BILL ANALYSIS Ó ACR 112 Page 1 Date of Hearing: May 3, 2016 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair ACR 112 (Hadley) - As Introduced January 7, 2016 SUBJECT: State Air Resources Board SUMMARY: Describes the events that led to the discovery of the Volkswagen defeat devices. Declares that the Legislature thanks the State Air Resources Board (ARB) for its exemplary work uncovering the Volkswagen defeat devices. EXISTING LAW: 1)Declares that the Legislature finds emissions of air pollutants from motor vehicles is the primary cause of air pollution in many parts of the state. 2)Requires ARB to endeavor to achieve the maximum degree of emission reductions possible from vehicular and other mobile sources in order to achieve attainment of state ambient air standards. 3)Requires ARB to adopt and implement emission standards for new motor vehicles that ARB finds to be necessary and ACR 112 Page 2 technologically feasible. 4)Prohibits a new motor vehicle or new motor vehicle engine from being certified by ARB, unless the vehicle or engine meets the emission standards adopted by ARB. 5)Prohibits a new motor vehicle required to meet the emission standards adopted by the state from being sold and registered in this state unless the new motor vehicle manufacturer permits ARB to conduct surveillance testing of emissions of new motor vehicles. 6)Requires ARB to establish criteria for the evaluation of the effectiveness of motor vehicle pollution control devices. 7)Prohibits a person from installing, selling, or offering for sale any device, apparatus, or mechanism intended for use with, or as a part of, a required motor vehicle pollution control device or system that alters or modifies the original design or performance of the motor vehicle pollution control device or system. 8)Establishes civil penalties for violations of new motor vehicle emission standards or altering or modifying the motor vehicle pollution control device. FISCAL EFFECT: Non-fiscal ACR 112 Page 3 COMMENTS: 1)Background. Current scientific evidence links short-term nitrogen dioxide (NO2) exposures, ranging from 30 minutes to 24 hours, with adverse respiratory effects including airway inflammation in healthy people and increased respiratory symptoms in people with asthma. Also, studies show a connection between breathing elevated short-term NO2 concentrations and increased visits to emergency departments and hospital admissions for respiratory issues, especially asthma. Oxides of nitrogen (NOx) react with ammonia, moisture, and other compounds to form small particles. These small particles penetrate deeply into sensitive parts of the lungs and can cause or worsen respiratory disease, such as emphysema and bronchitis, and can aggravate existing heart disease, leading to increased hospital admissions and premature death. Ozone is formed when NOx and volatile organic compounds react in the presence of heat and sunlight. Children, the elderly, people with lung diseases, such as asthma, and people who work or exercise outside are at risk for adverse effects from ozone. These include reduction in lung function and increased respiratory symptoms, as well as respiratory-related emergency department visits, hospital admissions, and possibly premature deaths. Emissions that lead to the formation of NO2 generally also lead to the formation of other NOx. These gases form when fuel is burned at high temperatures and come principally from motor vehicle exhaust and stationary sources, such as electric generators and industrial boilers. Emissions control measures ACR 112 Page 4 leading to reductions in NO2 can generally be expected to reduce population exposures to all gaseous NOx. This may have the important co-benefit of reducing the formation of ozone and fine particles (PM), both of which pose significant public health threats. California and the federal government have developed air quality standards for NO2, ozone, and PM. 2)Volkswagen. New motor vehicles and engines must be certified by ARB for emission compliance before they are legal for sale, use, or registration in California. New motor vehicles are subject to emission tests to verify that compliance. According to a Volkswagen PowerPoint that was discovered as part of the defeat device investigation, ten years ago Volkswagen engineers realized that the emissions control equipment installed in their diesel engines did not have the durability to meet the federal and California's emissions standards. Durable and effective emissions control equipment would have cost Volkswagen hundreds of dollars more per vehicle and would have increased the sticker price to consumers. Instead of pursuing the more expensive emission control equipment, Volkswagen developed software, known as a defeat device, that could detect when the vehicle was being put through an emission test and activate the emissions control equipment only for the purposes of passing the test. This would extend the life of the emissions control equipment and allow Volkswagen to appear to be in compliance with federal and California emissions standards. However, when not being tested, the vehicles were emitting up to 40 times the legal limit. The events that lead to the discovery of Volkswagen's defeat device began when the Center for Alternative Fuels, Engines and Emissions at West Virginia University was attempting to ACR 112 Page 5 understand the difference between vehicle emissions in real-world conditions and lab performance in both America and Europe. The real-world emissions of a Volkswagen Passat and Jetta were much higher than the lab tests at ARB's El Monte lab. This prompted ARB to open an investigation on the discrepancy. Eventually, Volkswagen's engineers admitted they were using defeat devices to ARB. Volkswagen is now subject to both federal and state investigations and enforcement actions. In addition, there have been various lawsuits against the company. On April 21, 2016, several parties to the various lawsuits stated in federal court they have reached an agreement in principle to address approximately 480,000 of 2.0 liter engine vehicles that had defeat devices. The settlement would give consumers several options to return their vehicles or have their vehicles modified. The settlement will also deal with compensation for consumers and how to remediate excess emissions. Details of the settlement are currently being worked out. 3)Thanks? This resolution thanks ARB for its role in discovering the defeat device. However, a thanks might not be enough. The defeat device was initially used in 2009 models and was not discovered until 2015. Court documents reveal that Volkswagen thought their chances of getting caught were slim. In addition, a law firm hired by Volkswagen indicated that previous fines for violating emissions limits did not outweigh the financial benefits of the defeat devices. The author and committee may wish to amend the resolution to declare that ARB should verify more emission tests under ACR 112 Page 6 real-world conditions and penalties for cheating emission tests should be enhanced to deter future efforts to circumvent emission standards. 4)Amendments. The author and committee may wish to amend the bill to fix technical errors in resolution and clarify ARB's role in the incident. REGISTERED SUPPORT / OPPOSITION: Support Professional Engineers in California Government Opposition None on file Analysis Prepared by:Michael Jarred / NAT. RES. / (916) 319-2092 ACR 112 Page 7