### TITLE 13. CALIFORNIA AIR RESOURCES BOARD

NOTICE OF PUBLIC HEARING TO CONSIDER PROPOSED AMEND MENTS TO

NEW PASSENGER MOTOR VEHICLE GREENHOUSE GAS EMISSION

STANDARDS FOR MODEL YEARS 2012-2016 TO PERMIT COMPL IANCE BASED

ON FEDERAL GREENHOUSE GAS EMISSION STANDARDS

The Air Resources Board (ARB or Board) will conduct a public hearing at the time and place noted below to consider proposed amendments t o California’s greenhouse gas emission standards that the Board approved in Septe mber 2004 pursuant to Assembly Bill 1493 (Pavley) (Stats. 2002, ch. 200.). These standards apply on a fleetwide basis to large-volume manufacturers of 2009 through 2016 model year new passenger motor vehicles certified for sale in California. The pro posed amendments would allow manufacturer compliance with United States Environm ental Protection Agency (U.S. EPA) standards to be deemed as compliant with California’s standards for the 2012 through 2016 model years.

DATE: February 25, 2010

TIME: 9:00 a.m.

PLACE: California Environmental Protection Agency

Air Resources Board Byron Sher Auditorium

1001 I Street Sacramento, California 95814

This item will be considered at a two-day meeting o f the Board, which will commence at 9:00 a.m., February 25, 2010, and may continue at 8 :30 a.m., on February 26, 2010. This item may not be considered until February 26, 2010. Please consult the agenda for the meeting, which will be available at least 10 days b efore February 25, 2010, to determine the day on which this item will be considered.

INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY ST ATEMENT

OVERVIEW

Sections Affected : Proposed amendments to California Code of Regula tions (CCR), title 13, sections 1961 and 1961.1, and to the “Cal ifornia Exhaust Emission Standards and Test Procedures for 2001 and Subsequent Model P assenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles” incorporated by r eference in CCR, title 13, section 1961(d) (as last amended May 2, 2008). Note: There are three other pending ARB rulemakings that also amend the incorporated test p rocedures; the text proposed with this notice identifies these other pending amendmen ts.2

Background :

Citing compelling and extraordinary air quality and other impacts California faces from global warming, in 2002 the Legislature passed and the Gov ernor signed Assembly Bill (AB) 1493. This bill required ARB to develop and adopt regulat ions to achieve the maximum feasible and cost-effective reduction of heat-trapping green house gas emissions from passenger motor vehicles, beginning with the 2009 model year. The Board approved those regulations at its September 2004 hearing, and they were adopte d in their final form in August 2005.

The AB 1493 regulations set separate greenhouse gas emission levels for both passenger cars and light-duty trucks (PC/LDT1) and heavier light-duty trucks and medium-duty passenger vehicles (LDT2/MDPV). The st andards are effective beginning in the 2009 model year and become more stringent ea ch year through 2016. The levels are measured in grams per mile of carbon dioxide-eq uivalent emissions, targeting carbon dioxide (CO 2 ) as the main greenhouse pollutant and other greenh ouse gases including refrigerants used in automotive air condi tioners. Compliance is determined on a fleetwide basis, meaning that while each individu al model can be above or below the standard, the average of a manufacturers’ fleet mus t meet the standard or else the manufacturer incurs debits that must be equalized w ithin five model years.

Manufacturers can also accrue and trade credits bet ween their PC/LDT1 and LDT2/MDPV segments, bank credits from over complian ce for use in later model years,

and trade credits with other manufacturers. Manufa cturers may also obtain additional credit for selling vehicles fueled by other than co nventional gasoline or diesel and demonstrating use of that fuel.

The greenhouse gas emission reductions to be achiev ed by the Pavley regulations are substantial. By 2016, the regulations require a 30 % reduction in greenhouse gas emissions compared to 2009 model year vehicles. Th e AB 1493 regulations provide about 27.7 million metric tons in greenhouse gas re ductions, or about 16 % of the 174

million metric ton CO 2 -equivalent reductions needed to meet 1990 levels b y 2020. They are the single largest emission reduction measure i dentified in the Scoping Plan adopted by the Board in December 2008 to chart ARB’ s course toward meeting AB 32, the Global Warming Solutions Act of 2006 (Stats. 20 06, ch. 488).

Since Board approval in 2004, motor vehicle manufac turers and their trade associations have challenged the regulations in numerous federal and State court proceedings and have opposed California’s request for an U.S. EPA w aiver of preemption under the

federal Clean Air Act to allow California to enforc e its adopted standards. On May 19, 2009, challenging parties, individual autom akers, California, and the federal government committed to a series of actions that wo uld resolve these current and potential future disputes over the California stand ards through model year 2016. A summary of those actions is contained in a document published in the Federal Register at 74 Fed. Reg. 24007 (May 22, 2009) and in commitm ent letters by California and other parties that are available at www.epa.gov/ota q/climate/regulations.htm. On June 30, 2009, U.S. EPA granted California’s waiver request for all model years 2009 through 2016. 74 Fed. Reg. 32744 (July 8, 2009).3

For its part, California committed to: (1) revise i ts standards to allow manufacturers to demonstrate compliance with the fleet average green house gas emission standard by “pooling” California and Section 177 State vehicle sales; (2) revise its standards for the 2012 through 2016 model year vehicles such that com pliance with U.S. EPA-adopted greenhouse gas standards would serve as compliance with California’s standards; and (3) revise its standards as necessary to allow manu facturers to use emission data from the federal Corporate Average Fuel Economy (CAFE) p rogram to demonstrate compliance with the Pavley regulations. Regulatory changes that implement the first and third commitments made by California as part of our May 2009 commitment letter were approved by the Board at a public hearing on S eptember 24, 2009. The current proposed amendments to California’s passenger motor vehicle regulations implement

our second commitment.

It is important to note that U.S. EPA has not yet i ssued a final rule for the 2012 through 2016 model year passenger vehicles. Consequently, these amendments are being proposed based on staff’s understanding of the Sept ember 28, 2009, Notice of Proposed Rulemaking (NPRM) for a joint rulemaking by U.S. EP A and the federal Department of Transportation that proposes a coordinated federal greenhouse gas and fuel economy program for light-duty vehicles, referred to as the National Program. 74 Fed. Reg. 49454 (September 28, 2009). This national rule is expect ed to be finalized by the end of March 2010. The subject proposed amendments to Californi a’s regulations will be finalized by means of a 15-day notice once the national rule has been finalized.

California’s commitment to accept compliance with U .S. EPA-adopted greenhouse gas standards as compliance with California’s standards in the 2012 through 2016 model years has been and remains contingent on U.S. EPA a dopting a final rule that preserves the benefits of the Pavley regulations. This will require that U.S. EPA adopt greenhouse gas standards that will achieve on average 250 gram s/mile of CO 2 in model year 2016 across the light-duty fleet, as currently proposed in the NPRM. ARB believes that this fleet average would provide roughly equivalent greenhouse gas reductions in the 2016 model year from the California fleet currently subject to the AB 1493 (Pavley) regulations. Furthermore, while ARB understands the need for U.S . EPA to include compliance flexibilities in the final rule, it is important th at such flexibilities do not significantly and demonstrably diminish the emission benefits of the National Program.

COMPARABLE FEDERAL REGULATIONS

There are currently no federal greenhouse gas emiss ion standards for the subject new motor vehicles. However, as noted above, on Septem ber 28, 2009, an NPRM was issued by U.S. EPA and the federal Department of Tr ansportation for a joint rulemaking that proposes a coordinated federal greenhouse gas emission reduction and fuel economy program for light-duty vehicles, beginning in the 2012 model year. This national rule is expected to be finalized by the en d of March 2010.4

AVAILABILITY OF DOCUMENTS AND AGENCY CONTACT PERSON S

ARB staff has prepared a Staff Report: Initial Sta tement of Reasons (ISOR) for the proposed regulatory action, which includes a summar y of the economic and environmental impacts of the proposal. The report is entitled: “Notice of Public Hearing to Consider Proposed Amendments to New Passenger Mo tor Vehicle Greenhouse Gas

Emission Standards for Model Years 2012-2016 to Per mit Compliance Based on

Federal Greenhouse Gas Emission Standards.”

Copies of the ISOR and the full text of the propose d regulatory language, in underline and strikeout format to allow for comparison with t he existing regulations, may be accessed on ARB’s website listed below, or may be o btained from the Public Information Office, Air Resources Board, 1001 I Str eet, Visitors and Environmental Services Center, First Floor, Sacramento, Californi a, 95814, (916) 322-2990, at least 45 days prior to the scheduled hearing on February 25, 2010.

Upon its completion, the Final Statement of Reasons (FSOR) will be available and copies may be requested from the agency contact per sons in this notice, or may be

accessed on ARB’s website listed below.

Inquiries concerning the substance of the proposed regulation may be directed to the designated agency contact persons, Mr. Paul Hughes, Manager, Low-Emission Vehicle Implementation Section, at (626) 575-6977, or Ms. S arah Carter, Staff Air Pollution Specialist, at (626) 575-6845.

Further, the agency representative and designated b ack-up contact persons, to whom nonsubstantive inquiries concerning the proposed ad ministrative action may be directed, are Ms. Lori Andreoni, Manager, Board Adm inistration and Regulatory Coordination Unit, (916) 322-4011, or Ms. Trini Bal cazar, Regulations Coordinator, (916) 445-9564. The Board has compiled a record fo r this rulemaking action, which includes all the information upon which the proposa l is based. This material is available for inspection upon request to the contact persons.

This notice, the ISOR and all subsequent regulatory documents, including the FSOR, when completed, are available on ARB’s website for this rulemaking at http://www.arb.ca.gov/regact/2010/ghgpv10/ghgpv10.h tm

COSTS TO PUBLIC AGENCIES AND TO BUSINESSES AND PERS ONS AFFECTED

The determinations of the Board's Executive Officer concerning the costs or savings necessarily incurred by public agencies and private persons and businesses in reasonable compliance with the proposed regulations are presented below.

Pursuant to Government Code sections 11346.5(a)(5) and 11346.5(a)(6), the Executive Officer has determined that the proposed regulatory action would not create costs or savings to any State agency or in federal funding t o the State, costs or mandate to any5

local agency or school district, whether or not rei mbursable by the State pursuant to Government Code, title 2, division 4, part 7 (comme ncing with section 17500), or other nondiscretionary cost or savings to State or local agencies.

In developing this regulatory proposal, ARB staff e valuated the potential economic impacts on representative private persons or busine sses. The proposal is not expected to negatively affect the cost of compliance for veh icle manufacturers that are subject to the requirements of the Pavley regulations. The proposed amendments provide manufacturers with the option of demonstrating comp liance with California’s regulations by demonstrating compliance with the National Progr am in the 2012 through 2016 model years. According to previous manufacturer st atements, providing this National Program compliance option would reduce manufacturer s’ overall compliance costs. Manufacturers retain the option to comply with the regulations as they are currently written (i.e., manufacturers may elect to comply wi th the Pavley regulations in the 2012 through 2016 model years), in which case these amen dments would produce no economic impacts.

The Executive Officer has made an initial determina tion that the proposed regulatory action would not have a significant statewide adver se economic impact directly affecting businesses, including the ability of California bus inesses to compete with businesses in other states, or on representative private persons.

In accordance with Government Code section 11346.3, the Executive Officer has determined that the proposed regulatory action woul d not affect the creation or elimination of jobs within the State of California, the creation of new businesses or elimination of existing businesses within the State of California, or the expansion of businesses currently doing business within the Stat e of California. A detailed assessment of the economic impacts of the proposed regulatory action can be found in

the ISOR.

The Executive Officer has also determined, pursuant to California Code of Regulations, title 1, section 4, that the proposed regulatory ac tion would not affect small businesses, because it does not apply to any businesses that fa ll under the definition of “small

business.”

In accordance with Government Code sections 11346.3 (c) and 11346.5(a)(11), the Executive Officer has found that the reporting requ irements of the regulation which apply to businesses are necessary for the health, s afety, and welfare of the people of

the State of California.

Before taking final action on the proposed regulato ry action, the Board must determine that no reasonable alternative considered by the Bo ard or that has otherwise been identified and brought to the attention of the Boar d, would be more effective in carrying out the purpose for which the action is proposed, o r would be as effective and less burdensome to affected private persons than the pro posed action.6

SUBMITTAL OF COMMENTS

Interested members of the public may also present c omments orally or in writing at the meeting, and may be submitted by postal mail or by electronic submittal before the meeting. The public comment period for this regula tory action will begin on January 11, 2010. To be considered by the Board, w ritten comments, not physically submitted at the meeting, must be submitted on or a fter January 11, 2010 and received no later than 12:00 noon, February 24, 2010 , and must be addressed to the following:

Postal mail: Clerk of the Board, Air Resources Boa rd

1001 I Street, Sacramento, California 95814

Electronic submittal: http://www.arb.ca.gov/lispub/comm/bclist.php

Please note that under the California Public Record s Act (Gov. Code, § 6250 et seq.), your written and oral comments, attachments, and as sociated contact information (e.g., your address, phone, email, etc.) become par t of the public record and can be released to the public upon request. Additionally, this information may become available via Google, Yahoo, and other search engin es.

The Board requests, but does not require, that 20 c opies of any written statement be

submitted and that all written statements be filed at least 10 days prior to the hearing so that ARB staff and Board Members have time to fully consider each comment. The Board encourages members of the public to bring to the attention of staff in advance of the hearing any suggestions for modification of the proposed regulatory action.

STATUTORY AUTHORITY AND REFERENCES

This regulatory action is proposed under that autho rity granted in sections 38510,
38560, 38562, 38563, 39500, 39600, 39601, 43013, 43 018, 43018.5, 43101, 43104, and 43105, Health and Safety Code. This action is proposed to implement, interpret and make specific sections 38501, 38510, 38560, 385 62, 38563, 39002, 39003, 39667,
43000, 43009.5, 43013, 43018, 43018.5, 43100, 43101 , 43101.5, 43102, 43104, 43105, 43106, 43204, 43205, and 43211, Health and Safety C ode.7

HEARING PROCEDURES

The public hearing will be conducted in accordance with the California Administrative Procedure Act, Government Code, title 2, division 3 , part 1, chapter 3.5 (commencing with section 11340).

Following the public hearing, the Board may adopt t he regulatory language as originally proposed, or with non substantial or grammatical mo difications. The Board may also adopt the proposed regulatory language with other m odifications if the text as modified is sufficiently related to the originally proposed text that the public was adequately placed on notice and that the regulatory language a s modified could result from the proposed regulatory action; in such event, the full regulatory text, with the modifications clearly indicated, will be made available to the pu blic, for written comment, at least 15-days before it is adopted.

The public may request a copy of the modified regul atory text from ARB’s Public Information Office, Air Resources Board, 1001 I Str eet, Visitors and Environmental Services Center, First Floor, Sacramento, Californi a, 95814, (916) 322-2990.

SPECIAL ACCOMMODATION REQUEST To request a special accommodation or language need s for any of the following:

• An interpreter to be available at the hearing.

• Have documents available in an alternate format (i .e. Braille

, large print) or another language.

• A disability-related reasonable accommodation.

Please contact the Clerk of the Board at (916) 322- 5594 or by facsimile at (916) 322-3928 as soon as possible, but no later th an 10 business days before the scheduled Board hearing. TTY/TDD/Speech to Speech u sers may dial 711 for the California Relay Service.

Para solicitar alguna comodidade especial o si por su idioma necesita cualquiera de los siguientes:

• Un intérprete que esté disponible en la audiencia.

• Documentos disponibles en un formato alternativo ( es decir, sistema Braille, letra grande) u otro idioma.

• Una acomodación razonable relacionados con una inc apacidad.8

Porfavor llame a la officina del Consejo a (916) 32 2-5594 o envie un fax a (916) 322-3928 lo mas pronto possible, pero no meno s de 10 dias de trabajo antes del el dia programado para la audencia del Consejo

. TTY/TDD/ Personas que nesessitan este servicion pueden marcar el 711 para el Servici o de Retransmisión de Mensajes de

California

.

CALIFORNIA AIR RESOURCES BOARD

/s/

_________________________________ James N. Goldstene

Executive Officer

Date: December 29, 2009

The energy challenge facing California is real. Ev ery Californian needs to take immediate action to r educe energy consumption. For a list of simple ways you can red uce demand and cut your energy costs, see our websi te at www.arb.ca.gov

.