STAFF REPORT: INITIAL STATEMENT OF REASONS FOR PROPOSED 

RULEMAKING 

PROPOSED AMENDMENTS TO THE REGULATION FOR IN-USE OFF-ROAD 

DIESEL-FUELED FLEETS 

Mobile Source Control Division 

Heavy Duty Diesel In-Use Strategies Branch 

June 2009 

State of California 

AIR RESOURCES BOARD 

STAFF REPORT: INITIAL STATEMENT OF REASONS 

Public Hearing to Consider 

PROPOSED AMENDMENTS TO THE REGULATION FOR IN-USE OFF-ROAD 

DIESEL-FUELED FLEETS 

To be considered by the Air Resources Board at a meeting of the Board that will 

commence on July 23, 2009, at 

San Diego, California 

Mobile Source Control Division: 

Robert Cross, Chief 

Heavy-Duty Diesel In-Use Strategies Branch: 

Erik White, Chief 

Off-Road Implementation Section: 

Kim Heroy-Rogalski, Manager 

This report has been prepared by the staff of the Air Resources Board. Publication 

does not signify that the contents reflect the views and policies of the Air Resources 

Board, nor does mention of trade names or commercial products constitute 

endorsement or recommendation for use. 

State of California 

AIR RESOURCES BOARD 

PROPOSED AMENDMENTS TO THE REGULATION FOR IN-USE OFF-ROAD 

DIESEL-FUELED FLEETS 

Contributing Authors

Elizabeth White 

Cory Parmer 

Elizabeth Yura 

Michael Baker 

Jeff Wilson 

 

Legal Counsel

Michael Terris, Office of Legal Affairs 

Supporting Division

Planning and Technical Support Division 

Acknowledgements 

This report was prepared with the assistance and support from the other divisions and 

offices of the Air Resources Board. In addition, we would like to acknowledge the 

assistance and cooperation that we have received from many individuals and 

organizations. 

vii 

TABLE OF CONTENTS 

EXECUTIVE SUMMARY ................................................................................................ 1

I. INTRODUCTION ...................................................................................................... 9

A. Background .......................................................................................................... 9

B. Need for Emission Reductions ........................................................................... 10

C. Report Overview................................................................................................. 11

D. Staff Recommendation ....................................................................................... 12

II. PROPOSED AMENDMENTS TO THE REGULATION FOR IN-USE OFF-ROAD 

DIESEL-FUELED FLEETS..................................................................................... 13

A. Regulatory Authority........................................................................................... 13

B. Rationale for Amendments ................................................................................. 13

C. Public Process.................................................................................................... 14

D. Proposed Amendments ...................................................................................... 15

III. ECONOMIC IMPACTS........................................................................................... 29

A. Legal Requirements ........................................................................................... 29

B. Legislatively Directed Amendments.................................................................... 29

C. Additional Incentives for Early Actions................................................................ 32

D. Other Proposed Amendments ............................................................................ 34

E. Impacts on California Economy.......................................................................... 34

F. Potential Impacts on Small Businesses.............................................................. 35

G. Potential Impacts on Public Agencies................................................................. 35

IV. ENVIRONMENTAL IMPACTS ............................................................................... 37

A. Legal Requirements ........................................................................................... 37

B. Air Quality Impacts of Proposed Amendments ................................................... 37

C. Future Evaluation of Current Economic Conditions on Emissions...................... 44

D. Other Environmental Impacts ............................................................................. 45

V. ALTERNATIVES CONSIDERED ........................................................................... 47

A. Legislatively Directed Amendments.................................................................... 47

B. Additional Incentives for Early Action ................................................................. 51

C. Other Amendments ............................................................................................ 53

VI. REFERENCES ....................................................................................................... 55
viii 

APPENDICES 

APPENDIX A: AB 8 2X LANGUAGE

APPENDIX B: PROPOSED REGULATION ORDER FOR IN-USE OFF-ROAD 

DIESEL-FUELED FLEETS

APPENDIX C: CREDIT EXAMPLES

APPENDIX D: LIST OF ACRONYMS
ix 

LIST OF TABLES 

Table 1: Proposed Revised BACT Schedule.............................................................. 2

Table 2: Proposed Revised BACT Schedule for Large Fleets meeting the Fleet 

Averages........................................................................................................ 2

Table 3: Estimated Emissions Benefits of Proposed Incentives for Early Action.. 6

Table 4: Proposed Revised BACT Requirements.................................................... 17

Table 5: Costs for a Fleet with Reduced Activity..................................................... 30

Table 6: Costs for a Fleet with Reduced Hp............................................................. 31

Table 7: Statewide NOx and PM Emission Reductions from the Current 

Regulation (tpd)........................................................................................... 37

Table 8: Statewide Increase in Emissions in 2011 and 2012 from BACT Schedule 

Amendments ............................................................................................... 39

Table 9: New Credits Awarded to Fleet .................................................................... 40

Table 10: Possible 2010 Emissions Benefits from Proposed Double Credit for 

Early NOx Retrofits ..................................................................................... 42

Table 11: Possible 2010 Emissions Benefits from the Proposed Turnover 

Exemption for Retrofit Vehicles and Extended Double Credit................ 43

Table 12: Possible 2010 Emissions Benefits from Proposed Repower Incentive 43

Table 13: Emissions Benefit Comparison for Triple Retrofit Credit ...................... 52
x 
xi 

LIST OF FIGURES 

Figure 1: Proposed NOx BACT Turnover Requirements for Large Fleets ............ 18

Figure 2: Proposed PM BACT Retrofit Requirements for Large Fleets................. 18

Figure 3: Costs for a Fleet with Reduced Activity................................................... 31

Figure 4: Costs for a Fleet with Reduced Hp ........................................................... 32

Figure 5: Effect of Proposed BACT Schedule Amendments on Emissions 

Benefits........................................................................................................ 39

Figure 6: NOx BACT Requirements for an Example Fleet...................................... 40

Figure 7: PM BACT Requirements for an Example Fleet........................................ 41
xii 
1 

EXECUTIVE SUMMARY 

What is the purpose of this report? 

As part of the recently signed California budget, the California Legislature adopted 

Assembly Bill 8 2X (Assembly Bill 8 2X or AB 8 2X), which added section 43018.2 to the 

Health and Safety Code. In AB 8 2X, the Legislature directed ARB to make several 

amendments to the California Code of Regulations, Title 13, sections 2449 through 

2449.3, the regulation for in-use off-road diesel fueled-fleets (the regulation). This 

report describes staff’s proposal to implement the legislatively directed amendments, as 

well as proposed new incentives to spur early actions by fleets to reduce emissions, and 

several additional minor modifications and clarifications to the regulation.

What did the legislature direct ARB to do and why? 

The intent of AB 8 2X, is to provide economic relief and to preserve jobs in the 

construction industry, which is currently facing difficult economic times due to the 

current global recession (Assembly, 2008; Senate, 2008). Once implemented, it would 

provide credits to fleets that have experienced drops in operational activity of their 

vehicles and/or that have reduced their fleet size by selling or retiring vehicles without 

acquiring replacements in the past three years. Under the legislatively-directed 

amendments, fleets would receive credits that could be used for compliance with the 

regulation’s in-use performance requirements, and effectively allow such fleets to delay 

the need to retrofit and turnover vehicles, especially in 2010 and 2011. The 

amendments would also allow large fleets the option of delaying a portion of their 

compliance obligations that are currently required for 2011 and 2012 until 2013. 

Specifically, AB 8 2X directs ARB to amend the regulation as follows: 

1. For the total cumulative turnover and retrofit requirements for the years 2011 

through 2013, to allow fleets to complete 20 percent of those requirements by 

March 1, 2011, an additional 20 percent by March 1, 2012, and the balance 

by March 1, 2013. 

2. To allow fleets to receive compliance credit for both particulate matter (PM) 

and oxides of nitrogen (NOx) for any vehicle retirements made between 

March 1, 2006, and March 1, 2010, provided that total fleet horsepower has 

decreased. 

3. To allow fleets that experience reduced activity of their off-road vehicles 

between July 1, 2007 and March 1, 2010 (i.e., operate their vehicle less), to 

receive credit for this reduced fleet activity to satisfy the turnover and 

retrofitting requirements of the regulation in 2010 and 2011. 

The full language of AB 8 2X is included as Appendix A to this report. 
2 

What amendments to the regulation is staff proposing in response to the 

legislature’s direction? 

Staff’s proposal for implementing AB 8 2X is summarized below. 

First, staff proposes to allow fleets complying via the Best Available Control Technology 

(BACT) provisions to take fewer actions to meet the regulation’s 2011 and 2012 

compliance dates, but such fleets would need to make up for the difference by the 2013 

compliance date. The BACT provisions allow fleets that do not meet the regulation’s 

annual fleet average targets to alternatively comply by meeting specified turnover and 

retrofit requirements. Staff proposes to revise the BACT schedule to lessen the number 

of required vehicle turnovers and retrofits required in 2011 and 2012, as shown in Table 

1 below. The turnover and retrofit requirements in 2011 and 2012 would be cut nearly 

in half, but if fleets take advantage of the new decreased requirements, they would need 

to make up for the delayed actions in 2013. 

Table 1: Proposed Revised BACT Schedule 

(Percent turnover required / Percent retrofit required) 

Regulation 2010 2011 2012 2013 2014 

Current 8 / 20 8 / 20 8 / 20 8 / 20 8 / 20

Proposed 8 / 20 4.8 / 12 4.8 / 12 14.4 / 36 8 / 20

Staff also proposes to adjust the required BACT percentages for all medium fleets and 

large fleets that are able to meet the fleet average targets in 2011 or 2012 to ensure 

that the revised schedule never increases the BACT requirements beyond what the 

current regulation requires for any fleet. The revised BACT percentages for such fleets 

are shown in Table 2 below. 

 

Table 2: Proposed Revised BACT Schedule for Large Fleets meeting the Fleet 

Averages 

(Percent turnover required / Percent retrofit required) 

Regulation 2010 2011 2012 2013 2014 

Meeting the Fleet 

Average in 2011 - - 4.8 / 12 11.2 / 28 8 / 20

Meeting the Fleet 

Average in 2012 

& Medium Fleets 

- - - 8 / 20 8 / 20

Second, staff proposes to add provisions to allow fleets to claim credit for any vehicle 

retirements that reduce total fleet horsepower (hp) between March 1, 2006, and March 
3 

1, 2010. The new provisions would provide that the new retirement credit could be used 

by fleets to satisfy their NOx and PM BACT requirements and that the new credit would 

not expire. 

Third, staff proposes to allow fleets to claim credit for reduced operational activity 

between July 1, 2007, and March 1, 2010. The reduced activity credit could be used by 

fleets to satisfy their NOx and PM BACT requirements in the years 2010 and 2011 only. 

Staff proposes to determine reduced activity by comparing activity during the period 

January 1, 2007, through December 31, 2007 (centered on July 1, 2007, the date 

specified in AB 8 2X) to the activity during the period March 1, 2009, to February 28, 

2010. Staff proposes to use horsepower-hours (work done by one horsepower in one 

hour) to determine activity, which is more reflective of emissions than simply using 

hours. Additionally, staff proposes that fleets report their reduced activity and that there 

be more stringent records required for fleets that claim more than a 20 percent 

reduction in activity as follows: 

• To receive credit up to 20 percent, a fleet would be required to produce verifiable 

records that show reduced fleet operational activity between the required time 

periods. Acceptable records include, but are not limited to, employment records 

(including man-hours worked), revenue records, taxes, operation records, and 

fuel use; 

• To receive credit greater than 20 percent, a fleet would be required to submit 

hour-meter or operator logs for each vehicle. 

Under the proposal, fleets that have retired vehicles and also have reduced activity from 

the remaining vehicles in the fleet could claim credit for both. However, staff is 

proposing provisions to prevent double counting of the same action (i.e., receiving credit 

both for retiring and reducing activity for the same vehicle). 

Why are the emission reductions from the regulation important for the State 

Implementation Plan (SIP) and for public health in California? 

As explained below, the emission reductions anticipated from the regulation are 

important from a public health standpoint and needed for the state to meet its federal 

SIP commitments. Because of this importance, when crafting the proposed 

amendments, staff included proposals to minimize the loss of emission benefits. 

The off-road vehicles covered by the regulation are a significant source of diesel PM 

and NOx emissions that lead to ozone and ambient PM. Staff estimates that 

approximately 1,100 premature deaths were associated with the baseline uncontrolled 

emissions from in-use off-road diesel vehicles in year 2005. 

The regulation was adopted in order to achieve significant emission reductions and 

protect public health. At the time the Board initially approved the regulation, staff 

estimated that approximately 4,000 premature deaths statewide would be avoided by 

the year 2030 by implementing the adopted regulation, in addition to preventing 

thousands of hospital admissions and asthma and bronchitis cases (ARB, 2007b). 
4 

Under the federal Clean Air Act (CAA), the U.S. Environmental Protection Agency (U.S. 

EPA) has established National Ambient Air Quality Standards (NAAQS) for pollutants 

considered harmful to public health, including PM2.5. Set to protect public health, the 

NAAQS are adopted based on a review of health studies by experts and a public 

process. Areas in the state that exceed the NAAQS are required by federal law to 

develop SIPs demonstrating how they would attain and maintain the standards by 

certain deadlines. If the state fails to make this demonstration, it can be subject to 

sanctions, including the loss of federal highway funds. 

In order to meet the PM2.5 standard in the South Coast and the San Joaquin Valley Air 

Basins, by 2015, reductions of NOx on the order of 50 percent are needed. Reductions 

of NOx of 80-90 percent by 2023 will be needed to achieve the 8-hour ozone standard 

in the South Coast and San Joaquin Valley. Clearly, with this magnitude of reductions 

needed, the maximum level of potential emission reductions from all sources, including 

in-use off-road diesel vehicles are critically needed. 

California’s 2007 SIP included the regulation as a control measure. ARB’s legal 

commitment to achieve the emission reductions laid out in the SIP relies upon the 

following emission reductions from the regulation by 2014 - 10.5 tpd NOx reductions 

and 2.6 tpd PM2.5 reductions in the South Coast, and 3.7 tpd NOx and 0.8 tpd PM2.5 

reductions in the San Joaquin Valley (ARB, 2007c). If the regulation falls short of 

achieving these reductions, the loss would need to be made up for by other control 

measures. 

What will the emissions impacts of the legislatively directed amendments be? 

The legislatively directed amendments will allow many fleets to comply with the off-road 

regulation by utilizing credits received under the new provisions, rather than taking 

actions to reduce emissions. Hence, the amendments will allow fleets to perform fewer 

actions to reduce emissions than they otherwise would have, with the likely 

consequence that there will be less retirement of high-emitting vehicles, fewer repowers 

of vehicles with cleaner engines, and fewer installations of exhaust retrofits. This will 

likely result in fleets having older and higher emitting vehicles. Overall, staff anticipates 

that the legislatively directed amendments will increase the emissions compared to the 

emissions that would otherwise result from the regulation. 

Because the legislatively directed amendments could lessen the requirements for many 

large fleets in the early years of the regulation, without mitigation, the changes could 

result in: 

• A loss in emission reductions achieved in 2014 (a key milestone year for the 

SIP); 

• A reduction in forecasted health benefits; and 

• An adverse economic impact on retrofit manufacturers and installers that have 

geared up for off-road implementation, which could result in reduced ability of 
5 

that industry to have product available for compliance in future years, as well as 

the potential loss of “green” jobs associated with these industries. 

However, staff recognizes that the recession has also impacted the emissions from 

many affected fleets. Many fleets have retired vehicles and reduced their vehicle 

activity and thereby reduced their emissions. However, staff does not have adequate 

data on how the current economic recession has affected the thousands of fleets in 

California to determine whether the emission reductions due to activity reductions and 

retirement are currently large enough to offset the emission benefit losses due to the 

legislatively directed amendments. A further analysis of which of these effects will have 

a larger impact on emissions is necessary. Staff is currently collecting and preparing to 

analyze relevant data from off-road fleets, including the reporting data required by the 

regulation, to address this question, and will provide an assessment of the of the impact 

of the regulatory changes to the emission reduction obligations contained in the SIP as 

part of staff’s October, 2009 update to the Board 

What does staff propose to do to mitigate the potential loss in emission benefits 

from the legislatively directed amendments? 

Staff is proposing four amendments to mitigate the potential loss in emission benefits 

from the legislatively directed changes by spurring early actions by fleets to reduce 

emissions. These amendments are intended to encourage fleets to install retrofits and 

repower vehicles with cleaner engines earlier than they otherwise would. This could 

result in reduced emissions from large fleets that otherwise would take no actions until 

2012 as a result of the legislatively directed amendments to the regulation. In turn, staff 

expects that these early actions will benefit companies that provide and install retrofits 

and repower solutions and help spur continued growth in green jobs. Because opting to 

take advantage of these incentives would be voluntary, they would not impose any 

requirements or costs on fleets. 

The amendments to provide additional incentives for early action to reduce emissions 

are: 

• Allow fleets to claim an exemption for up to 15 percent of their total horsepower 

from future turnover if they install a retrofit prior to March 1, 2011; 

• Allow fleets to claim double credit for NOx retrofits installed by March 1, 2011; 

• Allow medium and small fleets to claim double credit for PM retrofits installed by 

March 1, 2012; and 

• Allow fleets to accumulate NOx carryover turnover credit for early repowers 

installed, regardless of the total amount of fleet hp that is repowered. 

What will the emissions impacts of the additional incentives for early action be? 

The emissions impact of staff’s proposed amendments to encourage early retrofits and 

repowers would depend on their appeal to fleet owners. Staff estimated emissions 

benefits assuming that the new incentives for retrofits would spur approximately 400 

retrofits that reduce PM only and 400 additional retrofits that reduce both PM and NOx, 
6 

and that the new incentive for repowers would spur 500 repowers. Table 3 below 

summarizes the estimated emissions benefits from these incentives. In total, for the 

amount of early actions described above, PM benefits of 0.1 tons per day (tpd) and NOx 

benefits of 1.9 tpd could be expected. 

Table 3: Estimated Emissions Benefits of Proposed Incentives for Early Action 

Incentive Actions 

Incentivized 

PM Benefits 

(tons per day) 

NOx Benefits 

(tons per day)

Double Credit Towards NOx 

for Retrofits that Reduce NOx 

400 Retrofits 

with 40% NOx 

reduction 

0.05 0.5 

Turnover Exemption for 

Retrofit Vehicles, and 

Extended Double Retrofit 

Credit for Small/Medium 

Fleets 

400 Retrofits 0.05 0.1 

Credit Issued for Repowers 500 Repowers 0.1 1.3 

Total Benefits 0.2 1.9 

What other amendments to the regulation are staff proposing and why? 

Since January 2009, based on feedback and comments from affected fleets and other 

stakeholders, as well as an analysis by staff, staff is proposing that several other 

provisions of the regulation be clarified. Specifically, staff is proposing that the 

regulation clarify and provide that: 

• The manufacturer delay provisions apply to installer delays as well; 

• Community college programs that train students in the use of off-road vehicles 

are included in the definition of Non-Profit Training Center; 

• Retrofit installation may be determined unsafe if it would make compliance with 

any federal or state safety requirements impossible; 

• Public agency fire prevention activities are classified as forest operations; and 

• Fleets must report to ARB within 30 days of selling a vehicle. 

Staff believes these clarifications and modifications are necessary for successful 

implementation of the regulation. Staff does not believe the clarifications and 

modifications will have any quantifiable impact on emission reductions. 

What will be the economic impact of the proposed amendments? 

Overall, the proposed legislatively directed amendments will provide both a short-term 

and long-term cost savings to fleets subject to the regulation. However, at this time, 

staff does not have adequate data to determine how the current economic recession 

has affected each of the thousands of fleets in California, and thus staff cannot estimate 

a total dollar savings due to the legislatively directed amendments. In the interim, staff 

evaluated the impact of the proposed amendments on an example fleet to evaluate the 
7 

potential economic impacts of the proposed legislatively directed amendments. Staff 

found that if the example fleet had reduced its activity by half or retired half its vehicles, 

the proposed legislatively directed amendments would reduce its compliance costs by 

76 to 100 percent during the first three years of the regulation. The amendments would 

also reduce the fleet’s total compliance costs over the course of the regulation by up to 

one third. 

The additional incentives for early action are expected to result in some additional longterm cost savings as well to fleets that take advantage of them. Similarly, the 

amendments to expand the definitions of Non-Profit Training Center and forest 

operations would result in overall cost savings for affected fleets. 

Although the proposed amendments are not expected to adversely impact the economy 

overall, the legislatively directed changes could result in a negative economic impact on 

retrofit manufacturers and installers, and firms that provide repowers because they 

would receive fewer orders over the next few years. However, the proposed incentives 

for early action by fleets are intended to encourage early retrofitting and repowering and 

would help protect businesses that provide “green” jobs in California. 

What objectives did staff have when interpreting the legislatively directed 

amendments? 

When crafting staff’s proposal, staff strove toward the following goals: 

• Consistency – Develop a proposal consistent with the Legislature’s direction; 

• Simplicity – Implement the Legislature’s direction in as clear and simple a 

manner as possible. 

• Never increase the stringency of the regulation – Ensure that in no case would 

any fleet receive less credit (i.e., face greater compliance responsibilities) under 

the proposal than under the current regulation. This was critical because many 

fleets have already laid out their compliance plans for the regulation. Giving a 

fleet less credit than they were previously expecting under the current regulation 

would disrupt those plans. 

What alternatives did staff consider and why were they rejected in favor of staff’s 

proposal? 

When considering how to implement the legislatively directed changes, staff did not 

consider alternatives intended to be inconsistent with AB 8 2X, but did consider different 

ways to interpret the AB 8 2X language. First, staff considered limiting the credit for 

vehicle retirements to Tier 0 vehicles only. Ultimately, based on stakeholder feedback, 

staff concluded it was more consistent with the intent of AB 8 2X to allow retirement 

credit for retirement of any vehicle, no matter it’s emissions standard tier. Second, staff 

considered limiting reduced activity credit only to fleets with complete records of the 

hours of use for each and every vehicle. Again, based on feedback from fleets 

regarding the records that they were most likely to have available, staff modified this 

requirement to allow credit for fleets that could produce other types of documentation. 
8 

Third, staff considered a number of ways to determine the time period for reduced 

activity, but in the end concluded the period most consistent with the language in AB 8 

2X was to center the time period on the dates laid out by the Legislature, where 

possible. Finally, staff explored various ways to handle credit for fleets that had both 

retired vehicles and reduced activity, eventually settling on a method that awards such 

fleets both types of credits but prevents inappropriate double counting. 

When considering amendments to mitigate the loss in emission benefits from the 

legislatively directed changes, staff analyzed a number of options. Staff rejected 

alternatives that would have required a minimum amount of turnover and retrofit for 

fleets using the new credits, as well as increased BACT requirements for later years to 

make up for lost emission reductions. Staff determined that these options would have 

reduced the relief provided by AB 8 2X and hence would not be consistent with the 

intent of the legislation. Instead, staff chose to provide additional voluntary incentives for 

fleets to repower and retrofit, which would spur early emission reductions without 

imposing additional requirements on affected fleets. 
9 

I. INTRODUCTION 

The purpose of this report is to describe amendments to the Regulation for In-Use OffRoad Diesel-Fueled Vehicle Fleets (the regulation), California Code of Regulations, Title 

13, sections 2449 through 2449.3. Staff of the Air Resources Board (ARB or Board) is 

proposing amendments for three reasons - first, to implement the legislative directives 

set forth in the recently adopted California budget (Assembly Bill 8 2X or AB 8 2X); 

second, to mitigate potential losses in emission benefits due to the legislatively directed 

amendments; and third, to make minor amendments and clarifications to the regulation. 

Section A below provides background regarding the regulation, Section B discusses the 

need for emission reductions, and Section C outlines the organization and content of 

this report. 

A. Background 

The regulation was originally approved by the Board on July 26, 2007, formally adopted 

on April 4, 2008, and approved by the Office of Administrative Law (OAL) and filed with 

the Secretary of State on May 16, 2008. The regulation became effective on June 15, 

2008. Additional amendments were approved by the Board on December 11, 2008 and 

January 26, 2009, though these amendments have not as yet been formally adopted by 

the Board or submitted to OAL for approval. 

At the time of the Board’s approval of the regulation in July 2007, staff estimated that 

the regulation would significantly reduce emissions of diesel PM and NOx from the 

nearly 200,000 in-use off-road diesel vehicles that operate in California and 

consequently significantly reduce the public’s exposure to these pollutants. The 

regulation would achieve these environmental benefits by requiring fleet owners of offroad in-use diesel vehicles to modernize their fleets by accelerating the use of cleaner 

engines and exhaust retrofits in their vehicles (ARB, 2007a). The regulation supports 

the Diesel Risk Reduction Plan to Reduce Particulate Matter Emissions from DieselFueled Engines and Vehicles, which was adopted by the Board on September 30, 2000, 

as well as the 2007 State Implementation Plans (SIPs) for the South Coast and San 

Joaquin Valley air basins (ARB, 2000; ARB, 2007c). 

The scope of the regulation is far reaching; affecting vehicles of dozens of types used in 

thousands of fleets, in industries as diverse as construction, air travel, manufacturing, 

landscaping, and ski resorts, as well as public agencies. Once implemented, the 

regulation will affect, among others, the warehouse with one diesel forklift, the 

landscaper with a fleet of a dozen diesel mowers, the county that maintains rural roads, 

the landfill with a fleet of dozers, as well as the large construction firm or government 

fleet with hundreds of diesel loaders, graders, scrapers, and rollers. 

The regulation’s requirements vary depending on the size of the fleet and on the vintage 

of its vehicles. Fleets are defined in the regulation as small, medium, or large based on 

their total statewide horsepower (hp). The regulation requires that the largest fleets, 

which have the most significant emissions, meet the most stringent requirements. The 
10 

smallest fleets, and local municipal fleets located in low-population counties, are 

required to meet less stringent provisions. 

B. Need for Emission Reductions 

The emission reductions anticipated from the regulation are important from a public 

health standpoint and sorely needed to allow the state to meet its SIP commitments 

required by the Federal Clean Air Act (CAA). Because of this importance, which is 

described further below, when crafting the proposed amendments described in this 

report, staff included proposals to minimize any potential loss of emission benefits. 

1. Significant source of emissions and adverse health impacts 

The off-road vehicles covered by the regulation are a significant source of diesel PM, as 

well as NOx emissions that lead to ozone and ambient PM. Statewide, they are 

responsible for nearly a quarter of the total diesel PM emissions from mobile sources 

and nearly a fifth of the total NOx emissions from mobile diesel sources. The vehicles 

subject to this regulation were estimated to emit statewide about 386 tons per day (tpd) 

of NOx emissions and 23 tpd of PM emissions in 2005, which is 19 and 24 percent, 

respectively, of statewide diesel mobile source emissions (ARB, 2007b). Staff 

estimates that approximately 1,100 premature deaths were associated with the baseline 

uncontrolled emissions from in-use off-road diesel vehicles in 2005. The health impacts 

include direct effects from diesel PM as well as effects from secondary pollutants such 

as nitrate particles (ARB, 2007a). 

In 1998, the Board identified diesel PM as a toxic air contaminant (TAC). Of all known 

air pollutants, diesel PM is the largest known contributor to ambient cancer risk. Diesel 

PM also contributes to ambient concentrations of fine particulate matter (PM2.5), which 

is associated with premature mortality, aggravation of respiratory and cardiovascular 

disease, asthma exacerbation, chronic and acute bronchitis and reductions in lung 

function. 

NOx leads to formation in the atmosphere of ozone and PM2.5. Ozone is a powerful 

oxidant, and exposure to ozone can result in reduced lung function, increased 

respiratory symptoms, increased airway hyper-reactivity, and increased airway 

inflammation. Exposure to ozone is also associated with premature death, 

hospitalization for cardiopulmonary causes, and emergency room visits for asthma. 

2. Public health benefit 

The regulation was adopted in order to achieve significant emission reductions and 

protect public health. NOx emitted statewide from affected vehicles was expected to be 

about 13 percent lower in 2015 as a result of the regulation, and by 2020, NOx 

emissions were expected to be 32 percent lower than would occur in the absence of the 

regulation. The PM benefits were expected to be even greater. PM emissions from 

affected vehicles were expected to be 60 percent lower in 2015, and nearly 70 percent 

lower in 2020 than they would have been in the absence of the regulation (ARB, 

2007b). Also, staff estimated that the regulation would prevent approximately 4,000 
11 

premature deaths statewide by 2030, as well as thousands of hospital admissions and 

asthma and bronchitis cases (ARB, 2007b). 

3. SIP commitments 

Under the CAA, the U.S. Environmental Protection Agency (U.S. EPA) has established 

national ambient air quality standards (NAAQS) for pollutants considered harmful to 

public health, including PM2.5 and ozone, to which NOx is a precursor. Set to protect 

public health, the NAAQS are adopted based on a review of health studies by experts 

and a public process. Areas in the state that exceed the NAAQS are required by 

federal law to develop SIPs demonstrating how they would attain and maintain the 

standards by certain deadlines. If the state fails to make this demonstration, it can be 

subject to sanctions, including the loss of federal highway funds. 

Because of unique geographical and climatic conditions, combined with high numbers 

and concentration of people and mobile sources, California continues to have the worst 

air quality of any of the 50 states. Two air basins in California in particular – the South 

Coast Air Basin and the San Joaquin Valley Air Basin – are in nonattainment for both 

PM2.5 and the eight-hour ozone standard. The South Coast and San Joaquin Valley air 

basins are both required to attain the PM2.5 standard by 2015. California’s SIP shows 

that to meet the PM2.5 standard in the South Coast and the San Joaquin Valley Air 

Basins, reductions of NOx on the order of 50 percent are needed. Reductions of NOx 

of 80-90 percent will be needed to achieve the 8-hour ozone standard in the South 

Coast and San Joaquin Valley. Clearly, with this magnitude of reductions needed, the 

emission reductions from the regulation are sorely needed. 

California’s 2007 SIP included the regulation as a control measure. ARB’s legal 

commitment to achieve the emission reductions laid out in the SIP relies upon the 

following emission reductions from the regulation by 2014 - 10.5 tpd NOx reductions 

and 2.6 tpd PM2.5 reductions in the South Coast, and 3.7 tpd NOx and 0.8 tpd PM2.5 

reductions in the San Joaquin Valley (ARB, 2007c). If the regulation falls short of 

achieving these reductions, the loss would need to be made up for by other control 

measures. 

C. Report Overview 

Chapter II of this report describes the regulatory authority ARB has to adopt the 

proposed amendments to the regulation, the need for the amendments, the public 

process used to develop the amendments, and the amendments in detail. 

Chapter III describes the anticipated economic impacts of the amendments. 

Chapter IV describes the anticipated environmental impacts of the amendments, 

including their impact on air quality and other environmental impacts. 

Chapter V describes other alternatives staff considered when implementing the 

legislatively directed amendments. 
12 

Chapter VI lists the references used to develop this report. 

The appendices contain the AB 8 2X legislation, proposed regulatory language for the 

amendments, detailed examples of how the proposed amendments would affect the 

credit accumulated by fleets as they comply with the regulation, and other 

supplementary information. 

D. Staff Recommendation 

Staff recommends that the Board adopt the proposed amendments to California Code 

of Regulations, title 13, sections 2449 through 2449.3, as described in Chapter II and 

set forth in Appendix B. 
13 

II. PROPOSED AMENDMENTS TO THE REGULATION FOR IN-USE OFF-ROAD 

DIESEL-FUELED FLEETS 

This chapter discusses the regulatory authority and rationale for staff’s proposal, as well 

as the public process used to develop the proposed amendments to the regulation, 

which are also discussed in detail. 

A. Regulatory Authority 

ARB has authority under California law to adopt the proposed regulation amendments. 

California Health and Safety Code (Health & Saf. Code) sections 43000, 43000.5, 

43013(b) and 43018 provide broad authority for ARB to adopt emission standards and 

other regulations to reduce emissions from new and in-use vehicular and other mobile 

sources. Under Health & Saf. Code sections 43013(b) and 43018, ARB is directly 

authorized to adopt emission standards for off-road vehicular sources, as expeditiously 

as possible, to meet state ambient air quality standards. ARB is further mandated by 

California law under Health & Saf. Code section 39667 to adopt Air Toxic Control 

Measures (ATCMs) for new and in-use vehicular sources, including off-road diesel 

vehicles, for identified TACs, such as diesel PM. 

Under federal and California law, ARB is the primary agency in California responsible 

for making certain that all regions of the State attain and maintain NAAQS. To achieve 

this, California must adopt all feasible measures to obtain the necessary emission 

reductions, including measures from mobile sources. The CAA preempts states, 

including California, from adopting requirements for new off-road engines less than 175 

hp used in farm or construction equipment. California may adopt emission standards 

for in-use off-road engines (per CAA section 209(e)(2)), but must receive authorization 

from U.S. EPA before it may enforce the adopted standards. The regulation addresses 

in-use rather than new off-road engines, and is therefore not prempted. For example, 

turnover of a vehicle is not required until a vehicle is older than 10 years. ARB 

requested that the U.S. EPA grant authorization for the regulation on August 12, 2008, 

and a decision is pending. 

B. Rationale for Amendments 

As part of the recently signed California budget, the Legislature passed and the 

Governor signed AB 8 2X, directing ARB to make several amendments to the 

regulation. The pertinent provisions of AB 8 2X are codified at section 43018.2 of the 

Health & Safety Code and included herewith as Appendix A. The amendments include 

the following: 

• For the total cumulative turnover and retrofit requirements for the years 2011 

through 2013, fleets may complete 20 percent of those requirements by March 1, 

2011, an additional 20 percent by March 1, 2012, and the balance by March 1, 

2013; 

• Fleets will be given credit (for both PM and NOx) for any vehicle retirements 

made between March 1, 2006, and March 1, 2010, provided that total fleet hp 

decreased from the previous year; and 
14 

• Fleets who are now using their off-road vehicles less than they did as of July 1, 

2007, may take credit for this reduced fleet activity to satisfy the turnover and 

retrofitting requirements of the regulation in 2010 and 2011. 

Because the legislatively directed amendments could lessen the requirements for many 

large fleets in the early years of the regulation, without mitigation, the amendments 

could result in: 

• A loss in emission reductions achieved in 2014 (a key milestone year for the 

SIP); 

• A reduction in health benefits; and 

• An adverse economic impact on retrofit manufacturers and installers that have 

geared up for off-road implementation, which could result in reduced ability of 

that industry to have product available for compliance in future years, as well as 

a potentially significant loss of “green” jobs. 

Therefore, in addition to amending the regulation to meet the directives of AB 8 2X, staff 

is also proposing amendments to provide incentives to mitigate some of these potential 

impacts by incentivizing early actions to reduce emissions. These proposed incentives 

are intended to encourage fleets to voluntarily install retrofits and repower vehicles with 

cleaner engines earlier than otherwise required. Staff believes that they would spur 

some fleets that receive new credit from the legislatively directed amendments, and that 

as a consequence might not need to take any compliance action until 2012 or later, to 

act sooner to reduce their emissions than otherwise required. In turn, staff believes that 

these early actions would potentially benefit companies that provide retrofits and 

repower solutions and help avoid losing green California jobs that might be adversely 

affected by the compliance delays resulting from the implementation of the provisions of 

AB 8 2X. 

Finally, based on feedback and comments from affected fleets and other stakeholders, 

as well as analysis by staff, a number of other provisions of the regulation that require 

clarification or modification have been identified. Staff believes these clarifications and 

modifications are necessary for the successful implementation of the regulation. 

C. Public Process 

Staff held two public workshops to solicit public input on the proposed amendments to 

the regulation. The first one was held on April 7, 2009, in Sacramento, California. At 

that workshop staff presented an initial proposal to implement the legislatively directed 

changes. Staff held a second workshop on April 29, 2009 in Diamond Bar, California. 

At this second workshop staff presented a modified proposal based on comments 

received at the first workshop. As part of the revised proposal, staff developed two 

documents - one describing staff’s revised proposal for the April 29, 2009, workshop 

and another that provides detailed examples of how the legislatively directed 

amendments would apply to fleets in various situations (ARB, 2009b; ARB, 2009c). 

Staff sent both documents to an electronic mailing list that included approximately 3,000 

names, and also distributed them at the April 29, 2009, workshop. 
15 

In addition to the workshops, staff held meetings with individual fleets and, at the May 7, 

2009, Off-road Implementation Advisory Group (ORIAG) meeting, solicited input from 

ORIAG members on the proposed amendments.1

 

Staff also met with Air and Land Managers Group (consisting of several federal and 

state agencies ) on May 21, 2009, to discuss clarifying that public agency fire prevention 

activities would be classified as forest operations as part of the proposed amendments. 

The discussion included a review of vehicles the proposed exemption would apply to, 

and what portion of the vehicles’ operations involves forest fire prevention (e.g., 

installing fuel breaks, firebreaks, and fire hazard abatement, etc.). 

Staff considered all comments and recommendations received from various 

stakeholders, and crafted the final proposed amendments to address the concerns that 

were expressed. 

D. Proposed Amendments 

Staff is proposing the following amendments to the regulation to implement the 

directives of AB 8 2X: 

• Allow fleets that comply by using the Best Available Control Technology (BACT) 

provisions to take fewer actions than are currently required to meet the 

regulation’s 2011 and 2012 compliance dates, but make up for the difference by 

the 2013 compliance date; 

• Allow fleets that retire vehicles between March 1, 2006, and March 1, 2010, 

thereby reducing their total fleet hp, to receive credit for the retirements, which 

can then be used to meet the BACT turnover and retrofitting requirements of the 

regulation; and 

• Allow fleets that have experienced reduced fleet operational activity since 2007 

to receive credit for this reduced fleet activity that can then be used to meet the 

BACT turnover and retrofitting requirements of the regulation in 2010 and 2011. 

In addition, staff is also proposing the following amendments to encourage voluntary 

early actions to reduce emissions: 

• Allow fleets to claim an exemption from future turnover, up to a specified 

percentage of their total hp, if they install a retrofit prior to March 1, 2011; 

• Allow fleets to claim double credit for NOx retrofits installed by March 1, 2011; 

• Allow medium and small fleets to claim double credit for PM retrofits installed by 

March 1, 2012; and 

• Allow fleets to accumulate NOx carryover turnover credit for repowers with new 

engines certified to Tier 2 or cleaner standards. 

Finally, staff is proposing a number of amendments to clarify and provide that: 

 

1

 The mission of ORIAG - a committee made up of affected fleets, retrofit providers, vehicle 

manufacturers and other stakeholders - is to help ARB staff improve outreach and 

implementation materials and help make staff more aware of the needs and opinions of 

affected stakeholders. 
16 

• The manufacturer delay provisions apply to installer delays as well; 

• Community college programs that train students in the use of off-road vehicles 

are included in the definition of Non-Profit Training Center; 

• A retrofit installation may be determined unsafe if it would conflict with any 

federal or state safety agency requirements; 

• Public agency fire prevention activities are classified as forest operations; and 

• Fleets must report to ARB within 30 days of selling a vehicle. 

A more detailed discussion of all the amendments staff is proposing is provided below. 

Appendix C details examples of how the proposed new credits would apply to fleets. 

1. Legislatively directed amendments 

Subsections a through c below describe staff’s proposal to implement AB 8 2X. 

a) Revised BACT schedule 

Current Requirements

Currently, the regulation requires fleets to either meet the fleet average requirements or 

the BACT retrofit and/or turnover requirements. The same fleet average emission rate 

targets for PM apply to all fleets, regardless of fleet size, but the NOx fleet average 

targets apply only to large and medium fleets. Small fleets are exempted from having to 

meet any of the NOx performance requirements. Compliance dates are staggered 

based on fleet size. Each individual fleet’s emission targets vary depending on the 

distribution of horsepower of the fleet. The fleet average targets drive fleets to 

modernize their vehicles faster than natural turnover otherwise would. 

Fleets that cannot or choose not to meet the fleet average targets (for PM or NOx) may 

comply with the requirements of the regulation by meeting the BACT requirements. The 

current NOx BACT requirements require fleets to turn over 8 percent of the fleet’s 

maximum hp each year until 2015, after which time the requirement increases to 10 

percent. To meet the turnover requirements, a fleet must turn over Tier 0 and Tier 1 

vehicles (those with engines that were not subject to a new engine PM standard) before 

turning over any higher tiered vehicles. Compliance options for meeting the NOx 

turnover requirements include the following: 

• Replace older vehicles with new or used vehicles; 

• Replace diesel vehicles with electric or alternative fuel vehicles; 

• Repower older engines with Tier 2 or higher engines; 

• Retire vehicles from fleet; 

• Designate vehicles as permanent low-use (i.e., used less than 100 hours per 

year); or 

• Install NOx verified diesel emission control strategies (VDECS). 

The PM BACT requirements consist of installing VDECS on 20 percent of the fleet’s 

maximum hp in each compliance year. 
17 

Fleets must meet the in-use performance requirements by March 1 of each year, 

according to the following schedule: 

• Large fleets: 2010-2020 (PM and NOx); 

• Medium fleets: 2013-2020 (PM and NOx); and 

• Small fleets: 2015-2025 (PM only, exempt from NOx requirements). 

Proposed Amendments

Staff proposes to amend sections 2449.1(a)(2)(A) and 2449.2(a)(2)(A) to allow a fleet to 

achieve its BACT turnover and retrofit requirements for the years 2011 to 2013, 

inclusive, by completing 20 percent of its cumulative turnover and retrofit obligations in 

2011, an additional 20 percent in 2012, and the balance in 2013. This change would 

allow large fleets the option to defer a portion of the turnover and retrofits otherwise 

required in 2011 and 2012 to 2013, and result in a reduction of compliance costs in 

2011 and 2012. Table 4 shows the current regulatory provisions and the proposed 

revised BACT schedule. 

Table 4: Proposed Revised BACT Requirements 

(Percent turnover required / Percent retrofit required) 

Regulation 2010 2011 2012 2013 2014 

Current 8 / 20 8 / 20 8 / 20 8 / 20 8 / 20

Proposed 8 / 20 4.8 / 12 4.8 / 12 14.4 / 362 8 / 20

The proposed revised BACT schedule, for fleets failing to meet the fleet averages in 

2011 and 2012, changes the requirements for the years 2011 through 2013. In 2011 

and 2012, fleets must turn over 4.8 percent of their total fleet hp and retrofit 12 percent 

of their total fleet hp. In 2013, fleets must turn over 14.4 percent of their total fleet hp 

and retrofit 36 percent of their total fleet hp. The proposed amendments contain special 

provisions for fleets that meet the fleet averages during 2011 and/or 2012, to ensure 

that such fleets are not required to take more actions than the current regulation would 

required them to. These provisions specifically provide: 

• Large fleets that meet the fleet average targets in 2011, but do not meet them in 

2012, must turn over 11.2 percent and retrofit 28 percent of their total hp in 2013 

(explanation in next paragraph); 

• Large fleets that meet the fleet average targets in 2012, but not in 2013, must 

turn over eight percent and retrofit 20 percent of their total hp in 2013; and 

• All medium fleets must turn over eight percent and retrofit 20 percent of their total 

hp by the 2013 compliance date. 

Under the current regulation, fleets that meet the NOx fleet average target in 2011, but 

not in 2012, have to turn over 8 percent of their total hp in 2012, and again in 2013. So 

as not to make the regulation more stringent than it currently is, if a fleet meets the fleet 

 

2

 In 2013, turnover/retrofit requirements for large fleets that meet the fleet average targets in 

2011, but not in 2012, are 11.2/28 percent, and those for large fleets that meet the fleet 

average targets in 2012 are 8/20 percent. 
18 

average target in 2011, and then turns over 4.8 percent in 2012, it need only turn over 

11.2 percent in 2013 (for a total of 16 percent for 2012-2013). Similarly, under the 

current regulation, fleets that meet the PM fleet average target in 2011, but not in 2012, 

have to retrofit 20 percent of their total hp in 2012, and again in 2013. So as not to 

make the regulation more stringent than it currently is, if a fleet meets the fleet average 

target in 2011 and then has to meet the BACT retrofit requirements in 2012, it would 

have to retrofit 12 percent in 2012; in 2013, in order to ensure that it does not have to 

perform additional retrofitting of vehicles relative to the current requirements, it would 

need to retrofit 28 percent (for a total of 40 percent in 2012-2013). 

Figure 1 and Figure 2 below illustrate the proposed changes to the NOx and PM BACT 

requirements, respectively. 

Figure 1: Proposed NOx BACT Turnover Requirements for Large Fleets 

(Annual percent of hp) 

0

5

10

15

2010 2011 2012 2013 2014

Percent

Met the NOx Fleet Average

Target in 2012

Met the NOx Fleet Average

Target in 2011 Only

Did Not Meet the NOx Fleet

Average Target in 2011 or

2012

Existing Annual Turnover 

Requirement: 8%

Legend is for 2013 only

Figure 2: Proposed PM BACT Retrofit Requirements for Large Fleets 

(Annual percent of hp) 

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014

Percent

Met the PM Fleet Average

Target in 2012

Met the PM Fleet Average

Target in 2011 Only

Did Not Meet PM Fleet

Average Target in 2011 or

2012

Existing Annual Retrofit 

Requirement, 20%

Legend is for 2013 only
19 

Staff proposes to include this provision so that the proposed amendments do not 

provide a disincentive to meeting the fleet average targets in either 2011 or 2012, and 

so as not to increase the stringency of the performance requirements for medium fleets. 

Under the proposed revised BACT schedule, fleets would continue to obtain PM 

carryover credit whenever they retrofit more than is required. Likewise, they would 

obtain NOx carryover credit whenever they turn over more than is required. For 

example, a fleet utilizing the proposed revised BACT schedule that turns over six 

percent of its maximum hp in 2011, would only be required to turnover an additional 3.6 

percent in 2012 (as a carryover credit of 1.2 percent would have been banked from 

2011). Similarly, a fleet that retrofits 20 percent of its maximum hp in 2011 would only 

be required to retrofit 4 percent in 2012 (as a carryover credit of 8 percent would have 

been banked from 2011). 

b) Additional credit for vehicle retirement 

Current Requirements

Currently, the regulation provides early credit (for NOx only) for voluntary retirement or 

replacement of Tier 0 engines in excess of an average turnover rate of eight percent per 

year between March 1, 2006, and March 1, 2009. Therefore, for example, if a fleet 

retired or replaced its Tier 0 machines at a rate of 10 percent per year between 2006 

and 2009, the fleet would obtain a six percent early credit towards the NOx BACT 

requirements. Once obtained, these credits do not expire. 

Proposed Amendments

Staff is proposing amendments to sections 2449.1(a)(2)(A)2.a. and 2449.2(a)(2)(A)2.a. 

that would allow fleets to claim credit for vehicle retirements (regardless of engine tier) 

that reduce their total fleet hp between March 1, 2006, and March 1, 2010. The new 

credit would also not require retirement in excess of an average eight percent per year 

between March 1, 2006 and March 1, 2009. This new retirement credit could be used 

by fleets to satisfy their NOx and PM BACT requirements, and would not expire. In 

order to effectively implement the new provisions, staff also proposes to amend section 

2449(g) to require fleets that claim the proposed retirement credit to report specific 

information in support of their claims, and to amend section 2449(h) to add 

recordkeeping requirements associated with claiming and reporting the new retirement 

credit. 

As with the reduced activity credit, the retirement credit would allow some large fleets to 

reduce or completely eliminate the need to take compliance actions in the early years of 

the regulation and would primarily benefit those fleets that have significantly downsized 

since 2006. Because the new credits do not expire, they may be banked and used by 

fleets for several years and thus could assist some medium and small fleets as well. 
20 

c) Reduced activity credit 

Current Requirements

There are currently no provisions in the regulation specifically providing credits for 

reduced fleet activity. However, the regulation does provide special consideration for 

low-use vehicles and takes hours of operation into account in determining whether a 

vehicle qualifies under that provision. 

Proposed Requirements

Staff proposes to add provisions to sections 2449.1(a)(2)(A)2.a. and 2449.2(a)(2)(A)2.a. 

that would allow fleets to claim credit for reduced activity between July 1, 2007, and 

March 1, 2010. The new provisions specify that the new reduced activity credit may be 

used by fleets to satisfy their NOx and PM BACT requirements, but will only be 

applicable to the March 1, 2010 and March 1, 2011 compliance dates. 

Staff also proposes to amend section 2449(g) to require reporting of information for 

those fleets claiming the reduced activity credit. Staff also proposes to amend section 

2449(h) to add the recordkeeping requirements associated with claiming the new 

reduced activity credit. 

Staff proposes to determine reduced activity by comparing activity during the period 

January 1, 2007, to December 31, 2007, (centered on July 1, 2007, the date specified in 

AB8 2X) to the activity during the period March 1, 2009, to February 28, 2010. Staff 

proposes to use horsepower hours (hp-hours) -- that is work done by one hp in one 

hour -- to determine activity. Utilizing hp-hours to determine activity is more reflective of 

emissions relative to simply using hours. It also provides an equitable methodology, 

such that a fleet that starts using a lower hp vehicle in lieu of using a higher hp vehicle 

will receive the appropriate credit. Therefore, the activity reduction would be the 

percent reduction in hp-hours activity from the initial period (January 1, 2007, to 

December 31, 2007) to the later period (March 1, 2009, to February 28, 2010). 

Staff solicited feedback at the two public workshops, held on April 7, 2009, and April 29, 

2009, and at the ORIAG meeting held on May 7, 2009, regarding the types of records 

that fleets have that represent reduced activity and to what degree those records aptly 

represent reduced activity. Staff indicated that these records would need to be from 

January 1, 2007, through February 28, 2010. At these meetings, some fleet owners 

stated that they had hour-meter logs, vehicle operator logs, maintenance records that 

demonstrate vehicle use, and/or other records that clearly define the hours of use for 

each vehicle. However, other fleet owners informed ARB staff that although they do not 

have records for each vehicle, they have records of off-road diesel fuel use, operator 

logs (that do not identify which vehicles were used), and/or other indicators that 

demonstrate fleet activity, but do not define activity directly by vehicle. Lastly, some 

fleet owners stated that they only have records that do not directly correlate to fleet 

activity, such as overall employment, revenue, cost of construction put in place, or other 

indicators of business or staffing activity. 
21 

To address this, staff is proposing varying levels of reduced activity credit depending on 

the quality and type of records available, as described below: 

1. For fleets that can demonstrate the individual hours of use for each vehicle in the 

fleet from January 1, 2007, through February 28, 2010, the amendments would: 

• Allow fleets to receive full credit for the percent reduction in fleet activity. 

• Identify acceptable records that include hour-meter logs, operator logs that 

show which vehicles were used and how often, maintenance records that 

demonstrate vehicle use, or other records that clearly define the hours of 

use for each vehicle. 

• Allow fleets to combine their reduced activity credit with credit for retiring 

vehicles from 2006 through 2010. That is, they could take credit for 

vehicles retired, and then also take credit for activity reductions from the 

remaining vehicles. 

. 

2. For fleets with records that show a reduction in overall fleet activity, but do not 

have records for each vehicle, the amendments would: 

• Allow fleets to receive full credit for the percent reduction in fleet activity.

• Identify acceptable records, that include off-road diesel fuel use 

information for the fleet, operator logs that do not identify which vehicles 

were used, or other indicators that demonstrate fleet activity, but do not 

define activity by vehicle. 

• Not be allowed to combine their credits with vehicle retirements, as they 

would be unable to demonstrate that the reduced activity was not due to 

the reduction of fleet hp without vehicle-specific records. Any retirement 

credit for these fleets must be subtracted from reduced activity credit. 

3. For fleets with records that show a reduction in business not directly tied to fleet 

usage, the amendments would: 

• Allow fleets to receive up to a 20 percent credit only.

• Identify acceptable records that include overall employment, revenue, cost 

of construction put in place, or other indicators of business or staffing 

activity that do not necessarily directly correlate to fleet activity. 

• Not allow fleets to combine their credits with vehicle retirements. Any 

retirement credit for these fleets must be subtracted from reduced activity 

credit, so as to prevent potential doublecounting. 

This new reduced activity credit would allow some large fleets to reduce or completely 

eliminate the need for compliance action in 2010 and 2011, thereby delaying action until 

later years. The new credit would primarily benefit those fleets that have experienced 

the greatest reduction in activity since 2007. Staff proposes the credit for fleets with 

records that show a reduction in business not directly tied to fleet usage, to receive up 

to 20 percent credit, as this would provide enough credit to meet the highest PM BACT 

requirement of 20 percent in a given compliance year. 
22 

Under staff’s proposal, fleets that have retired vehicles and also have reduced activity 

from the remaining vehicles in the fleet could claim credit for the retired vehicles but 

only a reduced activity credit for the activity reduction related to the non-retired vehicles 

in the fleet. That is, a fleet could not double count retired vehicles (i.e., receive credit for 

retiring and reduced activity for the same vehicle). 

2. New Incentives for Early Action 

Staff is proposing a number of specific measures to help offset the loss in emission 

benefits due to the legislatively directed amendments, as well as to spur early retrofits 

and repowers of affected vehicles. (Section IV.b. discusses the loss in emission 

benefits further.) These new incentives are also intended to help protect and create 

green jobs in California through retrofit technology engineering and development, 

system assembly, installation, and maintenance. In addition, the new incentives will 

increase the likelihood that sufficient retrofit manufacturers and installers will remain 

viable and be available to assist fleets with compliance in future years. 

a) Exempt vehicles retrofit early from future turnover

Current Requirements

There are currently no requirements to exempt vehicles that are retrofit early from the 

turnover requirements. However, the regulation currently allows specialty vehicles to be 

considered exempt from the NOx turnover requirements. 

Proposed Requirements

Staff proposes to amend section 2449.1(a)(2)(A)4. to allow fleets to claim a limited 

exemption from future NOx turnover requirements if they install a highest level VDECS 

prior to March 1, 2011. This credit would provide an incentive for fleets to install retrofits 

and achieve immediate PM reductions earlier than they otherwise would. Using this 

exemption would be purely voluntary, so it would impose no additional requirements on 

fleets. Staff is proposing to limit the exemption by capping the number of vehicles for 

which a fleet can claim the exemption to no more than 15 percent of the hp in the fleet 

as of March 1, 2011; this would effectively mitigate potential long-term effects on 

emission reductions. 

b) Double credit for early NOx retrofit 

Current Requirements

Currently the regulation provides single credit for early NOx retrofits. The provision 

allows fleets that have installed VDECS that have been verified as achieving NOx 

reductions on their vehicles before March 1, 2009, to accrue carryover turnover credit 

(in hp) equal to: [(verified percent NOx reduction divided by 60 percent) multiplied by 

(maximum hp of the vehicle on which the NOx retrofit was installed before March 1, 

2009).] 
23 

For example, if a fleet installs a NOx retrofit (with 30 percent emission reduction) on a 

200 hp vehicle, under the current requirements, the credit would be calculated as: 

(30/60) * (200) = 100 hp 

Proposed Amendments

Staff is proposing to amend section 2449.1(a)(2)(A)2.a. to add a provision to allow fleets 

to claim double credit for NOx retrofits installed by March 1, 2011. The double NOx 

credit could be used by fleets to satisfy their NOx BACT requirements in future years. 

The regulation currently provides double credit for early PM retrofits, and this proposed 

amendment would provide a similar incentive for NOx retrofits. 

For example, if a fleet installs a NOx retrofit (with 30 percent emission reduction) on a 

200 hp vehicle, under the proposed amendments, the credit would be calculated as: 

2*(30/60) * (200) = 200 hp 

Staff recommends this double credit because it could help mitigate the potential loss in 

NOx emission reductions from the legislatively-directed amendments by providing an 

incentive for early NOx reductions. This new provision would be voluntary as well, so it 

would also not impose any additional requirements on fleets. 

c) Repower credit 

Current Requirements

Currently, the regulation allows early credit for fleets that have repowered their vehicles 

with Tier 1 or higher engines before March 1, 2009. Under this provision, fleets begin 

with a carryover turnover credit (in hp) equal to the maximum power of Tier 1 or higher 

repower engines installed in affected vehicles before March 1, 2009. However 

currently, no carryover credit can be awarded to a medium fleet between 2010 and 

2013, unless it has turned over more than eight percent of its hp per year. Also, 

currently in 2010 and 2011, no carryover credit can be awarded to a large fleet utilizing 

the new retirement or reduced activity credit unless it has turned over more than eight 

percent of its hp per year as well. 

Proposed Amendments

Staff proposes to amend section 2449.1(a)(2)(A)2.b. to add a provision to allow medium 

fleets prior to their initial compliance date in 2013 and large fleets in 2010 and 2011 to 

accumulate NOx carryover turnover credit for repowers installed, even if such repowers 

do not exceed eight percent of its total fleet hp. This change is intended to encourage 

large fleets to pursue repowers in 2010 and 2011 even if the new reduced activity and 

retirement credits would otherwise allow them to comply in those years with no 

additional turnover, as well as to encourage medium fleets to pursue repowering in the 

years prior to their initial 2013 compliance date. 
24 

d) Extension of double PM retrofit credit for small/medium fleets 

Current Requirements

Currently the regulation provides single credit for medium fleets that install highest level 

VDECS on their vehicles between March 1, 2009, and February 29, 2012, and for small 

fleets that install highest level VDECS on their vehicles between March 1, 2009, and 

February 28, 2014.3 

Proposed Amendments

Staff proposes to amend section 2449.1(a)(2)(A)2.a.ii. to provide double credit for small 

and medium fleets that install highest level VDECS on their vehicles prior to March 1, 

2012. The double PM credit could be used by fleets to satisfy their PM BACT 

requirements in future years. 

Staff recommends this double credit for small and medium fleets because it could help 

mitigate the potential loss in PM emission reductions from the legislatively-directed 

amendments by providing an incentive for early PM reductions. This new provision 

would be voluntary as well, so it would also not impose any additional requirements on 

fleets. 

3. Other Proposed Amendments 

a) Definition of nonprofit training centers (community colleges) 

Current Requirements

Currently, the definition in section 2449(c)(38) applies only to entities qualifying as a 

non-profit or not-for-profit organization under title 26 Internal Revenue Code section 

501(a), (c)(3), (c)(5), or (c)(6). Since adoption of the regulation, staff has learned that 

community colleges run similar training programs to those included in the current 

definition of Non-Profit Training Center, but that these programs do not meet the nonprofit or not-for-profit Internal Revenue Code definitions above. Per the definition of 

small fleet in section 2449(c)(25), Non-Profit Training Center fleets are considered small 

and therefore are provided more time to comply while being exempt from the NOx 

provisions, regardless of their total hp. 

Proposed Amendments

Staff is proposing to amend the definition of Non-Profit Training Center in section 

2449(c)(38) to include community college programs that train students in the use of offroad vehicles. Staff proposes that only the vehicles used by a community college for an 

off-road vehicle training program be considered a non-profit training center and any 

 

3

 Based on amendments approved in January 2009, the regulation will provide double credit for 

retrofits installed before January 1, 2010, but single credit thereafter. 
25 

vehicles that are not used for an off-road training program would not be considered part 

of a non-profit training center. 

Staff believes that community college training programs should be extended this same 

consideration for the same reason it was extended to other non-profit training centers, 

namely that they have little opportunity to raise the money needed to pay for 

compliance, and that their equipment is relatively low-use. 

b) Amend manufacturer delay provisions to also apply to installer 

delays 

Current Requirements

Currently the regulation provides an extension for fleet owners who have purchased an 

engine or VDECS at least four months prior to the compliance date. Therefore, fleet 

owners are excused from immediate compliance if the engine or VDECS is not available 

in time due to manufacturer delays. 

Proposed Amendments

Staff is proposing to amend section 2449(e)(6) to clarify that the section applies to 

installer delays as well as manufacturer delays, both of which are beyond the fleet 

owner’s control. Hence, a fleet owner who has purchased an engine or VDECS in order 

to comply with this regulation, will be excused from immediate compliance if the engine 

or VDECS is not installed in time due to installer delays as long as the engine or 

VDECS was purchased at least four months prior to the compliance date. 

Documentation from the installer confirming that there is a delay, such that the retrofit or 

engine will be received or installed after the compliance date, is required under the 

proposed amendment. Any fleet requesting a compliance extension due to 

manufacturer or installer delays must be able to provide proof of purchase records and 

show that the fleet owner had entered into a contractual agreement for the purchase 

and installation of a VDECS at least four months prior to the required compliance date. 

c) Clarify safety provisions to include meeting federal 

requirements 

Current Requirements

Fleet owners may currently request that the Executive Officer find that a VDECS should 

not be considered the highest level VDECS available because its use would make 

compliance with occupational safety and health requirements, mining safety and health 

requirements, or an ongoing local air district permit condition, impossible. 
26 

Proposed Amendments

Staff is proposing to amend section 2449(e)(8) to clarify that a retrofit installation may 

be determined unsafe if it would make compliance with any federal or state safety 

requirement impossible. Since the performance requirements may apply to types of 

equipment that must meet other requirements (e.g., airport ground support equipment 

must comply with Federal Aviation Administration requirements), staff believes it is 

appropriate to clarify that these requirements are not inconsistent with federal and state 

safety requirements. 

d) Clarify definition of forest operations to include public agency 

fire prevention activities 

Current Requirements

Currently, the definition of agricultural operations includes forest operations such as 

installing fuel breaks, firebreaks, and fire hazard abatement, if they are “for commercial 

purposes.” However, if such activities were undertaken by a public agency, they are not 

covered by the definition. 

Proposed Amendments

Staff is proposing to amend section 2449(c)(26) to clarify that public agency fire 

prevention activities are classified as forest operations. Thus, vehicles used solely for 

such activities would be considered to be used for agricultural operations and be 

exempt from the off-road regulation irrespective of whether they are performed by a 

public agency or private entity. Staff is proposing the modification for reasons of equity 

and to avoid discouraging public agencies from undertaking fire prevention activities. 

e) Clarify reporting vehicle sales 

Current Requirements

Although the regulation requires fleets to report added vehicles to ARB within 30 days, 

there are currently no requirements for fleet owners to report vehicle sales to ARB 

within 30 days. Fleet owners are only required to report sold vehicles by their next 

compliance date. 

Proposed Amendments

Staff is proposing to amend section 2449(g) to require that fleets report to ARB within 

30 days of selling a vehicle. Section 2449(g)(1) already requires that fleets report within 

30 days of purchasing a vehicle or bringing it into California. To enable fleets to add 

vehicles that they have purchased from another fleet and for the vehicles to maintain 

their Equipment Identification Numbers (EINs), it is also necessary for fleets to report 

sales in the same time frame. If vehicles that are sold are not reported within 30 days, 

fleets that purchase vehicles that have already been reported to ARB would likely have 
27 

to remove EINs from vehicles, get a new EIN, and relabel the vehicle. If the original EIN 

stays with the vehicle, tracking would be more streamlined and fleet owners would not 

have to utilize additional resources to change EINs. 
28 
29 

III. ECONOMIC IMPACTS 

This chapter describes the potential economic impacts of staff’s proposal, specifically 

the legislatively directed amendments and other proposed amendments that will affect 

the compliance requirements of fleets subject to the regulation. 

A. Legal Requirements 

Sections 11346.3 and 11346.5 of the Government Code require state agencies to 

assess the potential for adverse economic impacts on California business enterprises 

and individuals when proposing to adopt or amend any administrative regulation. The 

assessment shall include a consideration of the impact of the proposed regulation or 

amendments on California jobs, business expansion, elimination, or creation, and the 

ability of California businesses to compete. 

State agencies are also required to estimate the cost or savings to any state or local 

agency and school districts in accordance with instruction adopted by the Department of 

Finance. This estimate is to include any nondiscretionary costs or savings to local 

agencies and the costs or savings in federal funding to the state. 

B. Legislatively Directed Amendments 

The legislatively directed amendments lessen the requirements for large fleets; in fact 

many large fleets may not need to take any compliance actions in 2010 and 2011 as a 

result of these amendments. This is because, due to the current recession, there will 

be a large number of reduced activity and retirement credits accrued. 

Because staff does not have complete data on how the current economic recession has 

affected each of the thousands of off-road fleets in California subject to the regulation, 

staff cannot estimate at this time a total dollar savings due to the legislatively directed 

amendments. However, to examine the potential economic impacts of the legislatively 

directed amendments, staff evaluated the impact of these proposed amendments on an 

illustrative individual fleet. The methodology and results of this analysis are described 

in the sections below. 

1. Methodology 

To estimate comparative compliance costs for fleets under the legislatively directed 

amendments relative to the current requirements of the regulation, staff reevaluated a 

previous analysis of an actual large earth moving fleet that shared its fleet information 

with staff during the development of the original rulemaking. Staff used average costs 

for repowers, vehicle replacements, and retrofits as outlined in the original Staff Report 

and the Technical Support Document (ARB, 2007a; ARB 2007b) to estimate the total 

compliance costs for the fleet under four different scenarios: 

1) Current regulation with reduced activity: Compliance with the original 

regulation approved in July 2007 with no legislatively directed amendments. The 
30 

fleet has reduced its activity of each vehicle by 50 percent, but has retired no 

vehicles; 

2) Proposed amended regulation with reduced activity: Compliance with the 

regulation, including the legislatively directed amendments. The fleet has 

reduced the activity of each vehicle by 50 percent, but has retired no vehicles; 

3) Current regulation with reduced hp: Compliance with the original regulation. 

The fleet has reduced its total fleet horsepower by 50 percent, but has not 

reduced the activity of its remaining vehicles; and

4) Proposed amended regulation with reduced hp: Compliance with the 

regulation, including the legislatively directed amendments. The fleet has 

reduced its total fleet horsepower by 50 percent, but has not reduced the activity 

of its remaining vehicles. 

The results of these four scenarios are provided in Section 2 below. 

2. Individual fleet analysis results 

The compliance costs for the example fleet are shown for each scenario in Table 5 and 

Table 6 below, as well as in Figure 3 and Figure 4. As shown in Table 5 and Table 6, 

the legislatively directed amendments will allow fleets to reduce their compliance costs 

in the initial years of the regulation, as well as their compliance costs over the thirty year 

phase-in of the program. 

Table 5: Costs for a Fleet with Reduced Activity 

Scenario 

Compliance Costs for First 

Three Years of Regulation 

(2009 dollars)4

Total Compliance Costs 

Over Entire Regulation 

(2009 dollars)4

Current regulation 

with reduced activity $3,751,000 $9,098,000 

Proposed amended 

regulation with 

reduced activity 

$909,000 $9,007,000 

 

4

 Assuming an annual 5 percent real interest rate. 
31 

Figure 3: Costs for a Fleet with Reduced Activity 

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

Cost of First 3 Years Total Compliance

Costs

Cost (millions, 2009 dollars)

Current regulation

Proposed amended

regulation 

For a fleet that has reduced its activity, but has not performed any early vehicle 

replacements or retirements, the fleet would not have received early credits under the 

current regulation and would have experienced compliance costs over the initial three 

years of nearly $3.8 million. However, with the legislatively directed amendments, this 

same example fleet would now accrue enough early credits to eliminate its compliance 

requirements in 2010 and 2011, reducing compliance costs over the first three years to 

about $900,000. This reduction in requirements would reduce the fleet’s compliance 

costs by 76 percent during the first three years of the regulation, while not appreciably 

reducing the fleet’s overall compliance costs. 

Similarly, if the example fleet had not reduced its activity, but instead had retired 50 

percent of its hp between March 1, 2006, and March 1, 2009, under the current 

regulation, that fleet would receive early NOx credit only for the Tier 0 vehicles retired, 

and only if the fleet had retired over 24 percent of its total horsepower over that same 

period. In other words, only the Tier 0 vehicles retired above this 24 percent threshold 

would have generated early credit towards the NOx BACT requirements (but not the PM 

BACT requirements). However, under the proposed amendments, this fleet would now 

receive both NOx and PM BACT credit for all of the vehicles retired. As shown in Table 

6 and Figure 4, for this example fleet, under the proposed amendments there would be 

no compliance costs for the first three years of the regulation compared to over $1.4 

million in compliance costs under the current regulation. Overall, the total compliance 

costs would be reduced by 35 percent. 

Table 6: Costs for a Fleet with Reduced Hp 

Scenario 

Compliance Costs for First 

Three Years of Regulation 

(2009 dollars)4

Total Compliance Costs 

Over Entire Regulation 

(2009 dollars)4

Current regulation 

with reduced hp $1,435,000 $4,924,000 

Proposed amended 

regulation with 

reduced hp 

$0 $3,202,000 
32 

Figure 4: Costs for a Fleet with Reduced Hp5 

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

Cost of First 3 Years Total Compliance

Costs

Cost (millions, 2009 dollars)

Current regulation

Proposed amended

regulation 

As shown in the scenarios above, if fleets have been severely affected by the current 

recession, they may be able to minimize the cost of the regulation in its initial years by 

taking advantage of the proposed amendments to reduce their compliance 

requirements, especially in 2010 and 2011. 

The proposed amendments may also reduce a fleet’s overall compliance costs for 

several other reasons. First, they may decrease costs by allowing fleets to defer 

compliance costs to later years using later year dollars (i.e., the present value of their 

compliance costs will be lower). Second, if fleets postpone their compliance 

requirements by utilizing the new credits to comply in the early years of the regulation, 

they may be required to take fewer or less expensive actions on their vehicles than 

originally estimated. For example, a large fleet may have planned to purchase several 

Tier 3 vehicles and retrofit them with VDECS for their 2010 compliance date. However, 

if that fleet is not required to take any compliance actions for several years, they may be 

able to instead purchase newly available Tier 4 or Tier 4 interim vehicles. By enabling 

fleets to purchase Tier 4 vehicles instead of Tier 3 vehicles, the proposed amendments 

may allow fleets to perform fewer actions in future years (such as replacing vehicles) to 

meet the fleet average target. As such, the proposed amendments will likely allow 

many fleets to reduce their total compliance costs.

C. Additional Incentives for Early Actions 

The additional incentives for early action are also expected to result in some long-term 

cost savings to fleets that take advantage of them. However, because staff cannot 

predict with certainty how many fleets will take advantage of the new incentives for early 

action, it cannot estimate the total dollar savings that will result. However, qualitative 

assessments of the possible cost savings are described below. 

 

5

 Note that the proposed amended regulation cost for the first three years is $0 (2009 dollars). 
33 

1. Vehicles retrofitted early are exempt from future turnover 

If fleets claim an exemption from future turnover for the installation of retrofits prior to 

March 1, 2011, some cost savings may result from not having to turn over specific 

vehicles in a fleet. For example, repowering an older 300 hp dozer with a new engine 

would cost approximately $81,000, while retrofitting that same vehicle would only cost 

$18,0006 (ARB, 2007b). Therefore, if a fleet is able to retrofit a vehicle and never 

replace it, it may result in a saving of approximately 78 percent for that vehicle. 

However, use of this new provision would not always result in an overall cost savings to 

a fleet. This is because the number of vehicles eligible for the turnover exemption is 

capped at 15 percent of the fleet’s horsepower. Thus, a fleet cannot use the new 

provision to exempt all its vehicles from future turnover. Because the fleet average 

requirements still take into consideration vehicles exempted from the turnover 

requirements, the fact that one vehicle is exempt from turnover may mean the fleet is 

required to take additional actions on other vehicles instead. Hence, although the new 

provision would allow fleets to reduce compliance costs for an individual vehicle as 

described above, in some cases, it may not provide the fleet an overall savings in 

compliance costs. 

2. Double credit for early NOx retrofit 

Fleets that install NOx retrofits before March 1, 2011, will receive double credit for those 

installations. This double credit could reduce NOx compliance requirements 

significantly in the beginning years of the regulation, allowing fleets to spread out their 

NOx compliance costs. However, this proposed amendment may not decrease overall 

compliance costs for a fleet. 

3. Repower credit 

The proposed amendment to allow NOx carryover turnover credit for repowers may 

result in some savings to fleets. Similar to the double credit for early NOx retrofits 

amendment, if additional credit is received for these repowers, fleets may be able to 

spread out compliance costs in the early years of the regulation, but would have little 

impact on overall compliance costs for a fleet. 

4. Extension of credit for other PM retrofits before initial compliance 

date 

The proposed amendment to provide double credit for small and medium fleets that 

install highest level VDECS on their vehicles prior to March 1, 2012, may also result in 

some savings to fleets. The proposed amendment would give small and medium fleets 

additional time to receive double credit for the installation of retrofits, thereby allowing 

such fleets to spread out their costs in the later years. 

 

6

 This example uses the repower and retrofit costs used in the TSD (ARB, 2007b). 
34 

D. Other Proposed Amendments 

As described further below, the proposed amendments to the definitions of nonprofit 

training center and forestry operations are expected to provide savings to the small 

number of affected fleets. All of other proposed amendments are not expected to result 

in any additional costs, or cost savings and therefore are not mentioned below. 

1. Definition of nonprofit training centers (community colleges) 

For community college training programs that were not already considered small fleets, 

the proposed amendment would result in a cost savings. If a community college 

program has an off-road vehicle training program, that grouping of vehicles would now 

constitute a small fleet, regardless of the fleet’s total hp. These fleets would be able to 

delay their first compliance date from 2010 or 2013 to 2015 and would be exempt from 

all the regulation’s NOx performance requirements, which will reduce overall 

compliance costs. 

2. Definition of forest operations includes public agency fire prevention 

activities 

The reclassification of vehicles owned by public agencies that are used for fire 

prevention activities will also provide cost savings to affected fleets. Because these 

vehicles would be reclassified as forest operations vehicles, they would become exempt 

from all of the performance requirements of the regulation. For the public agencies that 

own these types of vehicles, this exemption would result in a cost savings for the fleet, 

which could be significant for a particular fleet if it has a large number of these vehicles. 

Staff does not have an exact count of the vehicles that will be affected by this 

reclassification, but based on preliminary inventory data from affected agencies, 

estimates that statewide, this change would affect fewer than 500 vehicles. 

E. Impacts on California Economy 

The proposed amendments will not impose additional impacts on the economy, nor are 

they expected to adversely impact employment. The amendments are intended to allow 

fleets to spread out or lower their compliance costs (especially in 2010 and 2011), which 

are expected to make the regulation more affordable in its early years. If in turn, that 

leads fewer fleets to reduce employment as a result of the regulation, the amendments 

could benefit overall California employment. 

Although these proposed amendments are not expected to adversely impact the 

economy overall, these modifications could have a negative economic impact on retrofit 

manufacturers and installers and firms that provide repowers because they would 

receive fewer orders in the next few years. However, the proposed amendments to 

provide incentives are intended to encourage early retrofitting and repowering, and 

could help mitigate potential impacts on retrofit and repower jobs and businesses. 
35 

F. Potential Impacts on Small Businesses 

The proposed amendments would not impose any additional costs on small businesses. 

Instead, they may provide a benefit to them by allowing fleets to spread out or lower 

their compliance costs. While staff believes most small businesses are small or 

medium fleets, which have a first compliance date in 2015 or 2013, respectively, a few 

small businesses meet the regulation’s definition of large fleet, which have their first 

compliance date in 2010. 

Overall, large fleets that are small businesses would benefit most from the proposed 

amendments because of the credits they may accrue. However, medium and small 

fleets that have reduced their total horsepower since March 1, 2006, would be able to 

benefit from the amendments by accumulating credits for PM (small fleets) or PM and 

NOx (medium fleets) to offset their later compliance requirements. Medium and small 

fleets would benefit predominantly from the proposed retirement credit, as well as from 

the proposed exemption for vehicles that are retrofitted early and the proposed 

additional credit for early repowers and retrofits. The new reduced activity credit would 

not benefit medium and small fleets because it expires in 2011 before the first 

compliance dates for medium or small fleets. 

Small fleets would not benefit from the other proposed amendments; however, medium 

and large fleets that are small businesses would be able to benefit from the other 

proposed modifications because they may help those fleets to spread out or lower their 

compliance costs. 

G. Potential Impacts on Public Agencies 

The proposed amendments would not impose any additional costs on public agencies; 

however, some cost savings are expected for public agencies that off-road vehicles that 

perform fire prevention activities. 

Overall, because of the nature of the work performed by public agencies (road 

maintenance, etc.), it is not expected that many public fleets have appreciably reduced 

their total horsepower or activity. Therefore, public fleets may accrue little, if any, credit 

towards their required compliance actions, and would not benefit from most of the 

proposed amendments. Although the modifications to the BACT provisions may help 

spread out the compliance requirements for State, Federal, and larger municipal fleets 

between 2011 and 2013, it may not result in large cost savings since the overall BACT 

compliance actions required during that time period would remain the same as in the 

original regulation. 

The other proposed amendments may benefit public agencies that are medium or large 

fleets because they are intended to allow fleets to spread out or lower their compliance 

costs, which are expected to make the regulation more affordable. 
36 
37 

IV. ENVIRONMENTAL IMPACTS 

This chapter describes the potential environmental impacts of the proposed 

amendments. This includes the legislatively directed amendments, the mitigation 

measures intended to help offset the loss in emission benefits due to the legislatively 

directed amendments, the inclusion of community college training programs as nonprofit training centers, and the inclusion of public agency fire abatement equipment 

within the forestry operations definition. The other proposed amendments are 

clarifications only, and would not increase or decrease the estimated emissions benefits 

of the regulation. Therefore, they have not been included in staff’s analysis. 

A. Legal Requirements 

The legal requirements applicable to the environmental impact analysis are the same as 

those presented in the original off-road TSD (ARB, 2007b). Please see Chapter IX.A. of 

the off-road TSD for a description of these requirements. 

The results of the environmental impact analysis for the proposed regulation 

amendments are discussed in the sections below. Alternatives to the proposed 

amendments to the regulation are discussed in Chapter V of this report. 

B. Air Quality Impacts of Proposed Amendments 

Section 1 below discusses the air quality impacts of the legislatively directed 

amendments. Section 2 discusses the air quality impacts of the additional incentives for 

early action. Section 3 discusses the air quality impacts of the other proposed 

amendments to the regulation. Section 4 provides staff’s overall assessment of all of 

the proposed amendments. 

To put the air quality impacts discussed later in context, Table 7 below shows the 

emission reductions anticipated from the regulation, prior to any of the proposed 

amendments discussed in this report. 

Table 7: Statewide NOx and PM Emission Reductions from the Current 

Regulation (tpd) 

Emission Reductions 2010 2015 2020 2025 

NOx Benefits of 

Regulation 13 30 48 20 

PM Benefits of 

Regulation 2.3 6.9 5.2 2.9 

1. Legislatively directed amendments 

The legislatively directed amendments would allow many fleets to comply with the 

regulation by utilizing credit received under the new provisions, rather than taking 

actions to reduce emissions. Hence, the amendments would cause fleets to perform 
38 

fewer actions to reduce emissions than they otherwise would have. As a result, there 

will be less retirement of high-emitting vehicles, fewer repowers of vehicles with cleaner 

engines, and fewer installations of exhaust retrofits. Typically, the fewer actions that a 

fleet takes to reduce emissions, the older and higher emitting its vehicles will be. 

Therefore, staff anticipates that the legislatively directed amendments would have an 

overall negative impact on the emission reductions achieved by the regulation. 

Staff recognizes that, due to the current economic recession, many fleets have retired 

vehicles and/or reduced their vehicle activity, thereby reducing their emissions. 

However, staff does not yet have adequate data on how the current economic recession 

has affected the thousands of fleets in California to determine whether the emission 

reductions due to activity reductions and retirement are currently large enough to offset 

the emission benefit losses due to the legislatively directed amendments. Nor can staff 

accurately determine how future economic changes will affect emissions relative to what 

was initially predicted by staff when analyzing the anticipated benefits of the regulation 

(ARB, 2007a). Due to the uncertainty regarding fleet activity, and credits that fleets may 

claim, staff cannot currently quantify the overall combined effect of the economy and the 

legislatively directed amendments on emissions. However, staff is examining the 

effects of the current economic conditions on California fleets and will report its findings 

as part of staff’s October, 2009 update to the Board, as discussed further in Section C 

below. 

The subsections below discuss the anticipated emission impact of each of the 

legislatively directed changes on emissions. 

a) Amendments to the BACT Schedule 

The proposed amendments to the BACT schedule from 2011 to 2013 would allow large 

fleets to perform fewer actions than are currently required in 2011 and 2012, but would 

require them to make up for any reduced compliance in those years by the 2013 

compliance date. Under the legislatively directed amendments, large fleets could elect 

to take up to a 40 percent reduction from required compliance under the present 

regulation in 2011 and 2012, for both NOx and PM requirements, and, if a fleet elects to 

take such reductions, an 80 percent increase in actions required in 2013. 

Although by 2013, overall emission reductions would be achieved under either the 

current regulation or the proposed amendments, under the proposed amendments, 

there would be a loss in emissions benefits in both 2011 and 2012; a loss which staff 

expects would correspond to the reduction in the BACT requirements in these years, or 

40 percent. 

Applying this change to the emissions reductions staff estimated in the TSD (ARB, 

2007b)7

, the reduction in benefits can be seen in Figure 5 below.8 . 

 

7

 The TSD emissions estimates, which for consistency are cited in Table 7 and Figure 5 and 

utilized for the estimates in this report, did not include the effects of changing the small fleet 
39 

Figure 5: Effect of Proposed BACT Schedule Amendments on Emissions 

Benefits 

Table 8: Statewide Increase in Emissions in 2011 and 2012 from BACT Schedule 

Amendments 

Year PM (tpd) NOx (tpd) 

2011 0.7 3.5 

2012 1.5 5.0 

As shown in Figure 5 and Table 8 above, although fleets meeting the BACT 

requirements would be required to take fewer actions through 2012, they would be 

required to fully make up for this by the March 1, 2013, compliance date, and thereby 

achieve the emissions benefits expected in 2013 and beyond. The loss of emissions 

benefits shown by the gap in benefits above are substantial for 2011 and 2012, and 

would result in a near term impact on mortality. However there should be no long-term 

disbenefits in emissions from these BACT amendments, as long as fleets successfully 

are in full compliance with the 2013 requirements.

b) Credit for reduced activity and retirements that reduce overall 

fleet hp 

Until staff receives more data from fleets on the level of activity reduction, the type and 

quality of records that fleets have maintained, and the distribution of activity reduction 

 

definition from 1,500 hp to 2,500 hp. However, this change made only a small change (less 

than 3 percent) to staff’s overall benefit estimates. 

8

 The emission benefit estimates in Figure 5 are only for the proposed change to the BACT 

schedule and do not include the effects of the new credits for retired hp or reduced activity. 
40 

among California’s off-road fleets, the overall effect on emissions cannot be accurately 

quantified. However, individual, fleets that receive additional credit using either of the 

proposed provisions for reduced activity credit or vehicle retirement credit would be 

required to take fewer actions to meet the regulation’s BACT requirements than are 

currently required. As an example of how a fleet’s requirements could be lowered, the 

actions required before and after the legislatively directed amendments are shown 

below for an example fleet. 

For the purposes of this example, consider a 10,000 hp fleet that retires 2,000 hp 

between 2006 and 2009, and experiences an additional 25 percent reduction in activity 

between July 1, 2007, and March 1, 2010, over their remaining 8,000 hp. This reduction 

in activity provides 25 percent of the remaining hp, or 2,000 hp, in credit. Table 9 

summarizes the new credits awarded to the fleet per the proposed amendments. 

Table 9: New Credits Awarded to Fleet 

Credit NOx and PM Credit (Hp) 

Reduced Activity Credit 2,000 

Retirement Credit 2,000 

Total New Credits Awarded 4,000 

As shown below in Figure 6 and Figure 7, after the first six years of the regulation, the 

fleet’s turnover requirements have decreased by 3,280 hp and the fleet’s retrofit 

requirements have decreased by 2,400 hp, when compared to the requirements prior to 

the legislatively directed amendments. 

Figure 6: NOx BACT Requirements for an Example Fleet 

0

1000

2000

3000

4000

2009 2010 2011* 2012 2013 2014 2015

Horsepower

Previous Cumulative

Turnover Requirements

Cumulative Turnover

Requirements Using

New Credits 3280

HP Not 

Turned 

Over

*Unused credit from reduced activity expires. 2,000 hp turnover credit is carried forward.
41 

Figure 7: PM BACT Requirements for an Example Fleet 

0

1000

2000

3000

4000

5000

6000

7000

8000

2009 2010 2011 2012 2013 2014 2015

Horsepower

Previous

Cumulative Retrofit

Requirements

Cumulative Retrofit

Requirements

Using New Credits

2400

HP Not 

Retrofit

Because the example fleet has reduced activity as well as retired a significant portion of 

its hp, its emissions have been reduced from its previous 2006 levels9

. However, the 

fleet’s emissions are likely to be higher than they would have been in the absence of the 

proposed amendments. Also, the fleet is likely older and higher emitting than it would 

have been in the absence of the amendments. Hence, if the fleet’s activity increases in 

the future as the economy rebounds, it will have significantly higher emissions than it 

would have had in the absence of those amendments. As fleets begin to report reduced 

activity (anticipated in Spring 2009), staff will have more data to analyze this effect. 

2. Additional Incentives for Early Action 

The effect on emissions from the three proposed amendments intended to spur early 

retrofitting - exempting vehicles retrofit early from future turnover, providing double 

credit for early NOx retrofits, and extending double retrofit credit for medium and small 

fleets – would provide early emission benefits and serve to offset the emission impacts 

of the legislatively directed amendments. However, the overall benefit of these 

proposed amendments will depend entirely on their appeal, and on how many additional 

retrofits and repowers fleets perform. The analysis described below therefore bounds 

the potential benefits. 

a) NOx retrofit double credit 

Based on the approximately 400 VDECS reported to date in the Diesel Off-road On-line 

Reporting System (DOORS) (DOORS, 2009), it is reasonable to assume that double 

credit for NOx amendments might spur roughly 400 additional retrofits. Additionally, 

 

9

 Not all reduction in activity or retirements will reduce emissions. If a fleet retires their cleanest 

vehicles, and reduces activity, their overall emissions may still increase if they are using 

their older, dirtier vehicles substantially more. 
42 

after reviewing the applicability of the current VDECS which are verified to reduce NOx 

emissions, staff estimate that approximately 28,000 vehicles in the statewide off-road 

fleet fall into the hp range and model year range that could be retrofitted. To determine 

a reasonable upper bound, staff analyzed the early emissions benefit if large fleets 

responded to the new incentive by retrofitting 2 percent of their horsepower (about 

2,800 vehicles). Staff assumed that these installations provided a NOx reduction of 40 

percent10

. 

Staff assumed the vehicles retrofitted were 250 hp on average, and were equivalent in 

age and emission factors to an average sample of the statewide fleet. 

As summarized in Table 10 below, staff estimates that the double credit for early NOx 

retrofits could result in emission benefits of approximately 0.1 to 0.3 tpd PM and 0.5 to 

3.2 tpd NOx. 

Table 10: Possible 2010 Emissions Benefits from Proposed Double Credit for 

Early NOx Retrofits 

Additional Retrofits 

Installed 

PM Benefits 

(tpd) 

NOx Benefits 

(tpd) 

Estimated Effect 400 0.05 0.5 

Upper bound 2,800 0.34 3.2 

When considering the proposed amendment’s effect on emissions, fleets that take 

advantage of the credit would achieve early short term emissions benefits. However, in 

the long term, staff anticipates little change in overall emissions benefits due to the 

proposed NOx double retrofit credit. While fleets that receive the new NOx double 

credit would be able to delay other turnover in the future, based on the verified 

applicability of the only currently-verified NOx device10, fleets with older, dirtier vehicles 

would not be able to install a NOx VDECS on a high percentage of their older vehicles. 

As a result, staff does not anticipate that older, dirtier fleets would be able to apply a 

NOx VDECS to a large enough portion of their fleet to accumulate enough credit to 

appreciably impact their turnover schedule or significantly increase their NOx emissions. 

b) Turnover exemption for vehicles retrofit early 

As summarized in Table 11 below, the proposed turnover exemption for vehicles 

retrofitted early, and the extension of double retrofit credit for medium and small fleets 

could result in benefits between 0.1 and 0.3 tpd PM and 0.1 to 0.4 tpd NOx in 2010. 

The extension for medium and small fleets could also achieve benefits in future years, 

although this is not quantified in the table below. Staff’s estimate of the early emissions 

benefits of the proposed amendment ranged from a lower bound of an additional 400 

retrofits (the same as the analysis above) up to 2,800 retrofits (assuming all fleets 

retrofit approximately 1.5 percent of their vehicle inventory). For this analysis, as there 

 

10 Currently the only VDECS which is verified to reduce NOx emissions, the Cleaire Lonestar, is 

verified at 40 percent NOx reduction. 
43 

is currently only one retrofit device (of the eight devices verified to date) that is verified 

to reduce NOx emissions, staff assumed that only one in eight vehicles was retrofitted 

with a NOx reduction device. 

Table 11: Possible 2010 Emissions Benefits from the Proposed Turnover 

Exemption for Retrofit Vehicles and Extended Double Credit 

Additional 

Retrofits Installed 

PM Benefits 

(tpd) 

NOx Benefits 

(tpd) 

Estimated Effect 400 0.05 0.1 

Upper bound 2,800 0.34 0.4 

Staff assumed the vehicles retrofit were 250 hp on average, and were equivalent in age 

and emission factors to an average sample of the statewide fleet. 

Although the exemption from turnover in the future would allow older vehicles to remain 

in the fleet throughout the course of the regulation, if the exemption is limited to no more 

than 15 percent of any fleet’s hp, staff anticipates that fleets would meet the fleet 

average targets with increased turnover in the non-exempt portion of their fleet. Hence, 

the exemption from future turnover should not result in long term emissions disbenefits. 

An analysis of the possible emissions disbenefits of this proposed amendment, if its 

provisions are not limited, is discussed in the consideration of alternatives in Chapter V. 

c) Incentivizing Repowers 

In addition to incentivizing retrofits, staff is proposing to provide credit for repowers to 

fleets that, either because they are medium fleets or because they receive new credit 

due to the legislatively directed amendments, would no longer be required to take 

emissions reduction actions in 2010 or 2011. 

Again, the emissions benefit in early years would depend on how many fleets take 

advantage of the new incentive. Table 12 provides an estimate of the emission benefits 

from the repower incentive if 500 additional vehicles were repowered. 

Table 12: Possible 2010 Emissions Benefits from Proposed Repower Incentive 

Additional Repowers 

Performed 

PM Benefits 

(tpd) 

NOx Benefits 

(tpd) 

500 0.1 1.3 

For the purpose of this analysis, staff assumed the average vehicle repowered was 300 

hp, and repowered from a Tier 0 or Tier 1 engine to a Tier 2 engine. Additionally, staff 

assumed the average load factor was equivalent to the load factor of the most 

commonly repowered vehicle reported to ARB to date, scrapers, with a load factor of 

0.72 (ARB, 2007b). 
44 

3. Additional amendments to the regulation 

Staff analyzed the impacts of two additional amendments to the regulation - inclusion of 

community college training programs as non-profit training centers, and the inclusion of 

public agency fire abatement equipment within the forestry operations definition. 

As described below, staff does not believe sufficient vehicles will be covered by these 

proposed provisions to have any quantifiable impact on emission reductions. 

The addition of community colleges to the non-profit training center definition will mean 

some community college training programs that otherwise would have had to comply 

with the large or medium fleet requirements in 2010 or 2013, respectively, can now wait 

until 2015 to comply with the PM requirements of the regulation and would be 

completely exempt from the turnover requirements of the regulation. Therefore, the 

proposed amendment would likely result in less NOx reductions than otherwise 

expected. However, staff does not expect this impact to be significant. Although staff 

has not received complete inventory information from every community college training 

program in the state11, it has determined that there are no more than 10 such programs 

(ARB, 2009a). Using the inventory data for three training programs that staff has been 

able to obtain, staff estimates there is no more than 30,000 hp total from the affected 

vehicles owned by such training programs. Given that the total hp of affected vehicles 

covered by the regulation is nearly 29 million, a change affecting less than 30,000 hp 

(approximately 0.1 percent of the total) is unlikely to have a measurable effect. 

 

The change in the forestry definition would mean that vehicles owned by public 

agencies and used primarily for forest fire abatement or prevention would now be 

exempted from the off-road regulation. Such vehicles would instead be covered by a 

future control measure for agricultural off-road vehicles, if such a measure were 

adopted as planned. Although staff does not have complete inventory data regarding 

how many such vehicles there are, staff estimates that there are fewer than 500 such 

vehicles. Hence, this change is not expected to have a quantifiable impact on 

emissions. 

C. Future Evaluation of Current Economic Conditions on Emissions 

Staff recognizes that the current recession and downturn in the construction industry in 

particular, has reduced vehicle activity and thereby at least temporarily reduced 

emissions. Additionally, fleets may also have chosen to downsize in response to a 

decline in the economy. Some fleets choosing to reduce their fleet size due to 

economic hardship may have retained the older equipment and sold newer equipment; 

others may have sold their oldest equipment. Fleets may also have slowed or ceased 

their normal replacement of older vehicles with new in order to conserve capital. Each 

of these actions will have a different effect on emissions. 

 

11 Staff has requested fleet data from all such programs but as of May 2009 has received data 

from only three. 
45 

Staff is currently collecting data on California’s off-road diesel vehicle inventory as fleets 

comply with the reporting requirements in the regulation, with thousands of vehicles 

being reported to ARB each week. However, because the reporting deadlines for small 

fleets will not occur until later this summer, current data is incomplete for a full analysis. 

Additionally, not all large fleets have yet reported their vehicle retirements over the past 

few years, which will provide additional information on recent changes in the state’s offroad inventory. Nor have fleets yet reported data to ARB on their changes in vehicle 

activity. 

Staff will continue to receive and compile fleet information as it is received, and will 

report its findings, including an assessment of how emissions have changed as a result 

of the current economic climate, to the Board in October, 2009. 

D. Other Environmental Impacts 

Staff does not believe there will be any additional environmental impacts from the 

proposed amendments to the regulation. Although several of the proposed amendments 

are intended to increase the early use of exhaust retrofits, and the use of exhaust 

retrofits can have impacts on fuel economy and hazardous waste generation, the overall 

use of retrofits is expected to be less than initially expected due to the legislatively 

directed amendments. Hence, any negative environmental impacts are expected to be 

less than described in the Technical Support Document for the regulation (ARB, 2007b). 

The overall benefit of retrofits, including fuel economy concerns and hazardous waste, 

is discussed in chapter IX of the Technical Support Document for the regulation (ARB, 

2007b). 
46 
47 

V. ALTERNATIVES CONSIDERED 

This chapter discusses alternatives to the proposed amendments to the regulation. 

Section A discusses alternative methods of implementing the legislatively directed 

amendments, as well as alternatives to the proposed mitigation measures. When 

considering the legislatively directed amendments, staff did not consider alternatives 

that were inconsistent with the intent of AB 8 2X. 

Section B discusses a number of alternatives to the proposed additional incentives for 

early actions considered by staff, and why staff rejected those alternatives in favor of 

those staff are proposing. Section C discusses alternatives to the proposed community 

college training program change considered by staff and why they were rejected. 

Because the other proposed amendments are clarifications or minor changes, staff did 

not perform an alternatives analysis for them. 

A. Legislatively Directed Amendments 

1. Revised BACT schedule 

Staff considered implementing the BACT requirements as described by AB 8 2X without 

special provisions for fleets which met the fleet average targets in 2011 or 2012. 

However, without exempting fleets which met the fleet average targets in 2011 and/or 

2012 from the increased BACT requirements in 2013, the legislatively directed 

amendments could potentially increase the stringency of the regulation for some fleets. 

Fleets meeting the fleet average targets in 2011 and 2012, but not in 2013, would have 

been required to turn over 8 percent of their hp and retrofit 20 percent of their hp to 

meet the 2013 BACT requirements under the current regulation. However, without 

including special provisions for these fleets, these same fleets would have had their 

2013 BACT requirements increased to turning over 14.4 percent and retrofitting 36 

percent of their hp. This would nearly double their requirements. 

Staff does not believe it was the intent of the legislature to increase the stringency of the 

regulation for fleets in the early years of the regulation, especially not for the cleanest 

fleets (those meeting the fleet average targets). Therefore, staff chose to include 

language to prevent the BACT schedule amendments from increasing the requirements 

on fleets. 

2. Additional credit for vehicle retirement 

Although staff initially proposed crediting only the retirement of Tier 0 vehicles or Tier 0 

and 1 vehicles that were not certified to a PM level, staff believes that crediting the 

retirement of all vehicles reducing overall hp, regardless of engine tier, is the option 

most consistent with the intent of AB 8 2X. 

By limiting the credit to only Tier 0 vehicles, this provision would have limited credit to 

only those fleets that had retired their oldest vehicles, thereby decreasing their 

emissions and fleet average emission rates. This limitation would have been consistent 
48 

with the current provisions in the regulation for the early retirement of Tier 0 vehicles in 

fleets that have reduced hp (section 2449.2(a)(2)(A)1.b.). This interpretation would 

have been equivalent to extending the current credit for the retirement of Tier 0 vehicles 

back by 3 years (from March 1, 2009, back to March 1, 2006). 

At the initial workshop on April 7, 2009, to discuss the proposed amendments, staff 

received feedback that the provision should allow fleets that had retired all of their Tier 0 

vehicles to receive credit for the retirement of Tier 1 vehicles as well, because these 

retirements would remove the dirtiest vehicles remaining in the fleet. To not allow credit 

for retirement of such Tier 1s would unfairly penalize cleaner fleets. Staff agreed that 

crediting the retirement of Tier 1 vehicles, in a fleet that did not have Tier 0 vehicles, 

was consistent with awarding credit for actions which would decrease the average 

emissions from the fleet. 

At the second workshop on April 29, 2007, staff proposed allowing credit for all Tier 0 

retirements and Tier 1 retirements in fleets with no Tier 0s. However, staff received 

additional feedback from fleets that, because section 2449.1(a)(2)(A)2.a.ii. of the 

regulation only offered credit for early vehicle retirements if such retirements exceeded 

eight percent per year on average from 2006 to 2009, some fleets had delayed the 

retirement of their Tier 0 vehicles in order to receive credit for the retirements after 

March 1, 2009, while retiring higher tiered vehicles first. As such, any limit on the credit 

by vehicle tier would unfairly prevent any credit being awarded to fleets that had 

retained Tier 0 vehicles due to provisions in the current regulation. 

Staff also received a letter from a number of legislators indicating that the legislative 

intent of the AB 8 2X retirement credit was to apply to retirement of all vehicles 

regardless of tier (Assembly, 2009; Senate, 2009). After reviewing all the feedback, 

staff concluded that crediting the retirement of all vehicles reducing overall hp, 

regardless of vehicle tier, from March 1, 2006 to March 1, 2010, is the most appropriate 

approach consistent with the intent of AB 8 2X. 

3. Reduced activity credit 

a) Determining average annual use 

Although staff considered other length time periods for determining activity, staff 

concluded that a 12-month period was the most accurate and representative 

interpretation of AB 8 2 X. As shown in Appendix A, AB 8 2X states that reduced 

activity is defined by the “average annual hours” for vehicles in the fleet, as determined 

on July 1, 2007, and March 1, 2010. As the average annual hours of use cannot 

representatively be determined by the use on a single day, staff had to determine the 

most appropriate annual period for determining fleet activity on the above dates. The 

average annual hours could be defined by a period shorter than a year, but such a 

shorter period would not accurately depict annual activity. For example, using June 

through August of 2007 as the baseline period would exaggerate the baseline activity as 

summer months are historically more active months than an annual average for the 

construction industry, the industry most heavily affected by the regulation. Hence, staff 
49 

concluded a 12-month period was the most appropriate way to capture the seasonal 

nature of the construction industry. 

b) Dates used to determine baseline activity period 

Initially, staff proposed to determine the average annual use for July 1, 2007, as the 

twelve month period beginning July 1, 2007, and ending on June 30, 2008, and the 

average annual use for March 1, 2010 as the twelve month period beginning March 1, 

2009, and ending on February 28, 2010. This interpretation would be consistent with 

the AB 8 2X language which states “reduced activity between July 1, 2007, and March 

1, 2010” as both of these periods are included between these dates. At the initial 

workshop, however, fleets expressed concern that beginning the initial period on 

July 1, 2007, would not provide them with the credit intended by the legislature as many 

in the construction industry had experienced periods of higher activity prior to July, 

2007. 

Staff therefore amended the initial twelve month period to center on July 1, 2007, 

instead of beginning on that date. By centering the twelve month period on July 1, 

2007, staff believes the provision more accurately captures the activity average on July 

1, 2007, rather than an average of the twelve months after that date. 

Several fleets and construction industry members requested that the initial period be 

determined by the twelve month period ending on July 1, 2007. Staff considered this 

method, but does not agree that the twelve months ending on July 1, 2007, capture the 

average annual activity as of that date any more so than the twelve months beginning 

on July 1, 2007. Defining the initial period as August, 2006, to July, 2007, most 

accurately captures the fleet average annual hours of January, 2007, and not July, 

2007, which would not be consistent with the language in AB 8 2X. 

c) Dates used to determine final activity period 

In order to be consistent with baseline activity period, staff considered using the twelve 

month period centered on March 1, 2010, to determine the average annual activity of 

that date. While this would be the most accurate way to determine the activity on March 

1, 2010, and would be consistent with the recommended method for determining the 

baseline activity, staff recognizes that many fleets will be using the credits to meet the 

March 1, 2010, BACT requirements. As such, in order to provide certainty to fleets 

regarding their compliance requirements, the period to determine the credit provided 

cannot reasonably extend past that initial compliance date for large fleets. While the 

regulation could provide credit based on an initial estimate of the activity for this period, 

and then later provide a correction in the 2011 requirements if activity did not match the 

estimate, this would become both extremely complicated and could unexpectedly 

increase the stringency of the regulation for fleets in 2011 if their activity increased in 

2010. On reviewing the available options, staff considered the twelve months ending on 

March 1, 2010, to be the best option to meet the intent of AB 8 2X and still be workable 

for fleets. 
50 

d) Including vehicle hp in activity calculations 

As AB 8 2X does not include mention of vehicle hp when defining reduced fleet activity, 

staff briefly considered not including hp when calculating vehicle activity. However, not 

including the hp could provide the same credit to a fleet that reduced their activity on a 

2,700 hp mining truck as a fleet that reduced activity on a 35 hp riding mower. 

Alternatively, a fleet could lower their use of the 2,700 hp mining truck, and increase the 

use of the 35 hp riding mower, and receive no credits. Staff does not believe that would 

be equitable or consistent with the intent behind the legislatively directed amendments. 

e) Demonstrating reduced activity using fleet records 

Staff ultimately crafted a proposal that allows fleets with records allowing a vehicle-byvehicle determination of baseline and final activity to receive as much reduced activity 

credit as they can document. Staff’s proposal also attempts to ensure that inappropriate 

credit is not unfairly awarded to fleets that have not actually reduced activity, but at the 

same time allows fleets which cannot substantiate specific vehicle reductions to receive 

some credit. Staff considered a wide range of possibilities when considering how fleets 

could submit a document of reduced activity. After receiving feedback during the 

workshops, and from advisory group and industry representatives, staff considered 

several different options: 

• Credit Only for Fleets with Hour Meter Logs for Each Vehicle: Staff 

considered requiring fleets to provide logs showing readings from hour meters for 

every vehicle in the fleet in order to receive reduced activity credit. However, 

based on informal polling at the workshops held to discuss the proposed 

amendments, staff estimated that a quarter or less of the fleets affected by the 

regulation have hour meters installed on each vehicle, not to mention logs of the 

readings dating back to 2007. Requiring such logs would prevent many fleets 

that have legitimately reduced activity from receiving credit. 

• Full Credit for Fleets with Any Indicator of Reduced Activity: Staff 

considered allowing fleets that could demonstrate any indicator of reduced 

activity to receive full credit. For example, a fleet that had decreased total 

employment by 40 percent from 2007 to 2010 might receive 40 percent of their 

hp as credit under this rejected alternative. However, such a provision would not 

necessarily properly award credit for reduced activity, in that, for example, a fleet 

may have reduced their employment by laying off workers that do not operate 

vehicles. Staff also rejected decreased revenue as an indicator of reduced 

activity, in that a fleet may have maintained a constant level of operational 

activity but experienced decreased revenue as a result of operating with 

decreased profit margins. Ultimately, staff determined that allowing uncapped 

credit to fleets for any indicator of reduced activity would provide more credit than 

was appropriate as fleets could choose which indicator could provide them with 

the most credit, even if they had more accurate vehicle data. 

4. Combination of credits for reduced activity and early retirement 

To avoid double counting vehicle retirements as reduced activity, staff considered 

requiring fleets to choose between reduced activity credits and retirement credits. The 
51 

example below illustrates why allowing fleets to count both reduced activity and vehicle 

retirement would inappropriately double the amount of credit given for the same action. 

Example fleet: 

Consider a 100,000 hp fleet that retires 30,000 hp of Tier 0 equipment in 2008. These 

retirements lead to a 30 percent reduction in activity. (For the example, we assume the 

vehicles retired are of average hp for the fleet and were of average hours used in 2007 

compared to the other vehicles.) The emission reductions achieved by the fleet are 

approximately equal to if they had reduced to zero the emissions of 30 percent of their 

fleet. 

Retired Hp Credit for PM and NOx: 30,000 hp 

Reduced Activity Credit: 30% x 100,000 hp = 30,000 hp 

If allowed to combine their credits, the fleet would gain: 

60,000 hp total credit for PM and NOx for retiring 30,000 hp 

In other words, the fleet would receive credit for the same action twice (60,000 hp credit 

for an action that reduced emissions from 30,000 hp vehicles). This would be 

equivalent to 86 percent of the fleet’s final hp (60,000 hp/70,000 hp). Staff believes that 

allowing the fleet to accumulate 60,000 hp credit in the example above would incorrectly 

double count and overstate the emission reductions actually achieved. 

At the workshops, staff received comment that some fleets had experienced both 

reduced activity and retirements, in separate portions of their fleet. Staff agreed that 

crediting reduced activity in the portion of the fleet which was not retired would prevent 

double counting while providing appropriate credit to such fleets and hence adjusted 

staff’s proposal to allow this. 

B. Additional Incentives for Early Action 

1. Extension or increase of double retrofit credit 

To incentivize additional retrofits, staff considered triple retrofit credit and proposing an 

extension to the period for double PM retrofit credit for large fleets, which currently is 

scheduled to end on January 1, 2010. While the idea was appreciated by those fleets 

that had already planned to retrofit vehicles for double credit, staff received mixed 

feedback as to the anticipated effectiveness of providing more than double retrofit credit 

or extending double credit. 

In the end, staff rejected triple credit or further extension of double PM credit for large 

fleets for the following reasons. First, it would reduce the retrofit requirements for large 

fleets that would not receive credit per the legislatively directed amendments and would 

have to install retrofits in the early compliance years. For example, if a fleet would 

already be required to install retrofits in 2011, giving double credit for those retrofits 

would provide no further incentive to that fleet but instead would simply allow that fleet 

to delay further retrofitting. Second, if the provisions for double retrofit credits were 
52 

extended for several years, large fleets would lose the incentive to retrofit early to 

receive double credit, as they would be able to delay retrofitting several years and still 

receive double credit. Finally, staff was hesitant to extend double retrofit credit or put in 

place triple retrofit credit because both could lead to long-term emission disbenefits as 

described further below. For these reasons, staff does not recommend triple retrofit 

credit or further extension of double retrofit credit for large fleets. 

 

To demonstrate how triple credit could reduce long term emissions benefits, staff 

analyzed the effect of a fleet that retrofits 100 vehicles in 2010 (and receives triple credit 

(i.e., credit for 300 retrofits), and compared it to the emissions benefits that would be 

achieved if that same fleet actually retrofitted 300 vehicles in 2012, shown in Table 13. 

To simplify the example, one retrofit is assumed to remove one “unit” of emissions per 

year. As Table 13 shows, although there is an initial emission benefit for this fleet to 

retrofit early (greater cumulative benefits in 2010 and 2011), by 2012, the cumulative 

benefits are equal, and for all years after 2012, the cumulative emission benefits are 

greater for the later installation of 300 retrofits. 

Table 13: Emissions Benefit Comparison for Triple Retrofit Credit 

Number Annual Benefits (units) Cumulative Benefits (units) 

of 

Actual 

Retrofits 

Installed

2010 2011 2012 2013 2014 Through 

2010 

Through 

2011 

Through 

2012 

Through 

2013 

Through 

2014 

100 100 100 100 100 100 100 200 300 400 500 

300 0 0 300 300 300 0 0 300 600 900 

Staff does not find this same reasoning to apply to medium or small fleets that must 

comply no sooner than 2013 and 2015, respectively, and is proposing an extension of 

double credit for these fleets. In contrast to large fleets, in 2011 and 2012, small and 

medium fleets are not subject to compliance in these years, and the providing of double 

credit to them would not adversely delay scheduled compliance. Additionally, the 

extension of double credit would assist medium and small fleets in complying with the 

regulation and provide flexibility to these smaller fleets that do not benefit from the credit 

for reduced activity, which expires in 2011. 

2. Minimum BACT requirements for fleets awarded credit under new 

provisions 

At the initial workshop, staff received the comment that fleets using the new credit 

should be required to meet at least a minimal portion of the BACT requirements. That 

is, they should be required to do a certain percent retrofitting and a certain percent 

turnover per year, regardless of what new reduced activity and retirement credits they 

have. According to the commenter, the new credits should not exempt any fleet 

completely from taking actions to clean up their fleets during the initial few years of the 

regulation. 

 
53 

Staff performed an analysis of the likely emissions benefits that would result from 

maintaining minimum BACT requirements for those fleets using the new credits. For 

this analysis, staff assumed that fleets using the new credits would be required to 

complete half of the adopted initial BACT requirements (i.e., four percent turnover, and 

10 percent retrofits). Staff concluded that such minimum BACT requirements could 

indeed mitigate by 50 percent the potential loss in emission benefits from the 

legislatively directed amendments (as discussed in Chapter IV.B.1 above). 

Staff, however, did not propose the suggested minimum BACT requirements finding 

such a requirement to be inconsistent with the intent of AB 8 2X to provide needed relief 

to affected fleets during the current economic downturn. 

3. Increase the stringency of the regulation to compensate for relief 

provided 

Staff received the suggestion to increase the BACT requirements in the regulation in 

2013 and 2014 for all fleets that took advantage of the new credits. While this approach 

could prevent any emission benefits losses from the new credits from 2014 and later, 

staff is not proposing it as part of the amendments described in this report because it 

could push annual compliance costs in 2013 and 2014 to levels that would not be 

affordable to many fleets. Additionally, staff believes that the proposal is inconsistent 

with the intent of AB 8 2X. 

C. Other Amendments 

As discussed in Chapter II, staff proposes to amend the definition of Non-Profit Training 

Center to include community college off-road vehicle training programs (community 

college programs) in order to lower potential compliance costs for such programs and 

give such programs more time to comply. When considering how to provide relief to the 

community college programs, staff considered including them in the exemption for job 

corps training centers in section 2449(e)(13) of the regulation rather than defining them 

as Non-Profit Training Centers. Section 2449(e)(13) completely exempts job corps 

training centers from all of the regulation’s requirements except for reporting and 

labeling. Hence, if community college programs had been added to section 

2449(e)(13), they would have been exempted from all of the turnover and retrofitting 

requirements of the regulation. 

Staff opted to include the community college programs in with the Non-Profit Training 

Centers to (1) better maintain the emission benefits of the regulation, (2) maintain 

consistency between community college programs and very similar programs run by 

labor unions, and (3) encourage community college programs to obtain exhaust retrofits 

and thereby provide training to their students in the use and maintenance of retrofits. 

Because exhaust retrofits are expected to become commonplace in the future, having 

some exposure to the use of such retrofits would be useful to community college 

students who wish to become future equipment operators. 
54 
55 

VI. REFERENCES 

AB 8 2X, 2009. Assembly Bill 8 2X, Chapter 6. An act to amend Section 11011 of the 

Government Code, to add Section 43018.2 to the Health and Safety Code, which 

directs ARB to amend Sections 2449.1 and 2449.2 of Title 13 of the California Code of 

Regulations. Approved by the Governor on February 20, 2009. 

ARB, 2000. California Air Resources Board. Risk Reduction Plan to Reduce 

Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles. California Air 

Resources Board, October 2000. http://www.arb.ca.gov/diesel/documents/rrpFinal.pdf

ARB, 2007a. California Air Resources Board. Staff Report: Initial Statement of Reasons 

for Proposed Rulemaking; Regulation for In-Use Off-Road Diesel Vehicles. California 

Air Resources Board, April 2007. http://www.arb.ca.gov/regact/2007/ordiesl07/isor.pdf

ARB, 2007b. California Air Resources Board. Technical Support Document: Regulation 

for In-Use Off-Road Diesel Vehicles. California Air Resources Board, April 2007. 

http://www.arb.ca.gov/regact/2007/ordiesl07/TSD.pdf

ARB, 2007c. California Air Resources Board. Air Resource’s Board Proposed State 

Strategy for California’s 2007 State Implementation Plan: Revised Draft. California Air 

Resources Board, April 26, 2007. 

http://arb.ca.gov/planning/sip/2007sip/apr07draft/covtoc.pdf

http://www.arb.ca.gov/planning/sip/2007sip/2007sip.htm#April26 

ARB, 2008. California Air Resources Board. Conditional Verification Letter 08-661-461 

for Cleaire Lonestar® Diesel Retrofit System. California Air Resources Board, 

December 23, 2008. 

http://www.arb.ca.gov/diesel/verdev/pdf/conditional/08-661-461.pdf

ARB, 2009a. Internet search by ARB staff to compile a list of community colleges that 

have off-road equipment training programs. April 22, 2009. 

ARB, 2009b. Staff’s Proposed Amendments to the April 7, 2009 Proposal for 

Implementing the Legislatively Directed Changes. April 23, 2009. 

ARB, 2009c. In-Use Off-road Diesel Vehicle Regulation Legislatively Directed 

Changes: Fleet Examples. April 28, 2009. 

DOORS, 2009. Diesel Off-road On-line Reporting System. 

https://secure.arb.ca.gov/ssldoors/doors_reporting/reporting.php, May 18, 2009. 

Assembly, 2009. Letter from select members of the Assembly to Mary Nichols, ARB. 

Legislative intent regarding ABX2 8 with regard to off-road diesel regulation. April 22, 

2009. 
56 

Senate, 2009. Letter from select members of the Senate to Mary Nichols, ARB. 

Legislative intent of ABX2 8 relating to off-road diesel regulation. April 22, 2009. 
57 

AB 8 2X LANGUAGE 

Assembly Bill No. 8 

CHAPTER 6 

An act to amend Section 11011 of the Government Code, to add Section 

43018.2 to the Health and Safety Code, to add and repeal Sections 21080.41 and 

21080.42 of the Public Resources Code, and to add Section 130240.5 to the Public 

Utilities Code, relating to state government. 

[Approved by Governor February 20, 2009. Filed with

Secretary of State February 20, 2009.] 

LEGISLATIVE COUNSEL’S DIGEST 

SEC. 2. Section 43018.2 is added to the Health and Safety Code, to read: 

43018.2. (a) The state board shall amend Sections 2449.1 and 2449.2 

of Title 13 of the California Code of Regulations to do both of the following: 

(1) Modify the nitrogen oxides (NOx) and particulate matter (PM) best 

available control technology requirements to allow a fleet to achieve its 

cumulative turnover and retrofit requirements for the years 2011 to 2013, 

inclusive, by completing 20 percent of its cumulative turnover and retrofit 

obligations in 2011, an additional 20 percent in 2012, and the balance in 

2013. 

(2) (A) Modify the nitrogen oxides (NOx) and particulate matter (PM) 

credit provisions to reflect vehicle retirements that reduce total fleet 

horsepower between March 1, 2006, and March 1, 2010, and reduced activity 

between July 1, 2007, and March 1, 2010. 

(B) “Reduced activity” for the purposes of this paragraph means the 

percentage reduction in the average annual hours of operation of the off-road 

fleet. That percentage shall be carried forward as a credit for nitrogen oxides 

(NOx) and particulate matter (PM) to offset the annual percentage reductions 

required for 2010 and 2011. The credit shall not be used to meet any 

obligations beyond 2011. 

(b) The amendment of regulations required by this section is exempt 

from the Administrative Procedure Act (Chapter 3.5 (commencing with 

Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). 
58 
59 

APPENDIX A: PROPOSED REGULATION ORDER FOR IN-USE OFF-ROAD 

DIESEL-FUELED FLEETS 

Note: Proposed modifications are shown in underline to indicate additions and strikeout

to indicate deletions, compared to the preexisting regulatory language. Modifications 

that were proposed at the January Board hearing are shown in bold underline to 

indicate additions and bold strikeout to indicate deletions, compared to the preexisting

regulatory language. The symbol “*****” indicates that regulatory language not being 

amended is not shown. 

Amend sections 2449, 2449.1, and 2449.2, title 13, California Code of Regulation to 

read as follows. 

§ 2449 General Requirements for In-Use Off-Road Diesel-Fueled Fleets 

***** 

 (c) Definitions 

***** 

(26) “Forest operations” means (A) forest fire prevention activities performed by 

public agencies, including but not limited to construction and maintenance of 

roads, fuel breaks, firebreaks, and fire hazard abatement or (B) cutting or 

removal or both of timber, other solid wood products, including Christmas trees, 

and biomass from forestlands for commercial purposes, together with all the work 

incidental thereto, including but not limited to, construction and maintenance of 

roads, fuel breaks, firebreaks, stream crossings, landings, skid trails, beds for 

falling trees, fire hazard abatement, and site preparation that involves 

disturbance of soil or burning of vegetation following forest removal activities. 

Forest operations include the cutting or removal of trees, tops, limbs and or brush 

which is processed into lumber and other wood products, and or for landscaping 

materials, or biomass for electrical power generation. Forest operations do not 

include conversion of forestlands to other land uses such as residential or 

commercial developments. 

(27) “Highest Level Verified Diesel Emission Control Strategy” (VDECS) means 

the highest level VDECS verified by ARB under its Verification Procedure, 

Warranty and In-Use Compliance Requirements for In-Use Strategies to Control 

Emission from Diesel Engines (Verification Procedure), title 13, CCR, sections 

2700-2710, for a specific engine as of 10 months prior to the compliance date, 

which (1) can be used without impairing the safe operation of the vehicle as 

demonstrated per section 2449(e)(8), and (2) the diesel emission-control 

strategy manufacturer and authorized diesel emission-control strategy dealer 

agree can be used on a specific engine and vehicle combination without 

jeopardizing the original engine warranty in effect at the time of application. 
This Page Begins with 2449(c)(27) 

60 

Plus designations do not matter; that is, a Level 3 Plus is the same diesel PM 

level as Level 3; and Level 2 Plus is the same diesel PM level as Level 2. 

The highest level VDECS is determined solely based on verified diesel PM 

reductions, not based on verified NOx reductions. All Level 3 diesel PM devices 

are higher than all Level 2 diesel PM devices. Level 1 devices are never 

considered highest level VDECS for the purpose of this regulation. 

(28) “Hour Meter Log” means a log of the hours that a vehicle operated directly 

taken from the vehicle’s hour meter.

(2928) “Implement of husbandry” is as defined in California Vehicle Code 

(Veh.Code) division 16. 

(3029) “Local Municipality” means a city, county, city and county, special district, 

or other public agency, or two or more public entities acting jointly, or the duly 

constituted body of an Indian reservation or rancheria. Agencies of the United 

States of America or the State of California, and departments, divisions, public 

corporations, or public agencies of this State or of the United States are not 

considered local municipalities. 

(3130) “Low-Population County Local Municipality Fleet” means a fleet owned 

by a local municipality (as defined above) that is located in a county as defined in 

title 13, CCR, section 2022(b)(2) and identified in section 2022(c)(2), Table 2, or, 

using the criteria set forth in title 13, CCR, section 2022.1(c)(4), a local 

municipality not located in a low-population county that has requested and has 

received Executive Officer approval to be treated like a municipality in a lowpopulation county. Fleets owned by such local municipalities shall be treated as 

small fleets even if their total maximum power exceeds 2,500 horsepower. 

(3231)“Low-use vehicle” means a vehicle that operated in California less than 100 

hours during the preceding 12-month period running from March 1 to end of 

February. For example, when reporting in 2009, the hours of use between 

March 1, 2008 and February 28, 2009 would be used to determine low-use 

status. To be considered a low-use vehicle, the fleet owner must submit engine 

operation data from a functioning non-resettable hour meter. 

(A) Vehicles used outside California - Vehicles that operate both inside and 

outside of California can meet the low-use vehicle definition if they are used 

less than 100 hours per year in California. 

(B) Three-year rolling average - A vehicle operated only in California for the 

previous three years and owned by the same owner during that period will be 

considered low-use if it operated on average less than 100 hours per year 

during that previous three-year period. 

(C) Emergency operation hours - Hours used for emergency operations are 

not counted when determining low-use status. 
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61 

(3332) ”Maximum power” (Max Hp) means the engine’s net horsepower or net 

flywheel power certified to Society of Automotive Engineers (SAE) Method J1349 

or International Organization for Standardization (ISO) Method 9249. If the 

engine’s net horsepower or net flywheel power certified to SAE Method J1349 or 

ISO Method 9249 is not readily available, another net horsepower or net flywheel 

power from the manufacturer’s sales and service literature or horsepower from 

the engine label may be used. 

(3433) “Model year” has the same meaning as defined in title 13, CCR, section 

2421(a)(37). 

(3534) “Motor vehicle” has the same meaning as defined in Veh. Code section 

415. 

(3635) “New fleet” means a fleet that is acquired or that enters California after 

March 1, 2009. Such fleets may include new businesses or out-of-state 

businesses that bring vehicles into California for the first time after March 1, 

2009. 

(3736) “NOx index” means an indicator of a fleet’s overall NOx emission rate. The 

NOx Index for a specific fleet is determined by summing the product of the 

maximum power of each engine times the NOx Emission Factor, and dividing by 

the fleet’s total maximum power. 

(3837) “NOx target rate” means the NOx fleet average that a specific fleet must 

meet in a compliance year in order to show compliance with the fleet average 

requirements. The NOx Target Rate varies depending on a fleet’s horsepower 

distribution. The NOx Target Rate for a specific fleet for each compliance year is 

determined by summing (adding) the product of the maximum power (Max Hp) of 

each engine times the NOx target, and dividing the resulting sum by the fleet’s 

total maximum power. 

 (3938) “Non-Profit Training Center” means an entity that operates a program for 

training in the use of off-road vehicles and that (A) is a community college 

program that trains students in the use of off-road vehicles or (B) qualifies as a 

non profit or not for profit organization under title 26 Internal Revenue Code 

section 501(a), (c)(3), (c)(5), or (c)(6). Any vehicles that are not used for an offroad training program are not considered part of a non-profit training center and 

must be considered a separate fleet. 

(4039) “Off-highway vehicle” is defined in Veh. Code division 16.5. 

(41) “Operator Log” means a log of the hours that a vehicle operated taken from 

records of vehicle operator hours. 
This Page Begins with 2449(c)(42) 

62 

(4240) “Oxides of nitrogen” (NOx) means compounds of nitric oxide, nitrogen 

dioxide, and other oxides of nitrogen. Nitrogen oxides are typically created during 

combustion processes and are major contributors to smog formation and acid 

deposition. 

(4341) “Post-2007 Flexibility Engine” means an engine certified on or after 

January 1, 2007 to the implementation flexibility standards in title 13, CCR, 

section 2423(d). Such flexibility engines are generally labeled as follows by the 

engine manufacturer: 

"THIS ENGINE COMPLIES WITH CALIFORNIA EMISSION 

REQUIREMENTS UNDER 13 CCR 2423(d)...” or 

"THIS ENGINE CONFORMS TO CALIFORNIA OFF-ROAD 

COMPRESSION-IGNITION ENGINE REGULATIONS UNDER 13 

CCR, 2423(d)." 

Post-2007 flexibility engines should use the emission standard to which the 

engine is certified. For example, a Tier 4 engine flexed back to Tier 2 emission 

levels should use the Tier 2 PM standard in title 13, CCR, section 2423(b)(1)(A) 

as the emission factor (converted from grams per kilowatt hour (g/kW-hr) to 

g/bhp-hr by multiplying by 0.746). 

(4442) “Queuing” means the intermittent starting and stopping of a vehicle while 

the driver, in the normal course of doing business, is waiting to perform work or a 

service, and when shutting the vehicle engine off would impede the progress of 

the queue and is not practicable. Queuing does not include the time a driver 

may wait motionless in line in anticipation of the start of a workday or opening of 

a location where work or a service will be performed. 

(4543) “Registered and driven safely on-road” means a vehicle meets the 

requirements to be registered for on-road operation in Veh. Code division 3, 

chap. 1, article 1, sections 4000 et seq. (i.e., required to be registered or could 

be registered), and the requirements to be driven safely on-road in “Equipment of 

Vehicles” requirements in Veh. Code division 12, chap. 1, sections 24000 et seq. 

and “Size, Weight, and Load” requirements in Veh. Code division 15, 

sections 35000 et seq. Having a California Special Construction Equipment 

plate as defined in California Veh. Code sections 565 and 570 does not 

constitute registration. 

(46) “Replacement” means the addition of off-road diesel vehicles to a fleet that 

had retired one or more off-road diesel vehicles of an equivalent horsepower.

(4744) “Repower” means to replace the engine in a vehicle with another engine 

meeting a subsequent engine emissions standard (e.g., replacing a Tier 0 engine 

with a Tier 2 or later engine).
This Page Begins with 2449(c)(48) 

63 

(4845) “Responsible Official” means one of the following: 

(A) For a corporation: A president, secretary, treasurer, or vice president of the 

corporation in charge of a principal business function, or any other person 

who performs similar policy or decision-making functions for the corporation, 

(B) For a partnership or sole proprietorship: a general partner or the proprietor, 

respectively 

(C) For a municipality, state, federal, or other public agency: either a principal 

executive officer or ranking elected official. For the purposes of this part, a 

principal executive officer of a federal agency includes the chief executive 

officer having responsibility for the overall operations of a principal 

geographic unit of the agency (e.g., a Regional Administrator of the U.S. 

EPA). 

(4946) “Retire” means to take an engine out of service and not operate it again in 

the State of California. To retire an engine, the vehicle with the engine may be 

moved outside of California, sold, or scrapped. 

(5047) “Snow removal operations” means removing snow from public roads, 

private roads, or driveways. 

(5148) “Specialty vehicle” means a vehicle for which no used vehicle with a 

cleaner engine that can serve an equivalent function and perform equivalent 

work is available. 

(5249) “Tier 0 Engine” means an engine not subject to the requirements in title 13, 

CCR, section 2423; Title 40, Code of Federal Regulations (CFR), Part 89; or 

Title 40, CFR, Part 1039. 

(5350) “Tier 1 Engine” means an engine subject to the Tier 1 new engine emission 

standards in title 13, CCR, section 2423(b)(1)(A) and/or Title 40, CFR, Part 

89.112(a). This also includes engines certified under the averaging, banking, 

and trading program with respect to the Tier 1 Family Emission Limits (FEL) 

listed in title 13, CCR, section 2423(b)(2)(A) and/or Title 40, CFR, Part 89.112(d). 

(5451) “Tier 2 Engine” means an engine subject to the Tier 2 new engine emission 

standards in title 13, CCR, section 2423(b)(1)(A) and/or Title 40, CFR, 

Part 89.112(a). This also includes engines certified under the averaging, 

banking, and trading program with respect to the Tier 2 FEL listed in title 13, 

CCR, section 2423(b)(2)(A) and/or Title 40, CFR, Part 89.112(d). 

(5552) “Tier 3 Engine” means an engine subject to the Tier 3 new engine emission 

standards in title 13, CCR, section 2423(b)(1)(A) and/or Title 40, CFR, Part 

89.112(a). This also includes engines certified under the averaging, banking, 

and trading program with respect to the Tier 3 FEL listed in title 13, CCR, section 

2423(b)(2)(A) and/or Title 40, CFR, Part 89.112(d).
This Page Begins with 2449(c)(56) 

64 

(5653) “Tier 4 Final Engine” means an engine subject to the final after-treatmentbased Tier 4 emission standards in title 13, CCR, section 2423(b)(1)(B) and/or 

Title 40, CFR, Part 1039.101. This also includes engines certified under the 

averaging, banking, and trading program with respect to the Tier 4 FEL listed in 

title 13, CCR, section 2423(b)(2)(B) and/or Title 40, CFR, Part 1039.101. 

(5754) “Tier 4 Interim Engine” means an engine subject to the interim Tier 4 

emission standards (also known as transitional) in title 13, CCR, section 

2423(b)(1)(B) and/or Title 40, CFR, Part 1039.101. This also includes engines 

certified under the averaging, banking, and trading program with respect to the 

Tier 4 FEL listed in title 13, CCR, section 2423(b)(2)(B) and/or Title 40, CFR, 

Part 1039.101. 

(5855) “Total maximum power” means the sum of maximum power for all of a 

fleet’s engines that are subject to this regulation. Low-use vehicles, dedicated 

snow-removal vehicles, and vehicles used solely for emergency operations need 

not be included in the sum. 

(5956) “Verified Diesel Emission Control Strategy” (VDECS) means an 

emissions control strategy, designed primarily for the reduction of diesel PM 

emissions, which has been verified pursuant to the Verification Procedures. 

VDECS can be verified to achieve Level 1 diesel PM reductions (25 percent), 

Level 2 diesel PM reductions (50 percent), or Level 3 diesel PM reductions (85 

percent). VDECS may also be verified to achieve NOx reductions. See also 

definition of Highest Level VDECS. 

(6057) “VDECS Failure” means the condition of not achieving the emissions 

reductions to which the VDECS is verified. Such condition could be due to 

inappropriate installation, damage, or deterioration during use. If a Level 3 

VDECS is emitting visible smoke, it should be assumed to have failed. 

(6158) “Workover rig” means a mobile self-propelled rig used to perform one or 

more remedial operations, such as deepening, plugging back, pulling and 

resetting liners, on a producing oil or gas well to try to restore or increase the 

well’s production. 

*****

(e) Special Provisions/Compliance Extensions 

*****

(6) Compliance Extension for Equipment Manufacturer or Installer Delays - A fleet 

owner who has purchased new equipment (including VDECS) or vehicles in order to 

comply with this regulation, will be excused from immediate compliance if the new 

equipment or vehicles have not been received due to manufacturing or installer 

delays as long as all the conditions below are met:
This Page Begins with 2449(e)(6)(A) 

65 

(A) The equipment or vehicle was purchased, or the fleet owner and seller had 

entered into contractual agreement for the purchase, at least four months prior to 

the required compliance date, or - for a VDECS purchased to replace a failed or 

damaged VDECS – the fleet owner and seller had entered into contractual 

agreement for the purchase within 60 days of the VDECS failure. 

(B)Proof of purchase, such as a purchase order or signed contract for the sale, 

including engine specifications for each applicable piece of equipment, must be 

maintained by the fleet owner and provided to an agent or employee of ARB 

upon request. 

(C)The new equipment or vehicles are immediately placed into operation upon 

receipt. 

(D) Documentation from the manufacturer or the installer that there is a delay, 

such that the equipment or vehicle will be received or installed after the 

compliance date. 

***** 

(8) VDECS That Impairs Safe Operation of Vehicle - A fleet owner may request that 

the Executive Officer find that a VDECS should not be considered the highest level 

VDECS available because (A) it cannot be safely installed or operated in a particular 

vehicle application, or (B) its use would make compliance with federal or state

requirements for safety or health, occupational safety and health requirements, mining

safety and health requirements, or an ongoing local air district permit condition, such as 

for use of a diesel oxidation catalyst, impossible. If a VDECS manufacturer states that 

there is no safe or appropriate method of mounting its VDECS on the requesting party’s 

vehicle, then the VDECS will not be considered safe. The Executive Officer shall accept 

the official findings of the responsible federal or state agency that compliance with the 

requirements of this regulation would make compliance with the federal and state safety 

or health requirements impossible. In the absence of such a declaration by the VDECS

manufacturer or official findings of a responsible federal or state agency, the requesting 

party shall provide other documentation to support its claims. Documentation must 

include published reports and other findings of federal, state or local government 

agencies, independent testing laboratories, engine or equipment manufacturers, or 

other equally reliable sources. The request will only be approved if the requesting party 

has made a thorough effort to find a safe method for installing and operating the 

VDECS, including considering the use of mirrors, various locations for VDECS 

mounting, and use of an actively regenerated VDECS. The Executive Officer shall 

review the documentation submitted and any other reliable information that he or she 

wishes to consider and shall make his or her determination based upon the totality of 

the evidence. Upon finding that a VDECS cannot be installed without violating the safety 

standards prescribed under federal or state requirements for safety or 

healthoccupational safety and health requirements, mining safety and health 

requirements, the Executive Officer shall issue a determination that there is no highest 

level VDECS available. The Executive Officer shall inform the requesting party, in 

writing, of his or her determination, within 60 days of receipt of the request. Parties may 

appeal the Executive Officer’s determination as described in (A) and (B) 
This Page Begins with 2449(e)(8) 

64 

below. During the appeal process described in (A) and (B) below, the requesting 

party may request the administrative law judge to stay compliance until a final 

decision is issued. If the stay is granted and the Executive Officer denies the 

requesting party’s request, the requesting party has six months from the date of the 

Executive Officer’s final written decision to bring his or her fleet back into 

compliance. 

***** 

(g) Reporting – Reporting is required for each and every fleet. Large and medium 

fleets may report separately for different divisions or subsidiaries of a given company or 

agency. 

***** 

(1) Initial reporting – All fleet owners must submit the information in section 

2449(g)(1)(A) through (G) to ARB by their initial reporting date. In the initial 

reporting, fleet owners must report information regarding each vehicle subject to this 

regulation that was in their fleet on March 1, 2009. Systems or non-diesel fueled 

vehicles that are used in place of a vehicle that would be subject to this regulation 

must also be reported. The initial reporting date for large fleets is April 1, 2009. The 

initial reporting date for medium fleets is June 1, 2009. The initial reporting date for 

small fleets is August 1, 2009. Reports must include the following information: 

***** 

(G) Credit for Early Actions – Fleet owners claiming credit for early action must 

report information required under sections 2449(g)(1)(B)1. through 449(g)(1)(B)5. 

and sections 2449(g)(1)(C)1. through 2449(g)(1)(C)6. for each vehicle for which 

credit is claimed. As appropriate, the following information must also be reported: 

1. For each vehicle within the fleet that was repowered with a Tier 1 or newer 

engine prior to March 1, 2009, the date of repower;

2. For each vehicle within the fleet that was retrofit with the highest level 

VDECS available at the time of retrofit prior to March 1, 2009, the date of 

retrofit and whether Carl Moyer Incentive Program funding was used to 

pay for the retrofit; 

3. Fleet owners claiming early credit for retirement or replacement of any Tier 

0 vehicles per section 2449.1(a)(2)(A)2.a.ii. or 2449.1(a)(2)(A)(2)a.vi. or 

2449.2(a)(2)(A)(2)a.v. must report information on each and every vehicle 

within the fleet between March 1, 2006 and March 1, 2010 2009, as 

required under sections 2449(g)(1)(B)1. through 2449(g)(1)(B)4. and 

sections 2449(g)(1)(C)1. through 2449(g)(1)(C)6. as well as the date of 

any purchase and/or retirement between March 1, 2006 and March 1, 

2010 2009.

4. Fleet owners claiming credit for reduced activity in the fleet per section 

2449.1(a)(2)(A)(2)a.iv. or 2449.2(a)(2)(A)2.a.iii. must report to the 

Executive Officer the total hours of use for each vehicle in the fleet, 

excepting vehicles claimed for early retirement credit, for the twelve 

month period January 1, 2007, to December 31, 2007 as well as the 
This Page Begins with 2449(g)(1)(G)4. 

65 

twelve month period March 1, 2009, to February 28, 2010. Fleets that do 

not have hourly reporting records of each vehicle in the fleet must submit 

to the Executive Officer copies of information that is verifiable and 

substantively demonstrates a reduction in fleet activity from July 1, 2007, 

to March 1, 2010.

***** 

(4) Selling Vehicles – Any person selling a vehicle with an engine subject to this 

regulation in California must notify ARB within 30 days from the date the vehicle was 

sold. If the reporting date under section 2449(g)(2) occurs within 30 days of the 

vehicle being sold, the annual reporting may serve as the notification to ARB that the 

vehicle was sold. 

***** 

 

(h) Record keeping - Fleet owners must maintain copies of the information reported 

under section 2449(g), as well as the records described in section 2449(h) below, and 

provide them to an agent or employee of the ARB within five business days upon 

request. Records must be kept at a location within the State of California. 

***** 

(8) Credit for Reduced Activity – Each fleet owner that claims credit for reduced 

fleet activity with vehicle specific data per sections 2449.1(a)(2)(A)(2)a.iv. or 

2449.2(a)(2)(A)2.a.iii. shall maintain the records setting forth the total hours of use of 

each vehicle in the fleet for each of the twelve month periods indicated in 

2449(g)(1)(G)4. A fleet that submits non-vehicle specific data claiming credit for 

reduced fleet activity, per sections 2449.1(a)(2)(A)(2)a.v. or 2449.2(a)(2)(A)(2)a.iv.,

must keep a record of all of the information submitted to ARB to support its claim of

reduced fleet activity.

(9) Credit for Early Retirement or Replacement – Each fleet owner that claims 

credit for the retirement or replacement of vehicles from March 1, 2006, to March 1, 

2010, per sections 2449.1(a)(2)(A)2.a.ii. or 2449.1(a)(2)(A)(2)a.vi. or 

2449.2(a)(2)(A)(2)a.v shall maintain records substantiating the fleet’s claim of 

previous ownership for those vehicles.

(8)(10) Record Retention – Each fleet owner shall maintain the records for each 

vehicle subject to the regulation until it is retired and for the overall fleet as long 

as the owner has a fleet or March 1, 2030, whichever is earlier. If vehicle 

ownership is transferred, the seller shall convey the vehicle records including 

vehicle data per section 2449(g)(1)(B), engine data per section 2449(g)(1)(C), 

and VDECS data per section 2449(g)(1)(D) to the buyer. If fleet ownership is 

transferred, the seller shall convey the fleet records including fleet data per 

sections 2449(g)(1)(A) through (G) to the buyer. Dealers Any person selling a 

vehicle with an engine subject to this regulation in California must maintain 

records of the disclosure of regulation applicability required by Section 2449(j) for 

three years after the sale. 
This Page Begins with 2449 Authority and References

66 

Note: Authority cited: Sections 39002, 39515, 39516, 39600, 39601, 39602, 39650, 

39656, 39658, 39659, 39665, 39667, 39674, 39675, 40000, 41511, 42400, 42400.1, 

42400.2, 42400.3.5, 42402, 42402.1, 42402.2, 42402.4, 42403, 43000, 43000.5, 43013, 

43016, and 43018, and 43018.2, Health and Safety Code. Reference: Sections 39002, 

39515, 39516, 39600, 39601, 39602, 39650, 39656, 39657, 39658, 39659, 39665, 

39667, 39674, 39675, 40000, 41511, 42400, 42400.1, 42400.2, 42402.2, 43000, 

43000.5, 43013, 43016, and 43018, and 43018.2, Health and Safety Code. 

***** 

§ 2449.1 NOx Performance Requirements 

***** 

(a) Performance Requirements 

***** 

(2) BACT Requirements – Each year, each fleet must determine if it will be able to 

meet the fleet average requirements for the next March 1 compliance date, and if 

not, the following BACT requirement must be met. If a fleet does not meet the 

NOx target rate in section 2449.1(a)(1), it must meet the BACT turnover 

requirements in section 2449.1(a)(2)(A) below. 

***** 

(A) Turnover Requirements for Fleets Not Meeting NOx Target Rate – 

***** 

1. Turnover Rate – If a fleet does not meet the NOx Target Rate in section 

2449.1(a)(1) on a compliance date on or before March 1, 2015, it must 

demonstrate on the applicable compliance date that it has turned over 8 the 

required percent of the total maximum power of the fleet that existed on 

March 1of the previous year since March 1 of the previous year. Any 

carryover turnover credit previously accrued may be applied towards the 

turnover required in a later year. The required turnover percents to 

demonstrate on each compliance date are described below in a. through e. 

a) 2010: 8 percent.

b) 2011 and 2012: 4.8 percent.

c) 2013: 14.4 percent for large fleets that did not meet the NOx fleet average 

target in 2011 or 2012, 11. 2 percent for large fleets that met the NOx fleet 

average target in 2011 but not 2012, and 8 percent for large fleets that met 

the NOx fleet average target in 2012 and for all medium fleets. 

d) 2014: 8 percent.

e) 2015 and later: 10 percent.

If a fleet does not meet the NOx Target Rate in section 2449.1(a)(1) on a 

compliance date after March 1, 2015, it must demonstrate on the applicable 

compliance date that it turned over 10 percent of its total maximum power that 

existed on March 1 of the previous year since March 1 of the previous year. 
This Page Begins with 2449.1(a)(2)(A)2. 

67 

***** 

 2. Carryover turnover credit – 

a. Beginning - All fleets other than those meeting the criteria in (i) or (ii) or

(iii) below begin with zero carryover turnover credit on March 1, 2009. 

All fleets may begin accumulating carryover turnover credit on March 

1, 20102009. To claim credit, fleets must submit to ARB and retain

records as described in sections 2449(g) and (h).

i. Credit for Early Repowers - Fleets that have repowered their 

vehicles with Tier 1 or higher engines before March 1, 2009 begin 

with will accumulate a carryover turnover credit (in horsepower) 

equal to: the maximum power of Tier 1 or higher repower engines 

installed in affected vehicles before March 1, 2009. The credit can 

only be claimed for engines that remain in the fleet in the year that 

the credit is taken. To claim credit, fleets must keep adequate 

records as described in section 2449(h).

ii. Credit for Early Replacement Retirement – Fleets that have 

replaced retired their Tier 0 vehicles at an average rate greater 

than 8 percent of total maximum power per year between March 1, 

2006 and March 1, 2009 begin withwill accumulate carryover 

turnover credit (in horsepower) equal to: [(Total maximum power of 

Tier 0 vehicles retired between March 1, 2006 and March 1, 2009) 

minus (Total maximum power of Tier 0 vehicles added between 

March 1, 2006 and March 1, 2009) minus (Total credit for early 

retirement claimed under section (vi) below)] minus [(Total 

maximum power of fleet on March 1, 2007 times 0.08) plus (Total 

maximum power of fleet on March 1, 2008 times 0.08) plus (Total 

maximum power of fleet on March 1, 2009 times 0.08)]. Tier 0 

vehicles repowered with newer engines are counted under (i) 

above and shall not be counted under (ii). To claim such credit, 

fleets must keep adequate records as described in section 

2449(h).

iii. Double Credit for Early NOx Retrofits – Fleets that have installed 

VDECS that have been verified as achieving NOx reductions on 

their vehicles before March 1, 201109 begin with will accumulate a 

carryover turnover credit (in horsepower) equal to: 2 multiplied by

(Verified Percent NOx Reduction divided by 60 percent) multiplied 

by (Maximum power on which VDECS verified to achieve NOx 

reductions was installed before March 1, 201109). 

iv. Credit for Reduced Fleet Activity– Fleets that demonstrate a 

reduction in fleet activity will accumulate carryover turnover credit 

(in horsepower). Fleet activity is defined as the sum of [(Total 

maximum power of the vehicle) times (Number of hours the vehicle 

was operated in the applicable 12 month period)] for each vehicle 

in the fleet. 

1. Carryover turnover credit generated from reduced activity may 

only be applied toward the March 1, 2010, or March 1, 2011 

compliance dates.
This Page Begins with 2449.1(a)(2)(A)2.a.iv.2. 

68 

2. Fleets that receive credit for the retirement of any vehicle prior 

to March 1, 2010, per section (v) below, can not count that 

vehicle in the calculation of reduced activity credit. 

3. Carryover turnover credit shall be calculated for the fleet, not 

including those vehicles retired for credit under section (v) 

below, as:

[(Fleet activity for January 1, 2007, to December 31, 2007) 

minus (Fleet activity for March 1, 2009, to February 28, 

2010, including vehicles added to the fleet) divided by (fleet 

activity for January 1, 2007, to December 31, 2007)]

multiplied by (Total maximum power of fleet on July 1, 2007) 

4. Fleet owners must use vehicle specific data, including but not 

limited to hour meter logs or operator logs linking operators to 

specific vehicles, from July 1, 2007, to March 1, 2010, as 

described in section 2449(g)(1)(G)4 to document vehicle 

activity.

5. Fleets that do not have hour meter logs or vehicle-specific 

operator logs or equivalent records that are verifiable and 

substantively demonstrate activity for all vehicles in the fleet:

A. May use other verifiable indicators that are directly related to 

reduced vehicle operation to demonstrate an overall

reduction in fleet activity from July 1, 2007, to March 1, 2010,

including but not limited to records of overall off-road diesel 

fuel use for the fleet, as described in section 2449(g)(1)(G)4. 

However, such fleets must subtract the total credit for early 

retirement claimed under section (v) below from their 

reduced activity credit. 

B. May use indicators, including but not limited to revenue 

or total vehicle operator employment, that demonstrate a 

reduction in business or staffing but that do not directly 

correspond to vehicle or fleet activity. To qualify for a credit 

using such indirectly-correlated indicators, the fleet must be 

able to provide some evidence of overall reduced fleet 

activity. The Executive Officer will grant a fleet using such 

indicators a maximum 20 percent credit for demonstrated 

reduced activity not directly related to vehicular operation. 

Such fleets must also subtract from the 20 percent reduced 

activity credit any credits received for early retirement 

claimed under section (v) below credit. Fleets must not apply 

for credit using indicators that would demonstrate reduced 

business or staffing if the fleet has information or records 
This Page Begins with 2449.1(a)(2)(A)2.a.iv.5.B. 

69 

that demonstrate the fleet has not reduced overall vehicle 

activity.

v. Credit for Early Retirement – Fleets that reduce overall 

horsepower from March 1, 2006, to March 1, 2010, accumulate 

carryover turnover credit (in horsepower) equal to: (Total 

maximum horsepower of the fleet on March 1, 2006) minus (Total 

maximum horsepower of the fleet on March 1, 2010).

b. Accumulating carryover turnover credit – 

i. 2010-2015 - From March 1, 2010 through March 1, 2015 for large 

fleets and from March 1, 2013 through March 1, 2015 for medium 

fleets, a fleet accumulates carryover turnover credit each year it 

turns over more than the required8 percent of its maximum power 

specified in section 2449.1(a)(2)(A)1. The amount accumulated is 

the maximum power turned over in excess of the required8

percent in the 12 months prior to March 1 of the year in which the 

carryover is calculated. From March 1, 2010, through March 1, 

2012, a medium fleet accumulates carryover turnover credit each 

year the total horsepower it turns over exceeds 8 percent of its 

maximum power.

ii. After 2015 - After March 1, 2015, a fleet will accumulates carryover 

turnover credit each year it turns over more than 10 percent of its 

maximum power. The amount accumulated is the maximum 

power turned over in excess of 10 percent in the 12 months prior 

to March 1 of the year in which the carryover is calculated plus 

the carryover turnover credit used minus the required 10 percent. 

iii. Repower Credit– From March 1, 2010 through March 1, 2012, a 

medium fleet that did not accumulate any credit under (i) above

shall accumulate carryover turnover credit each year equal to the 

total maximum power of Tier 2 or higher repower engines 

installed in affected vehicles in the 12 months prior to March 1 of 

the year in which the carryover is calculated. From March 1, 2010 

through March 1, 2011, a large fleet that did not accumulate any 

credit under (i) above shall accumulate carryover turnover credit 

each year equal to the total maximum power of Tier 2 or higher 

repower engines installed in affected vehicles in the 12 months 

prior to March 1 of the year in which the carryover is calculated.

c. Using carryover turnover credit - Accumulated carryover turnover 

credit may be applied to meeting the turnover requirements of section 

2449.1(a)(2)(A)1 in a later year. The amount of carryover turnover 

credit used to meet the turnover requirements in any one year is 

subtracted from the carryover turnover credit total available in 

subsequent years. The amount of actual turnover plus the amount of 

carryover turnover credit used must equal the minimum BACT 

turnover required by section 2449.1(a)(2)(A)1. 

*****
This Page Begins with 2449.1(a)(2)(A)4. 

70 

4. Exemptions A vehicle is exempt from the turnover of section 

2449.1(a)(2)(A)1. if all vehicles in the fleet that do not qualify for an 

exemption under this section have been turned over and the vehicle 

meets one of the following conditions: 

a. On the compliance date, the vehicle is less than 10 years old from the 

date of manufacture; 

b. The vehicle meets all of the following specialty vehicle criteria: 

i. The fleet has turned over all other vehicles first, 

ii. No repower is available for the specialty vehicle, as 

demonstrated to 

the Executive Officer, 

iii. A used vehicle with a cleaner engine is not available to serve a 

function and perform the work equivalent to that of the specialty 

vehicle, as demonstrated to the Executive Officer, and 

iv. The specialty vehicle has been retrofit with highest level VDECS, 

c. The vehicle has been retrofitted within the last six years with a Level 2 

 or 3 VDECS that was highest level VDECS at the time of retrofit, or 

d. The vehicle has a Tier 4 interim or Tier 4 final engine. 

e. The vehicle has the highest level VDECS installed prior to March 1, 

2011, except that this exemption may be applied to no more than 15 

percent of a fleet’s total horsepower as of March 1, 2010.

***** 

Note: Authority cited: Sections 39002, 39515, 39516, 39600, 39601, 39602, 43000, 

43000.5, 43013, 43016, and 43018, and 43018.2, Health and Safety Code. Reference: 

Sections 39002, 39515, 39516, 39600, 39601, 39602, 39650, 39656, 39657, 39658, 

39659, 39665, 39667, 43000, 43000.5, 43013, 43016, and 43018, and 43018.2, Health 

and Safety Code. 

§ 2449.2 PM Performance Requirements 

***** 

(a) Performance Requirements - 

***** 

(2) BACT Requirements – Each year, each fleet must determine if it will be able to 

meet the fleet average requirements for the next March 1 compliance date, and if 

not, the following BACT requirement must be met. If a fleet does not meet the 

Diesel PM Target Rate in section 2449.2(a)(1), it must meet the BACT Retrofit 

Requirements in section 2449.2(a)(2)(A). Fleets that fail to meet both an 

applicable NOx target rate in section 2449.1(a)(1) and the Diesel PM Target 

Rates in section 2449.2(a)(1) in a compliance year must first meet the BACT 

turnover requirements in section 2449.1(a)(2) in that year and then meet the 

BACT Retrofit Requirements in section 2449.2(a)(2)(A) in that year. 

***** 
This Page Begins with 2449.2 Authority and References 

71 

(A) PM Retrofit Requirements for Fleets Not Meeting Diesel PM Target Rate 

***** 

1. PM Retrofit Rate - If a fleet does not meet the Diesel PM Target Rate in 

section 2449.2(a)(1), it must demonstrate that it has retrofit the 20 required 

percent of its total maximum power (not including specialty vehicles retrofitted 

and exempted from turnover in section 2449.1(a)(2)(A)4.b.) with highest level 

VDECS since March 1 of the previous year, as described below. Any carryover 

retrofit credit previously accrued may be applied towards the 20 percent retrofits

required. If the VDECS is not new (i.e., is being reused), it must have been taken 

from a vehicle that is no longer operating in California. Fleets may count 

acquisitiont of vehicles with Tier 4 interim or Tier 4 final engines or retirement of 

Tier 0 vehicles toward the retrofit requirement as described below. The required 

retrofit percents to demonstrate on each compliance date are described below in 

a. through d. 

a. 2010: 20 percent.

b. 2011 and 2012: 12 percent. 

c. 2013: 36 percent for large fleets that did not meet the PM fleet average 

target in 2011 or 2012, 28 percent for large fleets that met the PM fleet 

average target in 2011 but not 2012, and 20 percent for large fleets that met 

the PM fleet average target in 2012 and for all medium fleets.

d. 2014: 20 percent.

***** 

2. Carryover PM retrofit credit – 

a. Beginning - All fleets other than those meeting the criteria in (i) or 

(ii) below for vehicles remaining in their fleets begin with zero 

carryover retrofit credit on March 1, 2009. All fleets may begin 

accumulating carryover retrofit credit on March 1, 2009.

i. Double Credit for Early PM Retrofits – Fleets that have installed 

the highest level VDECS on their vehicles before January 1, 2010

March 1, 2009 begin withl will accumulate a carryover retrofit 

credit equal to: 2 multiplied by total maximum power of engines on 

which highest level VDECS was installed before January 1, 2010

March 1, 2009, unless the contract for funding the VDECS 

stipulates single credit for installation of the VDECS. 

ii. Single Credit for Other PM Retrofits Before Initial Compliance 

Date – Small and Mmedium fleets that install highest level VDECS 

on their vehicles between January 1, 2010 March 1, 2009 and 

February 29 before March 1, 2012 will accumulate carryover 

retrofit credit equal to: 2 multiplied by total maximum power of 

engines on which highest level VDECS was installed. Small fleets 

that install highest level VDECS on their vehicles between March 

1, 2012January 1, 2010 March 1, 2009 and February 28, 2014 

accumulate carryover retrofit credit equal to total maximum power 

of engines on which highest level VDECS was installed. 

iii. Credit for Reduced Fleet Activity– Fleets that demonstrate a 

reduction in fleet activity will accumulate carryover retrofit credit (in 
This Page Begins with 2449.2 Authority and References 

72 

horsepower). Fleet activity is defined as the sum of [(Total 

maximum power of the vehicle) times (Number of hours the vehicle 

was operated in the applicable 12 month period)] for each vehicle 

in the fleet. 

1. Carryover retrofit credit generated from reduced activity may 

only be applied toward the March 1, 2010, or March 1, 2011 

compliance dates.

2. Fleets that receive credit for the retirement of any vehicle prior 

to March 1, 2010, per section (iv) below, can not count that 

vehicle in the calculation of reduced activity credit. 

3. Carryover retrofit credit shall be calculated for the fleet, not 

including those vehicles retired for credit under section (iv) 

below, as:

[(Fleet activity for January 1, 2007, to December 31, 2007) 

minus (Fleet activity for March 1, 2009, to February 28, 

2010, including vehicles added to the fleet) divided by (fleet 

activity for January 1, 2007, to December 31, 2007)]

multiplied by (Total maximum power of fleet on July 1, 2007)

4. Fleet owners may use vehicle specific data, including but not 

limited to hour meter logs or operator logs linking operators to 

specific vehicles, from July 1, 2007, to March 1, 2010, as 

described in section 2449(g) to document vehicle activity. 

a. Fleets that do not have hour meter logs or vehicle-specific 

operator logs or equivalent records that are verifiable and 

substantively demonstrate activity for all vehicles in the fleet:

A. May use other verifiable indicators that are directly related to 

reduced vehicle operation to demonstrate an overall

reduction in fleet activity from July 1, 2007, to March 1, 2010,

including but not limited to records of overall off-road diesel 

fuel use for the fleet, as described in section 

2449(g)(1)(G)4. However, such fleets must subtract the total 

credit for early retirement claimed under section (iv) below 

from their reduced activity credit. 

B. May use indicators, including but not limited to revenue or 

total vehicle operator employment, that demonstrate a 

reduction in business or staffing but that do not directly 

correspond to vehicle or fleet activity. To qualify for a credit 

using such indirectly-correlated indicators, the fleet must be 

able to provide some evidence of overall reduced fleet 

activity. The Executive Officer will grant a fleet using such 

indicators a maximum 20 percent credit for demonstrated 
This Page Begins with 2449.2 Authority and References 

73 

reduced activity not directly related to vehicular operation. 

Such fleets must also subtract from the 20 percent reduced 

activity credit any credits received for early retirement 

claimed under section (iv) below. Fleets must not apply for 

credit using indicators that would demonstrate reduced 

business or staffing if the fleet has information or records 

that demonstrate the fleet has not reduced overall vehicle 

activity.

iv. Credit for Early Retirement – Fleets that reduce overall 

horsepower from March 1, 2006, to March 1, 2010, begin with 

carryover retrofit credit (in horsepower) equal to: (Total maximum 

horsepower of the fleet on March 1, 2006) minus (Total maximum 

horsepower of the fleet on March 1, 2010). 

b. Accumulating carryover PM retrofit credit - Beginning March 1, 2010 

for large fleets, March 1, 2013 for medium fleets, and March 1, 2015 

for small fleets, a fleet will accumulates carryover retrofit credit each 

year the total horsepower it retrofits plus the carryover retrofit credit it 

uses exceeds more than the required 20 percent of its maximum 

power specified in section 2449.2(a)(2)(A)1. The amount 

accumulated is the maximum power retrofit plus the carryover retrofit 

credit used minus percent of maximum power retrofit in excess of 20

the required percent in the past 12 months prior to March 1. A large 

fleet also accumulates carryover retrofit credit on March 1, 2010 

if the sum of the double retrofit credit earned from March 1, 2009 

to January 1, 2010 plus the single retrofit credit earned from 

January 1, 2010 to March 1, 2010 exceeds 20 percent of its 

maximum horsepower. The amount accumulated is the sum of 

double credit retrofit credit earned from March 1, 2009 to January 

1, 2010 plus the single credit earned from January 1, 2010 to 

March 1, 2010 in excess of 20 percent of fleet’s maximum 

horsepower in the past 12 months. 

c. Using carryover PM retrofit credit - Accumulated carryover retrofit 

credit may be applied to meeting the retrofit requirements of section 

2449.2(a)(2)(A)1. in a later year. The amount of carryover retrofit 

credit used to meet the retrofit requirements in any one year is 

subtracted from the carryover retrofit credit total available in 

subsequent years. The amount of actual retrofit plus the amount of 

carryover retrofit credit used must equal the minimum BACT retrofit. 

***** 

Note: Authority cited: Sections 39002, 39515, 39516, 39600, 39601, 39602, 39650, 

39656, 39658, 39659, 39665, 39667, 39674, 39675, 40000, 41511, 42400, 42400.1, 

42400.2, 42400.3.5, 42402, 42402.1, 42402.2, 42402.4, 42403, 43000, 43000.5, 43013, 

43016, and 43018, and 43018.2, Health and Safety Code. Reference: Sections 39002, 

39515, 39516, 39600, 39601, 39602, 39650, 39656, 39657, 39658, 39659, 39665, 
This Page Begins with 2449.2 Authority and References 

74 

39667, 39674, 39675, 40000, 41511, 42400, 42400.1, 42400.2, 42402.2, 43000, 

43000.5, 43013, 43016, and 43018, and 43018.2, Health and Safety Code. 
75

APPENDIX B: CREDIT EXAMPLES 

These examples demonstrate how a fleet would receive credit using the new provisions 

in the legislatively directed changes as well as provisions in the current regulation, and 

how those credits could be used to meet the fleet’s BACT requirements. Throughout 

the examples, the colors shown for the different credits below are used to help clarify 

which credit provisions the example is calculating. For each current provision and 

proposed provision in the regulation, the table below shows the regulatory citation, the 

pollutant that the credit for emission reductions is applied to, and what action the credit 

is given for. 

2449.1(a)(2)(A)(2) 

on pg. 36 of regulation NOx Replacing Tier 0 engines from March 1, 2009, to 

March 1, 2010. 

2449.1(a)(2)(A)(2)(a)(ii) 

on pg. 37 of regulation NOx 

Replacing Tier 0 engines above 8 percent of total 

hp on average, annually, from March 1, 2006, to 

March 1, 2009. 

AB 8 2X 

43018.2(a)(2)(B)

NOx 

PM 

Retirement of any off-road diesel vehicles that 

reduce total hp, between March 1, 2006, and 

March 1, 2010. 

2449.1(a)(2)(A) 

On pg. 36 of regulation 

2449.2(a)(2)(A)1.b 

on pg. 43 of regulation 

NOx 

PM 

In the rare case that this provision provides more 

credit than the 2006 to 2010 reduced total hp

credit above, fleets could instead choose:

Retirement of Tier 0 off-road diesel vehicles that 

reduce total hp, between March 1, 2009, and 

March 1, 2010. 

AB 8 2X 

43018.2(a)(2)(B)

NOx 

PM 

Reduced activity in the off-road diesel fleet, 

defined as the reduction in average annual hours 

of use between January 1, 2007, to December 31, 

2007, and March 1, 2009, to February 28, 2010

The following actions will also still provide credit to fleets, but are not included in the 

examples as there is little or no interaction between these credits and those proposed 

by staff to implement the legislatively directed changes. These credits will be applied to 

fleets in addition to the new credits. 

2449.2(a)(2)(A)(2) 

on pg. 43 of regulation PM Installation of PM VDECS. 

2449.1(a)(2)(A)(2).iii 

on pg.37 of regulation NOx Installation of VDECS that are verified to reduce 

NOx emissions. 

2449.1(a)(2)(A)(2).i 

on pg.37 of regulation NOx Repowers to Tier 1 or higher, from a lower Tier, 

prior to March 1, 2009. 
76

Credit Timeline 

Each of the following examples demonstrates how the fleet would receive credits and 

how the fleet could choose the optimal credit option. The examples calculate credit 

awarded for actions from March 1, 2006, through March 1, 2010. In some cases the 

fleets will have credits that roll over to 2011 or beyond. For the sake of simplicity, and 

to focus on the early credit, the examples do not show the requirements for multiple 

years; however all carryover credits may be kept until they are used in future years, 

unless it is specifically noted that they expire in a certain year. 

Replacements 

Note that where the credits say “Tier 0 Replacements” it refers to a replacement of the 

hp, not the specific vehicle. That is, if the fleet’s only actions are retiring a 500 hp Tier 0 

scraper, and purchasing a 350 hp off-road crane for an entirely different purpose, the 

regulation will count this as 350 hp replaced, and 150 hp retired. 
77

1: Fleet with Reduced Activity Only 

Fleet on March 1, 2006: 

 100,000 hp 

 

1. Retirement / Turnover 

The fleet does not retire or replace any vehicles. 

2. Activity 

The fleet has reduced activity by 10 percent from 

July 1, 2007 to March 1, 2010. 

This fleet had 400 vehicles with 100,000 hp total 

working 1000 hours per year for their July 1, 

2007, annual average. 

The fleet has the same 400 vehicles with 100,000 

hp total working 900 hours per year for their 

March 1, 2010, annual average. 

This is a 10 percent reduction in total activity. 

3. Credit Available 

 NOx Credit (hp) PM Credit (hp) 

2009-2010 

Replacements 0 n/a 

Early 

Replacements 

(2006-2009) 

0 n/a 

Retirement Credit 

for Shrinking 

Fleets

0 0 

New Reduced 

Activity Credit 

(expires in 2011)

10,000 10,000 

Total Credit 10,000 hp 

(expires in 2011)12

10,000 hp 

(expires in 2011) 

 

12 Unless noted, the credits in these examples do not expire until they are used to meet 

the BACT requirements for the fleet. 
78

Determining July 1, 2007 Fleet Activity 

Dates Vehicle hp Hours Used Activity (hp*Hrs) 

250 900 225,000 

291 1100 320,100 

Jan 1, 2007 

To 

Dec 31, 2007 173 725 125,425 

Activity calculated and summed for all remaining vehicles here. l

Sum 100,000 1,000 100,000,000 

Determining March 1, 2010 Fleet Activity 

Dates Vehicle hp Hours Used Activity (hp*Hrs) 

250 810 202,500 

291 750 218,250 

March 1, 2009

To 

Feb 28, 2010 173 810 140,130 

Activity calculated and summed for all remaining vehicles here. l

Sum 100,000 900 90,000,000 

The fleet’s final activity is subtracted from their initial activity, and then divided by the 

initial activity to determine a percent. 

(100,000,000- 90,000,000) / 100,000,000 = 10% 

Reduced Activity Credit 

The fleet would receive credit for 10% of their July 1, 2007 hp, or 

10% x 100,000 hp = 10,000 hp credit to PM and NOx. 

Calculating the BACT Requirements 

Pursuant to AB 8 2X, the BACT requirements for 2011, 2012, and 2013, must be 

changed, but not the 2010 BACT requirements. Fleets that do not meet the fleet 

average targets in 2010 are required to meet NOx BACT requirements for 8 percent of 

their total fleet hp and meet PM BACT requirements for 20 percent. 

NOx PM 

March 1, 2009 Fleet Size 100,000 hp 100,000 hp 

2010 BACT Requirement 8 % 20 % 

BACT hp Requirements 8,000 hp 20,000 hp 

Applying New Credit to the Regulation Requirements 

NOx (hp) PM (hp) 

2010 BACT Requirements 8,000 20,000 
79

Credit Applied -10,000 -10,000 

Requirements After Credit 0 10,000 

Credit Rollover -2,000 

(expires in 2011) 0 

4. Result: The fleet receives enough credit so that it does not have to turn over any 

vehicles or engine in 2010 for NOx BACT requirements, and receives 2,000 hp credit 

towards their 2011 compliance requirements for NOx BACT. 

The fleet’s retrofit requirements for 2010 are cut from 20,000 hp to 10,000 hp by the 

reduced activity credit. 

5. Comparison of credit under current regulation versus proposed amendments 

Prior to the proposed amendments, there was no credit granted for reduced activity. 

NOx (hp) PM (hp) 

Total Credit Available Before 

Changes 0 0 

Total Credit Available After 

Legislatively Directed Changes 10,000 10,000 
80

2: Fleet that has replaced Tier 0s and shrunk 

Fleet on March 1, 2006: 

 100,000 hp 

 

1. Retirement / Turnover 

The fleet retired 15,000 hp of Tier 1, Tier 2, 

and Tier 3 vehicles in August, 2007. In July, 

2009, the fleet retires another 10,000 hp of Tier 

0 vehicles, and adds 1,000 hp back in the form 

of Tier 2 vehicles. 

2. Activity 

The fleet does not reduce activity overall, i.e. the 

fleet increases activity in their remaining vehicles 

so that total overall activity remains constant. 

3. Credit Available 

 NOx Credit (hp) PM Credit (hp) 

2009-2010 Tier 0 

Replacements 1,000 n/a 

Early Tier 0 

Replacements 

(2006-2009) 

0 n/a

Retirement Credit 

for Shrinking 

Fleets

24,000 24,000 

New Reduced 

Activity Credit 

(expires in 2011)

0 0 

 

Total 25,000 hp 24,000 hp 

Credit for 2009 to 2010 Replacements 

The fleet retires 10,000 hp in Tier 0s and adds back 1,000 hp of Tier 2s. 

The fleet receives 1,000 hp credit to NOx only for Tier 0 replacements. 

Credit under new provision for the retirement of any vehicle which reduces total 

hp 
81

From March 1, 2006, to March 1, 2010, the fleet 

• Retired 25,000 hp Tier 1s, 2s, and 3s 

• Shrunk overall by 24,000 hp 

o The fleet receives 24,000 hp, to NOx and PM

Calculating the BACT Requirements 

Fleets that do not meet the fleet average targets are required to meet NOx BACT 

requirements for 8 percent of their hp and meet PM BACT for 20 percent by March 1, 

2010. 

NOx PM 

March 1, 2009 Fleet Size 85,000 hp 85,000 hp 

2010 BACT Requirement 8 % 20 % 

BACT hp Requirements 6,800 hp 17,000 hp 

Applying New Credit to the Regulation Requirements 

NOx (hp) PM (hp) 

2010 BACT Requirements 6,800 17,000 

Credit Applied -25,000 -24,000 

Requirements After Credit 0 0 

Credit Rollover -18,200 -7,000 

4. Result: The fleet has no requirements in 2010 for NOx or PM. 

The fleet receives 18,200 hp in NOx rollover credit, and 7,000 hp in PM rollover credit 

that can be applied to the BACT requirements in future years. 

5. Comparison of credit under current regulation versus proposed amendments 

Currently in the regulation, for a fleet to get credit for Tier 0 retirements prior to March 1, 

2009, whether replaced or not, the retirements had to exceed 8 percent of the fleet’s hp 

each year on average, from 2006 to 2009 (i.e., greater than 24 percent total in that 

three-year period). There is no credit for early retirement of higher tier vehicles. This 

fleet did not retire any Tier 0s from March 1, 2006 through March 1, 2009 and therefore 

would have received no early retirement credit. 

0 hp early credit Available prior to legislatively directed changes 

Total Tier 0 Retirements from March 1, 2009 to March 1, 2010: 10,000 hp 

Total Reduction in Fleet size from March 1, 2009, to March 1, 2010: 9,000 hp 

NOx (hp) PM (hp) 
82

Total Credit Available Before Changes 10,000 9,000 

Total Credit Available After 

Legislatively Directed Changes 25,000 24,000 
83

3: Fleet that has retired Tier 0s and reduced activity

Fleet on March 1, 2006: 

 100,000 hp 

 

1. Retirement /Turnover 

The fleet retires 5,000 hp of Tier 0 vehicles per 

year from 2006 to 2010. 

The fleet also adds another 1,000 hp of Tier 1s 

in August, 2009. 

2. Activity 

The fleet has reduced activity by 15 percent 

from July 1, 2007 to March 1, 2010, when 

comparing 

 Total (hp * hours) of the 80,000 hp

which was not retired, from January 1, 

2007, to December 31, 2007

Vs 

 Total (hp * hours) of the entire fleet from 

March 1, 2009, to February 28, 2010.

3. Credit Available 

 NOx Credit (hp) PM Credit (hp) 

2009-2010 

Replacements 1,000 n/a 

Early Replacements 

(2006-2009) 0 n/a

Retirement Credit 

for Shrinking Fleets 19,000 19,000 

New Reduced 

Activity Credit 

(expires in 2011)

12,150 12,150 

 

Total 32,150 hp 31,150 hp 
84

Credit for 2009 to 2010 Replacements 

The fleet retires 5,000 hp in Tier 0s and adds back 1,000 hp of Tier 1s. 

The fleet receives 1,000 hp credit towards NOx requirements for Tier 0

replacements. 

Credit for early replacement of Tier 0s 

To get credit for early replacement of Tier 0s, the fleet would have had to replace Tier 

0s at a rate exceeding 8% of their hp on average from March 1, 2006, to March 1, 2009 

Year Total hp 8% of hp 

March 1, 2007 95,000 7.600 

March 1, 2008 90,000 7,200 

March 1, 2009 85,000 6,800 

21,600 

Therefore, to receive credit, the replacement of Tier 0s must exceed: 21,600hp

Actual Fleet Replacement from March 1, 2006 to March 1, 2009: 15,000 hp

 

 Credit: 0 

Credit under new provision for the retirement of Tier 0s 

From March 1, 2006, to March 1, 2010, the fleet 

• Retired 20,000 Tier 0s 

• Shrunk overall by 19,000 hp 

o The fleet receives 19,000 hp, to NOx and PM

Credit from Reduced Activity 

Determining July 1, 2007 Fleet Activity 

Dates Vehicle hp Hours Used Activity (hp*Hrs) 

250 500 125,000 

291 500 145,500 

Jan 1, 2007 

To 

Dec 31, 2007 173 500 86,500 

Activity calculated and summed for all vehicles which were not 

retired by March 1, 2010. 

Sum 47,500,000 

Determining March 1, 2010 Fleet Activity 
85

Dates Vehicle hp Hours Used Activity (hp*Hrs) 

461 505 232,805 

237 505 119,685 

March 1, 2009

To 

Feb 28, 2010 245 505 123,725 

Activity calculated and summed for all vehicles in the fleet at any 

time from March 1, 2009 to February 28, 2010. 

Sum 40,375,000 

(47,500,000- 40,375,000) / 47,500,000 = 15% 

The fleet would receive credit for 15% of their March 1, 2007 hp, or 95,000, minus the 

14,000 hp that was retired for credit prior to March 1, 2010 - or 81,000 hp. 

15% * 81,000 = 12,150 

12,150 hp credit to PM and NOx. 

Calculating the BACT Requirements 

Fleets that do not meet the fleet average targets are required to meet NOx BACT 

requirements for 8 percent of their hp and meet PM BACT for 20 percent by March 1, 

2010. 

NOx PM 

March 1, 2009 Fleet Size 85,000 hp 85,000 hp 

2010 BACT Requirement 8 % 20 % 

BACT hp Requirements 6,800 hp 17,000 hp 

Applying New Credit to the Regulation Requirements 

NOx (hp) PM (hp) 

2010 BACT Requirements 6,800 17,000 

Credit Applied -32,150 -31,150 

Requirements After Credit 0 0 

Credit Rollover -25,350 -14,150 

Note that any remaining credit for reduced activity would expire if not used in 2011. 

4. Result: The fleet receives 24,600 hp in NOx rollover credit, and 13,400 hp in PM 

rollover credit that can be applied to the BACT requirements in future years. The fleet 

receives enough credit so that it does not have to turn over any vehicles or engines in 

the early years of the regulation. In 2010, the fleet will need to do minimal retrofits to 

meet the PM BACT requirements. 

5. Comparison of credit under current regulation versus proposed amendments 
86

To determine how much hp the fleet would have to retire prior to receiving credit, fleets 

can perform the following calculation. 

Year Total hp 8% of hp 

March 1, 2007 95,000 7.600 

March 1, 2008 90,000 7,200 

March 1, 2009 85,000 6,800 

21,600 

Therefore, to receive credit, the retirement of Tier 0s must exceed: 21,600hp

Actual Fleet Tier 0 retirement from March 1, 2006 to March 1, 2009: 15,000 hp

0 hp early credit available under current regulatory provisions 

Total Tier 0 Retirements from March 1, 2009 to March 1, 2010: 5,000 hp 

Total Reduction in Fleet size from March 1, 2009, to March 1, 2010: 4,000 hp 

NOx (hp) PM (hp) 

Total Credit Available Before Changes 5,000 4,000 

Total Credit Available After 

Legislatively Directed Changes 32,150 hp 31,150 hp 
87

APPENDIX C: LIST OF ACRONYMS 

ARB --- Air Resources Board 

ATCM --- Air Toxic Control Measures 

BACT --- Best Available Control Technology 

CAA --- Federal Clean Air Act 

CCR --- California Code of Regulations 

DOORS --- Diesel Off-Road On-Line Reporting System 

EIN --- Equipment Identification Number 

HP --- Horsepower 

HP-Hours ---Horsepower Hours 

HEALTH & SAF. CODE --- California Health and Safety Code 

NAAQS --- National Ambient Air Quality Standards 

NOX --- Oxides of Nitrogen 

OAL --- Office of Administrative Law 

ORIAG --- Off-Road Implementation Advisory Group 

PM --- Particulate Matter 

PM2.5 --- Fine Particulate Matter 

SIP --- State Implementation Plan 

TAC --- Toxic Air Contaminants 

TPD --- Tons Per Day 

U.S. EPA --- United States Environmental Protection Agency 

VDECS --- Verified Diesel Emission Control System