## APPENDIX A

Proposed Regulation Order45-Day Notice version A-1 Release Date: July 29, 2005 Hearing Date: September 15, 2005 PROPOSED REGULATION ORDER

Amend the following sections of title 13, Calif ornia Code of Regulations, to read as set forth in the following pages:

Amend : Section 1956.1 Exhaust Emission St andards and Test Procedures – 1985 and Subsequent Model Heavy Duty Urban Bus Engines and Vehicles Section 1956.8(a)(2)(A) Exhaust Emissions Standards and Test Procedures – 1985 and Subsequent Model Heavy-Duty Engines and Vehicles Section 2023.1(a) Fleet Rule for Transit Agencies – Urban Bus Requirements

Notes: This document is printed in a style to indicate changes to the preexisting regulations. The proposed amendm ents are shown in underline to indicate additions and strikeoutto indicate deletions. The symbol “* * * * *” means that intervening text notbeing amended is not shown. “[No Change]” means that no changes are being proposed to a specified subsection, the text of which is not shown. Subsection headings are shown in italics and should be italicized in Barclays California Code of Regulations.

The existing Fleet Rule for Transit Agencies is located with the heavy-duty engine emission standards in title 13, CCR, sections 1956.2- 1956.4. At its February 24, 2005 heari ng, the Board approved staff's proposal to move the existing secti ons for the Fleet Rules for Transit Agencies to new sections which cover rules for controlling diesel emissions from existing in-use engines or fleets. As a result, upon final approval by the Office of Administrative Law, section 1956.2 will be renumbered as section 2023.1, and will re flect amendments to the text of former 1956.2 approved at the February 2005 hearing. In this document, the Fleet Rule for Transit Agencies – Urban Bus Requirements is accordingly shown as section 2023.1, with the amendments to the text of former section 1956.2 approved at the February 2005 hearing shown in italic underlineto indicate additions, and italic strikeout to indicate deletions.

The text of sections 2020 and 2021, with amendments approved by the Board at its February 24, 2005 hearing but not yet final, is provided for information only. As is the ca se above, amendments approved at that hearing to add language are shown in italic underline , and amendments deleting language are shown in italic strikeout

.45-Day Notice version A-2 Release Date: July 29, 2005 Hearing Date: September 15, 2005 PROPOSED REGULATION ORDER

Amend title 13, California Code of Regulati ons, section 1956.1 to read as follows:

§ 1956.1 Exhaust Emission Standards and Test Procedures - 1985 and Subsequent- 2006 Model Year Heavy Duty Urban Bus Engines and Vehicles

(a) The exhaust emissions from new 1985 and subsequentthrough 2006 model year-heavy-duty diesel cycle urban bus engines and vehicles fueled by methanol, natural gas, liquefied petro leum gas, and petroleum shall not exceed the following, by model year:

(1) [No Change]

(2) [No Change]

(3) [No Change]

(4) [No Change]

(5) [No Change]

(6) [No Change]

(7) October 1, 2002, PM standard– For diesel-fueled, dual-fuel, and bifuel bus engines except for heavy-duty pilot ignition engines, the PM standard shall be 0.01 g/bhp-hr (0. 01 PM g/bhp-hr in-use) for 2002 and subsequent model year engines produced beginning October 1, 2002. Manufacturers may choose to meet this standard with an aftertreatment system that reduces PM to 0.01 g/bhp-hr.

(8) October 2002-2006 optional standards– Except for diesel-fueled, dualfuel, and bi-fuel engines but including heavy-duty pilot ignition engines, manufacturers may choose to certify 2002 – 2006 model year bus engines produced beginning October 1, 2002, to an optional 1.8 g/bhphr to 0.3 g/bhp-hr NOx plus NMHC standard, measured as the arithmetic sum of the NOx and NM HC exhaust component certification values, without restriction on indivi dual component certification values; provided that engines certified to this optional reduced-emission NOx plus NMHC standard may not participat e in any averaging, banking, or trading program set forth in the te st procedures document incorporated by reference in subdivision (c) of this section. A manufacturer may certify to any standard between the va lues of 1.8 g/bhp-hr to 0.3 g/bhphr, by 0.3 g/bhp-hr NOx + NMHC incr ements. Manufacturers certifying45-Day Notice version A-3 Release Date: July 29, 2005 Hearing Date: September 15, 2005 to this optional standard must also certify to a PM standard of 0.03, 0.02, or 0.01 g/bhp-hr.

(9) [No Change]

(10) 2004-2006 : – Except as provided in paragraph (11), below, the required standard shall be 2.4 g/bhp- hr NOx + NMHC measured as the arithmetic sum of exhaust component certification values for these pollutants, without restriction on individual component values, 15.5 g/bhp-hr CO, and 0.05 g/bhp-hr PM (0.07 g/bhp-hr PM in-use).

(A) Manufacturers may choose to certify to a 2.5 g/bhp-hr optional combined NOx + NMHC standard, provided that the NMHC exhaust component certification value shall not exceed 0.5 g/bhp-hr.

(B) Emissions averaging may be used to meet the combined NOx + NMHC standard, the opt ional combined NOx + NMHC standard set forth in paragraph (A), and the PM standard.

(C) The combined NOx + NMHC standard and the optional combined NOx + NMHC standard described in paragraph (A) may serve as the certification standard for the higher emitting fueling mode of an engine certifi ed under the dual fueling mode certification process set forth in section 1956.8(a)(4), title 13, CCR.

(11) 2004-2006 – For diesel-fueled, or dual-fuel, and bi-fuel urban bus engines except for heavy-duty pilot ignition engines, the standards are 0.5 g/bhp-hr NOx, 0.01 g/bhp-hr PM, 0. 5 g/bhp- hr NMHC, 5.0 g/bhp-hr CO, and 0.01 g/bhp-hr formaldehyde. As an option, manufacturers may choose to meet the NOx and PM standards with a base engine that is certified to the standards in paragraph (10) above, equipped with an aftertreatment system that reduces NOx to 0.5 g/bhp-hr and PM to 0.01 g/bhp-hr standards. The NMHC, CO, and formaldehyde standards in this paragraph (11) shall still apply. Manufacturers shall be responsible for full certification, durability, testing, and warranty and other requirements for the base engine. For the aftertreatment system, manufacturers shall not be subjec t to the certification durability requirements, or in-use recall and enforcement provisions, but are subject to warranty provisions for functionality.

(A) Engine manufacturers may sell diesel-fueled, dual-fuel, or bifuel engines to any transit fl eet exempted by the Executive Officer under paragraphs (c)(8) and (d)(7) of section 1956.2, title45-Day Notice version A-4 Release Date: July 29, 2005 Hearing Date: September 15, 2005 13, CCR, from the requirements of paragraphs (c)(5) and (d)(4) of section 1956.2, certified to the standards in either paragraphs (9) or (10) above, provided that engines certified to the standards in paragraph (10) must be certified to a 0.01 g/bhp-hr PM standard.

(B) Manufacturers may sell diesel-fueled hybrid-electric buses that are certified to a 1.8 g/bhp-hr NOx, 0.01 g/bhp-hr PM, 0.5 g/bhphr NMHC, and 15.5 g/bhp-hr CO standard to any transit agency that has received written author ization from the Executive Officer pursuant to paragraph (d)(9) of section 1956.2, title 13, CCR. The formaldehyde standard set forth in paragraph (11), above, shall not apply to the HEBs sold pursuant to this subparagraph.

(12) 2007 and subsequent – 0.2 g/ bhp-hr NOx, 0.01 g/bhp-hr PM, 0.05 g/bhp-hr NMHC, 5.0 g/bhp-hr C O, and 0.01 g/bhp-hr formaldehyde.

(b) 2003-2006 bi-fuel heavy-duty pilot ignition engines – A bi-fuel engine meeting the definition of a heavy-duty pilot i gnition engine set forth in section1956.2 (b)(4) may be certified to the standards in section1956.1 (a)(8) and (a)(10), provided that the engine is certified to an optional PM standard of 0.03, 0.02, or 0.01 g/bhp-hr.

(c) Test Procedures. The test procedures for determining compliance with standards applicable to 1985 and subsequentthrough 2006 model-year heavy-duty diesel cycle urban bus engines and vehicles and the requirements for participation in the averaging, bank ing and trading programs, are set forth in the "California Exhaust Emission Standards and Test Procedures for 2004 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles," adopted December 12, 2002, and the “California Interim Certification Procedures for 2004 and Subsequent Model Hybrid-Electric Vehicles, in the Urban Bus and Heavy-Duty Vehicle Classes,” adopted October 24, 2002, which are incorporated by reference herein.

NOTE: Authority cited: Sections 39600, 39601, 43013, 43018, 43100, 43101, 43104 and 43806, Health and Safety Code; and section 28114, Vehi cle Code. Reference: Sections 39002, 39003, 39017, 39033, 39500, 39650, 39657, 39667, 39701, 40000, 43000, 43000.5, 43009, 43013, 43018, 43102 and 43806, Health and Safety Code; and section 28114, Vehicle Code.45-Day Notice version A-5 Release Date: July 29, 2005 Hearing Date: September 15, 2005 Amend section 1956.8 (a)(2)(A) to read as follows:

§ 1956.8. Exhaust Emissions Standards and Test Procedures – 1985 and Subsequent Model Heavy-Duty Engines and Vehicles.

(a)(1) [No Change]

(2)(A) The exhaust emissions from new 2004 and subsequent model heavy-duty diesel engines, heavy-duty natural gas -fueled and liquefied-petroleum-gasfueled engines derived from diesel -cycle engines, and heavy-duty methanolfueled diesel engines, and the optional , reduced-emission standards for 2002 and subsequent model engines produced begi nning October 1, 2002, except in all cases engines used in medium-duty vehicles, shall not exceed:

Exhaust Emission Standards for 2004 and Subsequent Model Heavy-Duty Engines,and Optional, Reduced Emission Standards for 2002 and Subsequent Model HeavyDuty Engines Produced Beginning October 1, 2002, Other than Urban Bus Model Year Engines October 1, 2002 through 2006 L(grams per brake horsepower-hour [g/bhp-hr])

Model Year Oxides of Nitrogen Plus Non-methane Hydrocarbons Optional Oxides of Nitrogen Plus Non-methane Hydrocarbons Oxides of Nitrogen Non-methane Hydrocarbons Carbon Monoxide Particulates

2004-2006 H 2.4 A,C,E,J 2.5 B,C,E,J n/a n/a 15.5 0.10 C October 1, 2002-2006 n/a 1.8 to 0.3 A,D,F n/a n/a 15.5 0.03 to 0.01 G 2007 and subsequent n/a n/a 0.2 I 0.14 15.5 0.01 K

A This is the standard for the arithmeticsum of the oxides of nitrogen exhaust component certification value and the non -methane hydrocarbon exhaust component certification value, without individual rest riction on the individual component values.

B This is the standard for the arithmeticsum of the oxides of nitrogen exhaust component certification value and the non -methane hydrocarbon exhaust component certification value, with the non-methane hydrocarbon individual component value not to exceed 0.5 g/bhp-hr.

C For 2004 through 2006 model years, emissions averaging may be used to meet this standard. Averaging must be based on the requirements of the averaging, banking and trading programs described in “Califor nia Exhaust Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles” incorporated by reference in section 1956.8 (b), below.45-Day Notice version A-6 Release Date: July 29, 2005 Hearing Date: September 15, 2005 D A manufacturer may elect to certify to an optional reduced-emission NOx+NMHC standard between the values, inclusive, by 0.3 grams per brake horsepower-hour increments. Engines certified to any of these optional reduced-emission NOx standards are not eligible for participati on in any averaging, banking or trading programs described in “California Exhaus t Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles” incorporated by reference in section 1956.8 (b), below.

E May be used as the certification standard fo r the higher emitting fueling mode of an engine certified under the dual fueling mode ce rtification process of section 1956.8 (a)(4), below.

F May be used as the certification standard fo r the lower emitting fueling mode of an engine certified under the dual fueling mode ce rtification process of section 1956.8 (a)(4), below.

G A manufacturer may elect to certify to an optional reduced-emission PM standard between the specified values, inclusive, by 0.01 grams per brake horsepower-hour increments. Engines certified to any of these optional reduced-emission PM standards are not eligible for participati on in any averaging, banking or trading programs described in “California Exhaus t Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles” incorporated by reference in section 1956.8 (b), below.

H Engine manufacturers subject to the Heavy-Duty Diesel Engine Settlement Agreements (Settlement Agreements) 1 must produce engines in compliance with the requirements contained in their respec tive Settlement Agreement. Most engine manufacturers subject to the Settlement Agreements are required to manufacture engines meeting the exhaust emissi on standards for 2004 and subsequent model years engines beginning October 1, 2002.

I A manufacturer may elect to include any or all of its heavy-duty diesel engine families in any or all of the NOx emissions averagi ng, banking, or trading programs for heavyduty diesel engines, within the restrictions described in "California Exhaust Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles" incorporated in sect ion 1956.8 (b), below. If the manufacturer elects to include engine families in any of these programs, the NOx family emission limit (FEL) may not exceed the follo wing FEL caps: 2.00 grams per brake

1 Seven of the largest heavy-duty diesel engine manufacturers will be implementing measures to reduce emissions beginning October 1, 2002, to meet the requirements of the Heavy-Duty Diesel Engine Settlement Agreements reached with the ARB. T he Heavy-Duty Diesel Engine Settlements were agreements reached in response to lawsuits brought by the United States Environmental Protection Agency and violations alleged by the ARB pertaining to excess in-use emissions caused by the use of defeat devices and unacceptable algor ithms. Navistar signed its Settl ement Agreement on October 22, 1998. Cummins, Detroit Diesel Corporation, Cate rpillar, Volvo, Mack and Renault signed their Settlement Agreements on December 15, 1998.45-Day Notice version A-7 Release Date: July 29, 2005 Hearing Date: September 15, 2005 horsepower-hour (0.75 grams per megajoule) for model years before 2010; 0.50 grams per brake horsepower-hour (0.19 gr ams per megajoule) for model years 2010 and later. The FEL cap applies whether credi ts for the engine family are derived from averaging, banking, or trading programs.

J For 2007 through 2009 model years, a m anufacturer may use these emission standards in accordance with section 1956.8 (a)(2)(B). A manufacturer may elect to include any or all of its heavy-duty diesel engi ne families in any or all of the NOx plus NMHC emissions averaging, banking, or trading programs for heavy-duty diesel engines, within the restrictions described in "California Exhaust Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles" incorporated in section 1956.8 (b), below. If the manufacturer elects to include engine families in any of these program s, the NOx family emission limit (FEL) may not exceed the following FEL caps : 2.00 grams per brake horsepower-hour (0.75 grams per megajoule) for model years. The FEL cap applies whether credits for the engine family are derived from av eraging, banking, or trading programs.

K A manufacturer may elect to include any or all of its heavy-duty diesel engine families in any or all of the particulate averaging, banking, or trading programs for heavy-duty diesel engines, within the restrictions de scribed in “California Exhaust Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles” incorporated by reference in section 1956.8 (b), below. The particulate FEL for each engine family a manufacturer elects to include in any of these programs may not exceed an FEL c ap of 0.02 grams per brake horsepowerhour (0.0075 grams per megajoule). The FE L cap applies whether credits for the engine family are derived from aver aging, banking, or trading programs.

L For 2007 and subsequent model year urban bus engines, this section applies.

(B) Phase-in Options. (i) 1. Early NOx compliant engines. For model years 2007, 2008, and 2009, a manufacturer may, at their option, cert ify one or more of their engine families to the combined NOx plus NMHC standard or FEL applicable to model year 2006 engines under section 1956.8 (a)(2), in lieu of the separate NOx and NMHC standards or FELs applicable to the 2007 and subsequent model years, specified in section 1956.8 (a)(2 ). Each engine certified under this phase-in option must comply with all other emission requirements applicable to model year 2007 engines. To qualify for this option, a manufacturer must satisfy the U.S.-directed production require ment of certifying no more than 50 percent of engines to the NOx plus NMHC standards or FELs applicable to 2006 engines, as specified in 40 Code of Federal Regulations, part 86, section 86.007-11 (g)(1), as adopted January 18, 2001. In addition, a manufacturer may reduce the quantity of engines that are required to be phased-in using the early certification credit program specified in 40 Code of45-Day Notice version A-8 Release Date: July 29, 2005 Hearing Date: September 15, 2005 Federal Regulations, part 86, secti on 86.007-11 (g)(2), as adopted January 18, 2001, and the “Blue Sky” engine program specified in 40 Code of Federal Regulations, part 86, section 86.007- 11 (g)(4), as adopted January 18, 2001.

(ii) 2. Early PM compliant engines. A manufacturer certifying engines to the 2007 and subsequent model year PM standard listed in section 1956.8 (a)(2) (without using credits, as determined in any averaging, banking, or trading program described in “Californi a Exhaust Emission Standards and Test Procedures for 1985 and Subsequent Model Heavy-Duty Diesel Engines and Vehicles,” to comply with the standards) before model year 2007 may reduce the number of engines that are required to meet the 2007 and subsequent model year PM standard listed in sect ion 1956.8 (a)(2) in model year 2007, 2008 and/or 2009. To qualify for this opti on, a manufacturer must satisfy the PM emission requirements pursuant to the methods detailed in 40 Code of Federal Regulations, part 86, se ction 86.007-11 (g)(2)(ii), as adopted January 18, 2001.

* * * * *

NOTE: Authority cited: Sections 39600, 39601, 43013, 43018, 43100, 43101, 43104, 43105, and 43806, Health and Safety Code, and section 28114, Vehicle Code. Reference: Sections 39002, 39003, 39500, 43000, 43013, 43018, 43100, 43101, 43102, 43104, 43106, 43202, 43204, 43206, 43210, 43211, 43212, 43213, and 43806, Health and Safe ty Code; and section 28114, Vehicle Code.45-Day Notice version A-9 Release Date: July 29, 2005 Hearing Date: September 15, 2005 § 2020. Purpose and Definitions of Di esel Particulate Matter Control Measures

(a) Purpose . Diesel particulate matter was identified in 1998 as a toxic air contaminant. According to California law, an airborne toxic control measure using the best available control technology shall, therefore, be employed to reduce the public’s exposure to diesel particulate matter.

(b) Definitions . For the purposes of the rules specified in article 4, the following definitions apply:

“Alternative fuel” means natural gas, propane, ethanol, methanol, gasoline (when used in hybrid electric buses only), hydrogen, electricity, fuel cells, or advanced technologies that do not rely on diesel fuel. “Alternative fuel” also means any of these fuels used in combination with each other or in combination with other nondiesel fuels.

“Commercially available” means available for purchase and installation at a reasonable cost.

“Heavy-duty pilot ignition engine” means an engine designed to operate using an alternative fuel, except that diesel fuel is used for pilot ignition at an average ratio of no more than one part diesel fuel to ten parts total fuel on an energy equivalent basis. An engine that can operate or idle solely on diesel fuel at any time does not meet this definition.

“Level” means one of three categories of Air Resources Board-verified diesel emission control strategies: Level 1 m eans the strategy reduces engine diesel particulate matter emissions by between 25 and 49 percent, Level 2 means the strategy reduces engine diesel particulate matter emissions by between 50 and 84 percent, and Level 3 means the strategy reduces engine diesel particulate matter emissions by 85 percent or great er, or reduces engine emissions to less than or equal to 0.01 grams diesel parti culate matter per brake horsepower-hour.

“Municipality” means a city, county, cityand county, special district, or a public agency of the United States of Americ a or the State of California, and any department, division, public corporation, or public agency of this State or of the United States, or two or more entities acti ng jointly, or the duly constituted body of an Indian reservation or rancheria.

“Owner” means the same as in titl e 13, California Code of Regulations, section 2180.1(a)(21).

“Retirement” or “Retire” means an engi ne or vehicle will be withdrawn from an active fleet in California. The engine may be sold outside of California, scrapped, or used in a backup vehicle.45-Day Notice version A-10 Release Date: July 29, 2005 Hearing Date: September 15, 2005 “Transit agency” means a public entity responsible for administering and managing transit services. Public transit agencie s can directly operate transit service or contract out for all or part of the total transit service provided.

“Terminal” means any place or places where a vehicle is regularly garaged or maintained, or from which it is operated or dispatched, which may include a private business or residence.

“Verified” means that a diesel emission control strategy or system has received approval from the Executive Officer accordi ng to the “Verification Procedure for InUse Strategies to Control Emissions from Diesel Engines” in title 13, California Code of Regulations, commencing wit h section 2700, and incorporated by reference.

“Warranty Period” means the same as in title 13, California Code of Regulations, section 2707.

NOTE: Authority cited: Sections 39600 and 39601, Health and Safety Code. Reference: Sections 39002, 39003, 39650-39675, 43000, 43013, 43018, 43101, 43102, 43104, 43105 and 43700, Health and Safety Code.45-Day Notice version A-11 Release Date: July 29, 2005 Hearing Date: September 15, 2005 Amend section 2023.1(a) to read as follows:

§ 2023.1. Fleet Rule for Transit Agencies – Urban Bus Requirements

(a) To encourage transit agencies that operate urban bus fleets to purchase or lease lower emission alternative-fuel buses, while also providing flexibility to such fleet operators to determine their optimal fleet mi x in consideration of such factors as air quality benefits, service availability, cost, efficiency, safety, and convenience, two paths to compliance with this fleet rule are available: the alternative-fuel path and the diesel path.

(1) Transit agencies must choose their compliance path, and shall notify ARB of their intent to follow either the di esel or the alternative-fuel path, by January 31, 2001. Reporting requirement s for that notification are set forth in subdivisions (a) and (b) of section 1956.4 2023.4 , title 13, CCR.

(2) A transit agency within the jurisdic tion of the South Coast Air Quality Management District may elect to change its compliance path from the diesel path to the alternative-fuel path, provided that the transit agency notifies the Executive Officer of the change by January 31, 2004, and provided that the transit agency is in compliance with all requirements of section 1956.2 2023.1 , including specific requirements of the diesel path, on or before January 1, 2004. Reporting requirements for this notification are set forth in paragraph (b)(3) of section 1956.4 2023.4 (b)(3), title 13, CCR.

(3) A new transit agency that is a successor to an existing transit agency or that has been created from a merger of two or more transit agencies or parts of two or more transit agencies must have the same compliance path as the transit agency or agencies out of which it is formed.

(4) A transit agency within the jurisdic tion of the South Coast Air Quality Management District shall follow the alte rnative-fuel path. If the transit agency had previously stated its intentto follow the diesel path, the change to the alternative-fuel path sha ll be effective on [Insert effective date of subsection] .

* * * * *

NOTE: Authority cited: Sections 39600, 39601, 39667, 43013, 43018 and 43101(b), Health and Safety Code. Reference: Secti ons 39002, 39003, 39017, 39500, 39650, 39667, 40000, 43000, 43000.5, 43013, 43018, 43701(b), 43801 and 43806, Health and Safety Code; and sections 233 and 28114, Vehicle Code.