### State of California

AIR RESOURCES BOARD

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

PUBLIC HEARING TO CONSIDER PROPOSED AMENDMENTS TO N EW PASSENGER

MOTOR VEHICLE GREENHOUSE GAS EMISSION STANDARDS

Public Hearing Date: September 24, 2009

Agenda Item No.: 09-8-7

I. GENERAL

The Staff Report: Initial Statement of Reasons for Rulemaking ("staff report"),

entitled " NOTICE OF PUBLIC HEARING TO CONSIDER PROPOSED

AMENDMENTS TO NEW PASSENGER MOTOR VEHICLE GREENHOUS E GAS EMISSION STANDARDS," released August 7, 2009 1 , is incorporated by reference

herein.

In this rulemaking, the Air Resources Board (ARB or Board) is adopting amendments to California’s new passenger motor vehicle greenho use gas regulations. These amendments include the following primary elements:

Allowing manufacturers to meet the fleet average gr eenhouse gas emission requirements by “pooling” the California and Clean Air Act Section 177 State Vehicle

sales;

Allowing the use of data from the federal Corporate Average Fuel Economy (CAFE) program to demonstrate compliance with California’s new passenger motor vehicle greenhouse gas regulations; and

Incorporation of a number of administrative amendme nts to align them with current federal requirements.

The rulemaking was initiated by the August 6, 2009 publication of a notice for a September 24, 2009 public hearing to consider the p roposed amendments. A Staff Report: Initial Statement of Reasons (the Staff Rep ort) was also made available for public review and comment starting August 6, 2009. The Staff Report, which is incorporated by reference herein, describes the rat ionale for the proposal. The text of the proposed amendments to title 13, California Code of Regulations (CCR) sections 1961 and 1961.1 was included as an Appendi x to the Staff Report. These documents were also posted on the ARB’s Internet si te for the rulemaking at: http://www.arb.ca.gov/regact/2009/ghgpv09/ghgpv09.h tm

. Also posted on the internet site were the proposed amendments to the “ California Exhaust Emission Standards and Test Procedures for 2001 and Subseque nt Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles,” which is incorporated by reference in section 1961(d).

On September 24, 2009, the Board conducted the publ ic hearing, at which it

received oral and additional written comments. At the conclusion of the hearing, the

1 The “Date of Release” for this rulemaking was Frid ay, August 7, 2009. However, due to the implementation of the Governor’s Executive Order S- 13-09 requiring furloughs on this and other Fridays, the actual posting date for this rulemakin g was Thursday, August 6, 2009.2

Board adopted Resolution 09-53, in which it approve d the originally proposed

amendments and one significant modification: Section 1961.1(a) (1)(A)1.d., has been modified to allow compliance with the fleet average greenhouse gas requirements to be based on the number of vehicles “produced and de livered for sale” in California and other states within the pooled average rather t han on actual vehicle sales in those states. This modification makes these regula tions consistent with the LowEmission Vehicle and Zero-Emission Vehicle program requirements. Sections E.2.5.1.1.4. and H.4.5(a)(iv) and (v) of the of the "California and Exhaust Emission Standards and Test Procedures for 2001 and Subseque nt Model Passenger Cars, Light-Duty Trucks, and Medium Duty-Vehicles," which also incorporate this requirement have similarly been changed.

These modifications had been suggested by staff in two documents entitled “Proposed Modified Text of the Regulations to Amend the New Passenger Motor

Vehicle Greenhouse Gas Emission Standards” and “Sta ff’s Suggested Modifications to the Originally Proposed “California Exhaust Emis sion Standards and Test Procedures for 2001 and Subsequent Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles” that were distributed at the hearing and were Attachments C and D, respectively, to the Resolutio n. Attachments C and D showed excerpts of the originally proposed amendments to t he regulations and incorporated documents, with the text of all suggested modificat ions clearly identified. In

accordance with section 11346.8 of the Government C ode, the Resolution directed the Executive Officer to incorporate the modificati ons into the proposed regulatory text, with such other conforming modifications as m ay be appropriate, and to make the modified text available for a supplemental comm ent period of at least 15 days. He was then directed either to adopt the amendments with such additional modifications as may be appropriate in light of the comments received, or to present the regulations to the Board for further considerat ion if warranted in light of the

comments.

A number of additional clarifying 15-day modificati ons were also made to the regulations, based on comments received during the 45-day comment period and during subsequent discussions with manufacturers th at indicate that some of the regulatory language, as contained in the 45-day not ice, was being incorrectly interpreted. These modifications included the addi tion of language to clarify how to calculate credits and how reporting requirements wo uld apply for a manufacturer that elects to use CAFE data to demonstrate compliance w ith California’s greenhouse gas regulations. All of these changes were include d in the amended 15-day regulatory language and test procedure language.

The text of all of the modifications to the origina lly proposed amendments to the regulations and incorporated documents was made ava ilable for a supplemental 15- day comment period by issuance of a “Notice of Publ ic Availability of Modified Text” and supporting documents. Four comments were recei ved during the supplemental comment period that ran from November 24, 2009 to D ecember 9, 2009

. After considering these comments, the Executive Officer i ssued Executive Order February 22, 2010, adopting the amendments to CCR, title 13, and amending or adopting the incorporated documents.

This Final Statement of Reasons (FSOR) updates the Staff Report by identifying and providing the rationale for the modifications made to the originally proposed regulatory text. The FSOR also contains a summary of the comments the Board3

received on the proposed regulatory amendments duri ng the formal rulemaking process and the ARB’s responses to those comments.

Receipt of the pooled states’ sales data, including California sales, enables ARB to track compliance with the new alternative complianc e option. Because this is essential to determining whether the greenhouse gas reductions mandated by AB 1493 to reach its environmental goals are actually occurring, it is clearly related to the regulatory aim of protecting the health, safety , and welfare of the people of California. In adopting this Final Statement of Re asons, the Executive Officer hereby

finds this to be the case.

The Board has determined that this regulatory actio n will not result in a mandate to any local agency or school district, whether or not reimbursable by the state pursuant to part 7 (commencing with section 17500), division 4, title 2 of the Government Code, or other nondiscretionary savings to state ag encies.

No alternatives were considered to lessen the impac t on small business, because small businesses will not be impacted by these prop osed amendments.

The Board has further determined that no alternativ e considered by the agency would be more effective in carrying out the purpose for which the regulatory action was proposed or would be as effective and less burd ensome to affected private persons than the action taken by the Board.

II. SUMMARY OF COMMENTS AND AGENCY RESPONSE

The Board received nine written letters and/or e-ma ils commenting on the proposal during the 45-day comment period prior to and/or at the September 24, 2009 hearing. At the hearing, the Board received oral t estimony from the Association of

International Automobile Manufacturers.

A. COMMENTS PRESENTED PRIOR TO OR AT THE HEARING

Comments Addressing “Pooling” Amendments

1. Comment : The proposed requirement for reporting state-spe cific data for each Section 177 state is inconsistent with the goa l of reducing compliance burdens through fleet pooling. (Michael J. Stanton , President and CEO,

Association of International Automobile Manufacture rs, Inc. (AIAM))

Agency Response: A manufacturer that chooses to demonstrate compli ance with the Pavley regulations using the “pooling” opt ion will be required to submit data to ARB, which shows that the mix of veh icles delivered to states (including the District of Columbia) within the poo l meets the fleet average requirements each year. Manufacturers will also be required to provide ARB with a state-by-state breakdown of this data. This is needed to identify the portion of the greenhouse reductions that may be cr edited towards meeting the goals of California’s AB 32 and similar program s in the other pooled states. Furthermore, ARB does not believe that thi s reporting requirement imposes an undue burden on manufacturers. Since ma nufacturers know where they send their vehicles, this data is availa ble.4 2. Comment : Sales in Pennsylvania should not be included in the pooling

because that state does not have its own fleet-aver age GHG emissions requirements. (Michael J. Stanton, President and C EO, AIAM)

Agency Response: ARB disagrees with this comment for the pool for the reasons given in Comment 3. This same commenter al so stated (Comment 26) that the relevant regulatory section need not s pecifically list each Section 177 state – a comment with which ARB agrees – becau se the language of Clean Air Act Section 177 speaks for itself. See a lso Agency Response to

Comment 4.

3. Comment : The Pennsylvania Department of Environmental Pro tection understands that an automobile manufacturer has que stioned whether Pennsylvania’s regulations incorporate California’s GHG standards for motor vehicles, and that the Association of International Automobile Manufacturers (AIAM) questions whether Pennsylvania sales should be included in the pool

of vehicle sales in Section 177 states. Please be assured that Pennsylvania’s regulations do include California’s GHG standards and that Pennsylvania sales belong in the pool. Under Penns ylvania law, Pennsylvania’s 1998 adoption and incorporation by r eference of California regulations automatically incorporated all later am endments and additions California has made and will make to its regulation s. Pennsylvania Statutory

Construction Act

, 1 Pa.C.S.A. § 1937(a). Consequently, Pennsylvani a has in place the current California LEV II program, includ ing the California GHG regulations.

Additionally, the reports required to be submitted to demonstrate compliance with the non-methane organic gas fleet average in P ennsylvania include reports of annual sales in Pennsylvania, contrary t o the assertion of AIAM that our regulations do not require separate report ing of sales in Pennsylvania.” (Kenneth R. Reisinger, Acting Deput y Secretary, Pennsylvania Department of Environmental Protection )

Agency Response: ARB agrees with this comment.

4. Comment : The District of Columbia, Pennsylvania, and New Jersey do not have regulations authorizing them to enforce fleet average GHG standards

for vehicles delivered for sale within their border s. Therefore, vehicles

delivered for sale in these states should not be in cluded in the volumes used for purposes of determining compliance with Option 2. (Robert D. Brown, Director, Vehicle Environmental Engineering, Enviro nmental & Safety Engineering, Ford Motor Company)

Comment: We do not find that the GHG regulations are effec tive in the District of Columbia. Therefore, references to the District of Columbia should be eliminated from the GHG regulations. (Naoyuki O saki, General Manager, Environmental & Safety Engineering Department, Mazd a)

Agency Response: The pooling amendments apply to sales in those st ates (and the District of Columbia) that have adopted Ca lifornia’s greenhouse gas program in accordance with the requirements of the Clean Air Act, and their own state-specific laws. Section 177 is self-execu ting, that is, at any given

time the states that can enforce California’s stand ards in their state exists as5 a matter of law and requires no specific state list ing and no further response here. Nevertheless, ARB disagrees with the comment ers’ assertions regarding Pennsylvania, as discussed in response to Comments 2. and 3. above. The commenter’s assertion regarding New Jer sey is puzzling and appears to be in error because their highlighted po rtion within Section 7:27- 29.13(g) specifically includes the subject Section 1961.1 and because, like Pennsylvania, subsections (b) and (f) of that Secti on prospectively incorporates by reference future amendments – such as the subject amendments – to California’s standards. It appears that the commenter may be correct regarding the District of Columbia, at l east as to model years

before 2012.

5. Comment : Section 177 of the Clean Air Act allows a state to “adopt and

enforce” California’s vehicle emission standards fo r a particular model year, if “California and such State adopt such standards at least two years before commencement of such model year.” Thus, a state is not authorized under

the Clean Air Act to “enforce” a California vehicle emissions standard unless it has promulgated regulations that meet the two-ye ar lead-time requirement of Section 177. The National Program agreement in principle provides that only vehicles in states that can enforce the Califo rnia GHG standards should be included in the aggregated total for purposes of determining compliance. Therefore, California’s regulations should clarify: 1) that the vehicles counted under Option 2 must be from states that can enforce the California GHG standards, and 2) that one prerequisite for enforce ment is that the two-year lead-time requirement of Section 177 is satisfied. (Robert D. Brown, Director, Vehicle Environmental Engineering, Environmental & Safety Engineering, Ford Motor Company)

Agency Response: The pooling amendments apply to sales in those st ates (and the District of Columbia) that have adopted Ca lifornia’s greenhouse gas program in accordance with the requirements of the Clean Air Act, and their own state-specific laws. It is not clear whether the commenter is arguing that the pooling amendments cannot apply until two years after Board approval or adoption, but that interpretation would both run counter to the manufacturers’ stated desire to exercise Option 2 a s amended herein, and would unduly impede other States from exercising th eir rights under Section

177. See Motor Vehicle Manufacturers Assoc. v. New York Depa rtment of Environmental Conservation, 810 F.Supp. 1331, 1347-48 (U.S. Dist. Ct. N.D. NY (1993)) (holding Section 177 state may adopt Cal ifornia regulations that have not received a Section 209(b) waiver).

6. Comment : AIAM recommends that the regulatory amendments s pecifically provide that vehicle sales in a Section 177 state s hall not be included in the calculation of debits that are subject to penalties unless such state has had its program in place for at least five model years. Thus, for example, vehicle sales in Maryland or New Mexico will not be used in calculating any penalties under the regulations until the 2016 model year, an d vehicle sales in Arizona will not be used in calculating any penalties under the regulations until the 2017 model year. (Michael J. Stanton, President an d CEO, AIAM)

Agency Response: Debits that are subject to penalties are calculat ed separately for California, the District of Columbia , and each individual state that is included in the fleet average greenhouse ga s requirements for a given6 model year. Penalties accrue if greenhouse gas deb its are not equalized within five model years after they are earned. Sin ce the greenhouse gas fleet average does not apply in Maryland or New Mexico un til the 2011 model year, penalties would not be calculated for these s tates prior to the 2016 model year. The recommended change is therefore un necessary.

7. Comment : The expanded definition of “California” to inclu de the Section 177 States should therefore also apply to subsection 19 61.1(a)(1)(A). (Michael J. Stanton, President and CEO, AIAM)

Agency Response: The definition of “California” has only been expa nded to identify and clarify those sections of the regulati ons to which the Option 2 pooled sales apply. Subsection 1961.1(a)(1)(A), co ntains requirements for both Option 1 (individual state) and Option 2 (pool ed) in certification. Since the expanded definition of “California” does not ap ply to Option 1, it is not necessary to expand the definition of “California” for this entire subsection.

8. Comment : In section 2.5.1.1.4 of the draft regulatory lan guage, it states that a manufacturer that selects Option 2 must provide t o the Executive Officer production, delivery, and sales values separately f or District of Columbia and for each individual state within the average. Beca use manufacturers do not

track dealer sales or dealer trades, Ford recommend s that this language be revised to remove the sales reporting requirement. (Robert D. Brown, Director, Vehicle Environmental Engineering, Enviro nmental & Safety Engineering, Ford Motor Company)

Agency Response: ARB agrees with this recommendation and has modif ied the regulatory language accordingly.

9. Comment : In section 3.2.3.1., CARB modified the language for calculating the number of passenger cars and LDT1s not meeting the state board’s

emission standards to reference California vehicles only, but did not do the

same for the number of LDT2s and MDPVs. Ford recom mends that consistent language is used for all vehicles. (Rob ert D. Brown, Director, Vehicle Environmental Engineering, Environmental & Safety Engineering, Ford Motor Company)

Agency Response: ARB agrees with this recommendation and has modif ied the regulatory language accordingly.

10. Comment : It is unclear from this language how CARB intend s to address the question of the enforcement of the GHG emissions re gulations and the collection of statutory penalties under the Califor nia Health and Safety Code for those manufacturers that choose the pooling opt ion. AIAM believes that

CARB should consult further with the Section 177 St ates and the industry to develop an approach that is legally defensible and workable. (Michael J. Stanton, President and CEO, AIAM)

Agency Response: The comment is addressed by the proposed modifications to title 13, CCR section 1961.1 (b)(3 )(A), which state that for a manufacturer demonstrating compliance using the poo ling option, the emission debits that are subject to a civil penalty under Health and Safety Code section 43211 shall be calculated separately f or California, the District7 of Columbia, and each individual state that is incl uded in the fleet average greenhouse gas requirements. The civil penalty for non-compliance in a

Section 177 state or in the District of Columbia wi ll be based on the emission

debits calculated for that individual state or in t he District of Columbia in accordance with the applicable non-compliance penal ties for that state or for

the District of Columbia.

Comments Addressing CAFE Amendments

11. Comment : Mazda believes that the calculation using CAFE d ata should be based on the Model Type Group instead of the GHG ve hicle test group because CAFE is calculated based on Model Type Grou p (referred to 40 CFR Part 600 Subpart F) while the California fleet GHG is calculated with

CO 2 for each GHG vehicle test group. (Naoyuki Osaki, General Manager, Environmental & Safety Engineering Department, Mazd a Motor Corporation (Mazda))

Agency Response: ARB agrees that it is appropriate to modify this section to better accommodate language used in the CAFE progra m. However, the “Model Type Group” is too large a group to allow AR B to verify a manufacturer’s fleet average calculations. Instead , ARB has modified this

section to allow a manufacturer that elects to demo nstrate compliance with California’s greenhouse requirements using CAFE dat a to calculate the CO 2 - Equivalent Values based on the vehicle “subconfigur ations,” which are smaller groupings used in the CAFE program.

12. Comment : We request that CARB allow an option to calculat e the grams per

mile CO 2 from CAFE data using the carbon content of gasolin e or diesel. (Naoyuki Osaki, General Manager, Environmental & Sa fety Engineering Department, Mazda)

Agency Response: ARB does not believe that a third compliance opti on is needed. CAFE program data covers all passenger veh icles sold in California. So, a manufacturer that elects to demonstrate compl iance with California’s greenhouse gas regulations using this data will be able to do so using available CAFE data, without the need for additiona l testing.

13. Comment : Ford agrees with CARB’s revision in section 2.5. 2.1 that allows manufacturers to demonstrate compliance with GHG re quirements by substituting the term 1.9 CO 2 - equivalent grams per mile for the terms “296 x

N 2 O + 23 x CH 4 ” in the CO 2 - equivalent value calculation. Ford believes tha t further clarification regarding the use of CAFE Pro gram data is required in the section. Ford recommends that the regulatory langu age should be amended to specify that “metro-highway grams per mile avera ge CO 2 - equivalent values may be used in lieu of “city” and “highway” grams per mile average

CO 2 - equivalent values. Both methods will yield iden tical CO 2 - equivalent values. (Robert D. Brown, Director, Vehicle Enviro nmental Engineering, Environmental & Safety Engineering, Ford Motor Comp any)

Agency Response: Automobile manufacturers are required to submit b oth city and highway fuel economy results to U.S. EPA i n order to demonstrate compliance with CAFE, the federal fuel economy prog ram. It would, therefore, not be a burden to manufacturers to subm it both city and highway8 data to ARB. This data is needed for ARB to audit a manufacturer’s greenhouse gas data using U.S. EPA’s CAFE database.

14. Comment : In section 3.4, CARB states that a manufacturer that elects to use CAFE Program emissions data to demonstrate complian ce with the greenhouse gas requirements must use all of the dat a that is used by the U.S. Environmental Protection Agency to determine a manufacturer’s corporate average fuel economy for the applicable m odel year, may forego testing of the “worst case“ configuration. In some cases there may be Federal-only model type groups, if such a case exis ts, then the California volume would be zero, thus this model type group wo uld not contribute to the greenhouse gas fleet average. For this reason, For d recommends that the language be revised as follows: “A manufacturer tha t elects to use CAFE Program emissions data to demonstrate compliance wi th the greenhouse gas requirements may use, as appropriate, the data used by the U.S. Environmental Protection Agency...” (Robert D. Brown , Director, Vehicle Environmental Engineering, Environmental & Safety E ngineering, Ford Motor Company)

Agency Response: ARB is requiring all CAFE data be used to demonst rate compliance with the fleet average greenhouse gas re quirements, in order to avoid the potential for “cherry picking” of data. This could be possible if the overly vague qualifier “may use, as appropriate” wa s added to the regulatory language.

15. Comment : In section 4.5(v), Ford believes that manufactur ers that have elected to demonstrate compliance under Option 2, s hould be given the option to use Model Type Group. Ford recommends th at the regulatory language be modified accordingly. (Robert D. Brown , Director, Vehicle Environmental Engineering, Environmental & Safety E ngineering, Ford Motor Company)

Agency Response: ARB agrees that it is appropriate to modify this section to accommodate language used in the CAFE program. How ever, in order to verify a manufacturer’s fleet average calculations, ARB needs more data than “Model Type Group” will provide. ARB has, therefor e, modified this section to allow a manufacturer to report data from the CAFE p rogram using the CAFE term “subconfiguration,” which is the smallest vehi cle group for which CAFE

data is available.

Comments In Support of Amendments

16. Comment: The Pennsylvania Department of Environmental Prot ection supports the proposed amendments to California’s gr eenhouse gas emission standards for new passenger motor vehicles and test procedures for lightand medium-duty vehicles. (Kenneth R. Reisinger, A cting Deputy Secretary, Pennsylvania Department of Environmental Protection )

Agency Response: This comment is supportive of the staff proposal. No response needed.

17. Comment: The North East States for Coordinated Air Use Man agement (NESCAUM) supports the Proposed Amendments to New Passenger Vehicle9 Greenhouse Gas Emission Standards . (Coralie Cooper, Transportation Program Manager, NESCAUM)

Agency Response: This comment is supportive of the staff proposal. No response needed.

18. Comment: The New Mexico Environment Department (NMED) stro ngly supports CARB’s proposed amendments. NMED apprecia tes CARB’s inclusion of New Mexico as part of the multi-state compliance averaging option beginning in the 2011 model year despite the fact that there is ongoing litigation challenging New Mexico’s Motor Veh icle Greenhouse Gas Standards. (Jim Norton, Director, Environmental Pr otection Division, State of New Mexico Environment Department)

Agency Response: This comment is supportive of the staff proposal. No response needed.

Comments Outside the Scope of this Rulemaking

19. Comment: My family is totally against any additional regul ation of Motor Vehicles with respect to Greenhouse Gas Emissions. There is absolutely

zero evidence that CO 2 emissions propose any hazard whatsoever on our environment, but an amazing amount of evidence on h ow such regulations hurt our families and state economy. (Robert J. Sa ndor)

Agency Response: This comment addresses issues outside the scope o f this rulemaking. In AB 1493 the Legislature required AR B to adopt greenhouse gas emission standards for motor vehicles, and ARB adequately estimated economic impacts that could occur from these amendm ents. No response

needed.

20. Comment: High efficiency ethanol engines could offer an ad ditional 20 to 30 percent reduction to carbon over the numbers being discussed today. Along with this, ethanol has the potential to displace 25 percent more oil by approaching the next generation of FFV’s from the p erspective of efficiency and mileage capabilities. By listing the emission of carbon per horsepower hour, this is the most straight forward approach to evaluating cars, trucks or any other engine application. Carbon per horsepower hour would see significant reduction when ethanol is used. Ethanol can achieve much higher efficiency then gasoline and has demonstrated highe r efficiencies of even the most advanced diesels with significant reductions o f not only carbon but other harmful emissions. What many need to realize at th e California ARB is that in order for cellulose ethanol to be successful, we need to raise the value for ethanol. (Steve Vander Griend, ICM Inc.)

Agency Response: This comment addresses issues outside the scope o f this rulemaking. No response needed.

21. Comment : We request that the A/C direct emission reductio n credits and/or A/C indirect emission reduction credits, which are approved based on MAC 2009-01, be accepted for the GHG standard A/C direc t emission allowance and the A/C indirect emission allowance. (Naoyuki Osaki, General Manager, Environmental & Safety Engineering Department, Mazd a)10 Agency Response: This comment addresses issues outside the scope o f this rulemaking. No response needed.

22. Comment : The ISOR states that in the “unlikely” event a m anufacturer has accrued net debits at the end of the 2011 model yea r and then transitions to the federal program for the 2012 model year and bey ond, “California will likely require that manufacturers opting into the federal program will offset any debits incurred in California by earning a commensu rate number of credits in the federal program and retiring those credits rath er than using them to meet their federal obligations....” ISOR at 4. AIAM belie ves that this issue should

be addressed in connection with EPA’s GHG rulemakin g in consultation with CARB and the industry. The most equitable solution would be to allow for both credits and debits accrued in the California p rogram to be carried over into the EPA program. The regulatory mechanism for achieving this result, however, should be a matter for the federal program and related rulemaking and not the CARB rulemaking. (Michael J. Stanton, President and CEO, AIAM)

Agency Response: This comment does not pertain to proposed regulat ory changes for this rulemaking. The issue raised by t he commenter will be addressed in a future rulemaking. No additional re sponse needed.

23. Comment : CARB should seek a within the scope determinatio n for these amendments. (Michael J. Stanton, President and CEO , AIAM)

Agency Response: This comment addresses issues outside the scope o f this rulemaking in that it does not seek a regulatory te xt change, and therefore no response is needed. ARB notes that Board Resolutio n 09-53 directs the Executive Officer to seek this determination post-a doption if appropriate.

24. Comment : In describing the regulatory and legal backgroun d for these proposed amendments, the ISOR states that “[m]anufa cturers agreed to ultimately drop current, and forego similar future legal challenges, including challenging a waiver grant, which occurred June 30, 2009.” Although it is not part of the actual regulatory amendments, AIAM feel s that this statement is an inaccurate description of the commitments undert aken by the automobile industry and, thus, merits comment to avoid future confusion. The industry never committed to foregoing all “similar future le gal challenges.” Rather, the industry only agreed “to dismiss all such litigatio n (and not to renew any such litigation) with respect to MYs 2009-2016. (Michae l J. Stanton, President and CEO, Association of International Automobile Manufa cturers, Inc. (AIAM))

Agency Response: ARB agrees that this comment addresses issues out side the scope of this rulemaking. No response needed.

B. COMMENTS SUBMITTED DURING THE 15-DAY COMMENT PER IOD

Comments Addressing Proposed 15-day Changes

25. Comment : For the 2011 and later model years, a manufactur er that selects compliance Option 2 must notify the Executive Offic er of that selection, in writing, prior to the start of the applicable model year or must comply with11 Option1. Since the 2011 model year officially begi ns on January 2, 2010, and it is unlikely that these amendments will be effect ive before that date, AIAM recommends that the 2011 model year be moved to sub section a. along with 2009 and 2010, and that subsection b. be revised to apply to 2012 and later model years. (Michael J. Stanton, President and CE O, Association of International Automobile Manufacturers, Inc. (AIAM) )

Agency Response: This comment addresses issues outside the scope o f this rulemaking. However, it should be noted that since these amendments will not become effective prior to January 2, 2010, a ma nufacturer will not be required to notify the Executive Officer of its sel ection of Option 2 prior to the start of the 2011 model year. Rather, ARB will enf orce the aforementioned reporting requirement once these amendments have be en approved by California’s Secretary of State.

26. Comment : The State of Pennsylvania opted into the Califor nia LEV II program but expressly stated its intent not to enfo rce the fleetwide greenhouse gas emissions standards in Pennsylvania. While it is unnecessary to amend this section to specifically l ist each Section 177 state,

auto manufacturers do need direction from CARB on w hich states CARB expects to be included in the annual reports. AIAM recommends that CARB address this matter in a subsequent Manufacturer Ad visory Circular (MAC), which can be updated from year-to-year, as needed, to reflect which states should be covered by the annual report. (Michael J . Stanton, President and CEO, Association of International Automobile Manufa cturers, Inc. (AIAM))

Agency Response: See responses to comments 2, 3, and 4, above. AR B agrees that it is unnecessary to amend this section to specifically list each Section 177 state, as those state requirements exis t independently as a

matter of law. We will consider the commenter’s su ggestion for a MAC or similar guidance document.

27. Comment : In Subsection 1961.1 (a)(1)(B)1.a., the proposed new language for Option B reads: Option B: For a manufacturer th at elects to demonstrate compliance with the greenhouse gas requirements usi ng CAFE data, “GHG vehicle test group” shall mean “subconfiguration” i n this subsection 1961(a)(1)(B)1.a.

While AIAM agrees with this change generally, one c larification is needed. While CAFE data is usually available at the subconf iguration level (especially for higher sales volume subconfigurations), CAFE da ta is not always available for lower sales volume subconfigurations. Therefore, the regulation should provide for these cases by adding the follow ing language to the end of this provision: “. . . except where CAFE subconfigu ration data do not exist manufacturers may substitute available CAFE configu ration data.” (Michael J. Stanton, President and CEO, Association of Inter national Automobile Manufacturers, Inc. (AIAM))

Agency Response: In cases where EPA allows a manufacturer to submi t configuration data rather than subconfiguration dat a to demonstrate compliance with CAFE requirements, ARB will also ac cept configuration data to demonstrate compliance with California’s greenho use gas regulations.12 28. Comment : CARB should revise the regulations to clarify th at actual sales data may be used to calculate fleet averages as lon g as the approach is consistent with respect to all states. (Frank J. D iertl, General Manager, Engineering Services and Anthony P. La Spada, Assoc iate General Counsel and Assistant Secretary, Mercedes-Benz USA, LLC)

Agency Response: ARB modified the regulation to specify that a manufacturer calculate its greenhouse gas fleet ave rage based on the number of vehicles produced and delivered for sale in California. This proposed language is consistent with the requiremen t for determining compliance with a manufacturer’s non-methane organi c gas fleet average requirement and with determining compliance with ze ro-emission vehicle requirements. Therefore, in those cases where actu al sales data is used by a manufacturer to demonstrate compliance with these o ther two programs, ARB will also accept sales data to demonstrate comp liance with the greenhouse gas regulations.

29. Comment : The proposed requirement to do calculations and report data at the “subconfiguration” level would create unnecessa ry and costly burdens. Ford suggests modifying the proposed regulations to replace the term “subconfiguration” with the term “model type,” a ch ange that would reduce the burden on manufacturers while still providing CARB with all of the data it needs for purposes of administering and enforcing i ts GHG regulations. (Cynthia Williams for Robert D. Brown, Director, Ve hicle Environmental Engineering, Environmental & Safety Engineering, Fo rd Motor Company)

Agency Response: ARB is requiring that a manufacturer report data from the CAFE program using the CAFE term “subconfiguration, ” because it is the smallest vehicle group for which CAFE data is avail able. EPA is also proposing to require that a manufacturer report sub configuration data to demonstrate compliance under the proposed National greenhouse gas program for passenger vehicles, which will take eff ect in the 2012 model year. Data at the subconfiguration level is needed in order to verify a manufacturer’s fleet average greenhouse gas emissio n calculations for California, since “Model Type Group” data has alrea dy been sales weighted several times based on national sales and may not r eflect the mix of vehicles

in California.

General Comment

30. Comment: I do not support any more restrictions on our veh icles. You are wasting tax dollars and it needs to stop. I do not support this. Let the people decide what they want to drive by what they choose to purchase. Get government out of our lives! (Nicole Hickey)

Agency Response: This comment addresses issues outside the scope o f this rulemaking. No response needed.13