AGC’s General Counsel Negotiates Compromise on California Emissions Rule

In 2007, the California Air Resources Board (CARB) set in motion strict off-road diesel emissions rules that could have had long-range impact on contractors and equipment suppliers. When the recession hit the state particularly hard, the CARB rules, based data that was questioned from the outset, seemed unfair and costly. Officials estimated the equipment replacements and upgrades would cost billions of dollars.

Enter Michael Kennedy, the Associated General Contractors of America’s general counsel. In a two-year journey filled with sometimes contentious board and private meetings, Kennedy took the industry’s lead in addressing the issue and negotiating a compromise, which occurred on Oct. 8 and was confirmed by CARB on Dec. 16. Due to the recession, the rules have been revised and now are based on far lower estimates of off-road diesel-equipment emissions. Plus, the start of requirements will be delayed until Jan. 1, 2014.

“I think this California rule-making issue was always viewed as a national issue,” says Kennedy. “Had the board allowed the rule to be enforced, any state would have been free to adopt the same rule, jeopardizing the viability of AGC member companies across the U.S.”

Kennedy says the industry always has taken the position that it has to do its part to improve environmental conditions from coast to coast, and evolving changes in diesel technology will play a significant role in meeting the emissions challenges in the next few years.

“Our successful negotiation shows that when industry representatives sit down in good faith with government regulators, the public gets the benefit of standards that address valid economic concerns,” says Mary Nichols, CARB chairman. “Mike is a forceful advocate who is able to articulate the concerns of his organization’s members clearly, but he also brings a national perspective on the role of the construction industry in building the new economy. The agreement with CARB provides a strong basis for a future relationship and will ultimately help the construction industry be a leader in greening its operations in the nation.”

Stephen Sandherr, AGC’s CEO, says, “Mike made himself an expert in California’s regulatory process and also mastered the intricacies of diesel emission and the way states and the federal government estimate it.” By figuring out the flaws in the current methodology, “Mike helped find a better way” to both safeguard air quality and protect jobs, Sandherr says.