United States Environmental Protection Agency, Region 9 

Air Division 

Technical Support Document 

for 

EPA’s Notice of Proposed Rulemaking 

for the 

California State Implementation Plan 

San Joaquin Valley Unified Air Pollution Control District’s 

Rule 9610, State Implementation Plan Credit for Emission Reductions Generated through 

Incentive Programs 

Prepared by: Idalia Pérez 

May 2014 

 
Page 2 of 55

Table of Contents 

I. Description of SIP submittal................................................................................................3

II. Rule Summary .....................................................................................................................3

III. Effects on Emissions............................................................................................................4

IV. Rule Evaluation Criteria ......................................................................................................5

V. Rule Evaluation ...................................................................................................................7

A. SIP Revision ........................................................................................................................7

B. EIP Integrity Elements.........................................................................................................8

VI. Review of Incentive Program Guidelines..........................................................................12

A. Background Regarding Incentive Program Guidelines.....................................................12

B. General Carl Moyer Requirements (Section 3.1.1) ...........................................................13

C. Carl Moyer On-Road Heavy-Duty Vehicle: New Vehicle Purchase (Section 3.1.1.1.1)..19

D. Carl Moyer On-Road Heavy-Duty Vehicle: repower (Section 3.1.1.1.2) and retrofit 

(Section 3.1.1.1.3)......................................................................................................................21

E. Carl Moyer On-Road Heavy-Duty Vehicles Fleet Modernization (Section 3.1.1.2)........22

F. Carl Moyer Off-Road Compression-Ignition Equipment: repower (Section 3.1.1.3.1), 

replacement (Section 3.1.1.3.2), or retrofit (Section 3.1.1.3.3).................................................24

G. Carl Moyer Portable and Stationary Agricultural Sources: repower (Section 3.1.1.4.1) and 

retrofit (Section 3.1.1.4.3)..........................................................................................................29

H. Carl Moyer Portable and Stationary Agricultural Sources: new purchase of electric motor 

(Section 3.1.1.4.2)......................................................................................................................31

I. NRCS Environmental Quality Incentives Program (EQIP): Mobile Off-Road Agricultural 

Equipment Replacement............................................................................................................33

J. Proposition 1B Goods Movement Emission Reduction Program Guidelines for HeavyDuty Diesel Trucks repower, replacement, PM retrofit, or PM + NOx retrofit incentive 

projects. (Section 3.1.3).............................................................................................................42

VII. “Case-by-Case Determinations” and Other Guidelines.....................................................49

VIII. Incentive Program Guidelines Issues.................................................................................50

IX. EPA’s Recommendations for Rule Revisions...................................................................50

X. EPA’s Recommendations for Implementation ..................................................................52

A. Manual of Procedures........................................................................................................52

B. Annual Demonstration Report...........................................................................................52

 
Page 3 of 55

I. Description of SIP submittal 

This Technical Support Document (TSD) addresses San Joaquin Valley Unified Air Pollution 

Control District (SJVUAPCD) Rule 9610, “State Implementation Plan Credit for Emission 

Reductions Generated through Incentive Programs.”

· Adopted by SJVUAPCD: June 20, 2013 

· Submitted by the California Air Resources Board (ARB) for inclusion in the State 

Implementation Plan (SIP): June 26, 2013 

· Determined complete by operation of law: December 26, 2013 

This TSD addresses the first version of this rule. There are no previous submittals and there is 

no previously SIP-approved version of the rule requirements. 

Following the SIP submission by ARB on June 26, 2013, the District, ARB and NRCS submitted 

several clarifying and supplemental documents. These documents include: 

1. Manual of Procedure (January 31, 2014) 

2. Demonstration Report including date sheet (January 31, 2014) 

3. Email dated December 18, 2013, from Jeannine Tackett, SJVUAPCD, to Idalia Perez, 

U.S. EPA Region 9 

4. Email dated July 2, 2013, from Karen Magliano, ARB, to Andrew Steckel U.S. EPA 

Region 9 and attachments 

5. Email dated August 26, 2013, from Elizabeth Yura, ARB, to Andrew Steckel, U.S. EPA 

Region 9 and attachments 

6. Email dated February 20, 2014 from Jeannine Tackett, SJVUAPCD, to Idalia Perez, U.S. 

EPA and attachments 

7. Email dated March 4, 2014 from Jeannine Tackett, SJVUAPCD, to Idalia Perez, U.S. 

EPA and attachments 

8. Email dated June 11, 2013, from Todd DeYoung, SJVUAPCD, to Andrew Steckel, U.S. 

EPA Region 9 and attachment 

9. Email dated December 20, 2013 from Jeannine Tackett, SJVUAPCD, to Rynda Kay, U.S. 

EPA Region 9 and attachment 

10. E-mail dated March 31, 2014, from Stephanie Johnson, USDA Office of General 

Counsel, to Kerry Drake, EPA Region 9, Air Division, RE: “Summaries of 1619 and 

EQIP”. 

11. E-mail dated April 23, 2014, from Joshua Schnell, USDA Office of General Counsel, to 

Jeanhee Hong, USEPA Region 9, Office of Regional Counsel, RE: “Summaries of 1619 

and EQIP”. 

II. Rule Summary 

Rule 9610 establishes requirements and procedures for the District to follow in quantifying 

emission reductions achieved through implementation of incentive programs in the San Joaquin 

Valley. Among other things, the rule identifies a number of incentive program “guidelines” that 
Page 4 of 55

specify the terms and conditions applicable to each grant of incentive funds under three incentive 

funding programs implemented in the SJV: the Carl Moyer Memorial Air Quality Standards 

Attainment Program (Carl Moyer Program), the Proposition 1B Goods Movement Emission 

Reduction Program (Prop 1B Program), and the Environmental Quality Incentives Program 

(EQIP). Key provisions of the rule include: 

· Section 2.0 defines terms used throughout the rule, including surplus, quantifiable, 

enforceable, permanent and SIP-Creditable Emission Reductions. 

· Section 3.1 identifies several incentive programs and program guidelines that SJVUAPCD 

expects to rely on for emission reductions, which include: 

ß Carl Moyer 

o On-Road Heavy-Duty Vehicle: new vehicle purchase (Section 3.1.1.1.1), repower 

(Section 3.1.1.1.2), or retrofit (Section 3.1.1.1.3). 

o On-Road Heavy-Duty Vehicles Fleet Modernization (Section 3.1.1.2). 

o Off-Road Compression-Ignition Equipment: repower (Section 3.1.1.3.1), 

replacement (Section 3.1.1.3.2), or retrofit (Section 3.1.1.3.3). 

o Portable and Stationary Agricultural Sources: repower (Section 3.1.1.4.1), new 

purchase of electric motor (Section 3.1.1.4.2), or retrofit (Section 3.1.1.4.3). 

ß NRCS Conservation Practice Standard 372 – Combustion System Improvement: HeavyDuty Stationary Engines and Mobile Off-Road Agricultural Equipment Replacement and 

Retrofit (which replaced NRCS Interim Conservation Practice Standard 723- Combustion 

System Air Emission Management). (Section 3.1.2) 

ß ARB Proposition 1B Goods Movement Emission Reduction Program Guidelines for 

Heavy-Duty Diesel Trucks repower, replacement, PM retrofit, or PM + NOx retrofit 

incentive projects. (Section 3.1.3) 

· Section 3.2 describes procedures the District will follow to use guidelines not included in 

Section 3.1 and case-by-case determinations to quantify emission reductions according to 

Rule requirements. 

· Section 3.3 directs the District to develop a manual of procedures (MOP) that includes all 

incentive program guidelines. The MOP will be publicly available and will include a 

description of how the incentive program guidelines ensure that incentive program emission 

reductions are SIP creditable. 

· Section 4.0 requires that the District produce an annual report describing all emission 

reductions achieved over the past year through incentive programs for which the District 

intends to seek SIP credit and commit to timely remedies for any shortfalls in SIP emission 

reductions. 

· Section 5.0 describes the process the District will adhere to in producing the annual 

demonstration report. This includes releasing a draft report to the public and presenting it to 

the District Governing Board prior to submitting it to EPA. 

· Section 6.0 specifies the records that the District must keep. 

· Section 7.0 specifies minimum requirements that the District must address in each SIP 

submittal that relies on projections of emission reductions from incentive programs. 

III. Effects on Emissions 
Page 5 of 55

This rule does not apply to any emission source and does not directly impact emissions. The 

requirements and procedures in the rule apply only to the District and are designed to establish a 

transparent tracking system that will allow for verification and enforcement of emission 

reductions achieved through incentive programs that the District seeks to rely upon for SIP 

emission reduction credit. In the “Rule Evaluation Criteria” section below, we provide our 

evaluation of the rule and identified incentive program “guidelines” for consistency with CAA 

requirements for SIP emission reduction credit. 

Section 4.0 requires that the District produce an annual report describing all emission reductions 

achieved over the previous year through incentive programs which the District intends to rely on 

for SIP credit. As part of the Rule 9610 SIP submittal, the District has included the 2013 Annual 

Demonstration Report, which includes information on emission reductions from incentive 

programs estimated to occur from 2009 through 2020. As noted before, the District sent an 

updated 2013 Demonstration Report to EPA on February 20, 2014. The report was updated for 

added clarity and to implement requirements of the rule and it is currently available on the 

District website1. We are not proposing to take any particular action on this or previous versions 

of the 2013 Annual Demonstration Report as it is not part of Rule 9610, nor do we agree that all 

emission reductions described in the 2013 Annual Demonstration Report are creditable for SIP 

purposes. However, the 2013 Demonstration Report provides useful information about how 

SJVUAPCD intends to implement Rule 9610 and as such we have reviewed it and are providing 

a limited evaluation, including suggestions for improvement, in this TSD. 

IV. Rule Evaluation Criteria 

EPA considered the following requirements and policies in our review of Rule 9610: 

· Stringency – In reviewing submittals of State/local prohibitory rules, EPA routinely 

evaluates whether they satisfy applicable CAA control requirements, such as the CAA 

section 182 requirement for Reasonable Available Control Technology (RACT). Rule 9610, 

however, does not apply to any emission source or establish any requirement to control 

emissions and is not intended to implement RACT or any other CAA control requirement. 

The requirements of Rule 9610 apply only to the SJVUAPCD and are designed to provide a 

framework for the District to address CAA requirements in developing SIPs that rely on 

incentive programs for emission reductions. Therefore, we are not evaluating Rule 9610 

with respect to stringency. 

· SIP Revisions – CAA section 110(l) prohibits EPA from approving any SIP revision that 

would interfere with any applicable requirement concerning attainment and reasonable 

further progress (RFP) or any other applicable CAA requirement. In addition, CAA section 

193 prohibits the modification of any SIP-approved control requirement in effect before 

November 15, 1990, in a nonattainment area. 

· Economic Incentive Program Integrity Elements – These guidance documents apply to 

nontraditional emission reduction programs/measures such as discretionary economic 

incentive programs (EIPs) and provide EPA’s interpretation of the CAA requirements that 

apply to SIP submittals that rely on such programs/measures for emission reduction credit. 

These guidance documents are non-binding and do not represent final agency action. 

 

1 Available at http://www.valleyair.org/MOP/docs/AnnualDemonstrationReport1.30.14-Final.pdf
Page 6 of 55

o “Guidance on Incorporating Voluntary Mobile Source Emission Reduction Programs in 

State Implementation Plans (SIPs),” Richard D. Wilson, Acting Assistant Administrator 

for Air and Radiation, October 24, 1997. [VMEP] 

o “Improving Air Quality with Economic Incentive Programs” January 2001 (EPA-452/R01-001) [2001 EIP Guidance]. 

o “Guidance on SIP Credits for Emission Reductions from Electric-Sector Energy 

Efficiency and Renewable Energy Measures,” Brian McLean, Office of Atmospheric 

Programs, and Steve Page, OAQPS, August 5, 2004 [Electric-Sector Guidance]. 

o “Incorporating Emerging and Voluntary Measure in a State Implementation Plan (SIP),” 

Stephen D. Page, OAQPS, October 4, 2004 [Emerging and Voluntary Measures 

Guidance]. 

o “Guidance on Incorporating Bundled Measures in a State Implementation Plan,” Stephen 

D. Page, OAQPS, and Margo Oge, OTAQ, August 16, 2005 [Bundled Measures 

Guidance]. 

o “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs 

into State and Tribal Implementation Plans,” July 2012 (EPA-456/D-12-001a) [EE/RE 

Guidance]. 

o “Diesel Retrofits: Quantifying and Using Their Emission Benefits in SIPs and 

Conformity: Guidance for State and Local Air and Transportation Agencies,” February 

2014 (EPA-420-B-14-007) [Retrofit SIP Guidance] 

The CAA explicitly provides for the use of economic incentives as one tool for states to use to 

achieve attainment of the NAAQS. See, e.g., CAA section 110(a)(2)(A) (requiring that each SIP 

“include enforceable emission limitations and other control measures, means, or techniques 

(including economic incentives such as fees, marketable permits, and auctions of emissions 

rights), as well as schedules and timetables for compliance, as may be necessary or appropriate 

to meet the applicable requirements of [the Act]”); see also section 172(c)(6), 183(e)(4). EIPs 

use market-based strategies to encourage the reduction of emissions from stationary, area, and/or 

mobile sources in an efficient manner. EPA has promulgated regulations for statutory EIPs 

required under section 182(g) of the Act and has issued guidance for discretionary EIPs.2See 59 

FR 16690 (April 7, 1994) (codified at 40 CFR part 51, subpart U) and 2001 EIP Guidance. 

Where a State relies upon a discretionary EIP in a SIP submission, EPA evaluates the 

programmatic elements of the EIP to determine whether the resulting emission reductions are 

quantifiable, surplus, enforceable and permanent. See 2001 EIP Guidance at Section 4.1. These 

four fundamental “integrity elements,” which apply to all EIPs and other incentive/voluntary 

measures relied on for SIP purposes, are designed to ensure that such programs and measures 

satisfy the applicable requirements of the Act. See id. 

EPA has generally defined the four fundamental integrity elements for discretionary EIPs and 

other incentive/voluntary measures as follows: 

 

2 A “discretionary economic incentive program” is “any EIP submitted to the EPA as an 

implementation plan revision for purposes other than to comply with the statutory requirements 

of sections 182(g)(3), 182(g)(5), 187(d)(3), or 187(g) of the Act.” 40 CFR § 51.491. 
Page 7 of 55

1. Enforceable: emission reductions and other required actions are enforceable if they are 

independently verifiable; program violations are defined; those liable can be identified; 

the State and EPA may apply penalties and secure appropriate corrective action where 

applicable; citizens have access to emissions-related information obtained from 

participating sources; and the required reductions/actions are practicably enforceable 

consistent with EPA guidance on practical enforceability. 

2. Quantifiable: emissions and emission reductions are quantifiable if someone can reliably 

and replicably measure or determine them. 

3. Surplus: Emission reductions are surplus if they are not otherwise required by or 

assumed in a SIP-related program (e.g., an attainment or reasonable further progress plan 

or a transportation conformity demonstration), any other adopted State air quality 

program, a consent decree, or a federal rule designed to reduce emission of a criteria 

pollutant or its precursors (e.g., a new source performance standard or federal mobile 

source requirement); Additionally, the emission reductions are “surplus” only for the 

remaining useful life of the vehicle, engine, or equipment being replaced. 

4. Permanent: emission reductions are permanent if the State and EPA can ensure that the 

reductions occur for as long as they are relied upon in the SIP; the time period that the 

emission reductions are used in the SIP can be no longer than the remaining useful life of 

the retrofitted or replaced engine, vehicle, or equipment. 

See 2001 EIP Guidance at Section 4.1, 1997 VMEP at pp. 6-7, 2004 Emerging and Voluntary 

Measures Policy at pp. 3-4 and the 2014 Retrofit SIP Guidance at p. 11. 

Rule 9610 establishes requirements and procedures for the District to quantify, for air quality 

planning purposes, emission reductions achieved through implementation of incentive programs 

in the San Joaquin Valley. We provide below our evaluation of Rule 9610 and the extent to 

which the requirements and procedures contained in the rule establish a framework for 

development of SIP submittals that satisfy the requirements of the Act, as interpreted in EPA 

policy on discretionary EIPs and other nontraditional emission reduction measures. In addition 

to reviewing the rule itself, EPA has reviewed several of the incentive program “guidelines” 

identified in the rule and in the District’s supporting materials. Although EPA is not proposing 

to take any particular action on these guidelines,3 we have evaluated them as supporting material 

for the SIP submittal because the quantification protocols and other program requirements 

specified in these guidelines inform EPA’s review of the criteria and procedures set out in Rule 

9610. Below we provide our evaluation of them as a preliminary guide to assist the District in its 

effort to address CAA requirements in SIP submittals that rely on incentive programs going 

forward. 

V. Rule Evaluation 

A. SIP Revision 

Section 110(l) of the CAA prohibits EPA from approving any SIP revision that would interfere 

with any applicable requirement concerning attainment and RFP or any other applicable CAA 

 

3

 The guidelines themselves are not subject to EPA action under CAA section 110(k) as they are 

neither contained within Rule 9610 nor incorporated by reference therein, and the State has not 

separately submitted any of these guidelines for approval into the SIP. 
Page 8 of 55

requirement. Rule 9610 does not establish any emission limitation, control measure, or other 

requirement that applies directly to an emission source or that is necessary to meet CAA 

requirements. Additionally, the rule does not revise any requirement in the applicable SIP. The 

requirements and procedures in Rule 9610 apply only to the District and are designed to ensure 

that each SIP submittal in which the District relies upon emission reductions achieved through 

incentive programs in the SJV will adequately address the requirements of the Act.4 We propose 

to determine that our approval of Rule 9610 would comply with CAA section 110(l) because the 

proposed SIP revision would not interfere with the on-going process for ensuring that 

requirements for attainment of the NAAQS and other CAA provisions are met. 

Section 193 of the Act does not apply to this proposed action because Rule 9610 does not modify 

any SIP-approved control requirement in effect before November 15, 1990. 

B. EIP Integrity Elements 

Enforceable 

Rule 9610 defines emission reductions as enforceable “if the incentive program includes 

provisions for ensuring the following: 

· The emission reductions are independently and practicably verifiable through inspections, 

monitoring, and/or other mechanisms; 

· Incentive program violations are defined through legally binding contracts, including 

identifying the party or parties responsible for ensuring that emission reductions are 

achieved; 

· Grantees are obligated to provide all records needed to demonstrate that emission 

reductions are achieved; and 

· The public has access to all emissions-related information for reductions claimed in the 

annual demonstration report, as outlined in Section 4.0.” (Rule 9610, Section 2.8) 

EPA’s 2001 EIP Guidance recommends seven factors for evaluating the enforceability of 

emission reductions: 

(1) they are independently verifiable; 

(2) program violations are defined; 

(3) those liable for violations can be identified; 

(4) the State and EPA maintain the ability to apply penalties and secure appropriate 

corrective actions where applicable; 

(5) citizens have access to all the emissions-related information obtained from the source; 

(6) citizens can file suits against sources for violations; and 

(7) they are practicably enforceable in accordance with other EPA guidance on 

practicable enforceability. 

 

4

 EPA will review each SIP submittal developed pursuant to Rule 9610 on a case-by-case basis, 

following notice-and-comment rulemaking, to determine whether the applicable requirements of 

the Act are met. 
Page 9 of 55

See 2001 EIP Guidance at 35-36. 

Additionally, EPA generally considers a requirement to be “practically enforceable” if it contains 

a clear statement as to applicability; specifies the standard that must be met; states compliance 

timeframes sufficient to meet the standard; specifies sufficient methods to determine compliance, 

including appropriate monitoring, record keeping and reporting provisions; and recognizes 

relevant enforcement consequences. See “Review of State Implementation Plans and Revisions 

for Enforceability and Legal Sufficiency,” September 23, 1987 (“1987 Potter Memo”) and 

“Guidance on Enforceability Requirements for Limiting Potential to Emit through SIP and 

Section 112 Rules and General Permits,” January 25, 1995 (“1995 PTE Policy”) at 5, 6. 

The definition of “enforceable” in Section 2.8 of Rule 9610 is generally consistent these policy 

recommendations, e.g., by requiring that emission reductions be independently and practicably 

verifiable through inspections, monitoring, and/or other mechanisms and that grantees provide 

all records needed to demonstrate that emission reductions are achieved. Other provisions of the 

rule also address EPA’s recommendations for practical enforceability. For example, Section 4.0 

states that “The APCO shall annually prepare a report that demonstrates the quantity of SIPcreditable emission reductions.” Section 4.0 of the rule then specifies detailed information 

regarding emission reductions that must be included in the report and Section 5.1 specifies a 

timeframe for the requirement (“no later than August 31 of each year”). 

The definition of enforceable in Section 2.8 generally ensures that citizens have access to 

emissions-related information. See Rule 9610, Section 2.8.4 (requiring public access to “all 

emissions-related information for reductions claimed in the annual demonstration report”). 

Additionally, Section 6.1 of Rule 9610 states that “[a]ll documents created and/or used in 

implementing the requirements of Section 4.0 shall be kept and maintained as required by the 

applicable incentive program guidelines. . . [and] shall be made available for public review” 

consistent with the California Public Records Act and other related requirements. Section 6.1 

also states that “[i]nformation regarding the process for the public review of such records shall 

be included in the annual demonstration report.” Rule 9610, Section 6.1. The District has 

confirmed that both EPA and citizens may use this form to request copies of the required records 

for any Prop 1B or Carl Moyer Program project that the District has relied upon for SIP credit, 

which will be identified in the District’s annual demonstration reports going forward.5 

Rule 9610 appears to contain one exception to this general public disclosure requirement that 

applies only to documents associated with NRCS’s implementation of EQIP. Section 6.2 of the 

rule states, “Records related to implementation of the NRCS Program Combustion System 

Improvement of Mobile Engines incentive program are prohibited from mandatory disclosure, 

pursuant to the Federal Food Security Act of 1985 (7 U.S.C. §608d(2)).” We note that 7 U.S.C 

§608d(2) concerns information relating to “marketing agreements” and “marketing order 

programs” under the Agricultural Adjustment Act (7 U.S.C. §§ 601 et. seq.) and does not apply 

to the NRCS’s implementation of EQIP. By e-mail dated April 23, 2014, the USDA’s Office of 

General Counsel confirmed that the key statutory provision that governs disclosure of 

 

5

 See e-mail dated December 18, 2013, from Jeannine Tackett, SJVUAPCD, to Idalia Perez, 

U.S. EPA Region 9, “RE: question needed for response to comments on contingency measure 

SIP” (confirming that the District “will include information in future annual demonstration 

reports as necessary to ensure the ongoing tracking of projects claimed in prior annual 

demonstration reports, including adjustments necessary under Section 4.3 [of Rule 9610]”). 
Page 10 of 55

information submitted by agricultural producers or owners of agricultural land to participate in 

EQIP is section 1619 of the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246, 7 

U.S.C. § 8791).6 We strongly recommend that the District revise Section 6.2 to remove the 

incorrect reference to 7 U.S.C. § 608d(2) and replace it with an accurate description of NRCS’s 

statutory obligations under 7 U.S.C. § 8791. 

Under 7 U.S.C. § 8791, the U.S. Congress has prohibited the Secretary of Agriculture and any 

officer or employee of the U.S. Department of Agriculture (USDA) from disclosing information 

provided by an agricultural producer or owner of agricultural land concerning the agricultural 

operation, farming or conservation practices, or the land itself, in order to participate in a USDA 

program. 7 U.S.C. § 8791. Any contractor or cooperator of the USDA is similarly prohibited 

from disclosing such information. Id. There are several exceptions to this prohibition, including 

that USDA may disclose information if it is transformed into a statistical or aggregate form 

without naming any individual owner, operator or producer or a specific data gathering site. Id. 

Additionally, USDA may disclose information if the agricultural producer or owner of the 

agricultural land consents to the disclosure. Id.

7

In March 2014, NRCS, EPA, the District and CARB signed the “Addendum to the December 

2010 Statement of Principles Regarding the Approach to State Implementation Plan Creditability 

of Agricultural Equipment Replacement Incentive Programs Implemented by the USDA Natural 

Resources Conservation Service and the San Joaquin Valley Air Pollution Control District” 

(“Addendum”). The purpose of the Addendum is to identify information that NRCS will make 

available to EPA and the District, consistent with NRCS’s statutory responsibilities under 

Section 1619 of the Farm Bill, to ensure that both EPA and the District can carry out their 

respective implementation responsibilities under the CAA and Rule 9610. 

The Addendum contains three provisions addressing information that NRCS will make available 

to EPA and the District. First, it specifies that NRCS will provide to EPA and the District an 

annual report, no later than March 31 of each year, containing “information regarding emission 

reductions achieved by individual EQIP projects, including unique project identification 

numbers, the county in which each project is located, and verification that each ‘old’ (replaced) 

engine has been destroyed.” See Addendum at paragraph 1a. NRCS’s regular submission of this 

information to the District is necessary to enable the District to comply with its annual reporting 

obligations in Section 4.0 and Section 5.0 of Rule 9610. These NRCS annual reports should 

include, whenever available, project-specific information regarding actual annual usage reports 

for both the existing equipment and the new equipment. See CPS-372 O&M and 2013 CPS-372 

Specification, Section VIII at page 4 (requiring EQIP grantees to annually submit documentation 

of actual usage/operations for both the existing equipment and new equipment). EPA generally 

expects that the emission reduction calculation for any EQIP project that the District intends to 

rely on for SIP credit will be supported by adequate documentation of actual annual usage for 

both the existing equipment and the new equipment. See Section I at page 37 of this TSD. 

 

6

See e-mail dated April 23, 2014, from Joshua Schnell, USDA Office of General Counsel, to 

Jeanhee Hong, USEPA Region 9, Office of Regional Counsel. The general Freedom of 

Information Act exemptions in 5 U.S.C. § 552(b) also apply to EQIP information. Id.

7

See e-mail dated March 31, 2014, from Stephanie Johnson, USDA Office of General Counsel, 

to Kerry Drake, USEPA Region 9, Air Division. 
Page 11 of 55

Second, the Addendum states that the NRCS California State Conservationist will certify, as part 

of each annual report, that (1) emission reductions for each EQIP project identified in the annual 

report were calculated in accordance with the applicable NRCS conservation practice standards 

and related guidelines; (2) the annual report does not include any funded project that NRCS has 

found to be in violation of its EQIP contract; and (3) the information provided in the annual 

report is true and accurate to the best of his/her knowledge. See Addendum at paragraph 1b. 

We note that Section 4.6 of Rule 9610 requires the District to include in each annual 

demonstration report a “summary of monitoring and enforcement activities conducted during the 

reporting period for incentive projects for which SIP-creditable emission reductions are being 

claimed.” The 2013 Demonstration Report does not include this information for the NRCS 

EQIP and instead states generally that “the USDA NRCS is currently reviewing their processes 

and may in future years be able to provide additional information for purposes of the District’s 

annual demonstration reports.” See 2013 Annual Demonstration Report at 31. In light of 

NRCS’s agreement to certify each year that the annual report does not include noncompliant 

EQIP projects, and given the requirement in Rule 9610 for the District to annually provide a 

summary of monitoring and enforcement activities for projects relied upon for SIP credit, we 

note that each annual report submitted by NRCS should include a summary of its monitoring and 

enforcement activities conducted during the relevant reporting period. 

Finally, the Addendum specifies that upon request by EPA or the District, the NRCS will 

provide representative samples of the compliance-related documentation used to compile the 

annual report described in paragraph #1 of the Addendum. NRCS will omit the names of any 

individual owners, operators, or producers before submitting these documents to EPA and/or the 

District. EPA may use these documents to assess the District’s compliance with SIP-approved 

emission reduction commitments. See Addendum at paragraph 2. 

We believe the certified annual reports described in the Addendum, which NRCS has agreed to 

submit to EPA and the District by March 31 of each year, will provide information adequate to 

enable the District, EPA, and the public to easily and accurately calculate the emissions of the 

participating sources and to adequately assess the effectiveness of the EQIP program. 

These provisions of Rule 9610 and the certified annual reports to be submitted by NRCS 

generally ensure that the public will have access to emissions-related information necessary for 

enforcement purposes. 

As discussed further below under Section VI, “Review of Incentive Program Guidelines,” the 

Carl Moyer, Prop 1B, and EQIP guidelines contain detailed contract requirements that further 

address EPA’s recommendations for enforceability. For example, applicability requirements 

found in the program guidelines indicate which projects are eligible for funding including, e.g., 

information about regulatory requirements for the class and type of engine to ensure the projects 

are surplus, and are specific to each project type that can be funded. The standards that must be 

met are the minimum emission standards of the new, repowered or retrofitted equipment as 

required by the incentive program guidelines. The compliance timeframes and recordkeeping and 

reporting requirements are dictated by the contracts as required in the applicable guidelines. 

Many of the guidelines also address contract provisions concerning violations and liability. The 

discussions on enforceability for the incentive program guidelines that follow also include a 

discussion of the State’s ability to apply penalties and secure appropriate corrective actions for 

violations. 
Page 12 of 55

Quantifiable 

Rule 9610 defines emission reductions as quantifiable “if they can be reliably determined 

through the use of well-established, publicly available emission factors and calculation 

methodologies.” (Section 2.23) Section 3.1 of the rule specifies that “The District shall quantify 

emission reductions under this rule in accordance with the following specific incentive program 

guidelines”, which are discussed further below in this TSD. Additionally, Section 3.2 states that 

“the District may quantify emission reductions under this rule in accordance with incentive 

program guidelines not specifically identified in Section 3.1, provided the District submits to 

EPA, pursuant to Section 7.0, a demonstration that each such guideline provides for SIPcreditable emission reductions.” This demonstration must include quantification guidelines that 

adhere to the rule’s and EPA’s interpretation of quantifiable and will be reviewed by EPA along 

with the rest of the SIP submittal at the time of granting SIP credit for these emission reductions. 

These provisions adequately address EPA’s recommendations concerning quantifiability of 

emission reductions. 

Surplus 

Rule 9610 defines emission reductions as surplus if “they are not otherwise required by any 

federal, state, or local regulation, or other legal mandate, and are in excess of the baseline 

emission inventories underlying a SIP attainment demonstration.” (Section 2.27) This definition 

adequately addresses EPA’s recommendations concerning additionality of emission reductions 

(i.e., ensuring the emission reductions are “surplus” to required reductions). 

Permanent 

Rule 9610 defines emission reductions as permanent “if actions are taken to physically destroy or 

permanently disable existing or baseline equipment or vehicles, or to permanently amend 

practices to ensure the reduction of emissions for the duration of the project life.” (Section 2.18) 

This definition adequately addresses EPA’s recommendations concerning permanence of 

emission reductions. 

VI. Review of Incentive Program Guidelines 

A. Background Regarding Incentive Program Guidelines 

Section 3.0 of Rule 9610 identifies Incentive Programs and Program Guidelines which the 

District plans to use to quantify SIP creditable emission reductions and directs the District to 

develop a Manual of Procedures (MOP) that includes all incentive program guidelines to be 

used. The guidelines themselves are neither contained within Rule 9610 nor incorporated by 

reference therein. The District included the MOP in the SIP submission as supporting 

information and has since updated it to improve clarity and submitted it to EPA on March 4, 

20148. EPA is not approving the MOP into the SIP, but the MOP helps assure that all incentive 

program guidelines used to quantify emission reductions for SIP purposes under Rule 9610 are 

publicly available on the District’s website which improves program transparency and 

 

8 Available at http://www.valleyair.org/MOP/mop9610_idx.htm
Page 13 of 55

enforceability. Although EPA is not proposing to take any particular action on these guidelines 

or the MOP, we provide our evaluation of them (noting some issues that need further 

clarification) as a preliminary guide to assist the District in its effort to address CAA 

requirements in SIP submittals that rely on incentive programs going forward. Additional 

guidelines not explicitly included in Rule 9610 section 3.0 which the District wants to use to 

quantify SIP-creditable emission reduction in the future, must be submitted to EPA with 

demonstration that the guidelines meet the four integrity elements, pursuant to Section 7.0 of the 

Rule. Discussion follows of specific guidelines explicitly included in the Rule and the first MOP, 

including a brief history, their adoption process and how they help ensure that the projects 

funded pursuant to their requirements meet the four EIP integrity elements. 

In the discussion of incentive program guidelines below, we address enforceability in terms of 

practical enforceability of the guidelines and the contracts governing specific projects funded 

following these guidelines, as well as verifiability of the emission reductions achieved by these 

projects. The terms of the specific contracts governing funded projects are not enforceable by 

EPA or citizens under the CAA but are enforceable by the State and/or District under State law. 

B. General Carl Moyer Requirements (Section 3.1.1) 

The Carl Moyer Program funds the incremental cost of cleaner-than-required sources of air 

pollution (e.g. diesel engines) and has provided over $680 million in State and local funds to 

reduce emission from over 24,000 engines in its first 12 years. See “The Carl Moyer Program 

Guidelines,” approved April 28, 2011, at Chapter 1 (“Program Overview”).9 ARB adopted the 

first set of Carl Moyer Program Guidelines in early 1999, and legislation (Assembly Bill (AB) 

1571) enacted in 1999 formally established the statutory framework for the program (Health & 

Safety Code § 44275, et seq). Multiple changes have been made since the original guidelines 

were developed, and ARB continues to update the program guidelines, following public 

processes, in response to legislative and regulatory changes and to ensure that emission 

reductions funded through the Carl Moyer Program are “real, surplus, quantifiable, and 

enforceable” consistent with the underlying statutory mandates. ARB is required to make 

proposed changes to the Guidelines available to the public at least 45 days prior to final adoption 

and is required to hold one public meeting to consider public comments before final adoption of 

any changes. The Carl Moyer Program is implemented through a partnership between ARB and 

local air districts. ARB manages program funds and distributes them to participating air districts 

for program implementation each year; develops and revises guidelines, protocols, and criteria 

for covered projects; and determines methodologies used for evaluating project costeffectiveness. Air districts follow the Moyer Guidelines to select, fund, and monitor projects in 

their areas. The Guidelines describe requirements for administrative procedures, eligibility 

criteria for projects in different source categories, cost-effectiveness criteria, and reporting 

practices. See id.

The Carl Moyer Guidelines for the three years discussed in this TSD are subdivided into Parts. 

Table 1 below describes what is included in each Part for each guideline year. 

Table 1: Carl Moyer Guidelines contents. 

 

9Available at http://www.arb.ca.gov/msprog/moyer/guidelines/2011gl/2011cmpgl_3_27_13.pdf 
Page 14 of 55

Guideline Year Part Content 

2005 I Executive Summary, Program Overview and Administrative 

Requirements 

II Project Criteria 

III Agricultural Assistance Program 

IV Appendices 

2008 I Executive Summary, Program Overview, and Source Category Chapters 

II Agricultural Assistance Program 

III Program Administration 

IV Appendices 

201110 1 Program Overview, Project Criteria and Appendices 

2 Voucher Program Guidelines 

3 Agricultural Assistance Program 

Rule 9610 only includes references to the Project Criteria sections of the program. In the 

discussion of the Carl Moyer Guidelines considering the four EIP integrity elements, we include 

discussion of additional sections of the Guidelines as they describe administrative procedures 

and other requirements that are the foundation of the program. These are: 

· 2005 Carl Moyer Guidelines, Part I, Chapter 2, Administration of the Carl Moyer 

Program

· 2008 Carl Moyer Guidelines, Part III, Program Administration

· 2011 Carl Moyer Guidelines, Part 1 Chapter 2, General Criteria, and Chapter 3, Program

Administration

In the future, we expect SIP submittals that rely on emission reductions from this program to 

contain these general requirements of the guidelines, along with the project specific criteria, as 

supporting technical documentation for the submittals. 

On July 2, 3013, ARB provided additional information, “Carl Moyer Program: Guideline 

Criteria for On-Road and Off-Road Projects”, dated July 2013, confirming that certain sections 

of the Moyer guidelines discussed in this TSD meet the four EIP integrity elements. See email 

from Karen Magliano to Andrew Steckel, Subject: Moyer Integrity Elements Write Up. We have 

reviewed this assessment and generally agree with many of the State’s conclusions, with a few 

exceptions, as discussed further below. In cases where specific project types do not meet the EIP 

integrity elements, we discuss why the criteria are not met. We provide our evaluation of the 

guidelines identified below as a preliminary guide to assist the District in its effort to address 

 

10 The 2011 Cal Moyer Guidelines have been updated since their April 28, 2011 adoption. 

Throughout this TSD, references to the 2011 Carl Moyer Guidelines are to the version adopted 

April 28, 2011, as referenced in Section 3.1.1 of Rule 9610. 
Page 15 of 55

CAA requirements in SIP submittals that rely on these guidelines going forward. We are not at 

this time addressing other projects funded through Moyer not discussed below. 

General Carl Moyer Enforceable 

Specific funding criteria established in the Carl Moyer Program Guidelines help ensure that 

emission reductions sought for projects funded according to the guidelines will be independently 

verifiable and practicably enforceable by ARB and the District consistent with EPA policy. In 

order for projects to be considered for funding, a complete application must be submitted by the 

applicant to the District. The requirements for the applications are in: 

· 2008 Carl Moyer Guidelines, Part III, Minimum Project Application Requirements at 29 

· 2011 Carl Moyer Guidelines, Part 1, Minimum Project Application Requirements at 3-26 

These sections require that “information regarding previous years of existing engine usage (e.g. 

miles traveled, hours operated, or fuel consumed per year) must be documented and included in 

the project application.” These sections also specify that minimum annual usage is not required 

to be included in the contract for projects which have 24 months of verified and documented 

historical usage. In addition, the applicant is required to certify that the information provided in 

the application is accurate and correct. See 2008 Carl Moyer Guidelines, Part III, Section 

26(e)(5) at 31; 2011 Carl Moyer Guidelines, Section W.5 at 3-26. In contrast with the 2008 and 

2011 guidelines which have compiled application requirements into the Minimum Project 

Application Requirements section, the minimum application requirements for the 2005 

guidelines are included in the project criteria chapters and are discussed in project type specific 

sections, below. 

Once the SJVUAPCD has selected a project for funding through the Carl Moyer Program, the 

District must execute contracts with the grantees who will receive funds under the Program. The 

requirements for these contracts, which are legally enforceable by ARB or the SJVUAPCD, are 

in: 

· 2005 Carl Moyer Guidelines, Part I, Minimum Contract Requirements at II-28 

· 2008 Carl Moyer Guidelines, Part III, Minimum Contract Requirements at 34 

· 2011 Carl Moyer Guidelines, Part 1, Minimum Contract Requirements at 3-31 

Per these provisions, each equipment project contract must include: (1) the name and contact 

information of the grantee; (2) specified timeframes for “project completion” (the date the 

project post-inspection confirms that the project has become operational) and “project 

implementation” (the project life used in the project cost-effectiveness calculation); (3) detailed 

information on both baseline and new vehicles, equipment, and/or engines, including 

documentation adequate to establish historical annual usage; (4) requirements for the grantee to 

maintain the vehicle, equipment and/or engine according to the manufacturer’s specifications for 

the life of the project; (5) annual reporting requirements; (6) a provision authorizing the District, 

CARB, and their designees to conduct fiscal audits and to inspect the project engine, vehicle, 

and/or equipment and associated records during the contract term, and (7) requirements to 

maintain and retain project records for at least two years after contract expiration or three years 

after final project payment, whichever is later. These requirements ensure that projects are 

carried out as anticipated, provide the District, ARB and the public with data needed to verify the 

projected emission reductions and help ensure that violations can be identified. Contract non-
Page 16 of 55

performance is included in the above sections regarding minimum contract requirements with 

more details of actions towards non-performing projects included in: 

· 2005 Carl Moyer Guidelines, Part I, Repercussions for Nonperformance at II-32 

· 2008 Carl Moyer Guidelines, Part III, Repercussions for Nonperformance at 36 

· 2011 Carl Moyer Guidelines, Part 1, Nonperforming Projects at 3-44 

Provisions in this section of the 2011 guidelines specify some of the actions that would constitute 

a breach of contract as well as penalties and appropriate corrective actions for non-performance, 

including cancellation of the contract and recovery of all or a portion of Program funds. The 

2005 and 2008 guidelines do not specify repercussions for noncompliance but state that the 

contracts must include these types of stipulations. 

Pre- and post-inspections are also required for funded projects further ensuring the emission 

reductions are verifiable. This requirement ensures information provided by the project owner is 

consistent with actual operating equipment and that the existing equipment is in working 

conditions. Additional requirements for pre-inspections including verification of usage and 

requirements for photographic confirmation of the equipment are in: 

· 2005 Carl Moyer Guidelines, Part I, Pre-Inspection at II-35 

· 2008 Carl Moyer Guidelines, Part III, Project Pre-Inspections at 37 

· 2011 Carl Moyer Guidelines, Part 1, Project Pre-Inspection at 3-38 

Additional requirements for post-inspections including photographic confirmation of the new 

equipment are in: 

· 2005 Carl Moyer Guidelines, Part I, Post-Inspection at II-35 

· 2008 Carl Moyer Guidelines, Part III, Post-Inspection at 39 

· 2011 Carl Moyer Guidelines, Part 1, Project Post-Inspection at 3-38 

In general we believe that the application, contracting and inspection requirements are sufficient 

to ensure that the projects funded following Carl Moyer guidelines are independently verifiable 

and enforceable by ARB and the District. Additional requirements specific to each project type 

and how they help ensure the integrity criteria for enforceability when combined with the 

requirements discussed in this section are discussed below. 

General Carl Moyer Quantifiable 

Appendix C of the 2005, 2008 and 2011 Moyer Guidelines contains the formulas used to 

determine annual emissions and annual emission reductions based on activity data, including 

options for using hours of operation, fuel consumption and miles traveled to determine annual 

usage. In general, emission reductions are calculated by taking the difference between the 

emissions of a baseline technology and a reduced technology. The baseline technology is an 

engine certified by ARB to the current emission standards for new purchases or the existing 

engine in a vehicle or equipment for repowers, replacements and retrofits. The reduced 

technology is generally one of the following: 

ß For a new purchase, the reduced technology is an engine certified by ARB to reduce NOx

emissions by at least 30 percent less than the current NOx emission standard, or certified 

by ARB to the optional NOx or NOx+NMHC emission standard. 
Page 17 of 55

ß For a repower, the reduced technology is the replacement engine certified by ARB to at 

least 15 percent less than the NOx emissions from the baseline technology. 

ß For a NOx retrofit, the reduced technology is an ARB-verified retrofit technology that 

reduces NOx emissions by at least 15 percent from the NOx emissions of the baseline 

technology. 

ß For a PM retrofit, the reduced technology is the ARB-verified diesel emission control 

strategy that reduces PM emissions to the appropriate level depending on the specific 

project types. 

The following sections of the Guidelines have tables containing data needed to calculate the 

emission reductions of projects using formulas in Appendix C: 

· 2005 and 2008 Carl Moyer Guidelines, Part IV, Tables for Emission Reduction and CostEffectiveness Calculations at B-1 

· 2011 Carl Moyer Guidelines, Part 1, Tables for Emission Reduction and CostEffectiveness Calculations at D-1 

Included are data such as engine emission factors, load factors, and other conversion factors used 

in the calculations described in Appendix C. Along with activity data required to be reported by 

the guideline sections discussed above in the “General Carl Moyer Enforceable” section, these 

appendices allow for quantification of emissions and emission reductions. Appendix B of the 

2005 guidelines states that “the emission factors in the tables reflect preliminary data on 

emission rates developed by ARB staff as part of a comprehensive effort to update the emissions 

models used for on-road motor vehicles and off-road mobile sources.” This Appendix also 

clarifies that the draft data were made available on ARB's website in early 2005, but were subject 

to change as staff completed their analyses. See 2005 Carl Moyer Guidelines, Part IV, Appendix 

B at B-1. Some of the specific project guidelines for the 2008 and 2011 Carl Moyer guidelines 

indicate the source of the data in the Tables in Appendix B and D, respectively, and will be 

discussed below when specified. Additional requirements specific to each project type and how 

they help ensure the integrity criteria for quantifiable when combined with the requirements 

discussed in this section are discussed below. 

General Carl Moyer Surplus 

Emission reductions are surplus if they are not required by other regulations or legal mandates. 

The Carl Moyer Guidelines specify that emission reductions cannot be required by any federal, 

state or local regulation, memorandum of agreement/understanding, settlement agreement, 

mitigation requirement, or other legal mandate in order for projects to be funded. See: 

· 2005 Carl Moyer Guidelines, Part I, Section VIII.D at.II-31 

· 2008 Carl Moyer Guidelines, Part III, Section (a) at II-1 

· 2011 Carl Moyer Guidelines, Part 1, Section A at 2-1. 

The 2008 and 2011 guidelines also state that “rule approval date (or the promulgation date of a 

federal regulation) represents the cutoff date by which a Carl Moyer Program project contract 

must be fully executed, without needing to consider the rule in evaluating the surplus nature of 

the project’s emission reductions. After that date, the new rule must be considered in the 
Page 18 of 55

evaluation of a project’s eligibility.” See 2008 Carl Moyer Guidelines, Part I, Section (b) at II-1 

and 2011 Carl Moyer Guidelines, Part 1, Section B at 2-1. 

According to ARB, “As part of the SIP development and/or revision process, ARB reviews the 

Moyer project mix to ensure that the amount of emission reductions credited to the program are 

not included in the future year inventories, including review of fleet turnover and equipment 

lifetime assumptions that are specific to the future year inventory used in each individual 

attainment demonstration.” See email from Karen Magliano to Andrew Steckel, Subject: Moyer 

Integrity Elements Write Up. We expect ARB and the District to clarify, in future SIP submittals 

developed pursuant to Rule 9610, how the State ensures that those emission reductions relied 

upon for SIP credit are not included in future year inventories. The State/District’s demonstration 

of SIP creditability should also show how the underlying assumptions of future year inventories 

and the project life are consistent with the remaining useful life of the vehicle, engine, or 

equipment being replaced. 

Recordkeeping and reporting requirements described above in the “General Carl Moyer 

Enforceable” and “General Carl Moyer Quantifiable” sections ensure that historic and future 

emission estimates correctly represent emissions occurring in the San Joaquin Valley. Preinspection requirements described in the “General Carl Moyer Enforceable” section ensure that 

the unit to be replaced is still in useable form and thus would not have been replaced by normal 

fleet turnover. These requirements ensure that emission reductions from normal fleet turnover 

that have already been accounted for in the future baseline emission inventories underlying a SIP 

attainment demonstration are not treated as surplus. 

Additional requirements specific to each project type and how they help ensure the integrity 

criteria for surplus when combined with the requirements discussed in this section are discussed 

below. 

General Carl Moyer Permanent 

Carl Moyer Program requirements that old engines be destroyed and that the destruction is 

verified to ensure old equipment is not reused and that the emission reductions are permanent. 

See 2005 Carl Moyer Guidelines, Part I, Section IX.B at II-36; 2008 Carl Moyer Guidelines, Part 

III, Section 31(c) at 41; and 2011 Carl Moyer Guidelines, Part 1, Section BB at 3-38. 

The Carl Moyer Program Guidelines also require that each contract executed with a grantee 

identify a “contract term” which must include two time frames as discussed in the “General Carl 

Moyer Enforceable” Section– “project completion” and “project implementation” – to ensure 

that the District and ARB can fully enforce the contract during the life of the Carl Moyer 

Program-funded project. 

· 2005 Carl Moyer Guidelines, Part I, Contract Term at II-29 

· 2008 Carl Moyer Guidelines, Part III, Contract Term at 35 

· 2011 Carl Moyer Guidelines, Part 1, Contract Term, at 3-32 

These sections specify that the contract must include language stating that the grantee is required 

to operate and maintain their funded projects, be it the repowered engines, the equipment retrofit 

or the new engine, for the full project implementation period ensuring that the emission 

reductions quantified are occurring throughout the project life. These contract provisions enable 
Page 19 of 55

EPA and the public to evaluate the duration for which the District attributes emission reductions 

to a particular project and to determine whether that duration adequately covers the period for 

which the reductions are relied upon in a SIP. 

Additional requirements specific to each project type and how they help ensure the permanence 

of the emission reductions when combined with the requirements discussed in this section are 

discussed below. 

C. Carl Moyer On-Road Heavy-Duty Vehicle: New Vehicle Purchase (Section 3.1.1.1.1) 

Section 3.1.1.1.1 of Rule 9610 refers to the following Carl Moyer Guidelines: 

· 2005 Carl Moyer Guidelines, Part II, Chapter 1, Heavy-Duty On-Road Vehicles

· 2008 Carl Moyer Guidelines, Part I, Chapter 3, On-Road Heavy-Duty Vehicles

· 2011 Carl Moyer Guidelines, Part 1, Chapter 4, On Road Heavy-Duty Vehicles

These chapters describe the minimum criteria and requirements for all on-road heavy-duty 

projects except Fleet Modernization projects. In this Section we will only discuss the 

requirements in these chapters related to new purchases. New Purchases are “vehicles or 

equipment certified to optional, lower emission standards.” See 2011 Carl Moyer Guidelines, 

Part 1 at B-8. The engines purchased through these projects do not replace existing engines but 

have lower emissions than what is required by regulations at the time of purchase. 

Carl Moyer On-Road New Vehicle Enforceable 

Chapter 1 of the 2005 Carl Moyer Guidelines states that grantee “records must contain, at 

minimum, total miles traveled in and outside of California, fuel usage, and maintenance and 

repair information” and must be retained and updated throughout the project life and made 

available at the request of the district or ARB. See 2005 Carl Moyer Guidelines, Part II, Section 

VII.B at I-24. In addition, Table 1-6 contains all information that the applicant must submit in a 

project application to be eligible for funding. The required information includes information 

about the baseline and replacement technologies, information about the vehicle activity and 

information about the applicant. 

Chapter 3 of the 2008 Carl Moyer Guidelines requires grantees include “the information needed 

to track the project and calculate project cost-effectiveness.” See 2008 Carl Moyer Guidelines, 

Part I, Section V at III-14. 

Both the 2008 and 2011 Carl Moyer Guidelines requires that “if using the fuel based 

calculations, usage must be based on two years of historical fuel usage documentation specific 

for the equipment being funded. Documentation may include fuel logs, purchase receipts or 

ledger entries.” See 2008 Carl Moyer Guidelines, Part I Section IV.(a)(5) at III-7; 2011 Carl 

Moyer Guidelines, Part 1 Section D.1.(E) at 4-4.

The requirements in the “General Carl Moyer Enforceable” section above, along with the 

requirements that activity be reported, to different degrees depending on the guideline year as 

described above for the 2005, 2008 and 2011 guidelines, help ensure the integrity criteria for 

enforceability for projects funded under these guidelines. 
Page 20 of 55

Carl Moyer On-Road New Vehicle Quantifiable 

For the 2005 guidelines, the emissions standards, emission factors and conversion factors needed 

quantify emission reductions are in Tables B-2 though B-8 of Appendix B. As indicated in the 

“General Carl Moyer Quantifiable” section, these data were preliminary when the guidelines 

were published. According to Chapter 1, the converted emission standards used in the 

calculations were the emission standards adjusted using the fuel correction factors and the NOx

fraction factors found in Appendix B. See 2005 Carl Moyer Guidelines, Part II, Section VII at I21. 

According to Chapter 3 of the 2008 and to Chapter 4 of the 2011 Carl Moyer Guidelines, “onroad calculations shall be based on projected annual mileage instead of fuel usage, due to the fact 

that the exhaust emission factors are more robust. Fuel based calculations may be used only if 

documentation of previous fuel use and mileage records are submitted to the district with the 

application that show the project to be at least 30% more cost-effective when using fuel based 

calculations.” See 2008 Carl Moyer Guidelines, Part I, Section IV.(a)(5) at III-7; 2011 Carl 

Moyer Guidelines, Part 1, Section D.1.(E) at 4-4.

Emission standards used for this category of projects are found in Table 3-3 of the 2008 and 

Table 4-3 of the 2011 Guidelines and are codified in Title 13, California Code of Regulations 

(CCR), sections 1956.8 and 1956.1. Additionally, Chapter 4 of the 2011 Carl Moyer Guidelines 

explains that “the emission factors in Appendix D, Tables D-3 and D-4 are based on in-use 

dynamometer testing data. All other on-road emission factors in Appendix D are converted 

emissions standards based on the engine certification level.” See 2011 Carl Moyer Guidelines, 

Part 1, Section F at 4-5. These guidelines also require that “engine model year, not the vehicle 

model year, must be used to determine the appropriate emissions factors.” See 2011Carl Moyer 

Guidelines, Part 1, Section D.1.(H) at 4-5.

As described in the “Carl Moyer General Quantifiable” section, emission reductions are 

calculated by taking the difference between the emissions of a baseline technology and a reduced 

technology. ARB defines the baseline technology for new purchases as “an engine certified by 

ARB to the current emission standards.” See 2005 and 2008 Carl Moyer Guidelines, Part IV at 

C-2; 2011Carl Moyer Guidelines, Part 1 at B-2. Thus, the emission reductions for New 

Purchases are calculated by taking the difference of the emissions of the new engine and an 

engine certified to the current emission standard. 

The information discussed in this section, along with that discussed in the “General Carl Moyer 

Quantifiable” section provide for well-established, publicly available emission factors and 

calculation methods and requiring that grantees record and annually report activity data to the 

District, the 2005, 2008 and 2011 Carl Moyer Program Guidelines ensure that emission 

reductions from On-Road projects funded through these guidelines can be determined using 

reliable and replicable methods. We find these provisions adequate to further ensure that the 

criterion for emission reductions to be “quantifiable,” as defined in EPA guidance and in section 

2.23 of SJVUAPCD Rule 9610. 

Carl Moyer On-Road New Vehicle Surplus 

New Purchase projects expand the existing fleet of vehicles by providing funding for the 

purchase of vehicles that do not replace existing vehicles. Emissions from New Purchases are an 
Page 21 of 55

increase of emissions from the fleet as compared to the emissions of the fleet had the additional 

engine not been added. 

As described in the “Carl Moyer On-Road New Vehicle Quantifiable” section, the emission 

reductions for New Purchases are calculated by taking the difference of the emissions of the new 

engine and an engine certified to the current emission standard. We do not believe that the 

emission reductions obtained from this calculation are surplus because the emissions of the total 

fleet have increased as compared to the emissions of the fleet had the additional engine not been 

added. Additionally, the District did not provide information to demonstrate that the projects are 

surplus. Because of this, we conclude that New Purchases do not meet the criterion for emission 

reductions to be surplus. 

Carl Moyer On-Road New Vehicle Permanent 

According to Rule 9610, “emission reductions are permanent if actions are taken to physically 

destroy or permanently disable existing or baseline equipment or vehicles, or to permanently 

amend practices to ensure the reduction of emissions for the duration of the project life.” See 

Section 2.18. In the case of New Purchases, there is no existing or baseline equipment to be 

destroyed, nor are there existing or baseline practices to be amended for the duration of the 

project life. Because of this, we conclude that New Purchases do not meet the criterion for 

emission reductions to be permanent, as defined in Rule 9610. 

D. Carl Moyer On-Road Heavy-Duty Vehicle: repower (Section 3.1.1.1.2) and retrofit 

(Section 3.1.1.1.3) 

Sections 3.1.1.1.2 and 3.1.1.1.3 of Rule 9610 refer to the following Carl Moyer Guidelines: 

· 2005 Carl Moyer Guidelines, Part II, Chapter 1, Heavy-Duty On-Road Vehicles

· 2008 Carl Moyer Guidelines, Part I, Chapter 3, On-Road Heavy-Duty Vehicles

· 2011 Carl Moyer Guidelines, Part 1, Chapter 4, On Road Heavy-Duty Vehicles

These chapters describe the minimum criteria and requirements for all on-road heavy-duty 

projects with the exception of Fleet Modernization projects. In this Section we will only discuss 

the requirements related to repower and retrofit projects. Repower is “the replacement of an inuse engine with another engine”. See 2011 Carl Moyer Guidelines, Part 1, Appendix B at B-9. 

Retrofit “means an emission control system employed exclusively with an in-use engine, vehicle 

or piece of equipment.” See 2011 Carl Moyer Guidelines, Part 1, Appendix B at B-9. 

Carl Moyer On-Road Repower and Retrofit Enforceable 

The requirements for the Repower and Retrofit projects are the same as for New Purchases

described above in the “Carl Moyer On-Road New Vehicle Enforceable” Section which we 

believe ensure the integrity criteria for enforceability for projects funded under the 2005, 2008 

and 2011 Carl Moyer guidelines for these project types. 

Carl Moyer On-Road Repower and Retrofit Quantifiable 
Page 22 of 55

The data used for the Repower and Retrofit projects are the same as for New Purchases described 

above in the “Carl Moyer On-Road New Vehicle Quantifiable” Section. For these projects, the 

baseline technology used to determine the baseline emissions are the existing engines that will be 

repowered or retrofitted. In addition, the guidelines state that “only ARB-verified retrofits are 

eligible for funding.” See 2005 Carl Moyer Guidelines, Part II, Section V.E at I-14; 2008 Carl 

Moyer Guidelines, Part I, Section IV(e)(3) at III-9; and 2011 Carl Moyer Guidelines, Part 1, 

Section D.5.(B) at 4-8. For repower projects, engines must be ARB certified to a specific 

emission level, which depends on the guideline year. See 2005 Carl Moyer Guidelines, Part II, 

Section V.D at I-13; 2008 Carl Moyer Guidelines, Part I, Section IV(d) at III-9;and 2011 Carl 

Moyer Guidelines, Part 1, Section D.4 at 4-7. These requirements combined with the 

requirement discussed in the “Carl Moyer On-Road New Vehicle Quantifiable” and the “General 

Carl Moyer Quantifiable” Sections meet the criterion for emission reductions to be 

“quantifiable,” as defined in EPA guidance and in section 2.23 of SJVUAPCD Rule 9610 for 

projects funded under the 2005, 2008 and 2011 Carl Moyer guidelines for these project types. 

Carl Moyer On-Road Repower and Retrofit Surplus 

The surplus quality of projects for this category has changed since the inception of the Carl 

Moyer Program because California has since promulgated regulations that apply to this source 

category. Section III of Chapter 1 of the 2005 guidelines describes the existing regulations at that 

time and state that “any Carl Moyer Program project must be surplus to these regulations. See

2005 Carl Moyer Guidelines, Part II, Section III at I-2. Section III of Chapter 3 of the 2008 

guidelines lists multiple regulations that were in place at the time and states that projects must be 

surplus to those regulations listed. See 2008 Carl Moyer Guidelines, Part I, Section II at III-3.

Section E of Chapter 4 of the 2011 guidelines states that “most on-road vehicles are subject to an 

in-use regulation. Funding is available for emissions reductions that are early or extra to 

regulatory requirements.” See 2011 Carl Moyer Guidelines, Part 1, Section E at 4-9. This section 

specifies which projects are eligible for funding based on the existing regulations. The 

requirements in the “General Carl Moyer Surplus” section above, along with the specifics 

mentioned above for the 2005, 2008 and 2011 guidelines help ensure the integrity criterion for 

enforceability for projects funded under these guidelines. 

Carl Moyer On-Road Repower and Retrofit Permanent 

We believe that requirements in the “General Carl Moyer Permanent” section above are 

sufficient to help ensure the integrity criterion for enforceability for projects funded under the 

2005, 2008 and 2011 guidelines. 

E. Carl Moyer On-Road Heavy-Duty Vehicles Fleet Modernization (Section 3.1.1.2) 

Section 3.1.1.2 of Rule 9610 refers to the following Carl Moyer Guidelines: 

· 2005 Carl Moyer Guidelines, Part II, Chapter 2, Heavy-Duty On-Road Fleet 

Modernization

· 2008 Carl Moyer Guidelines, Part I, Chapter 4, On-Road Heavy-Duty Fleet 

Modernization
Page 23 of 55

· 2011 Carl Moyer Guidelines, Part 1, Chapter 5, On-Road Heavy-Duty Vehicles Fleet 

Modernization

These chapters apply to the same types of units covered by the Section 3.1.1.1 of Rule 9610 

discussed above (i.e. heavy duty vehicles), but the project type is different. Because they are the 

same source category, the regulatory requirements described in the other on-road heavy duty 

Carl Moyer Guidelines discussed above also apply to these projects. See “Carl Moyer On-Road 

Repower and Retrofit Surplus” Section. Fleet modernization projects provide “incentives to 

replace old high-polluting heavy-duty vehicles with newer, lower-emission replacement 

vehicles.” See 2011 Carl Moyer Guidelines, Part 1, Section A at 5-1. Of these three sets of 

guidelines, only the 2005 guidelines include tiered transaction in which “the purchaser of a new 

vehicle meeting the optional standard identifies a standard fleet modernization project that meets 

the fleet modernization criteria, including the participation of a 1999 or newer replacement 

vehicle. A second participant acquires the replacement vehicle and scraps a 1990 or older 

vehicle.” See 2005 Carl Moyer Guidelines, Part II, Section VII.D at II-15. We are not at this time 

opining on this project type as the District did not provide enough information to demonstrate 

that it meets the four integrity elements and it is not explicitly cited in the rule. If the District 

intends to seek credit for these, they should submit further documentation pursuant to Section 3.2 

of Rule 9610. 

Carl Moyer On-Road Fleet Modernization Enforceable 

The guidelines from the three years require that the old vehicle be registered in CA for at least 

the previous two years before contract starts. See 2005 Carl Moyer Guidelines, Part II, Section 

VII.B at II-11; 2008 Carl Moyer Guidelines, Part I, Section IV.(c)(3) at IV-6; and 2011 Carl 

Moyer Guidelines, Part 1, Section C.3.(F) at 5-4. The guidelines also require that the grantee 

own and operate the old vehicle. See 2005 Carl Moyer Guidelines, Part II, Section VII.B at II-11; 

2008 Carl Moyer Guidelines, Part I, Section IV.(b)(6) at IV-4; and 2011 Carl Moyer Guidelines, 

Part1, Sections C.2.(B) at 5-2. Participants are required verify the horsepower rating of the old 

engine using the value listed on the old engine tag. If the engine tag is not legible, a 

dynamometer test can be used to determine the horsepower rating. See 2005 Carl Moyer

Guidelines, Part II, Section VII.C at II-12; 2008 Carl Moyer Guidelines, Part I, Section IV.(d)(6) 

at IV-7; and 2011 Carl Moyer Guidelines, Part 1, Section C.3.(F) at 5-4. The participant must 

provide documentation of annual mileage or vehicle usage in California. See 2005 Carl Moyer

Guidelines, Part II, Section VII.C at II-12; 2008 Carl Moyer Guidelines, Part I, Section IV.(l)(2) 

at IV-15; and 2011 Carl Moyer Guidelines, Part 1, Section C.2.(A) at 5-2. 

While the 2011 guidelines do not explicitly require and Electronic Monitoring Unit (EMU), the 

2005 and 2008 guidelines require an EMU on all replacement vehicles and data has to be 

reported to the district for the project life. See 2005 Carl Moyer Guidelines, Part II, Section 

VII.C at II-14; and 2008 Carl Moyer Guidelines, Part I, Sections IV.(d)(12) and IV.(d)(14) at IV8. 

The requirements in the “General Carl Moyer Enforceable” section above, along with the 

specifics mentioned above for the 2005, 2008 and 2011 guidelines help ensure the integrity 

criterion for enforceability for projects funded under these guidelines. 
Page 24 of 55

Carl Moyer On-Road Fleet Modernization Quantifiable 

The data used for the fleet modernization projects are the same as for New Purchases described 

above in the “Carl Moyer On-Road New Vehicle Quantifiable” Section. For these projects, the 

baseline technology used to determine the baseline emissions are the existing engines that will be 

replaced. Since on-road fleet modernization projects and on-road new vehicle purchase projects 

encompass the same source category, the discussion and conclusion of the “Carl Moyer On-Road 

New Vehicle Quantifiable” section above applies to this project type. See “Carl Moyer On-Road 

New Vehicle Quantifiable” Section.

Carl Moyer On-Road Fleet Modernization Surplus 

In addition to the inclusion of regulatory requirements in the Carl Moyer Program discussed in 

the “Carl Moyer On-Road Repower and Retrofit Surplus” Section above, the fleet modernization 

guidelines of the Carl Moyer program include requirements to ensure the old and replacement 

vehicles are comparable. The guidelines require that the old vehicle be in operational condition 

as determined through a California Highway Patrol’s Biennial Inspection of Terminals. See 2005 

Carl Moyer Guidelines, Part II, Section VII.B at page II-11; 2008 Carl Moyer Guidelines, Part I, 

Section IV.(c)(4) at IV-6; and 2011 Carl Moyer Guidelines, Part 1, Section C.3.(D) at 5-4. The 

guidelines for the three years also limit the horsepower rating for the replacement vehicle engine 

to match the baseline engine horsepower. See 2005 Carl Moyer Guidelines, Part II, Section VII.C 

at II-12; 2008 Carl Moyer Guidelines, Part I, Section IV.(d)(5) at IV-7; and 2011 Carl Moyer 

Guidelines, Part 1, Section C.4.(C) at 5-5.

In addition, the 2005 and 2008 guidelines require the annual mileage of the replacement vehicle 

must not exceed 150 percent of the baseline project mileage. See 2005 Carl Moyer Guidelines, 

Part II, Section VII.C at II-12; and 2008 Carl Moyer Guidelines, Part I, Section IV.(d)(4) at IV-7. 

These two guideline years also require that the replacement vehicle must operate in the same 

vocation for the project life. See 2005 Carl Moyer Guidelines, Part II, Section VII.C at II-12; and 

2008 Carl Moyer Guidelines, Part I, Section IV.(d)(3) at IV-7. 

The requirements in the “General Carl Moyer Surplus” section above, along with the specifics 

mentioned above for the 2005, 2008 and 2011 guidelines help ensure the integrity criterion for 

surplus for projects funded under these guidelines. 

Carl Moyer On-Road Fleet Modernization Permanent 

Along with the requirements discussed in the “General Carl Moyer Permanent” section above, 

we believe that the requirement to destroy the old vehicle is sufficient to help ensure the on-road 

fleet modernization projects funded under the 2005, 2008 and 2011 guidelines generate emission 

reductions that are permanent. See 2005 Carl Moyer Guidelines, Part II, Section X.C at II-21; 

2008 Carl Moyer Guidelines, Part I, Section IV.(j) at IV-14; and 2011 Carl Moyer Guidelines, 

Part 1, Section C.6.(C)(3) at 5-8. 

F. Carl Moyer Off-Road Compression-Ignition Equipment: repower (Section 

3.1.1.3.1), replacement (Section 3.1.1.3.2), or retrofit (Section 3.1.1.3.3) 
Page 25 of 55

Sections 3.1.1.3.1 and 3.1.1.3.3 of Rule 9610 refer to the following Carl Moyer Guidelines: 

· 2005 Carl Moyer Guidelines, Part II, Chapter 5, Compression-Ignition Off-Road 

Equipment

· 2008 Carl Moyer Guidelines, Part I, Chapter 5, Off-Road Compression-Ignition 

Equipment

· 2011 Carl Moyer Guidelines, Part 1, Chapter 7, Off-Road Compression-Ignition 

Equipment

Section 3.1.1.3.2 of Rule 9610 refers to the following Carl Moyer Guidelines: 

· 2008 Carl Moyer Guidelines, Part I, Chapter 4, On-Road Heavy-Duty Fleet 

Modernization

· 2011 Carl Moyer Guidelines, Part 1, Chapter 9, Off-Road Equipment Replacement

We believe that the District included an incorrect reference to Chapter 4 of the 2008 guidelines 

in Section 3.1.1.3.2 since the chapter is titled On-Road Heavy-Duty Fleet Modernization. We are 

reviewing Chapter 7, Off-Road Equipment Replacement, of the 2008 guidelines instead because 

it is akin to the other references in this section of the rule. 

Chapter 5 of the 2005 guidelines includes New Purchases as a project type eligible for funding. 

Section 3.1.1.3 of Rule 9610 does not explicitly include such project type and hence we are not 

at this time opining on their ability to generate SIP creditable emission reductions. In addition, 

Chapter 7 of the 2008 guidelines and Chapter 9 of the 2011 guidelines include projects involving 

the replacement of large spark ignition engines. Since these types of projects are not explicitly 

referenced in the rule language, we are not at this time opining of their fulfillment of the four 

integrity elements. Off-road CI equipment that is eligible for funding includes construction and 

agricultural equipment that is 25 hp or greater. 

Chapter 9, Off-Road Equipment Replacement, describes the minimum criteria and requirements 

for Carl Moyer Program mobile, self-propelled off-road compression-ignition (CI) and large 

spark-ignition (LSI) equipment replacement projects. Chapter 9 states that “All provisions 

regarding the in-use regulations described in Chapters 7 and 8 “Off-Road Compression-Ignition 

Equipment and Off-Road Large Spark-Ignition Equipment also apply in this chapter.” As such, 

we discuss some provisions in these chapters that affect the ability of CI projects funded through 

Carl Moyer Chapter 9 to meet the four integrity elements 

Carl Moyer Off-Road Repower, Replacement and Retrofit Enforceable 

Chapter 5 of the 2005 Carl Moyer Guidelines states that the “contract term must extend to the 

end of the project life.” See 2005 Carl Moyer Guidelines, Part II, Section V. A at V-9. In 

addition, Table 5-3 contains all information that the applicant must submit in a project 

application to be eligible for funding. The required information includes information about the 

baseline and replacement technologies, information about the vehicle activity and information 

about the applicant. This chapter also requires a functioning hour meter to support equipment 

activity data included in the application. See 2005 Carl Moyer Guidelines, Part II, Section VI 

page V-13. 

Chapter 5 of the 2008 guidelines, which covers the repower and retrofit projects, requires 

historical hours of operation be based on the average of the two previous years use or that two 
Page 26 of 55

years of historical fuel usage documentation be used to determine historical fuel usage for 

calculations based on fuel. See 2008 Carl Moyer Guidelines, Part I, Section IV.(a)(4) at V-3. 

Chapter 5 also requires that “future annual hours of equipment operation for determining 

emission reductions must be based only on readings from an installed and fully operational hour 

meter.” See 2008 Carl Moyer Guidelines, Part I, Section IV.(a)(5) at V-3. 

Chapter 7 of the 2008 guidelines, which covers replacement projects, requires that the participant 

provide proof that they owned the equipment in California for the previous two years (See 2008 

Carl Moyer Guidelines, Part I, Section IV.(b)(2) at V-6) and that the old equipment is in 

operational conditions (See 2008 Carl Moyer Guidelines, Part I, Section IV.(b)(3) at VI-4). 

Similarly to the 2005 guidelines, the 2008 guidelines require that participants submit 

documentation of annual usage of the old equipment for the previous two years. See 2008 Carl 

Moyer Guidelines, Part I, Section IV.(b)(4) at VI-4. 

Chapter 7 of the 2011 guidelines, which covers repower and retrofit projects, also requires that 

project emission reductions be based upon readings from an installed and fully operational hour 

meter or, alternatively, if fuel usage is used, then future annual fuel usage must be based on fuel 

logs, purchase receipts, or ledger entries specific to the funded equipment. See 2011 Carl Moyer 

Guidelines, Part 1, Section D.1.(I) at 7-6 

Chapter 9 of the 2011 guidelines, which covers repowers off-road CI project, also require that 

the grantee demonstrate that it owned and operated the old equipment in California for the 

previous two years (see 2011 Carl Moyer Guidelines, Part 1, Section C.2(E) at 9-4) and to verify 

the operational status of the equipment being replaced by providing two years of usage 

documentation (see 2011 Carl Moyer Guidelines, Part 1, Section C.2(F) at 9-4). To verify the 

usage of the new equipment, the guidelines require that new replacement equipment have an 

installed and fully operational hour meter or that fuel logs or purchase receipts of fuel be kept. 

See 2011 Carl Moyer Guidelines, Part 1, Section C.3.(I) at 9-9. 

The requirements in the “General Carl Moyer Enforceable” section above, along with the 

requirements that activity be reported, to different degrees depending on the guideline year as 

described above for the 2005, 2008 and 2011 guidelines, help ensure the integrity criterion for 

enforceability for projects funded under these guidelines. 

Carl Moyer Off-Road Repower, Replacement and Retrofit Quantifiable 

Tables B-12 and B-13 in Appendix B of the 2005 guidelines have the emission and load factors 

necessary to calculate the emission reductions using the equations in Appendix C. According to 

Chapter 5 of the 2005 Carl Moyer Guidelines, the emission factors “reflect preliminary emission 

data based on model input values to the OFFROAD emission inventory model for engines 

greater than or equal to 25 hp.” See 2005 Carl Moyer Guidelines, Part II, Section VI at V-13. 

Tables B-11 through B-13 in Appendix B of the 2008 guidelines have the necessary emission 

and load factors to calculate the emission reductions using the equations in Appendix C. The 

source of the data used for the emission and load factors is not clear from the information 

provided in the guidelines. 

Tables D-10 through D-12 in Appendix D of the 2011 guidelines have the necessary emission 

and load factors to calculate the emission reductions using the equations in Appendix C. The 

certification emission standards and Tier designation for the engine used to calculate emission 
Page 27 of 55

reduction must be determined from engine emission standards adopted by ARB and U.S. EPA 

through a public process. See 2011 Carl Moyer Guidelines, Part 1, Section D.1.(C) at 7-5. 

All three guidelines require documented activity levels be used along with the above discussed 

data and equations to calculate the emission reductions as discussed in the “Carl Moyer OffRoad Repower, Replacement and Retrofit Enforceable” Section. 

The information discussed in this section, along with that discussed in the “General Carl Moyer 

Quantifiable” section provide for well-established, publicly available emission factors and 

calculation methods and requiring that grantees record and annually report activity data to the 

District, the 2005, 2008 and 2011 Carl Moyer Program Guidelines ensure that emission 

reductions from Off-Road projects funded through these guidelines can be determined using 

reliable and replicable methods. We find these provisions adequate to meet the criterion for 

emission reductions to be “quantifiable,” as defined in EPA guidance and in section 2.23 of 

SJVUAPCD Rule 9610. 

Carl Moyer Off-Road Repower, Replacement and Retrofit Surplus 

Chapter 5 of the 2005 guidelines specify that emission reductions generated through the projects 

may not be required by any federal, state or local regulation, memorandum of 

agreement/understanding with a regulatory agency, settlement agreement, mitigation 

requirement, or other legal mandate. See 2005 Carl Moyer Guidelines, Part II, Section V.A at V8. Table 5-2 includes the federal and California emission standards that would preclude engines 

from being surplus if they are subject to these. 

Section III of Chapter 5 of the 2008 guidelines lists regulations and emission standards that were 

in place at the time of guideline adoption which would preclude engines from being surplus if the 

engines are subject to these regulations. See 2008 Carl Moyer Guidelines, Part I, Section II at V2. 

For replacement projects, the 2008 guidelines require that the replacement equipment be 

functionally equivalent to replaced equipment to help ensure that new equipment is surplus. For 

projects that replace two or more pieces of old, like equipment with one piece of replacement 

equipment, the 2008 guidelines require that the replacement equipment must execute the same 

job as the old pieces of equipment. For baseline emissions in this scenario, the annual emissions 

of the two pieces of old equipment are summed. See 2008 Carl Moyer Guidelines, Part I, Section 

IV.(b)(5) at VII-6. Additionally, the 2008 guidelines require that replacement equipment serve 

the same function and perform the same work equivalent as the old equipment (see 2008 Carl 

Moyer Guidelines, Part I, Section IV.(c)(2) at VII-7) and that the horsepower rating for the 

replacement equipment engine not be greater than 125 percent of the baseline horsepower for the 

old equipment engine (see 2008 Carl Moyer Guidelines, Part I, Section IV.(c)(4) at VII-7). 

Chapter 7 of the 2011 guidelines mandates that emission reductions achieved from funded 

projects cannot count towards a fleet’s regulatory requirements for the duration of the project 

life. See 2011 Carl Moyer Guidelines, Part 1, Section E.2 at 7-10. If subject to this regulation, the 

guidelines require that the grantee submit data to determine if old equipment or equipment to be 

repowered is in compliance with the Off-road In-Use regulations reporting system. See 2011 Carl 

Moyer Guidelines, Part 1, Section E.1 at 7-10. Additionally, Sections E.4 through E.6 specify 
Page 28 of 55

years through which funding is available based on the compliance deadline in the In-Use OffRoad Diesel Vehicle Regulation. 

Similarly to the 2008 guidelines, Chapter 9 of the 2011 requires that the replacement equipment 

is functionally equivalent to new equipment to help ensure that new equipment is surplus. The 

guidelines require that replacement equipment serve the same function and perform the same 

work as the old equipment (see 2011 Carl Moyer Guidelines, Part 1, Section C.3.(B) at 9-7) and 

documentation must be provided to verify this (see 2011 Carl Moyer Guidelines, Part 1, Section 

C.3.(D) at 9-7). Additionally, the guidelines require that the horsepower rating for the 

replacement engine not be greater than 125 percent of the original manufacturer rated hp 

(baseline hp) for the old (existing) equipment engine (see 2011 Carl Moyer Guidelines, Part 1, 

Section C.3.(D) at 9-7). These requirements are designed to ensure that the new equipment is 

replacing an existing (higher-polluting) piece of equipment that is currently being used, instead 

of expanding a fleet. 

For projects subject to California’s In-Use Off-Road Diesel Vehicle Regulation, Chapter 9 

specifies that “no emission reductions achieved from a funded program can count towards a 

fleet’s regulatory requirements for the duration of the project life.” See 2011 Carl Moyer 

Guidelines, Part 1, Section C.7.(C) at 9-16. If subject to this regulation, the guidelines require 

that the grantee submit data to determine if old equipment or equipment to be repowered is 

registered in the Off-road In-Use regulations reporting system. See 2011 Carl Moyer Guidelines, 

Part 1, Section C.2.(D) at 9-4. Additionally, Sections C.7.(E) through C.7.(G) specify years 

through which funding is available based on the compliance deadline in the In-Use Off-Road 

Diesel Vehicle Regulation. 

The requirements discussed in this section, along with that discussed in the “General Carl Moyer 

Surplus” help ensure the integrity criterion for surplus for projects funded under these guidelines. 

Carl Moyer Off-Road Repower, Replacement and Retrofit Permanent 

There are no additional requirements in Chapter 5 of the 2005 guidelines that further ensure that 

the emission reductions generated are permanent. 

Chapter 5 of the 2008 guidelines requires that engines replaces as part of an off-road repower be 

destroyed. See 2008 Carl Moyer Guidelines, Part I, Section IV.(a)(11) at V-8. Chapter 7 of the 

2008 guidelines requires that old equipment be destroyed within 60 days of being replaced and 

that Districts do a salvage inspection. See 2008 Carl Moyer Guidelines, Part I, Section IV.(d)(1) 

and (d)(2) at VII-9. 

Similarly to the 2008 guidelines, Chapter 7 of the 2011 guidelines requires that engines replaced 

as part of an off-road repower project be destroyed and rendered useless. See 2011 Carl Moyer 

Guidelines, Part 1, Section D.2.(I) at 7-9. Also following the requirements of the 2008 

guidelines, Chapter 9 of the 2011 guidelines requires that the old equipment be destroyed within 

60 days of being replaced. See 2011 Carl Moyer Guidelines, Part 1, Section D.4.(C) at 9-11. 

Recordkeeping and reporting requirements for the replacement projects discussed in the “Carl 

Moyer Off-Road Repower, Replacement and Retrofit Enforceable” section above (e.g., the 

requirement that the grantee demonstrate that it owned and operated the old equipment in 

California for the previous two years) provide further documentation of the emission reductions 

from an Off-Road CI engine replacement project that occur in the San Joaquin Valley. 
Page 29 of 55

Along with the requirements discussed in the “General Carl Moyer Permanent” section above, 

we believe that the requirement discussed in this section are sufficient to help ensure that the 

emission reductions generated through the off-road repower, replacement and retrofit projects 

funded under the 2005, 2008 and 2011 guidelines are permanent. 

G. Carl Moyer Portable and Stationary Agricultural Sources: repower (Section 

3.1.1.4.1) and retrofit (Section 3.1.1.4.3) 

Sections 3.1.1.4.1 and 3.1.1.4.3 of Rule 9610 refer to the following Carl Moyer Guidelines: 

· 2005 Carl Moyer Guidelines, Part II, Chapter 10, Agricultural Sources

· 2008 Carl Moyer Guidelines, Part I, Chapter 10, Agricultural Sources

· 2011 Carl Moyer Guidelines, Part 1, Chapter 10, Portable and Stationary Agricultural 

Sources

These chapters describe the minimum criteria and requirements for all portable and stationary 

agricultural sources projects. The chapters also include Non-Engine Agricultural Use as an 

additional project type that may be eligible for funding. Section 3.1.1.4.1-3 of the rule does not 

explicitly include such projects and hence we are not at this time opining on their ability to meet 

the four integrity criteria. 

In this section, we will discuss the requirements in these chapters related to the repower and 

retrofit of portable and stationary agricultural engines (“Agricultural Repower and Retrofit”) 

projects. 

Carl Moyer Agricultural Repower and Retrofit Enforceable 

ARB requires the use of an hour-based formula for Agricultural Repower and Retrofit projects; a 

fuel-based formula can be used if 2 years of historical fuel logs or purchase receipt 

documentation are provided by the grantee. See 2008 Carl Moyer Guidelines, Part I, Section 

IV.(a).(8) at X-5, 2011 Carl Moyer Guidelines, Part 1, Section C.1.(E) at 10-3. To verify the 

usage of the new equipment, the guidelines require that future annual hours of equipment 

operation for determining emission reductions be based on an installed and fully operational hour 

meter or that fuel logs or purchase receipts of fuel be kept. See 2005 Carl Moyer Guidelines, Part 

II, Section VII.B at X-15, 2008 Carl Moyer Guidelines, Part I, Section IV.(a).(9) at X-5, 2011 

Carl Moyer Guidelines, Part 1, Section C.1.(F) at 10-3. 

ARB requires that engines be certified and retrofit devices be verified by ARB (see 2005 Carl 

Moyer Guidelines, Part II, Section IV.B.2 at X-6 and Section IV.C at X-7, 2008 Carl Moyer 

Guidelines, Part I, Section IV.(a)(4) at X-5) and/or EPA (see 2011 Carl Moyer Guidelines, Part 

1, Section C.1.(G-I) at 10-4 and Section C.4 at10-8). The guidelines clearly define alternative 

documentation and testing requirements when certification is unavailable. See 2005 Carl Moyer 

Guidelines, Part II, Section V.C at X-11, 2008 Carl Moyer Guidelines, Part I, Section IV.(b).(12) 

at X-7, 2011 Cark Moyer Guidelines, Part 1, Section C.2.(I - K) at 10-6.

The requirements discussed in the “General Carl Moyer Enforceable” section of this TSD, along 

with the specific requirements discussed above, help ensure the integrity criterion for 
Page 30 of 55

enforceability of Agricultural Repower and Retrofit projects funded under the 2005, 2008 and 

2011 Carl Moyer Guidelines. 

Carl Moyer Agricultural Repower and Retrofit Quantifiable 

As discussed in the “General Carl Moyer Quantifiable” section of this TSD, the following 

appendices to the Carl Moyer Guidelines provide the methodology for calculating emission 

reductions from Agricultural Repower and Retrofit projects, using hours of operation or fuel 

consumption as activity factors: Appendix C (2005, 2008, and 2011 Carl Moyer Guidelines), 

Appendix B (2005 & 2008 Carl Moyer Guidelines) and Appendix D (2011 Carl Moyer 

Guidelines). Along with the usage data discussed in the “General Carl Moyer Enforceable” 

section of this TSD and the recordkeeping requirements discussed in the “Carl Moyer 

Agricultural Repower and Retrofit Enforceable” section above, these appendices allow for the 

reliable and replicable the quantification of emission reductions. 

Carl Moyer Agricultural Repower and Retrofit Surplus 

Most Agricultural Repower and Retrofit projects are subject to regulation under the Stationary 

Engine Airborne Toxic Control Measure (ATCM), the Portable Engine ATCM, or SJVUAPCD 

Rule 4702 (Internal Combustion Engines). As described in “General Carl Moyer Surplus” 

section of this TSD, regulated engines are not eligible for funding (also see 2008 Carl Moyer 

Guidelines, Part I, Table 10-1 at X-1 and Section III at X2-X4 and 2011 Carl Moyer Guidelines, 

Part 1, Table 10-1 at 10-1). Generally, Carl Moyer projects must have a minimum project life of 

three years with the exception of agricultural engines subject to the Stationary Engine ATCM 

(including portable engines), which are eligible for a one year project life. See 2008 Carl Moyer 

Guidelines, Part I, Section III at X-3 and 2011 Carl Moyer Guidelines, Part 1, Section C.1.(C) at 

10-3. The 2008 and 2011 Carl Moyer Guidelines “Fleet Rule Implementation Charts for use 

with the (2008) 2011 Carl Moyer Program Guidelines” (“Implementation Chart”) document 

details the appropriate project lifetimes base on compliance deadline by project type and year. 

For projects where an existing engine is replaced by a natural gas engine or an electric motor, the 

project life can extend beyond a compliance date. In this case, the quantification protocol ensures 

that only surplus emission reductions are calculated. The Implementation Chart document 

specifies that the existing engine’s emissions should be used as a baseline until the compliance 

deadline. After which, the required Tier emission rate should be used as the baseline for the 

remainder of the project life. For example, a 100 hp Tier 1 diesel agricultural engine may be 

eligible for a repower with a new electric motor until the compliance date, with a 10 year project 

life. The existing Tier 1 engine emissions are calculated as the baseline emission until the 

compliance date, after which Tier 4 diesel emissions are used as baseline emissions for the 

remainder of the project life. The District has clarified that “[a]ll electric irrigation pump 

replacement projects included in the 2013 Annual Demonstration Report were fully surplus to 

Rule 4702/ATCM requirements during the entire reported project life.”11 If the District wishes 

to seek SIP-credit for projects with a “step” change in emission reductions as described above, 

 

11 See Email from Jeannine Tackett to Rynda Kay, attachment “Rynda’s Email questions 12-

2013.docx” , dated 12/20/2013 
Page 31 of 55

the emission reductions along with years in which they are valid should be clearly detailed in the 

Annual Demonstration Report (See “Additional Recommendations” section of this TSD). 

The 2011 Carl Moyer Guidelines, Part 1, Section C.1.(C).(2), at 10-3 states that in accordance 

with Senate Bill x2 3, portable farm equipment may be eligible for funding up to the compliance 

date of an applicable in-use rule, and up to a 10 year project life. Consistent with Section 2.25 

and 2.27 of Rule 9610, emission reductions are not surplus for SIP-credit purposes beyond a 

compliance deadline, regardless of project life used in cost-effectiveness calculations for funding 

purposes. Consistent with Sections 3.3.2 and 7.0 of the rule, SIP-credit sought in the Annual 

Report should only be relied upon for the time period in which the project was surplus. The 

District has clarified that “[a]ll ag projects using the 10-year project life [in the 2013 Annual 

Demonstration Report] were fully surplus to regulation during the entire reported project life.”12

The District should continue to assure that all projects listed in the Annual Demonstration 

Reports list the appropriate SIP-Creditable project life for each project (See “Additional 

Recommendations” section of this TSD). 

The requirements in the “General Carl Moyer Surplus” section of this TSD, along with the 

specific requirements detailed above help ensure the surplus nature of emission reductions 

achieved for Agricultural Repower and Retrofit projects funded under the 2005, 2008 and 2011 

Carl Moyer Guidelines. 

Carl Moyer Agricultural Repower and Retrofit Permanent 

The following sections require that all engines replaced as part of an Agricultural Repower 

project be destroyed consistent with the provisions discussed in the “General Carl Moyer 

Permanent” section of this TSD: 2005 Carl Moyer Guidelines, Part II, Section V.E at X-3, 2008 

Carl Moyer Guidelines, Part I, Section IV.(b).13 at X-7, and 2011 Carl Moyer Guidelines, Part 1, 

Section C.2.(L) at 10-8. In combination with the contracting requirements discussed in the 

“General Carl Moyer Permanent” section and the recordkeeping requirements in the “General 

Carl Moyer Enforceable” section of this TSD, these requirements ensures that emission 

reductions for Agricultural Repower and Retrofit funded under the 2005, 2008 and 2011 Carl 

Moyer Guidelines are permanent for the duration of the project life. 

H. Carl Moyer Portable and Stationary Agricultural Sources: new purchase of electric 

motor (Section 3.1.1.4.2) 

Sections 3.1.1.4. of Rule 9610 refers to the following Carl Moyer Guidelines: 

· 2005 Carl Moyer Guidelines, Part II, Chapter 10, Agricultural Sources

· 2008 Carl Moyer Guidelines, Part I, Chapter 10, Agricultural Sources

· 2011 Carl Moyer Guidelines, Part 1, Chapter 10, Portable and Stationary Agricultural 

Sources

These chapters describe the minimum criteria and requirements for all portable and stationary 

agricultural sources projects. In this section we will discuss the requirements in these chapters 

related to purchase of electric motors for new, non-replacement, non-mobile agricultural 

 

12 Id.
Page 32 of 55

equipment installation (“Agricultural New Purchase of Electric Motor”) projects. The motors 

purchased through these projects do not replace existing engines and have zero emissions. 

Carl Moyer Agricultural New Purchase of Electric Motor Enforceable 

The requirements for Agricultural New Purchase of Electric Motor projects are the same as for 

Agricultural Repower and Retrofit projects described in the “Carl Moyer Agricultural Repower 

and Retrofit” section of this TSD, We believe these requirements help ensure the integrity 

criterion for enforceability of Agricultural New Purchase of Electric Motor projects funded 

under the 2005, 2008 and 2011 Carl Moyer Guidelines. 

Carl Moyer Agricultural New Purchase of Electric Motor Quantifiable 

The methodology for calculating emission reductions from Agricultural New Purchase of 

Electric Motor projects follows that of Agricultural Repower and Retrofit projects described in 

the “Carl Moyer Agricultural Repower and Retrofit Quantifiable” section of this TSD. 

In general, emission reductions are calculated by taking the difference between the emissions of 

the baseline technology and a reduced technology. For the purpose of determining emission 

reductions for Agricultural New Purchase of Electric Motor projects, the new electric motor is 

compared to a motor certified by ARB to the current emission standard. See 2005 Carl Moyer 

Guidelines, Part IV, Appendix C at C-2, 2008 Carl Moyer Guidelines, Part IV, Appendix C at C2, and 2011 Carl Moyer Guidelines, Part I, Appendix B at B-2. 

This methodology along with the usage data discussed in the “General Carl Moyer Enforceable” 

and recordkeeping requirements discussed in the “Carl Moyer Enforceable” section of this TSD, 

help ensure the integrity criterion for enforceability of Agricultural New Purchase of Electric 

Motor projects funded under the 2005, 2008 and 2011 Carl Moyer Guidelines. 

Carl Moyer Agricultural New Purchase of Electric Motor Surplus 

Agricultural New Purchase of Electric Motor projects provide funding for the purchase of new 

motors that do not replace existing motors. Therefore, these projects do not decrease emissions 

compared to what would have been there had the motor not been added. 

As described in the “Carl Moyer Agricultural New Purchase of Electric Motor Quantifiable” 

section, the emission reductions for Agricultural New Purchase of Electric Motor projects are 

calculated by taking the difference of the emissions of the new engine and an engine certified to 

the current emission standard. We do not believe that the emission reductions obtained from this 

calculation are surplus because the emissions of the total inventory have not decreased as 

compared to the inventory had the additional engine not been added. Additionally, the District 

did not provide information to demonstrate that the projects are surplus. Because of this, we do 

not believe the New Purchases meet the criterion for emission reductions to be surplus. 

Carl Moyer Agricultural New Purchase of Electric Motor Permanent 
Page 33 of 55

According to Rule 9610, “emission reductions are permanent if actions are taken to physically 

destroy or permanently disable existing equipment or vehicles, or to permanently amend 

practices to ensure the reduction of emissions for the duration of the project life.” See Rule 9610, 

Section 2.18. In the case of Agricultural New Purchase of Electric Motor, there is no existing or 

baseline equipment to be destroyed, nor are there existing practices to be amended for the 

duration of the project life. Because of this, we conclude that New Purchase of Electric Motors 

do not meet the criterion for emission reductions to be permanent, as defined in Rule 9610. 

I. NRCS Environmental Quality Incentives Program (EQIP): Mobile Off-Road 

Agricultural Equipment Replacement 

Section 3.1.2 of Rule 9610 refers to the following as guideline documents: 

· NRCS Conservation Practice Standard 372 - Combustion System Improvement 

(approved September 2010) 

· Conservation Practice Standard 723 – Combustion System Air Emission Management 

(approved May 2009) 

· NRCS General Manual, Title 450, Part 401 – Conservation Practice Standards (approved 

October 18, 2009) 

· NRCS General Manual, Title 450, Part 407 – Documentation, Certification, and Spot 

Checking (approved October 17, 2009) 

· Conservation Practice Standard 372 Specification (approved September 2010) 

· NRCS Interim Conservation Practice Standard 723 – Combustion System Air Emission 

management (approved May 2009) 

· NRCS Combustion System Improvement 372 Operation & Maintenance 

· NRCS Program Combustion System Improvement of Mobile Engines Guidelines 

(December 2011; updated May 2012) 

The District and NRCS provided several supporting documents and clarifications as listed in the 

“Rule Identification” section of this TSD. The MOP updates the list of guideline documents 

listed in Rule 9610, Section 3.1.2, to remove a duplicate entry, correct references, and adds 

several new/updated documents as detailed in the table below. The full text of these guidelines 

can be found in the docket associated with this action or as referenced in the District’s MOP 

(currently available at http://www.valleyair.org/MOP/mop9610_idx.htm). On June 2, 2013, SJV 

also provided information outlining how certain sections of the EQIP guidelines discussed in this 

TSD meet the four EIP integrity elements. See email from Todd DeYoung to Andrew Steckel, 

Subject: “FW: SJV Rule 9610 integrity element support 05-08-2013 -6-11-13 comments.docx” 

(“EQIP Integrity Elements Demonstration”). 

NRCS EQIP: Mobile Off-Road Agricultural 

Equipment Replacement Guidelines 

Document Date Hereafter referred to 

as 

Conservation Practice Standard documents: 

NRCS Conservation Practice Standard 372 - 

Combustion System Improvement 

September 2010 “CPS-372” 
Page 34 of 55

Conservation Practice Standard 723 – Combustion 

System Air Emission Management 

May 2009 “Interim CPS-723” 

Conservation Practice Standard 372 -Specification September 2010 “2010 CPS-372 

Specification” 

Conservation Practice Standard 372 -Specification November 2013 “2013 CPS-372 

Specification” 

NRCS Combustion System Improvement 372, 

Operation & Maintenance 

September 2010 

NRCS Combustion System Improvement 372B, 

Mobile Off-Road Agricultural Engines and 

Equipment, Operation & Maintenance 

August 2013 “CPS-372 O&M” 

NRCS General Manual: 

NRCS General Manual, Title 450, Part 401 – 

Conservation Practice Standards 

October 18, 2009 

NRCS General Manual, Title 450, Part 407 – 

Documentation, Certification, and Spot Checking 

October 2009 

NRCS General Manual, Title 440, Part 512 – 

Conservation Practice Contracting 

October 2006 

Other Guideline Documents: 

NRCS Environmental Quality Incentives Program, 

Conservation Innovation Grants (b), Agricultural 

Emissions Reductions Guidelines, Policies, and 

Procedures 

April 30, 2009 “FY 2009 Guidelines” 

NRCS Environmental Quality Incentive Program, CIG 

(b) Air Quality – Fiscal Year 2010, Guidelines, 

Policies, and Procedures, Combustion Systems Air 

Emissions Management, (Code 723) 

January 2010 “FY 2010 Guidelines” 

NRCS Environmental Quality Incentive Program, 

California Air Quality Emission, Reductions from 

Replacing Engines, Fiscal Year 2011, Guidelines, 

Policies, and Procedures, Combustion Systems 

Improvement, (Code 372) 

November 15, 

2010 

“FY 2011 Guidelines” 

NRCS Environmental Quality Incentive Program, 

California Air Quality Emission, Reductions from 

Replacing Engines, Fiscal Year 2012, Guidelines, 

Policies, and Procedures, Combustion Systems 

Improvement, (Code 372) 

December 30, 

2011; updated 

May 2, 2012 

“FY 2012 Guidelines” 

NRCS Environmental Quality Incentives Program 

(EQIP), FY 2013 EQIP Program Information, National 

Air Quality Initiative 

FY 2013 

NRCS Conservation Practice Standard 372 – FY 2013 
Page 35 of 55

Worksheets: calculation, emission factors, certification, 

and destruction certification 

EQIP Mobile Off-Road Agricultural Equipment Replacement Background 

The EQIP National Air Quality Initiative administered by NRCS is a voluntary program 

provided for under the Food Conservation and Energy Act of 2008 (2008 Farm Bill). The 

program provides eligible agricultural producers in designated areas13 with financial and 

technical support to implement conservation practices that will reduce NOx, VOC, PM, NH3, 

and greenhouse gas emissions resulting from agricultural operations. 

NRCS develops national Conservation Practice Standard documents, which loosely define 

eligible projects funded through EQIP and establish basic requirements for each practice type. 

These requirements can be modified at the State-level (e.g., CA-NRCS) to meet local needs14. 

Rule 9610, Section 3.1.2, identifies CA-NRCS CPS-372 and superseded Interim CPS-723 as 

practice standards which could provide for SIP creditable emission reductions15. 

CPS-372 at page 1 and Interim CPS-723 at page 1 define eligible projects broadly as “installing, 

replacing, or retrofitting agricultural combustion systems and/or related components or devices.” 

In the MOP at page D-11, the District clarifies that “[a]lthough the Guidelines provide for 

multiple types of combustion system improvements, only those that can be classified as off-road 

mobile agricultural equipment replacement projects are being relied upon for SIP credit at this 

time.” Here we are only analyzing the ability of EQIP Mobile Off-Road Agricultural Equipment 

Replacement projects, funded through CPS-372, Interim CPS-723, to meet the four integrity 

criteria. We are not opining on the ability of other project types funded through CPS-372, 

Interim CPS-723, or other projects funded through EQIP to generate SIP creditable emission 

reductions. For clarity, we recommend the District revise Section 3.1.2 to explicitly list “Mobile 

Off-Road Agricultural Equipment Replacement” as the project type associated with these 

guidelines. Additionally, update the guideline documents to reflect the latest MOP guidelines. 

 

13 Those designated as nonattainment for the national ambient air quality standards (NAAQS) 

pursuant to the federal Clean Air Act. 

14 The policy for Conservation Practice Standards (CPS) development, revision, archiving, 

modification for local implementation, and procedures for public review and comment are 

outlined in the NRCS General Manual, Title 450, Part 401. In summary, the National Handbook 

of Conservation Practices (NHCP) establishes the minimum acceptable level of quality required 

to plan, design, install, operate, and maintain conservation practices. Each national CPS is 

formally reviewed at least once every 5 years. The National CPS can be used by States without 

modification or be rewritten to include additional requirements for local needs, including State 

laws or local ordinances or regulation which may dictate more stringent criteria. Specification 

documents are site-specific documents which provide the technical details required to implement 

the CPS. 

15 Interim practice standards serve as mechanisms for field testing new technology. Standards for 

interim conservation practices that prove successful are developed into national CPS (see NRCS 

General Manual, Title 450, Section 401.17 and 7 CFR §1466.10). Interim CPS-723, approved 

May 2009, was replaced by CPS-372 and CA-NRCS CPS-372 in April 2010 and September 

2010 respectively. 
Page 36 of 55

We also note that emission reductions from such incentive programs become creditable for SIP 

purposes upon EPA approval of a SIP submission that satisfies the provisions of Rule 9610 and 

identifies specific amounts of emission reductions to be credited toward a specific SIP purpose. 

We suggest the MOP language “... are being claimed for SIP credit” should be modified to 

clarify this process (see “Additional Recommendations Section of this TSD”). 

EQIP Mobile Off-Road Agricultural Equipment Replacement Enforceable 

CA-NRCS inspects proposals prior to contract development to verify that existing mobile offroad agricultural equipment is fully functional, in operational condition. This pre-inspection 

verifies that current emission reductions are from in-use equipment and thus assumed in excess 

of normal fleet turnover. See 2010 CPS-372 Specification, Section III at page 1, 2013 CPS-372 

Specification, Section III at page 1,FY 2009 Guidelines at Section 2 at page 34, FY 2010 

Guidelines, Section 3 at page 13, FY 2011 Guidelines, Section 3 at page 13, and FY 2012, 

Section 3 at page 17. 

CA-NRCS specify that the applicant must own the existing equipment for at least 12 months 

prior to the date of application and operate the equipment during this period exclusively in 

California. See 2013 CPS-372 Specification, Section III at page 1, FY 2009 Guidelines at 

Section 2 at page 34, FY 2010 Guidelines, Section 3 at page 13, FY 2011 Guidelines, Section 3 

at page 13, and FY 2012 at page 2. Additionally, Conservation Program Contracting, referenced 

under NRCS General Manual Title 440, Part 512, Subpart C, Section 512.22 requires that 

participants have control of the land for the length of the proposed contract through deed, lease, 

or other written authorization. If the applicant does not own the land, the landowner must give 

written consent to install, operate, and maintain the practice through the lifespan of the practice. 

See also 7 CFR §1466.8 (3). Land ownership and farming activities are confirmed using 

documents submitted to the Farm Service Agency16. These requirements ensure that a given 

piece of existing agricultural equipment is tied to a piece of land currently being farmed. In 

November 2013, NRCS added additional documentation requirements to further confirm that 

existing equipment is owned by the grantee and has operated during for the previous 12-months. 

See 2013 CPS-372 Specification at page 4. 

CA-NRCS requires that existing equipment and engines be disabled and destroyed. For projects 

funded under CPS-723, grantees provided NRCS a written certification including a description 

of where and how the engine and equipment was destroyed, the date of destruction, and 

year/model/make/serial number of equipment (photographic evidence was recommended). 

NRCS could follow-up with a site visit to verify destruction. See FY 2009 Guidelines at Section 

2 at page 36 and FY 2010 Guidelines, Section 3 at page 17. For projects funded under CPS-372, 

the disabled engine must be disposed of and destruction certified by an approved dismantler 

using a “California Engine Equipment Destruction Certification” form (See FY 2011 Guidelines, 

Section 5 at page 25 and FY 2012, Section 5 at page 30). This certification must include 

photographic documentation of the disabled equipment identifying the engine serial number 

and/or equipment vehicle identification number. See 2010 CPS-372 Specification, Section VI at 

 

16 See email dated December 20, 2013 from Jeannine Tackett, SJVUAPCD, to Rynda Kay, U.S. 

EPA Region 9 and attachments 
Page 37 of 55

page 2, 2013 CPS-372 Specification, Section VI at page 3, FY 2011 Guidelines, Section 4 at 

page 18, and FY 2012, Section 4 at page 23). 

To ensure maximum emission reductions from the new technology, CA-NRCS requires the new 

engine meet the most recent model year emission standards. CA-NRCS staff verifies the new 

eligible EPA Tier-certified diesel engines via California Air Resources Board (CARB) Executive 

Order. See 2010 CPS-372 Specification, Section IV at page 2 and 6, 2013 CPS-372 

Specification, Section IV at page 2 and 9, FY 2009 Guidelines at Section 2 at page 35, FY 2010 

Guidelines, Section 3 at page 14, FY 2011 Guidelines, Section 3 at page 14 and Section 6 at page 

30, and FY 2012, Section 3 at page 18. 

Existing and new equipment annual usage estimates are provided by the grantee through the 

NRCS application process, and then tracked through ongoing new equipment annual usage 

reporting. See FY 2009 Guidelines, Section 3 at page 41 and 43, FY 2010 Guidelines, Section 3 

at page 21 and 23, FY 2011 Guidelines, Section 5 at page 21 and 23, 2012 Guidelines, Section 5 

at page 26 and 28, and CPS-372 O&M. NRCS staff assesses the estimated baseline usage “based 

on their expertise regarding farming practices, size of farm, etc (such as row crops, seasonal 

crops, orchards, or dairy)”17. For ongoing usage, Grantees are required to record and report new 

engine annual usage to NRCS throughout the 10-year lifespan18. This report includes total hour 

meter reading, annual hours of operation, and percentage of those hours in the San Joaquin 

Valley Air Basin based on a non-resettable chronometer installed in the power unit. See 2013 

CPS-372 Specification, page 4 and CPS-372 O&M. The NRCS General Manual Title 450, Part 

407 outline spot checking requirements, which require NRCS to review at least 5% of all active 

projects annually. During these project reviews, NRCS verifies the new equipment is still 

operational. 

Generally, the SIP demonstration required under Section 7.0 of Rule 9610 must include 

documentation adequate to support the District’s emissions estimates for both the old equipment 

and new equipment. Because existing usage for EQIP projects is not verified through 

documentation of previous usage (as in e.g., 2011 Carl Moyer Guidelines, Chapter 9, Section 

C.2.F), usage estimates listed in the 2013 Project Data Spreadsheet (i.e., column M) are difficult 

to verify as accurate. For years and projects where SIP-credit is sought, existing and new annual 

usage estimates should be revised based on actual annual usage reporting within a timeframe that 

allows for identifying and correcting any shortfall in projected emission reductions consistent 

with Section 7.4 of Rule 9610. This revision should be based on a minimum of two-year average 

actual emissions reporting and be reflected in the Annual Demonstration Report. 

Together, the above requirements provide adequate assurance that emission reductions are 

verifiable through the life of the project. 

The applicable portions of the NRCS guidelines specifically define the required elements of each 

contract and the type of actions that constitute violations of such contracts. Required elements of 

each contract and the types of actions which constitute violation of such contract are found in the 

NRCS General Manual Title 440, Part 512 and 7 CRF Part 1466, Subpart B. 

 

17 Id.

18 This requirement applies to all projects funded from 2009 onward, with reporting required 

annually for 2013 through the remainder of the project life. 
Page 38 of 55

What must be contained in an EQIP contract is described in NRCS General Manual Title 440, 

Part 512, Subpart E (“Subpart E”) and 7 CFR Part 1466.21. For example project contracts must 

include: (1) a unique “contract number” (See Subpart E, Section 512.47); (2) the equipment 

owner’s contact information (See Subpart E, Section 512.43, item 1 and Form NRCS-CPA1200); (3) the original application submitted by the equipment owner (See Subpart E, Section 

512.43, item 1 and Form NRCS-CPA-1200 and attachments); (4) the operation and maintenance 

(O&M) agreement associated with the practice and requirement that the practice be maintained 

consistent with the O&M for the lifespan of the practice (See 7 CRF Part 1466.21(b)(3)(vi-vii) , 

7 CRF Part 1466.22(a-b), Subpart E, Section 512.40, item 7, and CPS 372 O&M); (5) the 

equipment owner’s agreement to allow ongoing evaluations and audits of equipment by NRCS 

and/or its agents during the lifespan of the installed practices (See 7 CRF Part 1466.22(d) and 

Subpart E, Section 512.40, item 3 and 7). 

NRCS General Manual Title 440, Part 512, Subpart F, Section 512.57(A) identifies the following 

as contract violations: (1) participant or land becomes ineligible; (2) participant transfers 

ownership or loses control of land under contract; (3) participant has violated the terms of the 

contract and has failed to correct and comply within a reasonable time; (4) participant fails to 

install, operate, or maintain one or more practices or activities required to meet the contract 

objectives; (5) participant’s actions pose a threat to the health and safety of NRCS employees; 

(6) participant is determined to have― knowingly misrepresented any fact affecting a program 

determination; (7) adopted any scheme or device that tends to defeat the program purpose; or (8) 

made any fraudulent representation. 

NRCS maintains the ability to apply penalties and secure appropriate corrective action where 

contract terms are violated, and EPA and the State maintain the ability to require appropriate 

corrective actions of the District where projected emission reductions are not achieved. For 

example, NRCS General Manual Title 440, Part 512, Subpart F covers Contract Administration 

and provides for recovering liquidated damages for contract termination. Handling contract 

violations are addressed in NRCS General Manual Title 440, Part 512, Subpart H and 7 CFR 

1466.26 where violations of contract terms must be corrected by the participant within a 

reasonable period of time to comply. If the violation continues, the contract may be terminated 

and future program participation deferred. The requirements discussed in this section help ensure 

the integrity criterion for enforceability for projects funded under these guidelines. 

EQIP Mobile Off-Road Agricultural Equipment Replacement Quantifiable 

The CA-NRCS emission reduction calculation methodology is based on Carl Moyer Program 

Guidelines. For discussion of the Carl Moyer Program see the “General Carl Moyer 

Quantifiable” section of this TSD. CA-NRCS stipulates that emissions for existing and new 

equipment be calculated using the following formula: 

Tons/year = [(EF g/bhp-hr) x (Engine Max Rated BHP) x (Annual Hours) x (Load Factor)] 

 (907,200 g/ton) 

where, default Emission Factors (EFs) and Load Factors are from the 2008 Carl Moyer Program 

Guidelines, Appendix B, Tables B11-15 (See 2010 CPS-372 Specification, pages 4-5, Tables 1-

5), updated in 2012 to 2011 Carl Moyer Program Guidelines, Appendix D, Tables 10-14 (See 

2013 CPS-372 Specification, pages 5-6, Tables 1-5). Also See FY 2009 Guidelines Section 4 at 

page 11 and Appendix A, FY 2010 Guidelines, Section 4 at page 25, FY 2011 Guidelines, 
Page 39 of 55

Section 3 at page 13, and FY 2012, Section 3 at page 17. The guidelines specify that source data 

for specific engines should be used in lieu of default factors if available. The Engine Max Rated 

BHP is taken from the replaced or new engine brake horse power ratings. See 2010 CPS-372 

Specification, Section V at page 2 and 2013 CPS-372 Specification, Section V at page 2. 

For existing equipment, Annual Hours is estimated by the Grantee. See “California Supplemental 

Application Form – Existing Engine Information” FY 2009 Guidelines, Section 3 at page 41, FY 

2010 Guidelines, Section 3 at page 21, FY 2011 Guidelines, Section 5 at page 21, and 2012 

Guidelines, Section 5 at page 26. As discussed in the “EQIP Mobile Off-Road Agricultural 

Equipment Replacement Enforceable” section above, “NRCS staff assesses the reported baseline 

usage based on their expertise regarding farming practices, size of farm, etc (such as row crops, 

seasonal crops, orchards, or dairy).” For new equipment, Annual Hours is initially estimated by 

the Grantee (See “California Supplemental Application Form – New Engine Information” FY 

2009 Guidelines, Section 3 at page 43, FY 2010 Guidelines, Section 3 at page 23, FY 2011 

Guidelines, Section 5 at page 21, and 2012 Guidelines, Section 5 at page 26), then as reported on 

usage forms submitted annually to NRCS (See CPS-372 O&M). As discussed in “EQIP Mobile 

Off-Road Agricultural Equipment Replacement Enforceable” above, we expect existing and new 

annual usage estimates to be revised based on actual annual usage reporting and be reflected in 

the Annual Demonstration Report. 

In certain cases, CA-NRCS allows for the replacement of more than one piece of existing 

equipment for one piece of new equipment. “To be eligible, the new equipment must serve the 

same function and perform similar work as one of the existing equipment it’s replacing. The 

other existing equipment may be different in type or perform functionality different to the new 

equipment. The emission benefits are determined by subtracting the estimated annual emissions 

from the new replacement engine from the sum of the annual emissions from the two or three 

subject existing engines.” See FY 2009 Guidelines at Section 2 at page 34, FY 2010 Guidelines, 

Section 3 at page 13, FY 2011 Guidelines, Section 3 at page 13, and FY 2012, Section 3 at page 

17. When the District quantifies emission reductions for EQIP Mobile Off-Road Agricultural 

Equipment Replacement projects for the purpose of SIP-credit, the calculation methodology used 

when multiple pieces of old equipment are replaced with one piece of new equipment should 

only include pieces of equipment that serve the same function and performs equivalent work as 

the equipment being replaced. Additionally, the annual usage estimate for new equipment should 

equal the sum of the annual usage for the existing equipment. See e.g., 2011 Carl Moyer 

Program Guidelines, Chapter 9, Section C.1.F. In the MOP at page 20, the District confirms, 

“[t]he emission reductions for each project, including projects with multiple old units for one 

new unit, are calculated using the methodologies outlined in the Carl Moyer Guidelines”. 

The above requirements help assure that emissions and emission reductions can be reliably and 

replicably determined. 

EQIP Mobile Off-Road Agricultural Equipment Replacement Permanent 

As described in the “EQIP Mobile Off-Road Agricultural Equipment Replacement Enforceable” 

Section of this TSD, CA-NRCS requires pre-inspections and post-destruction certifications 

before funding is distributed. CA-NRCS inspects equipment prior to contract development to 

verify that existing mobile off-road agricultural equipment is fully functional, in operational 

condition. See 2010 CPS-372 Specification, Section III at page 1, 2013 CPS-372 Specification, 
Page 40 of 55

Section III at page 1, FY 2009 Guidelines at Section 2 at page 34, FY 2010 Guidelines, Section 3 

at page 13, FY 2011 Guidelines, Section 3 at page 13, and FY 2012, Section 3 at page 17. 

CA-NRCS requires that existing equipment and engines be disabled and destroyed. For projects 

funded under CPS-723, grantees provided NRCS a written certification that the engine and 

equipment. This certification included a description of where and how the engine and equipment 

was destroyed, the date of destruction, and year/model/make/serial number of equipment 

(photographic evidence was recommended). NRCS could follow-up with a site visit to verify 

destruction. See FY 2009 Guidelines at Section 2 at page 36 and FY 2010 Guidelines, Section 3 

at page 17. For projects funded under CPS-372, the disabled engine must be disposed of and 

destruction certified by an approved dismantler using a “California Engine Equipment 

Destruction Certification” form (See FY 2011 Guidelines, Section 5 at page 25 and FY 2012, 

Section 5 at page 30). This certification must include photographic documentation of the 

disabled equipment identifying the engine serial number and/or equipment vehicle identification 

number. See 2010 CPS-372 Specification, Section VI at page 3, 2013 CPS-372 Specification, 

Section VI at page 3, FY 2011 Guidelines, Section 4 at page 18, and FY 2012, Section 4 at page 

23). 

New reporting requirements include annual hours of use and percentage of time used within the 

San Joaquin Valley for the entire 10 year lifespan of the practice, ensuring emission reductions 

are permanent for the project lifespan. See CPS-372 O&M. 

The 2010 CPS-372 Specification, Section VI at page 2 and 2013 CPS-372 Specification, Section 

VI at page 3 state, “Under certain circumstances, an existing Tier-certified diesel engine may be 

relocated and used to replace an uncontrolled Tier 0 diesel engine. The uncontrolled Tier 0 

engine it’s replacing must then be destroyed.” It is our understanding that this type of transaction 

has not yet been funded, or at least is not currently included in the Demonstration Report, but 

could be considered in the future. Note, we consider this “trade-down” approach to be a separate 

project type. In the future, if the District intends to seek credit for emission reductions from such 

projects, this and other project types can be submitted for consideration through the mechanism 

outlined in Rule 9610, Section 3.2 (e.g., a demonstration included in Section III.B. of an Annual 

Demonstration Report and in the relevant SIP submittal where credit is sought) and clearly 

identified as a different project type in the Demonstration Report (See “Additional 

Recommendations” section of this TSD). 

EQIP Mobile Off-Road Agricultural Equipment Replacement Surplus 

CA-NRCS is “implementing the NRCS-NAQI to replace old, in-use, uncontrolled dieselpowered mobile off-road agricultural equipment earlier than through normal attrition”. See EQIP 

Integrity Elements Demonstration. 

CA-NRCS specify that the applicant must own the existing equipment for at least 12 months 

prior to the date of application and operate the equipment during this period exclusively in 

California. See 2013 CPS-372 Specification, Section III at page 1, FY 2009 Guidelines at 

Section 2 at page 34, FY 2010 Guidelines, Section 3 at page 13, FY 2011 Guidelines, Section 3 

at page 13, and FY 2012 at page 2. Additionally, Conservation Program Contracting, referenced 

under NRCS General Manual Title 440, Part 512, Subpart C, Section 512.22 requires that 

participants have control of the land for the length of the proposed contract through deed, lease, 
Page 41 of 55

or other written authorization. If the applicant does not own the land, the landowner must give 

written consent to install, operate, and maintain the practice through the lifespan of the practice. 

See also 7 CFR §1466.8 (3). Land ownership and farming activities are confirmed using 

documents submitted to the Farm Service Agency19. These requirements ensure that a given 

piece of existing agricultural equipment is tied to a piece of land currently being farmed. In 

November 2013, NRCS added additional documentation requirements to further confirm that 

existing equipment is owned by the grantee and has operated during for the previous 12-months. 

See 2013 CPS-372 Specification at page 4. 

CA-NRCS inspects proposals prior to contract development to verify that existing mobile offroad agricultural equipment is fully functional, in operational condition. This pre-inspection 

verifies that current emission reductions are from in-use equipment and thus assumed in excess 

of normal fleet turnover. See 2010 CPS-372 Specification, Section III at page 1, 2013 CPS-372 

Specification, Section III at page 1,FY 2009 Guidelines at Section 2 at page 34, FY 2010 

Guidelines, Section 3 at page 13, FY 2011 Guidelines, Section 3 at page 13, and FY 2012, 

Section 3 at page 17. A 2008 study prepared for CARB examining off-road engines less than 175 

horsepower operating in the California revealed that the “age distribution for diesel, and 

especially gasoline, agricultural tractors was particularly skewed toward older units, with the 

median age being more than 20 years old”20. 

The existing equipment is replaced with the latest emissions EPA Tier-certified diesel-powered 

agricultural equipment currently available. CA-NRCS staff verifies the new eligible EPA Tiercertified diesel engines via California Air Resources Board (CARB) Executive Order. See 2010 

CPS-372 Specification, Section IV at page 2 and 6, 2013 CPS-372 Specification, Section IV at 

page 2 and 9, FY 2009 Guidelines at Section 2 at page 35, FY 2010 Guidelines, Section 3 at page 

14, FY 2011 Guidelines, Section 3 at page 14 and Section 6 at page 30, and FY 2012, Section 3 

at page 18. 

The 2013 CPS-372 Specification states that “SIP creditable emission reductions must not be 

required by any air quality rule, regulation, or other local mandate; and not used as marketable 

credits or to offset any emission banking or trading program.” A rule or regulation does not 

currently exist for off-road mobile agricultural equipment, so the emission reductions resulting 

from replacing existing mobile off-road agricultural engines funded under the NRCS-NAQI per 

CPS-372 and CPS-723 are currently surplus from regulation for the 10-year project lifespan. 

EPA revised the 8-hour ozone standard in 2008, lowering the level to 0.075 ppm (73 FR 16436, 

March 27, 2008). EPA finalized designations for the 2008 ozone standard in 2012 (77 FR 30087, 

May 21, 2012), designating the San Joaquin Valley as an extreme nonattainment area with an 

attainment deadline of 2032. State Implementation Plan (SIP) submittal deadlines were proposed 

in EPA’s SIP Requirements Rule proposal (78 FR 34177, June 6, 2013). In a recent public mailout, California Air Resources Board stated, “The new SIP will include a comprehensive strategy 

applying to many types of sources, including strategies that rely on the future availability of the 

 

19 See email dated December 20, 2013 from Jeannine Tackett, SJVUAPCD, to Rynda Kay, U.S. 

EPA Region 9 and attachments 

20

“Characterization of the Off-Road Equipment Population”, ARB Contract No. 04-315, Final 

Report Prepared for: California Air Resources Board and the California Environmental 

Protection Agency, Prepared by Rick Baker, Principal Investigator Eastern Research Group, Inc., 

December 2008. Currently available at http://www.arb.ca.gov/research/apr/past/04-315.pdf
Page 42 of 55

cleanest technologies for mobile agricultural equipment operating in the San Joaquin Valley. 

ARB staff is planning to hold a separate public workshop in fall 2013 to discuss possible 

strategies for inclusion in the 2015 SIP, with the goal of securing additional reductions from 

mobile agricultural equipment in the San Joaquin Valley by the 2032 attainment deadline.”21 If 

mobile off-road agricultural equipment replacement becomes subject to regulation, the Incentive 

Program Guidelines should be modified to list compliance or funding deadlines and the Annual 

Report should list the SIP-Creditable project life for each project. 

J. Proposition 1B Goods Movement Emission Reduction Program Guidelines for 

Heavy-Duty Diesel Trucks repower, replacement, PM retrofit, or PM + NOx retrofit 

incentive projects. (Section 3.1.3) 

California voters approved Proposition 1B in November 2006, authorizing the Legislature to 

appropriate $1 billion in bond funding to the ARB to reduce air pollution emissions and health 

risks from freight movement along California’s priority trade corridors. See “Proposition 1B 

Program: Goods Movement Emission Reduction Program, Final 2013 Guidelines for 

Implementation,” adopted January 25, 2013, at pp. 1-12.22 The State bills that created the 

Program are codified in the California Health and Safety Code, section 39625 et seq. By statute, 

the Program can only fund emission reductions not otherwise required by law or regulation. 

ARB awards grants following the program guidelines to fund projects proposed by local 

agencies, including the SJVUAPCD, that are involved in freight movement or air quality 

improvements associated with goods movement activities. ARB staff developed the initial 

Proposition 1B: Goods Movement Emission Reduction Program Guidelines for Implementation 

(Guidelines) in consultation with stakeholders, including: air districts, metropolitan planning 

organizations, port authorities, shipping lines, railroad companies, trucking companies, harbor 

craft owners, freight distributors, terminal operators, local port community advisory groups, 

community interest groups, and airports. When the ARB Governing Board adopted the initial 

Guidelines in 2008, the Board directed ARB staff to reassess those Guidelines following each 

appropriation of funding. Updates to the Guidelines are based on evaluating advances in 

technology, changes in equipment costs, regulatory actions, demand for Program funds, and 

other new information that influences the design of project specifications. The process involves 

the release of a concept paper and workshops to obtain feedback from stakeholders. See id. 

Section 3.1.3 of Rule 9610 specifically identifies Heavy-Duty Diesel Trucks repower, 

replacement, PM retrofit, or PM + NOx retrofit as guidelines for projects which the District 

intends to use to generate SIP credit. These are in: 

· 2008 Prop 1B Guidelines, Appendix A, Trucks Serving Ports and Intermodal Rail Yards, 

and Appendix B, Other Heavy Duty Diesel Trucks

· 2010 Prop 1B Guidelines, Appendix A, Heavy Duty Diesel Trucks

· 2013 Prop 1B Guidelines, Appendix A, Heavy Duty Diesel Trucks

Heavy-Duty Diesel Trucks include Class 6, Class 7 and Class 8 trucks. Repower projects are 

projects in which a higher-emitting diesel engine is replace by a new or remanufactured, lower-

 

21 Mail-Out # MSC 13-16, California Air Resources Board, Dated July 1, 2013. 

22 Available at

http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goods_movement_2013_program_guidelin

es_for_implementation.pdf
Page 43 of 55

emitting engine in the same vehicle, piece of equipment, or harbor craft. In Replacement

projects, a higher-emitting diesel vehicle(s), a piece of diesel equipment, or diesel harbor craft is 

replaced by a lower-emitting vehicle, piece of equipment, or craft (e.g., replacement of one or 

two old trucks with a new one). A Retrofit means the act of adding emission control technology 

or modifying an engine on an existing diesel vehicle, piece of diesel equipment, or diesel harbor 

craft. See 2013 Prop 1B Guidelines, Section I.C, Definitions, at 18. In the discussion of how the 

four integrity elements are addressed by the Prop 1B Guidelines, we include information 

presented on additional sections of the Guidelines, beyond the abovementioned appendices, as 

they describe administrative procedures and other requirements that are the foundation of the 

program. These are in: 

· 2008 Prop 1B Guidelines, Section II, ARB Program Administration, Section III, Local 

Agency Project, and Section IV, General Equipment Project Requirements

· 2010 Prop 1B Guidelines, Section II, ARB Program Administration, Section III, Local 

Agency Project Proposal, Section IV, Local Agency Project Implementation, Section V, 

State Agency Project Implementation, and Section VI, General Equipment Project 

Requirements

· 2013 Prop 1B Guidelines, Section II, ARB Program Administration, Section III, Local 

Agency Project Proposal, Section IV, Local Agency Project Implementation, Section V, 

State Agency Project Implementation, and Section VI, General Equipment Project 

Requirements

In the future, we expect SIP submittals that rely on emission reductions from this program to 

contain these general requirements of the guidelines, along with the project specific criteria, as 

supporting technical documentation for the submittals. 

The references to the guidelines included below help ensure that the four EIP integrity elements 

are met for emission reductions generated by these project types and guideline years only. At this 

time, we are not addressing the ability of other heavy duty diesel projects funded through Prop 

1B, including three-way truck transaction and truck electrification infrastructure among others, 

to meet the four integrity elements. On August 26, 2013, ARB sent additional information, 

“Responses to U.S. EPA’s Request to Address “Integrity Elements” in the Proposition 1B: 

Goods Movement Emission Reduction Program Guidelines”, dated August 2013 confirming that 

sections of Prop 1B discussed in this TSD meet the four EIP integrity elements. See email from 

Elizabeth Yura to Andrew Steckel, Subject: Prop IB documentation for SJV Rule 9610. We have 

reviewed their assessment and concur as summarized below. 

Prop 1B Enforceable 

Specific funding criteria established in the Prop 1B program guidelines ensure that emission 

reductions sought for these projects will be independently verifiable and practicably enforceable 

consistent with EPA policy. The ARB Governing Board holds a noticed public hearing to 

consider recommendations for funding local agency projects. In order for projects to be funded, a 

complete equipment project application must be submitted. The application must contain the 

“equipment project information” identified in appendices of the Prop 1B Guidelines, which 

typically include information on the equipment owner, the proposed equipment project, 

documentation of current equipment and activity information (e.g. engine make, model, 

horsepower and fuel type, annual vehicle miles of travel (VMT) in California, and estimated 
Page 44 of 55

percentage of annual VMT in trade corridors), to quantify the benefits of the equipment project. 

See 

· 2008 Prop 1B Guidelines, Section IV.D.1, Equipment Project Information, at 90 

· 2010 Prop 1B Guidelines, Section VI.D.1, Equipment Project Information, at103 

· 2013 Prop 1B Guidelines, Section VI.D.1, Equipment Project Information, at 114 

Existing vehicle usage is used to determine baseline emissions and is based on vehicle activity 

data for the past two years. See 2008 Prop 1B guidelines, Appendices A and B, Section F.2 at A5 and B-6, respectively; 2010 Prop 1B guidelines, Appendix A, Section C.2 at A-10; and 2013 

Prop 1B guidelines, Appendix A, Section C.2 at A-8. 

The Board’s funding decisions become legally enforceable by ARB through executed grant 

agreements between ARB and the selected local agencies. The requirements for these grant 

agreements are in: 

· 2008 Prop 1B Guidelines, Section II.D.10, Local Agency Project Grant Agreement, at 29 

· 2010 Prop 1B Guidelines, Section II.E.10, Local Agency Grant Agreement, at 35 

· 2013 Prop 1B Guidelines, Section II.E.10, Local Agency Grant Agreement, at 38 

These sections include requirements that the local agency complete equipment project preinspections to verify information regarding the baseline engine, vehicle, or equipment and postinspections of project to record, among other things, identifiers and specifications for the new 

engine/equipment (e.g., VIN numbers for new trucks, serial numbers for new engines), 

verification that the new engine/equipment is operational and consistent with the equipment 

described in the project application, and verification of the destruction of the old/replaced 

equipment, where applicable. This requirement ensures that equipment information provided by 

the project owner is consistent with actual operating equipment and that the existing equipment 

is in working condition. Additional requirements for pre-inspections including verification of 

usage and requirements for photographic confirmation, including an engine serial number, 

visible distinguishing identification (e.g., a license plate), and a full view of the equipment are in: 

· 2008 Prop 1B Guidelines, Section III.D.8, Equipment Project pre-inspections, at 68 

· 2010 Prop 1B Guidelines, Section IV.A.10, Equipment Project Pre-Inspections, at 82 

· 2013 Prop 1B Guidelines, Section IV.A.10, Equipment Project Pre-Inspections, at 90 

Similarly, additional requirements for post-inspections are in: 

· 2008 Prop 1B Guidelines, Section III.D.14, Equipment Project Post-Inspections, at 77 

· 2010 Prop 1B Guidelines, Section IV.A.16, Equipment Project Pre-Inspections, at 90 

· 2013 Prop 1B Guidelines, Section III.D.16, Equipment Project Post-Inspections, at 99 

Prop 1B funding is obligated by the SJVUPACD for each project by contracts between the 

District and the equipment owner. The requirements for these contracts, which are legally 

enforceable by the SJVUAPCD, are in: 

· 2008 Prop 1B Guidelines, Section III.D.10, Equipment Project Contracts, at 69 

· 2010 Prop 1B Guidelines, Section IV.A.11, Equipment Project Contracts, at 83 

· 2013 Prop 1B Guidelines, Section IV.A.11, Equipment Project Contracts, at 91 

These sections require that each equipment project contract include: (1) a unique “tracking 

number”; (2) the equipment owner’s contact information; (3) the original application submitted 
Page 45 of 55

by the equipment owner; (4) requirements for the equipment owner to submit reports to the local 

agency annually or biennially23; (5) the equipment owner’s agreement to allow ongoing 

evaluations and audits of equipment and documentation by the District, CARB, or their 

designated representative(s); and (6) requirements for the equipment owner to retain all records 

pertaining to the program (i.e., invoices, contracts, and correspondence) for at least two years 

after equipment project ends or three years after final payment, whichever is later. 

Contract non-performance provisions per these sections of the guidelines specify some of the 

actions that would constitute a breach of contract including (among others): (1) failure to meet 

the terms and conditions of an executed equipment project contract, including equipment 

operating conditions and geographic restrictions; (2) failure to allow for an electronic monitoring 

device or tampering with an installed device or data; (3) insufficient, incomplete, or faulty 

equipment project documentation; and (4) failure to provide required documentation or reports in 

a timely manner. Remedies for non-performance, also described in these sections, include 

cancellation of the contract and recovery of all or a portion of the Program funds. 

Additional requirements specific to truck repower, replacement, PM retrofit, or PM + NOx

retrofit are in: 

· 2008 Prop 1B guidelines, Appendix A, Trucks Serving Ports and Intermodal Rail Yards, 

Section C, Recordkeeping Requirements, at A-4; Section D, Annual Reporting 

Requirements, at A-4; and Section E, Ongoing Evaluation and Audits at A-4. 

· 2008 Prop 1B guidelines, Appendix B, Other Heavy Duty Diesel Trucks, Section C, 

Recordkeeping Requirements, at B-5; Section D, Annual Reporting Requirements, at B-5; 

and Section E, Ongoing Evaluation and Audits at B-6. 

· 2010 Prop 1B guidelines, Appendix A, Heavy Duty Diesel Trucks, Section E, PostInspection, at A-17; Section F, Recordkeeping Requirements, at A-19; and Section G, 

Annual Reporting Requirements, at A-19. 

· 2013 Prop 1B guidelines, Appendix A, Heavy Duty Diesel Trucks, Section E, PostInspection, at A-15; Section F, Recordkeeping Requirements, at A-16; and Section G, 

Annual Reporting Requirements, at A-17. 

Annual reporting requirements in these portions of the Prop 1B guidelines include but are not 

limited to: 

· Current odometer reading, including the date read. 

· Certification of annual California VMT since last report. 

· Certification of the required percent operation in California. 

· Certification of at least 50 percent of travel within the four California trade corridors as 

well as provide the percentage of annual VMT in the Central Valley trade corridor. 

 

23 Under the 2008 and 2013 Prop 1B guidelines, all grant recipients are required to submit 

reports to the District annually. See 2008 Prop 1B guidelines at Appendix A (“Trucks Serving 

Ports and Intermodal Rail Yards”), Section D (“Annual Reporting Requirements”) and 2013 

Prop 1B guidelines at Appendix A (“Heavy Duty Diesel Trucks”), Section G (“Annual Reporting 

Requirements”). The 2010 Prop 1B guidelines also require annual reports except that certain 

owners of equipment with PM retrofits with a 2-year contract may report at the end of the 2-year 

project life. See 2010 Prop 1B guidelines, Appendix A (“Heavy Duty Diesel Trucks”), Section 

G (“Annual Reporting Requirements”). 
Page 46 of 55

Finally, failure to comply with the terms of a project contract may result in: 

· Recovery of all or a portion of Program funds. 

· Other fiscal penalties on equipment owners based on the severity of the nonperformance. 

· Cancellation of the contract. 

· A ban on the equipment owner’s ability to participate in future State incentive programs. 

· Prohibiting a specific piece of equipment from participating in another State incentive 

program. 

These provisions are in: 

· 2008 Prop 1B guidelines, Section IV.G, Equipment Project Non-Performance, at 93. 

· 2010 Prop 1B guidelines, Section VI.I, Equipment Project Non-Performance, at 107. 

· 2013 Prop 1B guidelines, Section VI.K, Equipment Project Non-Performance, at 122. 

These criteria for on-road vehicle projects funded through the 2008, 2010 and 2013 Prop 1B 

guidelines ensure that actions required of grantees are independently verifiable; program 

violations are defined; those liable can be identified; and the District may apply penalties and 

secure appropriate corrective action where applicable. We find these provisions adequate to 

ensure that emission reductions generated by these guidelines meet the enforceability criterion. 

Prop 1B Quantifiable 

The Prop 1B Program Guidelines direct ARB staff to develop and make publicly available a 

“Project Benefits Calculator” to determine the emission reductions achieved by funded projects. 

See 2008 Prop 1B guidelines, Section II.C.2.b, Project Benefits Calculators, at 20; 2010 Prop 1B 

guidelines, Section II.C.2.b, Project Benefits Calculators, at 26; and 2013 Prop 1B guidelines, 

Section II.C.2.b, Project Benefits Calculators, at 28. Each guidelines year also has a “Directions” 

document for the benefits calculator that explains the methodologies used to quantify emission 

reductions. The Directions Documents also explain the inputs required in using the Project 

Benefits Calculators to quantify the emission reductions of the project and have sample 

calculations of how to use the Project Benefits Calculators. 

The 2008 directions24 document for the Project Benefits Calculator (“2008 Directions 

Document”) states that the methodology used to estimate emission reductions is based on 

EMFAC2007 and the adopted Regulation to Control Emissions from In-Use On-Road DieselFueled Heavy-Duty Drayage Trucks at Ports and Intermodal Rail Yard Facilities. See 2008 

Directions Document at 4. According to the 2008 Directions Document, “emissions from heavy 

duty trucks are the product of population (by model year), annual accrual (miles/year), and 

pollutant and model year specific emission rates (grams/mile). To estimate the project emissions 

benefits the emissions from the existing truck(s) and replacement truck(s) are estimated. The 

difference between the two is the benefit of that project.” See 2008 Directions Document at 4. 

 

24 See “Proposition 1B: Goods Movement Emission Reduction Program, Directions: Benefits 

Calculators,” March 11, 2008, available at

http://www.arb.ca.gov/bonds/gmbond/docs/calculator_directions_031108.pdf
Page 47 of 55

According to the “Directions” document for the 2010 Project Benefits Calculator (“2010 

Directions Document”),25 emission factors for diesel heavy duty trucks are based on in-use 

testing of Class 7 and Class 8 diesel trucks. See 2010 Directions Document at 7. The emission 

factors are the same ones used for California’s On-Road Heavy-Duty Diesel Vehicles (In-Use) 

Regulation and used in EMFAC2011, which EPA has approved for use in California SIPs and 

transportation conformity demonstrations (78 FR 14533, March 6, 2013). The publicly available 

Project Benefits Calculator uses vehicle miles traveled, which must be recorded and reported as 

explained above in the “Prop 1B Enforceable” section, together with emission factors obtained 

from the On-Road Heavy-Duty Diesel Vehicles (In-Use) Regulation, to determine emissions. See 

2010 Directions Document at 7. 

Similarly to the 2010 guidelines, the “directions” document for the 2013 Project Benefits 

Calculator (“2013 Directions Document”)26 states that emission factors for diesel trucks are 

based on in-use testing of diesel trucks and are the same ones used for California’s On-Road 

Heavy-Duty Diesel Vehicles (In-Use) Regulation. See 2013 Directions Document at 12. The 

2013 Directions Document also discloses that the calculator uses the emission rates for a 2012 

engine to estimate emissions for a used 2010 engine that meets the 0.2 NOx standard and uses the 

emission rate for a 2013 engine for a new 2013 or later engine. See 2013 Directions Document 

at 13. 

By providing for well-established, publicly available emission factors and calculation methods 

and requiring that grantees record and report activity data, as described in the “Prop 1B 

Enforceable” Section the 2008, 2010 and 2013 Prop 1B guidelines ensure that emission 

reductions from on-road vehicle replacement, repower and retrofit projects funded through these 

guidelines can be determined using reliable and replicable methods. We find these provisions 

help ensure the criterion for emission reductions to be “quantifiable”, as defined in EPA 

guidance and in section 2.23 of SJVUAPCD Rule 9610, is met. 

Prop 1B Surplus 

Prop 1B Guidelines explicitly state that “Local agencies shall certify that the local agency project 

would achieve emission reductions not otherwise required by law or regulation,” which means 

that “the emission reductions are not required pursuant to any local, State, or federal law, rule, or 

regulation; any requirements imposed by the California Environmental Quality Act (CEQA); or 

any requirements imposed by a legal instrument such as a legal settlement or consent decree 

(collectively referred to as ‘law or regulation’).” See 2008 Prop 1B Guidelines, Section III.B.1, 

Legal Restrictions, at 47; 2010 Prop 1B Guidelines, Section III.B.1, Legal Restrictions, at 57; 

and 2013 Prop 1B Guidelines, Section III.B.1, Legal Restrictions, at 60. 

 

25 See “Proposition 1B: Goods Movement Emission Reduction Program, Directions: Benefits 

Calculators,” March 17, 2011, available at 

http://www.arb.ca.gov/bonds/gmbond/docs/prop_1b_goods_movement_2008-

09_calculator_directions.pdf. 

26 See “Proposition 1B: Goods Movement Emission Reduction Program, Directions: Benefits 

Calculators,” September 18, 2013, available at 

http://www.arb.ca.gov/bonds/gmbond/docs/calculator_directions_trucks_2013_14.pdf. 
Page 48 of 55

Additionally, the project specific appendices of Prop 1B include a section on ineligible 

equipment which establishes a list of regulations at the time of guideline adoption that trucks 

cannot be subject to in order to be eligible for funding. See 2008 Prop 1B guidelines, Appendices 

A and B, Section A at A-1 and B-1, respectively; 2010 and 2013 Prop 1B guidelines, Appendix 

A, Section A at A-1. 

According to ARB, “As part of the SIP development and/or revision process, ARB reviews the 

Proposition 1B project mix to ensure that the amount of emission reductions credited to the 

program are not included in the future year inventories, including review of fleet turnover and 

equipment lifetime assumptions that are specific to the future year inventory used in each 

individual attainment demonstration.” See email from Elizabeth Yura to Andrew Steckel, 

Subject: Prop IB documentation for SJV Rule 9610. We expect ARB and the District to clarify, 

in future SIP submittals developed pursuant to Rule 9610, how the State ensures that those 

emission reductions relied upon for SIP credit are not included in future year inventories. The 

State/District’s demonstration of SIP creditability should also show how the underlying 

assumptions of future year inventories and the project life are consistent with the remaining 

useful life of the vehicle, engine, or equipment being replaced.. 

Recordkeeping, reporting and application requirements described above in the “Prop 1B 

Enforceable” and “Prop 1B Quantifiable” sections ensure that historic and future emission 

estimates correctly represent emissions occurring in the San Joaquin Valley. Pre-inspection 

requirements discussed above in the “Prop 1B Enforceable” section ensure that the unit to be 

replaced is still in useable form and thus would not have been replaced by normal fleet turnover. 

These requirements ensure that emission reductions from normal fleet turnover that have already 

been accounted for in the future baseline emission inventories underlying a SIP attainment 

demonstration are not treated as surplus. 

These provisions ensure that emission reductions attributed to On-Road Vehicle Retrofit, 

Repower and Replacement projects funded through the Prop 1B 2008, 2010 and 2013 guidelines 

are not required by any existing regulation or other legal mandate and are not accounted for in 

the future baseline inventories underlying a SIP. The combination of the requirements discussed 

above bolster assurance that projects funded through the implementation of the Prop 1B 

guidelines listed in Section 3.1.3 of Rule 9610 lead to emission reductions that meet the integrity 

criterion for surplus. 

Prop 1B Permanent 

For Prop 1B projects, two key types of requirements ensure that emission reductions are 

“permanent” for the life of the project: (1) requirements to demonstrate that both replaced (old) 

and replacement (new) equipment are used similarly in the San Joaquin Valley, and (2) 

requirements to document the destruction of the replaced equipment. The Prop 1B guidelines 

require that the local agency ensure that old equipment is scrapped. The following sections 

delineate the procedures that must be implemented for all replacement projects, which include 

specifics of how the units shall be destroyed and documentation requirements to demonstrate that 

the unit replaced was destroyed: 

· 2008 Prop 1B Guidelines, Section III.D.13, Equipment Project Scrap Requirements, at 

73. 
Page 49 of 55

· 2010 Prop 1B Guidelines, Section IV.A.14, Equipment Project Scrap Requirements, at 

88. 

· 2013 Prop 1B Guidelines, Section IV.A.14, Equipment Project Scrap Requirements, at 

97. 

Additional scrapping requirements specific to each project option are in Section D, Scrap 

Requirements, of Appendix A of the 2010 and 2013 guidelines at pages A-14 and A-13 

respectively. The information in these tables for the 2010 and 2013 guidelines is included in 

Section III.D.13 for the 2008 guidelines. 

Recordkeeping and reporting requirements discussed in the “Prop 1B Enforceable” section above 

(e.g., requirements to certify that at least 50 percent of travel is within the four California trade 

corridors and to provide the percentage of annual VMT in the Central Valley trade corridor) 

provide further documentation of the emission reductions from a Prop 1B truck projects which 

occur in the San Joaquin Valley. 

Finally, all three years of the Prop 1B guidelines require that each equipment project contract 

identify a “term of contract,” i.e., the project completion time plus the “equipment project life.” 

See 2008 Prop 1B Guidelines, Section III.D.10.a, Equipment project contracts, at 70; 2010 Prop 

1B Guidelines, Section IV.A.11.a, Equipment project contracts, at 84; and 2010 Prop 1B 

Guidelines, Section IV.A.11.a, Equipment project contracts, at 91. The term “equipment project 

life” is specifically defined in the guidelines as “the length of time an equipment owner is 

obligated (under an equipment project contract) to maintain and operate the bond-funded 

equipment according to the requirements of the Program.” See 2008, 2010 and 2013 Prop 1B, 

Section I.C, Definitions, at 11, 13 and 14, respectively. 

These contract provisions enable EPA and the public to evaluate the duration for which the 

District attributes emission reductions to a particular project and to determine whether that 

duration adequately covers the period for which the reductions are relied upon in a SIP. The 

combination of the requirements discussed above bolster assurance that projects funded through 

the implementation of the Prop 1B guidelines listed in Section 3.1.3 of Rule 9610 lead to 

emission reductions that meet the integrity criterion for permanent. 

VII. “Case-by-Case Determinations” and Other Guidelines 

Although some degree of state/local agency discretion in a SIP rule may be permissible if 

explicit and replicable procedures within the rule tightly define how the discretion will be 

exercised to assure equivalent emission reductions, EPA has long stated that SIP provisions that 

include unbounded discretion for state personnel unilaterally to change or to grant variances 

from applicable SIP provisions are problematic and inconsistent with the requirements of the 

CAA. See “Guidance Document for Correcting Common VOC and Other Rule Deficiencies 

(a.k.a. The Little Bluebook),” U.S. EPA Region IX, originally issued April 1991, revised August 

21, 2001; see also 78 FR 12460, 12485 to 12486 (February 22, 2013) (proposed findings of 

substantial inadequacy and SIP calls to amend provisions applying to excess emissions during 

periods of startup, shutdown, and malfunction). 

Section 3.2.2 of Rule 9610 states that “no case-by-case determination may be used to quantify 

emission reductions under this rule unless such determination is reviewed through a public 

process and submitted to EPA in accordance with Section 7.0.” The term “case-by-case 
Page 50 of 55

determination” is defined in the rule to mean “alternative procedures approved by ARB for 

specific projects, as authorized under the Carl Moyer Program Guidelines.” See Section 2.4. 

These provisions prohibit the District from relying on emission reductions achieved through 

projects subject to “case-by-case determinations” under the Carl Moyer Program, unless the 

case-by-case determination is submitted to EPA as part of a SIP submittal meeting the 

requirements of Rule 9610, Section 7.0. EPA will review any case-by-case determination 

submitted in accordance with these requirements of the rule and determine, through notice-andcomment rulemaking on the SIP submittal, whether the related emission reductions may be 

credited in the SIP. 

The definition of “case-by-case determination” in Rule 9610 does not explicitly address projects 

funded by Prop 1B or by EQIP. We note, however, that all three years of the Prop 1B guidelines 

prohibit the use of case-by-case consideration of projects. See 2008 Prop 1B Guidelines, Section 

II.C.1, Project specifications for each funding cycle, at 17; 2010 Prop 1B Guidelines, Section 

II.C.1, Project specifications for each funding cycle, at 25; and 2013 Prop 1B Guidelines, 

Section II.C.1, Project specifications for each funding cycle, at 27. We understand, therefore, 

that the District does not intend to rely on projects subject to any case-by-case determination 

under the Prop 1B Program. With respect to EQIP, we recommend that the District clarify 

whether it intends to seek SIP emission reduction credit for EQIP projects subject to case-bycase determinations pursuant to Rule 9610, Section 3.2.2. 

VIII. Incentive Program Guidelines Issues 

As discussed in Sections VII.C and VII.H, above, the purchase of new equipment that does not 

replace existing equipment does not appear to meet EPA guidance and be consistent with CAA 

requirements. These components of the Carl Moyer Program do not appear to provide a basis for 

emission reduction credit in a SIP since they do they do not address actions or activities that 

reduce air pollutant emissions. Thus, the following incentive program guidelines may not be 

used for purposes of quantifying SIP emission reductions unless additional information is 

provided to adequately demonstrate that these guidelines provide for emission reductions that are 

surplus, quantifiable, enforceable, and permanent consistent with the CAA. EPA will review 

each SIP submittal developed pursuant to Rule 9610 on a case-by-case basis, following noticeand-comment rulemaking, to determine whether the applicable requirements of the Act are met. 

Rule 9610, Section 3.1.1.1.1: New Vehicle Purchase (Chapter 1, approved 11/17/2005; Chapter 

3, approved 2008; or Chapter 4, approved 4/28/2011); 

Rule 9610, Section 3.1.1.4.2: New purchase of electric motor (Chapter 10, approved 11/17/2005; 

Chapter 10, approved 3/27/2008; or Chapter 10, approved 4/28/2011); or 

IX. EPA’s Recommendations for Rule Revisions 

EPA recommends that the SJVUAPCD make the following revisions to Rule 9610 to clarify its 

intentions with respect to implementation of these incentive programs and facilitate EPA’s 

review of future SIP submittals. Alternatively, the District may address these issues in individual 

SIP submittals that rely on incentive programs going forward, which EPA will review on a caseby-case basis for compliance with CAA requirements.
Page 51 of 55

· Section 2.16: The definition of “Inspection” as defined in the rule is inconsistent with how 

NRCS does inspections since the APCO is not involved as per the rule definition. 

· Correct the reference for the 2008 guidelines in Section 3.1.1.3.2 of the Rule mentioned on 

page 25 of this TSD. 

· Revise Section 3.1.2 to explicitly list “Mobile Off-Road Agricultural Equipment 

Replacement” project type and update the guideline list to reflect the latest MOP (see page 

35 of this TSD). 

· Specify in Section 4.3 or elsewhere in the Rule, that historical usage, as determined from 

annual usage reports, shall be used annually to update each emission reduction calculation in 

the demonstration report. 

· Rule 9610, Section 4.5 lists project information that shall be included in the Annual 

Demonstration Report which are currently not listed for NRCS EQIP. Please add this 

information or revise the rule. 

o Section 4.5.6: “Funding amount provided by District, NRCS, or ARB”. 

o Section 4.5.9.1: “Make and model of equipment or vehicle” 

· Section 4.6 of the Rule requires the demonstration report to include “a summary of 

monitoring and enforcement activities conducted during the reporting period for incentive 

projects for which SIP-creditable emission reductions are being claimed”. The 2013 

Demonstration Report does not include this information for the NRCS EQIP. The District 

should add this information to the Demonstration Report or correct the rule to be consistent 

with the information NRCS can provide. 

· Revise section 4.7 to clarify both the procedures for evaluating the emissions benefits 

achieved by those incentive programs for which it intends to seek SIP credit and its 

“reconciliation procedures” to address identified discrepancies between projected and actual 

emission reductions. It is not clear what sort of “retrospective assessment” the District 

intends to conduct under section 4.7 of the rule. In the Rule 9610 Staff Report, the District 

addresses this provision by stating that the annual demonstration reports required under 

section 4.0 of Rule 9610 go above and beyond EPA’s recommendation to evaluate program 

effectiveness triennially but does not explain how the requirement in section 4.7 differs, if at 

all, from the requirements of section 4.0. See Rule 9610 Staff Report at 22. Separately, in 

Section VI of the 2013 Annual Demonstration Report, the District provides a brief summary 

of incentive program audits conducted by CARB and other agencies but does not identify any 

particular action carried out by the District to retrospectively assess the effectiveness of these 

incentive programs or actual emission reductions achieved. See 2013 Annual Demonstration 

Report at 32, 33.27 EPA recommends that the District revise section 4.7 at its earliest 

opportunity to clarify its program evaluation and “reconciliation” procedures. As part of 

these revisions to section 4.7, we recommend that the District clarify whether it will 

retrospectively assess only those incentive programs that it directly implements, or whether 

the District will also assess the performance of the EQIP program implemented by NRCS 

and/or incentive programs implemented by CARB. 

 

27 The CARB audit referenced in this discussion focuses on the District’s expenditures of incentive program funds in 

accordance with applicable State requirements, rather than steps taken to validate emission reduction calculations or 

reconcile projected emission reductions with actual reductions achieved. See CARB, “Incentive Program: Program 

Review Report – San Joaquin Valley Air Pollution Control District Fiscal Years 2006-07 through 2009-10,” dated 

January 2, 2013, available at http://www.arb.ca.gov/msprog/moyer/audits/2011/san_joaquin_valley.htm. 
Page 52 of 55

· Under 28 U.S.C. 2462, the government has five years to bring an enforcement action or suit 

for the failure to implement a measure in a SIP. Based on this statute of limitations, all 

information to be monitored and recorded in accordance with this guidance for existing SIP 

requirements should be maintained by the state air agency or another responsible party for a 

period of no less than five years, or longer where appropriate. Specify in Section 6.0 or 

elsewhere in the Rule, that records will be kept by the District or other responsible party for 

no less than five years. 

· Correct the reference in Section 6.2 from 7 U.S.C. section 608d(2) to the appropriate privacy 

provisions (e.g., 7 U.S.C. 8791) as discussed on page 10 of this TSD. 

X. EPA’s Recommendations for Implementation 

A. Manual of Procedures 

As stated on Section VI, page 12, EPA is not proposing to take action on the MOP. The District 

included the MOP in the SIP submission as supporting information and has since updated it to 

improve clarity and submitted it to EPA and made it available online28. Per Section 3.3.1 of the 

rule, the MOP is a living document that will be “maintained on an ongoing basis as incentive 

program guidelines are adopted.” The MOP should be an all inclusive document in which the 

regulatory agencies and the public can find all of the necessary information to calculate the 

emission reductions from every project when used in combination with the data in the Annual 

Demonstration Report. We provide the following suggestions for clarification and improvement. 

· The MOP should include and/or refer to only these documents or sections thereof that are 

needed to ensure the projects meet the four integrity elements. For example, the program 

wide chapters should be but are not included on page D-6 along with the other chapters in the 

Carl Moyer references. 

· Although Rule 9610 requires the MOP to “[i]nclude a description of how the incentive 

program guidelines ensure that incentive program emission reductions are SIP-creditable,” 

we do not expect that the MOP will provide as detailed an evaluation of the applicable 

incentive program guidelines as would be necessary to support a demonstration of SIPcreditability in a SIP submittal. 

· It is unclear which year of the Moyer guidelines is referenced in pages D-6 through D-9 of 

the MOP. As discussed above (See Table 1, above), the sections change in the different 

guideline years and some of the requirements are not identical for all years. 

· The District states in the MOP at page D-11 that off-road mobile agricultural equipment 

projects “are being claimed for SIP credit at this time.” To avoid confusion, we recommend 

revising this language to state that the District intends to seek SIP emission reduction credit 

for off-road mobile agricultural equipment projects in future SIP submittals. 

B. Annual Demonstration Report 

Section 4.0 requires that the District produce an annual report describing all SIP-creditable 

emission reductions achieved over the past year through incentive programs. In the future, the 

District will identify specific amounts of emission reductions for which they intend to seek SIP 

 

28 Available at http://www.valleyair.org/MOP/mop9610_idx.htm
Page 53 of 55

credit for a particular year or years in the relevant SIP per Section 7.0 of the Rule. As part of 

EPA’s proposed actions on these future SIPs, EPA will examine the relevant relied upon 

emission reductions in the Demonstration Reports. As such, we are not, at this time, providing an 

exhaustive analysis of the January 31, 2014 or previous versions of the 2013 Demonstration 

Report but we are providing guidance to improve traceability and transparency of emission 

reductions in future Demonstration Reports. The following suggestions are based on review of 

the January 31, 2014 version of the 2013 Demonstration Report. 

· The Demonstration Report reviewed in this TSD was not the same version that the District 

made available to the public and presented to the Board on June 20, 2013. We expect that in 

the future the Demonstration Report submitted to EPA will follow the process described in 

Section 5.0 of the Rule. 

· Page 10 of the Report states “Section 3.1 of Rule 9610 identifies pre-approved incentive 

program guidelines from which the District can claim credit for incentive-based emission 

reductions.” We disagree with this characterization of the guidelines listed in Section 3.1. 

As explained above, EPA has evaluated the identified guidelines as a preliminary guide to 

assist the District in its effort to address CAA requirements in SIP submittals that rely on 

incentive programs going forward. EPA is not, however, “pre-approving” any guidelines and 

will review each SIP submittal developed pursuant to Rule 9610 on a case-by-case basis, 

following notice-and-comment rulemaking, to determine whether the applicable 

requirements of the Act are met. 

· Page 10 of the report has the same typographical error as does the rule, as referenced on page 

25 of this TSD. 

· Page 11 of the 2013 Annual Demonstration Report states that it “employs Section 3.2 of the 

rule by claiming SIP credit for incentive-based emission reductions from the ARB Carl 

Moyer Program Guidelines (2005, 2008 and 2011) for locomotive alternative technology 

switchers and new electric forklift purchases.” We note that emission reductions from these 

source categories are not SIP-creditable unless and until EPA approves a SIP that relies on 

such emission reductions, consistent with the requirements of the CAA. To obtain such EPA 

approval, the District must submit to EPA, among other things, a demonstration that the 

applicable guidelines provide for emission reductions that are surplus, quantifiable, 

enforceable, and permanent. See Rule 9610, section 7.0 and section 2.25. 

· We consider NRCS-EQIP “trade-down” projects to be a separate project type not considered 

here, but could be submitted for consideration under Rule 9610, Section 3.2 (see page 40 of 

this TSD). 

· Section III.C of the 2013 Demonstration Report does not but should specify which year of 

the Moyer guidelines is referenced. 

· Page 29 of the Demonstration Report states that of the audited Moyer projects for 2010, “the 

observed deficiencies were fully resolved with no expected impact on emissions reductions.” 

The District should clarify how these deficiencies were resolved without impacts on emission 

reductions. 

· Section VI of the 2013 Annual Demonstration Report describes the District’s program 

evaluations. As noted above in the Section IX of this TSD, EPA recommends that the District 

clarify (in the annual demonstration reports or elsewhere) both its procedures for evaluating 

the emissions benefits achieved by those incentive programs for which it intends to seek SIP 

credit and its “reconciliation procedures” to address identified discrepancies between 

projected and actual emission reductions, pursuant to section 4.7 of Rule 9610. Page 74 of 
Page 54 of 55

the EIP identifies a number of performance measures that the District should consider in 

future incentive program evaluations, including but not limited to: 

o Comparison of forecasted emissions with actual emissions or emission reductions. 

o Soundness of assumptions made in your initial emission forecasts, surplus 

determinations, and uncertainty determinations. 

o Effects on emissions in attainment and RFP/ROP demonstrations, and emission 

budgets. 

o Effects of modeled results in attainment and RFP/ROP demonstrations, emission 

budgets, NAAQS violations, and Class I areas. 

o Impacts on effectiveness of source compliance, enforcement, and penalty provisions. 

o Cost savings experienced by sources and regulators. 

o Resources used to develop and implement your EIP compared to environmental 

benefits gained (e.g., cost-benefit analysis). 

o Adequacy of State resources to implement the program over the expected life of the 

program. 

o Unintended beneficial or detrimental effects. 

o Inspection data that verify assumptions and track program implementation (i.e., realworld) of program elements. 

· In Appendix A and B of the demonstration Report, include actual reductions based on 

reported activity data for previous years. This should be part of the program evaluation as 

discussed above. 

· For Carl Moyer Agricultural Repower and Retrofit projects where an existing engine is 

replaced by a natural gas engine or an electric motor, the project life can extend beyond a 

compliance date. For such projects, the District should continue to assure that emission 

reductions for years pre- and post-compliance are listed separately and applicable years 

clearly defined in the Annual Demonstration Report as discussed on pages 30-31 of this 

TSD. 

· For Carl Moyer Agricultural projects, the District should assure project-life values only 

reflect years in which the emissions were surplus as discussed on page 31 of this TSD. 

· One way for EPA and other interested parties to be able to verify that emission reductions are 

achieved and SIP commitments are met is for SJV to link specific projects to specific CAA 

obligations in the annual report. See, for example, attachments of EPA’s TSD associated with 

our proposed approval of SJV’s contingency plan (78 FR53115, August 28, 2013). There 

may be other equivalent ways for SJV to ensure the surplus quality of reductions, although 

we are not aware of a successful such showing to reference. If the District intends to use an 

alternate approach, they must demonstrate that the reductions are surplus in the SIP 

submittal. 

· Many of the Tables provided in Section VII of the Report show numbers that have changed 

from the Report included with the SIP submission on June 26, 2013. The District should 

explain these adjustments in the Report to improve the transparency and traceability of 

emission reductions. 

· For years and projects where SIP-credit for NRCS-EQIP projects is relied upon, existing and 

new annual usage estimates should be revised based on actual annual usage reporting. This 

revision should be based on a minimum of two-year average actual emissions reporting and 

be reflected in the Annual Demonstration Report (see page 37 of this TSD). 
Page 55 of 55

· In general, as per Section 4.3 of the Rule, the District should “ensure that adoption of new 

local, state, or federal requirements that might affect the surplus nature of emission 

reductions achieved by incentive programs” are noted in the report and emission reduction 

calculations be updated accordingly. For example, CARB is considering a mobile off-road 

agricultural equipment regulation in 2015. When such a regulation is in place, the Incentive 

Program Guidelines as well as Annual Reports should be modified.