[Federal Register Volume 80, Number 163 (Monday, August 24, 2015)]
[Proposed Rules]
[Pages 51147-51151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20749]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2015-0489; FRL-9932-74-Region 9]


Revision to the California State Implementation Plan; San Joaquin 
Valley; Demonstration of Creditable Emission Reductions from Economic 
Incentive Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve a demonstration of creditable emission reductions submitted by 
California for approval into the San Joaquin Valley (SJV) portion of 
the California State Implementation Plan (SIP). This SIP submittal 
demonstrates that certain state mobile source incentive funding 
programs have achieved specified amounts of reductions in emissions of 
nitrogen oxides (NOX) and fine particulate matter 
(PM2.5) in the SJV area by 2014. The effect of this action 
would be to approve these amounts of emission reductions for credit 
toward an emission reduction commitment in the California SIP. We are 
taking comments on this proposal and plan to follow with a final 
action.

DATES: Written comments must be received on or before September 23, 
2015.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R09-OAR-2015-0489, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. Email: [email protected]
    3. Mail or deliver: Andrew Steckel (AIR-4), U.S. Environmental 
Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 
94105-3901. Deliveries are only accepted during the Regional Office's 
normal hours of operation.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at http://www.regulations.gov, including any personal information provided, 
unless the comment includes Confidential Business Information (CBI) or 
other information whose disclosure is restricted by statute. 
Information that you consider CBI or otherwise protected should be 
clearly identified as such and should not be submitted through http://www.regulations.gov or email. http://www.regulations.gov is an 
anonymous access system, and EPA will not know your identity or contact 
information unless you provide it in the body of your comment. If you 
send email directly to EPA, your email address will be automatically 
captured and included as part of the public comment. If EPA cannot read 
your comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment.
    Docket: Generally, documents in the docket for this action are 
available electronically at www.regulations.gov and in hard copy at EPA 
Region IX, 75 Hawthorne Street, San Francisco, California. While all 
documents in the docket are listed at www.regulations.gov, some 
information may be publicly available only at the hard copy location 
(e.g., copyrighted material, large maps), and some may not be publicly 
available in either location (e.g., CBI). To inspect the hard copy 
materials, please schedule an appointment during normal business hours 
with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Idalia Perez, EPA Region IX, 
[email protected], (415) 972-3248.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'' and 
``our'' refer to EPA.

Table of Contents

I. Background
II. The State's Submittal
III. EPA's Evaluation of the State's Submittal
    A. SIP Procedural Requirements
    B. EPA Policy on Economic Incentives
    C. Sections 110(l) and 193 of the Act
IV. Proposed Action and Public Comment
V. Statutory and Executive Order Reviews

I. Background

    On July 18, 1997, EPA established new national ambient air quality 
standards (NAAQS) for particles less than or equal to 2.5 micrometers 
([micro]m) in diameter (PM2.5), including an annual standard 
of 15.0 micrograms per cubic meter ([micro]g/m\3\) based on a 3-year 
average of annual mean PM2.5 concentrations, and a 24-hour 
(daily) standard of 65 [micro]g/m\3\ based on a 3-year average of 98th 
percentile 24-hour PM2.5 concentrations.\1\ EPA established 
these standards after considering substantial evidence from numerous 
health studies demonstrating that serious health effects are associated 
with exposures to PM2.5 concentrations above these levels.
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    \1\ 62 FR 36852 (July 18, 1997) and 40 CFR 50.7. Effective 
December 18, 2006, EPA strengthened the 24-hour PM2.5 
NAAQS by lowering the level to 35 [micro]g/m\3\. 71 FR 61144 
(October 17, 2006) and 40 CFR 50.13. Effective March 18, 2013, EPA 
strengthened the annual PM2.5 NAAQS by lowering the level 
to 12 [micro]g/m\3\. 78 FR 3086 (January 15, 2013) and 40 CFR 50.18. 
In this preamble, all references to the PM2.5 NAAQS, 
unless otherwise specified, are to the 1997 24-hour standard (65 
[micro]g/m\3\) and annual standard (15.0 [micro]g/m\3\) as codified 
in 40 CFR 50.7.
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    Following promulgation of a new or revised NAAQS, EPA is required 
under Clean Air Act (CAA) section 107(d) to designate areas throughout 
the nation as attaining or not attaining the NAAQS. On January 5, 2005, 
EPA published initial air quality designations for the 1997 annual and 
24-hour PM2.5 NAAQS, using air quality monitoring data for 
the three-year periods of 2001-2003 and 2002-2004.\2\ These 
designations became effective April 5, 2005.\3\ EPA designated the San 
Joaquin Valley (SJV) area \4\ as nonattainment for both the 1997 annual 
PM2.5 standard (15.0 [micro]g/m\3\) and the 1997 24-hour 
PM2.5 standard (65 [micro]g/m\3\).\5\
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    \2\ 70 FR 944 (January 5, 2005).
    \3\ Id.
    \4\ The SJV area encompasses over 23,000 square miles and 
includes all or part of eight counties in California's central 
valley: San Joaquin, Stanislaus, Merced, Madera, Fresno, Tulare, 
Kings, and Kern. For a precise description of the geographic 
boundaries of the San Joaquin Valley nonattainment area, see 40 CFR 
81.305.
    \5\ 40 CFR 81.305.
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    Between 2007 and 2011, California made six SIP submittals to 
address nonattainment area planning

[[Page 51148]]

requirements for the 1997 PM2.5 NAAQS in the SJV.\6\ We 
refer to these submittals collectively as the ``2008 PM2.5 
Plan.'' On November 9, 2011, EPA approved all elements of the 2008 
PM2.5 Plan except for the contingency measures, which EPA 
disapproved.\7\ As part of this action, EPA approved, inter alia, 
commitments by the California Air Resources Board (CARB) and the 
SJVUAPCD to achieve specific amounts of NOX and 
PM2.5 emission reductions by 2014.\8\ In July 2013, the 
State submitted a revised PM2.5 contingency measure plan for 
the SJV, which EPA fully approved in May 2014.\9\
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    \6\ 76 FR 69896 at n. 2 (November 9, 2011).
    \7\ Id. at 69924.
    \8\ 76 FR 69896, 69926 (codified at 40 CFR 
52.220(c)(356)(ii)(B)(2) and 52.220(c)(392)(ii)(A)(2)).
    \9\ 79 FR 29327 (May 22, 2014).
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    On May 20, 2015, the Ninth Circuit Court of Appeals issued its 
decision in a challenge to EPA's November 9, 2011 action on the 2008 
PM2.5 Plan.\10\ In Committee for a Better Arvin et. al v. 
EPA (Case Nos. 11-73924 and 12-71332) (CBA), the court held that EPA 
violated the CAA by approving the 2008 PM2.5 Plan even 
though the plan did not include certain state-adopted mobile source 
emission standards on which the plan relied to achieve its emission 
reduction goals.\11\ The CBA court remanded EPA's action on the 2008 
PM2.5 Plan for further proceedings consistent with the 
decision but did not vacate EPA's action.\12\ Thus, absent an EPA 
rulemaking to withdraw or revise the Agency's November 2011 approval of 
the emission reduction commitments in the 2008 PM2.5 Plan, 
these commitments remain enforceable components of the California 
SIP.\13\
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    \10\ Committee for a Better Arvin et al v. EPA, Case Nos. 11-
73924 and 12-71332, 2015 U.S. App. LEXIS 8295 (9th Cir. 2015).
    \11\ Id.
    \12\ Id.
    \13\ See n. 8, supra.
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II. The State's Submittal

    CARB adopted the ``Report on Reductions Achieved from Incentive-
based Emission Reduction Measures in the San Joaquin Valley'' (Emission 
Reduction Report) on October 24, 2014 and submitted it to EPA as a 
revision to the California SIP on November 17, 2014. On May 17, 2015, 
the Emission Reduction Report submittal became complete by operation of 
law under CAA section 110(k)(1)(B).
    The purpose of the Emission Reduction Report is to demonstrate that 
certain mobile source incentive funding programs implemented in the SJV 
area have achieved specified amounts of NOX and 
PM2.5 emission reductions by January 1, 2014 and to thereby 
satisfy a portion of the 2014 emission reduction commitments approved 
into the SIP as part of EPA's November 2011 action on the 2008 
PM2.5 Plan.\14\ Specifically, the Emission Reduction Report 
documents the State's bases for concluding that a total of 2,286 
incentive projects implemented in the SJV pursuant to the Carl Moyer 
Memorial Air Quality Standards Attainment Program (Carl Moyer Program) 
and the Proposition 1B: Goods Movement Emission Reduction Program (Prop 
1B Program) have achieved a total of 7.8 tons per day (tpd) of 
NOX emission reductions and 0.2 tpd of PM2.5 
emission reductions in the SJV, which may be credited toward the 
State's 2014 emission reduction commitment.\15\
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    \14\ Emission Reduction Report at 1-2.
    \15\ Emission Reduction Report at 24, Table 3 (``Total 2014 
Incentive-Based Emission Reductions''), Appendix H.1 (``SIP 
Creditable Incentive Projects in the San Joaquin Valley (Moyer 
Program)'') and Appendix H.2 (``SIP Creditable Incentive Projects in 
the San Joaquin Valley (Prop 1B)'').
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    The SIP submittal for the Emission Reduction Report includes eight 
appendices containing documentation to support the State's conclusions. 
First, Appendix A through Appendix E contain relevant excerpts from the 
Carl Moyer Program and Prop 1B Program guidelines \16\ that apply to 
specifically identified types of incentive projects. Table 1 identifies 
the selected project types and relevant portions of the incentive 
program guidelines that govern their implementation.
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    \16\ Under both the Carl Moyer Program and the Prop 1B Program, 
CARB adopts or approves program ``guidelines'' that specify, among 
other things, terms and conditions that must apply to each grant of 
incentive funds to an applicant. See California Health & Safety Code 
sections 44275 et seq. (establishing Carl Moyer Program) and 39625 
et seq. (establishing Prop 1B Program).

                                 Table 1
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                                        Applicable guideline  (relevant
             Project type                          portions)
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Carl Moyer Program: Off-road           The Carl Moyer Program
 equipment repower, replacement, and    Guidelines, Approved Revision
 retrofit projects.                     2005, part I, ``Program Overview
                                        and Administrative
                                        Requirements,'' and part II,
                                        chapter 5, ``Compression-
                                        Ignition Off-Road Equipment''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revision
                                        2008, part I, chapter 5, ``Off-
                                        Road Compression-Ignition
                                        Equipment,'' and Part III,
                                        ``Program Administration''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revisions
                                        2011, part I, chapter 3,
                                        ``Program Administration,'' and
                                        chapter 7, ``Off-Road
                                        Compression-Ignition
                                        Equipment''.
Carl Moyer Program: Portable and       The Carl Moyer Program
 stationary agricultural source         Guidelines, Approved Revision
 repower projects.                      2005, part I, ``Program Overview
                                        and Administrative
                                        Requirements,'' and part II,
                                        chapter 10, ``Agricultural
                                        Sources''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revision
                                        2008, part I, chapter 10,
                                        ``Agricultural Sources,'' and
                                        Part III, ``Program
                                        Administration''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revisions
                                        2011, part I, chapter 3,
                                        ``Program Administration,'' and
                                        chapter 10, ``Portable and
                                        Stationary Agricultural
                                        Sources''.
Prop 1B Program: On-road vehicle       Proposition 1B: Goods Movement
 replacement projects.                  Emission Reduction Program,
                                        Final Guidelines for
                                        Implementation, 2008, Section
                                        II, ``ARB Program
                                        Administration,'' Section III,
                                        ``Local Agency Project,''
                                        Section IV, ``General Equipment
                                        Project Requirements,'' and
                                        appendix A, ``Trucks Serving
                                        Ports and Intermodal Rail
                                        Yards''.
                                       Proposition 1B: Goods Movement
                                        Emission Reduction Program,
                                        Final Guidelines for
                                        Implementation, 2008, Section
                                        II, ``ARB Program
                                        Administration,'' Section III,
                                        ``Local Agency Project,''
                                        Section IV, ``General Equipment
                                        Project Requirements,'' and
                                        appendix B, ``Other Heavy Duty
                                        Diesel Trucks''.

[[Page 51149]]

 
                                       Proposition 1B: Goods Movement
                                        Emission Reduction Program,
                                        Final Guidelines for
                                        Implementation, 2010, Section
                                        II, ``ARB Program
                                        Administration,'' Section III,
                                        ``Local Agency Project
                                        Proposal,'' Section IV, ``Local
                                        Agency Project Implementation,''
                                        Section V, ``State Agency
                                        Project Implementation,''
                                        Section VI, ``General Equipment
                                        Project Requirements,'' and
                                        appendix A, ``Heavy Duty Diesel
                                        Trucks''.
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Source: Emission Reduction Report at 5, 10, 14, and 17.

    Second, Appendix F and Appendix G contain CARB's demonstrations 
that the identified portions of the Carl Moyer Program and Prop 1B 
Program guidelines adequately address EPA's recommended ``integrity 
elements'' by ensuring that the resulting emission reductions are 
quantifiable, surplus, enforceable, and permanent.\17\ We refer to 
these analyses as the State's ``integrity demonstrations'' for these 
components of the Carl Moyer Program and Prop 1B Program.
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    \17\ Under longstanding EPA guidance, emission reductions 
achieved through economic incentives and other nontraditional 
emission reduction measures must be quantifiable, surplus, 
enforceable, and permanent in order to qualify for SIP emission 
reduction credit under the CAA. See, e.g., ``Guidance on 
Incorporating Voluntary Mobile Source Emission Reduction Programs in 
State Implementation Plans (SIPs),'' October 24, 1997 (``1997 
VMEP'') at 6-7; ``Improving Air Quality with Economic Incentive 
Programs,'' U.S. EPA, Office of Air and Radiation, January 2001 
(EPA-452/R-01-001) (``2001 EIP Guidance'') at section 4.1; 
``Incorporating Emerging and Voluntary Measures in a State 
Implementation Plan,'' September 2004 (``2004 Emerging and Voluntary 
Measures Guidance'') at 3-4; and ``Diesel Retrofits: Quantifying and 
Using Their Emission Benefits in SIPs and Conformity,'' February 
2014 (``2014 Diesel Retrofits Guidance'') at 27-29.
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    Third, Appendix H lists each of the 832 Carl Moyer Program projects 
and 1,454 Prop 1B Program projects funded pursuant to the identified 
program guidelines that the State has relied upon in the Emission 
Reduction Report. For each of these projects, Appendix H identifies the 
``equipment project ID,'' contract term (project life), post-inspection 
date, adoption year of the applicable incentive program guideline, and 
NOX and/or PM2.5 emission reductions achieved in 
2014, in pounds per year (lbs/yr).
    The Carl Moyer Program is a California grant program established in 
1998 that provides funding to encourage the voluntary purchase of 
cleaner-than-required engines, equipment, and other emission reduction 
technologies.\18\ In its first 12 years, the Carl Moyer Program 
provided over $680 million in state and local funds to reduce air 
pollution from equipment statewide, e.g., by replacing older trucks 
with newer, cleaner trucks, retrofitting controls on existing engines, 
and encouraging the early retirement of older, more polluting 
vehicles.\19\
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    \18\ See generally CARB, ``The Carl Moyer Program Guidelines, 
Approved Revisions 2011,'' Release Date: February 8, 2013, at 
Chapter 1 (available electronically at http://www.arb.ca.gov/msprog/moyer/moyer.htm).
    \19\ Id.
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    The Prop 1B Program is a California grant program established in 
2007, as a result of State bond funding approved by voters, which 
provides $1 billion in funding to CARB to reduce air pollution 
emissions and health risks from freight movement along California's 
priority trade corridors. Under the enabling legislation (California 
Senate Bill 88 and Assembly Bill 201 (2007)), CARB awards grants to 
fund projects proposed by local agencies that are involved in freight 
movement or air quality improvements associated with goods movement 
activities. Upon receipt of such grants, the local agencies are then 
responsible for providing financial incentives to owners of equipment 
used in freight movement to upgrade to cleaner technologies, consistent 
with program guidelines adopted by CARB.\20\
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    \20\ See generally ``Strategic Growth Plan Bond Accountability, 
Goods Movement Emission Reduction Program,'' Approved February 27, 
2008 (available at http://www.arb.ca.gov/bonds/gmbond/docs/gm_accountability_with_links_2-27-08.pdf).
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III. EPA's Evaluation of the State's Submittal

A. SIP Procedural Requirements

    Sections 110(a)(2) and 110(l) of the Act require that revisions to 
a SIP be adopted by the State after reasonable notice and public 
hearing. EPA has promulgated specific procedural requirements for SIP 
revisions in 40 CFR part 51, subpart F. These requirements include 
publication of notices, by prominent advertisement in the relevant 
geographic area, of a public hearing on the proposed revisions, a 
public comment period of at least 30 days, and an opportunity for a 
public hearing.
    CARB's November 17, 2014 SIP submittal includes public process 
documentation for the Emission Reduction Report, including 
documentation of a duly noticed public hearing held by the State on 
October 24, 2014. On October 24, 2014, CARB adopted the Emission 
Reduction Report as a revision to the California SIP and submitted it 
to EPA on November 17, 2014 for action pursuant to CAA section 110(k) 
of the Act. We find that the process followed by CARB in adopting the 
Emission Reduction Report complies with the procedural requirements for 
SIP revisions under CAA section 110 and EPA's implementing regulations.

B. EPA Policy on Economic Incentives

    The CAA explicitly provides for the use of economic incentives as 
one tool for states to use to achieve attainment of the NAAQS.\21\ 
Economic incentive programs (EIPs) use market-based strategies to 
encourage the reduction of emissions from stationary, area, and/or 
mobile sources in an efficient manner. EPA has promulgated regulations 
for statutory EIPs required under section 182(g) of the Act and has 
issued guidance for discretionary EIPs.\22\ In light of the increasing 
incremental cost associated with further stationary and mobile source 
emission reductions and the difficulty of identifying such additional 
sources of emissions reductions in many areas, EPA encourages 
innovative approaches to reducing emissions through EIPs and other 
nontraditional measures and programs, including ``voluntary'' and 
``emerging'' measures.\23\
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    \21\ See, e.g., CAA section 110(a)(2)(A) (requiring that each 
SIP ``include enforceable emission limitations and other control 
measures, means, or techniques (including economic incentives such 
as fees, marketable permits, and auctions of emissions rights), as 
well as schedules and timetables for compliance, as may be necessary 
or appropriate to meet the applicable requirements of [the Act]''); 
see also sections 172(c)(6), 183(e)(4).
    \22\ See 59 FR 16690 (April 7, 1994) (codified at 40 CFR part 
51, subpart U) and 2001 EIP Guidance.
    \23\ See generally 1997 VMEP; 2004 Emerging and Voluntary 
Measures Guidance; 2014 Diesel Retrofits Guidance; and ``Guidance on 
Incorporating Bundled Measures in a State Implementation Plan,'' 
August 16, 2005 (``2005 Bundled Measures Guidance'').
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    We provide below a summary of our evaluation of the Emission 
Reduction Report and related incentive program

[[Page 51150]]

guidelines. Our Technical Support Document (TSD) contains a more 
detailed evaluation of the SIP submittal.
1. Programmatic ``integrity elements''
    Where a State relies upon a discretionary EIP or other 
nontraditional emission reduction measure in a SIP submittal, EPA 
evaluates the programmatic elements of the measure to determine whether 
the resulting emission reductions are quantifiable, surplus, 
enforceable and permanent.\24\ These four fundamental ``integrity 
elements,'' which apply to all discretionary EIPs and other innovative 
measures relied on for SIP purposes, are designed to ensure that such 
measures satisfy the applicable requirements of the Act.\25\ EPA has 
generally defined the four fundamental integrity elements for 
discretionary EIPs and other innovative emission reduction programs as 
follows:
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    \24\ See, e.g., 2001 EIP Guidance at section 4.1.
    \25\ See, e.g., 2001 EIP Guidance at section 4.1; 1997 VMEP at 
6-7; 2004 Emerging and Voluntary Measures Guidance at 3-4; and 2014 
Diesel Retrofits Guidance at 27-29.
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     Quantifiable: emission reductions are quantifiable if they 
can be measured in a manner that is reliable and replicable by 
different users;
     Surplus: Emission reductions are surplus if they are not 
otherwise required by or assumed in a SIP-related program (e.g., an 
attainment or reasonable further progress plan or a transportation 
conformity demonstration), any other adopted State air quality program, 
a consent decree, or a federal rule designed to reduce emission of a 
criteria pollutant or its precursors (e.g., a new source performance 
standard or federal mobile source requirement); additionally, emission 
reductions are ''surplus'' only for the remaining useful life of the 
vehicle, engine, or equipment being replaced.
     Enforceable: emission reductions and other required 
actions are enforceable if they are independently verifiable; program 
violations are defined; those liable can be identified; the State and 
EPA may apply penalties and secure appropriate corrective action where 
applicable; citizens have access to all emissions-related information 
obtained from participating sources; citizens may file suit against a 
responsible entity for violations; and the required reductions/actions 
are practicably enforceable consistent with EPA guidance on practical 
enforceability.
     Permanent: emission reductions are permanent if the State 
and EPA can ensure that the reductions occur for as long as they are 
relied upon in the SIP. The time period that the emission reductions 
are used in the SIP can be no longer than the remaining useful life of 
the retrofitted or replaced engine, vehicle, or equipment.\26\
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    \26\ See 2001 EIP Guidance at Section 4.1; 1997 VMEP at 6-7; 
2004 Emerging and Voluntary Measures Guidance at 3-4; and 2014 
Diesel Retrofits Guidance at 27-29.
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    The Emission Reduction Report documents CARB's bases for concluding 
that the portions of the incentive program guidelines identified in 
Table 1 adequately address each of these integrity elements. First, 
with respect to quantification, the Emission Reduction Report 
references and describes the formulas that the guidelines require 
applicants to use to determine annual emissions (i.e., baseline 
emissions, based on existing equipment or new equipment certified by 
CARB to current emission standards) and annual emission reductions 
(i.e., the difference between baseline emissions and reduced emissions 
from new/upgraded equipment).\27\ These requirements ensure that 
program participants will calculate emission reductions reliably, using 
widely available methods and assumptions, and in a manner that can be 
replicated by different users.
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    \27\ Emission Reduction Report at 7-8, 11-12, 15, 19-20, 
Appendix F, and Appendix G.
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    Second, with respect to additionality (i.e., ensuring that 
reductions are ``surplus'' or non-duplicative to existing 
requirements), the Emission Reduction Report references and describes 
the provisions in the guidelines that prohibit the use of program funds 
for emission reductions that are required by any federal, state or 
local regulation or other legal mandate and requirements to ensure that 
equipment or engines being replaced are still in usable form and would 
not have been replaced by normal fleet turnover.\28\ These provisions 
ensure that projects funded under these guidelines will achieve 
emission reductions that are not otherwise required by or assumed in a 
SIP-related program and that are surplus to federal, state, and local 
requirements.
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    \28\ Emission Reduction Report at 9, 12, 15-16, 20, Appendix F, 
and Appendix G.
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    Third, with respect to enforceability, the Emission Reduction 
Report references and describes the funding criteria in the guidelines 
that are designed to ensure that emission reductions will be 
independently verifiable and practicably enforceable by CARB and the 
District, including detailed requirements for project applications, 
contracts, pre- and post-project inspections, and recordkeeping and 
reporting by both the grantees and the implementing local agencies.\29\ 
These requirements ensure that emission reductions can be independently 
verified, that the public has access to emissions-related information, 
and that required actions are practicably enforceable consistent with 
EPA guidance on practical enforceability.
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    \29\ Emission Reduction Report at 6-7, 10-11, 15, 17-19, 
Appendix F, and Appendix G.
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    Finally, with respect to permanence, the Emission Reduction Report 
references and describes requirements in the guidelines for program 
applicants to demonstrate that both the baseline (old) and replacement 
(new/upgraded) equipment are used similarly in the nonattainment area 
and to document the destruction of the baseline (old) equipment, as 
well as requirements to identify in each contract the timeframe during 
which the State/District attribute emission reductions to the 
project.\30\ These requirements ensure that emission reduction 
calculations are based on reasonable assumptions concerning equipment/
vehicle activity; that baseline (old) equipment and vehicles do not 
continue in operation; and that EPA and the public can determine 
whether emission reductions attributed to a project adequately cover 
the period for which those reductions are relied upon in a SIP.
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    \30\ Emission Reduction Report at 9-10, 13-14, 16, 21-22, 
Appendix F, and Appendix G.
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    Based on these evaluations, we find that the portions of the Carl 
Moyer Program and Prop 1B Program guidelines identified in Table 1 
establish emission reduction quantification protocols, grant 
conditions, recordkeeping and reporting obligations, and other 
requirements that adequately address EPA's recommended integrity 
elements for economic incentive programs.
2. Enforceable Commitment
    Where a State relies on a discretionary EIP or other voluntary 
measure to satisfy an attainment planning requirement under the CAA 
(e.g., to demonstrate that specific amounts of emission reductions will 
occur by a future milestone date), the State must take responsibility 
for assuring that SIP emission reduction requirements are met through 
an enforceable commitment, which becomes federally enforceable upon 
approval into the SIP.\31\ The purpose of the Emission Reduction 
Report, however, is to demonstrate that a portion of the emission 
reductions required under a previously-approved

[[Page 51151]]

SIP commitment have in fact been achieved, not to satisfy a future 
emission reduction requirement. Accordingly, it is not necessary to 
require the State to submit additional commitments for this purpose.
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    \31\ See, e.g., 1997 VMEP at 4-7; 2004 Emerging and Voluntary 
Measures Guidance at 8-12; and 2005 Bundled Measures Guidance at 7-
12.
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C. Sections 110(l) and 193 of the Act

    Section 110(l) of the CAA prohibits EPA from approving any SIP 
revision that would interfere with any applicable requirement 
concerning attainment and RFP or any other applicable CAA requirement. 
The Emission Reduction Report documents CARB's bases for concluding 
that specific incentive projects implemented by January 1, 2014, in 
accordance with the identified portions of the Carl Moyer Program and 
Prop 1B Program guidelines, have achieved a total of 7.8 tpd of 
NOX emission reductions and 0.2 tpd of PM2.5 
emission reductions in the SJV area which may be credited toward the 
State's 2014 emission reduction commitment in the 2008 PM2.5 
Plan. These calculations of emission reductions are based on actions 
taken by grantees before January 1, 2014 which reduced emissions of 
NOX and PM2.5 in the SJV (e.g., through 
replacement of older, higher-polluting vehicles operating in the SJV 
area with newer, cleaner vehicles). The Emission Reduction Report does 
not establish or revise any emission limitation, control measure, or 
other requirement in the applicable SIP. We propose to determine that 
our approval of the Emission Reduction Report would comply with CAA 
section 110(l) because the proposed SIP revision would not interfere 
with the on-going process for ensuring that requirements for attainment 
of the NAAQS and other CAA provisions are met.
    Section 193 of the Act does not apply to this proposed action 
because the Emission Reduction Report does not modify any SIP-approved 
control requirement in effect before November 15, 1990.

IV. Proposed Action and Public Comment

    Under section 110(k)(3) of the Act, EPA is proposing to fully 
approve the submitted Emission Reduction Report and, based on CARB's 
documentation therein of actions taken by grantees in accordance with 
the identified incentive program guidelines, to approve 7.8 tpd of 
NOX emission reductions and 0.2 tpd of PM2.5 
emission reductions for credit toward the State's 2014 emission 
reduction commitment in the 2008 PM2.5 Plan.
    We will accept comments from the public on this proposed action 
until the date noted in the DATES section above.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a 
SIP submission that complies with the provisions of the Act and 
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). 
Thus, in reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. 
Accordingly, this proposed action merely approves state law as meeting 
Federal requirements and does not impose additional requirements beyond 
those imposed by state law. For that reason, this proposed action:
     Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, the SIP is not approved to apply on any Indian 
reservation land or in any other area where EPA or an Indian tribe has 
demonstrated that a tribe has jurisdiction. In those areas of Indian 
country, the proposed rule does not have tribal implications and will 
not impose substantial direct costs on tribal governments or preempt 
tribal law as specified by Executive Order 13175 (65 FR 67249, November 
9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Particulate 
matter, Reporting and recordkeeping requirements.

    Authority:  42 U.S.C. 7401 et seq.

    Dated: August 6, 2015.
Jared Blumenfeld,
Regional Administrator, Region IX.
[FR Doc. 2015-20749 Filed 8-21-15; 8:45 am]
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