The Legislature established the State Air Resources Board in 1967 to attain and maintain healthy air quality; and

WHEREAS, In 2012, the State Air Resources Board initiated a testing campaign focused on light-duty diesel vehicles and agreed to provide in-kind support to the International Council on Clean Transportation and to West Virginia University for their light-duty diesel vehicle studies, which led to the discovery that two Volkswagen diesel-fueled motor vehicles emitted significantly higher levels of oxides of nitrogen in onroad tests than in standard emissions tests; and

WHEREAS, Emissions of oxides of nitrogen have been linked to ozone formation, smog, and acid rain; and

WHEREAS, The concerns raised by the study prompted the State Air Resources Board to open an investigation and discussions with Volkswagen Group of America (Volkswagen) in 2014; and

WHEREAS, In December 2014, Volkswagen issued a voluntary recall in the United States of some of its diesel-fueled motor vehicles from model years 2009 to 2014 after conducting its own tests and identifying a recalibration fix that Volkswagen claimed would address excess emissions; and

WHEREAS, The State Air Resources Board, in cooperation with the United States Environmental Protection Agency, conducted confirmatory testing in 2015; and

WHEREAS, The State Air Resources Board notified Volkswagen in July 2015 that the test vehicles, despite having completed the recalibration fix under the voluntary recall, still showed emissions that exceeded state and federal limits; and

WHEREAS, In September 2015, the United States Environmental Protection Agency and the State Air Resources Board demanded an explanation from Volkswagen and were prepared to withhold certification that Volkswagens 2016 diesel-fueled motor vehicles complied with applicable emissions standards; and

WHEREAS, Volkswagen then admitted defeat devices were installed on the emissions control equipment on certain Volkswagen diesel-fueled motor vehicles; now, therefore, be it

Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature acknowledges and praises the State Air Resources Board for its unwavering diligence and dedication to preserving the air quality in the state and its exposure of Volkswagens circumvention of emissions standards on certain diesel-fueled motor vehicles; and be it further

Resolved, That the Legislature thanks the State Air Resources Board for its exemplary work and tenacity in uncovering Volkswagens emissions control defeat devices; and be it further

Resolved, That the Legislature supports the State Air Resources Board increasing the use of real-world emissions verification testing; and be it further

Resolved, That the Legislature supports the State Air Resources Board enhancing its penalty authority for cheating emissions tests to deter future efforts to circumvent emissions standards; and be it further

Resolved, That the Chief Clerk of the Assembly transmit sufficient copies of this resolution to the author for appropriate distribution.

WHEREAS, The Legislature established the State Air Resources Board in 1967 to attain and maintain healthy air quality; and

WHEREAS, A May 2014 study by researchers at West Virginia University, done in collaboration with the International Council on Clean Transportation, discovered In 2012, the State Air Resources Board initiated a testing campaign focused on light-duty diesel vehicles and agreed to provide in-kind support to the International Council on Clean Transportation and to West Virginia University for their light-duty diesel vehicle studies, which led to the discovery that two Volkswagen diesel-fueled motor vehicles emitted significantly higher levels of nitrogen oxides oxides of nitrogen in onroad tests than in standard emissions tests; and

WHEREAS, Nitrogen oxide emissions Emissions of oxides of nitrogen have been linked to smog ozone formation, smog, and acid rain; and

WHEREAS, The concerns raised by the study prompted the State Air Resources Board to open an investigation and discussions with Volkswagen Group of America (Volkswagen) in 2014; and

WHEREAS, In December 2014, Volkswagen issued a voluntary recall in the United States of all some of its diesel-fueled motor vehicles from model years 2009 to 2014 after conducting its own tests and identifying a recalibration fix; fix that Volkswagen claimed would address excess emissions; and

WHEREAS, The State Air Resources Board, in cooperation with the United States Environmental Protection Agency, said it wanted to do confirmatory tests of the tests Volkswagen ran in 2014, and the State Air Resources Board did so in May conducted confirmatory testing in 2015; and

WHEREAS, The State Air Resources Board notified Volkswagen in July 2015 that the test vehicles, despite having completed the recalibration fix under the voluntary recall, still showed emissions that exceeded state and federal limits, and the State Air Resources Board deemed the initial recall ineffective; limits; and

WHEREAS, In September 2015, the United States Environmental Protection Agency and the State Air Resources Board demanded an explanation from Volkswagen and were prepared to withhold certification that Volkswagens 2016 diesel-fueled motor vehicles complied with applicable emissions standards; and

WHEREAS, Volkswagen then admitted defeat devices were installed on the emissions control equipment on certain Volkswagen diesel-fueled motor vehicles; now, therefore, be it

Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature acknowledges and praises the State Air Resources Board for its unwavering diligence and dedication to preserving the air quality in the state and its exposure of Volkswagens circumvention of emissions standards on certain diesel-fueled motor vehicles; and be it further

Resolved, That the Legislature thanks the State Air Resources Board for its exemplary work and tenacity in uncovering Volkswagens emissions control defeat devices; and be it further

Resolved, That the Legislature supports the State Air Resources Board increasing the use of real-world emissions verification testing; and be it further

Resolved, That the Legislature supports the State Air Resources Board enhancing its penalty authority for cheating emissions tests to deter future efforts to circumvent emissions standards; and be it further

Resolved, That the Chief Clerk of the Assembly transmit sufficient copies of this resolution to the author for appropriate distribution.

WHEREAS, The Legislature established the State Air Resources Board in 1967 to attain and maintain healthy air quality; and

WHEREAS, A May 2014 study by researchers at West Virginia University, done in collaboration with the International Council on Clean Transportation, discovered that two Volkswagen diesel-fueled motor vehicles emitted significantly higher levels of nitrogen oxides in onroad tests than in standard emissions tests; and

WHEREAS, Nitrogen oxide emissions have been linked to smog and acid rain; and

WHEREAS, The concerns raised by the study prompted the State Air Resources Board to open an investigation and discussions with Volkswagen Group of America (Volkswagen) in 2014; and

WHEREAS, In December 2014, Volkswagen issued a voluntary recall in the United States of all of its diesel-fueled motor vehicles from model years 2009 to 2014 after conducting its own tests and identifying a recalibration fix; and

WHEREAS, The State Air Resources Board, in cooperation with the United States Environmental Protection Agency, said it wanted to do confirmatory tests of the tests Volkswagen ran in 2014, and the State Air Resources Board did so in May 2015; and

WHEREAS, The State Air Resources Board notified Volkswagen in July 2015 that the test vehicles, despite having completed the recalibration fix under the voluntary recall, still showed emissions that exceeded state and federal limits, and the State Air Resources Board deemed the initial recall ineffective; and

WHEREAS, In September 2015, the United States Environmental Protection Agency and the State Air Resources Board demanded an explanation from Volkswagen and were prepared to withhold certification that Volkswagens 2016 diesel-fueled motor vehicles complied with applicable emissions standards; and

WHEREAS, Volkswagen admitted defeat devices were installed on the emissions control equipment on certain Volkswagen diesel-fueled motor vehicles; now, therefore, be it

Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature acknowledges and praises the State Air Resources Board for its unwavering diligence and dedication to preserving the air quality in the state and its exposure of Volkswagens circumvention of emissions standards on certain diesel-fueled motor vehicles; and be it further

Resolved, That the Legislature thanks the State Air Resources Board for its exemplary work and tenacity in uncovering Volkswagens emissions control defeat devices; and be it further

Resolved, That the Chief Clerk of the Assembly transmit sufficient copies of this resolution to the author for appropriate distribution.

 THIRD READING  

Bill No: ACR 112

Author:

:

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 6/29/16

AYES: Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

ASSEMBLY FLOOR: Read and adopted, 6/6/16

SUBJECT:

SOURCE: Author

DIGEST: This resolution outlines the events that led to the discovery of the Volkswagen (VW) defeat devices, and declares that the Legislature thanks the State Air Resources Board (ARB) for its exemplary role in uncovering the defeat devices. This resolution declares the Legislature's support for the increased use of real-world emissions verification testing and enhanced penalty authority for ARB to deter future efforts to circumvent emissions standards.

ANALYSIS:

Existing law:

1. Authorizes, under the federal Clean Air Act, the United States Environmental Protection Agency (US EPA) to establish and regulate emissions standards for mobile sources, including vehicle emission limits for hydrocarbons, carbon monoxide, nitrogen oxides, and particulates.

US EPA regulations require that, prior to introducing a vehicle for sale in the US, manufacturers obtain a certificate of conformity (COC). Certification requires manufacturers to demonstrate that the vehicle meets emissions standards. The COC application is required to list and justify all “defeat devices.”

1. Defines, pursuant to the Clean Air Act, a defeat device as “an auxiliary emission control device (AECD) that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use.” A manufacturer may equip a vehicle with a defeat device if it can justify the need for it in terms of preventing damage or accident, the AECD does not go beyond the requirements of engine starting, and the manufacturer discloses this information in its application to US EPA for its COC.
2. Provides, pursuant to federal law, that violators be subject to civil penalties up to $37,500 per non-compliant vehicle or engine, $3,750 per tampering event or sale of defeat device, and $37,500 per day for reporting and recordkeeping violations.
3. Authorizes, pursuant to the Clean Air Act, California to implement separate mobile emission standards from the federal government. Other states may choose to follow either the national standard or the stricter California standards.
4. Assigns, under state law, ARB with primary responsibility for controlling mobile-source air pollution, including adoption of rules for reducing vehicle emissions and the specification of vehicular fuel composition. (Health and Safety Code §43013)
5. Requires that persons who violate any ARB order, rule, or regulation, where there is not a penalty described for the specific violation, shall be subject to a civil penalty not to exceed $500 per vehicle, portable fuel container, spout, engine, or other unit subject to regulation and that the penalty be collected by the State Treasurer and deposited into the Air Pollution Control Fund. (HSC §43016)
6. Prohibits new vehicles from being sold in California that do not meet the emissions standard adopted by ARB, and provides penalties of $5,000 per action, for manufacturers who sell, attempt to sell, or offer for sale, a new vehicle that does not meet ARB emission standards. (HSC §43211)
7. Provides that manufacturers or distributors who do not comply with emission standards or test procedures adopted by ARB may be subject to civil penalties of $50 per vehicle that is not in compliance and that no further sales of the vehicles can take place until the penalty is paid. (HSC §43212)

This resolution:

1. Makes various findings relating to ARB’s role in the detection of VW’s defeat devices and subsequent oversight leading up to the company’s admissions of wrong-doing and ARB’s refusal to certify emissions compliance of affected 2016 diesel models.
2. Acknowledges, praises, and thanks ARB for its diligence and dedication to preserving state air quality and uncovering VW’s defeat devices.
3. Supports ARB increasing its use of real-world emissions testing, and enhanced authority by ARB for appropriate penalties to deter further efforts to circumvent emissions standards.

Background

1. Federal and state air quality laws. The federal Clean Air Act and its implementing regulations are intended to protect public health and environmental quality by limiting and reducing pollution from various sources. Under the Clean Air Act, the US EPA establishes National Ambient Air Quality Standards (NAAQS) that apply to outdoor air throughout the country. These federal standards exist for several air pollutants due to their negative impact on public health when above specified thresholds, including ozone, particulate matter (PM), nitrogen oxides (NOx), sulfur oxides, carbon monoxide, and lead. US EPA reviews each NAAQS at five-year intervals to ensure that the standards are based on the most recent scientific information.

Regions that do not meet the national standards for any one of the standards are designated nonattainment areas. The Clean Air Act sets deadlines for attainment based on the severity of nonattainment and requires states to develop comprehensive plans, known as the state implementation plan, to attain and maintain air-quality standards for each area designated nonattainment for an NAAQS.

California has some of the most severe air pollution problems in the country. In particular, the South Coast and San Joaquin air basins, which contain over half of the state’s population, are extreme nonattainment regions (the highest degree of severity) for ozone pollution and are both nonattainment regions for PM.

1. Why transportation emissions standards matter. Nationally and statewide, the transportation sector is responsible for a major fraction of air pollution, especially NOx (including NO and NO₂), which contributes to both ozone and PM formation. People who live and work in closer proximity to roadways are especially exposed to and impacted by this pollution. Nationwide, approximately 16% of U.S. housing units (including 48 million people) are located within 300 ft. of a major highway, railroad, or airport, and the affected population is disproportionately economically disadvantaged and non-white.

Ground-level ozone (or tropospheric ozone) is a primary component of smog and is formed from the reaction of NOx with volatile organic compounds in sunlight. Ozone has a number of negative health effects including irritated respiratory system, reduced lung function, aggravated asthma, and inflammation and damage of the lining of the lungs. Active children are at highest risk from ozone exposure.

PM can be directly emitted or can be formed in the atmosphere when gaseous pollutants such as sulfur dioxide and NOx react to form fine particles. Very fine PM is particularly dangerous since it burrows deep into the lungs where it can enter the bloodstream and harm the heart and other organs. Fine particulate pollution poses an especially critical health danger for children, the elderly, and people with existing health problems. Exposure to PM 2.5 (i.e., particles or droplets that are 2.5 µm or less in diameter) is also linked to cardiovascular disease. A 2010 ARB analysis based on scientific assessments by US EPA reported that approximately 9,000 people in California are estimated to die prematurely each year as a result of exposure to fine particle pollution.

In addition, the specialized cancer agency of the World Health Organization, the International Agency for Research on Cancer, classified outdoor air pollution, and PM as a major component of outdoor air pollution, as carcinogenic to humans.

1. US EPA and ARB vehicle testing requirements. To address transportation sector emissions, the federal Clean Air Act authorizes the US EPA to establish and regulate standards for hydrocarbons, carbon monoxide, NOx, and PM from mobile sources of pollution. Because of its pre-existing vehicle-emission standards and motor vehicle air pollution problems, California is also authorized under the Clean Air Act to implement separate stricter state mobile emission standards. State law assigns ARB with primary responsibility for control of mobile-source air pollution. Both US EPA and ARB regulations require that, prior to introducing a vehicle for sale, a manufacturer must demonstrate that the vehicle meets certain federal and state emissions standards. In particular, manufacturers must demonstrate that its vehicle’s exhaust and emission-control systems are durable and comply with the emission standards for the vehicle’s useful life. Only after going through this “certification of conformity” (COC) process are vehicles legal for sale. Manufacturers that fail to comply are subject to civil penalties and other enforcement actions. The current maximum federal penalty for violating the Clean Air Act through the sale of new vehicles without a valid COC is $37,500 per violation.

In California, applications for certification must be concurrently submitted to and approved by both the ARB and US EPA. By obtaining and testing a limited sample of vehicles from a test group or engine family, and attempting to duplicate the manufacturers’ vehicle emissions certification tests, ARB’s In-Use Compliance Program aims to ensure that manufacturers’ vehicles meet emissions standards throughout their useful lives.

1. The Volkswagen case and its lessons. As detailed in the background paper of the Joint Oversight Hearing by the Senate Transportation and Housing and Environmental Quality Committees (Volkswagen’s “Defeat Device:” Update and Implications for California, March 8, 2016), a 2014 study by researchers at the Center for Alternative Fuels, Engines and Emissions at West Virginia University, followed by an expanded 2015 investigation by ARB and US EPA of discrepancies between emissions during stationary tests and while driving, led to admission by VW that several of their “clean diesel” engines had been designed with software-based defeat devices to bypass key elements of the emissions control systems. As a result, these vehicles were able to pass emissions tests despite exceeding federal emissions standards by up to 40 times. According to vehicle sales data, there are estimated to be 617,000 of these vehicles nationally, 79,400 of which are in California.

During the hearing, Members of the Senate Committees expressed the need for stronger state penalties to discourage further non-compliance by automobile manufacturers, particularly given that federal penalties are substantially higher and that state penalties in California were set in 1974 and have not been indexed to inflation. Members suggested that existing ARB penalties do not provide sufficient deterrent, particularly for egregious actions to circumvent emissions requirements, such as with VW.

Federal and state investigations of VW continue, with the strong likelihood of additional enforcement actions. In addition, there are many individual and class action lawsuits against the company. On April 21, 2016, several parties to various lawsuits stated in federal court they have reached an agreement in principle to address approximately 480,000 of the 2.0 liter engine vehicles with defeat devices. Details of the settlement are currently being worked out, but it appears to provide consumers several options to return their vehicles or have their vehicles modified. The settlement will also deal with compensation for consumers and how to remediate excess emissions.

Comments

1. Purpose of bill. According to the author, “the ARB was the regulatory body that distinguished itself in uncovering VW’s malfeasance. ACR 112 is meant to show the Legislature is open-minded in overseeing the agency. After all, you’re only credible if you are fair-minded enough to acknowledge good work when it’s done.”
2. Legislative versus ARB authority? The language of ACR 112 can be seen to suggest that ARB has the authority to enhance its penalties for emissions cheaters, but maximum penalties are specified by the Legislature in statute. AB 1685 (Gomez, 2016), which is currently working its way through the Senate, proposes to increase the specified maximum state penalties for such emissions violations to the level of federal penalties, with periodic increases scaled to inflation thereafter.

Similarly, ACR 112 states that it supports the ARB in increased use of real-world emissions testing. Because such testing is more difficult and costly than conventional testing, however, ARB may need additional budgetary support to significantly expand their real-world testing program.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 7/7/16)

Professional Engineers in California Government

OPPOSITION: (Verified 7/7/16)

None received

Prepared by:

7/29/16 10:50:13

**** END ***

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: ACR 112

SUBJECT: State Air Resources Board.

ANALYSIS:

Existing law:

1. Under the federal Clean Air Act, authorizes the United States Environmental Protection Agency (US EPA) to establish and regulate emissions standards for mobile sources, including vehicle emission limits for hydrocarbons, carbon monoxide, nitrogen oxides, and particulates.

US EPA regulations require that, prior to introducing a vehicle for sale in the U.S., manufacturers obtain a certificate of conformity (COC). Certification requires manufacturers to demonstrate that the vehicle meets emissions standards. The COC application is required to list and justify all “defeat devices.”

1. Defines, pursuant to the Clean Air Act, a defeat device as “an auxiliary emission control device (AECD) that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use.” A manufacturer may equip a vehicle with a defeat device if it can justify the need for it in terms of preventing damage or accident, the AECD does not go beyond the requirements of engine starting, and the manufacturer discloses this information in its application to US EPA for its COC.
2. Provides, pursuant to federal law, that violators be subject to civil penalties up to $37,500 per non-compliant vehicle or engine, $3,750 per tampering event or sale of defeat device, and $37,500 per day for reporting and recordkeeping violations.
3. Authorizes, pursuant to the Clean Air Act, California to implement separate mobile emission standards from the federal government. Other states may choose to follow either the national standard or the stricter California standards.
4. Assigns, under state law, California Air Resources Board (ARB) with primary responsibility for controlling mobile-source air pollution, including adoption of rules for reducing vehicle emissions and the specification of vehicular fuel composition.
5. Requires that persons who violate any ARB order, rule, or regulation, where there is not a penalty described for the specific violation, shall be subject to a civil penalty not to exceed $500 per vehicle, portable fuel container, spout, engine, or other unit subject to regulation and that the penalty be collected by the State Treasurer and deposited into the Air Pollution Control Fund. (Health and Safety Code §43016)
6. Prohibits new vehicles from being sold in California that do not meet the emissions standard adopted by ARB, and provides penalties of $5,000 per action, for manufacturers who sell, attempt to sell, or offer for sale, a new vehicle that does not meet ARB emission standards. (HSC §43211)
7. Provides that manufacturers or distributors who do not comply with emission standards or test procedures adopted by ARB may be subject to civil penalties of $50 per vehicle that is not in compliance and that no further sales of the vehicles can take place until the penalty is paid. (HSC §43212)

This Resolution:

1. Makes various findings relating to ARB’s role in the detection of Volkswagen’s defeat devices and subsequent oversight leading up to the company’s admissions of wrong-doing and ARB’s refusal to certify emissions compliance of affected 2016 diesel models.
   
2. Acknowledges, praises, and thanks ARB for its diligence and dedication to preserving state air quality and uncovering Volkswagen’s defeat devices.
3. Supports ARB increasing its use of real-world emissions testing, and enhanced authority by ARB for appropriate penalties to deter further efforts to circumvent emissions standards.

Background

1. Federal and state air quality laws. The federal Clean Air Act and its implementing regulations are intended to protect public health and environmental quality by limiting and reducing pollution from various sources. Under the Clean Air Act, the US EPA establishes National Ambient Air Quality Standards (NAAQS) that apply to outdoor air throughout the country. These federal standards exist for several air pollutants due to their negative impact on public health when above specified thresholds, including ozone, particulate matter (PM), nitrogen oxides (NOx), sulfur oxides (SOx), carbon monoxide, and lead. US EPA reviews each NAAQS at five-year intervals to ensure that the standards are based on the most recent scientific information.

Regions that do not meet the national standards for any one of the standards are designated nonattainment areas. The Clean Air Act sets deadlines for attainment based on the severity of nonattainment and requires states to develop comprehensive plans, known as the state implementation plan (SIP), to attain and maintain air-quality standards for each area designated nonattainment for an NAAQS.

California has some of the most severe air pollution problems in the country. In particular, the South Coast and San Joaquin air basins, which contain over half of the state’s population, are extreme nonattainment regions (the highest degree of severity) for ozone pollution and are both nonattainment regions for PM.

1. Why transportation emissions standards matter. Nationally and statewide, the transportation sector is responsible for a major fraction of air pollution, especially NOx (including NO and NO₂), which contributes to both ozone and PM formation. People who live and work in closer proximity to roadways are especially exposed to and impacted by this pollution. Nationwide, approximately 16% of US housing units (including 48 million people) are located within 300 ft. of a major highway, railroad, or airport, and the affected population is disproportionately economically disadvantaged and non-white.

Ground-level ozone (or tropospheric ozone) is a primary component of smog and is formed from the reaction of NOx with volatile organic compounds in sunlight. Ozone has a number of negative health effects including irritated respiratory system, reduced lung function, aggravated asthma, and inflammation and damage of the lining of the lungs. Active children are at highest risk from ozone exposure.

PM can be directly emitted or can be formed in the atmosphere when gaseous pollutants such as sulfur dioxide and NOx react to form fine particles. Very fine particulate matter is particularly dangerous since it burrows deep into the lungs where it can enter the bloodstream and harm the heart and other organs. Fine particulate pollution poses an especially critical health danger for children, the elderly, and people with existing health problems. Exposure to PM 2.5 (i.e., particles or droplets that are 2.5 µm or less in diameter) is also linked to cardiovascular disease. A 2010 ARB analysis based on scientific assessments by US EPA reported that approximately 9,000 people in California are estimated to die prematurely each year as a result of exposure to fine particle pollution.

In addition, the specialized cancer agency of the World Health Organization, the International Agency for Research on Cancer, classified outdoor air pollution, and PM as a major component of outdoor air pollution, as carcinogenic to humans.

1. US EPA and ARB vehicle testing requirements. To address transportation sector emissions, the federal Clean Air Act authorizes the US EPA to establish and regulate standards for hydrocarbons, carbon monoxide, NOx, and PM from mobile sources of pollution. Because of its pre-existing vehicle-emission standards and motor vehicle air pollution problems, California is also authorized under the Clean Air Act to implement separate stricter state mobile emission standards. State law assigns ARB with primary responsibility for control of mobile-source air pollution. Both US EPA and ARB regulations require that, prior to introducing a vehicle for sale, a manufacturer must demonstrate that the vehicle meets certain federal and state emissions standards. In particular, manufacturers must demonstrate that its vehicle’s exhaust and emission-control systems are durable and comply with the emission standards for the vehicle’s useful life. Only after going through this “certification of conformity” (COC) process are vehicles legal for sale. Manufacturers that fail to comply are subject to civil penalties and other enforcement actions. The current maximum federal penalty for violating the Clean Air Act through the sale of new vehicles without a valid COC is $37,500 per violation.

In California, applications for certification must be concurrently submitted to and approved by both the ARB and US EPA. By obtaining and testing a limited sample of vehicles from a test group or engine family, and attempting to duplicate the manufacturers’ vehicle emissions certification tests, ARB’s In-Use Compliance Program aims to ensure that manufacturers’ vehicles meet emissions standards throughout their useful lives.

1. The Volkswagen case and its lessons. As detailed in the background paper of the Joint Oversight Hearing by the Senate Transportation and Housing and Environmental Quality Committees (Volkswagen’s “Defeat Device:” Update and Implications for California, March 8, 2016), a 2014 study by researchers at the Center for Alternative Fuels, Engines and Emissions at West Virginia University, followed by an expanded 2015 investigation by ARB and US EPA of discrepancies between emissions during stationary tests and while driving, led to admission by Volkswagen (VW) that several of their “clean diesel” engines had been designed with software-based defeat devices to bypass key elements of the emissions control systems. As a result, these vehicles were able to pass emissions tests despite exceeding federal emissions standards by up to 40 times. According to vehicle sales data, there are estimated to be 617,000 of these vehicles nationally, 79,400 of which are in California.

During the hearing, Members of the Senate Committees expressed the need for stronger state penalties to discourage further non-compliance by automobile manufacturers, particularly given that federal penalties are substantially higher and that state penalties in California were set in 1974 and have not been indexed to inflation. Members suggested that existing ARB penalties do not provide sufficient deterrent, particularly for egregious actions to circumvent emissions requirements, such as with VW.

Federal and state investigations of Volkswagen continue, with the strong likelihood of additional enforcement actions. In addition, there are many individual and class action lawsuits against the company. On April 21, 2016, several parties to various lawsuits stated in federal court they have reached an agreement in principle to address approximately 480,000 of the 2.0 liter engine vehicles with defeat devices. Details of the settlement are currently being worked out, but it appears to provide consumers several options to return their vehicles or have their vehicles modified. The settlement will also deal with compensation for consumers and how to remediate excess emissions.

Comments

1. Purpose of bill. According to the author, “the ARB was the regulatory body that distinguished itself in uncovering VW’s malfeasance. ACR 112 is meant to show the Legislature is open-minded in overseeing the agency. After all, you’re only credible if you are fair-minded enough to acknowledge good work when it’s done.”
   
2. Legislative versus ARB authority? The language of ACR 112 can be seen to suggest that ARB has the authority to enhance its penalties for emissions cheaters, but maximum penalties are specified by the Legislature in statute. AB 1685 (Gomez), which is currently working its way through the Senate, proposes to increase the specified maximum state penalties for such emissions violations to the level of federal penalties, with periodic increases scaled to inflation thereafter.

Similarly, ACR 112 states that it supports the ARB in increased use of real-world emissions testing. Because such testing is more difficult and costly than conventional testing, however, ARB may need additional budgetary support to significantly expand their real-world testing program.

Related/Prior Legislation

SB 1402 (Dutton, Chapter 413, Statutes of 2010) requires ARB to provide a specified written explanation prior to imposing an administrative or civil penalty for a violation of air pollution law, make these explanations available to the public, annually report specified administrative penalties imposed, and publish a penalty policy pertaining to vehicular air pollution control.

AB 1685 (Gomez) increases and clarifies the civil penalties for certain emissions violations by vehicle and engine manufacturers and distributors. AB 1685 passed out of the Senate Environmental Quality Committee (4-2) on June 8, 2016, and will be heard by the Senate Transportation and Housing Committee on June 21, 2016.

SOURCE:

Author

SUPPORT:

Professional Engineers in California Government (PECG)

OPPOSITION:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:ACR 112

Author:(Hadley)

As Amended Ver:May 5, 2016

Majority vote

SUMMARY: Describes the events that led to the discovery of the Volkswagen defeat devices. Declares that the Legislature thanks the State Air Resources Board (ARB) for its exemplary work uncovering the Volkswagen defeat devices. Declares the Legislature's support for the increased use of real-world emissions verification testing and enhanced penalty authority for ARB to deter future efforts to circumvent emissions standards.

EXISTING LAW:

1. Declares that the Legislature finds emissions of air pollutants from motor vehicles is the primary cause of air pollution in many parts of the state.
2. Requires ARB to endeavor to achieve the maximum degree of emission reductions possible from vehicular and other mobile sources in order to achieve attainment of state ambient air standards.
3. Requires ARB to adopt and implement emission standards for new motor vehicles that ARB finds to be necessary and technologically feasible.
4. Prohibits a new motor vehicle or new motor vehicle engine from being certified by ARB, unless the vehicle or engine meets the emission standards adopted by ARB.
5. Prohibits a new motor vehicle required to meet the emission standards adopted by the state from being sold and registered in this state unless the new motor vehicle manufacturer permits ARB to conduct surveillance testing of emissions of new motor vehicles.
6. Requires ARB to establish criteria for the evaluation of the effectiveness of motor vehicle pollution control devices.
7. Prohibits a person from installing, selling, or offering for sale any device, apparatus, or mechanism intended for use with, or as a part of, a required motor vehicle pollution control device or system that alters or modifies the original design or performance of the motor vehicle pollution control device or system.
8. Establishes civil penalties for violations of new motor vehicle emission standards or altering or modifying the motor vehicle pollution control device.

FISCAL EFFECT: None

COMMENTS: New motor vehicles and engines must be certified by ARB for emission compliance before they are legal for sale, use, or registration in California. New motor vehicles are subject to emission tests to verify that compliance. According to a Volkswagen PowerPoint that was discovered as part of the defeat device investigation, 10 years ago Volkswagen engineers realized that the emissions control equipment installed in their diesel engines did not have the durability to meet the federal and California's emissions standards. Durable and effective emissions control equipment would have cost Volkswagen hundreds of dollars more per vehicle and would have increased the sticker price to consumers. Instead of pursuing the more expensive emission control equipment, Volkswagen developed software, known as a defeat device, that could detect when the vehicle was being put through an emission test and activate the emissions control equipment only for the purposes of passing the test. This would extend the life of the emissions control equipment and allow Volkswagen to appear to be in compliance with federal and California emissions standards. However, when not being tested, the vehicles were emitting up to 40 times the legal limit.

The events that lead to the discovery of Volkswagen's defeat device began when the Center for Alternative Fuels, Engines and Emissions at West Virginia University was attempting to understand the difference between vehicle emissions in real-world conditions and lab performance in both America and Europe. The real-world emissions of a Volkswagen Passat and Jetta were much higher than the lab tests at ARB's El Monte lab. This prompted ARB to open an investigation on the discrepancy. Eventually, Volkswagen's engineers admitted they were using defeat devices to ARB.

Volkswagen is now subject to both federal and state investigations and enforcement actions. In addition, there have been various lawsuits against the company. On April 21, 2016, several parties to the various lawsuits stated in federal court they have reached an agreement in principle to address approximately 480,000 of 2.0 liter engine vehicles that had defeat devices. The settlement would give consumers several options to return their vehicles or have their vehicles modified. The settlement will also deal with compensation for consumers and how to remediate excess emissions. Details of the settlement are currently being worked out.

Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092 FN: 0002897

Date of Hearing: May 3, 2016

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Das Williams, Chair

ABPCA Bill Id:ACR 112 (

Author:Hadley) – As Introduced Ver:January 7, 2016

SUBJECT: State Air Resources Board

SUMMARY: Describes the events that led to the discovery of the Volkswagen defeat devices. Declares that the Legislature thanks the State Air Resources Board (ARB) for its exemplary work uncovering the Volkswagen defeat devices.

EXISTING LAW:

1. Declares that the Legislature finds emissions of air pollutants from motor vehicles is the primary cause of air pollution in many parts of the state.
2. Requires ARB to endeavor to achieve the maximum degree of emission reductions possible from vehicular and other mobile sources in order to achieve attainment of state ambient air standards.
   
3. Requires ARB to adopt and implement emission standards for new motor vehicles that ARB finds to be necessary and technologically feasible.
   
4. Prohibits a new motor vehicle or new motor vehicle engine from being certified by ARB, unless the vehicle or engine meets the emission standards adopted by ARB.
5. Prohibits a new motor vehicle required to meet the emission standards adopted by the state from being sold and registered in this state unless the new motor vehicle manufacturer permits ARB to conduct surveillance testing of emissions of new motor vehicles.
6. Requires ARB to establish criteria for the evaluation of the effectiveness of motor vehicle pollution control devices.
7. Prohibits a person from installing, selling, or offering for sale any device, apparatus, or mechanism intended for use with, or as a part of, a required motor vehicle pollution control device or system that alters or modifies the original design or performance of the motor vehicle pollution control device or system.
8. Establishes civil penalties for violations of new motor vehicle emission standards or altering or modifying the motor vehicle pollution control device.

FISCAL EFFECT: Non-fiscal

COMMENTS:

1. Background. Current scientific evidence links short-term nitrogen dioxide (NO2) exposures, ranging from 30 minutes to 24 hours, with adverse respiratory effects including airway inflammation in healthy people and increased respiratory symptoms in people with asthma. Also, studies show a connection between breathing elevated short-term NO2 concentrations and increased visits to emergency departments and hospital admissions for respiratory issues, especially asthma.

Oxides of nitrogen (NOx) react with ammonia, moisture, and other compounds to form small particles. These small particles penetrate deeply into sensitive parts of the lungs and can cause or worsen respiratory disease, such as emphysema and bronchitis, and can aggravate existing heart disease, leading to increased hospital admissions and premature death. Ozone is formed when NOx and volatile organic compounds react in the presence of heat and sunlight. Children, the elderly, people with lung diseases, such as asthma, and people who work or exercise outside are at risk for adverse effects from ozone. These include reduction in lung function and increased respiratory symptoms, as well as respiratory-related emergency department visits, hospital admissions, and possibly premature deaths.

Emissions that lead to the formation of NO2 generally also lead to the formation of other NOx. These gases form when fuel is burned at high temperatures and come principally from motor vehicle exhaust and stationary sources, such as electric generators and industrial boilers. Emissions control measures leading to reductions in NO2 can generally be expected to reduce population exposures to all gaseous NOx. This may have the important co-benefit of reducing the formation of ozone and fine particles (PM), both of which pose significant public health threats. California and the federal government have developed air quality standards for NO2, ozone, and PM.

1. Volkswagen. New motor vehicles and engines must be certified by ARB for emission compliance before they are legal for sale, use, or registration in California. New motor vehicles are subject to emission tests to verify that compliance. According to a Volkswagen PowerPoint that was discovered as part of the defeat device investigation, ten years ago Volkswagen engineers realized that the emissions control equipment installed in their diesel engines did not have the durability to meet the federal and California’s emissions standards. Durable and effective emissions control equipment would have cost Volkswagen hundreds of dollars more per vehicle and would have increased the sticker price to consumers. Instead of pursuing the more expensive emission control equipment, Volkswagen developed software, known as a defeat device, that could detect when the vehicle was being put through an emission test and activate the emissions control equipment only for the purposes of passing the test. This would extend the life of the emissions control equipment and allow Volkswagen to appear to be in compliance with federal and California emissions standards. However, when not being tested, the vehicles were emitting up to 40 times the legal limit.

The events that lead to the discovery of Volkswagen’s defeat device began when the Center for Alternative Fuels, Engines and Emissions at West Virginia University was attempting to understand the difference between vehicle emissions in real-world conditions and lab performance in both America and Europe. The real-world emissions of a Volkswagen Passat and Jetta were much higher than the lab tests at ARB’s El Monte lab. This prompted ARB to open an investigation on the discrepancy. Eventually, Volkswagen’s engineers admitted they were using defeat devices to ARB.

Volkswagen is now subject to both federal and state investigations and enforcement actions. In addition, there have been various lawsuits against the company. On April 21, 2016, several parties to the various lawsuits stated in federal court they have reached an agreement in principle to address approximately 480,000 of 2.0 liter engine vehicles that had defeat devices. The settlement would give consumers several options to return their vehicles or have their vehicles modified. The settlement will also deal with compensation for consumers and how to remediate excess emissions. Details of the settlement are currently being worked out.

1. Thanks? This resolution thanks ARB for its role in discovering the defeat device. However, a thanks might not be enough. The defeat device was initially used in 2009 models and was not discovered until 2015. Court documents reveal that Volkswagen thought their chances of getting caught were slim. In addition, a law firm hired by Volkswagen indicated that previous fines for violating emissions limits did not outweigh the financial benefits of the defeat devices. The author and committee may wish to amend the resolution to declare that ARB should verify more emission tests under real-world conditions and penalties for cheating emission tests should be enhanced to deter future efforts to circumvent emission standards.

1. Amendments. The author and committee may wish to amend the bill to fix technical errors in resolution and clarify ARB’s role in the incident.

REGISTERED SUPPORT / OPPOSITION:

Support

Professional Engineers in California Government

Opposition

None on file

Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092