## Appendix I

Costs and Cost MethodologyI-1 Cost Methodology

This Appendix describes the methodology used to det ermine the annual costs and the total cost of the proposed amendments for t he Truck and Bus Regulation and the Drayage Truck regulation. The costs for th e Tractor-Trailer GHG regulation are not significant.

A. Truck and Bus Regulation Cost Methodology

Staff used the same methodology in estimating the c ost saving of the amended Truck and Bus regulation as was used in estimating the costs attributable to the existing regulation. Staff updated some of the ass umptions used in the model and modified the model to reflect the predicted eff ects of the recession consistent with the updated emissions inventory. Details on t he methodology and the inner working of the cost compliance model and results ar e available in Chapter XIII and Appendix J of October 2008 Technical Support Do cument for In-Use OnRoad Diesel Vehicles (ARB, 2008).

1. Overview

To estimate the costs associated with the amended S tatewide Truck and Bus Regulation, staff of the Air Resources Board (ARB) developed a compliance model to simulate normal vehicle replacement practi ces for individual fleets and the costs to that of projected replacement and retr ofit strategies a fleet would use to comply with regulation. The compliance model wa s used to estimate the capital expenditures of normal vehicle replacement compared to the capital expenditures required to comply with the regulation for individual company. Staff also considered the costs of retrofitting a vehicle compared to replacing it in estimating what types of fleet may accelerate vehic le replacements to reduce the number of retrofits otherwise required. The result s for each fleet included in the cost compliance model were then scaled up to reflec t the estimated costs for the statewide truck population.

2. Fleet Cost Compliance Model Modification

To determine the costs of the regulation with propo sed amendments, staff made several modifications to the cost compliance model. Staff divided the simulation into three sub-modules: small fleet, lighter trucks , and heavier trucks. Major changes applied to all three modules with minor cha nges in each module that matched the fleet’s requirements as in the proposed amendments. Staff added a method to account for the recession, converted the costs to 2010 dollars and removed the fleet averaging option that is no longe r applicable and modified the percentage limit option in the existing regulation to reflect the proposed new optional phase-in provision.I-2 a) Modeling Effects of the Recession

Due to the recession, many fleets have slowed norma l vehicle replacements or stopped replacing vehicles. As a result, the avera ge fleet age for a given fleet in

2009 is older than what it would be under “normal” conditions. The compliance model uses the fleet age to determine normal replac ement practices. The simulation needed to slow down predicted vehicle pu rchases for the near future and to accelerate purchase later as the economy rec overs and estimated vehicle sales increase due to pent up demand. To compensat e for this faster replacement rate, staff added routines to account f or this catch up period and then return to normal after the period. In all, th e modifications include defer, catch up and average fleet age change with respect to each period. With the regulation, staff also assumed fleets would begin m aking normal replacements with 2007 model year engines and newer starting in 2012 and that most fleetw would replace their trucks with those having 2010 m odel year engines and newer starting 2015.

b) Dollar Conversion and Loss In Value

The cost compliance model developed in the initial rule making was based on 2008 dollars. Staff updated the model to convert t he output to 2010 dollars using an interest rate of 5 percent. The formula for com puting the net present value (NPV) is NPV = Cost / (1+r)^(CY-2010), where r = th e annual interest rate and CY = the calendar year for the cost.

The loss in value due to the regulation has been ze roed out for all fleets. The rational was that since the proposed amendments do not require replacement for any vehicles younger than 20 years old, and 20 year s or older vehicles have practically no value, any replacement done would be based on fleet’s business needs rather than the regulation with proposed amen dments.

c) Addition and Removal of Options to Align with th e Proposed

Amendments

The proposed amendments contain two new BACT schedu les: one for heavier trucks and one for lighter trucks. Subroutines wer e created that matched the new BACT schedules and implemented in each respecti ve modules. The PM portion of the existing routines for the lighter tr ucks was removed since there is no PM requirement for the lighter trucks under the amendments. The fleet averaging and the NOx percentage limit options were no longer applicable and therefore removed or made inactive. The PM percent age limit option with the percentage matching the amendments remained for the heavier trucks and small fleets. The NOx portion of the BACT schedule routi ne applicable to heavier trucks was added to small fleet module, allowing sm all fleet an alternative compliance pathway to lower the costs. Staff also added codes to reflect that in compliance years where fleets would have to replace vehicles more than normal, fleets would replace vehicles with vehicle age olde r than normal to reduce costs.I-3 3. Fleet Data

Staff used actual fleet data to match the revised e missions inventory model year distribution for various inventory categories. Thi s was done to allow the compliance model results to be compared directly wi th the emissions inventory. The compliance model predictions of fleet actions w as compared with the inventory analysis for consistency and assured that statewide cost estimates would be as comparable as possible. The fleet make up was primarily from a collection of fleets chosen from ARB fleet survey c onducted over the last few years. See Appendix J of October 2008 Technical Su pport Document and the survey form at the end of the appendix for summary information obtained by the survey regarding reported counts by vehicle body ty pe and by a consistent base year (ARB, 2008). From the survey pool, staff sele cted fleets that best match the statewide fleet types, weight classes and age distr ibutions compared to the emissions inventory. Where certain engine model ye ar data was missing from the fleets selected, staff supplemented the actual fleet information with created fleets to match the age distributions and vehicle c lass. Figure 1 and Figure 2 illustrate the matching patterns between the matchi ng fleet data and the emissions inventory data.

Figure 1 Fleet Pattern Matching for 1 to 20 Fleet Size

0 10 20 30 40 50 60 70 80

-1 4 9 14 19 24 3 8 13 18 23 2 7 12 17 22 1 6 11 16 21

AgeTrucks Goal

Attempt

T7Tractor

T7Single T7CAIRP T6I-4 Figure 2 Fleet Pattern Matching for Fleet Size Ove r 20

0 10 20 30 40 50 60 70 80 90 100

-1 4 9 14 19 24 3 8 13 18 23 2 7 12 17 22 1 6 11 16 21

AgeTrucks Goal

Attempt

T7Tractor T7Single T7CAIRP T6

4. Capital Cost Inputs and Ongoing Costs for Modeli ng

a) VDECS Cost

Staff developed VDECS costs in conjunction with int ernal and external sources for the 2008 Staff Report. The costs for active and passive VDECS are listed in

Table 1. These costs include taxes and installatio n; however annual

maintenance would be an additional cost calculated separately. The costs for VDECS on 1994 model year and newer engines were est imated to include a mix of passive and active systems and that higher costs VDECS would be used on pre-1994 model year engines.

Table 1: Installed Retrofit PM Filter Costs

Engine Model Year PM Filter

1994 to 2006 15,000 Heavy Heavy-Duty $19,000

b) Vehicle Prices and Replacement Cost Curves

For the current regulation staff developed price cu rves for over 50 vehicle body types by using for-sale vehicle price data download ed from Truckpaper.com and other online sources. Staff example price curves are shown in Figure 3.I-5 Figure 3 Example Vehicle Prices (in thousands of d ollars)

Conventional Truck Without Sleeper

0 20 40 60 80 100 120

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Vehicle AgePrice (thousands of $)

GVRW > 33,000 lbs

Flatbed Truck Cab & Chassis Truck

0 10 20 30 40 50 60

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Vehicle AgePrice (thousands of $)

GVRW < 33,001 lbs

Dry Van Staff reviewed vehicle prices in August 2010 to con firm that the previously developed price curves from 2008 remained accurate given the shifting vehicle market and recession. Existing price curves by veh icle age was found to be within the range of current data and subsequently n o vehicle price modifications

were made.

5. Cost by Fleet Age and Fleet Size

The cost compliance model was run for each fleet to determine the costs above normal replacements. The costs for each fleet are determined by comparing the modeled costs for normal vehicle replacement with t hat required by the regulation with proposed amendments. The increased cost is then divided by the number of vehicles to determine the average increas ed cost per vehicle in each fleet. The average cost per vehicle in the fleet w as then plotted by fleet age to determine the average cost. The average increased costs by fleet age and fleet size groups reflect that individual companies with newer fleets will have no increased costs while companies with older fleets w ill have higher costs compared to normal vehicle replacements. Older fle ets are estimated to either normally buy used lower cost vehicles or to buy new vehicles but to keep them longer than newer fleets. Therefore, the average i ncreased cost per vehicle associated with the proposed amendments varies by t he average age of the fleet. The analysis was done for large fleets with 4 or more trucks with a GVWR more than 26,000 pounds meeting the full requiremen ts as shown in Figure 4. The results for the small fleet provisions trucks w ith a GVWR more than 26,000 pounds is shown in Figure 5. Figure 6 shows the re sults of the proposed requirements for trucks with a GVWR 26,000 or less.I-6

Figure 4 Average Increased Cost by Fleet Age for La rge Fleets

Average Increased Cost for HHD in Fleets with 4 or More Vehicles

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Average Fleet Age (Years)Average Increased Cost per Truck ($)

Figure 5 Average Increased Cost by Fleet Age for Sm all Fleets

Average Increased Cost for HHD in Fleets with 1 to 3 Vehicles

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Average Fleet Age (Years)Average Increased Cost per Truck ($)I-7

Figure 6 Average Increased Cost For Fleets with Tru cks Less Than 26,001 GVWR

Average Increased Cost for Vehicles with GVWR Less Than 26,000

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000

0 2 4 6 8 10 12 14 16

Average Fleet Age (Years)Average Increased Cost per Truck ($)

6. Scaling to Statewide Results

The cost model output provides the average increase d cost per vehicle by fleet age and fleet size for individual company fleets. The statewide total cost was then calculated for each fleet age group by multipl ying the increased average cost by fleet age with the fleet age distributions previously used from DMV and IRP data. The average costs by inventory group was scaled to match the current inventory population for each of the inventory cate gories were fleet age

distribution data was available. Table 2 shows sam ple results for the heavy heavy-duty vehicles subject to the heavy duty fleet requirements for fleets with four or more vehicles and would not qualify for any of the special provisions.

Table 2 Instate Heavy Heavy-Duty Vehicles by Fleet Age for Fleets with 4 or

More Vehicles (excluding special provisions)

Fleet Age # Vehicles (Per

Updated Emissions Inventory for 2008) % (per 2006 DMV Data) $/Vehicle (Per

Model Output) Statewide $

<=3 5,775 16.7% $- $-

>3 & <=6 12,083 35.0% $2,150 $25,972,902

>6 & <=10 12,515 36.2% $6,454 $80,770,463

>10 & <=13 2,604 7.5% $10,759 $28,016,977

>13 & <=16 592 1.7% $14,449 $8,551,982I-8

>16 & <=20 406 1.2% $18,138 $7,363,585

>20 360 1.0% $20,598 $7,416,901

Unknown 212 0.6% $10,364 $2,201,281

34,547 100.0% $160,294,092

Overall Average $/Vehicle $1,263

In the above example, the highest increased costs d ue to the regulation with amendments are found in the >20 fleet age category with an average $/vehicle of $20,598 and the least cost increases due to the reg ulation are found in the three or fewer fleet age category with no average increas ed costs. Similar analyses have been done for all the remaining population cat egories including: California IRP fleets with four or more vehicles, neighboring out of state fleets with four or more vehicles, instate small fleets with heavy duty vehicles, and instate fleets with vehicles less than 26,000 pounds. The results of the analyses as well as the cost model are posted at ARB web site (ARB, 2010).

7. School buses

Adjustments to the original cost estimates, publish ed in Appendix K of the 2008 staff report for the rule, have been calculated to reflect proposed changes to the school bus portion of the regulation which aligning the requirements with the broader truck and bus regulation. Staff estimates that the costs to school districts will be reduced by about 12 percent, or o ver $8 million, over the life of the regulation. Approximately $200 million in Lowe r-Emission School Bus Program funds have been provided to assist public s chool districts with this effort. In addition, many local air districts have also provided local and federal

funds.

8. Annual Costs

a) Ongoing Maintenance and Regeneration Costs

In addition to capital costs, there are various ann ual operational and maintenance costs. Operational and maintenance cos ts associated with verified DECS include annual filter cleaning expenses, fuel economy losses and costs associated with regeneration of active systems. Th e methodology and assumptions for calculating the annual costs remain the same, and is available in Appendix J of October 2008 Technical Support Docume nt for In-Use On-Road Diesel Vehicles (ARB, 2010).

In 2012 through 2016, the proposed amendments would require the installation of diesel particulate matter filters (DPFs) on exis ting vehicles. After 2016 all

vehicles would have PM filters and the total number decreases as vehicles are retired. By 2021, aftermarket PM retrofits will be phased out. The estimated

maximum number of retrofits and OEM DPFs in the ins tate vehicles is shown in Table 3 (ARB, 2010). This estimate does not includ e the effects of the phase-in option or other credits in the regulation.I-9

Table 3 Total Number of Aftermarket and OEM DPFs S tatewide for In-State

Vehicles Resulting from Proposed Amendments

Calendar year Number of Aftermarket DPFs Increased Number of Engines with OEM equipped DPF
2012 14,154 0
2013 35,424 0
2014 101,069 0
2015 105,190 16,801
2016 100,413 23,631
2017 93,030 29,241
2018 85,059 24,862
2019 80,048 20,655
2020 59,647 32,661
2021 30,237 50,720

2022 0 68,599

2023 0 56,993

2024 0 47,808

2025 0 40,585

For neighboring out of state fleets, the maximum nu mber of estimated retrofits would be about 12,000. For non-neighboring out of state vehicle, generally long haul fleets that have the newest trucks, staff do n ot expect there will be a significant number of retrofits because almost all of these vehicles will already be equipped with PM filters. Staff believes that most out of state fleets would send their newer vehicles to California and keep the sma ll percentage of older trucks

outside of California. Trucks that come into Calif ornia infrequently would also be able to utilize the exemption for vehicles operatin g less than 1,000 miles in the state or could utilize the three day pass to avoid retrofit costs.

Staff used the same maintenance costs for the OEM D PF and the aftermarket VDECS as previously used. The annual DPF maintenan ce costs resulting from the proposed amendments from 2012 to 2025 was estim ated to be approximately $266 million, as shown in Table 4. The maintenance cost due to the current regulation is $516 millions in 2008 dollars (ARB, 2 008), which is equivalent to $569 million in 2010 dollars. The reduction result s in a savings of $283 million (ARB, 2010).

Table 4 Cumulative Increased Retrofit Maintenance Costs

Per Filter Costs Cumulative Costs (millions $) OEM equipped DPFs $ 64 Aftermarket DPFs $ 222 TOTAL $ 286I-10

For the regeneration cost, staff assumes that consi derably fewer vehicles would require a filter that needs active regeneration. T his is in part because the proposed amendments only require VDECS on 1998 and newer vehicles that tend to be higher mileage vehicles than lighter tru cks, and that with the added flexibility more fleets would be able to use lower cost retrofits first and would likely replace older vehicles in later years. The estimated cost of active regeneration would be much lower than the current r egulation.

Assuming that a small percentage of 1998 model year and newer engines will require an active VDECS for a variety of operationa l reasons, and assuming the changes in the number of regeneration and fuel usag e during regeneration are negligible, staff estimates the total cost to the s tatewide fleet is $102.1 million at a diesel fuel price of $3.69 per gallon. Table 5 s hows the statewide regeneration costs for various fuel prices. The regeneration co st as a result of the current regulation is $181.7 million in 2008 dollars, which is equivalent to $200.3 million in 2010 dollars (ARB, 2008). The amendments to the regulation would result in a savings of $98 million (ARB, 2010).

Table 5 Regeneration Costs for Various Fuel Prices

Fuel Prices/Gallon Regeneration Costs (millions $) $3.00 $110.3 $3.69 $110.7 $4.00 $110.9
$5.00 $111.4

The regeneration cost calculation is highly sensiti ve to the active VDECS population assumed and to vehicle down time but is insensitive to fuel price. Staff assumes that the majority of regenerations will be planned to avoid vehicle downtime during the workday.

b) Reporting Costs

Staff anticipates that substantially fewer fleets w ill be required to report with the proposed amendments, and reporting cost will be low er for most fleets. Vehicles with GVWR 26,000 pounds or less will no longer need to report. These vehicles account for about 150,000 in-state vehicles. Using the same assumptions as in 2008 Technical Support Documents to calculate the r eporting cost, the initial reporting costs would be reduced by 40 percent and more fleets would be expected to meet the BACT schedule requirements and would not need to report. The initial reporting for the current regulation is approximately $16.5 million in 2008 dollars (ARB, 2008). That is an equivalent of $18 million in 2010 dollars. The estimated savings on the initial reporting cost s would be approximately $13 million (ARB, 2010).I-11

The reporting period over the life of the regulatio n has also been reduced by several years, one year defer at the beginning for all fleets, three years shorter for small fleets and seven years shorter for large fleets. The total annual reporting cost for the current regulation is $60 mi llion in 2008 dollars, which is equivalent to $67 million in 2010 dollar (ARB, 2008 ). Adjusting the costs by the reporting period and reducing it by the equivalent percentages, the total annual reporting cost is approximately $10 million, which is a $57 million savings (ARB, 2010). Table 6 shows the costs and savings as the result of amendments.

Table 6 Reporting Costs and Savings for In-State F leets

Cost Reporting Cost

(million) Savings Accrues

by Amendments (million) Initial Reporting $5 $13 Annual Reporting $10 $57 Total $15 $70

9. Total Costs

The results of multiplying the number of vehicles f or each fleet type by the costs per vehicle are shown in Table 7 (ARB, 2010). This table also incorporates reporting costs for company fleets to comply with t he regulation with amendments including the initial reporting costs an d the total annual reporting

costs. It also includes the annual maintenance cos t of retrofits. Overall, staff estimates the cost of the regulation to be about $2 .2 billion.

Table 7 Total Statewide Compliance Costs

Fleet/Population Type Total Cost (Millions) # Vehicles

CA-IRP Vehicles for Fleets >3 Vehicles $160 34,547

NEIG-OOS Vehicles for Fleets >3 Vehicles $118 25,384

Instate HHD Vehicles for Fleets >3 Vehicles $69 54,375

Instate MHD Vehicles for Fleets >3 Vehicles $313 97,842

Instate HHD Vehicles for Fleets w/1-3 Vehicles $478 76,410

Instate MHD Vehicles for Small Fleets with 1-3Vehic les $487 92,307

Far State Vehicles for All Fleets $149 344,294

School Buses $61 14,629 Reporting Costs $15 n/a Operating Costs $397 n/a

Grand Total $2,247 734,024

The total compliance cost for the current regulatio n is approximately $5.5 billion (ARB, 2008). Comparing to the costs incurred by th e amendments, the amendments would result in about $3.3 billion in sa vings.I-12 10. Cost Sensitivities

The total compliance cost calculation is sensitive to several factors: how many fleets utilize credits, growth and decline of vehic le population and age groups, fleets buying new replacement vehicles verses the n umber buying used replacements, the increased cost of new 2010 truck, and how older out of state fleets might change their business practice to conf orm with the regulation.

Credits would reduce the number of retrofits or OEM DPF in the population for a period of time and would improve fleets ability to make lower cost used vehicle replacements to comply. This, in turn, would affec t not only the capital cost but also the operating costs. The end result would be a lower overall compliance cost. The effect of the credits providing economic relief for fleet size reduction is highly dependent on the rate of economic recovery.

Changes in population for instate vehicles also cou ld have significant impact on cost estimates. First, vehicles that are operated fewer than 1000 miles per year, do not have any cleanup requirements. Staff was co nservative in not reducing costs due to low use vehicles. Second, the propose d amendments would provide credit until 2016 if fleets have fewer vehi cles operating in the compliance year than they had in the peak year of 2006. Fleet s could have substantially lower compliance costs if they retire additional ve hicles. The credit encourages

fleets to decrease the number of trucks in the flee t and reduces actions required on other trucks at the same time. If the economy c ontinues to recovers slower than projected and the population declines more the costs would be lower. On the other hand, if the economy recovers faster then fewer fleets would be able to take advantage of the credits and the costs would b e higher.

The population of affected out of state vehicles is more variable than for instate fleets. Long haul fleets generally have the newest trucks, and most will already comply with the regulation because of normal 3 to 7 year replacement cycles. However, the number of different out of state truck s operating in California is

estimated to be about one half million. Staff beli eves that most out of state fleets

would send their newer vehicles to California and k eep the small percentage of

older trucks outside of California. Staff was cons ervative in assuming costs attributable to the regulation for many of the out of state trucks because trucks that come into California infrequently would also b e able to utilize the exemption for vehicles operating less than 1,000 miles in the state or could utilize the three day pass to be exempt from the clean-up requirement s.

Staff considered the impact of using different vehi cle replacement costs. The costs attributable to the regulation are subtracted from the costs from normal replacements. Fleets that typically buy used truck s are expected to be older fleets and have lower capital investments than flee ts that buy newer trucks on the same schedule. Cost estimates are dependent on whe ther fleets are expected to buy newer or older vehicles as a result of the regu lation. Because per vehicle cost is calculated based on the replacement vehicle costs, buying new or nearI-13

new replacement vehicles would result in an increas e in per vehicle cost, and its effect ripples through the cost calculation. If fl eets were to rely on buying older used vehicles than normal to comply with the regula tion, the estimated costs could be decreased substantially.

Staff evaluated the sensitivity to the estimated pr ice premium for new trucks with 2010 model year or newer heavy duty engine and foun d that the results do not vary significantly. First, no truck that is less th an 20 years or 97 percent of all trucks would be required to be replaced early until 2020. Newer fleets are expected to buy new replacement vehicles, but also normally replace their vehicles faster than the regulation would require. Both the baseline cost estimates and the with rule costs would change by a n equal amount. Older fleets have higher costs attributable to the regulation bu t are not modeled as buying new replacement trucks. These fleets typically buy used trucks and would be expected to continue to do so with the regulation i n place. Used truck prices were not assumed to be higher because of higher ini tial costs. The change in the price premium for new engines attributable to the r egulation have minimal impact

on the cost estimates.

11. Cost Effectiveness of the Proposed Amendments

The cost-effectiveness for the proposed amendments is determined by dividing the total capital costs plus the annual costs by th e total pounds of diesel PM and NOx reduced during the years 2012 to 2025. The expe cted cost effectiveness of the amended regulation is $1.70/lb for NOx and $44/ lb for PM. All costs are in $2010. Staff used the inventory estimated number o f PM filters adjusted the costs attributable to PM reductions down by 15 perc ent to account for the effects of credits and flexibility options because the tota l cost calculation had considered BACT schedule and phase-in compliance options and t he inventory cost modeling, on the other hand, had not and therefore was conservative on PM filter estimate. The remaining total cost of the regulati on was attributed to NOx reductions. Most of the replacement costs are attr ibuted to NOx reductions (ARB, 2010). Table 8 shows the summary of the cos t effectiveness ratio estimated for the amended Truck and Bus regulation.

Table 8 Cost Effectiveness Ratio Comparison

Emission

Reductions Proposed

Amendments Current

Regulation NOx ($/lb) $1.70 $1.76 PM ($/lb) $44.20 $46.00

B. Truck and Bus Regulation Costs Analysis for Indi vidual Fleets

Although the overall economy for trucks is down abo ut twenty percent on average, some fleets and sectors are more affected than others. Staff collected survey data from fleets from various industries to better understand their ability toI-14

comply with the existing regulation and the propose d amendments. The Economic Analysis Survey Form can be found in at th e end of this appendix.

1. Financial Analysis of Survey Respondents

The recession has imposed significant downward pres sure on most fleets, and fleets have downsized their businesses significantl y. Many fleets have sold assets, cut back debt, reduced employment, and impr oved productivity. This adjustment still continues for some fleets and is e xpected to continue for some time because the recovery that followed the recessi on has been slow and it is

uncertain when it will accelerate to a more normal growth path. The amended regulation would decrease costs substantially for m ost fleets, and the additional

economic relief in the form of credits for fleets t hat have downsized would further reduce capital investments required until 2016. Th e credit provision can delay some or all of the compliance costs to later years giving fleets the ability to defer costs and to take advantage of lower used truck pri ces in later years. To further analyze the savings expected from the proposed amen dments, staff evaluated the impact of the amendments on individual fleets.

a) Moving Company

The following company is an actual moving fleet wit h 14 trucks, seven of which are heavier trucks (more than 26,000 pounds GVWR) a nd the others are lighter trucks (less than 26,001 pounds GVWR). The engine model years for the trucks range from 1996 to 2007. The fleet has downsized 3 0 percent since 2006 and typically will replace one truck per year at a cost of about $94,000 after trade-in. Staff assumed the annual revenue of this company fo r 2010 would remain the same as in 2009. From 2006 to 2010 the average ann ual revenue was about $4.9 million.

The existing regulation would require the fleet to install six retrofit PM filters and to replace eight trucks one to two years earlier th an normal. The fleet’s total costs with the existing regulation above normal rep lacement costs from 2010 to 2025 would be $160,000 (2010 dollars).

With the proposed amendments the fleet would need t o install two retrofit PM filters and replace two trucks one year early. Fig ure -7 shows the annual expenditures the company would make in current doll ars under the proposed amendments compared to the existing regulation. The average normal replacement costs are shown by the dashed line. Wit h the proposed amendments, the fleet’s total compliance costs woul d be reduced to about $74,000 above normal replacement costs, or 55 perce nt lower than with the current regulation. More importantly the proposed amendment would impose no

additional costs other than business as usual for t his fleet until 2014, in part, because of the credits for downsizing. By January 1, 2014, the fleet would need to install one PM filter on an existing truck. The cost to comply would representI-15

about 0.15 percent of annual revenue. The spreadshe et analysis used for this example is available at xxx

Figure -7: Moving Company Annual Rule Costs vs. Nor mal Replacement

Costs

$0 $50,000 $100,000 $150,000 $200,000 $250,0002010201120122013201420152016201720182019202020212022202320242025 Proposed

Existing Average Normal
Replacment Costs

b) Concrete Company

Staff also evaluated the impact of the proposed ame ndments for an actual concrete company. The concrete company has 18 truc ks with engine model years ranging from 1994 to 2007, all of which are h eavier trucks with a GVWR greater than 26,000 pounds. The company has annual revenues above $3,000,000. The fleet has the same number of truck s as it did in 2006, but it has not been operating six of the trucks. Therefore, t he fleet could utilize a 33 percent economic relief credit (six out of 18 tr ucks). The fleet typically replaces one truck per year at a cost of about $103 ,000 per year after trade-in. Staff assumed the annual revenue of this company fo r 2010 would remain the same as in 2009. From 2006 to 2010 the average ann ual revenue was about $6.5 million.

The existing regulation would require the fleet to install eight retrofit PM filters and to replace 14 trucks one to six years earlier t han normal. With the existing regulation, the fleet’s cumulative compliance costs from 2010 to 2025 are expected to be $440,000 (2010 dollars) above normal replacement costs.

With the proposed amendments, the fleet would be ex pected to install seven retrofit PM filters and to replace nine trucks earl y. Figure -8 shows the annual expenditures the company would make in current doll ars under the proposed amendments compared to the existing regulation. One truck is replaced one yearI-16

early in 2016 because the fleet would not be expect ed to install a PM filter on a truck that would normally be replaced in one year. Most of the early replacements occur from 2021 to 2023. With the pro posed amendments, the fleet’s cumulative compliance costs from 2010 to 20 25 would be reduced to about $230,000 above normal replacement costs or ab out 50 percent lower than with the current regulation. More importantly the amended regulation would impose no costs for this fleet until 2014 when thre e PM filters would be required compared to substantially higher costs under the ex isting regulation. In 2016, one more truck than normal was replaced 2 years ear ly and reflects that a fleet would not be likely to install a retrofit PM filter on a truck that was about to be replaced. The spreadsheet analysis used for this ex ample is available at xxx

Figure -8: Concrete Company Rule vs Normal Replacem ent Costs

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,0002010201120122013201420152016201720182019202020212022202320242025 Proposed

Existing Average Normal
Replacment Costs

c) Transportation Company

The following company is an actual freight transpor tation fleet, primarily a truckload carrier, with 33 truck tractors (GVWR gre ater than 26,000 pounds). The engine model years range from 1990 to 2009. St aff assumed the annual revenue of this company for 2010 would remain the s ame as in 2009. From 2006 to 2010 the average annual revenue was about $ 5.5 million. The fleet did not provide information about the number of trucks in 2006; therefore, staff did

not assume the fleet size declined and no economic relief credits for downsizing would apply in this example. The fleet typically r eplaces two trucks per year with used trucks that are three years old at a cost of l ess than $45,000 per truck after

trade-in.

The existing regulation would require the fleet to install 14 retrofit PM filters and to replace 27 trucks one to six years earlier than normal. The cost increase inI-17

2010 reflects that the fleet would purchase a newer truck than normal that is originally equipped with a PM filter. The fleet wo uld be expected to replace some trucks early in planning to meet future NOx reducti on requirements while reducing the number of retrofit PM filters. The fl eet’s total costs to comply with the existing regulation from 2010 to 2025 would be $410,000 (2010 dollars) above normal replacement costs with the highest cap ital investments required

2012 to 2014.

Under the proposed amendments the fleet would be ex pected install 16 retrofit PM filters and to change the order in which the old er trucks are replaced. Figure 9 shows the annual expenditures the company would m ake in current dollars with the proposed amendments compared to the existing re gulation. The fleet would continue to replace two trucks per year until 2016 when the fleet would need to replace four trucks. In 2022 and 2023 the fleet wo uld need to replace 11 trucks early. With the proposed amendments, the fleet’s t otal compliance costs would be reduced to about $185,000 above normal replaceme nt costs, or 55 percent lower than with the current regulation. The capita l investments required from 2010 to 2015 would be about 50 percent lower. The cost increase in 2010 reflects that the fleet has begun to purchase newer trucks than normal that are originally equipped with a PM filter. The average normal replacement costs are shown by the dashed line. The cost to comply with the proposed amendments would represent about 0.3 percent of annual revenue . The spreadsheet analysis used for this example is available at xxx

Figure 9: Freight Company Annual Rule Costs vs. Nor mal Replacement

Costs

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,00020102011201220132014201520162017201820192020202120222023 Proposed

Existing Average Normal
Replacment CostsI-18 2. Financial Feasibility for Individual Fleets

Staff is continuing to evaluate the potential impac ts on actual individual fleets and industries subject to the regulation. Towards this end, staff plans to present additional economic information regarding cash flow analyses, access to capital, and fleets’ “ability to pay” to comply with the rev ised regulation as part of the December 2010 Board hearing.

C. Cost Savings for Drayage Truck Amendments

Trucks serving the Ports of Long Beach and the Port of Los Angeles already have 2007 model year engines or newer; therefore, t he proposed amendments would not result in any changes except for trucks s erving other ports and intermodal rail yards.

As shown in the following table, by 2014, 23 percen t of the drayage trucks outside the South Coast are expected to have 2007 a nd newer engines. 43 percent are expected to have 2004 to 2006 model yea r engines and 35 percent are expected to have 1994 to 2003 model year engine s already retrofit with PM

filters.

Trucks Serving the Port of Oakland and other ports outside LA 2014

CY Population 2007Plus 2004to2006 Pre2004

2014 4224 960 1801 1463

23% 43% 35%

The 23% with 2007 engines would have no costs with the existing rule and would have no savings with the amendments. Fleets that w ould be expected to have 2004 to 2006 model year engines would need to upgra de to a 2007 model year or newer truck to comply with the existing drayage regulation by 2014. Staff estimates that it would cost $35,000 to purchase a 2008 model year truck in 2013 instesd of $20,000 for a 2004 to 2006 model year tr uck. The net cost would be about $15,000 which is the roughly the same cost as installing a PM filter on an existing truck. Therefore, these fleets would not experience a significant change in cost with the proposed amendments. Fleets with 1994 to 2003 model year engines represent 35% of the trucks. These trucks have already been retrofit to comply with the regulation and would need to be upg raded to a 2007 model year engine by 2014 if the regulation were not amended. The cost to upgrade to a 2007 model year engine would be about $35,000 minus the trade-in value of the older truck. The trade-in value would likely range from $5000 to $20,000 depending on the condition of the truck. If the av erage trade-in value was $10,000 the average cost would be $25,000 per truck . The proposed amendments would eliminate the requirement to upgra de to the 2007 engine; therefore, the average cost savings would be 1,463* 25,000=$36 million.

By 2014, the existing Truck and Bus Regulation alre ady requires all trucks to have PM filters and nearly all trucks to have at le ast a 2004 model year engine orI-19

newer. Fleets with 4 or more trucks can comply w ith 50 percent 2010 model year engines and the remainder could be any model y ear with PM filters. Newer trucks are able to comply longer; therefore, there is an incentive for fleets to upgrade to newer trucks. Therefore, the inclusion of Class 7 tractors serving the ports and rail yards would result in no increased c osts for fleets with 2004 or newer engines.

With the proposed amendments to the truck and bus r egulation, single truck owners with pre-2004 engines could comply with the amended regulation by installing a PM filter and would no longer have to upgrade to a truck with a 2004 model year engine and equip it with a PM filter. T herefore, if the truck costs are similar to the example above, the truck owner would experience a cost saving of $20,000-$10,000=10,000 for avoiding the truck repla cement. The PM filter cost would be unchanged. Thus, the minimum net cost sav ings for a single truck owner would be $10,000 per truck.

Reporting cost saving from the Drayage Truck regula tion will be about $13

million. Business owners as well as motor carriers will see a cost savings starting in 2017 when reporting, data collection, a nd truck monitoring requirements cease after the Drayage Truck Regulati on sunsets. The savings is estimated to be approximately $270 per year (2010 d ollars) for an independent drayage truck owner and approximately $4,700 per ye ar (2010 dollars) for a

licensed motor carrier. The total annual costs sav ings that results from an estimated 18,000 drayage truck owner-operators, and approximately 1,800

licensed motor carrier firms is estimated to be abo ut $13 million (18,000 x $270 + 1,800 x $4,700 total cost ~ $13,000,000).I-20

D. References

ARB, 2008. California Air Resources Board. Staff Re port: Initial Statement of Reasons (ISOR), Technical Support Document. October 2008. Available at: http://www.arb.ca.gov/regact/2008/truckbus08/truckb us08.htm

ARB, 2010. California Air Resources Board, Diesel A ctivities - AB1085 Compliance. October 2010. Available at: http://www.arb.ca.gov/dieseltruckI-21 ECONOMIC ANALYSIS SURVEY

Staff evaluated survey information from 72 fleets t hat participated in ARB’s Economic Analysis Survey below. The purpose of the survey was to gather fleet

data and financial information so staff could evalu ate the impact of the economy on individual business that need to comply with the Truck and Bus regulation. The survey responses included information on more t han 2,500 vehicles. These fleets ranged in size from one vehicle to over 700 vehicles and represented various business sectors such as construction, agri culture, transportation, and government.



### ECONOMIC ANALYSIS SURVEY



# □ Confidential

Company Information Company Name: Contact Person:

Company Address: Phone Number:

Email Address:

ARB Confidentiality The California Code of Regulation (CCR) Article 2, sections 91010 requires the state board to give notice to any person from whom it req uest information that the information proved may be released (1) to the public upon reque st, except trade secrets which are

not emission data or other information which is exe mpt from disclosure or the disclosure of which is prohibited by law, and (2) to the feder al Environmental Protection Agency, Please feel free to contact the following staff for questions concerning the survey

Virginia Humphreys Phone: (916) 322-8739

Email: vhumphre@arb.ca.gov

Please return the completed survey and any addition al information by [DATE] and email or mail to: Attention: Virginia Humphreys (MSCD)

California Air Resources Board

P.O. Box 2815 Sacramento, CA 95812I-22

which protects trade secrets as provided in Section 114(c) of the Clean Air Act and Amendments thereto and in federal regulations.

If your responses to any part of this survey contai n confidential information, please

check the box marked confidential located above on the right side of this page and refer

to Attachment C for more detailed information. In addition, please complete the confidentiality form provided in Attachment C.



# □ Confidential
Economic Analysis Survey Form

The purpose of this form is to gather fleet data an d financial information for staff to evaluate the impact of the economy on individual business that need to comply with the Truck and Bus Regulation. Any informatio n that is marked confidential

will remain confidential. Please complete and return this form to the Air Resources Board by [Date]

Company Name: _____________________________________

_____________

Contact Person: ___________________________________

_______________

Physical Address: _________________________________

_______________

Email Address: ____________________________________

_______________

1. Please provide us with your NAICS or SIC code:

2. Please provide audited financial statements, ba lance sheets and/or profit and loss statements for the past three to fi ve years (Attach information to this form and email to Virginia Hump hreys at vhumphre@arb.ca.gov or mail to PO box 2815, Sacrame nto, CA 95812 Attn: Virginia Humphreys).

3. Please tell us about your trucks and buses opera ted in the calendar years of 2006 to 2009. Specifically, what is the mo del year(s) and annual miles traveled for each vehicle during each calendar year? If the truck was idle for the entire year, please ente r zero for mileage.I-23 Annual Miles Traveled

Model

Year Vehicle Body Type (see Attachment A) Gross

Vehicle Weight Rating (GVRW) Year

Sold/

Retired 2006 2007 2008 2009

(See attachment B to include additional vehicles)



# □ Confidential

4. In addition to vehicles in your fleet that are s ubject to the Truck and Bus regulation, do you also have vehicles that are subj ect to the Off-Road regulation? If so, please provide us with your DOOR S identification number so we may access information regarding your off-road vehicles.

5. Have you or your company applied for and receive d any incentive funding for vehicle purchases, repowers, or retrofits in th e last three to five years? If yes, how much money have you received?

6. Do any of your trucks have a PM exhaust retrofit ? If so, how many?

7. Please tell us how you classify your business. F or example, are you a logging, construction, or moving company?

8. If your organization is a national organization, is there a California branch

or affiliate?

9. How many California fleet owners does your organ ization represent?

10. Can you provide us with individual fleets willi ng to provide data?I-24

11. Do you currently subscribe to our listserv? If not, would you like to be enrolled? (Note: listserv subscribers are notified immediately by email regarding updates on the regulation, outreach mater ial, and workshops. Please provide your email address if you wish to su bscribe)

Attachment A Vehicle Body Type

Vehicle Body Type Vehicle Body Type (Continued)
Beverage Tank Truck: LPG

Bucket/Boom Tank: Milk
Bus (Motor Coach) Tank: Vacuum
Bus - Shuttle Tank: Water-Single
Cab & Chassis single Tank: Water-Tandem

Cab & Chassis tandem Toter
Cab & Chassis (Cabover) Tow Truck: Roll-back-Single

Cab & Chassis Dual Frame Tow Truck: Roll-back-Tande m

Car Carrier Tow Truck: Wrecker
Chipper Tractor: Cabover w/o Sleeper-Single
Cotton Module Tractor: Cabover w/o Sleeper-Tandem

Crane Tractor: Cabover w/ Sleeper-Single
Drill Rig Tractor: Cabover w/ Sleeper-Tandem

Dump Tractor: Conv w/ Sleeper-Single
Dump: Transfer Tractor: Conv w/ Sleeper-Tandem
Expeditor/Hot Shot Tractor: Conv w/o Sleeper-Single

Farm/Grain Tractor: Conv w/o Sleeper-Tandem

Flatbed Van: Dry-Single
Flatbed-Dump Van: Dry-Tandem
Fuel/Lube-Single Van: Moving

Fuel/Lube-Tandem Van: Reefer
Garbage Trucks: Packer Winch
Garbage Trucks: Roll-Off Yard Spotter (Goat)
Grapple

Hooklift
Logging
Landscape
Mixer/Asphalt
Service/Utility

Stake
Sweeper

Tank Truck: General

Tank Truck: Asphalt

Tank Truck: Chemical
Tank Truck: Liquid fuelI-25 

# □ Confidential

Attachment B

On-Road Vehicles

Annual Miles Traveled Model

Year Vehicle Body Type Gross Vehicle Weight Rating (GVRW) Year

Sold/

Retired 2006 2007 2008 2009I-26 

# □ Confidential

Attachment C

CONFIDENTIAL INFORMATION SUBMITTAL FORM

If you wish to designate any information contained in your survey data as CONFIDENTIAL

INFORMATION , please provide the information requested below an d return it with your completed Survey form.

In accordance with Title 17, California Code of Reg ulations (CCR), Sections 91000 to 91022, and the California Public Records Act (Government Code Section 6250 et seq.), the information that a company provides to the Air Resources Board (ARB) m ay be released (1) to the public upon request, except trade secrets which are not emissio ns data or other information which is exempt from disclosure or the disclosure of which is prohi bited by law, and 2) to the Federal Environmental Protection Agency, which protects tra de secrets as provided in Section 114(c) of the Clean Air Act and amendments thereto (42 USC 7 401 et seq.) and in federal regulation, and 3) to other public agencies provided that those age ncies preserve the protections afforded information which is identified as a trade secret, or otherwise exempt from disclosure by law (Section 39660(e)).

Trade secrets, as defined in Government Code 6254.7 , are not public records and therefore will not be released to the public. However, the Califor nia Public Records Act states that air pollution emission data are always public records, even if th e data comes within the definition of trade secrets. Even so, the information used to calculate air pollution data is not "emission data," and will not be released to the public if it is a trade secret.

If any company believes that any of the information it may provide is a trade secret or otherwise exempt from disclosure under any provision of law, it must identify the confidential

information as such at the time of submission to th e ARB and must provide the name, address, and telephone number of the individual to be consulted . If the ARB receives a request for disclosure or seeks to disclose the dat a claimed to be confidential, the ARB may ask the company to provide documentation of its claim o f trade secret or exemption at a later date.

Data identified as confidential will not be disclos ed unless the ARB determines, in accordance with the above referenced regulations that the data do not qualify for a legal exemption from disclosure. The regulations establish substantial safeguards before any such disclosure.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - In accordance with the provisions of Title 17, Cali fornia Code of Regulations, Sections 91000 to 91022, and the California Public Records Act (Gover nment Code Sections 6250 et seq.)

Company Name: declares that only those portions specifically iden tified (by checking the upper right-hand corner confidentiality box on each form) and submitted in response to the California Air Resources Board's information request on the Survey are confi dential "trade secret" information, and requests that it be protected as such from public d isclosure. We have designated confidential information by checking (x) in the upper right-hand corner confidentiality box on the first page of the survey.

Printed Name: Title: Signature: Date: Mailing Address: City/State: Zip/Country: Telephone Number: E-mail Address:

Page C-1I-27 Division 3, Air Resources Board Chapter 1, Air Resources Board Subchapter 4. Disclosure of Public Records

Article 1. General

§91000. Scope and Purpose.

This subchapter shall apply to all requests to the state board under the California Public Records Act (Government Code Sections 6250 et seq.) for the disclosure of public records or for maintaining the confidentiality of data received by the state board. Written guidelines shall govern the internal review of such requests.

NOTE: Authority cited: Sections 39600 and 39601(a), Health and Safety Code. Reference: California Public Records Act, Chapter 3 .5 (commencing with Section 6250), Division 7, Government Code.

§91001. Disclosure Policy.

It is the policy of the state board that all record s not exempted from disclosure by state law shall be open for public inspection with the least possible delay and expense to the requesting party.

NOTE: Authority cited: Sections 39600 and 39601(a), Health and Safety Code. Reference: Section 6253, Government Code; Black Panther Party v. Kehoe (1974) 42 Cal.App.3d 645.

Article 2. Board's Requests for Information

§91010. Request Procedure.

The state board shall give notice to any person fro m whom it requests information that the information provided may be released (1) to the pub lic upon request, except trade secrets which

are not emission data or other information which is exempt from disclosure or the disclosure of which is prohibited by law, and (2) to the federal Environmental Protection Agency, which protects trade secrets as provided in Section 114(c) of the Clean Air Act and amendments thereto (42 USC 7401 et seq.) and in federal regulations.

NOTE: Authority cited: Sections 39600, 39601 and 39 602, Health and Safety Code. Reference: Sections 39701, 41510, 41511, 41512 and 42705, Health and Safety Code; and Section 6253, Government Code.

§91011. Submissions of Confidential Data.

Any person submitting to the state board any record s containing data claimed to be “trade secret” or otherwise exempt from disclosure under Governmen t Code Section 6254 or 6254.7 or under other applicable provisions of law shall, at the ti me of submission, identify in writing the portions of the records containing such data as “confidentia l” and shall provide the name, address and telephone number of the individual to be contacted if the state board receives a request for

disclosure of or seeks to disclose the data claimed to be confidential. Emission data shall not be

identified as confidential. The state board shall n ot disclose data identified as confidential, except in accordance with the requirements of this subchap ter or Section 39660(e) of the Health and Safety Code.

Page C-2I-28

NOTE: Authority cited: Sections 39600 and 39601, He alth and Safety Code. Reference: Sections 39660, 39701, 41500, 41511, 415 12 and 42705, Health and Safety Code; Sections 6253, 6254 and 6254.7, Government Code Nat ural Resources Defense Council v. EPA, 489 F.2d 390 (5th Cir. 1974) (6 ERC 1248); Northern California Police Practices Project v. Craig (1979) 90 Cal.App.3d 116; Uribe; v. Howie (1971) 19 Cal.App.3d 194.

Article 3. Inspection of Public Records

§91020. Disclosure Policy. §91021. Disclosure Procedure.

NOTE: Authority cited: Section 39601, Health and Sa fety Code. Reference: Sections 6253-6257, Government Code.

§91022. Disclosure of Confidential Data.

(a) This section shall apply to all data in the cus tody of the state board (1) designated “trade secret” prior to the adoption of this subchapter,

(2) considered by the state board or identified by the person who submitted the data as confidential pursuant to this subchapter, or

(3) received from a federal, state or local agency , including an air pollution control district, with a confidential designation, subject to the fo llowing exceptions:

(A) Except for the time limits specifically provide d in subsection (b), only subsections (c) and (d) of this section shall apply to information subm itted pursuant to Health and Safety Code section 39660(e).

(B) Appropriate portions of an application for app roval, accreditation, or certification of a motor vehicle emission control device or system sh all be kept confidential until such time as the approval, accreditation, or certification is grant ed, at which time the application (except for trade secret data) shall become a public record, e xcept that estimates of sales volume of new model vehicles contained In an application sha ll be kept confidential for the model year, and then shall become public records. If an applic ation is denied, it shall continue to be confidential but shall be subject to the provisions of this section.

(C) If disclosure of data obtained after August 9, 1984 from a state or local agency subject to the provisions of the Public Records Act is sought, the state board shall request that the agency which provided the data determine whether it is confidential. The state board shall request that it be notified of the agency's determi nation within ten days. The state board shall not release the data if the agency determines that it is confidential and so notifies the state board; provided, however, that the data may be rele ased with the consent of the person who submitted it to the agency from which it was obtain ed by the state board.

(b) Upon receipt of a request from a member of the public that the state board disclose data

claimed to be confidential or if the state board it self seeks to disclose such data, the state board shall inform the individual designated pursua nt to Section 91011 by telephone and by mail that disclosure of the data is sought. The per son claiming confidentiality shall file with the state board documentation in support of the claim o f confidentiality. The documentation must be received within five (5) days from the date of t he telephone contact or of receipt of the mailed notice, whichever first occurs. In the case of information submitted pursuant to Health and Safety Code section 39660(e), the documentation must be received within 30 days of the date notice was mailed pursuant to that section.

Page C-3I-29 The deadlines for filing the documentation may be e xtended by the state board upon a showing of good cause made within the deadline spec ified for receipt of the documentation. © The documentation submitted in support of the cla im of confidentiality shall include the following information:

(1) the statutory provision(s) under which the clai m of confidentiality is asserted;

(2) a specific description of the data claimed to b e entitled to confidential treatment;

(3) the period of time for which confidential treat ment is requested;

(4) the extent to which the data has been disclosed to others and whether its confidentiality has been maintained or its release restricted;

(5) confidentiality determinations, if any, made by other public agencies as to all or part of the data and a copy of any such determinations, if avai lable; and

(6) whether it is asserted that the data is used to fabricate, produce, or compound an article of trade or to provide a service and that the discl osure of the data would result in harmful effects on the person’s competitive position, and, if so, the nature and extent of such anticipated harmful effects.

(d) Documentation, as specified in subsection ©, in support of a claim of confidentiality may be submitted to the state board prior to the time d isclosure is sought.

(e) The state board shall, within ten (10) days of the date it sought to disclose the data or received the request for disclosure, or within 20 d ays of that date if the state board

determines that there are unusual circumstances as defined in Government Code Section 6256.1, review the request, if any, and supporting documentation, if received within the time limits specified in subsection (b) above, including any extension granted, and determine

whether the data is entitled to confidential treatm ent pursuant to Government Code Section 6254, 6255 or 6254.7 or other applicable provisions of law and shall either:

(1) decline to disclose the data and, if a request was received, provide to the person making the request and to the person claiming the data is confidential a justification for the determination pursuant to Government Code Section 6 255; or

(2) provide written notice to the person claiming t he data is confidential and, if a request was received, to the person requesting the data that it has determined that the data is subject to disclosure, that it proposes to disclose the data, and that the data shall be released 21 days after receipt of the notice by the person claiming confidentiality, unless the state board is restrained from so doing by a court of competent ju risdiction. The state board shall release

the data in accordance with the terms of the notice unless so restrained.

(f) Should judicial review be sought of a determina tion issued in accordance with subsection (e), either the person requesting data or the perso n claiming confidentiality, as appropriate, may be made a party to the litigation to justify th e determination.

NOTE: Authority cited: Section 39601, Health and Sa fety Code. Reference: Sections 6253, 6254, 6254.7, 6255, 6256, 6256.1, 6258 and 6259, Government

Code. Page C-4