State of California California Environmental Protection Agency

AIR RESOURCES BOARD

Final Statement of Reasons for Rulemaking, Including Summary of Comments and Agency Responses

PUBLIC HEARING TO CONSIDER REGULATORY AMENDMENTS TO THE

EXHAUST EMISSION STANDARDS FOR 2007-2009 MODEL-YEAR HEAVY DUTY

URBAN BUS ENGINES AND THE FLEET RULE FOR TRANSIT AG ENCIES

Public Hearing Date: September 15, 2005

Agenda Item No.: 05-8-6 Continued on October 20 and October 27, 2005

Agenda Item No.: 05-10-2

I. GENERAL

In this rulemaking the Air Resources Board (ARB or the Board) is amending the regulations for two programs that reduce emissions from urban buses. One program affects emissions from in-use urban buses operated by transit agencies (Fleet Rule for Transit Agencies - Urban Bus Requirements, containe d in section 2023.1, title 13, California Code of Regulations (CCR) and the relate d Reporting Requirements for Transit Agencies, contained in section 2023.4). Th e other program achieves emission reductions by establishing new engine standards for urban buses (contained in sections 1956.1 and 1956.8).

The rulemaking was initiated on July 29, 2005, with the publication of a notice of public hearing scheduled for September 15, 2005. Notices of continuation, dated September 9, 2005, and October 20, 2005, continued the Board’ s consideration of the rulemaking to October 20 and 27, 2005, and were also posted an d made available to the public. The Staff Report: Initial Statement of Reasons, ent itled "Proposed Amendments to the

Exhaust Emission Standards for 2007-2009 Model-Year Heavy Duty Urban Bus Engines and the Fleet Rule for Transit Agencies" (S taff Report or ISOR) was made available for public review and comment beginning o n July 29, 2005. The Staff Report, which is incorporated by reference herein, describe s the rationale for the amendments. This Final Statement of Reasons for Rulemaking (FSO R) updates the staff report by identifying and explaining the modifications that w ere made to the original proposal at the Board’s direction and summarizes and responds t o written comments and hearing testimony.2

At the public hearing held on September 15, 2005, t he Board considered amendments presented by staff affecting urban buses owned or o perated by transit agencies. Staff presented two policy decisions for the Board’s cons ideration: 1) amending the statewide urban bus engine emission standards, and 2) mandati ng that all transit agencies operating in the South Coast Air Quality Management District (SCAQMD or South Coast District) be required to follow the alternative-fue l compliance path. The Board adopted Resolution 05-47 at the hearing, which adopted the staff’s proposed amendment mandating transit agencies in SCAQMD to switch to t he alternative-fuel path. The

Board deferred consideration of the amendment to th e statewide urban bus emission standard until October 20, 2005.

On October 20, 2005, staff presented modifications to the regulation originally proposed in the Staff Report. Staff presented three options to the Board: 1) retain the current new urban bus emissions standards, 2) align the 2007 an d subsequent model-year new urban bus engine emission standards with the equiva lent model-year heavy-duty truck-engine emission standard, and 3) require all transit agencies statewide to purchase/lease only alternative fuel buses. At the conclusion of the hearing, the Board adopted Resolution 05-53, in which it approved modi fied amendments subject to the Board’s consideration at an October 27, hearing of a report from the staff on the likely

effect of one element of the modified amendments.

At the October 27, 2005, hearing, after considering the staff’s report, the Board adopted Resolution 05-61, approving the modifications previ ously approved with one additional modification. The modified amendments align the 20 07 and subsequent model-year urban bus engine emission standards with the equiva lent model-year California heavy-duty truck engine emission standards, but req uire diesel path transit agencies

with more than 30 urban buses in their fleets that purchase 2007 through 2009 model-year urban buses with diesel engines not cert ified at or below 0.2 grams per brake horsepower-hour (g/bhp-hr) oxides of nitrogen (NOx) engine emission standard to meet specified conditions. The conditions require the transit agency to mitigate the NOx emissions through retrofitting an existing urban bu s or transit fleet vehicle within its fleet with a level 3 diesel emission control strategy wit h a 40 percent NOx reduction, and if a device is not verified, a minimum of 25 percent NOx reduction, until vehicles in the agency’s fleet are retrofitted or are incapable of being retrofitted.

Resolution 05-61 reaffirmed the directions in Resol ution 05-53 that the Executive Officer incorporate the approved modifications into the pro posed regulatory text, with such other conforming modifications as may be appropriat e, and make the modified text available for a supplemental comment period of 15 d ays or more. The Executive Officer was then directed either to adopt the amendments wi th such additional modifications as may be appropriate in light of the comments receive d, or to present the regulations to

the Board for further consideration if warranted in light of the comments.

On April 28, 2006, ARB issued a Notice of Public Av ailability of Modified Text, which advised of, and requested comment on, the above des cribed modifications to the3

regulations. The notice included an additional con forming modification as authorized in

Resolution 05-53. The additional modification adds a reporting requirement to title 13, CCR, section 2023.4 for transit agencies. No furth er substantive modifications were made following the April 28, 2006 notice and the Ex ecutive Officer issued Executive Order R-05-007, in which she adopted the amendments to 1956.1, 1956.8, 2023.1, and

2023.4. 1

Fiscal Impacts

. Pursuant to Government Code section 11346.9(a)(2), ARB has determined that the amended regulations will not im pose a mandate upon or create costs or savings, as defined in Government Code sec tion 11346.5(a)(6), to any school

district. The ARB has also determined that while t he amendments will impose a mandate on local agencies (i.e., transit agencies), there are no costs that require reimbursement as explained below.

Alternative-Fuel Path Mandate for All Transit Agenc ies in the District. The direct cost impacts of this amendment affect tr ansit agencies that are public agencies in SCAQMD. Requiring all transit agencies in SCAQMD to follow the alternative-fuel path for urban buses would not hav e a fiscal impact on transit agencies or on transportation planning agencies and commissi ons within the South Coast District because SCAQMD Rule 1192 already requires transit a gencies operating in the District to purchase only alternative-fuel buses. For this reason, the amendment of ARB’s regulation will not cause additional costs to be in curred. Further, this proposal does not require a new program nor does it expand existing p rograms, but simply affects transportation agencies’ methods for providing exis ting services.

Transit agencies receive 80 to 83 percent of their direct capital costs in the form of grants from the federal government (Federal Transpo rtation Administration). Transit agencies in California generally make up the additi onal 17 to 20 percent of capital costs and all operating costs through a variety of grant programs administered by state and local governments and through fares.

Amend the Statewide Urban Bus Emission Requirements

. The amendments will have a fiscal impact on those t ransit agencies and transportation planning agencies and commissions statewide which e lect to purchase diesel buses before 2010 because such buses would require mitiga tion. The amended regulations, however, require neither a new program nor an expan ded level of service from existing

1 The Proposed Regulation Order attached to the ISOR showed the text of section 1956.1(a)(8) as it then existed, without change. This subsection was adopt ed in 2001 and became operative January 13, 2001. On January 7, 2005, ARB submitted to OAL another ru lemaking package that included amendments to section 1956.1(a)(11); the Final Regulation Order s howed those amendments and indicated that no changes were being made to subsection (a)(8). Neve rtheless, due to an apparent printing error, sectio n 1956.1(a)(8) was omitted when the amendments to sec tion 1956.1(a) were printed in Barclays Register 2006, No. 5. To correct this error, the Final Regu lation Order in this rulemaking shows subsection (a )(8) in underline format. Item 19 of the rulemaking fil e contains the Secretary of State filings for the rulemaking that adopted section 1956.1 (January 200 1) and the most recent rulemaking before the current rulemaking in which section 1956.1 was amen ded (January 2006). The latter filing shows the paragraph without amendment, i.e., as an extant reg ulatory provision.4

programs; they simply affect transportation agencie s’ methods for providing existing

services.

No costs are expected for the 2005-2006 fiscal year . The expected costs of the proposal for the 2006-2007 fiscal year are about $7 36,700, with a range of about $345,000 to $1,129,000; and expected costs for the 2007-2008 fiscal year are about $1,438,000, with a range of about $673,000-$2,204,0 00. These costs are for the purchase and maintenance of an expected 40 to 130 d iesel emission control systems each year for calendar years 2007-2009. It is assu med that half of the controls purchased in calendar year 2007 are purchased in fi scal year 2006-7. There is also a small possible variation in the range of the purcha se cost of plus-or-minus 2.7 percent in addition to the ranges given above.

Transit agencies receive 80 to 83 percent of their direct capital costs in the form of grants from the federal government (Federal Transpo rtation Administration). Transit agencies in California generally make up the additi onal 17 to 20 percent of capital costs and all operating costs through a variety of grant programs administered by state and local governments and through fares.

Consideration of Alternatives

. The Board has determined that no reasonable alternative considered by the agency or that has ot herwise been identified and brought to the attention of the agency would be more effect ive in carrying out the purpose for which the regulatory action was proposed, or would be as effective and less burdensome to affected private persons or small bus inesses than the action taken by

the Board.

II. MODIFICATIONS TO THE ORIGINAL AMENDMENTS

At the October 27, 2007, hearing, the Board adopted Resolution 05-61, approving the originally noticed alignment of the statewide urban bus engine standards with the heavy-duty truck engine standards with additional m odifications. The Board further directed staff to work with stakeholders regarding modifications or clarifications to the approved regulations. The following is a descripti on of the final modifications and clarifications, by section number.

Title 13, CCR

§ 1956.1 – Exhaust Emission Standards and Test Proc edures

Paragraph (a) (12) was modified by removing the 200 7 and subsequent model year urban bus engine standard.

§ 1956.8 – Exhaust Emission Standards and Test Proc edures

Paragraph (a)(2)(A) was modified to include additio nal footnotes to the chart of Exhaust Emission Standards. These footnotes clarify the ap plicable emission standard for5

model year 2007 through 2009 urban bus engines and reference purchasing requirements for transit agencies.

§ 2023.1 – Fleet Rule for Transit Agencies – Urban Bus Requirements

Paragraph (a) was modified to include subparagraph (5) which details the mitigation and reporting requirements for transit agencies on the diesel path purchasing urban buses with engines not certified at or below 0.2 g/bhp-hr

.

§ 2023.4 – Reporting Requirements for Transit Agenc ies

Paragraph (b) was modified to include subparagraph (4) which details the reporting requirement for transit agencies purchasing urban b uses with engines not certified at or below 0.2 g/bhp-hr.

III. SUMMARY OF PUBLIC COMMENTS AND AGENCY RESPONSE S

During the 45-day comment period, the Board receive d written comments from:

Albert Chang Rowland Unified School District (Rowla nd) Angelo J. Bellomo Los Angeles Unified School Distri ct (LAUSD) Austin O'Dell San Luis Obispo Transit (SLO) Barry Wallerstein South Coast Air Quality Managemen t District (SCAQMD) Bonnie Holmes-Gen American Lung Assoc. of Calif. (E nviro Coalition)

Brhram Fazeli Communities for a Better Environment (Enviro Coalition) Carl Sedoryk Monterey-Salinas Transit (MST) Catherine Reheis-Boyd Western States Petroleum Asso ciation (WSPA) Charles Saylar Ocean Conservation Society, Form Let ter #3, 7 form letters stating similar opinions (FL#3); Craig Perkins City of Santa Monica (Santa Monica) Don Anair Union of Concerned Scientists (Enviro Coa lition) Enrique Chiock American Lung Assoc. of Los Angeles County (Enviro Coalition) Gary Patton Planning and Conservation League (Envir o Coalition) Jac A. Crawford San Luis Obispo RTA and South Count y Transit Authorities (RTA, SCAT) Jeffrey Noonan-Day John Deere (Deere) Jesse Marquez Coalition for a Safe Environment (Env iro Coalition) Jose Carmona Center for Energy Efficiency & Renewab le Technologies (Enviro Coalition) Jose Huizar Los Angeles Unified School District (LA USD) Joseph Haraburda Oakland Metro Chamber of Commerce, Form Letter #2, 3 form letters stating similar opinions (FL#2) Julie Masters Natural Resources Defense Council (En viro Coalition) Mark Wall Lake Transit Authority (Lake) Matthew Haskett private citizen (Haskett)6

Michael T. Burns Santa Clara Valley Transportation Authority (VTA)

Michael Eaves California Natural Gas Vehicle Coalit ion (CNGVC) Mitchell Pratt Clean Energy Neil Miller City of Manhattan Beach Public Works De partment, Form Letter #1 20 form letters stating similar opinions (FL#1)

Noel Park San Pedro & Peninsula Homeowner's Coaliti on (Enviro Coalition) Patricia Ochoa Pacoima Beautiful (Pacoima) Patrick Kudell American Lung Assoc. of the Inland C ounties (Enviro Coalition) Paul J. Phillips City of Covina (Covina) Peter Spaulding California Association for Coordina ted Transportation (CalACT) Racheal Lopez Center for Community Action and Envir onmental Justice (CCAEJ) Richard Prentice City of Hawthorne (Hawthorne)

Rick Fernandez Alameda-Contra Costa Transit Distric t (AC Transit) Rick Ramacier The County Connection (CCCTA) Robert Mack private citizen (Mack) Robina Suwol California Safe Schools (Enviro Coalit ion) Sarang S. Dalal private citizen (Dalal) Steve Wallauch Lynn Suter & Assoc. for MCI (MCI) Susan Smartt California League of Conservation Vote rs (Enviro Coalition) Todd Campbell Coalition for Clean Air (Enviro Coali tion) Tom Whittle City of Torrance (Torrance) Tonia Reyes Uranga Councilmember, 7th District, Cit y of Long Beach (Uranga)

At the September 15, 2005, hearing, oral testimony was presented by:

Allan Pollock* Montebello Bus Lines (Montebello) Allen Schaeffer* Diesel Technology Forum (DTF) Barry Wallerstein* South Coast Air Quality Manageme nt District (SCAQMD) Bill Haller Sierra Club & West Van Nuys Neighborhoo d Council (WVNNC) Brian Decker California Independent Oil Marketers Association (CIOMA) Bruce Magnani California Chamber of Commerce (CCC) & Californians for Sound Fuel Strategy (CSFS) Catherine Reheis-Boyd* Western States Petroleum Ass ociation (WSPA) & Californians for Sound Fuel Strategy (CSFS) Charles Lapin International Truck and Engine Corpor ation (ITEC) Charlie Ker Westport Innovations (Westport) Clay Thomas Barrio* Montebello Bus Lines (Montebell o) Dave Smith British Petroleum (BP) Dave Winnett City of Torrance (Torrance) Francisca Porchas Bus Riders Union (BRU) Gordan Exel Cummins Westport (CWI)7

Henry Lo Senator Gloria Romero, 24th District (Rome ro) Jacqueline McHenry Councilmember, City of Claremont (McHenry) James Lyons* Diesel Technology Forum (DTF) Jed Mandel* Engine Manufacturers Association (EMA) Jeffrey Noonan-Day* John Deere (Deere) Jim Parker Norwalk Transit (Norwalk) John Hall Torrance Transit (Torrance) Joseph Lyou, Dr. California Environmental Rights Al liance (CERA) Joshua Goldman* ISE Corporation (ISE) Joshua Shaw* California Transit Association (CalTra nsit) Julie Masters* Natural Resources Defense Council (N RDC) Laurene Weste City of Santa Clarita (Santa Clarita) Lee Wallace* Southern California Gas Company (SCG) and San Diego Gas and Electric (SDGE) Margaret Wilkinson private citizen (Wilkinson)

Michael Eaves* California Natural Gas Vehicle Coali tion (CNGVC) Mike Tunnell American Trucking Association (ATA) Mitchell Pratt* Clean Energy Patricia Byrd American Lung Association (ALA) Patrick Charbonneau International Truck and Engine Corporation (ITEC)

Patrick O'Connor* National Assoc. of Fleet Administ rators (NAFA) Richard Teebay Los Angeles Department of Public Wor ks (LADPW) Rick Sikes City of Santa Monica (Santa Monica) Rick Zbur* International Truck and Engine Corporati on (ITEC) Rosa Washington Western Riverside Council of Govern ment & the Western Riverside Clean Cities Coalition (WRCOG/CCC) Shabaka Heru Community Coalition for Change and Soc iety for Positive Action (CSPA) Stephanie Magnien Judy Chu, Assemblywoman 49th dist rict (Chu) Stephanie Williams Californians for Sound Fuel Stra tegy (CSFS) Todd Campbell* Coalition for Clean Air (CCA) Tzeitel P. Caracci Mayor Pro Tem, City of Duarte (C aracci)

The people listed above with asterisks also submitt ed written comments.

Prior to the October 20, 2005 Board Hearing, the Bo ard received written comments

from:

A.L. Andrews Clean Air Partners Transportation Syst ems (CAPTS) Alnna & Doug Cameron private citizens (Carmerons) Andrew Littlefair private citizen (Littlefair) Austin O'Dell City of San Luis Obispo (SLO) Barry Wallerstein South Coast Air Quality Managemen t District (SCAQMD) Bill Vernon private citizen (Vernon) Bob Guzman private citizen (Guzman) Bob Jorgensen Cummins, Inc. (Cummins)8

Bonnie Holmes-Gen American Lung Association of Cali fornia (Enviro Coalition) Brian Stokes Pacific Gas and Electric (PG&E) Bret Banks private citizen (Banks) Catherine Reheis-Boyd Western States Petroleum Asso ciation (WSPA) Carl G. Sedoryk Monterey-Salinas Transit (MST) Carol Harmon private citizen; Form Letter #3-2, 4 form letters stating similar opinions (FL#3-2) Chad Lindhom private citizen (Lindhom) Charlie Ker Westport Innovations (Westport) Charlie Stringer private citizen. Form Letter #1-2, 8 form letters stating similar opinions (FL#1-2) Chris Ferrera East Bay Clean Cities (EBCC) Crista Worthy private citizen (Worthy) Daniel Price private citizen (Price) Dave Aasheim private citizen (Aasheim) David Lilly San Luis Obispo RTA (RTA) & San Luis Ob ispo SCAT (SCAT) David Mazer private citizen (Mazer) David Pearce private citizen (Pearce) David Shonbrunn Transportation Solutions Defense & Education Fund (TSDEF) Debra Padilla private citizen, Form Letter #2-2, 12 form letters stating similar opinions (FL#2-2) Diane Bailey Natural Resources Defense Council (Env iro Coalition) Don Anair Union of Concerned Scientists (Enviro Coa lition) Fred Cavanah Modesto (Modesto) Gayle Pratt private citizen (Pratt) Henry McElvery private citizen (McElvery) Jared Hightower private citizen (Hightower) Jean-Francois Oeullet Xebec Inc. (Xebec) Jeanne Cain California for a Sound Fuel Strategy (C SFS) Jeffrey Noonan-Day John Deere (Deere) Jim Hekkers Monterey Bay Aquarium (MBA) Joseph Lyou California Environmental Rights Allianc e (Enviro Coalition) Joseph J. Haraburda Oakland Metropolitan Chamber (F L#2) Judith Morgan Richmond Chamber of Commerce (FL#2) Julie Ivy Kids First (Kids) Kathryn Phillips Environmental Defense (Enviro Coal ition) Kenneth Scheidig Alameda-Contra Costa Transit Distr ict (AC Transit) Larry Ozier Gas Equipment Systems Incorporated (GES I) Laura Dennison private citizen (Dennison) Lawrence Smith private citizen (Smith) Lewis Nelson City of Tulare (Tulare)

Lila Hussain Urban Habitat Lola Ungar private citizen (Ungar) Mark Perez private citizen (Perez)9

Mary Pitto Regional Council of Rural Counties (RCRC ) Melantha Tatum private citizen (Tatum)

Michael Eaves California Natural Gas Vehicle Coalit ion (CNGVC) Mike Wixon City of Roseville (Roseville) Neal Mulligan City Engines Inc (CEI) Nelsen Fregoso Humboldt Transit Authority (HTA) Pattie Sanchez private citizen (Sanchez) Peter Slaby private citizen (Slaby) Rich Wagner Cummins, Inc. (Cummins) Richard Kolodziej Natural Gas Vehicle Coalition (NG VC) Robert A Lynch private citizen (Lynch) Scott Raty Hayward Chamber of Commerce (FL#2)

Sherrie Fisher Santa Barbara Metro Transit District (SBMTD) Shirley Bianchi San Luis Obispo RTA (RTA) Stuart Sunshine SF MUNI (MUNI) Steve Wallauch Motor Coach Industries (MCI) Susan Chiaroni Golden Gate Transit (GGT) Todd Campbell Coalition for Clean Air (Enviro Coali tion) Virginia Field private citizen (Field)

At the October 20, 2005, hearing, oral testimony wa s received from:

Arthur Douwes Santa Clara Valley Transportation Aut hority (VTA) Bonnie Holmes-Gen* American Lung Association of Cal ifornia (ALA) Brian Stokes* Pacific Gas and Electric (PG&E) Bruce Magnani California Chamber of Commerce (CCC) and Californians for a Sound Fuel Strategy (CSFS) Carl Sedoryk* Monterey-Salinas Transit (MST) Chuck Harvey San Mateo County Transit District (Sam trans) Dawn Friest* Engine Manufacturers Association (EMA) Diane Bailey* Natural Resources Defense Council (NR DC) Don Anair* Union of Concerned Scientists (UCS) Gene Walker* California Transit Association (CalTra nsit) and Golden Gate Bridge Highway & Transportation District (GGT) Jean Roggenkamp Bay Area Air Quality Management Dis trict (BAAQMD) Jeanne Krieg Eastern Contra Costa Transit Authority (ECCTA) Joe Sparano Western States Petroleum Association (W SPA) Joshua Goldman* ISE Corp (ISE) Joshua Shaw* California Transit Association (CalTra nsit) Kenneth Scheidig* Alameda-Contra Costa Transit Dist rict (ACTransit) Marty Mellera San Francisco MUNI and Regional Trans it Association (RTA) (MUNI) Mary King Alameda-Contra Costa Transit District (AC Transit)

Michael Eaves* California Natural Gas Vehicle Coali tion (CNGVC) Mitchell Pratt* Clean Energy10

Peter Spaulding* California Association for Coordin ated Transportation (CalACT) Rebecca Kaplan Alameda-Contra Costa Transit Distric t (ACTransit) Steve Heminger* Metropolitan Transportation Commiss ion (MTC) Todd Campbell Coalition for Clean Air (CCA) Vallerie Turella Assembly Majority Leader Dario Fro mer from LA County (Fromer)

The people listed above with asterisks also submitt ed written comments.

Set forth below is a summary of each objection or r ecommendation made regarding the specific adoption, amendment, or repeal proposed, t ogether with an explanation of how the proposed action has been changed to accommodate each objection or recommendation, or the reasons for making no change . The requirement applies only to objections or recommendations directed at the ag ency's proposed action or to the procedures followed by the agency in proposing or a dopting the action. The agency may aggregate and summarize repetitive or irrelevan t comments as a group, and may respond to repetitive comments or summarily dismiss irrelevant comments as a group. For the purposes of this paragraph, a comment is "i rrelevant" if it is not specifically directed at the agency's proposed action or to the procedures followed by the agency in proposing or adopting the action. The comments hav e been grouped by topic wherever possible.

As stated previously, the September 15 rulemaking w as continued to October 20 and 27. The Board heard testimony and approved act ions regarding the SCAQMD transit bus fleet rulemaking at the September 15 he aring, and heard testimony and approved actions for the statewide urban bus engine emission standards at the October 20 and 27 hearings. At the September 15 Bo ard hearing, the SCAQMD fleet rulemaking was considered with two related fleet ru lemakings which the Board did not approve. The comments received during the 45-day n otice period and testimony at the September 15 hearing included comments and testimon y on all three related fleet rulemakings. Many of the commentors and testifiers included background information which was not related to the specific regulatory pr oposals. Among these at the September 15 hearing, the SCAQMD's presentation and testimony provides background information about the South Coast Distri ct's circumstances, its rules, and its

views about the merits of alternative fueled vehicl es. As these comments and a

numbers of other comments in the same vein do not m ake specific objections to, or recommendations on, the ARB's amendments to the reg ulations, ARB has not responded as provided in Government Code section 11 346.9 paragraph (a)(3).

Part 1. Related to requiring all transit agencies operating in the South Coast Air Quality Management District to follow the alternati ve-fuel compliance path

A. General11

1. Comment : The Board received general support to amend the urban transit bus rule mandating transit fleets in the South Coast Air Qua lity Management District to follow the alternative-fuel compliance path. (SCAQMD, Rowl and, LAUSD, Enviro Coalition, FL#3, Santa Monica, Hasket, CNGVC, Clean Energy, FL #1, Pacoima, Covina, CCAEJ, Hawthorne, Uranga, WVNNC, Westport, BRU, Rom ero, McHenry, Deere, CERA, NRDC, Santa Clarita, SCG & SDGE, Wilkinson, A LA, Santa Monica, WRCOG/CCC, Chu, CCA, Caracci)

Agency Response : The Board adopted the amendment to the Fleet Rul e for Transit Agencies requiring all transit agencies operating i n the South Coast Air Quality Management District to follow the alternative-fuel compliance path.

2. Comment : The Board received general opposition based on t he request that ARB maintain fuel neutrality in all aspects of ARB tran sit fleet rules and engine regulations and not mandate a local or regional "ca rve out" or regional exception to the ARB's statewide transit fleet rule. (SLO, WSPA, CalACT, Mack, MCI, Torrance, Montebello, DTF, CIOMA, CSFS, CCC, ITEC, BP, EMA, N orwalk, CalTransit, ATA, NAFA, LADPW)

Agency Response : See the response to Comment E-1.

3. Comment : Existing rules already provide for substantial d ecreases in the

contributions of diesel to emissions of NOx and of its already modest share of PM 2.5 emissions. (DTF)

Agency Response : Comment noted.

4. Comment : The proposed fleet rules do not provide any PM [ particulate matter] or NOx [oxides of nitrogen] emission benefits. The pr ojected NOx benefits in the staff report are completely illusionary and come at an in credible cost. (EMA, CSFS)

Agency Response : While the South Coast District is able to enforc e Rule 1192, we

believe the ARB’s rule and the District’s rule will get the same benefits. There are no additional emission benefits of ARB’s rule beyon d the District’s rule. Nonetheless, the Board’s decision reflects a balanc ing of legal and policy considerations. By amending ARB’s fleet rule to re quire that all transit agencies

within the South Coast District follow the alternat ive fuel path, the Board assists the South Coast District in continuing to exercise its authority in HSC section 40447.5.

This statute authorizes the South Coast District to impose alternative fuel requirements on fleets within its jurisdiction. Fu rther, the Board’s assistance to the

South Coast District is consistent with the Board’s authority in Health and Safety Code section 39605 to provide any assistance to any district. If ARB’s rule were a stand-alone rule it would reduce NOx emissions by 0 .13 tons per day in 2010. See the response to Comment C-1 for cost effectiveness information.12

5. Comment : We are committed to have engines that will meet the 0.2 gram NOx per brake horsepower-hour for model year 2007. (Deere, CWI)

Agency Response : The Board appreciates the manufacturers’ commitme nt to offering engines that meet a NOx emission rate of 0 .2 grams per brake horsepowerhour in the 2007 model year. The availability of C arl Moyer Program funding for these engines will likely encourage their purchase by transit agencies in the South

Coast District and statewide.

6. Comment : If you choose to adopt this rulemaking, I request that the fleets maintain records that demonstrate that they have purchased f ully compliant motor vehicle fuels. (BP)

Agency Response : This comment is outside the scope of this rulemak ing. But the commentor may wish to know that Reporting Requireme nts for Transit Agencies, adopted in title 13, CCR, section 2023.4, already r equire that each transit agency to submit an annual report that includes the fuel used for each urban bus it currently owns and operates. Additionally, ARB’s Standards f or Motor Vehicles, title 13, CCR division 3 chapter 5, commencing with section 2260, require that all fuels sold for motor vehicles in California, except as waived, exc luded, or otherwise exempted, comply with the appropriate standard for fuel type.

7. Comment : I would like to see the Board seriously consider mandating biodiesel as an alternative to the current proposal. This would be a cost-effective solution that every transit agency can implement here and now, wi thout abandoning their significant capital investments in diesel. (Dalal)

Agency Response : In the definition applicable to the Fleet Rule fo r Transit Agencies – Urban Bus Requirements, “Alternative fue l” means natural gas, propane, ethanol, methanol, gasoline (when used in hybrid el ectric buses only), hydrogen, electricity, fuel cells, or advanced technologies t hat do not rely on diesel fuel. “Alternative fuel” also means any of these fuels us ed in combination with each other

or in combination with other non-diesel fuels. Mos t biodiesel blends are considered to be diesel fuel since they consist primarily of p etroleum-derived diesel fuel. This suggested modification is not within the scope of t he notice for the rulemaking since ARB did not propose to amend the definition of alte rnative fuel.

B. Authority

1. Comment : The rules are not necessary. Based on Judge Coo per’s decision, the South Coast is enforcing its own Fleet Rules agains t public and private fleet operators. The rules will not act as a backstop fo r the South Coast. They need an EPA waiver, which could take a year or more and lik ely would themselves be the subject of litigation. ARB should not risk its pre stige or its authority by adopting rules which EPA disfavors and which require EPA waivers a nd do not meet Clean Air Act waiver requirement[s]. (EMA, WSPA)13

Agency Response : The Board’s decision reflects a balancing of leg al and policy considerations. The ultimate outcome in the litiga tion to which the comment refers is yet to be determined as Judge Cooper’s decision in this litigation has been appealed. 2 In amending ARB’s fleet rule to require that all transit fleets within the South Coast District follow the alternative fuel pa th, the Board assists the South Coast District in continuing to act under its autho rity in Health and Safety Code (HSC) section 40447.5 to impose alternative fuel re quirements on public fleets within its jurisdiction. The Board’s action is consistent with the waiver provisions in section 209(b) of the federal Clean Air Act (FCAA) since th e purpose of section 209(b) is to allow California to adopt and enforce its own emiss ion standards for new motor vehicles and engines that are not identical to fede ral requirements.

Over the years, the criteria in section 209(b) for granting waivers of preemption have been interpreted in many waiver decisions issued by the United States Environmental Protection Agency (U.S. EPA). In gra nting waivers to California’s motor vehicle program, U. S. EPA has routinely defe rred to the policy judgments of California’s decision makers. Recognizing Congress ’s intent to create a limited review of California’s determinations, U.S. EPA has said:

The structure and history of the California waiver provision clearly indicate both a congressional intent and an U.S. EPA practice of le aving the decision on ambiguous and controversial matters of public policy to Calif ornia’s judgment. (40 Fed.Reg. at 23104.) See also 58 Fed.Reg. 4166, LEV I Decision Document at p. 64.)

Given the broad policy discretion accorded to Calif ornia under FCAA section 209(b), the Board has not violated 209(b) by exercising its discretion to assist the South Coast District to exercise its authority under HSC section 40447.5 to require that transit-agency urban buses in the South Coast Distr ict use alternative fuels.

2. Comment : We believe this represents an abandonment of CAR B's long-standing policy of fuel neutrality, which has served the Sta te's clean air programs well. If adopted, we believe this would be the first time CA RB will adopt an emissions standard with the intention and effect of excluding a comparably low emitting technology. Because the proposed rules are not fue l neutral, as our comments discuss, we believe they violate requirements for a pproval of a waiver under Section 209(b) of the Federal Clean Air Act because they're not consistent with the federal regulatory framework, which is fuel neutral. (ITEC, EMA, WSPA)

Agency Response : The Board’s decision reflects a balancing of leg al and policy considerations. By amending ARB’s fleet rule to re quire that all transit agencies

within the South Coast District follow the alternat ive fuel path, the Board assists the South Coast District in continuing to exercise its authority in Health and Safety Code (HSC) section 40447.5. This statute authorizes the South Coast District to impose

2 Engine Manufacturers Association, et al. v. South C oast Air Quality Management District, et al. , United

States District Court Central District of Californi a, CV 00-09065 FMC (BQRx).14

alternative fuel requirements on fleets within its jurisdiction. Further, the Board’s

assistance to the South Coast District is consisten t with the Board’s authority in Health and Safety Code section 39605 to provide any assistance to any district.

The Board’s action is also consistent with section 209(b) of the federal Clean Air Act (FCAA). See the response to Comment B-1.

3. Comment : Adoption of the proposed rule would be the first time CARB has adopted piecemeal emissions standards applicable to only a portion of the state. Again, the Federal Clean Air Act Section 209(b) gives EPA auth ority to waive preemption for emissions standards adopted by the State of Califor nia. Congress clearly envisioned that only emissions standards of statewi de applicability would qualify for such waivers. CARB has never previously adopted, n or has the U.S. EPA granted a waiver for, emission standards that apply to only a limited portion of the state. (ITEC)

Agency Response : The ARB’s current regulation, title 13, CCR, sec tion 2023.1, Fleet Rule for Transit Agencies - Urban Bus Require ments, establishes two paths for compliance by transit agencies: a diesel-fuel path and an alternative-fuel path. Since 2001 when the regulation was first adopted, 3 transit agencies on differing fuel paths have followed differing requirements. This r esults in differing requirements for transit districts throughout the State. The presen t amendments to the regulations affect the option available to transit agencies ope rating in the South Coast District, but do not otherwise amend the differing requiremen ts for transit agencies throughout the State. As noted earlier, U.S. EPA’s consideration of the California’s waiver request must give deference to California’s policy choices as explained in the response to Comment B-1.

4. Comment : The proposed rules violate both the Federal Clea n Air Act Section 209(b) and the California Health and Safety Code because t he proposed rules, implementation, and enforcement would be delegated to the AQMD. And that's the provision under the Health and Safety Code. Import antly, Health and Safety Code Section 43101 requires that CARB implement emission standards that it adopts. The delegation to the AQMD violates CARB's authorit y under this provision. (ITEC)

Agency Response : The amendments adopted in this rulemaking do not delegate

enforcement to the South Coast District.

5. Comment : The proposed rules are inconsistent with Section 209(b) of the Federal Clean Air Act, because they violate lead time and s tability requirements. I won't go into this in more detail other than to say the lett er that was addressed to the AQMD from the U.S. EPA on February 1 of this year indica ted that EPA believed lead time standards applied in this case. (ITEC)

3 First adopted in title 13, CCR, section 1956.2, fi led with the Secretary of State on January 23, 2001 ; renumbered to section 2023.1 and amendments filed w ith the Secretary of State on January 31, 2006.15

Agency Response : The provisions for lead time and stability to wh ich the comment refers are found in federal Clean Air Act (FCAA) se ction 202(a)(3)(C), not section 209(b). Whether the lead time and stability requir ements apply to California in the context of a fleet regulation remains an open quest ion since U.S. EPA has not issued any waiver decision on the specific question . As noted in several recent ARB waiver requests, California continues to believe th at the requirements of FCAA section 202(a)(3)(C) do not apply to California’s a doption of heavy-duty vehicle and engine standards. The text of the FCAA provision i tself indicates that the provision is not applicable to California:

Any standard promulgated or revised under this para graph and applicable to classes or categories of heavy-duty vehicles or eng ines shall apply for a period of no less than 3 model years beginning no e arlier than the model year commencing 4 years after such revised standard is promulgated. [FCAA section 202(a)(3)(C).]

The provision’s text states that “standards promulg ated or revised under this paragraph,” that is, under FCAA section 202(a), mus t provide the specified lead time and stability. In the person of the Administrator, U.S. EPA prescribes standards under 202(a). Clearly the provision applies to U.S . EPA’s promulgation of

standards.

California, however, does not promulgate its standa rds under the grant of authority in section 202(a). California promulgates vehicula r emission standards under grants of authority in state law 4 and under the waiver of federal preemption for Cali fornia’s standards contained in FCAA section 209(b). Since section 202(a)(3)(C) is only applicable to standards promulgated under section 2 02(a) and since California does not promulgate its standards under 202(a), the prov ision does not apply to California. And, if the provision does not apply, its specified lead-time and stability requirements do not apply to California.

With regard to the consistency issue, U.S. EPA’s Ad ministrator has stated that California’s standards and accompanying test proced ures are inconsistent with section 202(a) if: (1) there is inadequate lead tim e to permit the development of technology to meet those requirements, giving appro priate consideration to the cost of compliance within that time frame, or (2) the fe deral and California test procedures impose inconsistent certification requir ements so as to make manufacturers unable to meet both sets of requireme nts with the same vehicle. 5

4 California Health & Safety Code Division 26.

5 See, e.g., 46 F.R. 26371 (May 12, 1981). Even wher e there is incompatibility between the California and federal test procedures, U.S. EPA’s Administrat or has granted a waiver when U.S. EPA is able to determine that federal compliance can be demonstrat ed based on California test results, thus obviating the need for two separate tests. (43 F.R. 1829, 18 30 (January 12, 1978); 40 F.R. 30311, 30314 (July 1 8, 1975).)16

Notable as well, the U.S. Supreme Court decision in Engine Manufacturers

Association and Western States Petroleum Associatio n, et al. v. South Coast Air Quality Management District, et al. suggested that fleet rules that can be characterized as internal state purchasing decision s would not be preempted. 6

Because transit districts are created in the Califo rnia Public Utilities Code, an ARB regulation that imposes fleet requirements on trans it district agencies is consistent with a characterization of the regulation as an int ernal state purchasing decision to which preemption would not apply.

6. Comment : There are only 21 [school] buses that will be af fected by this, and that's in response to Dr. Gong's question. And there have been a number of exemptions that have been applicable to the AQMD by AQMD contr actors, one in which we are involved with, which I think affected over 150 buse s. So the LAUSD's [Los Angeles Unified School District] issues, they have required significant exemptions under the AQMD rule. (ITEC)

Agency Response : This comment does not relate to the fleet rule f or transit agencies.

7. Comment : ARB must obtain a preemption waiver from U.S. EP A under FCAA section 209(b) before attempting to enforce the alt ernative-fuel mandate. Stated differently, ARB cannot grant itself a preemption w aiver, but must wait to receive (or not) the grant of a waiver from EPA as a condit ion precedent to enforcing any

new motor vehicle emission standard. In this insta nce, ARB is not allowing sufficient time for EPA to act on a preemption waiver request (especially since OAL approval will itself take approximately 60 days). Moreover, a condition to EPA's grant of a preemption waiver is that the ARB standard and acco mpanying enforcement procedures must be consistent with FCAA section 202 (a). That section includes the 4-year lead time and 3-year stability requirements, which would be violated by the ARB rule. Thus, EPA may not properly grant a preem ption waiver for he proposed urban bus fleet rule. (EMA, WSPA)

Agency Response : Under the waiver process established by U.S. EPA , regulations that represent amendments or modifications to requi rements for which a waiver of preemption has been granted pursuant to FCAA sectio n 209(b) may be treated as within the scope of the previously granted waiver a nd are federally enforceable. The current rulemaking represents an amendment of the F leet Rule for Transit Agencies – Urban Bus Requirements. The ARB believe s that these amendments may be considered as within the scope of the earlie r rulemaking and, therefore, will not need a new waiver of preemption. As to the iss ues of lead time and stability, see the response to Comment B-5. As to consistency wit h FCAA section 202(a), see the response to Comment B-9.

6 Engine Manufacturers Association and Western States Petroleum Association v. South Coast Air Quality Management District, et al. (2004) 124 S.Ct. 1756, 1764-1765.17

8. Comment : CAA section 209(b) contemplates a preemption wai ver for ARB standards and accompanying ARB enforcement procedur es. Here, however, ARB is proposing to allow the SCAQMD's Executive Officer t o administer the enforcement procedures for the proposed fleet rule. The CAA ma kes no allowance for a preemption waiver of any kind – whether for standar ds or enforcement procedures – in favor of a political subdivision, such as the SC AQMD. (EMA, WSPA)

Agency Response : See the responses to Comments B-3 and B-4.

9. Comment : The alternative-fuel mandate (or, alternatively, the outright ban of new diesel-fueled urban bus engines) through 2015 is no t "within the scope" of any prior ARB rulemaking. Historically, EPA has treated regu latory packages as "within the scope" only where the action was straightforward an d noncontroversial. The proposed fleet rule is neither. Thus, ARB's claim that it can proceed to enforce its alternative-fuel mandate upon the mere filing of a waiver request is baseless. (EMA, WSPA)

Agency Response : See the response to Comment B-7. Additionally,

U.S. EPA considers ARB’s amended standards as withi n the scope of a previous waiver of preemption if California’s rulemaking act ion does not undermine California’s determination that its standards, in t he aggregate, are as protective of public health and welfare as comparable federal sta ndards, does not affect the consistency of California’s requirements with secti on 202(a) of the Act, and raises no new issues affecting the U.S. EPA’s previous waiver determination. 7 With regard to the consistency issue, U.S. EPA’s Administrator has stated that California’s standards and accompanying test procedures are inco nsistent with section 202(a) if: (1) there is inadequate lead time to permit the dev elopment of technology to meet those requirements, giving appropriate consideratio n to the cost of compliance within that time frame, or (2) the federal and California test procedures impose inconsistent certification requirements so as to make manufactur ers unable to meet both sets of requirements with the same vehicle. 8

10. Comment : MCI is concerned with the precedent setting natu re of the proposal to adopt a separate fleet rule for the South Coast Dis trict, and the lack of a clearly defined process for securing a waiver to this propo sed rule. (MCI)

Agency Response : See the responses to Comments B-3, B-7, and B-9.

7 Decision Document accompanying scope of waiver dete rmination in 51 F.R. 12391 (April 10, 1986), at p. 2; see also, e.g., 46 F.R. 36742 (July 15, 1981)

.

8 See, e.g., 46 F.R. 26371 (May 12, 1981). Even wher e there is incompatibility between the California and federal test procedures, U.S. EPA’s Administrat or has granted a waiver when U.S. EPA is able to determine that federal compliance can be demonstrat ed based on California test results, thus obviating the need for two separate tests. (43 F.R. 1829, 18 30 (January 12, 1978); 40 F.R. 30311, 30314 (July 1 8, 1975).)18

11. Comment : The proposed process for adopting these new stan dards has been identified by the US EPA as inappropriate for consi deration as within the scope of a previously issued waiver for State standards, which would impose a four year lead time from adoption – effectively making the issue m oot until 2010. (Torrance)

Agency Response : See the responses to Comments B-1, B-5, and B-7.

12. Comment : Supports the Board's consideration for a waiver to avoid any lag time should the District's rules be ruled invalid by the courts. (CCA)

Agency Response : The Board appreciates the commentor’s support.

13. Comment : The rules would pull the rug out from under the manufacturers who in response to EPA's and ARB's challenge and in relian ce on their rulemaking commitment to certainty, stability, and lead time h ave invested billions in successfully achieving clean diesel technology. (EM A)

Agency Response : The amendments to the Fleet Rule for Transit Age ncies – Urban Bus Requirements only affect the transit agencies i n the South Coast District. Transit agencies in the balance of California, if o n the diesel path, may continue to purchase diesel urban buses and engines. See also the responses to Comments

B-3 and B-5.

C. Cost-Effectiveness and Emission Reductions

1. Comment : The cost-effectiveness and emission reductions c alculations published in the Staff Report are in question. (SCAQMD, EMA, CNG VC, ATA, DTF)

Agency Response : During the 45-day comment period, staff was noti fied of the

calculation error in the cost-effectiveness and emi ssion reductions published in the Staff Report. Subsequently, staff made the correct ions and presented the information at the Board Hearing. Comments were re ceived supporting the new

numbers. The revised cost-effectiveness is estimat ed to be $10,784 per ton of NOx reduced with an emission benefit of 0.13 tons per d ay NOx in 2010.

The cost-effectiveness analysis is based on estimat es of expected emissions reductions and of costs for implementation. The in cremental cost is determined by the difference between the capital and operations a nd maintenance costs of diesel

urban buses and alternative-fuel urban buses. In o rder to determine costeffectiveness, ARB took the typical incremental cos t of the buses to be purchased, with FTA funding, and divided by the total NOx emis sion reductions for the life of the regulation.

2. Comment : This is staff’s analysis of the cost of the thre e rules that were before you today. The most expensive under staff’s analysis i s the transit rule, which is that dot19

way up there. So I don’t think we want to suggest that this transit bus rule is cost-effective. (EMA)

Agency Response : See the response to Comment C-3.

3. Comment : This rulemaking is not cost-effective. (EMA, CCC , CSFS)

Agency Response : The information presented by EMA at the hearing was based on information provided in the Staff Report published on July 29, 2005. As stated in the response to Comment C-1, staff presented updated in formation at the hearing. This rulemaking is cost-effective and the cost-effective ness value of $10,784 per ton of NOx reduced is in line with other adopted regulatio ns.

D. Exemptions

1. Comment : We ask the Board to consider having the same 30 bus exemption standard for sections 2023(e) and (g). Requiring a ll transit agencies to purchase or lease only alternative fuel buses will work an extr eme financial hardship. (SCAT, RTA)

Agency Response : The alternative-fuel compliance path requires th at 85 percent of a transit agency’s annual purchases or leases be po wered by alternative fuels. Section 2023.4(a)(2) provides a transit agency an o pportunity to apply for a waiver from the 85 percent requirement. Section 2023(e) p rovides that a transit agency with fewer than 30 buses in its transit fleet may a pply for waiver based on financial hardship. Section 2023(g) provides for an extensio n of the particulate matter requirements for a transit agency with fewer than 2 0 buses in its transit fleet in a

federal one-hour ozone attainment area. No amendme nts to these provisions were proposed in this rulemaking. Any amendments to tit le 13, CCR, section 2023, paragraphs (e) and (g) would not be within the scop e of this rulemaking.

2. Comment : Alternative fuel technology is currently insuffi cient to power 40- and 45-foot coaches in all conditions. Therefore, it i s important for CARB to develop a process that allows transit operators to request a waiver in the event that no alternative fuel technology exists. (MCI)

Agency Response : Exemptions or waivers are already available unde r title 13, CCR, section 2023.4(a)(2). Exemption criteria are not with in the scope of this rulemaking.

E. Fuel Neutrality

1. Comment: An ARB fleet rule potentially can be adopted by o ther States under Section 177 of the CAA, which (as noted above) coul d undermine the nationwide 2007/2010 HDOH [federal heavy-duty on-highway engin e] standards that ARB and EPA developed, and on which engine manufacturers ex pressly relied. The possible20

proliferation of bans on diesel technologies when t hose technologies are becoming

as clean as or cleaner than alternative fuel techno logies should be avoided.

Adopting an alternative-fuel mandate will make a de parture from ARB's policy of "fuel neutrality," and will also amount to an abrog ation of ARB's agreement to pursue general alignment with the 2007/2010 HDOH engine st andards. Engine manufacturers have spent billions of dollars to ach ieve compliance with the near-zero 2007/2010 emission standards in express r eliance on ARB's commitment to adopt and maintain those standards. Banning the sale of otherwise-compliant HDOH diesel-fueled engines amounts, in effect, to c hanging the rules in the middle of the game, and bespeaks regulatory bad faith. It also opens the door for other jurisdictions to attempt similar rulemakings, there by directly threatening the regulatory uniformity that was and remains such a f undamental tenet supporting the cost-effectiveness and feasibility of the 2007/2010 emission standards. ARB should not be seen as engaging in such blatant efforts to renege on core regulatory commitments. (EMA)

Agency Response : This rulemaking does not ban the use of diesel b uses. Of the 17 transit agencies in the South Coast District, 16 are using and/or purchasing alternative fuel buses, including five of the six a gencies on the diesel path. This is a result of ARB’s fleet regulations and South Coast D istrict Rule 1192. Thus the adoption of this regulatory amendment will have lit tle affect on the status quo, and will serve mainly as a backstop to prevent any of t he six agencies from purchasing higher emitting diesel engines during 2007 through 2009 should the South Coast District’s authority be invalidated.

The Board’s decision reflects a balancing of legal and policy considerations. By amending ARB’s fleet rule to require that all trans it agencies within the South Coast District follow the alternative fuel path, the Boar d assists the South Coast District in continuing to exercise its authority in HSC section 40447.5. This statute authorizes the South Coast District to impose alternative fuel requirements on fleets within its jurisdiction. Further, the Board’s assistance to t he South Coast District is consistent with the Board’s authority in Health and Safety Cod e section 39605 to provide any assistance to any district.

2. Comment : It is my understanding that the diesel engines u sed by the majority of public transit agencies will effectively be banned by this proposal, as no diesel technology available or under development will be a ble to meet the proposed standards. This would effectively force these agen cies to abandon their diesel fleets and switch to natural gas vehicles. (Dalal, CCC, CS FS)

Agency Response : See response to Comment E-1 above.

3. Comment : Supports fuel neutrality. Encourage clients to buy the cleanest. Complex technology development and certification needs mark et certainty. It is important that when standards are set, they are maintained. (ISE)21

Agency Response : South Coast District Rule 1192 has been in place since 2000. This rulemaking maintains the status quo. ARB appr eciates the cooperation from industry and looks forward to working with the indu stry in the future.

4. Comment : It is our position that recent advances in clean air technology, especially as they pertain to cleaning up diesel emissions, bo th NOx and PM, make such an action both untimely and unnecessary. The gap betw een diesel and natural gas is quickly disappearing; PM is very much under control , and as regards the overall emissions profiles of the fuels in question, the to xic equivalence issue remains a very open question. (Torrance)

Agency Response : See the response to Comment B-2.

5. Comment : Elimination of the diesel path would eradicate t he investment we have made in diesel clean-up technology and infrastructu re. (Torrance, Norwalk, Montebello, EMA)

Agency Response : The six public transit agencies within the South Coast District that will be affected by this rulemaking are alread y subject to SCAQMD Rule 1192. The South Coast District currently enforces the alt ernative fuel new purchase requirement. This rulemaking will support the stat us quo within the South Coast

District.

F. Fuel Supply

1. Comment : Rules not fuel-neutral, effectively ban the use of ultra low sulfur diesel, advanced engines, and highly efficient after-treatm ent devices with little or no air quality benefit in a cost ineffective manner betwee n now and 2010. Clean diesel is a success. A fuel monopoly will create supply shorta ges and price instability among other unintended consequences. Discussion of likel y NG supply constraints. Requiring CNG will not pave the way for hydrogen. ( WSPA)

Agency Response : As stated in the response to Comment E-1, this r ulemaking is not a ban on diesel, will have little affect on the status quo, and will serve mainly as support for South Coast District’s Rule 1192 to pre vent any of the six agencies from purchasing higher emitting diesel engines during 20 07 through 2009 should the South Coast District’s authority be invalidated.

This rulemaking will not create a fuel monopoly cre ating fuel supply shortages and price instability. “Alternative fuel” means natura l gas, propane, ethanol, methanol, gasoline (when used in hybrid electric buses only), hydrogen, electricity, fuel cells, or advanced technologies that do not rely on diesel fu el. Many of these fuels are currently used by transit agencies within SCAQMD.22

2. Comment : The rules eliminate fuel and technology choices and place the public's transportation and refuse collection needs at the r isk of a single source off-shore fuel supply. (EMA)

Agency Response : See the response to Comment F-1.

3. Comment : Adopting an alternative-fuel mandate will create unwarranted dependencies on one type of fuel and technology, wh ich in turn can lead to shortages in supply and instabilities in pricing. Fuel-neutral standards allow for a diverse range of fuels and products to compete in t he marketplace, resulting in an optimized mix of standard-compliant options at a ma rket-driven price. (WSPA)

Agency Response : See the response to Comment F-1.

4. Comment : If you lock in CNG and eliminate the propane pat h, what happens is it eliminates all the small businesses. (LADPW)

Agency Response : Propane is an alternative fuel and is not prohib ited from use under this rulemaking.

5. Comment : We can not depend on an interruptible fuel suppl y, such as natural gas, after a disaster such as a catastrophic earthquake. (Torrance, NAFA)

Agency Response : The needs of public safety and demands on public service during the times of a natural disaster are understo od. State law provides regulatory flexibility during catastrophic or emergency events

.

Part 2. Related to aligning California’s urban bus engine standards in the 2007 and subsequent model years with California’s heavy- duty truck engine

standards

A. Keep the current 2007 model-year urban bus emiss ions standards

1. Comment : Staff received several comments in general suppo rt for maintaining the existing 2007 model year urban bus emission standar ds. Commentors did not want

to “roll back” the emission standard in order to ma intain the progress on cleaning up California’s air. (FL#3, Pacoima, CAPTS, Cameron, L ittlefair, SCAQMD, Vernon, Guzman, Environ Coalition, PG&E, Banks, FL#3-2, Lin dhom, Westport, FL#1-2, EBCC, Worthy, Price, Aashiem, Maxer, Pearce, TSDEF, FL#2-2, Pratt, McEvery, Hightower, Xebec, Kids, GESI, Dennison, Smith, Tula re, Ungar, Perez, Tatum, CNGVC, Sanchez, Slaby, NGVC, Field, ALA, NRDC, UCS, BAAQMD, Clean Energy, CCA, Fromer)

Agency Response : The Board adopted alignment of the urban bus eng ine emission standard with the California heavy-duty truck engin e standard starting in the 2007 model year. With alignment, purchases of diesel ur ban bus engines and fleet turn-23

over will be able to resume in 2007 since engines m eeting the phased-in heavy-duty truck engine standard will be available. These 200 7-2009 purchases will replace older, dirtier urban buses and engines that are in use now. As a consequence, near-term emissions will be lowered by up to about 1.6 tons per day NOx and 80 pounds per day PM in 2009, compared to retaining the 2007 model-year urban

bus standards.

However, the sale of urban bus engines in 2007 thro ugh 2009 meeting the phased-in heavy-duty truck engine NOx standard will increase mid-term NOx

emissions after 2009 as a result in-use emissions f rom urban buses certified to the relaxed NOx standard. Projections show a maximum d isbenefit in NOx emissions

in 2015. There is no difference in diesel PM emiss ions after the initial near-term benefit attributable to alignment. By 2025, emissi ons of both NOx and PM will be

the same whether the 2007 urban bus standards are r etained or whether they are aligned with the heavy-duty truck engine standards. The Board’s approval of alignment balances the near-term benefits in NOx an d PM against the mid-term NOx disbenefit. The Board’s action acknowledges an d accepts the mid-term NOx disbenefit, but mitigates it by requiring the retro fitting of in-use diesel engines. See the response to Comment B-4.

2. Comment : Keeping the current 2007 model year urban bus en gine standard keeps pressure on engine manufacturers to meet the 0.2 gr ams per brake horsepowerhour standard and rewards those companies who inves ted into cleaner technologies to meet this standard. (Banks, Sanchez, Xebec, GESI , Lynch, CEI, CNGVC, TSDEF, Fromer, SCAQMD, CCA, Deere, Clean Energy, NG VC)

Agency Response : The California market for new urban bus engines is small, and meeting the California 2004 and 2007 NOx urban bus engine exhaust standards proved to be technologically challenging for diesel engines. In addition, U.S. EPA adopted new heavy-duty engine standards for trucks and urban buses that were less stringent than the urban bus standards previously a dopted by ARB. As a result, diesel engine manufacturers decided not to attempt to comply with California’s new urban bus engine standards but instead to work towa rds achieving the less stringent, but still technologically challenging, national hea vy-duty truck and urban bus engine

standards.

Although 2007 model year urban bus engines powered by alternative fuel will be available, transit agencies on the diesel path have stated that they are prepared to forgo purchases of new buses until 2010 if only alt ernative fuel engines are

available.

B. Align the 2007 model-year urban bus emission sta ndard with the California heavy-duty truck engine standard

1. Comment : Staff received several comments in general suppo rt of the alignment of the 2007 model year urban bus engine standard with California’s equivalent model24

year regulations for heavy-duty trucks. (SLO, MST, WSPA, RTA, SCAT, VTA, CALACT, CCCTA, Torrance, DTF, CCC,CSFS, ITEC, Cummi ns, Modesto, MBA, FL#2, RCRC, Roseville, HTA, SBMTA, MUNI, GGT, SamTr ans, EMA, CalTransit, ECCTA, ACTransit, MTC)

Agency Response : The Board adopted alignment of the urban bus eng ine emission standard with the California heavy-duty truck engin e standard starting in the 2007 model year with modifications that apply to transit agencies in specified circumstances. See the responses to Comments A-1 a nd C-1.

2. Comment : Aligning with the heavy-duty engine standard pun ishes those who have invested in developing the cleaner technologies and sends the message to the engine manufactures that these standards can be cha nged – providing a disincentive for companies to invest in future clea ner technologies. (CEI, CNGVC, TSDEF, Fromer, SCAQMD, CCA, Deere, Clean Energy, CN GVC, FL#2-2, FL#1-2)

Agency Response : The investment in low emission natural gas engin e development will continue. Alignment allows for incentive fund s for cleaner technologies to

remain available until 2010. In addition, transit districts on the alternative fuel path account for nearly 60 percent of all California tra nsit buses, and they will provide a continuing demand for natural gas and other alterna tive fuel engines through at

least 2015.

3. Comment : Harmonizing the standard with weaker federal sta ndards would likely remove the alternate fuels path as an option for ma ny transit agencies. (PG&E)

Agency Response : The amendment of the emission standards for urba n bus engines does not alter the path selection required of transit agencies statewide. Transit agencies on the alternative fuel path accou nt for nearly 60 percent of all California’s urban buses and they will provide a co ntinuing demand for natural gas and other alternative fuel engines through at least 2015.

4. Comment : Alignment of 2007 urban bus emission standard wi th the California heavy-duty truck engine standard will allow diesel engines to be purchased that are six times dirtier than what is now required. These dirtier buses will be on the road for at least 12 years. (GESI, Field, Perez, Lindhom , Pearce, FL#3-2)

Agency Response : The commentors are correct that aligning the urb an bus and heavy-duty truck engine standards relaxes the stand ards for urban buses in the 2007-2009 model years. Diesel engine manufacturers have said that they plan to certify urban bus engines in 2010 when they will ce rtify all families of engines to the fully phased-in parallel heavy-duty truck engine st andards. Under the anticipated circumstances, therefore, for transit agencies on t he diesel path statewide, there would be no available diesel urban bus engines in 2 007-2009, resulting in no fleet

turnover in diesel urban buses. The lack of fleet turnover increases NOx in the near term as explained below.25

With alignment, purchases of diesel urban bus engin es and fleet turn-over will be able to resume in 2007 since engines meeting the ph ased-in heavy-duty truck engine standard will be available. These 2007-2009 purchases will replace older, dirtier urban buses and engines that are in use now . As a consequence, near-term emissions will be lowered by up to about 1.6 tons p er day NOx and 80 pounds per day PM in 2009, compared to retaining the 2007 mode l year urban bus standards. However, the sale of urban bus engines in 2007-2009 meeting the phased-in heavy-duty truck engine NOx standard will increase mid-term NOx emissions after

2009 as a result in-use emissions from urban buses certified to the relaxed NOx standard. Projections show a maximum disbenefit in NOx emissions in 2015. There

is no difference in diesel PM emissions after the i nitial near-term benefit attributable to alignment. By 2025, emissions of both NOx and P M will be the same whether the

2007 urban bus standards are retained or whether th ey are aligned with the heavy-duty truck engine standards. Figures 3 and 4 on page 47 of the ISOR illustrate these findings.

The Board’s approval of alignment balances the near -term benefits in NOx and PM against the mid-term NOx disbenefit. The Board’s a ction acknowledges and accepts the mid-term NOx disbenefit, but mitigates it by re quiring the retrofitting in-use diesel engines. The mitigation occurs whenever a diesel-p ath transit agency with more than 30 buses in its fleet purchases an urban bus e ngine not certified to a NOx emission level at or below 0.2 gram per brake horse power-hour. For this purchase, the transit agency must concurrently retrofit on a one-to-one basis its diesel urban buses and transit fleet vehicles by equipping them with verified diesel emission control strategies that meet specified NOx reductio n criteria. In this way, the Board effects a mitigated negative declaration for any ad verse environmental impact

attributable to the amended urban bus standards.

5. Comment : The California market for bus engines is just to o small for engine manufacturers to produce compliant engines until re quired by EPA in 2010. From 2007 through 2009 transit agencies on the diesel pa th will not be able to purchase buses with compliant engines and will continue to o perate older, dirtier buses. Harmonization will allow transit agencies to remove older dirty diesel engines from service sooner than 2010 and would achieve greater emission reductions from California transit fleets. (EMA, HTA, RCRC, VTA, MS T, CCCTA, Torrance, Covina, Modesto, CCC, CSFS, MTA, SBMTD, SCAT, CalACT, SLO, RTA, GGT, Cummins)

Agency Response : The Board aligned California’s urban bus standar d with the California heavy-duty truck engine standards.

6. Comment : Keep the current standard. ARB staff seemed to have ignored many of the incentive programs in the state that could impa ct cost effectiveness. In August, the federal Energy and Highway Bills passed and wer e signed into law by the President. These bills will offer as much as a $32 ,000 tax credit for purchasers of heavy-duty natural gas vehicles. There will be als o tax credits for the installation of26

fueling infrastructure. Their impact on cost-effec tiveness calculations and customer economics will be significant. (CNGVC, Clean Energy , PGE)

Agency Response : At the October 20 Board hearing, the Board asked staff to evaluate the effect of keeping the separate, more s tringent, 2007 urban bus engine standard on incentive funding for urban bus and eng ine purchases. Staff reported to the Board on the available funds for transit agenci es at the October 27 Board hearing. Based on a review of Federal Transit Admi nistration funding mechanisms and the new energy bill tax credit legislation, sta ff illustrated the effect for the Board in an example. Looking at the funding of a diesel bus and the incremental cost of the natural gas bus with the new federal tax credit included, the local transit agency’s share cost for a natural gas bus was about $60,860 versus $68,000 for a

diesel bus. This estimate, however, did not includ e infrastructure costs. Thus the Board’s alignment of the urban bus engine standard with the heavy-duty truck engine standards allows transit districts that want to seek incentive funding to do so, and provides flexibility to all transit agencies.

7. Comment : I do not believe if you uphold the standard the Carl Moyer funding will be in jeopardy for anyone, particularly if you are buy ing .2 gram engines because the standard is .5. And, therefore, you would have an advantage and be able to use those funding. (CCA)

Agency Response : As Executive Officer Witherspoon responded at th e October 20 hearing, “The standard in 2007 goes to .2 for both technologies, diesel and natural gas. And at that time, natural gas becomes ineligi ble for Carl Moyer funding unless you adjust the standard. And [the testifier] was c orrect in indicating that currently and until ’07 they can still qualify. But that wil l no longer be the case after ’07.”

The Board requested additional analysis to be condu cted by staff on the affect to Carl Moyer funding availability if the Board did no t align the urban bus and truck engine standards. At the October 27 hearing the Boa rd determined that transit agencies lose sufficient funding opportunities from Carl Moyer and modified the 2007 urban bus standard to align with the Californi a heavy-duty truck engine standard the engines standards to maintain this fun ding opportunity through 2009.

C. Allow for the purchase of urban bus engines abov e the current 2007 urban bus emission standard and require transit agencies to m itigate the excess NOx emissions from those purchases

1. Comment : General support for a policy to allow the purcha se of buses certified to NOx emissions greater than 0.2 g/bhp-hr by requirin g certain conditions to be met to mitigate the NOx. (ACT, VTA, CalTransit, ECCTA, WSP A)

Agency Response : The Board adopted a NOx mitigation requirement f or diesel path transit agencies with more than 30 urban buses. Wh en purchasing diesel urban buses with an engine certified to greater than 0.2 grams NOx per brake horsepower-27

hour, for each new purchase, a transit agency must retrofit one bus in its fleet. The

retrofit is to be made with a level 3 diesel emissi on control strategy with 40 percent NOx reduction, if available, or a minimum 25 percen t NOx reduction, until all urban

buses and transit fleet vehicles are retrofitted or are unable to be retrofitted.

As reflected in the numerous comments, various opti ons for mitigation were suggested. The Board’s approval in Resolution 05-6 1 of the mitigations that are reflected in the final regulation order for section 2023.1 represent the Board’s view of the options that provide the greatest flexibility t o transit agencies while achieving significant mitigation.

2. Comment : Preserve the 2007 urban bus standard with the fo llowing flexibility – small transits with fewer than 30 buses are exempt from the California standards; large diesel fuel path transits can also have the e xemption as long as they purchase the cleanest available diesel buses and as long as they retrofit an existing bus in

their fleet with the best available NOx control dev ice for every new bus purchased. (EBCC, Enviro Coalition, TSDEF, CNGVC, PG&E, NRDC, Urban Habitat)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

3. Comment : Require 100% offset of emissions for the purchas e of engines above the

current 2007 urban bus emission standard that inclu de repowers of older buses and verified NOx control devices in offset formulas. (C NGVC)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

4. Comment : Keep the current 2007 standard. Where the stand ard is waived, if the cleanest diesel equipment available is purchased, r equire the property to pay for

additional emission reductions, either from its own fleet or from another fleet of

buses or trucks in its air basin. These reductions would make the State whole for the emission reductions expected from implementing the 2007 standard. (TSDEF)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.28

5. Comment : For every non-compliant bus purchased, an existi ng bus within the same

fleet must be retrofitted with a verified NOx contr ol. If no other buses within that fleet are available for retrofit, funds equivalent to cos t of the retrofit shall be deposited in

an account established for NOx emission reductions measures. The in-lieu payment shall be borne by the engine manufacturer selling a non-compliant engine. (PG&E)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

6. Comment : We propose that ARB adopt a variation to the rul e that allows a transit bus operator to purchase a non-compliant convention al bus only if 1) they purchase the cleanest available option; and 2) for every non -compliant bus purchased, an existing bus within the same fleet must be retrofit ted with a verified NOx control, and 3) if no other buses within the fleet are available for retrofit, funds equivalent to cost of the retrofit shall be deposited in an account es tablished for NOx emission reductions measures. The in-lieu payment shall be borne by the engine manufacturer selling a non-compliant engine. (Modes to)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

7. Comment : Supports staff proposal for retrofits in return for buying buses that don't meet the current standards. This provides flexibil ity in the rule that allows transit agencies that need to purchase diesel buses the opt ion to do so and also maintain some of the benefits that we expected from the engi ne standards that are currently on the books. (Enviro Coalition)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

8. Comment : Support one-to-one mitigation as an alternative to keeping standard. We would also like to see you do everything possible t o promote additional NOx reduction beyond the one-to-one. We also want to s ee you write into the regulation a requirement that transits that are on the diesel path that cannot buy complying buses and do go ahead and buy non-complying diesel technology buses, they buy the cleanest diesel bus that's available. (Enviro C oalition)29

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

9. Comment : Support mitigating for those operators that need to purchase diesel buses. We also think that you need to require tran sit properties offset the emissions of non-compliant engines. (BAAQMD)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

10. Comment : Supports exemption with a one-to-one mitigation across fleets. WSPA supports allowing regulated entities some flexibili ty in how they comply with state regulations in order to ensure the regulations get implemented in a cost-effective

manner based on individual business variations. Th erefore, WSPA supports the staff's optional policy decision to align. (WSPA)

Agency Response : As reflected in the numerous comments, various o ptions for mitigation were suggested. The Board’s approval in Resolution 05-61 of the mitigations that are reflected in the final regulat ion order for section 2023.1 represent the Board’s view of the options that provide the gr eatest flexibility to transit agencies while achieving significant mitigation.

D. Require all transit agencies (statewide) to purc hase/lease only alternative-fuel

buses.

1. Comment : General opposition to a statewide alternative fu el mandate because of the lack of infrastructure availability throughout the State and the capital expenses already spent by transit agencies on the diesel pat h. In some cases, alternative fuel vehicles are not a viable option given the necessar y duty cycles required by some transit authorities. (MUNI, ACT, Lake, HTA, RCRC, S amtrans, MTA, VTA, WSPA, GGT, MTC,TSDEF, Hayward, Richmond, RTA, FL#2)

Agency Response : Comment noted. The Board did not adopt this opt ion; rather the Board acted to align the urban bus standard with th e heavy-duty truck engine standard. This action maintains the status quo for transit agencies as diesel and alternative fuel engines will be able for transit a gencies on the diesel fuel path and those on the alternative fuel path.

2. Comment : This [statewide mandate to alternative fuel path ] would create competition for the limited supply of natural gas a nd thus increase the price of30

natural gas. Any conversion to an alternative fuel path would require funds be

diverted from transit services in order to install infrastructure, purchase vehicles, and pay for higher operating costs associated with main tenance. No backfill is available

to fund services on the streets. This would result in service cuts effecting the poor and transit dependant, youth, seniors, and disabled populations. (AC Transit)

Agency Response: See response to Comment D-1 above.

3. Comment : Maintain technology and fuel neutrality in all a spects of ARB transit fleet rules and engine regulations, and accept and allow technology that meets adopted emission standards, including diesel-electric hybri d buses on the diesel path starting in 2007. (MST, GGT, RTA, SLO, SBMTD)

Agency Response : Comment noted. The Board did not adopt this opt ion, but did require all transit agencies within the South Coast District to follow the alternativefuel path. The alternative-fuel path requires 85 p ercent of a transit agency’s urban bus annual purchases be fueled by alternative fuel. Of the 17 transit agencies in the South Coast District subject to ARB’s Fleet Rule fo r Transit Agencies, eleven are on the alternative-fuel path and under current state l aw must continue to purchase alternative fuel buses through 2015. These agencie s represent 90 percent (4120 buses) of the transit buses in the South Coas t District.

The Board’s decision also reflects a balancing of l egal and policy considerations. By amending ARB’s fleet rule to require that all trans it agencies within the South Coast District follow the alternative fuel path, the Boar d assists the South Coast District in continuing to exercise its authority in Health and Safety Code (HSC) section

40447.5. This statute authorizes the South Coast D istrict to impose alternative fuel requirements on fleets within its jurisdiction. Fu rther, the Board’s assistance to the

South Coast District is consistent with the Board’s authority in Health and Safety Code section 39605 to provide any assistance to any district.

4. Comment : To require transit operators, least of all small transit operators with less than 100 buses in the entire fleet, to convert to a lternative fuel urban buses would be a substantially inappropriate investment of public funds. (Roseville)

Agency Response : Comment noted. The Board did not adopt this opt ion for transit agencies outside of the South Coast District. See the response to Comment D-3.

5. Comment : It is the District's position that the Board can not legally adopt the regulations because the Board has not complied with its own regulations implementing the California Environmental Quality A ct (CEQA). The financial costs associated with the proposed regulation have been w oefully underestimated. The proposed policy is contrary to the Board's Environm ental Justice policy. Finally, if adopted, the regulation constitutes a "state mandat ed program" for which the State is responsible for compensating the 48 transit agen cies that adopted the "diesel path" for the costs of compliance. (ACTransit)31

Agency Response : Comment noted. The Board has not required trans it districts

outside the South Coast District to be on the alter native fuel path. See the response

to Comment D-3.

6. Comment : Supports fuel neutrality. Encourage clients to buy the cleanest. If standards are aligned with EPA, we will likely defe r further emissions reduction and develop more cost effective systems with those stan dards that are met. Complex R&D needs market certainty. (ISE)

Agency Response : ARB appreciates the cooperation from industry an d looks forward to working the industry in the future.

7. Comment : I would ask you not to fall for false choices. The choice Option 3 to go to natural gas option only is a false choice. You’d h ave to redo the rule. We never asked you to do that. All we asked for is for publi c health standard to be maintained and for you to require the transit agencies to meet it. (CCA)

Agency Response : Comment noted. The Board did not adopt this opt ion for transit agencies outside of the South Coast District. See the response to Comment D-3.

IV. SUMMARY OF 15-DAY SUPPLEMENTAL COMMENTS AND AGE NCY

RESPONSES

During the 15-day supplemental comment period, the Board received written comments

from:

Kevin Beach City of Westminster John Dayton/Richard Hunt Metropolitan Transportati on Authority (MTA) Susan Chiaroni Golden Gate Bridge Highway & Trans District (GGT)

The comment letter from GGT supported the Board’s m odifications to the proposed amended regulations. The other two comment letters did not direct any objections or recommendations at the Board’s proposed modificatio ns or to the procedures followed by the Board in rulemaking action.