Existing law imposes various limitations on the emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources. The State Air Resources Board has adopted a regulation to significantly reduce emissions of particulate matter, oxides of nitrogen, and other criteria air pollutants from existing diesel trucks and buses operating in the state, commonly known as the Truck and Bus Regulation.

This bill would require the state board, until January 1, 2023, to deem a person, as defined, to be in compliance with the Truck and Bus Regulation and would prohibit the state board from requiring a person to expend further moneys to achieve compliance with, or from seeking to enforce against that person, that regulation if specified conditions are met.

Existing law imposes various limitations on the emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources. The State Air Resources Board has adopted a regulation to significantly reduce emissions particulate matter, oxides of nitrogen, and other criteria air pollutants from existing diesel trucks and buses operating in the state, commonly known as the Truck and Bus Regulation.

This bill would require the State Air Resources Board state board, until January 1, 2023, to deem a person, as defined, to be in compliance with all applicable rules and regulations of the state board and, notwithstanding the inadequacy of any required equipment, technologies, or practices, the Truck and Bus Regulation and would prohibit the state board from requiring a person to expend further moneys to achieve compliance with, or from seeking to enforce against that person, the applicable rules and regulations, that regulation if specified conditions are met.

Existing law imposes various limitations on the emissions of air contaminants for the control of air pollution from vehicular and nonvehicular sources.

This bill would require the State Air Resources Board to deem a person, as defined, to be in compliance with all applicable rules and regulations of the state board and, notwithstanding the inadequacy of any required equipment, technologies, or practices, would prohibit the state board from requiring a person to expend further moneys to achieve compliance with, or from seeking to enforce against that person, the applicable rules and regulations, if specified conditions are met.

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: SB 41

SUBJECT: State Air Resources Board: compliance: regulations

ANALYSIS:

Existing federal law:

1. The Federal Clean Air Act (FCAA) and its implementing regulations set National Ambient Air Quality Standards (NAAQS) for six criteria pollutants and designate air basins that do not achieve NAAQS as nonattainment, with extreme and severe nonattainment being the worst designations for air quality. (42 U.S.C. §7401 et seq.)
   

Existing state law:

1. Establishes the Air Resources Board (ARB) as the air pollution control agency in California and requires the ARB, among other things, to control emissions from a wide array of mobile sources and toxic air contaminant emissions from stationary sources. (Health and Safety Code (HSC) §39500 et seq.)
   
2. Requires the ARB to promulgate and enforce rules and regulations necessary for the proper execution of its statutory mandates. (HSC §39601 et seq.)
   
3. Defines “person” as any person, firm, association, organization, partnership, business trust, corporation, limited liability company, or company. (HSC §19)
   
4. Defines “person” to include any state or local governmental agency or public district, or any officer or employee thereof, and the United States or its agencies, to the extent authorized by federal law. (HSC §39047).
   
5. Authorizes, pursuant to the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (Proposition 1B) the issuance of $19.9 billion in general obligation bonds to fund a variety of transportation projects.
   
6. Establishes Section 2025 of Title 13 of the California Code of Regulations (Truck and Bus Regulation) that requires lower-emitting oxides of nitrogen engines and diesel particulate matter filters for nearly every heavy-duty vehicle operated in California.

This bill:

1. Deems a person to be in compliance with the Truck and Bus Regulation and would prohibit the ARB from (i) requiring the person to spend additional money on compliance or (ii) taking enforcement actions against a person, if all of the following are true:
   
   1. The person (i) purchased a Cleaire LongMile diesel particulate matter filter to comply with the Truck and Bus Regulation, (ii) it failed during the warranty period, and (iii) the manufacturer of the filter is no longer in business.
      
   2. The Truck and Bus Regulation requires a person to spend money on equipment, technology, or practices to comply.
      
   3. The person spent money on a Cleaire LongMile diesel particulate matter filter, including as part of an early compliance program.
      
   4. The Cleaire LongMile diesel particulate matter filter was approved for compliance with the Truck and Bus Regulation by the ARB at the time it was purchased.
      
   5. The Cleaire LongMile diesel particulate matter filter later was proved, or declared by the ARB, to be inadequate to achieve compliance with the Truck and Bus Regulation.
      
   6. The vehicle for which the Cleaire LongMile diesel particulate matter filter is not eligible for Proposition 1B filter substrate replacement program money.
      
2. Sunsets on January 1, 2023.

Background

1. Air Quality Standards.
   
   The Federal Clean Air Act (FCAA) and its implementing regulations are intended to protect public health and environmental quality by limiting and reducing pollution from various sources. Under the FCAA, the US EPA establishes National Ambient Air Quality Standards (NAAQS) that apply to outdoor air throughout the country.
   
   In 1969 and 1971, ARB set the first air quality standards for ozone, Particulate Matter (PM), oxides of nitrogen (NOx), oxides of sulfur (SOx), and carbon monoxide due to their negative impacts on public health above specified concentrations.
   
   The federal government followed suit and set NAAQS for six “criteria pollutants.” These included ground-level ozone, PM, NOx, SOx, and carbon monoxide, and added lead. Now, the 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 FCAA 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.
   
2. Health Effects of Diesel Exhaust.
   
   Diesel exhaust is produced when an engine burns diesel fuel. It is a complex mixture of thousands of gases and fine particles (commonly known as soot) that contains more than 40 toxic air contaminants. These include many known or suspected cancer-causing substances, such as benzene, arsenic and formaldehyde. It also contains other harmful pollutants, including nitrogen oxides (a component of smog).
   
   In 1998, the California Environmental Protection Agency’s (Cal/EPA) Office of Environmental Health Hazard Assessment (OEHHA) completed a comprehensive health assessment of diesel exhaust. This assessment formed the basis for a decision by ARB to formally identify particles in diesel exhaust as a toxic air contaminant that may pose a threat to human health.
   
   Diesel engines are a major source PM. The elderly and people with emphysema, asthma, and chronic heart and lung disease are especially sensitive to PM. Numerous studies have linked elevated particle levels in the air to increased hospital admissions, emergency room visits, asthma attacks and premature deaths among those suffering from respiratory problems. Because children’s lungs and respiratory systems are still developing, they are also more susceptible than healthy adults to fine particles. Exposure to PM is associated with increased frequency of childhood illnesses and can also reduce lung function in children.
   
   Diesel exhaust and many individual substances contained in it have the potential to contribute to mutations in cells that can lead to cancer. In fact, long-term exposure to diesel exhaust particles poses the highest cancer risk of any toxic air contaminant evaluated by OEHHA.
   
3. Key ARB Mandates.
   
   Today, the Legislature has directed ARB to accomplish three key goals:
   
   1. Achieve the health-based air quality standards for criteria and other air pollutants under the state and federal Clean Air Acts.
      
   2. Reduce public exposure to toxic air contaminants such as diesel particulate matter.
      
   3. Reduce greenhouse gas emissions to 1990 levels by 2020, with further reductions to 40% below 1990 levels by 2030.
      

ARB accomplishes these mandates through a mix of incentive programs and enforceable rules and regulations.

1. Truck and Bus Regulation.
   
   The “Truck and Bus Regulation” (Section 2025 of Title 13 of the California Code of Regulations), adopted in 2009, aims to reduce air toxics (diesel PM) and other criteria pollutants by ensuring that nearly every heavy-duty vehicle operated in California meets 2010 heavy-duty engine emission standards by 2023. PM filter requirements for heavier trucks and buses phased in beginning January 2012 and engine replacement requirements for heavier and lighter trucks began phase-in January 2015.
   
   At the time the Truck and Bus regulation was adopted, heavy-duty trucks were the largest mobile source of NOx and diesel PM emissions in California. The regulation requires emission control equipment retrofit for trucks and buses that are already on the road, and accelerates the turnover of old trucks and buses to the 2010 engine standards. This will reduce emissions from nearly one million heavy-duty diesel trucks and buses operating in California.
   
   The Truck and Bus Regulation reduces NOx emissions by 90% by requiring trucks and buses to upgrade to the 2010 state and federal heavy-duty engine standards, which require engines to be equipped with Selective Catalytic Reduction systems. The regulation reduces diesel PM emissions approximately 98% by requiring PM filters. Filters are not a one-time purchase; they must eventually be cleaned or changed.
   
2. Cleaire LongMile Diesel Particulate Matter Filters.
   
   Cleaire Advanced Emissions Controls LLC (Cleaire) was a manufacturer of diesel particulate matter filters (DPF), including the LongMile DPF.
   
   Different trucks and busses require different DPF specifications; after the Truck and Bus Regulation went into effect, other than the outright purchase of a new truck for $150,000+, the LongMile DPF (costing $18,000+) was the compliance mechanism primarily used by public utility fleets and a small number of other vehicle types, like concrete mixers.
   
   Two years later in 2011, Cleaire stopped selling and installing the LongMile DPF after Washington State officials claimed a turbocharger failure on an engine sent oil into its LongMile DPF and set it on fire, causing flaming particles to shoot out of the truck’s tailpipe and ignite dry grass along Highway 97 near Goldendale, Washington.
   
   The resulting fire, known as the Monastery Fire, took 721 firefighters 11 days to extinguish, and caused $5.4 million in damage to residences and other buildings.
   
   In 2012, Cleaire recalled the LongMile DPF and replaced the existing metal filter with Cleaire Muffler Module (sometimes identified as an “empty can”) until the unit could be upgraded to a certified silicon carbide core. The owner could also remove the entire system from the vehicle and restore the vehicle to its original equipment manufacturer configuration.
   
   Cleaire ceased operations on January 18, 2013. ARB was involved in the receivership process and worked to identify a company that could honor Cleaire products that remained on the road. On April 18, 2013, ESW CleanTech Incorporated (ESW CleanTech), a manufacturer of verified on-road and off-road diesel emissions control strategies, acquired the assets and product line of Cleaire. As a condition of transferring Cleaire’s verifications to ESW CleanTech, ESW CleanTech agreed to honor the warranty of existing products and help facilitate the upgrade of the LongMile DPF to another DPF.
   
   To mitigate the impact to customers, ARB amended the Truck and Bus regulation to allow the LongMile systems to be considered compliant for five years after the recall date. ARB determined that five years from the recall date ensured that vehicles equipped with the LongMile DPF were operable through the term of the original warranty. This gave the vehicles until August 16, 2017, to operate with only a Cleaire Modular Muffler in place or in the original equipment manufacturer configuration.
   
   Under the Truck and Bus Regulation, after the warranty period expires for any DPF the vehicle owner is responsible for repairing or replacing the retrofit to the best available control strategy.
   
3. Proposition 1B Funding.
   
   The Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, also known as Proposition 1B, was approved by voters in November 2006, and authorized the issuance of $19.9 billion in general obligation bonds to fund a variety of transportation projects, including funding for cleaner trucks.
   
   In June 2014 the ARB allocated Proposition 1B funding to replace the Cleaire LongMile DPF. In order to utilize these funds, however, vehicles need to pass an eligibility test before a replacement could be installed. Several trucks have failed the test because of their design and are therefore, ineligible for bond funding to replace the recalled Cleaire system. Those truck owners are responsible for removing the old system and investing in a new diesel DPF (an approximately $18,000 investment) if a compatible diesel DPF exists, or buying a new or used vehicle and retiring their dirtier truck.
   
   Depending on the configuration, purchasing a used truck that complies with the Truck and Bus Regulation can cost approximately $40,000, while new trucks are upwards of $150,000.
   
   To date, about 505 vehicles have replaced the substrate or filter system with available Prop 1B funds.

Comments

1. Purpose of Bill.
   
   According to the author, “the bill recognizes the state Air Resources Board’s intent to reduce vehicular pollution. This bill recognizes the investment of companies to comply with the rules set forth by CARB including through early actions. The bill is limited to only that specific piece of equipment which had been verified and approved by CARB and that failed.”
   
2. Ambiguities.
   
   There are many ambiguities in the bill that could have far reaching impacts.
   
   While “equipment” is defined in the bill as a Cleaire LongMile DPF that meets certain criteria, the bill interchangeably uses equipment as defined and in a general, generic sense, which creates internal conflicts. While it would appear that the bill intends to deem as compliant with the Truck and Bus Regulation any person who purchased a LongMile DPF, the bill later states that being required to spend money on “any equipment, technologies, or practices” is a condition to trigger deemed compliance. Does this mean that a person should be deemed as compliant if they spend any money on anything?
   
   Furthermore, one of the criteria defining “equipment” is that the equipment failed. The Cleaire LongMile DPFs did not fail, per se. Cleaire voluntarily recalled the filters and the ARB granted a five-year compliance period. It is unclear what “failed” means. Does being given five years of being considered compliant with the Truck and Bus Regulation, in line with the length of the original warranty, count as equipment failing?
   
   The bill also includes language about spending money “as part of an early compliance program.” No such thing exists. Without a regulation in place, there is nothing with which a person must comply. The Truck and Bus Regulation did, however, provide a compliance pathway that allowed dirtier trucks to stay on the road longer. Certain older trucks had to be retired under the regulation unless the owner installed a DPF before the retirement deadline. Doing so granted the owner a few extra years of using the dirtier vehicle as a tradeoff for reduced emissions earlier on, but should not be misunderstood as an “early compliance program.” It was simply one possible compliance pathway that never guaranteed pre-2010 vehicles could be used through 2023.
   
   Another factor in determining whether a person should be deemed in compliance with the Truck and Bus Regulation is that ARB proved or declared equipment (as noted earlier, it is unclear whether this means the LongMile DPF or any other equipment due to the interchangeable use of the word in the bill) inadequate to achieve compliance. ARB neither proved nor declared the LongMile DPF to be inadequate to achieve compliance with the Truck and Bus Regulation. Rather, Cleaire voluntarily recalled the LongMile DPF over safety concerns.
   
   Finally, it is unclear whether updates and amendments to the Truck and Bus Regulation will be covered by this bill. For example, if the ARB discovers an unforeseen circumstance requiring an update or amendment to the regulation, this bill might prohibit the ARB from forcing vehicle owners to comply with the updated regulation, possibly for their entire fleet.
   
3. Fleet-wide Concerns.
   
   A person is broadly defined in this bill to be any person, firm, association, organization, partnership, business trust, corporation, limited liability company, company, state or local governmental agency or public district and any officer or employee thereof, and the federal government and its agencies.
   
   Fleets are usually not owned not by individuals, but by these types of entities. Because this bill would deem these entities to be compliant with the Truck and Bus Regulation if they have just one vehicle for which a LongMile DPF was purchased, this bill would deem the entity, and therefore its entire fleet, as compliant with the regulation regardless of whether other vehicles had anything to do with the LongMile DPF saga.
   
4. Equipment doesn’t last forever.
   
   Unfortunately, the Cleaire LongMile DPF did not prove to be a long-term solution for the retrofit of these trucks.
   
   Even if a business does continue to exist, equipment doesn’t last forever. Eventually diesel DPFs have to be replaced at the owner’s expense if a warranty has expired. In due course, like any other vehicle, trucks have to be retired and replaced at the owner’s expense.
   
   As noted in the background, the ARB amended the Truck and Bus regulation to allow the LongMile systems to be considered compliant for five years after the recall date because they believed that would ensure all vehicles equipped with the LongMile DPF were operable through the term of the original warranty. This gave the vehicles until August 16, 2017, to operate with only a Cleaire Modular Muffler in place, at which point, if the equipment failed, the vehicle owners would be forced to spend money on a new filter, or buy a new or used truck.
   
   Although these vehicle owners were authorized to continue operating their trucks by ARB through the expiration of their warranties, it is reasonable to suggest that vehicle owners should not have assumed the life of that device beyond that date. Further, when the device was recalled in 2011, it is a reasonable expectation that those businesses that were affected would have begun to plan next steps for upgrading their fleets or equipment.
   
   ARB estimates that there are about 1,900 vehicles with filters subject to the recall that have not gotten the new substrate, retrofit, or replaced the vehicle. These vehicles include school buses, trucks, and other vehicles in the cement, beverage, solid waste collection, utilities, and public sectors.
   
   ARB has no way of knowing the number of affected vehicles that may have been retired, wrecked, disabled, or sold outside California.
   
   Given that the extended August 16, 2017, deadline for compliance has been looming for five years, a question arises as to why these owners have failed to make the necessary investments in their fleets over that time.
   
5. Why Now?
   
   The deadline for compliance with the amended Truck and Bus Regulation is August 16, 2017. Should this bill pass the Legislature and be signed by the Governor, it will not go into effect until January 1, 2018. Vehicle owners knew of the looming deadline for years now.
   
   A question arises as to why these owners should be given further exemption, thereby allowing them to start polluting again on January 1, 2018, after their vehicles will have been pulled off the road for four and a half months.
   
6. Broader Implications.
   
   Although there were other compliance pathways available to vehicle owners, the ARB has tried to work with Cleaire LongMile DPF purchasers to ensure some period of time where both their purchase had value and they could plan to come into compliance with the Truck and Bus Regulation.
   
   Purchasing a DPF was a choice for fleet owners. Rather than spend the money on a new or used Truck and Bus Regulation compliant vehicle, they spent a fraction of that amount on a DPF that was not guaranteed to work through 2023. If a DPF failed after its warranty expired and before 2023, vehicle owners were always on the hook to purchase another DPF, or a new or used vehicle.
   
   This bill sets a dangerous precedent for the Legislature to ensure that businesses who take a gamble on complying with a regulation in the cheapest possible manner will not face the consequence of losing that wager. Could this not have broader implications by stating in law that if an entity spends any money to comply with a law, but it doesn’t work out, they can’t be required to spend more?
   
7. Conclusion: Dangerous Precedent at the Cost of Air Quality.
   
   This measure sets a dangerous precedent. The Committee may wish to consider whether this bill is an appropriate remedy that warrants the implications and known harmful impacts.

Related/Prior Legislation

DOUBLE REFERRAL:

If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Rules Committee.

SOURCE:

California Construction and Industrial Materials Association

SUPPORT:

California Tow Truck Association

Western States Trucking Association

OPPOSITION:

American Lung Association in California

California League of Conservation Voters

Coalition for Clean Air

Sierra Club California

Union of Concerned Scientists

Voices for Progress Education Fund

ARGUMENTS IN SUPPORT: According to the Western States Trucking Association, “many of WSTA’s members purchased diesel particulate filters in order to comply with CARB’s Truck and Bus regulation, including the Cleaire LongMile diesel particulate filter produced by Cleaire Advanced Emissions Controls. In late 2011, Claire suspended selling and installing the LongMile and Allmetal PM filters. A major forest fire in south Washington was identified as possibly being caused by the failure of a LongMile system …one year later, Cleaire voluntarily recalled all LongMile diesel particulate matter filters systems. On January 18, 2013 Claire closed its doors and ceased to operate. Three months later, ESW CleanTech acquired Cleaire’s assets and product line, but did not fully guarantee all LongMile warranties. Truckers who installed LongMile filters in good faith are now faced with a system that has been recalled …given that all diesel trucks must meet the 2010 engine standards by 2023, SB 41 simply allows owners of the Cleaire LongMile system to operate their vehicles for an additional five years.”

ARGUMENTS IN OPPOSITION: According to a coalition of opponents, “California is home to the most difficult air pollution challenges in the United States, including in the San Joaquin Valley, where Bakersfield (1), Fresno (2), Visalia (3), Modesto (4) and Stockton (8) are ranked among the ten most particle-polluted cities in the United States. Fine particle pollution from diesel powered engines, residential fireplaces and other sources contribute to over 7,000 deaths per year in California, including 1,500 in the Valley every year … SB 41 would limit the effectiveness of state air quality programs to reduce fine particles, ozone and other harmful pollutants by restricting air quality regulators’ ability to protect public health in the event adopted policies fail to achieve intended progress … This approach could also affect air pollution inventory accounting needed to demonstrate compliance with federal air quality standards, potentially resulting in penalties or more stringent emission controls in other economic sectors.”

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