### Appendix G

Legal Authority and Other Requirements(This page intentionally left blank.)May 7, 2007 Appendix G 1 Overview of California’s Legal Authority

Legal authority to regulate sources of air pollution in California is found in both

federal and state law. At the federal le vel, the Clean Air Act (“the Act” or “CAA”) calls for a two or three partner endeavor involving federal, state and, where permitted by state law, local authorities. The Act directs the U.S. Environmental Protection Agency (U.S. EPA) to undertake a national effort to improve air quality. To carry out this directive, U.S. EPA is directed to establish national ambient air quality standards to protec t the public health and welfare (CAA §109).

The primary tool to be used in the effort to attain national standa rds is a SIP to be developed by each state that has one or more nonattainment areas. The SIP must provide for implementation, maintenance, and enfo rcement of the national standards (CAA § 110(a)(1)). CAA § 110(a)(2)(A) broadly authorizes and directs

states to include in their SIPs:

"...enforceable emission limitati ons and other control measures, means, or techniques (including ec onomic incentives such as fees, marketable permits, and auctions of emissions rights ), as well as

schedules and timetables for compliance, as may be necessary or appropriate to meet the applic able requirements of this Act."

While the Act requires states to develop SIPs, and clearl y intends that they bear primary responsibility for atta ining the national standards (C AA §101(a)(3 )), it also provides U.S. EPA with two significant role s in this process. As a partner in the effort to attain and maintain the standards, U.S. EPA is authorized and directed to adopt measures to control emissions from various sources, such as consumer products, motor vehicles, nonroad engines and vehicles, and aircraft (CAA §§183(e)(3), 202, 213 and 231). Additionally, U.S. EPA has ultimate authority and responsibility to in tervene with direct federal action if th e SIP is inadequate, incomplete or not properly implemented by the state (CAA §§ 110(c)(1) and 113).

Similarly, Cali fornia law generall y divides responsibili ty for meeting the requirements of the Clean Air Act (as we ll as separate, co mprehensive state requirements related to air quality) between ARB and local air pollu tion control or air quality management dist ricts (districts). Ho wever, other state or local agencies also have the authority under stat e law to regulate certain pol lutant-emitting sources or activities. For example, the State's mo tor vehicle inspecti on and maintenance program is primarily the responsibility of the Bureau of Automotive Repair in the Department of Consumer Affairs, and th e Department of Pesticide Regulation has primary authority to regulate the use of pest icides. Legal authorit y for state, district, and local efforts to improve air quality is contained primarily in Division 25.5 and

Division 26 of the Californ ia Health and Safe ty Code, although au thority for some programs is located elsewh ere in the State codes. 1

1 All section references in this discussion are to the Health and Safety Code unless otherwise specified.May 7, 2007 Appendix G 2 Pursuant to these codes, ARB is charged with co ordinating, regional and local

efforts to attain and maintain both state and national ambien t air quality standards. The direct statutory link between ARB and the mandates of the CAA is found in §39602 of the Health and Sa fety Code, which states:

"The state board is designate d the air pollution control agency for all purposes set fo rth in federal law. The state board is designated as the state agency responsible for the preparati on of the state implementati on plan requ ired by the Clean Air Act (42 U.S.C., Sec. 7401, et seq.) and, to this end, shall

coordinate the activities of all districts necessary to comply with that

act. Notwithstanding any other provis ion of this division, the state implementation plan shall only incl ude those provisions necessary to meet the requirements of the Clean Air Act."

In directing the California approach to improving air quality, State law divides

control activities into vehicular and no nvehicular sectors (§§39002 and 40000).

The control of vehicular so urces is the responsibility of ARB, while primary responsibility for nonvehicula r controls falls to the loca l air districts (§§ 39002, 40000-40002, 40702, 4 0717; see also §§ 40400- 40540 for provisions specific to the South Coast Air Quality Management District). T hese authorities have been used by the local district s to adopt and enforce numer ous rules to control air pollution. In a ddition, ARB has comprehen sive oversight authorit y over the districts

to undertake nonvehicular source control acti vities if any districts fails to perform satisfactorily (§§39002, 41500, 41502, 41503, 41 504, 41505 and 41652).

The Clean Air Act requires that SIP provisions be legally enforce able. Under State law, a tiered system of authority for enfo rcement exists which pa rallels the authority to develop and implemen t the SIP. ARB has authority to enforc e vehicular controls. (See, e.g., §§41510, 41511 and 41513, 43012, 43016 and 43017, 4 3100, 43105, 43106, 43204-43212 and Vehicle Code §§27156, 38390 and 38391.) Primary responsibility for nonvehicular enforcement is vested in the local air districts. (See, e.g., §§41510, 41511 an d 41513, and 42300 et seq.) Ho wever, if ARB finds that a

district is not taki ng reasonable action to enforce applicable air pollution control statutes, rules and regulat ions, ARB may, after a publ ic hearing, assume the district's enforcement power s and enforce these laws (§41505). U.S. EPA has similar authority to assume enforcement juri sdiction if a state fails to enforce SIP provisions (CAA §113).

Within the framework of state and local shared responsibility for air pollution control, with ultimate air district acc ountability to ARB, ARB has the necessary statutory authority to assu re compliance with the requirements of the Clean Air Act relating to the attainment of na tional standards and the rate-of-progress

demonstrations.May 7, 2007 Appendix G 3 Legal Authority to Adopt St ate and Federal SIP Measures

State components of the 2007 SIP are des igned to reduce emissions from onroad mobile sources (passenger vehicles and trucks), off-road mobile sources (agricultural equipment, construction equipment, and other off-road sources), goods movement sources, and areawi de sources (consumer products and pesticides). The legal authority for implem enting the measures in each of these categories is described below.

Mobile Sources

Mobile source measures are a central comp onent of the 2007 SI P. The measures

include reductions to be realized from ac tions taken or to be taken at both the

federal and state level.

Federal Responsibility for National Mobile Source Measures

If all areas of the St ate are to demonstrat e attainment by the specified deadlines, a critical part of the overall strategy to reduce mobile sour ce emissions in California

must be U.S. EPA's regulation of national sources pursuant to §§2 02(a)(2)(B), 213

and 231 of the Clean Air Ac (CAA). Projected emi ssions from sources under federal jurisdiction are very significant, and these emissi on categories are expected to grow dramatically through 2024 wi thout new strategi es. Under these circumstances, U.S. EPA has an obligation under the CAA to pr omulgate standards for these unregulated or underregulated national sour ces. Such measures should be fully creditabl e in the SIP.

Certainly, U.S. EPA has the authority to adopt standards for national sources in

order to assist states in achieving the national am bient air quality standards (NAAQS). U.S. EPA's author ity derives from a number of provisions of the Clean Air Act which authorize or require the pr omulgation of variou s types of control

measures. The sc ope of U.S. EPA's authority under many of these provisions is broadly defined. For example, CAA §202 directs the Administra tor of the U.S. EPA

to establish emission stan dards for new motor vehicles and CAA §231 directs the

Administrator to establish aircraft emission st andards. Both of th ese sections direct the Administrator to promul gate regulations in order to control emissions:

"which, in his judgment, cause or contribu te to air pollution which may reasonably be anticipate d to endanger pub lic health and welfare ..." (CAA §§202(a) and 231(a)(2)).

CAA §213 provides U.S. EPA with the au thority to adopt emi ssion standards for nonroad engines and vehicles (such as marine vessels, construction equipment, and farm equipment). Unde r §213, the Administrator is required to determine whether ozone pr ecursor or carbon m onoxide emissions from nonroad engines or vehicles (other than locomotives) "cause, or significant ly contribute to , air pollution which may reasonably be anti cipated to end anger public health or welfare" and to regulate the sources that in his judgme nt "cause, or contribute to, such airMay 7, 2007 Appendix G 4 pollution." CAA §213 also directs the Administrator to adopt emission standards for

new locomotives that:

"achieve the greatest degree of emission reduction achievable through the app lication of technology which the Administrator

determines will be availa ble for the locomotive s or engines to which such standards apply, gi ving appropria te consideration to the cost of applying such technolog y within the period of time available to

manufacturers and to noise, energy and safety factors associated with the application of such technology." (CAA §213(a)(5).)

Federal law preempts individual states fr om adopting emission standards for most of these sources (see CAA §§209 and 233). As explai ned in the next section, however, California has co ncurrent authority to regul ate some nonroad engines or vehicles including marine vessels, and Ca lifornia can obtain a waiver of federal preemption to adopt emission standards for other nation al source categories.

If California is to ade quately protect public health, the essential emission reductions necessary from these sources must be fully realized through ti mely promulgation of

all feasible standards for national sources by U.S. EPA under the authorities provided in the Act. Wi thout such federal contro l of preempted and national transportation sources, Cali fornia simply canno t adequately prot ect public health because it is not possible to obtain sufficient emission reductions solely from sources under local and juri sdiction to offset uncont rolled or undercontrolled emissions contributed by national sources subject to federal control.

The very broad language of the Clean Air Act authorizes and directs the Administrator to establish appropriate st andards for national sources in order to effectively address emissions from these sources in California and other states. Such standards are necessary and technolog ically feasible; therefore, U.S. EPA has an obligation to promulgate t hese standards without delay.

General State Authority for Mobile Source Measures

ARB has broad authorit y under State law to regulate m obile sources. Health and Safety Code §§ 43000, 43000. 5, 43013(b) and 43018 provide authority for ARB to adopt emission standards and other regul ations to reduce emissions from new and in-use motor vehicles and other mobile sources. These authorities empower the Board to adopt the mobi le source regulat ions and other co ntrol measures

identified in this SIP. Health and Safety Code §43013(a) provides that:

"The state board may adopt and implement motor vehicle emission standards, in-use performance stan dards, and motor vehicle fuel specifications for the control of ai r [pollutants] and sources of air pollution which the stat e board has found to be necessary, costeffective, and technologica lly feasible to carry ou t the purposes of this division, unless preemp ted by federal law."May 7, 2007 Appendix G 5 In addition, Health and Safe ty Code §430 18 provides:

"The state bo ard shall endeavor to achieve the maximum degree of emission reduction possible from vehicular and other mobile sources in order to accomplish the attainment of the state standards at the earliest practical date."

To carry out these directives, the Board is directed to:

"... adopt and implement emission standards for new motor vehicles [or new motor vehicle engi nes] for the control of emissions therefrom,

which standards the st ate board has found to be necessary and technologically feasible to carry out the purposes of this division. Prior to adopting such standards, the state board shall consider the impact of such standards on the ec onomy of the state, including, but not limited to, their effe ct on motor vehicle fuel efficiency ." (§43101)

The Board is also directed by §43013(b) to regulate ot her categories of mobile

sources:

“The state board shall ... adopt standards and regulations for ... off-road or nonvehicle engine categori es, including, but not limited to, off-highway motorcycles, off-highway vehicles, constr uction equipmen t, farm equipment, utility engines, locomotives, and, to the extent permitted by federal law,

marine vessels.”

ARB is further authorized by State law to adopt Air Toxic Control Measures (ATCMs) to control identified toxic air c ontaminants (TACs). ARB has identified anumber of substances as TACs, including “particulate emissions from dieselfueled engines” (see title 17, Californi a Code of Regulations, sections 93000 and 93001). The autho rity to identify TACs and adopt ATCMs is provided by the Tanner Act (Health and Safety Code §39650 et seq.). Under the Tanner Act, ARB may adopt ATCMs to control TAC emissions from both nonvehicular sources (such as off-road diesel en gines and equipmen t, marine vessels, etc.) and from

vehicular sources such as on-road diesel trucks (s ee §§36658, 39666, and 39667). ATCMs may specify both new and in-use emission stan dards for all of these

sources.

Each of the sections cited above must be read in the context of Health and Safety Code 39600, which prov ides that: "The state board s hall do such ac ts as may be necessary for the proper execution of the powers and duties granted to, and imposed upon, the state board by this division and by any other provision of law."

Pursuant to these authorities ARB ha s adopted the world's most stringent standards for passenge r cars, light-duty trucks and medium-duty vehicles. ARB has also adopted regulations establishing standards for heavy- duty vehicles, offroad vehicles and engines, including sm all off-road engines and equipment (e.g., lawn and garden, small utility engines), off-road recreat ional vehicles (e.g., dirtMay 7, 2007 Appendix G 6 bikes, all-terrain vehicles, golf carts), off-road diesel engine s and equipment (e.g.,

certain farm and constructi on equipment, portab le generato rs), off-road gasoline and LPG engines and equipment (e.g., forklifts, airport ground s upport equipment), and marine pleasure cra ft (e.g., jet skies and recreational boats).

Federal Preempti on and Waivers

The CAA preempts states, including Calif ornia, from adopting requirements for new off-road engines smaller than 175 horsepower used in farm or construction equipment. (CAA §209(e)). However, t he CAA does not preempt California from adopting requirements for new off-r oad engines greater than 175 horsepower used in farm or construction equipment. California may also adopt in-use emission standards for off-road engines. However, California must obtain

authorization from the Admi nistrator of the U.S. EPA (i.e., a waiver) under CAA §209(e) before any new or in-use standar ds for off-road vehicles can be enforced, unless such standards are withi n the scope of a previously granted

authorization.

In-use standards for on-road vehicles and engines (such as diesel trucks) are not covered by CAA §209. California is no t preempted from adopting in-use, on-road

standards and does not need to obta in a waiver for such standards.

State Authority to Regulate Marine Vessels

State law authorizes ARB to regulate marine vessels to the extent such regulation is not preempted by federal law. This authority is provided by Health and Safety Code §§43013 and 43018 and by the Tanner Act, which authorizes the adoption of ATCMs to regulate diesel particulate emissions from marine

vessels.

The CAA places certain constraints on ARB’s legal authority to regulate

emissions from marine vessels in Californ ia Coastal Waters. The key issue is whether ARB measures are engine emissi on standards or in-use operational requirements. The CAA pr eempts California from impl ementing engine emission standards (e.g., new or retrofit engi ne standards or re quirements) unless

California has received authorization from the U.S. EPA to enforce such standards under CAA §209(e)(2). However, the CAA does not preempt states from implementing in-use operational standards, which include but are not limited to restrictions on hours of operation, su lfur limits on fuel, and daily mass emission limits (see Appendix A to 40 CFR Part 89, Subpart A, as discussed at 62 FR 67733, 67735 (December 30, 1997)).

The 2007 SIP includes measures to require the use of cleaner, lo w-sulfur fuel in ship auxiliary and main engines. These r equirements are best characterized as in-use operation requirements that are not preempted under the CAA. However, to the extent that these fuel require ments could be characterized as engine emission standards, California would need to get U.S. EPA authorization under CAA section 209(e). Author ization from U.S. EPA under CAA section 209(e) willMay 7, 2007 Appendix G 7 also be needed for the proposed SIP meas ures on harborcraft that would impose new engine and in-use retrofit/repower standards.

The 2007 SIP also includes a cold-ironing measure for ships. This measure will likely not require U.S. EPA authorization si nce the measure can be drafted as an in-use operational requirement. Similarl y, the vessel speed reduction measure in the SIP would clearly be an in-use operatio nal requirement that does not require

U.S. EPA authorization. Ho wever, to the extent t hese two measures mandate the installation and use of specific equipment on board vessels, those mandates would likely require U.S. EPA authorization under CAA §209(e).

Case law supports California authority to regulate marine vessel emissions while the ships are at the ports and in Ca lifornia Coastal Waters, provided a

reasonable “nexus” is established bet ween the regulation and the state’s legitimate interest in protec ting the health and safety of its citizens or its natural resources (see Gillis v. State of Louisiana, 294 F.3d 755, 761 (5 th Cir. 2002)). Properly drafted to avoid impacting the in ternal affairs of a vessel, California regulations on marine vessels could also be extended to foreign-flagged vessels as well as U.S.-flagged ones (see Spector v. Norwegian Cruise Line, Ltd., 545 U.S. 119, 130-131).

Smog Check Program

California’s vehicle inspection and main tenance program (commonly referred to as the “smog check program”) is admin istered by the Bureau of Automotive Repair, which has the author ity under state law for devel oping and implementing the program (§ 44002). T he overall structure of Calif ornia’s current smog check program was established by legislati on enacted in 1994 in response to the requirements of the federal Clean Air Act and U.S. EPA regulations. The laws governing the implementation and enforcement of the program ar e set forth in Health and Safety Code §44000 et seq.

Fuels

ARB has the authority to regulate the cont ent of motor vehicle fuels. This was recognized by the California Supr eme Court in a 1975 decision, Western Oil & Gas Assn. v. Orange Co unty Air Pollution Control District (1975), 14 Cal. 3d 411, 418- 420, which held that the authority of ARB to adopt and implem ent motor vehicle

emission standards incl udes the authority to set standar ds for motor v ehicle fuels.

ARB’s authority over fuels wa s reaffirmed and clarified in the Californ ia Clean Air Act of 1988, which added §43 018 to the Health and Safe ty Code and substantially amended §43013. These sections provide that ARB has the authority to establish motor vehicle fuel regula tions, and that before adopting and amending such regulations ARB must take certain sp ecified actions and make specified

determinations.May 7, 2007 Appendix G 8 Consumer Products

ARB has broad author ity under California law to regulate consumer products. Specifically, Health and Safety Code §41712(b) provides that:

"The state board shall adopt re gulations to achieve the maximum

feasible reduction in volatile organic compounds [V OC] emitted by consumer products, if the state board determin es that ade quate data exists to establish both of the following: (1) The regulations are necessary to atta in state and federal ambient air quality standards. (2) The regulations are commercially and technologically feasible and necessary.” (See also §39600.)

Pursuant to this authority ARB has already ado pted standards for numerous categories of consumer products and has achieved significant emission reductions from these products. ARB will continue to develop and adopt measures that limit the VOC emissions from consumer products.

Vapor Recovery

Health and Safety Code §41954 re quires ARB to adop t procedures and performance standards for controlling gasoline vapo r emissions from gasoline marketing operations, includi ng transfer and storage o perations, to achieve and maintain ambient air qualit y standards. This section also authorizes ARB, in cooperation with districts, to certify vapor recovery systems that meet the performance standards . Health and Safe ty Code §39607(d) re quires ARB to adopt test procedures to determine compliance with ARB and districts’ non-vehicular standards. State law (§41954) further requires districts to use ARB test procedures for determining compliance with perf ormance standards and specifications established by ARB.

To comply with these provisions of stat e law, ARB has adopt ed the gasoline vapor recovery certification and test procedur es found in 17 Ca lifornia Code of Regulations §§94010 to 94015 and 94101 to 94165. These regu lations reference procedures for certifying vapor recovery systems and test procedures for verifying compliance with performance standards and specifications.

Pesticides

DPR has broad author ity under state law to control the use of pesticides for the purposes of protecting human health and the environment, including improving air quality. This authority is set forth in Divisions 6 and 7 of the California Food and Agricultural Code (FAC); (FAC §§14082, 14102, also §§12781, 12824-12828, 12976-12977, 12991-1 2995, 12996-12999, 13101 and 13102 ). Following are more specific descriptions of DPR’s authority in particular areas.May 7, 2007 Appendix G 9 DPR has the power to adopt r egulations to carry out t he provisions of the FAC

that it is authorized to administer or enforce (FAC §§11456, 11502.5, 12781, 12976, 12981). No pesticide may be manufactu red, sold or offered for sale in California unless it has been registered by the DPR (§12811). DPR may place appropriate restrictions on a pesticide’s use, including limitations on the quantity, area, and manner of appl ication (§12824).

Use of pesticides classified as “restricted materials” often re quires a permit (see §§14006.5; title 3, California Code of R egulations (CCR), §6412) . All agricultural and commercial structural use fumigants are re stricted materials. Permits to use restricted materials are issued by t he appropriate County Agricultural Commissioner, or by DPR in counties that have no County Agricultural

Commissioner. DPR can and does recomm end permit conditions to be included in restricted material pe rmits. DPR can also enact us e restrictions or permit conditions by regulation (FAC §14007( a)). DPR must adopt regulations governing the use of any restricted mate rial that the Director determines is injurious to the environment (FAC §14005). It is unlawful to apply any restricted material for which regulations have been adopted except as provided in such regulations (FAC §4011).

All agricultural and commercial structural us e of pesticides must be reported (title 3, CCR §6624 and FAC §12979). Among other information, the Pesticide Use Reports must identify the dat e of application; location of property treated; total acres or units treated; and the pestici de and amount used (tit le 3, CCR §6624).

New Technology Measures for ARB’s Long-Term Strategy

Like the 1994 and 1999 SIPs for the Sout h Coast Air Basin, this SIP contains a special class of new technology measures necessary to contribute to attainment in

the South Coast and San Jo aquin Valley. CAA §182 se ts out requirements for marginal, moderate, serious, severe an d extreme ozone nona ttainment areas, with the requirements for each le vel building on the preceding requirements. The South Coast and San Joaquin Valley have or inte nd to request to “bump-up” to an

extreme classification in or der to show attainment of the federal 8-hour ozone standard by 2024. As extr eme areas, th e South Coast and San Joaqui n Valley will be required to meet the mo st strenuous requirements a pplicable to areas with lesser ozone problems, plus all of the requirements of CA A §182(e)(1) th rough (3). The following discussion applies to any Cali fornia nona ttainment area classified as

extreme.

To address attainment planning for extreme ozone nonattainment areas, Congress enacted CAA §182(e)(5) as par t of the 1990 CAA amendments. Specifically, CAA §182(e)(5) provides:

"The Administrator may, in acco rdance with section 110, approve provisions of an implementation plan for an Extreme Area which anticipate development of new contro l techniques or improvement of existing control technol ogies, and an attainment demonstration basedMay 7, 2007 Appendix G 10 on such provisions, if the State demonstrates to the satisfaction of the

Administrator that-- (A) such provisions are not necessary to achieve the

incremental emission reductions require d during the first 10 years

after the date of the enactment of the Clean Air Ac t Amendments of 1990; and (B) the State has submitted enforceable commitments to develop and adopt contin gency measures to be implemented as set forth herein if the anticipated technologies do not achieve planned

reductions. Such contingency measures shall be submitted to the Administrator no later than 3 years befo re proposed implementation of the plan provisions and approved or disapp roved by the Administra tor in acco rdance with

section 110. T he contingency meas ures shall be adequate to produce

emission reductions suffi cient, in conjun ction with other approved plan provisions, to achieve the periodic emission reductions required by subsection (b)(1) and (c)(2 ) and attainment by the applicable dates. If the

Administrator determines that an Extr eme Area has failed to achieve an emission reduction requireme nt set forth in subsection (b)(1) or (c)(2), and

that failure is due in whole or part to an inability to fully implement provisions approved pursuant to this subsection, the Administ rator shall require the State to implement the co ntingency measures to th e extent necessary to assure compliance with subs ections (b)(1) and (c)(2)."

U.S. EPA approved the new te chnology measures set fo rth in the 1994 and 1999 Ozone SIPS (60 FR 43379, 4381 (August 21, 19 95); 65 FR 6091, 6093 (February 8, 2000), and fu rther explained its interp retation of §182(e)(5):

“The 1990 Amendments to the Act added section 182(e)(5), which applies exclusively to “Extreme” oz one areas. This provision authorizes the State to use conceptual, as yet unadopted measures fo r its ozone attainment

demonstration and rate-of- progress after the year 2000, if these measures anticipate new or improved technology or control tec hniques and are not needed to meet the progre ss requirements of the fi rst 10 years . . . These measures necessarily are pr eliminary, and as such lack both regulations and technical support or even decisions regarding specific directions and approaches. Complete SIP rule elem ents are dependent up on future years of research projects, analyses of te chnologies and associated commercial feasibility, public wor kshops, and public decision making.” (60 FR 43381)

The 2007 SIP for the South Coast and San Joaquin Valley will rely on §182(e)(5) measures for a significant quantity of em ission reductions. This reliance was intended by the Act, and long-term measures that rely on new or evolving technology (including measures requiring complex analyses and decision-making and coordination among numerous governmen t agencies) fall wi thin the coverage of §182(e)(5) and are approvable as SIP re visions although not yet fully developed or adopted.May 7, 2007 Appendix G 11 Use of Secured Incentive Funding

The emission reductions from adopted SIP measures include reductions achieved through incentive programs (such as the Carl Moyer program) that help finance the clean-up of the in-use or l egacy fleet of heavy-duty diesel trucks, buses, and other diesel equipment. Calif ornia is currently investing up to $140 million per year through the Carl Mo yer Program. In the adopted measure emission reduction calculations, ARB incl uded the benefit of emission reductions that will occur in future years from funds that have been directed to ARB and through legislation.

ARB is able to include the benefit of these incentive programs because the funds have been secured for ARB through state legi slation. The Carl Moyer Memorial Air Quality Standards program was establis hed in 1988 and in its first six years, the program provided over $140 million in funding to clean up more than 6,300 heavy-duty engines. State legislat ion (AB 923, 2004 and SB 1107, 2004) provided increased and cont inued funding for the program and other incentive programs – up to $141 million annually thro ugh 2015. The sources of this new funding secured in this legi slation are listed below.

1. Increased and expanded Smog Check pr ogram fee revenues directed to the program provide approximately $61 m illion per year. It is emission

reductions from these revenues t hat have been included in the adopted

measures in this SIP.

2. An increase in the fee assessed for new tire purchases from $1 to $1.75 provides approximately $25 million per year through 2015. The resulting

revenues are directed to the air districts.

3. A $2 increase in the amount of air district-imposed motor vehicle registration fees will provide up to $55 m illion per year to local air districts for clean air incentive programs.

Reasonably Available Contro l Measures (RACM) Discussion

U.S. EPA’s guidance requires each nona ttainment area to submit a demonstration that it has adopted a ll RACM necessary to demonstrate attainment as expeditiously as possi ble. However, U.S. EPA has already

determined that the California (i.e., ARB) control programs for mobile sources

and fuels constitute BACM. 2 Moreover, whereas U.S. EPA deems its federal mobile source program to establish bes t available control measures for the nation, the California program generally goes beyond federal mobile source requirements (where not otherwise prescri bed by federal law). Therefore, ARB

believes that the State mobile sour ce program exceeds federal RACM requirements.

2 See page 5419 of the F ebruary 4, 2004 proposed rulemaking for the San Joaquin Valley PM10 plan, and page 30035 of the May 26, 2004 final rule.May 7, 2007 Appendix G 12 Analyses of measures and adoption commitm ents for sources under air district responsibility subject to RACM and Reas onable Available Control Technology (RACT) requirements are included in the local air district plans.

Conformity Budgets

Section 176(c) of the CAA requires that any action by the Federal government be consistent with, or "conform" to the purpose and intent of the SIP. This section of the Clean Air Act also requires that trans portation planning agencies in areas that do not meet federal air qua lity standards demonstrate t hat their long range plans, funding programs and projects are consis tent with and conform to the SIP before any part of the federal gov ernment grants approval, f unding, or takes any other action on those plans, pr ograms or projects.

In turn, the local air quality attainment plans are required by the Clean Air Act to set out emissions budgets for transporta tion agencies to use when demonstrating conformity to the SIP. These emissi on budgets are linked to the attainment demonstration, and represent an upper bound, or ceiling that cannot be

exceeded without undermini ng the SIP in its efforts to attain the federal air quality standards. Because the development of an area's emission budget takes place at the local level, each loca l plan will contain that area's transportation conformity emissions budgets and supporting mate rial concerning the basis and development of those budgets.