# Final Statement of Reasons for Rulemaking

Including Summary of Comments and Agency Responses

PUBLIC HEARING TO CONSIDER

AMENDMENTS TO THE REGULATION FOR THE STATEWIDE

PORTABLE EQUIPMENT REGISTRATION PROGRAM AND THE

AIRBORNE TOXIC CONTROL MEASURE FOR DIESEL PARTICULA TE

MATTER FROM PORTABLE ENGINES

Public Hearing Date: March 22, 2007 Agenda Item Numbers: 07-3-3 & 07-3-4

July 20071 

### State of California

AIR RESOURCES BOARD

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

PUBLIC HEARING TO CONSIDER

AMENDMENTS TO THE REGULATION FOR THE STATEWIDE

PORTABLE EQUIPMENT REGISTRATION PROGRAM AND THE

AIRBORNE TOXIC CONTROL MEASURE FOR DIESEL PARTICULA TE

MATTER FROM PORTABLE ENGINES

Public Hearing Date: March 22, 2007 Agenda Item Numbers: 07-3-3 & 07-3-4

I. 

### GENERAL

On March 22, 2007, the Air Resources Board (ARB or Board) conducted a public hearing to consider amendments to the Regulation fo r the Statewide Portable Equipment Registration Program (Statewide PERP Regu lation) and the Airborne Toxic

Control Measure for Diesel Particulate Matter from Portable Engines (Portable Engine ATCM). The proposed amendments are designed to mak e permanent the emergency regulatory changes to the Statewide PERP Regulation and the Portable Engine ATCM adopted on December 7, 2006. In addition, these am endments will provide additional clarity and facilitate the implementation of the St atewide PERP Regulation and Portable Engine ATCM. These amendments will affect about 40 ,000 pieces of portable equipment.

Staff proposed in this rulemaking to address and ma ke changes to the eligibility requirements for portable engines, recordkeeping an d reporting requirements, and the registration fees for some engines. Certified engi nes that were previously ineligible for a district permit or PERP registration because they did not meet the most current emission standard in effect at the time of applicat ion will now be able to be registered with CARB or permitted with a district if they can demonstrate residency in California. Owners of non-certified engines may be able to obta in a district permit at the District’s discretion if residency in California can be proven . Rental equipment units will only be required to track material throughput for daily rec ordkeeping and annual reporting requirements, instead of operating hours as in prev ious adopted versions of the Statewide PERP Regulation. For resident certified engines entering PERP that do not meet the current emission standard, back registrati on and inspection fees must be paid.2

At the March 22, 2006, hearing, the Board adopted t he proposed amendments along with additional amendments that were presented for a 15 day comment period after the hearing. This Final Statement of Reasons (FSOR) su mmarizes the written and oral comments received during the 45-day comment period preceding the March 22, 2007, public hearing, at the hearing itself, and during t he 15-day comment period after the hearing. This FSOR contains the ARB staff’s respon ses to those comments.

Fiscal Impacts

The Board has determined that this minor regulatory action will result in minor costs and/or savings impacts to some State agencies, no i mpact on federal funding to the State, and some costs to local agencies or school d istricts, that are not reimbursable by the State pursuant to part 7 (commencing with secti on 17500), division 4, and title 2 of the Government Code, as discussed below or other no n-discretionary savings to local agencies. The increased costs are due to the colle ction of back fees for some engines entering PERP. ARB staff estimates that the total economic impact of the proposed amendments to the Statewide Regulation to affected private businesses and public (local, State, and federal) agencies is $6.6 millio n over its lifetime ($6.05 million for private businesses and $0.59 million for public age ncies). Because this is a voluntary program, public agencies and private businesses tha t do not wish to participate in the PERP may obtain permits from the districts.

Staff estimates that 260 local agencies will be aff ected by the proposed amendments. The total economic cost for local agencies to compl y with the amendments to the Statewide Regulation is estimated to be $450,000.

Staff estimates that 15 State agencies will be affe cted by the amendments. The total economic cost for State agencies to comply with the amendments to the Statewide Regulation is estimated to be $93,000.

Staff estimates that 19 federal agencies will be af fected by the amendments. The total economic cost for federal agencies to comply with t he amendments to the Statewide Regulation is estimated to be $42,000.

The Executive Officer has made an initial determina tion that the regulatory action will have minimal statewide adverse economic impacts dir ectly affecting businesses. The Executive Officer has also assessed that the regula tory action will have minimal statewide adverse economic impacts directly affecti ng the ability of California businesses to compete with businesses in other stat es or representative private persons. In fact, the amendments will result in an economic benefit of approximately $243.4 million compared to the previous version of the regulations.

The Executive Officer has determined, pursuant to t itle 1, CCR, section 4, that the amendments to the Statewide Regulation will affect small businesses. The total economic impact to small businesses would be $4.3 m illion dollars. The total economic impact to all businesses would be $6.1 million doll ars. In accordance with Government3

Code section 11346.3, the Executive Officer has det ermined that the regulatory action will not affect the creation or elimination of jobs within California, the creation of new businesses or elimination of existing businesses wi thin California, or the expansion of businesses currently doing business within Californ ia. A detailed assessment of economic impacts of the proposed regulatory action can be found in the Initial Statement or Reasons (ISOR).

In accordance with Government Code sections 11346.3 (c) and 11346.5(a)(11), the Executive Officer has found that the amended report ing requirements that apply to businesses are necessary for the health, safety, an d welfare of the people of the State of California. The amendments to the Statewide Reg ulation will continue to have a

beneficial effect on the California business climat e by eliminating the need for duplicative permits, allowing increased flexibility , and lowering overall costs compared to obtaining and maintaining multiple district perm its.

Consideration of Alternatives

The Board has further determined that there are no alternatives available that would be more effective in carrying out the purpose for whic h the regulatory action was proposed

or would be as effective and less burdensome to aff ected private persons than the action taken by the Board.

At the September 2006 Board hearing, the Board rece ived public testimony concerning the inability to register older engine in PERP or p ermit them at the districts. Pursuant to this testimony, the Board directed staff to conside r options and report back to the Board. ARB staff, in consultation with affected industry a nd the districts, developed emergency amendments to both the Statewide PERP Regulation an d the Portable Engine ATCM.

Staff believes that these amendments to the Statewi de PERP Regulation and the Portable Engine ATCM being adopted in this rulemaki ng reflect full consideration by both the affected industry and regulatory agencies of the available alternatives that could offer improved flexibility for affected indus tries regarding the Statewide PERP and district permitting programs.

Effective Date

On December 7, 2006 and again on March 22, 2007, th e Board adopted emergency amendments that revise the registration and registr ation fee requirements in the regulation for the Statewide Program and the requir ements in the Portable Engine ATCM. The first of these emergency amendments was approved by the Office of Administrative Law on December 27, 2006, and they w ere filed with the Secretary of State on the same day. In accordance with Governme nt Code section 11346.1, they became effective December 27, 2006 for a period not exceeding 120 days. The emergency amendments that were adopted on March 22, 2007 were a re-adoption of the December 7, 2006 emergency amendments in order that there would not be a gap in regulatory authority since these proposed perman ent amendments would not become4

effective prior to the expiration of the emergency amendments adopted in December of

2006.

ARB initiated a fully-noticed rulemaking to permane ntly implement the emergency amendments, with various modifications. The Propos ed Regulation Orders in that rulemaking will show the amendments as changes to t he Statewide PERP Regulation and the Portable Engine ATCM as amended in the rule making covered by this FSOR. The current Emergency Portable Engine ATCM is due t o expire on August 27, 2007; therefore, ARB staff intends to have the permanent amendments covered by this FSOR to become effective on or before August 27, 2007.



### II. CHANGES WITHOUT REGULATORY EFFECT

The following non-substantial or solely grammatical modifications to the regulatory text were made after the hearing. The changes do not mat erially alter any requirement, right, responsibility, condition, prescription, or other r egulatory element of any California Code of Regulations provision.

In section 2460, Fees, the incorrect citation of Ta ble 3 in subsection (k)(2) was changed

to Table 2.



### III. SUMMARY OF COMMENTS AND AGENCY RESPONSES

The Board received written and oral comments during the 45-day comment period and at the March 22, 2007, hearing. A list of commenter s is set forth below, identifying the

date and form of all comments that were submitted i n a timely manner.

Abbreviation Commenter

ACPA American Concrete Pumping Association

Ms. Christi Collins Written Testimony: March 20, 2007 Oral Testimony: March 22, 2007

ARA American Rental Association Dr. John W. McClelland, Ph.D. Dr. Michael S. Graboski, Ph.D. Written Testimony: March 20, 2007 Oral Testimony: March 22, 2007 Written Testimony: July 16, 2007

ARBI ARB, Inc.

Mr. Dan Dresser Oral Testimony: March 22, 20075

ATT American Telephone & Telegraph

Mr. Linus Farius Oral Testimony: March 22, 2007

BD Mr. Bill Davis Written Testimony: March 21, 2007 Oral Testimony: March 22, 2007

BJS BJ Services Co. Mr. Doug Van Allen Oral Testimony: March 22, 2007

CCEEB California Council for Environmental and

Economic Balance

Mr. Allan Lind Written Testimony: March 19, 2007 Oral Testimony: March 22, 2007 Written Testimony: July 16, 2007

CCR Cooper Crane & Rigging Mr. Howard Cooper Oral Testimony: March 22, 2007

CIAQC Construction Industry Air Quality Coaliti on Mr. Jeb Stuart

Mr. Michael Lewis Written Testimony: March 21, 2007 Oral Testimony: March 22, 2007

COA Crane Owners Association Mr. Alvan Mangalindan Oral Testimony: March 22, 2007

CP Conco Pumping

Mr. Mike Cusak Written Testimony: March 21, 2007 Oral Testimony: March 22, 2007

CQC/PTS California Quartz Crystals/Pat’s Tree S ervice Mr. Patrick Hurley Written Testimony: March 22, 2007 Oral Testimony: March 22, 2007

CRA California Rental Association

Mr. Louis Davies Written Testimony: March 21, 20076

DK Mr. Doug Korthof Oral Testimony: March 22, 2007

ECA Engineering Contractors Association

Ms. Lorena Fisher Written Testimony: February 21, 2007

EUCA Engineering & Utility Contractors Associa tion

Ms. Tara Haas Written Testimony: March 21, 2007

MCAQMD Mendocino County AQMD

Mr. Chris Brown Written Testimony: July 2, 2007

NWS Neighbors Well Services, Inc.

Mr. James Thomas Oral Testimony: March 22, 2007

PAI Putzmeister America, Inc. Mr. James Bury

Mr. David Rudin Written Testimony: March 13, 2007 Oral Testimony: March 22, 2007

QPS Quinn Power Systems Mr. Bob Shepherd Written Testimony: July 16, 2007

RA Mr. Richard Aguilera Written Testimony: March 19, 2007

RM Reed Manufacturing, LLC

Mr. James Shea Written Testimony: March 20, 2007

RW Mr. Robert Wilder Oral Testimony: March 22, 2007

SCAQMD South Coast AQMD Mr. Danny Luong Oral Testimony: March 22, 2007

SCCA Southern California Contractors Associati on Mr. Cash Benton Written Testimony: March 20, 20077

SCEC SCEC Air Quality Specialists Mr. Karl Lany Written Testimony: July 16, 2007

SCR Specialty Crane & Rigging

Mr. Seth Hammond Oral Testimony: March 22, 2007

SR Sierra Reaserch Mr. Allan Daly Written Testimony: March 21, 2007

SSDC State Senator

Honorable Dave Cox Written Testimony: March 21, 2007

UCCI Underground Construction Co., Inc.

Mr. Thomas Thornton Written Testimony: March 19, 2007

A few of the commenters supported the amendments to the Statewide Portable Equipment Registration Program. Set forth below is a summary of each objection or recommendation made regarding the proposed action w ith the agency response. The specific comments from each organization are summar ized according to subject area.

The comments below were received during the 45-day notice period or presented as oral testimony at the Board hearing on March 22, 20 07.

1. Comment: Several commenters expressed their support of the proposed amendments and urged the Board to adopt them. (ATT, NWS, PAI, CCEEB, ARBI, BJS, SCR, SCAQMD)

Agency Response : Thank you for the support. No response is require d.

2. Comment : ARB should re-open PERP registration to all prev iously unpermitted Tier 0 engines. Having to permit these engines in multiple districts is problematic. It is also a potential economic hardship if owners are forced to replace these engines. (ECA, UCCI, ACPA, RM, SCCA, CP, EUCA, CRA )

Agency Response: Tier 0 engines have been ineligible for registrat ion in PERP and district permitting since January, 1, 2006. Th e regulation amendments for that change were adopted back in February of 2004. Tier 0 engines have much higher NOx and PM10 emissions than certified engines. Due to these significantly higher emissions, we believe that it is inappropriate to i nclude these engines in a program that would allow them to operate on a statewide bas is. Since diesel PM has been8

identified as a toxic air contaminant, it has been the goal of the Board to minimize the toxic risk associated with exposure to these em issions. It should be noted that the Portable Engine ATCM does provide for the permi tting of Tier 0 engines. Permitting at the district level allows the potenti al local impacts to be better

evaluated.

3. Comment : ARB should allow Tier 0 engines to operate beyon d January 1, 2010. Many of these engines have useful life expectancies beyond 2010, and to force their retirement places an economic burden on the a ffected industry. Forcing the replacement of Tier 0 engines would make aggregate product, roads, concrete, and other building material more expensive, which would adversely affect the economy overall. (ECA, RM, EUCA, CRA, CQC/PTS )

Agency Response: This comment does not pertain to these proposed amendments as there was no proposal in these amendm ents to change the provision regarding the retirement of non-certified engines in 2010. Notwithstanding, diesel PM has been identified as a toxic air contaminant. It is the goal of the Board to minimize the toxic risk associ ated with exposure to these emissions. Allowing older engines to continue to o perate beyond 2010 is contrary to that goal.

The nonroad emissions standards took effect for por table engine starting in 1996. This means that by 2010, almost all Tier 0 engines will be at least 14 years old, and will be nearing the end of their useful life.

4. Comment : PERP should be reopened to register Tier 0 engin es because sufficient notice of the previous amnesty was not provided to owners of portable engines. Approximately 80% of portable equipment owners have never been exposed to ARB or any sort of regulatory requirements. (BD, R A, RW, CIAQC)

Agency Response: The regulation has been previously opened three t imes before to allow engines into the program and ample opportu nity has been allotted to register non-certified engines. Owners of engines that currently do not qualify for PERP will need to work with the district to bring t he engine into compliance and obtain a district permit. However, if these older engines are replaced with certified engines, there is no need to obtain district permit s.

We have already begun aggressive outreach activitie s which have included sending out almost 300,000 postcards to members of affected industry that may be subject to the requirements (using such databases a s the State Contractor Licensing Board), dedicating resources to assist th e public with questions and applications, and developing a specific information al website. Based on staff’s

estimates, ARB outreach has been more than 20% succ essful. ARB will continue to work with industry representative associations s uch as CIAQC, which has been9

actively involved in PERP since the beginning, to i nform all affected industry about all of the applicable requirements and permitting o ptions.

5. Comment: ARB should not force the replacement of Tier 1 en gines, but should establish a “clean up program” that would make thes e engines cleaner burning. Engine Manufacturers and CARB should perform resear ch to develop a device that will allow older engines to comply with emission re gulations. This would allow engines to stay in California rather than being shi pped to Mexico or Canada. (ECA, CQC/PTS)

Agency Response: ARB staff has considered the alternatives, and re quiring replacement of older engines and then reducing emis sions of newer engines through retrofits is the most effective approach to reducing toxic risk from exposure to diesel PM emissions from portable engines. A cl ean up program would be very resource intensive to implement, and would still no t be as effective as the current approach. The emission reductions from this replac ement approach are faster and more farther reaching.

6. Comment: The wording in the regulation is unnecessarily co mplicated for the engine eligibility provisions and the compliance fl exibility provisions for engines when there is an emission standard change. This is a great source of confusion, and ARB should take a more realistic approach to re gistering engines. (PAI, UCCI)

Agency Response: ARB staff has worked with the commenters to ensur e a better understanding of the regulatory requirements. ARB staff is committed to working with applicants on application submittals and to ac hieve compliance with the regulations. ARB staff has addressed this issue in the 15 day changes.

7. Comment: The back registration and inspection fees for PER P are excessive, punitive, and unfair. These fees should be removed or reduced. (ACPA, RA, SCCA, ARA)

Agency Response: Those engines that would be registered in PERP th at do not meet the current standard are required to pay the b ack registration and inspection fees. These fees would have been paid had the engi ne been properly registered when first put into service. As explained in the I SOR, these fees are necessary for several reasons including funding the increased com pliance efforts of the local districts who are mandated by State law to assist i n the enforcement of PERP. Furthermore, by not being registered, these engines have been operating at an economic advantage over those that have been in com pliance. A level playing field needs to be created with those that have been payin g registration fees since the beginning of PERP. The alternative to paying back fees would be to purchase a10

new engine which meets the current standards, which is far more costly than paying the back fees that have been adopted.

8. Comment: Instead of the current replacement provisions and fleet averaging requirements, ARB should require that all engines b e phased out upon 15 years of service or 7,500 hours, whichever comes first. (UCC I)

Agency Response: This type of phasing out of engines would result in slower engine replacement and consequently higher emission s than the current regulatory proposal. In order to achieve the goal of reducing toxic risk due to diesel PM emissions, engines need to be replaced and/or retro fitted on a more expedient schedule. Any delay would increase the public heal th risk associated with diesel

PM emissions.

9. Comment: Any rule being implemented statewide should be pr e-empted from district interference. Having both the state rule and the district rules is chaotic. (UCCI)

Agency Response: This is already the case for the Statewide Portab le Equipment Registration Program. Once an engine or equipment unit is registered in PERP, district rules and regulations do not apply, except at locations where the PERP registration is not valid. The ATCM is also applic able statewide, but is implemented separately by the ARB or the district depending on which agency the operator holds permits or registrations. State law specifically a llows local districts to adopt more restrictive regulations than the ATCM.

10. Comment: ARB should allow the registration in PERP of Tier0 engines and nonresident previous Tier certified engines if used ex clusively for emergency-use or designated as low-use. These emergency use engines typically operate less than 50 hours per year. Having these engines in PERP wo uld provide unrestricted mobilization of equipment throughout the state in t he event of an emergency. (CCEEB, ATT)

Agency Response: The PERP regulation does not preclude the use of engines for alleviating the threat to public health and safety during an emergency event. Nor does it preclude the use of registered engines to s erve as backup power for telecommunications equipment. This second type of use should be readily performed by an existing fleet of registered engine s, but if the need arises to increase the fleet of engines used for backup power , telecommunications companies have the option to rent equipment on a te mporary basis as needed, or they should be required to purchase the newest, cle anest engines available.11

11. Comment: The residency requirement for previous tier certi fied engines is very costly for small businesses. If there is not a suf ficient quantity of used engines available in California, the owners of small busine sses would be forced to buy new equipment with Tier 3 engines, which is very expens ive. (ACPA, BD, SCCA)

Agency Response: It is the goal of ARB to reduce emissions from th is category of engines by replacing older engines with newer ones and in the mean time only allowing the cleanest engines into the state. Allo wing the registration of dirtier, out-of-state engines is directly contrary to this g oal. Prior to these amendments, previous tier certified engines were not allowed to register at all. Allowing registration of previous tier resident engines is c onsistent with the goal stated above while providing industry with a reasonable me chanism for the purchase of used engines within the State.

12. Comment: If there are not sufficient quantities of Tier 4 engines available in the future, it will be difficult to comply with the fle et average requirements specified in the ATCM. Compliance flexibility, similar to those proposed for eligibility when engines are not available, should be provided for f leet standard compliance. (ARA)

Agency Response: The development of the fleet standards in the ATC M did take

into account the emission standards for each size r ange, and are expected to be achieved by existing certified engines in 2013 (com bination of Tiers 1, 2 and 3). The standards in 2017 and 2020 are expected to be a chieved by a combination of newer engines meeting Tier 4 standards and previous -tier certified engines equipped with Level 3 technology. If the Level 3 t echnology is not readily available in a time frame conducive to compliance with the fl eet standards, then the ARB will

re-evaluate the emission standards set forth in the ATCM.

13. Comment: Having to wait up to 90 days for registration to be issued so that the equipment can be operated is a significant financia l hardship. Engines should be able to be put into service immediately upon delive ry. ARB should modify the regulation to alleviate this financial hardship. (A RA, SSDC)

Agency Response: In response to public testimony, the Board direct ed staff to

work with the California Air Pollution Control Offi cers Association on a mutually acceptable procedure for allowing expedited registr ation. ARB staff has already

initiated this effort with the commenters and CAPCO A. If regulatory changes are necessary, staff will propose appropriate amendment s in a separate rulemaking.

14. Comment: The Statewide PERP regulation states in section 2 458(b) that the owner of rental equipment shall provide the renter with a written copy of applicable requirements of the regulation, including recordkee ping and notification requirements. ARB staff has previously stated that providing a copy of the12

registration satisfies this requirement. This shou ld be clarified in the regulation. (ARA)

Agency Response: Since it is required in section 2453(f) that the registration be kept onsite with the registered engine or equipment unit, it follows that the owner of the rental business is therefore required to provid e his/her customers with a copy of the registration. The requirement in 2458(b) was i ntended to ensure that the operator of the rental engine or equipment unit was not only aware of the registration requirements, but of other regulatory requirements that may pertain as

well.

15. Comment: According to the Census Bureau, there are 234,000 construction companies in California. If only half of these own ed one portable engine over 50 bhp, that is more than 109,000 engines that should already be in PERP. ARB must vastly increase its outreach efforts in order to re ach all the potential owners of portable equipment. (BD)

Agency Response: It should be kept in mind that PERP is a voluntar y program. ARB staff believes that there are many portable eng ines and equipment units that are operating under district rule exemptions, makin g registration unnecessary.

However, ARB has started and will continue to condu ct an aggressive outreach program regarding these amendments to PERP. Indivi dual meetings and/or workshops will be held as necessary to explain the changes that have been made to the regulation and to answer any concerns that m ay arise. Furthermore, letters, brochures, and pamphlets will be mailed to owners o f registered engines and to those who may potentially be interested in particip ating in the PERP. To date, nearly 300,000 post cards have been sent to a compr ehensive list of contractors in

California.

16. Comment: ARB Chairman Dr. Sawyer should appoint a construc tion industry task force to accurately measure the scope of the affect ed industries, consolidate all regulations impacting the construction industry, an d develop meaningful emission reductions to benefit all Californians. (BD)

Agency Response: ARB staff has continuously worked closely with ma ny representatives from industry in the development of PERP. Many regulatory agencies, not just concerning air quality, have env ironmental jurisdiction over the construction industry. To consolidate all agencies ’ regulations is not feasible.

17. Comment: Forcing Tier 0 and older certified engines out of state does not solve the problem of emissions, it just moves them. Shouldn’ t ARB try to control emissions from these engines, rather than just move them away ? Moving emissions does not reduce the risk of global warming. (CP, ECA)13

Agency Response: The purpose of PERP and the Portable Engine ATCM is to reduce the exposure of toxic diesel PM emissions to the residents of California. Greenhouse gas emissions from sources in California are being addressed pursuant to Assembly Bill 32. Environmental agenci es in other jurisdictions have the option of adopting regulations to address emiss ions impacts in those areas.

18. Comment: ARB should allow the PERP registration of Tier 0 engines and nonresident non-current Tier certified engines on cran es. Furthermore, ARB should allow these engines to be exempt from replacement o n January 1, 2010. (SR, CCR)

Agency Response: ARB staff understands that there are unique techn ical, cost, and logistical issues associated with the retrofit of cranes. We are currently evaluating these issues with a focus on equivalent emission reductions and are continuing our dialogue with the crane industry. W e have committed to representatives of the crane industry that we would address the unique issues with cranes as part of the ARB staff’s development of th e regulation to reduce diesel emissions from existing heavy-duty onroad fleets.

19. Comment: ARB should allow the registration without any pen alties for any engine that has historically been operating in a district that did not require permits for portable engines. Registration of such engines wou ld be completely voluntary since the districts continue to consider these engi nes permit exempt. (SR, COA)

Agency Response: By penalties, it is assumed that the commenter is referring to back fees. Any previous certified engine may regis ter in PERP, but will still have to pay back fees. If they wish to operate in a distri ct where permits are required, then they have the options of paying the back fees to re gister in PERP, applying for a district permit, or purchasing newer clean equipmen t. They also have the option of staying in that district that does not require perm its. Because of ARB’s commitment

to reduce the toxic risk associated with diesel PM emissions, we feel it is inappropriate to allow the operation of Tier 0 engi nes in PERP under these

circumstances.

20. Comment: These regulations are a distraction from the real air pollution problems facing California, e.g. refinery and car emissions. If those sources are dealt with, then the emissions from construction equipment are not so significant. The construction industry should not be subject to thes e regulations. (DK)

Agency Response: The air pollution challenge facing California is complex and comes from many different sources. However, portab le engines are a significant source of diesel PM emissions; much more than those from cars (which are14

primarily gasoline-powered) and refineries. Even s o, it is important to reduce hazardous emissions, such as particulate matter fro m diesel exhaust from every possible source in order to protect the health of t he people of California.

Furthermore, the districts and the Board are contin ually developing and implementing various regulatory programs that affec t many industries and sources of air pollution.

The comments below were received during the 15-day notice period after the Board hearing.

21. Comment: The definition of rental business should be modif ied to mean businesses that have engines to rent whether or not they are registered in PERP. Also, the definition of resident engine should be r estricted to only those engines that hold valid permits with a district. (MCAQMD)

Agency Response: There is no need to modify the definition of ren tal business in the PERP regulation to include those that do not ha ve engines registered in PERP, as the regulation is only applicable to rental busi nesses with engines so registered. It was the intent of the residency provision to inc lude both those engines with valid district permits originally issued prior to January 1, 2006 and those engines that have been operating without a permit; therefore, th e definition will not be modified as suggested.

22. Comment: The requirement for rental businesses to provide customers with a copy of the applicable requirements is difficult to comp ly with. Attaching a copy of the operating conditions is not always sufficient since they might be outdated with the recent amendments to PERP. Attaching a copy of th e entire regulation is also very impractical. Furthermore it is inconsistent that th e districts can have their own interpretation of PERP requirements. ARB should am end the regulation to make this requirement easier and more consistent for ren tal businesses. (ARA)

Agency Response: All existing registrations will not be updated un til the current renewal cycles are complete. All operating conditi ons will be updated with the new requirements upon renewal. Every registered compan y has to deal with this transition when regulatory changes are made. Inclu ding a copy of the most current regulation with a rental agreement is only one opti on in addressing the need to notify renters of all new applicable requirements. There are companies that chose to go through the new regulation and develop their own supplement to include with their agreements.

Although the enforcement of the PERP regulation is primarily handled by the

districts, ARB has and will continue to work with t he districts to ensure statewide consistency in application.15

23. Comment: The requirement for rental businesses to provide annual reports of total process weight or throughput for rented equipment u nits is unreasonable because the rental company does not have access to this inf ormation. (ARA)

Agency Response: The operators of rental equipment units are requ ired to maintain written records of daily throughput. The rental business must inform the customer of this requirement and all other applicab le PERP requirements as part of the rental agreement. Copies of these throughput r ecords can easily be handed over to the rental business so that the annual repo rts can be submitted.

24. Comment: The multiple inspection discount program is diffi cult for rental companies to participate in because it is not known in advance if multiple engines can be brought together for an inspection. There s hould be an option to get a refund if the rental company chooses to participate in the multiple engine discount inspection program at a later time. (ARA)

Agency Response: ARB is required to collect inspection fees upon i nitial application and/or renewal, and therefore registran ts must select the multiple inspection discount option at that time. If this o ption is selected, the company/agency must have the ability to bring 4-9 ( or 10+) engines together at the same location for an inspection. Registrants shoul d give careful consideration to selecting this option as being able to comply with this provision will take significant planning on their part. If a company/agency is not sure that they will be able to do this, they should not select the multiple engine di scount. Selecting the multiple engine inspection option at a later time and gettin g a rebate in fees is not possible.

25. Comment: The penalty fees charged for not paying rental fe es when due is unfair since the due date is prior to the registration exp iration date. (ARA)

Agency Response: The regulation clearly states in Table 3 what th e fees are for paying renewal fees within 2 months prior to expira tion date and also for paying them within 1 month prior to expiration date. Rene wal fees are due prior to the expiration date because time is needed to process t he renewal transaction and issue renewal registration documents prior to expir ation.

26. Comment: It is punitive that the original fee for a placar d is only $5 while the fee for a replacement placard is $30. (ARA)

Agency Response: The $5 initial cost for the placard is for mater ials only. The administrative costs associated with issuing this p lacard are included in the fee paid for initial registration or renewal. The extra fee s for a replacement placard cover the administrative cost of processing the replaceme nt request (accounting, data16

entry, document generation, mailing, etc.) and also for issuing a second

identification sticker that has to be issued with t he placard.

27. Comment: ARB has not yet made much progress with temporary registration which has been previously requested at the board hearing. (ARA)

Agency Response: See comment #13 and agency response. ARB staff i s still working with CAPCOA and the affected industry on th is issue.

28. Comment: The fleet average requirements in the ATCM will b e impossible to comply with because individual engine emission stan dards are not consistent with the fleet standards. (ARA)

Agency Response: This issue has been raised previously by the same party. See comment #12 and agency response.

29. Comment: It is impractical and unreasonable to require tha t the written rental agreements be kept onsite with the rental unit at a ll times. Often times these agreements are simply not available as the rental t ransaction is initiated by phone or from locations hundreds of miles away from the j obsite. In addition, most rental agreements contain sensitive and confidential data that should not be viewed by competing entities. (SCEC, QPS)

Agency Response: This comment does not pertain to these proposed amendments as there was no proposal in these amendm ents to change the provision regarding the written rental agreement. However, ARB staff believes that when a rental piece of equipment is received by a r enter, there is usually some form of written acknowledgement of the transaction at that time, even if the original order was not placed in person at the rental yard.

On a jobsite, the only people that would need to se e the rental agreement are the operator and the district inspector. There is no n eed to display the rental agreement in plain view. It is possible to keep it in a folder or binder in the operator’s vehicle. ARB staff does not agree that contact information is confidential; therefore, it is not inappropriate to disclose.

Having the written rental agreement onsite actually may protect the rental company from enforcement action in some instances if the op erator is in violation of PERP requirements. The written rental agreement may be used as proof that the operator was made aware of the PERP requirements by the rent al company when the operator took possession of the rental unit.17

Furthermore, district enforcement staff needs to be able to verify in the field if the engine or equipment unit is being operated under th e proper authority and/or if a change of ownership is needed. It is imperative th at if a district inspector encounters an engine with a rental company’s regist ration operating in the field that he/she be able to determine if the unit is being re nted, or if it was sold to the operator and a change of ownership application need s to be filed. Change of ownership applications are required to be filed wit hin 30 days after a unit has been purchased from a rental company.

30. Comment: The monthly sales transaction reports required by the PERP regulation may result in the sharing of confidential data with competitors. Also, this requirement was not in the draft regulatory languag e leading up to Board adoption. (SCEC, QPS)

Agency Response: This comment does not pertain to these proposed amendments as there was no proposal in these amendm ents to change the provision regarding the monthly sales transaction r eports. This requirement was originally adopted by the Board in the amendments p roposed on June 22, 2006. The implication made by the commenters that this re quirement was not properly noticed, and is therefore an illegal requirement is completely false. This requirement was contained in the Staff report relea sed on May 5, 2006, and there was ample opportunity for public comment before the Board hearing on June 22,

2006.

ARB staff understands that the sales price of equip ment is considered confidential information by the commenters. ARB has procedures in place to protect confidential information as long as it is identifie d in advance by the submitter. The sales price, however, is not required to be submitt ed with these monthly sales transaction reports. ARB staff does not agree that engine information or customer

information is considered confidential or “trade se crets”. This information is needed to determine compliance with other applicable distr ict permitting and/or PERP requirements.

31. Comment: Engines designated as low use or emergency use sh ould be allowed into PERP regardless of tier level or residency. T hese engines are necessary for alleviating any threat of emergency to telecommunic ation networks. California’s largest telecommunications provider already owns ap proximately 50 of these noncertified engines, which on average operate less th an 20 hours per year. The cost to replace any Tier 0 engine not already registered is unreasonably high, considering that they are used very infrequently. These engines should be allowed to remain in PERP until January 1, 2020. (CCEEB)

Agency Response: This comment was submitted previously by the same party. See comment #10 and agency response. In discussion s with representatives from18

California’s largest telecommunication provider, it was revealed that they have most of their engines registered in PERP already, but th at they wanted to retain the ability to register older engines just in case they came across some that they were unaware of. ARB staff believes that registered com panies have a responsibility to effectively manage their fleet in order to meet the ir business needs, and should

dedicate sufficient resources to do so. ARB should not allow the registration of a Tier 0 engine because a company lost track of it in their fleet.

Tier 0 engines designated as exclusively emergency use or low use are all scheduled for replacement within 2 years of the Tie r 4 emission standards taking effect, which is expected to start in 2011. Califo rnia’s largest telecommunication provider will incur the cost of replacement for all these engines at that time.