00-16tr030100.PDF

1 BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

5 IN THE MATTER OF:

6 VEHICLE SCRAPPAGE ACTIVITIES No. R00-16

7 35 ILL. ADM. CODE 207 (Rulemaking-Air)

13 Proceedings held on March 1st, 2000, at 10:00 a.m.,

at the

14 Illinois Pollution Control Board, 600 South Second Street,

Suite

15 403, Springfield, Illinois, before the Honorable Marie

Tipsord,

16 Hearing Officer.

21 Reported by: Darlene M. Niemeyer, CSR, RPR

CSR License No.: 084-003677

23 KEEFE REPORTING COMPANY

11 North 44th Street

24 Belleville, IL 62226

(618) 277-0190

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1 A P P E A R A N C E S

2 Members of the Board present:

3 G. Tanner Girard

Ronald C. Flemal

4 Elena Z. Kezelis

Marili McFawn

6 Also present: Anand Rao, Scientist

8 ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

BY: Bonnie Sawyer

9 Assistant Counsel

P.O. Box 19506

10 Springfield, Illinois 62794-9506

On behalf of the Illinois EPA.

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1 I N D E X

2 WITNESS PAGE NUMBER

4 ROGER A. KANERVA 11

STANLEY L. OSTREM 20

7 JAMES R. MATHENY 36

DARWIN J. BURKHART 46

10 MICHAEL BALOGH 69

DAVID BLISS 81

13 JAMES SCHAF 86

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1 E X H I B I T S

2 NUMBER MARKED FOR I.D. ENTERED

3 Hearing Exhibit 1 83 83

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1 P R O C E E D I N G S

2 (March 1, 2000; 10:00 a.m.)

3 HEARING OFFICER TIPSORD: Good morning. My name is

Marie

4 Tipsord, and I have been appointed by the Board to serve

5 Hearing Officer at this proceeding entitled, In the Matter

of:

6 Vehicle Scrappage Activities, 35 Ill. Adm. Code 207,

Docket

7 Number R00-16.

8 To my right is Dr. Tanner Girard. He is the

presiding

9 Board Member assigned to this matter. Also present today

are

10 Board Member Ronald C. Flemal, and Board Member Elena

Kezelis.

11 In addition to the Board Members present today, we

have a

12 number of our staff, including to my left, Anand Rao, from

our

13 technical staff, chief -- division chief, whatever.

14 Also present in the audience is Carol Sudman,

Assistant to

15 the Chairman, Claire Manning; Erin Connelly (spelled

16 phonetically) Amy Jackson, assistant to Elena Kezelis;

Steve

17 Langhoff, Joel Sternstein, assistant to Board Member

Nicholas

18 Melas; Natalie Williams, administrative assistant to Dr.

Girard;

19 and Karen Newbold and Cameron Kline. I think that is all

of the

20 Board staff. Did I miss anybody?

21 Dr. Girard, is there anything you would like to say

this

22 morning?

23 BOARD MEMBER GIRARD: Thank you. I would like to

welcome

24 everyone here to this public hearing this morning,

especially the

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1 members of the public who have come and taken time off

from work

2 and maybe traveled quite a distance to be here. We

certainly

3 appreciate your participation in this public hearing to

help us

4 craft the best possible rules for the people of Illinois.

And I

5 just want to assure you that we will take your comments

6 seriously, and we look forward to your participation.

Thank you.

7 HEARING OFFICER TIPSORD: The purpose of today's

hearing is

8 to hear the prefiled testimony of the Illinois

Environmental

9 Protection Agency and to allow questions to be asked of

the

10 Agency. There are four persons who will be testifying on

behalf

11 of the Agency. We will have them read their prefiled

testimony

12 into the record.

13 After all four have completed, we will then allow

questions

14 of the panel. We also have prefiled testimony from Mike

Balogh.

15 That is, B-A-L-O-G-H. After Mr. Balogh has presented his

16 testimony, also by reading it into the record, we will

allow

17 questions of him.

18 If there is anyone else here today who wishes to

testify, I

19 do have a sign-up sheet to the left, and they may sign up

there.

20 Anyone may ask a question, but I do ask that you raise

your hand

21 and allow me to acknowledge you before you ask the

question.

22 After I have acknowledged you, please state who you are

for the

23 record, and if you represent an organization who that

24 organization is. This will allow the court reporter to

present a

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1 more complete record for the Board. Please speak one at a

time.

2 If you are speaking over each other, the court reporter is

unable

3 to get everything down.

4 Also note that any questions asked by a Board Member

5 staff here today are intended to help build a complete

record for

6 the Board's decision, and not to express any preconceived

notion

7 or bias.

8 Okay. I have placed lists to the left side of the

room

9 here. There are copies of the current notice and service

list.

10 In addition, there is a sign-up sheet for anyone else who

wishes

11 to be placed on either the notice list or the service

list. If

12 you wish to be on the service list you will receive all

pleadings

13 and prefiled testimony in this proceeding. In addition,

you must

14 serve all of your filings on the persons on the service

list. If

15 you wish to be on a notice list, you will receive all of

the

16 Board and Hearing Officer orders in this rulemaking.

17 If you have any questions as to which list you need

to be

18 on or you would like to be on, please feel free to talk to

me at

19 a break, and I will try to direct you to the proper list.

There

20 are also copies of the Board's order which accepted this

21 rulemaking for hearing. There are a few copies there. If

22 should happen to run out, please let me know and we will

be happy

23 to send you a copy.

24 At this time are there any questions? Okay. Seeing

none,

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1 then we will proceed with the Agency.

2 Ms. Sawyer, do you have an opening statement?

3 MS. SAWYER: Yes, I do.

4 HEARING OFFICER TIPSORD: All right. Please go

ahead.

5 MS. SAWYER: Good morning. My name is Bonnie

Sawyer, and I

6 am an Assistant Counsel with the Division of Legal Counsel

at the

7 Illinois EPA.

8 The purpose of the hearing today is to present

testimony on

9 the Illinois EPA's Vehicle Scrappage rulemaking proposal,

which

10 was accepted by the Board as a proposed rule on January

20th of

11 this year. The proposed rule would establish procedures

12 receive emission reduction credits based on emission

reductions

13 achieved from voluntary vehicle scrappage activities

conducted in

14 Illinois.

15 Under vehicle scrappage older, higher-emitting

vehicles are

16 removed from the road prior to the end of their useful

life,

17 thereby generating emission credits once the emissions

from

18 replacement vehicles are netted. The primary use for

these

19 Creditable Emission Reductions is in conjunction with the

20 Emissions Reduction Market System, which may be described

today

21 as ERMS. ERMS establishes a market system that may be

used by

22 stationary sources to meet emission reduction

requirements. The

23 vehicle scrappage is a possible method to generate

marketable

24 emission reductions to meet ERMS requirements.

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1 The Illinois EPA is required to develop and submit

to the

2 Board a proposal that provides procedures, practices and

3 performance requirements to allow for emission reduction

credits

4 for voluntary vehicle scrappage activities by the Illinois

5 General Assembly in the Vehicle Emissions Inspection Law

of 1995.

6 This proposal is designed to fulfill the Agency's

statutory

7 obligation under this law.

8 The Illinois EPA intends to submit the final vehicle

9 scrappage rule adopted by the Board to the U.S. EPA as a

state

10 implementation plan revision. The Illinois EPA has

previously

11 submitted the Board's ERMS rule to the U.S. EPA for

approval as a

12 state implementation program in December of 1997. The

U.S. EPA

13 is currently reviewing that proposal.

14 As emission reduction credits generated due to

vehicle

15 scrappage activities may be used in conjunction with

programs

16 that are or will be part of Illinois' federally approved

17 implementation plan, this program must also be submitted

to the

18 U.S. EPA for approval.

19 The Agency filed the testimony of Darwin Burkhart,

part of

20 the Air Quality Planning Section, explaining how the

emission

21 reductions generated from vehicle scrappage activities

will be

22 factored into emissions inventories prepared by the Agency

and

23 submitted to the U.S. EPA, and also how these emission

reductions

24 will be accounted for in the State's Air Quality Planning

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1 Program. Mr. Burkhart will, of course, as the Hearing

Officer

2 pointed out, read this testimony into the record today.

3 The Agency also filed written testimony of Roger

Kanerva,

4 the Environmental Policy Advisor to the Director of the

Illinois

5 EPA; Stanley Ostrem, an Environmental Policy Analyst in

the

6 Office of Environmental Policy; and James Matheny, the

Manager of

7 the Technical Services Section in the Division of

Inspection and

8 Maintenance in the Bureau of Air. Each of these witnesses

are

9 available today to answer questions.

10 We will begin with the testimony of Roger Kanerva.

Mr.

11 Kanerva also has a short statement in addition to his

prefiled

12 testimony that provides some additional updated

information.

13 So at this point I would like to turn it over to Mr.

14 Kanerva.

15 HEARING OFFICER TIPSORD: Okay. Excuse me just a

moment,

16 Mr. Kanerva.

17 Ms. Sawyer, could we first have all of your

witnesses

18 sworn?

19 MS. SAWYER: Sure.

20 HEARING OFFICER TIPSORD: All right. Would the

court

21 reporter please swear in the witnesses.

22 (Whereupon the witnesses were sworn by the Notary

Public.)

23 HEARING OFFICER TIPSORD: Thank you. Okay. Please

24 ahead, Mr. Kanerva.

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1 MR. KANERVA: Good morning. As Bonnie mentioned, I

2 Roger A. Kanerva, Environmental Policy Advisor to the

Director of

3 the Illinois EPA. I have given my card to the court

reporter. I

4 have served in this position since 1991 and I have been

with the

5 IEPA since 1978 in various senior management roles. As

some of

6 you probably recall, I was also a co-manager of the design

7 process for the Emissions Reduction Market System, which

became a

8 rulemaking completed by the Board not too long ago, and

the

9 regulatory developments that came out of that.

10 My testimony will explain the IEPA's interest in

vehicle

11 scrappage, or VS, for clean air purposes, what we did to

test the

12 feasibility of such programs, and the role we see for VS

13 Illinois. This proposed rule is another demonstration of

the

14 IEPA's commitment to promote the use of market-based

approaches

15 for environmental protection. VS in the clean air

regulatory

16 context is another tool for generating emissions

reductions in

17 the ozone nonattainment areas in Illinois.

18 Our interest in VS goes back to the early 1990s when

19 first began to seriously investigate market-based

approaches for

20 clean air. As a result of an overall feasibility study,

we took

21 a careful look at the viability of doing VS. The first VS

22 project in the U.S. was conducted in 1990 by the Unocal

23 Corporation in Southern California. Under SCRAP, as it

was

24 called, they purchased over 8,000 vehicles and, through

testing

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1 of some vehicles, confirmed that older vehicles were high

2 emissions sources. In our minds, SCRAP left some

questions

3 unanswered, so we undertook our own project, which was

dubbed

4 Cash for Clunkers, in 1992.

5 The IEPA sponsored the first VS project done in the

6 Midwest. With assistance from the Environmental Defense

Fund and

7 General Motors, the IEPA designed a pilot project that

would

8 evaluate the feasibility of a large scale VS program in

the

9 Chicago area. This design introduced the following

important

10 features that had not been part of previous efforts:

11 One, emissions testing of each purchased vehicle.

12 Two, Institution of variable pricing schedule with

prices

13 paid for vehicles based on the expected emissions from

vehicles

14 by model year.

15 Three, a professional mechanic's inspection of every

16 vehicle to attempt to obtain a better understanding of the

17 remaining life that should be associated with vehicles

available

18 to full-scale scrappage programs.

19 Four, targeting of specific high-emitting vehicles

which

20 were identified by the IEPA's Division of Vehicle

Inspection and

21 Maintenance and incorporating actual miles traveled by

22 participants.

23 The target vehicle population was model years from

1968 to

24 1979 that had marginally passed the last inspection or

were being

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1 driven on waivers. Over 1,300 potential participants were

2 randomly selected and sent a letter that provided the

purchase

3 price being offered. IEPA received responses from 448

owners who

4 were willing to sell their vehicle for the amount

indicated.

5 This turned out to be more than twice the number of

vehicles

6 which we could afford to purchase. In total, we received

over

7 3,000 calls from interested citizens once the word got

around.

8 Seven corporate co-sponsors, being Abbott Labs,

Amoco Oil,

9 Clark Oil, Commonwealth Edison, Mobil Oil, People's Gas

and

10 UNOVEN Oil helped fund the actual purchase of 207 vehicles

11 late fall of 1992. The prices paid ranged from $647.00

for a

12 model year 1968, to $950.00 for a model year 1977, with

the

13 average cost per vehicle coming in at about $860.00.

14 Emissions testing was done using IM 240 procedures

and

15 expected remaining usage was determined. After deducting

the

16 replacement emissions, it was determined that the

purchases and

17 scrapping of 207 vehicles resulted in a total emissions

reduction

18 of 43.6 tons of hydrocarbons and seven tons of nitrogen

oxides.

19 On average, the participants bought a replacement vehicle

that

20 was eight years newer than the vehicle sold to the

project.

21 The complete results for this project are provided

in the

22 final report titled, "Pilot Project for Vehicle Scrapping

23 Illinois," May 1993. These positive results led the IEPA

24 recommend that VS be provided as an alternative emissions

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1 reduction strategy. A number of valuable lessons learned

from

2 this project are reflected in the proposed VS regulation

we have

3 filed.

4 I would like to go to some other regulatory

experiences.

5 The South Coast Air Quality Management District, or AQMD,

6 California adopted Rule 1610 for "Old-Vehicle Scrapping"

7 1993. This rule has been amended several times, including

8 changes in 1996 that allowed emissions credits from

scrapping to

9 be traded with other regulated sources. Over the years,

AQMD has

10 licensed some 14 scrappers under this rule. At present,

however,

11 two scrap yard companies and one broker are the active

licensed

12 scrappers.

13 Since 1993, some 25,800 vehicles have been collected

and

14 scraped under this rule. About half of these vehicles

have been

15 within the 1975 to 1981 model years. In turn, this has

generated

16 about 5,249,000 pounds, which equates to 2,625 tons of VOC

17 emission reduction credits and 2,127,000 pounds, or 1,064

tons of

18 NOx credits for scrappage sponsors.

19 Since 1996, when trading was allowed, the AQMD has

20 confirmed 733 transactions involving some 6,321,000 pounds

21 VOCs and NOx credits. This data was supplied to us by the

22 district in February. Interestingly enough, about

2,151,000

23 pounds of these credits, or about 34 percent, have been

purchased

24 directly by the AQMD using its Air Quality Investments

Fund.

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1 This fund receives payments from some companies that have

chosen

2 this compliance method for their ride share regulatory

program.

3 Certain amendments were also made to this rule to

better

4 address parts recycling, improve public accessibility, and

5 provide refinements for credit usage. All things

considered,

6 however, the AQMD's scrappage activities appear to be a

viable

7 and active component of their clean air regulatory

programs.

8 The VS role in Illinois. As has been stated, IEPA

found VS

9 to be a feasible method for generating emissions

reductions.

10 This finding was translated into legislative action in the

11 Vehicle Emissions Inspection Law of 1995. Subsection (d)

of the

12 13B-30 of this law requires the IEPA to propose and the

Board to

13 adopt rules for VS programs. These rules are necessary to

enable

14 persons that sponsor VS to receive credits for the

emissions

15 reductions achieved.

16 Back in this general time frame, 1994 to 1995, the

IEPA

17 developed and made public a discussion document for

possible VS

18 rules. At the same time, we had been working on our

proposal for

19 a VOM emissions trading system. The final system design

was

20 published in March, 1995. This system design specifically

21 identified inter-sector emissions trading as a viable

component,

22 and, in particular, mentioned VS programs as a way of

generating

23 necessary emissions reductions.

24 At this point, then, we made a strategic decision to

hold

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1 back on development of VS rules until authorizing

legislation and

2 related rulemaking could be accomplished for the overall

3 Emissions Reduction Market System for the Chicago metro

ozone

4 nonattainment area. After all, the existence of a market

system

5 for stationary sources is what would give real value to

credits

6 generated by VS programs.

7 It took most of three years, 1996 through 1998, to

get the

8 basic market system in place. Thus, we renewed or

development of

9 VS rules in late 1998 and on through 1999, including

additional

10 outreach efforts as described in the Statement of Reasons

11 filed. The culmination of this work is the proposal filed

12 early January 2000.

13 The IEPA envisions VS as playing a secondary role,

at most,

14 in the overall market system setup under Part 205,

Emissions

15 Reduction Market System, or ERMS. Creditable Emissions

16 Reductions, CERS, generated by VS would serve as a "stop

gap"

17 means of achieving compliance if purchased by a

participating

18 source. Thus, we generally see CERS as being less

desirable than

19 ATU transfers from regular allotments, ATU being allotment

20 trading units, but, nevertheless, important to have

available as

21 an optional compliance strategy. Section 205.510 of Part

205

22 provides for inter-sector transactions. Furthermore,

subsection

23 (a) of this Section recognizes regulatory based proposals

which

24 would ensue from adoption of Part 207.

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1 Another important role for VS comes from the Part

205 rules

2 for the ERMS. Section 205.710 specifies the provisions

for the

3 Alternative Compliance Market Account, the ACMA.

Subsection (g)

4 of this Section authorizes the Agency to implement VOM

emissions

5 reductions using funds derived from the sale of ATUs out

of the

6 ACMA. It further provides that, "the Agency shall

endeavor to

7 generate new emissions reductions whenever possible," in

the

8 instance where the ACMA does not have a positive balance.

We see

9 VS as one of the ways to fulfill this responsibility to

help keep

10 the ACMA as a viable source of ATUs when needed. In this

regard,

11 the proposed VS rule expressly provides for circumstances

where

12 the Agency serves as the scrapping sponsor.

13 Conclusion. The IEPA sees this proposed rule as

another

14 building block in the overall market-based structure we

are

15 fashioning for clean air in Illinois. It has been shown

to work

16 in practice and to achieve real emissions reductions that

should

17 be part of our plans for further progress towards ozone

18 attainment. This proposed rule will ensure that emissions

19 reductions are achieved in a credible manner and any

credits

20 granted are properly justified.

21 As Bonnie Sawyer mentioned, I have a couple of

supplemental

22 points to make, which will be considered as oral testimony

at the

23 hearing today, and elaborates on a couple of points in the

24 written testimony just provided, or that you just heard

that I

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1 just went through.

2 At the hearing today I will supplement my written

testimony

3 by elaborating on several points about the role of vehicle

4 scrappage and VS in Illinois' Clean Air Program. As

described in

5 my written testimony, we envision VS playing a secondary

role

6 with respect to the Emissions Reduction Market System, or

ERMS.

7 With the start-up of the ERMS just a few months away,

market

8 activity is already developing, as evidenced by the market

price

9 listings posted by Canter Fitzgerald, a national

environmental

10 brokerage service. Canter Fitzgerald, being CF. CF's web

site

11 listing for February 22nd of this year showed $210.00 per

VOM

12 ATU, or $2,100.00 per ton of VOM emissions for a seasonal

period.

13 In this listing CF also shows the price for

permanent

14 transfer of ATUs as being $10,000.00 per ton. As an

illustrated

15 comparison, the cost of buying scrappage credits under the

South

16 Coast AQMD rules varies from about $5,800.00 per ton of

VOCs to

17 as high as $20,000.00 per ton, depending on the model year

of the

18 vehicle collected. Using these respective costs, a

participating

19 source in search of emissions reductions for compliance

would

20 probably prefer trading for ATUs in the regular ERMS

market.

21 On the other hand, other factors could influence

this

22 decision, such as relative availability of ATUs in any

given

23 season and the time of year ATUs are sought in the market.

24 participating source might simply prefer to control its

own

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1 compliance fate and choose vehicle scrappage over finding

trading

2 partners in the marketplace. In this regard, vehicle

scrappage

3 sponsors may find enterprising ways to be competitive in

this

4 marketplace.

5 (Board Member Marili McFawn

entered the

6 hearing room.)

7 MR. KANERVA: The second matter I want to cover

involves

8 the utility of VS as a source of emissions reductions for

the

9 Alternative Compliance Market Account. In anticipation of

having

10 the responsibility to manage the ACMA, the Agency

sponsors

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1 to use. This proposal provides flexibility in the manner

2 which vehicle scrappage managers and sponsors notify

vehicle

3 owners that they are seeking vehicles for vehicle

scrappage

4 activities. Vehicle scrappage sponsors or managers may

ask the

5 Agency to notify owners who meet the specifications

contained in

6 the vehicle scrappage plan.

7 This option was identified in the recommendations

portion

8 of our pilot project because some sponsors may need some

9 additional assistance in identifying prospective vehicle

owners.

10 If a sponsor chooses to instead seek out vehicles on their

own,

11 they may do so through general notification methods such

as a

12 newspaper advisement in the area where a proposed vehicle

13 scrappage activity is to take place.

14 Whichever notification method is used, there is a

minimum

15 amount of information required. As with the vehicle

eligibility

16 requirements I covered earlier, there is a complete list

17 contained in the proposal, but I do want to touch on a

couple of

18 these requirements here today.

19 One of the key themes in this proposal that is

especially

20 important to highlight is that participation in all

vehicle

21 scrappage activities is strictly voluntary. No vehicle

owner

22 will be required to provide their vehicle to a vehicle

scrappage

23 project or program unless they choose to participate. In

24 addition, just because an owner's vehicle is identified as

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1 potential candidate for retirement, does not mean that

these

2 vehicles are subject to an environmental or other

violation. The

3 last thing we want to allow is vehicle scrappage sponsors

4 managers to give the wrong impressions during this

notification

5 process, so we have incorporated specific information

6 requirements that are to be contained in all public

notifications

7 of this type.

8 Pre-scrapping vehicle salvage operation. As

identified in

9 the Statement of Reasons, we met with a variety of

stakeholders

10 during the development of this proposal, and a lot of

useful

11 suggestions resulted from these discussions. One group of

12 stakeholders are those who are in the business of pre-

scrapping

13 vehicle salvage. The Agency recognizes the importance of

keeping

14 these groups informed of future vehicle scrappage

activities, so

15 we incorporated an extensive notification procedure into

the

16 vehicle scrappage proposal.

17 Vehicle scrappage sponsors and managers must provide

18 notification, either via the internet or through other

public

19 notification means, of upcoming vehicle scrappage

activities to

20 these types of organizations utilizing an Agency-provided

list.

21 So any vehicles collected in a vehicle scrappage project

22 program, or vehicle parts from collected vehicles, must be

made

23 available for purchase by one of these groups.

24 Even though vehicles or vehicle parts may be

recycled or

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1 parted out during vehicle scrappage project or programs,

it is

2 important to point out that credit for emissions will not

3 available for any vehicles sold to pre-scrapping

operations

4 unless the disassembly of certain emission-related

components

5 take place. Closely tracking this process helps ensure

that

6 credit for a vehicle scrappage project or program is not

claimed

7 unless actual reductions take place.

8 Operability check. Another expressed concern for

vehicle

9 scrappage is that some of the vehicles targeted for these

types

10 of activities may not be regularly used and should not be

11 providing emissions credit. We addressed this concern

based

12 primarily on our findings from the 1992 pilot project.

There are

13 minimum operability steps that must be completed before a

vehicle

14 scrappage sponsor or manager may scrap a vehicle for

credit. So

15 in addition to the eligibility requirements that I

mentioned

16 earlier, we have incorporated these safeguards into the

proposal

17 to exclude vehicles that are not operational.

18 Management of wastes and bona fide vehicle parts

handlers.

19 The final disposition of all collected vehicles was an

important

20 issue to resolve when we were designing the pilot project

and it

21 is also addressed in this proposal. The proper management

22 collected vehicles is fundamental to the success of

vehicle

23 scrappage activities. Removing emissions from the airshed

while

24 potentially causing other environmental problems due to

the

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1 improper handling and/or disposal of vehicles is

unacceptable.

2 Therefore, all proposed vehicle scrappage activities must

meet

3 certain disassembly, recycling and disposal requirements.

4 Also included were requirements for identifying

vehicle

5 parts handlers who would be allowed to purchase and resell

6 vehicle parts from sponsoring entities. We felt it was

important

7 to include the provision that these vehicle parts handlers

8 represent bona fide operations to ensure that proper

disassembly,

9 recycling and disposal of all collected vehicles takes

place. So

10 as a safeguard, any problems that arise with a vehicle

parts

11 handler during vehicle scrappage activities may subject

that

12 vehicle scrappage project or program to enforcement

actions in

13 accordance with the Illinois Environmental Protection Act;

14 including the possible revocation of approval of the

vehicle

15 scrappage plan. These types of provisions will help to

ensure

16 the validity of future vehicle scrappage activities.

17 Documentation beyond federal requirements. There

are

18 specific documentation requirements that all vehicle

scrappage

19 sponsors and managers must collect in order to properly

keep

20 track of vehicle scrappage activities that they operate.

As I

21 stated earlier, we designed this proposal to be in-line

with the

22 minimum documentation requirements contained in U.S. EPA's

23 vehicle scrappage guidance.

24 We wanted to ensure that good management practices

were

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1 followed for all vehicles collected, so we went above and

beyond

2 the federal guidance. Records need to be maintained for

at least

3 five years and should include the minimum amount of

information

4 included in the proposal in order to be considered

complete by

5 the Agency. Among the information items required, we have

6 mileage verification, emissions calculation verification,

and

7 demonstration of proper disassembly, which will allow the

Agency

8 to help verify the past activities during any future

inspections.

9 Optional program elements. There are provisions

included

10 in these proposed rules that vehicle scrappage projects

and

11 programs are required to follow, but there are also

optional

12 program elements available that exceed those requirements.

The

13 intent here is that vehicle scrappage sponsors and

managers may

14 propose to use optional program enhancements to better

narrow

15 down the universe of candidates they are targeting for

vehicle

16 scrappage activities.

17 This added flexibility will help to identify

vehicles for

18 potential inclusion in a vehicle scrappage project or

program.

19 Another added benefit for the vehicle scrappage sponsor

and

20 manager using optional program elements is the increase in

21 emission credits that can ultimately be attained.

22 Targeting of high emission vehicles. Getting the

most

23 emissions reduction "bang for the buck," if you will, is

24 obviously one of the main goals in pursuing these types of

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1 market-based activities. Since the amount of emissions

taken off

2 the road is directly proportional to the amount of

emission

3 credits a vehicle scrappage sponsor or manager will

receive, it's

4 an added bonus to be able to directly target high emission

5 vehicles for potential inclusion into a vehicle scrappage

project

6 or program.

7 The high emission vehicles can be targeted using the

8 Agency's administered Vehicle Inspection and Maintenance

Program

9 that issues certificates of waiver or test results to

these

10 applicable vehicles. This could be an attractive option

for

11 vehicle scrappage sponsors and managers to seriously

consider

12 when deciding what type of vehicle scrappage activity to

conduct.

13 Use of enhanced prescreening inspection. Another

option

14 available to vehicle scrappage sponsors and managers is

use of an

15 enhanced prescreening inspection. Basically, the

operability

16 checks I covered earlier can be supplemented with more

stringent

17 requirements when inspecting vehicles that are to be

retired.

18 This really gets into further analysis of the recent use

patterns

19 and the remaining useful life of vehicles, which can only

help to

20 further clarify the pool of vehicles when designing a

particular

21 vehicle scrappage project or program.

22 Credit generation. The credit generation portion of

the

23 vehicle scrappage proposal is the next area I want to

cover.

24 Since this proposal is a market-based activity where

emission

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1 reductions are sought after, there needs to be a

quantification

2 of these reductions for use in determining the proper

amounts of

3 credit allowed.

4 There are three methods for determining emission

5 reductions. In keeping with the theme throughout, there

is a

6 certain amount of flexibility available in how one

determines the

7 level of emissions reductions a particular vehicle

scrappage

8 project or program will receive.

9 First off, there is the measure/measure method where

the

10 emissions of both the retired and replacement vehicles are

11 measured using the Inspection and Maintenance, or IM 240

test.

12 Next, the model/model method uses the most recent

version

13 of U.S. EPA's MOBILE model to determine the modeled

emissions of

14 both the retired and replacement vehicles.

15 Finally, the measure/model method uses a combination

16 approach to allow for measuring of the retired vehicle and

17 modeling the replacement vehicle. The later method was

the one

18 we utilized for the pilot project.

19 Credit adjustments and discounting. The amount of

20 Creditable Emissions Reductions, or CERs, available will

depend

21 on which of these three methods are used. The credit

22 adjustments, or discounting, we have included will take

into

23 consideration the type of method used in determining the

amount

24 of emissions reductions that have been realized from

conducting a

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1 vehicle scrappage event.

2 Since measure/measure is the most rigorous method

available

3 to determine the emissions reductions of retired vehicles,

there

4 will be no required reduction to the value of CERs

claimed. The

5 measure/measure method requires additional effort and

expense on

6 behalf of the vehicle scrappage sponsor and manager to

arrange

7 for vehicle testing for both the retired or replacement

vehicles.

8 Since this is the most intensive method available, the

effort

9 will pay off with no discounting of CERs.

10 Using the measure/model method may cause claimed

CERs to be

11 discounted by ten percent to account for the natural

retirement

12 of vehicles. There is also the enhanced prescreening

option I

13 highlighted earlier that would, in effect, cancel out this

ten

14 percent reduction, but that is something that would have

to be

15 addressed and approved up-front during the planning phase.

16 Finally, using the model/model method, will result

in an

17 initial discount of 20 percent for the natural retirement

18 vehicles with an additional five percent environmental

discount.

19 These factors basically come from the original federal

guidance

20 mentioned previously.

21 This discounting rationale will provide flexibility

in the

22 design of vehicle scrappage projects or programs while at

the

23 same time ensuring that the proper discounting takes place

24 account for differences between measurement and modeling.

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1 will be up to the vehicle scrappage sponsor/manager to

design the

2 optimum combination of approaches.

3 Useful life of vehicles. When determining the

remaining

4 useful life of vehicles, we have incorporated limitations

that

5 depend on the type of measurement techniques used in a

particular

6 vehicle scrappage project or program. For retired

vehicles that

7 are modeled, the remaining useful life will be three

years, as

8 specified in the federal guidance. Retired vehicles that

are

9 measured will have, at a minimum, a useful life of two

years. I

10 should point out that in the case of measurement, a

greater than

11 two-year minimum useful life may be possible on a case by

case

12 basis. In these instances, vehicle scrappage sponsors or

13 managers must submit information to the Agency that

demonstrates

14 more than a two-year life is justified. In fact, using

the

15 enhanced prescreening option I briefly mentioned earlier

would be

16 one example of how one could demonstrate this

justification.

17 Submission and review of claims. Once a vehicle

scrappage

18 project or program is conducted, the CERs are not

automatically

19 granted to a program sponsor or manager. Another issue

bought up

20 during the proposal development process was deciding on

how to

21 accurately quantify the emission reductions claimed on

behalf of

22 vehicle scrappage activities. We have set up a CER review

23 process in the proposal where all CER claims are submitted

to the

24 Agency for review and approval.

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1 Timing requirements. These CER claims are to be

submitted

2 to the Agency for review not less frequently than yearly,

nor

3 more frequently than monthly depending on need. And the

Agency

4 has specific timing requirements in how long CER claim

submittals

5 can be reviewed and approved or disapproved. The Agency

has 45

6 calendar days from receipt of a complete claim to issue a

written

7 determination regarding how many CERS have been generated

from a

8 vehicle scrappage project or program. So vehicle

scrappage

9 sponsors and managers will know the disposition of their

CER

10 claim submittal in a timely manner.

11 Vehicle scrappage plans. Now we have covered many

of the

12 key components that make up a viable vehicle scrappage

program.

13 Taking a step back to the beginning of the process,

preparation

14 during the planning phase is integral to the success of

all

15 vehicle scrappage projects or programs. We initially had

some

16 concerns that, unless properly designed, projects or

programs

17 could easily "miss the mark" so to speak in achieving

viable

18 emissions reductions.

19 So the next feature of this proposal I want to spend

some

20 time on is the actual vehicle scrappage plan. This plan

should

21 be considered as the "blueprint" of how a vehicle

scrappage

22 sponsor and manager intends to conduct a vehicle scrappage

23 project or program from start to finish. As you might

imagine,

24 there are several required components that will constitute

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1 complete vehicle scrappage plan. The first being another

list of

2 items that all vehicle scrappage plans must include, at a

3 minimum, in order to be considered for approval. And,

again,

4 many of these items were incorporated from our experiences

with

5 the pilot project. Once the Agency receives a submitted

vehicle

6 scrappage plan, we will review the plan to either approve

7 disapprove it in accordance with the timing outlined in

the

8 vehicle scrappage proposal.

9 Public notice provisions and opportunity for

hearing. An

10 item I want to highlight with regards to the planning

process is

11 the public notice provisions we have in place. The intent

here

12 is to properly notify the general public of any proposed

vehicle

13 scrappage projects or programs that may be conducted in a

14 particular area. This is an added feature that will fully

inform

15 and allow comment for the potentially affected public.

16 There is a timing limitation here as well. The

vehicle

17 scrappage sponsor or manager must provide public notice,

i.e.,

18 through a local newspaper or other public notification

means, in

19 the area where vehicles are to be collected and retired

within 14

20 days of submitting the vehicle scrappage plan to the

Agency.

21 This will give interested persons an opportunity to obtain

a copy

22 of the vehicle scrappage plan; submit any comments; and,

23 desired, request that a hearing be scheduled.

24 Once the notice of proposed vehicle scrappage plan

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1 submission is published, any comments and requests for

hearing

2 must be received by the Agency within 21 days. We believe

this

3 will provide ample opportunity for the general public to

provide

4 comment and requests for hearing to the Agency. Should

any such

5 requests be submitted to the Agency, we will determine

whether to

6 hold a public hearing in accordance with the appropriate

7 provisions of the Agency's procedural rules.

8 Training requirements. Since functioning as a

vehicle

9 scrappage program manager encompasses several areas of

10 responsibility, including many technical areas, we felt it

was

11 important to ensure that these individuals were competent

in the

12 duties they are responsible to perform. Having a properly

13 trained vehicle manager will help ensure the success of

all

14 vehicle scrappage activities. So each person who wants to

become

15 a vehicle scrappage manager must meet the requirements

outlined

16 in the proposed rule; and, successfully complete the

training

17 course, including an examination for vehicle scrappage

managers

18 who will conduct vehicle scrappage programs. The training

will

19 be offered by the Agency annually, based upon need, and

will

20 follow a prescribed curriculum.

21 Fee provisions. The last thing I want to briefly

touch on

22 here today is the fee provisions we have included in this

23 proposal. For vehicle scrappage plan and plan renewal

fees there

24 are a variety of amounts outlined in the proposal that are

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1 line with other fee structures required in the Agency.

The same

2 holds true for the form of payment used, non-refundability

3 fees, and credits for overpayments.

4 Finally, technical support document, or TSD. The

TSD that

5 accompanies this proposal has been submitted as an

exhibit, so we

6 won't go over this document in detail. However, the

vehicle

7 testing and mobile source modeling portion of the TSD will

8 described by Jim Matheny here shortly to expound on some

of the

9 background concepts that are involved in this proposal.

10 This concludes my presentation.

11 MS. SAWYER: At this time the Agency would like to

present

12 the testimony of James Matheny.

13 HEARING OFFICER TIPSORD: Before you start, I would

just

14 like to note that Board Member Marili McFawn has joined us

today.

15 BOARD MEMBER McFAWN: Good morning.

16 HEARING OFFICER TIPSORD: And also to note that the

17 technical support document is listed as item number nine

in the

18 table of contents of the regulatory submittal.

19 MS. SAWYER: And one other thing, the U.S. EPA

guidance

20 that was referred to by Mr. Ostrem is Exhibit Number 2 in

the

21 proposal.

22 HEARING OFFICER TIPSORD: All right. Thank you very

much.

23 Please go ahead.

24 MS. SAWYER: We next would like to present Mr.

Matheny's

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1 testimony.

2 MR. MATHENY: Good morning. My name is James

Matheny, and

3 I am the Manager of the Technical Services Section in the

4 Division of Inspection and Maintenance, Bureau of Air. I

have

5 been employed with the Agency since 1976, including

approximately

6 nine years in the Division of Air Pollution Control, and

15 years

7 in the Division of Vehicle Inspection and Maintenance. I

am a

8 registered Professional Engineer.

9 The purpose of my testimony is to provide

information on

10 the vehicle emissions testing program and its relationship

with

11 this rulemaking, including the availability and use of IM

240 and

12 evaporative test data to quantify emissions from candidate

13 vehicles.

14 Illinois has included periodic inspection of motor

vehicle

15 emissions in its Air Quality improvement strategy since

1986.

16 This program requires most vehicles registered in the

Chicago and

17 metro-east St. Louis ozone nonattainment areas to undergo

18 biennial exhaust and evaporative system inspection.

Vehicles are

19 inspected to determine compliance with standards

applicable for

20 the vehicle type and model year.

21 Beginning in February of 1999, the Agency

implemented major

22 changes to the program required to bring Illinois into

compliance

23 with the federal Clean Air Act requirements for Enhanced

24 Inspection and Maintenance of motor vehicles. The

principle

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1 change to the Illinois program involves the incorporation

of the

2 IM 240 transient loaded mode test procedure to more

accurately

3 quantify exhaust emissions in 1981 and newer light-duty

vehicles

4 and identify high-emitting vehicles in need of emissions

5 repairs.

6 The IM 240 procedure provides a cost-efficient and

accurate

7 means to determine vehicle-specific exhaust emission rates

from

8 passenger cars and light-duty trucks. The IM 240 has been

9 successfully demonstrated in Illinois and in several other

10 ongoing IM programs throughout the country. The IM 240

test

11 procedure consists of operating the vehicle on a variable

inertia

12 weight dynamometer over a specified 240 second driving

cycle,

13 which simulates a typical urban trip of approximately two

miles

14 in length at speeds varying from zero, or idle, to 57

miles per

15 hour.

16 The dynamometer used is specifically designed to

accurately

17 simulate the vehicle loads generated during vehicle

operation,

18 including vehicle accelerations and decelerations

experienced on

19 the road. The drive cycle was derived from portions of

the drive

20 cycle used in the Federal Test Procedure, or FTP, used by

U.S.

21 EPA to determine compliance with federal new vehicle

22 certification standards.

23 The analytical equipment used is comparable to that

used in

24 the FTP. As a result, IM 240 measurements correlate

extremely

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1 well to the FTP and can provide reasonable estimates of

in-use

2 vehicle-specific exhaust emission rates. The IM 240 test

3 specifically identified in U.S. EPA guidance as an

acceptable

4 procedure for quantifying exhaust emissions of vehicles

5 participating in vehicle scrappage programs.

6 Although the vehicle emission test program limits IM

240

7 testing to 1981 and newer vehicles, older vehicles can be

tested

8 using this procedure. There are some vehicles for which

IM 240

9 testing is not possible due to the type of dynamometers

used in

10 Illinois facilities. The test lanes are equipped with

two-wheel

11 dynamometers, which prevents testing of vehicles with

full-time

12 four-wheel drive or vehicles with traction control systems

that

13 can not be disengaged.

14 Since IM 240 measures total hydrocarbon, THC,

emissions, it

15 may be appropriate to adjust measured results to account

for non

16 volatile components. The required adjustment is

relatively

17 small, five percent or less on older vehicles, increasing

to as

18 much as 15 percent of exhaust emissions on new vehicles.

19 The Illinois Enhanced IM program incorporates

features to

20 accommodate testing of vehicles for use in the proposed

program.

21 IM 240 testing is available at any one of 35 facilities

located

22 throughout the greater Chicago and metro-east St. Louis

areas.

23 The facilities are open 55 hours a week and the state

contract

24 with Envriotest Illinois, Incorporated, includes

provisions for

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1 scheduled, after-hour testing of fleets of vehicles.

2 The testing system is currently designed to allow

for

3 voluntary testing of vehicles not currently scheduled for

4 mandatory testing. While current lane software is

configured to

5 enable fast-passing of clean vehicles, a feature designed

6 terminate the test if measured emissions are below fast-

pass

7 standards, the software can be modified to disable this

feature

8 to provide the full-term IM 240 results required for this

9 scrappage program.

10 All voluntary testing must be authorized in advance

11 contractor management personnel, and are subject to a $20

fee, as

12 authorized by the Illinois Vehicle Inspection Law. The

enhanced

13 emission testing contains provisions to allow scheduled

14 after-hour testing of vehicles, the additional cost of

which

15 would be negotiated with the contractor.

16 Envirotest is required to maintain a database

containing

17 all vehicles registered in the Chicago and metro-east test

areas.

18 This database provides current information on emissions

program

19 compliance status, which is available on-line to Agency

personnel

20 through a local-area network linked to servers located in

the

21 contractors headquarters in Villa Park, Illinois. Agency

22 Technical Staff also have the capability to query the

vehicle

23 database to determine the vehicle eligibility requirements

24 specified in Section 207.304 of the proposed rule.

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1 The test system also maintains historical data on

all

2 vehicle tests, waiver determinations, and other

administrative

3 actions conducted. To the extent that full-term IM 240

data is

4 available, this information can be extracted from the

database

5 and used to quantify the emissions level of a vehicle.

Section

6 207.314 of the proposed rule would allow use of test

results

7 obtained within 90 days prior to the collection of the

vehicle.

8 As with vehicle information, test history information and

results

9 are available on-line for individual vehicles. Database

query

10 and reporting capabilities also exist to identify fleets

11 eligible vehicles, to characterize these vehicles for

screening

12 or targeting purposes, and for program auditing purposes

13 including verification of eligibility, verification of

vehicle

14 age or mileage, and of the final disposition of retired

vehicles.

15 Emissions modeling using U.S. EPA's MOBILE model.

The

16 modeling approach, as discussed previously, relies on the

use of

17 U.S. EPA's MOBILE model to estimate emission rates of

subject

18 vehicles. The MOBILE series of computer programs provides

19 estimates of exhaust and evaporative emission rates for

vehicle

20 fleets and sub-fleets that have traditionally been used by

states

21 in preparation of on-highway MOBILE source emission

inventories,

22 and determining the effectiveness of MOBILE source

emission

23 control strategies.

24 The MOBILE model generates emission factors based

upon U.S.

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1 EPA evaluation of vehicle certification an in-use emission

2 testing data. Most applications of the model require the

use of

3 local-area specific input data so that the emission

factors

4 generated reflect local conditions. Input variables

include

5 characterization of the fleet population using vehicle

6 registration data to establish the model year mix and

vehicle

7 type mix, characterization of ambient conditions, such as

daily

8 minimum and maximum temperatures, traffic related inputs

such as

9 average vehicle speeds and operating modes. Other

important

10 inputs include the proper characterization of local fuel

11 composition and the impacts of specific emission control

measures

12 such as Inspection and Maintenance programs.

13 U.S. EPA routinely updates the computer program to

reflect

14 recent research and results of in-use testing. The

current

15 version of the model is MOBILE 5, which was originally

released

16 in 1994. U.S. EPA is currently developing MOBILE 6, which

may be

17 released by sometime this year.

18 Of particular importance for the proposed program,

the

19 MOBILE model incorporates a by model year option that

provides a

20 detailed break-out of estimates of exhaust and evaporative

21 emissions by model year for the most recent 25 model

years.

22 These estimates are available for each of eight vehicle

types or

23 classes, including passenger cars and light-duty truck 1

and 2

24 classes included in this rulemaking. A limitation of the

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1 modeling approach is that the emission rates provided

represent

2 average emission rates for all vehicles within the model

year and

3 class. Since the average includes both "clean" and

"dirty"

4 vehicles, the results may underestimate the actual

emissions from

5 "dirty" vehicles selected for retirement.

6 Evaporative and other non-exhaust emissions. While

the IM

7 240 test can be used to quantify exhaust emissions from

vehicles,

8 no equivalent short-test is available to measure

evaporative and

9 running loss emissions from vehicles. These emissions

make up

10 from one-third to one-half of all VOM emissions from in-

use

11 vehicles, and can only be measured using sophisticated and

12 expensive evaporative tests such as the SHED test used by

U.S.

13 EPA and manufacturers during new vehicle certification.

14 Inspection and Maintenance programs incorporate

simple

15 screening tests to identify vehicles with leaking or

inoperative

16 evaporative emission control systems. Gas cap and/or fuel

system

17 vapor leak checks are limited in effectively identifying

gross

18 emitters resulting from leaking control systems, not those

that

19 have malfunctioning canister purge valves and lines. At

this

20 time, practical estimation of evaporative contributions is

21 limited to MOBILE model estimates, although the model can

be used

22 to generate evaporative emission factors separately, from

23 vehicles passing, or failing gas cap pressure tests.

24 Illinois vehicle emissions testing results. With

the

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1 inception of enhanced emissions testing in early 1999, the

Agency

2 has collected mass emissions data on over 1.5 million

vehicles.

3 This information provides tremendous amount of real-world

data on

4 the emissions performance of light-duty vehicles

registered in

5 Illinois nonattainment areas. Preliminary evaluation of

calendar

6 year 1999 results indicates that while the majority of in-

use

7 vehicles can be considered as "normal" emitters, a

significant

8 percentage of the fleet exceed applicable IM 240, idle,

and gas

9 cap pressure test standards, and are in need of repair

and/or

10 retirement.

11 Current initial failure rates for the Illinois

program are

12 approximately ten percent of vehicles presented. Exhaust

failure

13 rates average approximately seven percent, and gas cap

test

14 failures average approximately three percent. It is

important to

15 note, however, that a vehicle passing Illinois' current

standards

16 does not guarantee that the vehicle is clean. By design,

17 Inspection and Maintenance standards are designed to

maximize

18 emission reduction potential while minimizing errors of

19 commission or false failures. As such, standards are

typically

20 set two to three times higher than U.S. EPA certification

21 standards.

22 Testing data does indicate that the Illinois fleet

contains

23 a significant number of vehicles emitting at levels

several times

24 the level of applicable exhaust standards. In the first

year of

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1 the two year biennial test cycle, the Agency has

identified

2 28,500 vehicles that emitted over two times the allowable

3 Illinois IM 240 standard during its initial inspection.

The

4 Agency has identified over 6,000 vehicles that emitted

over five

5 times the allowable IM 240 standard. Most of these

vehicles are

6 older, high-mileage vehicles that may be difficult, if not

7 practically impossible to repair. To the extent that the

cost of

8 repairing these vehicles significantly exceeds the value

of the

9 vehicle, Inspection Maintenance is no longer an option.

10 Eligible vehicle populations. The Agency has

queried the

11 Vehicle Inspection Database to estimate the numbers of

vehicles

12 that would be eligible for participation in the proposed

program.

13 Based upon application of eligibility criteria specified

14 Section 207.304 of the proposed rule, and selecting

vehicles of

15 model year 1983 or older, approximately 152,000 vehicles

16 registered in the Chicago IM area were identified.

17 With significant numbers of high-emitting model year

1984

18 to 1990 model year vehicles, the addition of these

additional

19 model years brings the total eligible to 1,288,000

vehicles.

20 Obviously, most of these vehicles are normal emitters. By

21 focusing on vehicles that marginally passed or were

granted

22 waivers within the past test cycle, 73,500 model year 1968

23 1983, and 149,000 model year 1968 through 1990 model year

24 vehicles were identified.

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1 Thank you. This ends my prepared testimony.

2 MS. SAWYER: Thank you, Mr. Matheny. At this time I

would

3 like to present the testimony of Darwin Burkhart.

4 MR. BURKHART: Good morning. My name is Darwin

Burkhart.

5 I have been with the Air Quality Planning Section of the

Bureau

6 of Air at the Illinois EPA since 1991. I graduated from

Purdue

7 University in 1987 with a Bachelor's degree in Physical

Sciences,

8 and I also have a Master's degree in Environmental

Planning from

9 the University of Illinois at Springfield. My primary

10 responsibility at the Illinois EPA for the past nine years

has

11 been evaluating, developing and implementing programs

concerning

12 motor vehicles and fuels.

13 My testimony today addresses three areas. One,

14 inter-sector transactions; two, Creditable Emissions

Reductions,

15 or CERS, and three, the state's emission inventory.

16 Inter-sector transactions are provided in the

Emissions

17 Reduction Market System, or ERMS, rule. It is the

mechanism in

18 the ERMS program by which a project sponsor or manager may

submit

19 a proposal to the IEPA to seek credit for emissions

reductions

20 achieved from mobile sources. While there are other

mobile

21 source programs currently in place, such as enhanced

vehicle

22 emissions testing, clean fuel fleets, transportation

conformity

23 and a host of emission and fuel regulations at the federal

level,

24 vehicle scrappage will provide scrappage sponsors and

managers a

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1 measurable way to receive credit for additional emissions

2 reductions due to scrappage activities. These emissions

3 reductions in the mobile source sector resulting from

vehicle

4 scrappage will supplement the reductions already occurring

in the

5 other programs. They will not be double-counted in the

emission

6 inventory, as discussed below.

7 As a part of the proposal, the vehicles that are

scrapped

8 in a project or program will generate Creditable Emissions

9 Reductions or CERs. When approved by the Agency, these

emission

10 reductions may be used by the project sponsor or manager

in a

11 number of ways.

12 One, seasonal control periods. The CERS can be

converted

13 into allotment trading units, or ATUs, for use in the

market

14 system of ERMS. These ATUs are available to the project

manager

15 or sponsor for the approved time period.

16 Annual control period. Another use of CERs is for

meeting

17 the offset requirements of New Source Review. Major new

sources

18 and major modifications of existing sources emitting VOM

in the

19 Chicago ozone nonattainment area are subject to certain

20 preconstruction requirements contained in 35 Ill. Adm.

Code Part

21 203, commonly known as New Source Review. The CERs could

be used

22 to address the emissions offsets that are required when a

new

23 source is constructed or modified in the Chicago area.

Since the

24 NSR provisions require these offsets on an ongoing basis,

the

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1 source will need to replenish any expired CERs with new

CERS.

2 One of the primary Clean Air Act obligations that

the state

3 must satisfy is the requirement to prepare for each

serious or

4 above ozone nonattainment area a State Implementation

Plan, or

5 SIP, revision which provides for an actual reduction in

ozone

6 precursors of at least three percent per year averaged

over each

7 consecutive three-year period.

8 The Chicago ozone nonattainment area is a severe

area and

9 is, therefore, subject to this requirement. This

requirement,

10 referred to as the rate-of-progress, ROP, plan, began six

years

11 after the enactment of the 1990 Clean Air Act amendments

and

12 continues until the area attains the one-hour ozone

standard.

13 The process required by the U.S. EPA to address this

Clean

14 Air Act requirement is for states to first develop their

ROP

15 plan, or rate-of-progress plan, which identifies the

complement

16 of control programs that are being relied upon to meet the

17 necessary reduction requirements, then to later prepare a

18 periodic emissions inventory for each respective milestone

year,

19 for example, 1999, 2002, etcetera, to demonstrate that the

ROP

20 emissions level was actually achieved.

21 Illinois completed its 9 percent ROP plan for

Chicago for

22 the 1999 milestone period in December of 1997, and has

recently

23 updated that plan in January of 2000. This plan relies on

VOM

24 and NOx emissions reductions from all source sectors,

including

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1 mobile sources. In this latest ROP plan, no emission

reduction

2 credit was relied upon for the vehicle scrappage program.

3 Therefore, any reductions generated from this program are

4 available for use by sponsors in the previously mentioned

air

5 quality programs, consistent with the individual

provisions of

6 that program.

7 Illinois will account for any emission reductions

from the

8 vehicle scrappage program achieved during a milestone

period at

9 the time it completes its periodic emission inventory for

that

10 milestone year. For example, for the milestone period of

1997 to

11 1999, a periodic emission inventory will be prepared from

1999 to

12 demonstrate that the required 1999 ROP emissions level was

13 achieved. Illinois will account for any mobile source

control

14 program reductions, such as from clean fuel fleets,

15 transportation control measures, or vehicle scrappage, by

16 reducing the fleet-wide on-road mobile emissions by the

reduction

17 amounts achieved by these mobile source control programs.

18 Point source emissions are based on actual emission

rates,

19 such that any sources relying on vehicle scrappage

reductions to

20 meet their air quality reduction obligations do not have

their

21 emission rates reduced by the vehicle scrappage credits.

Thus,

22 the inventory will represent actual emissions levels for

each

23 source category, and no double counting will occur.

24 Approved emissions reductions will be reflected in

the

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1 inventory and it will serve as a means to document and

monitor

2 the mobile emissions reductions that take place.

3 Thank you. That concludes my testimony.

4 MS. SAWYER: Thank you, Mr. Burkhart.

5 HEARING OFFICER TIPSORD: I think before we go to

6 questioning -- is there something else you have before

that? If

7 not, I thought we would take a short break.

8 MS. SAWYER: No, there is nothing else before that.

9 HEARING OFFICER TIPSORD: Okay. Then we will take a

ten

10 minute break.

11 (Whereupon a short recess was taken.)

12 HEARING OFFICER TIPSORD: All right. We are back on

the

13 record.

14 (Board Member Elena Kezelis was not present in the

hearing

15 room after the recess.)

16 HEARING OFFICER TIPSORD: We will start with

questions of

17 the Agency.

18 Does anyone now have a question for the Agency in

the

19 audience?

20 All right. Then seeing none, are there any

questions of

21 the --

22 MR. RAO: Yes, I have a few.

23 HEARING OFFICER TIPSORD: All right. Go ahead. I

will let

24 you start.

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1 MR. RAO: I had a question for Mr. Kanerva.

Basically I

2 wanted to know if the Agency has any estimates of the cost

per

3 ton of VOM reduction involving the scrappage program. You

know,

4 you had mentioned some costs for the ATUs from both our

program

5 in Illinois and also from California. Do you have any

estimates

6 of how much it would cost per ton of VOM reduction from

the

7 scrappage program?

8 MR. KANERVA: Yes, I will respond to that. This is

Roger

9 Kanerva from the Agency.

10 We used -- we presented the cost per ton information

from

11 the California program, or the South Coast program -- let

me find

12 my place here -- because that is current, and it does

reflect the

13 actual program operation where people are complying with

the

14 South Coast rules.

15 Frankly, I think from our experience with the pilot

project

16 we would expect the cost per ton to range for scrapping

credits

17 to probably be less in our area. In the pilot project

work we

18 did, the amounts came out near the same level as the low

end on

19 South Coast, around the $4,000.00 to $5,000.00 level, or a

little

20 higher. And that was for just collecting 270 vehicles.

21 MR. RAO: And then that could change if the number

22 vehicles --

23 MR. KANERVA: That is right. As you get a larger

scrapping

24 project, you get less relative cost per activity you do.

So we

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1 had projected that you might even get down as low as

$2,500.00

2 to $3,000.00 a ton, which would then be pretty competitive

with

3 the ATUs in the marketplace, at least as they are being

initially

4 listed.

5 The other thing that is a little deceptive about how

the

6 actual pricing might come out on these is that we are at

the very

7 beginning of the ATU market. The experience with the acid

rain

8 program and the S02 market was that the trading units

there did

9 start out very low, but they are expecting to climb over

time.

10 So there may be a point at which the cost per ton of these

two

11 get quite comparable, you know, maybe several years down

the

12 road.

13 MR. RAO: Okay. Thank you. I had a couple of

questions

14 for Mr. Matheny. In your testimony concerning IM 240

testing you

15 mentioned that this procedure has certain limitations, you

know,

16 in vehicles that are pre 1981 model years. But you did

say that

17 the procedure can be used for testing. But could you

explain a

18 little bit about what those limitations are and, you know,

why

19 you think that it can be used for older vehicles.

20 MR. MATHENY: The limitations currently are tied to

the

21 software, the computer software that our test contractor

is using

22 to select the appropriate test procedure for vehicles

coming in

23 for a normal inspection. Currently it limits the IM 240

test to

24 vehicles that are model year 1981 or newer. Although that

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1 software can be modified, in fact, in an after hours

scenario,

2 the software can -- a switch can be thrown to allow the IM

240

3 testing for any vehicle that is presented.

4 MR. RAO: Okay. So it is something that is very

easily

5 modified and changed, depending on which vehicle is --

6 MR. MATHENY: Yes, it is a relatively easy

modification.

7 MR. RAO: Okay. And also in your testimony when you

were

8 talking about the database, the Envirotest database, you

9 mentioned that the test history information and reserves

are

10 available on line for individual vehicles. Is this

information

11 available to anybody who has access to the internet, or is

12 limited to the internet or --

13 MR. MATHENY: No, it is limited to the local area

network

14 that the Agency and the contractor use to administer the

test

15 program.

16 MR. KANERVA: It is available on line to the Agency

and the

17 contractor.

18 MR. RAO: Okay. We saw the statement, and we were

19 wondering if any public could access the information and

find out

20 what is going on with a particular vehicle. Okay. That's

about

21 it. Thank you.

22 HEARING OFFICER TIPSORD: Okay. Then --

23 MR. RAO: Oh, Marie, excuse me. I have just one

more. Dr.

24 Flemal wanted this information. This is in regards to the

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1 brokerage company that you were talking about on the web

page.

2 Do you have an address that you could provide us?

3 MR. KANERVA: Yes, I brought that. I can give that

to you

4 before we leave.

5 MR. RAO: Okay. Thank you.

6 HEARING OFFICER TIPSORD: All right. I have some

questions

7 specific to the rule. A couple of these, Ms. Sawyer, you

don't

8 have to answer today. You can file comments later. Some

of them

9 have been pointed out to us through the Joint Committee on

10 Administrative Rules. For example, in the table of

contents of

11 the proposal, at 207.510, 207.512, and the title of

subpart (g)

12 those do not match the titles within the rule.

13 MS. SAWYER: Okay.

14 HEARING OFFICER TIPSORD: So if you could just let

us know

15 which one you prefer, and then make that correction when

we go

16 final.

17 MS. SAWYER: Sure.

18 HEARING OFFICER TIPSORD: Okay. And then turning to

19 207.304 -- oh, wait. Excuse me.

20 In the definitions at 207.102, recognized repair

21 technician, you use the phrase, it means a person

professionally

22 engaged in vehicle repair employed by a going concern

whose

23 purpose is to repair vehicles. Could I have some

clarification

24 on exactly what a going concern whose purpose is the

repair of

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1 vehicles.

2 MS. SAWYER: Yes, hopefully -- I will tell you the

basis

3 for that language. It is out of the Illinois Vehicle

Emissions

4 Inspection law. It is the same way the term was defined

in that

5 law. But we can take a look into that and provide you a

6 clarification.

7 HEARING OFFICER TIPSORD: Great. Thank you. In

207.304

8 (d) you refer to the entire Chapter 12 of the Illinois

Vehicle

9 Code for being legally driven to the collection site.

That is a

10 really substantial chapter. I was just wondering if you

could

11 take a look at that and see if you might be able to

clarify that

12 a little more.

13 MS. SAWYER: Okay.

14 HEARING OFFICER TIPSORD: It just seemed, in my

quick run

15 through, that it didn't really have a -- some of it might

be able

16 to be excluded, basically.

17 MS. SAWYER: Okay. I will take a look at that.

18 HEARING OFFICER TIPSORD: Then in (h) you talk about

the

19 vehicle inspection law and regulations promulgated

thereunder. I

20 was wondering if you have any specific regs in mind, or if

there

21 is any specific cross-reference, or if there is a reason

to keep

22 the language that general.

23 MS. SAWYER: We can take a look into that, as well.

24 HEARING OFFICER TIPSORD: All right. And then in

207.310

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1 (a) do you have a preliminary list of collector

associations from

2 your pilot project and, if so, could you provide that to

us?

3 MR. KANERVA: This idea of having the list for the

4 collector groups came up after we did the pilot project.

5 Actually, it came up in some outreach sessions that we did

in the

6 Chicago area when we had done a discussion document about

this,

7 and it came out of evaluating the South Coast public

outreach

8 work. So we had not generated a specific list prior to

that.

9 The two discussion sessions or outreach sessions

that we

10 had last summer, one here in Springfield and one in

Chicago, we

11 had some lists that some groups had that were given to us,

but we

12 didn't collect them as anything official. So we would --

13 implementing this rule, we would offer an opportunity for

anyone

14 that wants to be part of that list to do it as a fresh

thing.

15 But it does not exist, per se, right now.

16 MS. SAWYER: Some of the names that I had provided

you with

17 to be included on the notice list were from the collector

18 associations that we had been working with.

19 HEARING OFFICER TIPSORD: Okay.

20 BOARD MEMBER GIRARD: While we are on this section,

I have

21 a question on subsection (b) there. In (b) you have got

two

22 different time frames for notification, either a ten day

time

23 frame for notifying over the internet or twenty days by

mail.

24 What if you have notification of both types? Or how do

you

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1 decide which type of notification to provide for a

particular

2 project or program?

3 MR. KANERVA: Well, again, we were trying to provide

4 scrappage managers, the sponsors and managers some

flexibility

5 here in the way that most suited them. In talking to the

6 collector folk, the groups, they make extensive use now of

the

7 internet capabilities, because it is so quick and it is

8 convenient for many of them. If I recall correctly, they

do sort

9 of have a fax out kind of concept, too, where certain of

them

10 will fax to some of their members and others will fax to

others,

11 so there is sort of a networking thing there.

12 Anyway, we wound up taking both approaches, where we

would

13 have some sort of electronic approach and then the written

one.

14 If they do them both, I would suspect we would say they

would

15 have the full twenty days probably, because they have

essentially

16 triggered both items. Now, that is something that needs

17 clarification, and we can look at that.

18 MS. SAWYER: I think we probably do need to take a

look

19 into that. If they notify on the internet then they have

20 fulfilled the first requirement that allows them to scrap

within

21 ten days. So we could provide written comments on how we

think

22 that should be interpreted or if it needs any further

23 clarification.

24 BOARD MEMBER GIRARD: Do you see any particular

problems if

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1 it was twenty days for either method of notification?

2 MR. KANERVA: Well, the main trade-off here is the

amount

3 of time -- the lapsed time for going ahead and completing

the

4 testing on the vehicles and getting them scrapped. And

there is

5 a concern about too much delay in that process, because

you are

6 starting to impact what the -- you are starting to move

into the

7 remaining lifetime of the vehicle, basically. So we have

8 cutoff of time in terms of how they can get credited for

things.

9 The main -- in talking to the South Coast folks who

have --

10 I think they even have a hotline approach. But if the

scrappers

11 came across any vehicle of real value and it gets posted,

folks

12 learn about it pretty quickly. So we thought that the ten

days

13 and twenty days was plenty of time for the word to get out

that

14 there was a vehicle that somebody might want. The

electronic is

15 quick enough, and these folks are in touch with each other

enough

16 that the ten days, I think, is plenty, if they do the

electronic.

17 BOARD MEMBER GIRARD: Okay. Thank you.

18 HEARING OFFICER TIPSORD: As a follow-up to that,

you

19 talked about posting on the internet. When you talk about

that,

20 do you mean posting on the Agency's page? Do you mean

posting on

21 the -- where, specifically, would they be posting this

notice?

22 MR. KANERVA: We left it up to their choice. In (c)

there

23 we say that they may utilize our capabilities. So we

would set

24 it up that they could use our web site if they wanted.

Some of

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1 these -- the more you get into this, the more intriguing

it gets.

2 Some of these scrappers and parts distributing people that

use

3 parts or whatever, have an extensive information setup of

their

4 own. I mean, they have to have some way of communicating

with

5 each other about who has what special parts all over the

country,

6 and for that matter, across the planet.

7 These folks are exchanging information in Europe and

here

8 and all over the place about what sorts of vehicle parts

are out

9 there. So some of them might prefer to use their own and

just

10 setup access to that, so that they would have a separate

little

11 posting of cars collected. For example, in addition to

all of

12 them, here is the parts we have for '57 Chevys and here is

the

13 whatevers, that they already can give people access to.

14 But if we get -- that would tend to be a -- someone

that

15 was more in the business of dealing with these vehicles,

like a

16 scrapping operation. If an individual industry, as Unocal

did

17 originally back in 1990, decided to sponsor like a one-

time

18 project to collect 500 cars or 1,000 or whatever they

needed for

19 that ozone season, they might not have, you know, the same

20 capabilities. And so it would be better for them to use

the

21 Agency's web site or something like that. So it is their

choice.

22 It would be in their scrappage plan. They would have to

23 identify, though, what they were going to do.

24 HEARING OFFICER TIPSORD: Also just as an aside,

back to

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1 the definitions, if any of those definitions perhaps come

from

2 another act, if you could identify that for us, that would

3 helpful.

4 MS. SAWYER: Another act other than the

Environmental

5 Protection Act?

6 HEARING OFFICER TIPSORD: Yes.

7 MS. SAWYER: Okay.

8 HEARING OFFICER TIPSORD: And then in 207.316, you

use the

9 same phrase as you did in 304, this time referring to the

used

10 tire stuff, Title 14 of the Environmental Protection Act

and

11 regulations promulgated thereunder. The Board has rules

at 848

12 and -- at 35 Ill. Adm. Code 848 and 849. Does the Agency

have

13 any regulations in mind, or is there a reason to keep the

14 language that general?

15 MS. SAWYER: Okay. We will check into that.

16 HEARING OFFICER TIPSORD: Okay. Then on to 207.318,

this

17 is a documentation requirement, and let me just say

generally

18 that you require that the documentation be maintained on

site,

19 but I don't recall, and I may have overlooked it, seeing

that any

20 of this documentation is provided to the Agency or kept by

the

21 Agency. Is that -- am I correct that this is not provided

22 in an annual report to the Agency?

23 MR. KANERVA: That's correct. We would prefer to

24 essentially do an on-site audit with these kinds of

operations

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1 and check them out on-site, and we can access that

information if

2 we want to. In particular, if there appear to be some

cars where

3 the records are not quite like we would like them to be or

4 something else, we may want to copy those records and

check that

5 out more carefully. But there really isn't a particular

reason

6 to submit all of the individual information constantly to

the

7 Agency. They do have to submit the specified

documentation when

8 they apply for their Creditable Emissions Reductions. So

when

9 they apply to get the credits, they have to go through a

certain

10 amount of documentation there.

11 HEARING OFFICER TIPSORD: Okay. What effect does

this have

12 on whether or not this information is public for purposes

of, for

13 example, the Freedom of Information Act requests? In

other

14 words, could someone from the general public ask to see

this

15 information on-site?

16 MS. SAWYER: I don't think that they would be

covered, the

17 individual scrappage projects or programs would be covered

by the

18 Freedom of Information Act. I think that that would need

-- you

19 know, it is in our possession, of course, and it would be

with

20 yours. But I don't think that there is anything in there

that

21 specifically allows the public to -- or I should say

requires the

22 scrappers to make this information available to the

public.

23 BOARD MEMBER GIRARD: Let me ask a direct question,

then.

24 Do you consider this five year documentation to be a

public

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1 record?

2 MS. SAWYER: I guess I could look into it more, but

it is

3 my understanding that it only becomes a public record when

it is

4 actually in the possession of a public agency or body of

some

5 sort. So anything that we have obtained during

inspections or

6 anything that they submit in terms of their CER claims or

7 anything in conjunction with their plan submittal, we can

look

8 into that further, but that is my understanding of how

public

9 records are defined.

10 BOARD MEMBER GIRARD: What problems do you have with

having

11 this submitted to the Agency as a report then?

12 MR. KANERVA: Well, it depends on what you mean by

annual

13 report. I mean --

14 BOARD MEMBER GIRARD: I didn't say annual. I just

said a

15 report.

16 MR. KANERVA: Oh, some kind of report. I guess the

comment

17 I was going to make, and we can consider that and give it

some

18 thought. But this is not unlike what we did with the

Emissions

19 Reduction Market System rules. There we required them to

keep a

20 compliance master file at the facility, which had to have

all of

21 the documentation pertinent to a company about

transactions and

22 trades. That is not something the Agency really has a

need to

23 have in its possession necessarily to carry out the

functions

24 that we have under that program.

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1 So there are additional documentation things that we

wanted

2 to check as an audit type of thing, but didn't need to

actually

3 have them filed with us to carry out our work. So that

concept

4 was partly what we were getting at here. Whether or not

it would

5 make sense -- I guess what I think might be kind of

interesting

6 about that point, is like with a one-time project, it may

make

7 some sense for them to put some kind of report together at

the

8 end, just sort of summarizing what they have done and what

the

9 results are.

10 I think we are still going to need to have an

opportunity

11 for people to file for their credit aspects on an ongoing

basis,

12 because they will collect 200 cars and then they could be

13 marketing those credits. We don't want them to wait until

the

14 end of the three year program, because then the cars that

they

15 bought the first six months are already kind of history.

16 MS. SAWYER: I don't think that it is particularly

uncommon

17 for sources of emissions or, you know, in this instance,

18 scrappers, to maintain a certain level of documentation on

site

19 and to submit to some form of summary of that information

to the

20 Agency periodically. And really that is the same thing

that is

21 being required in this rule when they have to -- or when

they

22 claim CERs. They are submitting some form of summary of

the

23 information that they are relying on. And it is very

common for

24 us to then have to go out and actually inspect to verify

the

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1 information submitted. So supporting documentation is

oftentimes

2 not submitted to the Agency.

3 BOARD MEMBER GIRARD: I think one major difference

you

4 would have in this program as opposed to the other program

5 that you don't have any trade secret problems. You don't

have

6 any of those kinds of problems here. There is not going

to be

7 any trade secret involved in this documentation. So I

think it

8 is a different situation.

9 MS. SAWYER: Perhaps. I mean, I don't know that the

10 information is not submitted to us simply because of trade

secret

11 concerns, because if there are genuine trade secret

concerns,

12 then it would not be available to the public anyway. I

think it

13 is not submitted more because of the burdensome level of

14 reporting that that requires of sources, or in this case

15 scrappers. And there is an extensive burden to the Agency

also

16 to maintain that level of records.

17 BOARD MEMBER GIRARD: I think another thing to keep

in mind

18 is there probably would be more public interest in a

program like

19 this, sort of even out of proportion to the amount of

reductions

20 it is going to produce, and along with that public

interest they

21 want to see if the program is actually reducing the

emissions the

22 way it is supposed to, and they want to see all of the

23 assumptions that go into it.

24 So, I mean, it could be more of a burden if you have

to go

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1 through a court challenge to see some of these records

than if we

2 simply make it available up front through a Freedom of

3 Information Act process that they can have access,

reasonable

4 access to these records, just as Agency personnel would

have

5 reasonable access.

6 MR. KANERVA: Maybe there is a little bit of

7 misunderstanding here, based on the way you just described

that.

8 Every one of these projects has to file a scrappage plan

with the

9 Agency, which is a public document, which has

documentation of

10 all of these procedural things that they are going to do.

So the

11 way that they are going to determine emissions reductions,

how

12 they are going to do the tests, where it is going to be

located,

13 all of the collection procedures, I mean, that has been

carefully

14 laid out.

15 So I think in terms of being able to ensure folks

that this

16 was a credible project, we are trying to do that on the

front

17 end, right at the very beginning. And that's why we had

the

18 public notice provisions and the opportunity for a

hearing, so

19 that the folks could have a -- could look very carefully

20 whatever was being proposed. And then the filing of all

of the

21 documentation for the credits, we thought was critical

over time,

22 and that will be in the public record, because that is

what is

23 the proof that there was emission reductions. I mean,

that's the

24 result of doing the scrapping. So we really focused on

the

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1 beginning and the results.

2 We can take a look at this concept about what other

3 information needs to be somehow summarized and sent to us.

I can

4 consider that.

5 BOARD MEMBER GIRARD: Thank you. I would appreciate

that.

6 Like you said, you have done a great job of having the

beginning

7 and the end in the public domain. If we could just find

some way

8 to have some of that middle in there also. Thank you.

9 HEARING OFFICER TIPSORD: My next question, then, is

10 Section 207.404. Within that section you refer to the

Agency

11 administered vehicle inspection and maintenance program.

Does

12 the Agency have rules on that, or if we could have even a

13 reference back to the act on that. I think particularly

since we

14 used the phrase Agency administered, we may want to

15 cross-reference where people can look for the Agency

direction on

16 that.

17 MS. SAWYER: Okay.

18 HEARING OFFICER TIPSORD: And then in 207.606, just

19 double-check, and then your Statement of Reasons -- I am

sorry.

20 It is specifically 207.606 (d) that you talk about review

to the

21 Board. In your Statement of Reasons you discussed the

fact that

22 you viewed this like a permit appeal, and that such a

permit

23 appeal would be pursuant to the Board's procedural rules,

Part

24 105. Am I correct in assuming that you still think this

is most

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1 like a permit appeal and should proceed along those lines

before

2 the Board?

3 MS. SAWYER: Yes. Although, I am not sure in the

amended

4 Board procedural rules if there may be a more appropriate

5 proceeding established. I know that there is a pending

project

6 on amending the subtitle (a) rules.

7 HEARING OFFICER TIPSORD: Would you object to having

8 cross-reference added?

9 MS. SAWYER: No. We didn't know if you really

wanted to be

10 tied down to that, or if you wanted to go in a different

11 direction because of what you are doing with your subtitle

(a)

12 rules.

13 HEARING OFFICER TIPSORD: Okay. I assumed that was

the

14 case, but I wanted to double-check. Thank you.

15 Then 207.700 (b)(3) and (c), and, quite honestly,

this is

16 just a double-check because of the question that came to

us from

17 the Joint Committee on Administrative Rules. First, in

207

18 (b)(3), you capitalized the word "state." Under I believe

the

19 Secretary of State's rules on rules, capitalization of the

word

20 state means the State of Illinois.

21 We just wanted to double-check and be sure that you

do mean

22 that there has never been a final judgment entered against

him or

23 her in the State of Illinois. Since you used the phrase

"any

24 state," do you mean just the State of Illinois, or do you,

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1 fact, mean any state?

2 MS. SAWYER: I think what we meant was any state

court.

3 HEARING OFFICER TIPSORD: So it would be a small S,

and not

4 just Illinois?

5 MS. SAWYER: No, I mean any State of Illinois court.

6 think that's what we meant.

7 MR. KANERVA: A court in the State of Illinois.

8 HEARING OFFICER TIPSORD: Okay. Just the State of

9 Illinois?

10 MR. KANERVA: Right.

11 HEARING OFFICER TIPSORD: Okay. So the capital S is

12 correct. Thank you.

13 My next question has to do with subsection (c) (5),

and it

14 talks about that the Agency will offer the examination

15 biannually, if needed. And also then in (d) you talk

about

16 training courses and taking the examination if applicable.

17 question really comes to I assume if there are no

applications

18 you don't want to hold this. But is there a minimum

number of

19 applications you are going to require before you do this?

If one

20 person files are you going to do it?

21 MR. KANERVA: At this point I think the latter

commentary

22 is correct, that if there is some interest expressed, and

23 someone comes forward and applies to be a scrapping

manager, then

24 we would do the training. The South Coast folks really

have sort

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1 of three full-time entities in this business, and the most

they

2 have had is 14. It is not like one that would -- it is

not like

3 other kinds of permitting things we would do where there

4 hundreds and hundreds. If we had a dozen people in this,

that

5 would probably be quite a lot. So we would do it for

anyone if

6 they came forward.

7 HEARING OFFICER TIPSORD: Okay. Then in 207.900,

and,

8 again, this is a question that was sent to us by JCAR.

You cite

9 the total section in the Environmental Protection Act that

deals

10 with penalties and enforcement. Since the title is just

11 enforcement, but sections 42 and I also believe 45 deal

with

12 penalties, would the title of this section be more

appropriate to

13 be enforcement and penalties?

14 MS. SAWYER: That sounds reasonable, yes.

15 HEARING OFFICER TIPSORD: Okay. That was really all

I had.

16 Are there any other questions?

17 MR. BALOGH: I have just one comment and a couple of

18 questions.

19 HEARING OFFICER TIPSORD: All right. Mr. Balogh,

could you

20 identify yourself for the court reporter?

21 MR. BALOGH: Yes. I am Mike Balogh. I have just a

couple

22 of -- a comment and a couple of questions for Mr. Kanerva.

23 I just want to say that the car collectors and

enthusiasts,

24 we are not that wired, we are not that smart, and we are

not that

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1 organized. The car collector folks are quite interested

2 salvage vehicles, and are not sitting at their terminals

with a

3 big pocket of cash waiting to pounce on these. So the

fact that

4 ten days notice is considered reasonable, or even twenty

days, I

5 don't think it is really practical. So for most

organizations

6 and most clubs to really get the information out it is

almost a

7 thirty-day cycle, because we need to get together and --

8 HEARING OFFICER TIPSORD: Excuse me. I apologize

for

9 interrupting. But part of what you are already really

doing is

10 giving testimony, so if we could go ahead and have you

sworn now.

11 MR. BALOGH: Okay. I do have questions.

12 HEARING OFFICER TIPSORD: That is fine, but we might

13 well go ahead and have you sworn, because we will have you

sworn

14 to deliver your testimony anyway, and then what you have

already

15 said will be considered a sworn statement.

16 MR. BALOGH: Okay.

17 HEARING OFFICER TIPSORD: So let's go ahead and do

that,

18 please.

19 (Whereupon the witness was sworn by the Notary

Public.)

20 HEARING OFFICER TIPSORD: Okay. Go ahead.

21 MR. BALOGH: So, anyway, I think ten days is not

22 sufficient. If we want it to be practical and really

workable,

23 and if really that is the intent, and you want the intent,

and to

24 really be followed through and you want it to be

meaningful, it

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1 is not enough. I think about 30 days is really necessary.

2 know that cuts into the time, so I realize that.

3 I have a question. I would like to know how does --

4 looking at the clunkers for cash program that was done, if

you do

5 the math, one vehicle that was scrapped comes out to about

five

6 tons of hydrocarbons savings emissions. How does that one

ton,

7 how does that fit out in a daily output of emissions for

let's

8 say Com Ed? How does that fit in the big scheme of

things?

9 MR. KANERVA: Well, we haven't done a comparison in

here.

10 MR. BALOGH: Well, say, any stationary source.

11 MR. KANERVA: Well, Com Ed is not particularly a

large

12 emitter of VOCs. It emits NOx and S02 and what have you

in the

13 fossil fuel plants that it has. Of course, it is mostly

nuclear

14 facilities. Take a major VOC source in the Chicago area,

one we

15 have worked with is the 3M Company, Bedford Park, and they

are

16 somewhere at about 1,900 tons per year of VOCs, if I

recall

17 correctly.

18 MR. BALOGH: So 2,000 tons a year.

19 MR. KANERVA: Yes, rounded it off to 2,000 tons a

year, and

20 so you divide that to get your per day. And that's the

largest,

21 if not one of the -- well, it is one of the largest

sources in

22 the nonattainment area.

23 MR. BALOGH: I am just looking at the common sense

and the

24 scale aspect.

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1 The next question would be I know it was presented

in June

2 and it was presented as a no cost program, and I am

intimating no

3 cost to the tax payers. What would be the estimate of the

number

4 of people that the EPA would have to hire to administer

the

5 program in terms of training, auditing, reviewing and

compliance?

6 Because I think that is a valid cost.

7 MR. KANERVA: One of the aspects of the rule are

some

8 modest fee provisions to defray some costs. But I think

that

9 given the experience we have seen with this, there are not

10 hundreds of these. We are not trying to inspect a large

number

11 of people. So we basically felt that this was going to be

12 manageable within the sources that we had, basically.

13 If for some reason we get a different experience

with this,

14 like many, many companies doing small scrappage projects,

which

15 would add to our inspection load for the year, then we

would have

16 to assess it at that time. But there really has been no

17 indication that this would be a significant increase to

our

18 resource demand.

19 MR. BALOGH: The point is if it is not a significant

20 increase in the resource demand, it does not result in a

21 significant reduction in emissions based on vehicles, is

the way

22 I see it. This is a layman. Again, I am not privy to a

lot of

23 the things.

24 I have a question for Stan Ostrem. The way the

model is

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1 presented, you take -- let's say someone takes their 1983

Volare

2 and turns it in, and they turn around and they buy a 1995

3 Expedition. I would think that they are going to drive

that

4 newer car a lot more. So I am just wondering in the model

and in

5 all your big calculations, how do you come up with the

mileage on

6 that and the usage?

7 MR. OSTREM: Well, I don't claim to be an expert for

the

8 model. Maybe someone else like Darwin or Jim would be

able to

9 further answer that question.

10 MR. BALOGH: Okay. Because I don't see that in

there where

11 the anticipated mileage is. And that's what we are

talking about

12 for the annual emissions. I just don't think that these

older

13 cars are used that much.

14 MR. KANERVA: Well, now we are switching back and

forth

15 here. The original car, the older car, we have the -- we

will

16 have the mileage estimates from that, from the vehicle

testing

17 program. What I thought you -- and we know from the U.S.

EPA's

18 vehicle testing records what the new vehicle's expected

emissions

19 are going to be. That is available from the U.S. EPA's

mobile

20 model. So if it is an Expedition or if it is something

else,

21 whatever its emissions are, are available and documented

in that

22 record.

23 And then there is a continued estimate of the amount

24 miles traveled. If anything, we are probably

conservative,

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1 because if they get the newer vehicle with a greater

reliability

2 and what have you, they may drive more. So we have stayed

on the

3 conservative side in terms of what the future emissions

are going

4 to be -- or what the future travel mileage would be.

5 MR. BALOGH: It just seems -- also, I am still -- I

brought

6 this up at the June meeting. I am still concerned that we

don't

7 address -- now, are commercial vehicles still being

considered in

8 this program?

9 MR. KANERVA: At the moment, no.

10 MR. BALOGH: But aren't they a large source of

emissions?

11 MR. KANERVA: Well, this is not a vehicle emission

control

12 program in the sense of the federal emissions standard

controls.

13 This is aimed at a particular population of high-emitting

older

14 vehicles, essentially non collector, that are in service

and that

15 might make economic sense to take out of service to get

the

16 emission reductions to trade. It is not aimed at changing

the

17 control pattern that is being applied to the mobile

source, you

18 know, for vehicles.

19 MR. BALOGH: I think there should be some verbiage

in there

20 somewhere that this is being considered in the overall

plan of

21 the EPA for emissions reductions, because commercial

fleets are

22 such high polluters. I would ask that that be considered

in your

23 planning.

24 That's all I have. Should I read my testimony now?

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1 HEARING OFFICER TIPSORD: Are there any other

questions for

2 the Agency? All right. Seeing none, I thank you, and we

will

3 discuss off the record in a little bit the prefiling for

the next

4 hearing.

5 And then, Mr. Balogh, we will allow you to come up

to the

6 microphone and read your testimony.

7 MR. BALOGH: My name is Mike Balogh. I appreciate

the

8 opportunity to be here today. When I am here today I

would like

9 to say I represent not just myself and my clubs and our

10 association, but I think I speak for a lot of other car

11 enthusiasts. I will give you a little bit of background.

I have

12 two degrees in science, a Bachelor's and a Master's

degree. I

13 have 20 years experience in the federal government, nine

of which

14 were in the Washington, D.C. area. And I have over 35

years of

15 experience as a car enthusiast. So when I speak to you

today,

16 that's my background.

17 As a citizen of Illinois and a tax paper and an

automobile

18 collector or hobbyist, I strongly oppose the proposed

vehicle

19 scrappage plan drafted by the Illinois EPA, now before

this

20 Board. My view is widely shared by my friends and fellow

21 hobbyists. We consider this plan as flawed in a number of

ways

22 that I shall explain. We, too, want clean air and a

healthy

23 environment. This plan is not the prudent way and it

should not

24 be implemented.

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1 Number one, it diverts attention from the major

source of

2 emissions. A recent report by the American Automobile

3 Association, based on data from 25 major U.S. cities

provided by

4 their respective states and submitted to the U.S. EPA,

showed

5 that stationary sources are responsible for nearly half,

6 percent of pollution emissions. Pollution from cars and

trucks

7 has been significantly reduced since 1970, with another

8 significant reduction projected by 2005.

9 Thus, the main focus of emission reductions should

be on

10 smokestack polluters. Letting them buy emissions credits

versus

11 spending the money on reducing that pollution just does

not make

12 any kind of sense. California and Arizona have

implemented

13 similar plans of mixed results. Are they effective? And

I was

14 able to hear some of that background today, so I am better

15 informed on that now.

16 Number two, money spent by stationary polluters, the

17 primary source of emissions, should be spent on reducing

their

18 emissions and not buying credits. This plan only delays

the need

19 for stationary polluters to reduce those emissions.

20 Number three, the plan creates a new bureaucracy for

21 administration oversight of the program. The Illinois EPA

22 offered this as a no government cost program. It will

cost

23 because of all of the paper work to be completed and filed

24 contractors and credit buyers and the cost of government

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1 employees to monitor and enforce the plan's statutes.

There is a

2 cost to process and review this new bureaucratic program.

3 Without accompanying regulatory oversight, the

scrappage

4 program is ripe for fraud by contractors who will fudge

the

5 information about a vehicle, such as the condition when

inspected

6 and remaining vehicle life and the volume of emissions it

would

7 have produced. What contractors would not give figures

that

8 maximize their profits? Without tight oversight why

wouldn't all

9 scrappage contractors maximize or falsify those numbers?

In this

10 whole process the vehicles are essentially worthless and

pawns

11 since the emissions credits are the real commodity. Yes,

this

12 program will cost tax dollars.

13 Number four, vehicle emissions projections are

considered

14 flawed and, of course, that's by me and my fellow

hobbyists. The

15 plan does not seem to take into account the current

composition

16 of today's vehicle population. Firstly, it seems that

commercial

17 vehicles, which tend to have much higher emissions for

vehicle

18 overall volume compared to passenger vehicles, are not

addressed.

19 Again, a primary source of emissions is seemingly not

addressed

20 in the plan with a goal to reduce emissions.

21 Secondly, over half of all vehicles sold in the U.S.

now

22 are trucks and SUVs. These vehicles are very significant

gas

23 guzzlers, getting 12 to 14 miles per gallon, thus

collectively

24 creating huge volumes of unburned hydrocarbons/pollution

relative

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1 to traditional passenger cars. Again, why is this not

addressed?

2 Perhaps an Illinois Gas Guzzler Tax would be a better way

to go.

3 Number five, the target group of vehicles is

considered

4 flawed. The plan targets vehicles 1983 and older. From

the

5 Illinois EPA's own graph of 1999 data on vehicles by year

6 manufacturer in the Chicago area, there is a rapid

attrition of

7 vehicles by the year group to the 1983 year group. Then

you see

8 a cluster of year groups from 1983 back to 1977, and then

9 basically a flat line of earlier groups. In fact, the

entire

10 1976 to 1968 group are probably fewer vehicles than the

entire

11 1984 group.

12 If we can assume that these small figures per year

group

13 continue for pre 1968 vehicles, the question that the EPA

should

14 have considered is why the vehicle groups flatten out over

time.

15 There are two main reasons. In most cases dealer support

is no

16 longer available due to those vehicle's age. People are

keeping

17 these older vehicles because they voluntarily want to. It

18 highly unlikely that they are going to be enticed by a few

19 dollars that the scrappage contractor is going to offer.

And,

20 two, many of these vehicles are over 25 years old, and are

now

21 registered as antiques, so the same rationale about not

wanting

22 to scrap them applies.

23 Six, the target group of vehicles does not produce

the

24 volume of emissions assumed in the plan, because they are

simply

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1 not driven as often as newer vehicles. This is a fact.

This is

2 a matter of comparing a graph showing relative emissions

by year

3 group usage and applying common sense. Cars that are 20

years or

4 more older also require more maintenance. They are more

likely

5 to be kept in tune and driven less. Incidently, a Model A

Ford

6 and many similar antiques get about 30 miles per gallon.

7 Seven, the proposed plan bypasses state legislative

review.

8 Considering that this plan would affect the vast majority

9 Illinoisans and their vehicles, and could be expanded to

the

10 entire state, it should have undergone some sort of

legislative

11 review.

12 Number eight, it poses an unnecessary threat to the

pool of

13 original and restorable vehicles in Illinois. This plan

14 threatens the best of the remaining pool of our older

vehicles,

15 i.e., not junk or derelict ones, but ones registered in

operating

16 condition. When cars are crushed, they are gone. This

plan

17 unnecessarily jeopardizes the historical vehicle resources

of the

18 state. Although the Illinois EPA has accommodated some

desires

19 of automotive hobbyists since the plan, the vehicle

scrappage

20 plan would unnecessary scrap thousands of cars that might

be kept

21 as original examples of their model, be restored, or serve

22 parts cars for restoration.

23 Collector cars are a part of our industrial history

of this

24 state and nation. They are a source of pride for their

owners,

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1 and they provide enjoyment for those that see them

displayed.

2 Cars are necessarily scrapped every day. Why do we need

3 sacrifice our 17 year old and older cars for a scrappage

plan

4 that does not address the major sources of pollution in

the

5 state?

6 I ask you to consider all of these points on my

behalf, on

7 behalf of myself, and the countless citizens of our state

who

8 share these same views. Please don't enact this plan.

Michael

9 J. Balogh, Illini Collector Car Club, and Illinois Classic

Auto

10 Preservation Society Member. Thank you.

11 HEARING OFFICER TIPSORD: Thank you, Mr. Balogh.

Are there

12 any questions for Mr. Balogh?

13 I just have one. You noted that cars that are 25

years old

14 may be registered as antiques. Is that through a program

with

15 the Secretary of State's office, or how is that

registration

16 done? Could you --

17 MR. BALOGH: Sure, it is right through the --

18 HEARING OFFICER TIPSORD: -- give us a little bit of

19 information on that?

20 MR. BALOGH: Sure, it is right through the Secretary

21 State.

22 HEARING OFFICER TIPSORD: Do you file a special --

23 MR. BLISS: License plates and everything. You just

send

24 in the paper work.

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1 MR. BALOGH: It is for, what, five years?

2 MR. BLISS: I think it is down to two or three years

now.

3 MR. BALOGH: Two or three. Okay.

4 HEARING OFFICER TIPSORD: Could you identify

yourself,

5 please, for the court reporter.

6 MR. BLISS: My name is David Bliss. I am from

Taylorville.

7 I am one of the officers of the Illinois Classic Auto

8 Preservation Society, of which Mr. Balogh is a car club

member.

9 HEARING OFFICER TIPSORD: Okay. Mr. Bliss, could we

also

10 have you sworn so that --

11 MR. BLISS: Yes.

12 HEARING OFFICER TIPSORD: -- the statements you have

made or

13 will make, you are considered sworn.

14 MR. BLISS: Yes.

15 (Whereupon the witness was sworn by the Notary

Public.)

16 HEARING OFFICER TIPSORD: All right. Thank you, Mr.

Bliss.

17 Yes, Mr. Kanerva?

18 MR. KANERVA: However you want to handle this is

fine, but

19 in the testimony here it talks about this AAA data on 25

major

20 U.S. cities.

21 MR. BALOGH: Yes.

22 MR. KANERVA: And the 45 percent of emissions. We

brought

23 information regarding Illinois' specific situation in the

24 nonattainment area for the relative area for mobile and

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1 stationary sources, and it is dramatically different than

these

2 numbers. So we can either submit them as comment or

provide them

3 today, or whatever you prefer.

4 HEARING OFFICER TIPSORD: If you have them with you

today

5 we can put them in as an exhibit.

6 MR. KANERVA: Okay.

7 MR. BALOGH: Could I ask what the percentage is?

8 MR. BURKHART: Basically our 1990 emissions

inventory is

9 our baseline that we use from which we deduct all the

programs

10 that we have under the Clean Air Act and the voluntary

control

11 measures. But the 1990 baseline, the on road mobile

sources

12 comprised of 36 percent of the overall volatile organic

material

13 emissions, the VOM emissions, whereas stationary sources

comprise

14 about 25 and a half percent. And during our data

collection in

15 1996, for the 15 percent rate of progress plan, on road

mobile

16 sources made up over 37 percent, where stationary sources

were at

17 17 and a half percent, roughly.

18 The 1996, that is based on real emissions data. So

it is

19 consistent in our 1999 plan and our 2007 plan, and based

on our

20 projections it has mobile sources continuing to be about

21 percent on a frequent basis, basically 36 percent of the

overall

22 emissions inventory.

23 HEARING OFFICER TIPSORD: Dr. Flemal?

24 BOARD MEMBER FLEMAL: Mr. Burkhart, you are

referring to

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1 the Chicago metropolitan areas?

2 MR. BURKHART: That is correct, yes, that is for the

3 Chicago's nonattainment area, right.

4 HEARING OFFICER TIPSORD: In that case, would you

like to

5 move to have this --

6 MS. SAWYER: Sure. I would like to move to have

this

7 entered as an exhibit. It is all stapled together, so we

will

8 just enter it as one exhibit.

9 HEARING OFFICER TIPSORD: Is there any objection?

Seeing

10 none, we will mark this as Exhibit Number 1.

11 (Whereupon said document was duly marked for

purposes of

12 identification and entered into evidence as Hearing

Exhibit

13 Number 1 as of this date.)

14 HEARING OFFICER TIPSORD: Do you have any extra

copies of

15 this with you?

16 MS. SAWYER: I don't think we do.

17 HEARING OFFICER TIPSORD: Okay. We will make a

couple of

18 copies and make sure that you have a copy before you --

19 MR. BALOGH: My only comment would be that, again,

that is

20 a pie chart, and it is easy to subdivide and take the

target

21 group and see what percentage of the target group is

comprised of

22 that 36 percent, what that would be. And that gives you

kind of

23 a rule and a scale to say are you really effectively

attacking

24 the emissions.

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1 MR. RAO: Could you explain what you mean by target

group?

2 MR. BALOGH: Sure. I think he has quoted that there

is --

3 well, the target group in the vehicle scrappage. In other

words,

4 the --

5 MR. RAO: You mean that you want to --

6 MR. BALOGH: I am just saying that you don't have to

do it.

7 I am asking you to just look at it. Is it really

significant?

8 Will you really get a significant -- by scrapping a couple

9 thousand cars, or by sacrificing them, are you really

making

10 significant reductions, other than ones on paper, and are

you

11 really ignoring other reductions that could be done

through more

12 regulatory aspects on smokestack industries and other

means.

13 MR. KANERVA: We are really submitting that as an

exhibit

14 simply to provide what we feel is a more accurate

representation

15 of the Chicago area specific emissions inventory numbers,

because

16 the testimony here talks about nearly 47 percent being

stationary

17 source related. And we are just trying to clarify from

our

18 actual emissions inventory what the number is that we have

19 record with the EPA. That's all.

20 HEARING OFFICER TIPSORD: Thank you. Do you have

any other

21 questions? Any other questions for Mr. Balogh?

22 All right. Thank you very much, Mr. Balogh. We

appreciate

23 it.

24 MR. BALOGH: Thank you.

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1 HEARING OFFICER TIPSORD: And we will get you a copy

2 this exhibit before you leave today.

3 MR. BALOGH: Okay.

4 HEARING OFFICER TIPSORD: Mr. Bliss, you also signed

up.

5 MR. BLISS: Yes, ma'am.

6 HEARING OFFICER TIPSORD: Did you want to give any

7 additional remarks?

8 MR. BLISS: Other than concurring with what Mr.

Balogh has

9 had to say. Our only fear is that eventually this will

effect

10 all automobiles. And like he said, when the specific

model is

11 gone, it is gone forever. The auto manufacturers have

been able

12 to interchange parts with different cars and different

model

13 years. But when the older cars are gone, there will be no

source

14 of these parts, whether it be engines, doors, whatever.

15 And we think that eventually whatever is happening

16 Chicago and in the metro east St. Louis area will filter

through

17 the rest of the State of Illinois, and whatever was

originally

18 supposed to be voluntary will eventually become mandatory.

And

19 whether they say that is not true or not now, we don't

know what

20 the future holds.

21 HEARING OFFICER TIPSORD: Thank you. Are there any

22 questions for Mr. Bliss?

23 Okay. Mr. Scharf (spelled phonetically) you also

signed

24 up. Did you want to offer any testimony?

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1 MR. SCHARF: Yes. I am Jerry Scharf. I am with the

McLean

2 County Antique Auto Club.

3 HEARING OFFICER TIPSORD: All right. We need to

have you

4 sworn in.

5 MR. SCHARF: Fine.

6 (Whereupon the witness was sworn by the Notary

Public.)

7 MR. SCHARF: My name, again, is Jerry Scharf.

8 HEARING OFFICER TIPSORD: Could you step up to the

9 microphone. We are not going to be able to hear you from

back

10 there.

11 MR. SCHARF: Certainly.

12 HEARING OFFICER TIPSORD: Thank you.

13 MR. SCHARF: I am Jerry Scharf. I am with McLean

County

14 Antique Automobile Club. I have been an automobile

enthusiast

15 now for in the neighborhood of 35 years and twice

president of

16 the Bloomington-Normal Club, so I have a lot of

background. I am

17 formerly a school teacher, and I worked for a large

insurance

18 company in Bloomington. I am sure you know who that is.

I just

19 retired from there, but anyway, I wanted to give you a

little

20 background.

21 I certainly concur with the testimony given by Mr.

Balogh

22 and Mr. Bliss. I think that -- unfortunately, I did not

have a

23 copy of the proposed ruling here or the proposed program

that we

24 are talking about prior to coming in here, so I have a

little bit

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1 of a disadvantage from that standpoint. But I think

probably one

2 of our bigger concerns is a lot of the -- a lot of these

cars in

3 the late 1970s and into and through the 1980s become

collector

4 cars. Many of those cars, obviously, are going to be

located in

5 the metropolitan areas because that is where more people

are and

6 there are more vehicles located there. And with the

premature

7 disposal of these vehicles, especially those that will

have a

8 collector interest on down the road, there will be less of

those

9 cars available and, of course, obviously, parts will

become a

10 problem, too.

11 So that's -- I just wanted to go on the record as

saying

12 that, and I appreciate the opportunity to speak here

today.

13 HEARING OFFICER TIPSORD: Are there any questions?

I would

14 just note that we are going to be holding a second hearing

15 Chicago, and we will also allow final comments after that

second

16 hearing, so after you have had a chance to look at the

proposal

17 if you want to come back and talk to us again in Chicago

or file

18 comments, you are more than welcome to.

19 MR. SCHARF: All right. Thank you.

20 HEARING OFFICER TIPSORD: Thank you. Yes, Mr.

Bliss?

21 MR. BLISS: Madam Chairman, there is not only auto

22 collectors or auto enthusiasts, there are those that

cannot

23 afford to collect a car. And if need be we could probably

get a

24 million signatures of auto enthusiasts throughout the

state.

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1 What we are vehemently opposed to is jumping together of

apples

2 and oranges, that is stationary as opposed to mobile

polluters.

3 And we just don't understand how that mobile polluters,

you can

4 buy the credits to continue with the stationary polluters.

5 think that we should be lumped together. Stationary

polluters

6 should have to trade their credits between the newer

factories

7 and the older factories that are the gross polluters. We

just

8 don't see how you can compare the two as opposed to

forming of

9 the pollution credits.

10 HEARING OFFICER TIPSORD: All right. Thank you.

Was there

11 anyone else who wished to offer comments today, testify?

12 Okay. Seeing none, let's go off the record for just

13 minute.

14 (Discussion off the record.)

15 HEARING OFFICER TIPSORD: All right. We are back on

the

16 record then.

17 At this time I would like to remind everyone that we

are

18 scheduled for a second hearing in Chicago. Specifically,

the

19 hearing will be at 100 West Randolph, the Thompson Center,

and it

20 is Room 9040. That hearing is scheduled for March 24th.

That

21 hearing will also start at 10:00 a.m. I believe that's a

Friday.

22 Yes, it is Friday, March 24th. We will not require

prefiling of

23 testimony. If anyone wishes to testify, they may come in

and

24 sign up and we will allow testimony in that manner.

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1 At this time I would really like to thank all of you

for

2 your time and attention. It has been really helpful. We

have

3 gotten some good comments.

4 I would also like to ask if any of the Board Members

5 present have anything they would like to add at this time?

6 BOARD MEMBER McFAWN: It is not substantive. I

would just

7 add that for those of you not familiar with our process,

our

8 transcripts are available on the web site, so they could

9 reviewed before the next hearing. If you have further

questions

10 of the Agency or of the participants in general you can

bring

11 them up at the 24th meeting.

12 HEARING OFFICER TIPSORD: Thank you. I always

forget to

13 mention the web site. Those are posted rather quickly, so

that

14 this will be available -- the transcript will be available

15 three business days, so I would say within a week it will

16 available on the web for review.

17 All right. Thank you again very much, and if there

18 nothing further, we will draw this hearing to a close.

19 Yes, Mr. Bliss?

20 MR. BLISS: I learned about this probably only about

two

21 days before the deadline for filing to be heard. I think

you

22 need to get it out to the public maybe a month ahead of

time

23 prior to another meeting, other than the one in Chicago.

24 HEARING OFFICER TIPSORD: I would just note that all

of our

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1 hearings are public noticed in the newspaper 30 days in

advance

2 of the hearing.

3 MR. BLISS: Okay. Is that every newspaper in the

State of

4 Illinois or just certain ones or what?

5 HEARING OFFICER TIPSORD: I believe this one was

done in

6 eleven newspapers. Because it is an air rule, it was done

7 eleven newspapers in the eleven regions. It is a 30 day

notice.

8 I believe it was actually 28 in some of the newspapers,

because

9 some of the newspapers are weekly newspapers. So I

believe it

10 was only 28 days before this hearing. But both hearings

were

11 noticed at least 20 days in advance.

12 MR. BLISS: I understood that this has always been

-- the

13 way I found out was through Old Cars Weekly, which is a

weekly

14 automotive newspaper. I take the Illinois State Journal

15 daily, and I did not notice it in there.

16 HEARING OFFICER TIPSORD: I am pretty sure the

Springfield

17 newspaper is one of them. Quite frankly, I think the

Champaign

18 newspaper may be one, as well. There are also a couple of

weekly

19 newspapers in that, that eleven. We do eleven regions in

the

20 state, and so it is broken up in eleven regions. And

although

21 this is probably not necessarily a federally driven rule,

we did

22 take this as if it were, and did use the eleven regions.

We also

23 submitted the proposal to libraries in those eleven

regions as

24 well as putting notice of the hearing in our Environmental

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1 Register and on our web page.

2 So I apologize if you heard of it late. I hope that

with

3 the second hearing if there is anything further you would

like to

4 add that you can join us there. And, again, I want to

reiterate

5 that we will have final comments due sometime after that

last

6 hearing, and so you will have yet another opportunity to

file

7 written comments.

8 MR. BLISS: Okay.

9 HEARING OFFICER TIPSORD: Anything else? Okay.

Then we

10 are --

11 MR. BLISS: Thank you for having this hearing.

12 HEARING OFFICER TIPSORD: All right. We are

adjourned.

13 Thank you.

14 (Hearing Exhibit 1 was retained by

15 Hearing Officer Tipsord.)

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1 STATE OF ILLINOIS )

) SS

2 COUNTY OF MONTGOMERY)

3 C E R T I F I C A T E

5 I, DARLENE M. NIEMEYER, a Notary Public in and for

the

6 County of Montgomery, State of Illinois, DO HEREBY CERTIFY

that

7 the foregoing 91 pages comprise a true, complete and

correct

8 transcript of the proceedings held on the 1st of March

A.D.,

9 2000, at 600 South Second Street, Suite 403, Springfield,

10 Illinois, In the Matter of: Vehicle Scrappage Activities,

35 Ill.

11 Adm. Code 207, in proceedings held before the Honorable

Marie

12 Tipsord, Hearing Officer, and recorded in machine

shorthand by

13 me.

14 IN WITNESS WHEREOF I have hereunto set my hand and

affixed

15 my Notarial Seal this 3rd day of March A.D., 2000.

Notary Public and

20 Certified Shorthand Reporter and

Registered Professional Reporter

22 CSR License No. 084-003677

My Commission Expires: 03-02-2003

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