TITLE 13. CALIFORNIA AIR RESOURCES BOARD

NOTICE OF PUBLIC HEARING TO CONSIDER PROPOSED AMENDMENTS TO THE

EXHAUST EMISSION STANDARDS FOR 2007-2009 MODEL-YEAR HEAVY DUTY

URBAN BUS ENGINES AND THE FLEET RULE FOR TRANSIT AGENCIES

The Air Resources Board (the Board or ARB) will conduct a public hearing at the time

and place noted below to consider adoption of amendments to the exhaust emission

standards and test procedures for urban bus engines and vehicles and to the ARB fleet

rule for transit agencies. The purposes of these amendments are to achieve emission

reductions from the operations of transit agencies throughout the state, and to make

specific changes in the regulations to specifically address transit vehicles used in the

South Coast Air Quality Management District (SCAQMD or District). This notice

summarizes the significant amendments. The staff report presents the proposal in

greater detail.

DATE: September 15-16, 2005

TIME: 9:00 a.m.

PLACE: South Coast Air Quality Management District

Auditorium

21865 E. Copley Drive

Diamond Bar, California 91765

This item will be considered at a two-day meeting of the Board, which will commence at

9:00 a.m., September 15, 2005, and may continue at 8:30 a.m., September 16, 2005.

This item may not be considered until September 16, 2005. Please consult the agenda

for the meeting, which will be available at least 10 days before September 15, 2005, to

determine the day on which this item will be considered.

If you have a disability-related accommodation need, please go to

http://www.arb.ca.gov/html/ada/ada.htm for assistance or contact the ADA Coordinator at

(916) 323-4916. If you are a person who needs assistance in a language other than

English, please contact the Bilingual Coordinator at (916) 324-5049. TTY/TDD/Speech-toSpeech users may dial 7-1-1 for the California Relay Service.

INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT

OVERVIEW

Sections Affected: Proposed amendments to title 13, California Code of Regulations,

sections 1956.1, 1956.2, and 1956.8.
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Staff has identified two policy decisions to be considered by the Board. They are:

• The appropriate emission standards for new 2007 and later model-year urban

bus engines, and the potential amendment of ARB’s transit fleet rule to require

the use of alternative fuel transit buses statewide; and

• The need for Board adoption of a fleet rule requiring the use of alternative fuel

buses by the six “diesel path” transit agencies within SCAQMD.

Background: California’s current oxides of nitrogen (NOx) emission standard for new

2007 and later model-year diesel urban bus engines is 0.2 grams per brake

horsepower-hour (g/bhp-hr) – a tightening of the 0.5 g/bhp-hr NOx standard that has

applied for the 2004-2006 model years. The California and federal national heavy-duty

truck new engine standard for 2007, which includes urban buses for all but California, is

also 0.2 g/bhp-hr NOx, and applies to one-half of the new engines sold in 2007 through

2009. The heavy-duty truck standard, however allows manufacturers the flexibility to

choose, for each engine type, any emission level between the current standard

2.4 g/bhp-hr (non-methane hydrocarbon plus NOx) and the new 0.2 g/bhp-hr NOx

standard. This results in the option of certifying all engines to an average NOx level of

1.2 g/bhp-hr during 2007 through 2009, and this is what engine manufacturers have

stated they plan to do. Thus, California’s new urban bus engine standard is more

stringent than the national urban bus engine standard.

Along with the exhaust emission standards for urban bus engines and vehicles, in 2000

ARB also adopted a Fleet Rule for Transit Agencies. It has required each transit

agency in the state to select a non-revocable compliance path – either the “diesel” path

or the “alternative-fuel” path – by January 1, 2001. Path selection establishes the fuel

type for new urban bus purchases or leases through model year 2015 and is a

non-revocable election. There are 76 transit agencies statewide that report to ARB

under ARB’s Fleet Rule for Transit Agencies (28 are on the alternative fuel path and 48

are on the diesel path). Most air quality districts are fairly evenly split, with some transit

agencies on the alternative fuel path and some on the diesel path. Exceptions are the

Bay Area, where most agencies are on the diesel path, and the South Coast, where

most agencies are on the alternative fuel path.

The trends in certification and purchases of new urban buses show that manufacturers

are not certifying any diesel urban bus engines that meet California’s standards of

0.5 g/bhp-hr for 2004 to 2006 model years, leading to little or no turnover of diesel

buses in 2004-2006 for transit agencies on the diesel fuel path reluctant to switch to

alternative fuel. Engine manufacturers have indicated they do not plan to certify diesel

urban bus engines to meet the California NOx standard of 0.2 g/bhp-hr for 2007 to 2009

model year, so diesel engines for buses would continue to be unavailable for three

additional years.

In June 2004, ARB staff, with concurrence of the Board, postponed a decision on a staff

proposal to align ARB’s current urban bus engine standards with the California 2007

heavy-duty standard because of an ongoing evaluation of available 2007 urban bus
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engine technology. Of particular interest to the Board was whether natural gas engines

would comply with the 2007 urban bus NOx emission standard.

Potential Amendments to the Emission Standards for New Urban Bus Engines or

Other Statewide Amendments

Staff has assessed urban bus engine availability based on the current 2007-2009 model

year standard versus what could be available if the Board were to amend the NOx

standard to align with the current 2007-2009 model year heavy-duty truck engine

standards, and is presenting the results of its assessment to the Board. The Board has

two basic options. The first is to keep the urban bus NOx standard as it is. Under this

option, there will not be any diesel engines that meet the current standard for 2007

through 2009 available to transit agencies on the diesel path. Starting in 2010 however,

diesel urban bus engines are expected to meet the required standard and will become

available for purchase. Alternative fuel engines will likely be available beginning in 2007

meeting the 0.2 g/bhp-hr NOx standard, and thus transit agencies on the alternative fuel

path may continue to buy alternative fuel urban buses and are not directly affected by

potential amendments to the urban bus engine emission standard.

Under the first option, many transit agencies favoring diesel buses have indicated that, if

no diesel buses are available during 2007 through 2009, they do not plan to purchase

alternative fuel buses and instead will delay purchases of new buses until diesel buses

are available in 2010. As a result, higher emitting older buses that would have been

replaced during 2007 through 2009 will stay in operation until at least 2010, adding to

the older buses already held onto during the 2004 through 2006 time period.

Supporters of alternative fuels favor this option because it increases the incentive to

purchase alternative fuel buses. However, transit agencies on the diesel path oppose it

because it disrupts their purchase process of new buses and keeps their older buses on

the road longer.

The second option available to the Board is to relax the urban bus NOx emission

standard for 2007 through 2009 to align it with the comparable emission standard for

heavy-duty truck engines. As a result of this option, urban buses would be required to

meet the same standards that most other diesel engines for trucks and buses are

required to meet. Manufacturers would accordingly provide compliant diesel engines for

urban buses, and urban buses with these engines would be available for transit

agencies to purchase beginning in 2007. This results in lower emissions compared to

retaining the current standards, at least for the first few years, because higher emitting

older diesel buses will be replaced during 2007 through 2009 with the new, cleaner

engines meeting a 1.2 g/bhp-hr level for NOx. Under the first option these older diesel

buses would remain in service until at least 2010, and perhaps beyond.

Under the second option however, total statewide emissions will be somewhat higher

than under the first option after about 2011. This occurs because, under the first option,

transit agencies would begin after 2009 to make up for purchases deferred during 2007

through 2009. The engines in the new buses purchased in 2010 and later will meet the
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0.2 g/bhp-hr NOx standard rather than the less stringent 1.2 g/bhp-hr NOx standard that

would have applied in 2007-2009 under the second option. Thus, in the longer term

there will be some engines meeting the 1.2 g/bhp-hr NOx level in the bus fleet under the

second option, whereas all would meet 0.2 g/bhp-hr under the first option.

Agencies on the diesel path favor the second option because it allows them to

continually purchase diesel buses beginning in 2007 without disruption. Proponents of

alternative fuel buses believe that this option undercuts their investment in alternative

fuels and sends the signal that the State no longer favors alternative fuels.

A third option the staff considered is amending ARB’s Fleet Rule for Transit Agencies to

require that all transit agencies statewide use alternative fuel buses when making

purchases or leases through 2015. Under this option, transit districts now on the diesel

path would no longer have the option of deferring purchases while waiting for diesel

engines to be available in 2010. These agencies would have to switch to alternative

fuel in order to buy buses and maintain transit service.

The third option results in slightly lower emissions than the second option (align).

Compared to the first option (keep current standard), emissions are lower from 2007 to

2012. Transit agencies on the diesel path, particularly those in the Bay Area, strongly

oppose this option because they believe the use of alternative fuel buses results in less

reliable service, and diesel as clean as alternative fuel buses will be available in 2010

for purchase. They also point out they were allowed to make a choice of fuel type when

the ARB Fleet Rule for Transit Agencies was adopted in 2000, and they should not be

forced to change now at great cost and disruption, for little air quality benefit. Smaller

transit agencies in less urbanized areas have expressed concern about the cost of

alternative fuel engines, and the lack of alternative fuel availability. Proponents of

alternative fuel strongly favor this approach because it creates a growing demand for

their products and a strong incentive to develop new engines.

The rulemaking documents prepared in connection with this notice set forth the

language necessary to implement the option of aligning the urban bus standards with

the heavy-duty truck standards beginning with the 2007 model year. Should the Board

favor the first option – keeping the urban bus standards as they are – no regulatory

changes are necessary. Should the Board decide that all transit agencies statewide

should be required to purchase alternative fuel, a 15-day modification to ARB’s Fleet

Rule for Transit Agencies would be needed accomplish this (and no change to the

urban bus emission standards would be necessary).

Amending ARB’s Fleet Rule to Mandate the Alternative Fuel Path for Transit

Agencies Within the SCAQMD

Under its Clean Fleets Program, SCAQMD adopted seven fleet rules during 2000 and

2001. The rules were developed to gradually shift public agencies and certain private

entities to lower emission and alternative-fuel vehicles whenever a fleet operator

purchases or leases a vehicle for replacement or addition to a fleet. The District
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adopted these rules based on Health and Safety Code section 40447.5, which

authorizes SCAQMD to adopt regulations that require operators of 15 or more public

and commercial fleet vehicles, when adding or replacing vehicles, to purchase vehicles

that are capable of operating on methanol or other equivalently clean-burning

alternative fuel. One of the fleet rules adopted is Rule 1192 - Clean On-Road Transit

Buses.

Shortly after the District adopted its fleet rules, the Engine Manufacturers (EMA) and the

Western States Petroleum Association (WSPA) sued the District in federal court

challenging its authority to adopt the rules. In April 2004, the United States Supreme

Court ruled that it appears likely that at least certain aspects of the fleet rules were

preempted by section 209(b) of the federal Clean Air Act. The Supreme Court

remanded the case back to the federal District Court to determine whether some parts

of the fleet rules could be characterized as state purchasing decisions and, if so,

whether preemption applied. In response to this decision, SCAQMD requested that

ARB submit the District’s rules to the United States Environmental Protection Agency

(U.S. EPA) for a waiver of preemption pursuant to section 209(b) of the Clean Air Act.

The ARB requested public comment and consulted with U.S. EPA regarding the legal

requirements for obtaining a waiver for a rule adopted by a local government.

Based on its review, ARB staff concluded that these fleet rules, as written and adopted

by the District, would not receive a Section 209(b) waiver because these rules have not

been adopted by the ARB as state regulations (applicable within the SCAQMD). For

this reason, staff has developed this proposal which is designed to maintain the

reductions anticipated from the full implementation of SCAQMD's Rule 1192 and will

ensure that statewide alignment does not allow the six transit agencies in the District

that are currently on the diesel fuel path to purchase higher emitting diesel engines.

Of the 17 transit agencies in SCAQMD that are subject to ARB’s Fleet Rule for Transit

Agencies, 11 are on the alternative fuel path and accordingly must continue to purchase

alternative fuel buses through 2015 under the existing ARB rule. These agencies

represent 90 percent (4120 buses) of the transit buses in the District. Of the six transit

agencies currently on the diesel path in the District, most have been planning to

purchase alternative fuel buses only, in order to comply with SCAQMD Rule 1192.

Meanwhile, on May 5, 2005, the federal District Court ruled that, under the “market

participant” doctrine, the SCAQMD fleet rules are not preempted to the extent they

apply to purchasing decisions made by state and local governmental entities. However,

the District Court has not yet addressed questions whether the fleet rules are

preempted as they apply to private entities under contract with state or local

governments or to used or leased vehicles. It is also possible that EMA or WSPA could

appeal the “market participant” decision.

In this rulemaking, the Board will have the option of amending the ARB’s Fleet Rule for

Transit Agencies to mandate that the six diesel path transit agencies in SCAQMD

switch to the alternative fuel path, in order to have the state rule achieving the
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alternative fuel objectives of the District’s Rule 1192. The ARB’s adoption of a unique

fleet requirement for the transit agencies in the District would have the effect of

addressing the Court’s decision while reflecting the Legislature’s intent that SCAQMD

be authorized to establish an alternative fuel fleet rule for transit districts within the

District operating 15 or more buses. Proponents of alternative fuels believe this option

will encourage further development of alternative fuel engines and infrastructure, and is

a good policy necessary to prepare California for a more energy secure future. Diesel

engine manufacturers and California businesses oppose, on principle, any rule that

mandates alternative fuels.

If the Board wishes to assure that alternative fuel urban transit buses are purchased

throughout the District, and determines it wise to provide a backstop to the current

District Rule 1192 in case litigation overturns the District rule, the rulemaking documents

include regulatory language that would amend ARB’s Fleet Rule for Transit Agencies to

require diesel path transit agencies in SCAQMD to switch to the alternative fuel path.

COMPARABLE FEDERAL REGULATIONS

There are comparable federal regulations for 2007 and subsequent model-year heavyduty engines, which are codified in title 40, Code of Federal Regulations, part 86,

subparts A, I, and N. One of the regulatory options developed by staff would align the

exhaust emission engine standards for new urban bus engines with the federal

standards.

There are no federal regulations comparable to the California fleet rule for transit

agencies.

AVAILABILITY OF DOCUMENTS AND AGENCY CONTACT PERSONS

The Board staff has prepared a Staff Report: Initial Statement of Reasons (ISOR) for

the proposed regulatory action, which includes a summary of the economic and

environmental impacts of the proposal. The staff has also prepared a technical support

document (TSD) that summarizes technology available and feasible for rule compliance.

Copies of the staff ISOR, the TSD, and the full text of the proposed regulatory language,

in underline and strikeout format to allow for comparison with the existing regulations,

may be accessed on the ARB’s website listed below, or may be obtained from the

Public Information Office, Air Resources Board, 1001 I Street, Visitors and

Environmental Services Center, 1st Floor, Sacramento, California 95814, (916) 322-

2990 at least 45 days prior to the scheduled hearing September 15, 2005.

Upon its completion, the Final Statement of Reasons (FSOR) will be available and

copies may be requested from the agency contact persons in this notice, or may be

accessed on the ARB’s website listed below.
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Inquiries concerning the substance of the proposed regulation may be directed to the

designated agency contact persons, Mr. David Salardino by email at

dsalardi@arb.ca.gov or by phone at (626) 575-6679, or to Ms. Annette Hebert by email

at ahebert@arb.ca.gov or by phone at (626) 575-6973.

Further, the agency representative and designated back-up contact person to who

nonsubstantive inquiries concerning the proposed administrative action may be directed

are Ms. Artavia Edwards, Manager, Board Administration & Regulatory Coordination

Unit, (916) 322-6070, and Ms. Alexa Malik, Regulations Coordinator,

(916) 322-4011. The Board has compiled a record for this rulemaking action, which

includes all the information upon which the proposal is based. This material is available

for inspection upon request to the contact persons.

This notice, ISOR and all subsequent regulatory documents, including FSOR, when

completed, are available on ARB’s Internet site for this rulemaking at

www.arb.ca.gov/regact/sctransit/sctransit.htm

COSTS TO PUBLIC AGENCIES AND TO BUSINESSES AND PERSONS AFFECTED

The determinations of the Board's Executive Officer concerning the costs or savings

necessarily incurred by public agencies and private persons and businesses in

reasonable compliance with the proposed regulations are presented below.

Pursuant to Government Code sections 11346.5(a)(5) and 11346.5(a)(6), the Executive

Officer has determined that the proposed regulatory action will not create costs or

savings to any state agency or in federal funding to the state, costs or mandate to

school districts whether or not reimbursable by the state pursuant to part 7

(commencing with section 17500), division 4, title 2 of the Government Code, or other

nondiscretionary savings to state or local agencies. However, the staff’s proposal to

require all transit buses in the SCAQMD to follow the alternative-fuel path, combined

with the proposal to align the California urban bus standards with the federal 2007 and

later model-year heavy-duty engine standards may result in costs to local agencies

operating transit properties, but those costs are expected to be recovered through

appropriate fare increases. Statewide, these costs are expected to range from about

$6-$8 million over the life of the regulations.

In developing this regulatory proposal, the ARB staff evaluated the potential economic

impacts on representative private persons or businesses. The ARB is not aware of any

cost impacts that a representative private person or business, apart from those

providing transit services, would necessarily incur in reasonable compliance with the

proposed action.

The Executive Officer has made an initial determination that the proposed regulatory

action to require transit buses in the SCAQMD to follow the alternative-fuel path and to

align the California urban bus standards with the federal 2007 and later model-year

heavy-duty engine standards would not have a significant statewide adverse economic
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impact directly affecting businesses, including the ability of California businesses to

compete with businesses in other states, or on representative private persons.

In accordance with Government Code section 11346.3, the Executive Officer has

determined that the proposed regulatory action to require transit buses in the SCAQMD

to follow the alternative-fuel path and to align the California urban bus standards with

the federal 2007 and later model-year heavy-duty engine standards would not affect the

creation or elimination of jobs within the State of California, the creation of new

businesses or elimination of existing businesses within the State of California, or the

expansion of businesses currently doing business within the State of California. A

detailed assessment of the economic impacts of the proposed regulatory action can be

found in the ISOR.

The Executive Officer has also determined, pursuant to title 1, CCR, section 4, that the

proposed regulatory action to require transit buses in the SCAQMD to follow the

alternative-fuel path and to align the California urban bus standards with the federal

2007 and later model-year heavy-duty engine standards would not affect small

businesses because the proposed amendments do not impose a mandate to produce

but open a potential market by allowing the sale and purchase of urban buses. In

addition, the proposal requiring the alternate-fuel path for all transit agencies in the

District is expected to have a positive impact on the alternative-fuel engine and bus

manufacturers.

Before taking final action on the proposed regulatory action, the Board must determine

that no reasonable alternative considered by the Board or that has otherwise been

identified and brought to the attention of the Board would be more effective in carrying

out the purpose for which the action is proposed or would be as effective and less

burdensome to affected private persons than the proposed action.

SUBMITTAL OF COMMENTS

The public may present comments relating to this matter orally or in writing at the

hearing, and in writing or by e-mail before the hearing. To be considered by the Board,

written submissions not physically submitted at the hearing must be received

no later than 12:00 noon, September 14, 2005, and addressed to the following:

Postal mail is to be sent to:

Clerk of the Board

Air Resources Board

1001 I Street, 23rd Floor

Sacramento, California 95814
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Electronic mail is to be sent to: sctransit@listserv.arb.ca.gov and received at the ARB

no later than 12:00 noon, September 14, 2005.

Facsimile transmissions are to be transmitted to the Clerk of the Board at

(916) 322-3928 and received at the ARB no later than 12:00 noon,

September 14, 2005.

The Board requests but does not require that 30 copies of any written statement be

submitted and that all written statements be filed at least 10 days prior to the hearing so

that ARB staff and Board Members have time to fully consider each comment. The

Board encourages members of the public to bring to the attention of staff in advance of

the hearing any suggestions for modification of the proposed regulatory action.

STATUTORY AUTHORITY AND REFERENCES

This regulatory action is proposed under that authority granted in Health and Safety

Code, sections 39600, 39601, 39667, 39701(b), 43013, 43018, 43100, 43101, 43104,

43105, 43701(b) and 43806, and section 28114 of the Vehicle Code. This action is

proposed to implement, interpret and make specific sections 39002, 39003, 39017,

39033, 39500, 39650, 39657, 39667, 39701, 40000, 43000, 43000.5, 43009, 43013,

43018, 43100, 43101, 43102, 43104, 43106, 43202, 43204, 43206, 43210, 43211,

43212, 43213, 43701(b), 43801 and 43806 of the Health and Safety Code, and sections

233 and 28114 of the Vehicle Code.

HEARING PROCEDURES

The public hearing will be conducted in accordance with the California Administrative

Procedure Act, title 2, division 3, part 1, chapter 3.5 (commencing with section 11340) of

the Government Code.

Following the public hearing, the Board may adopt the regulatory language as originally

proposed, or with nonsubstantial or grammatical modifications. The Board may also

adopt the proposed regulatory language with other modifications if the text as modified

is sufficiently related to the originally proposed text that the public was adequately

placed on notice that the regulatory language as modified could result from the

proposed regulatory action; in such event the full regulatory text, with the modifications

clearly indicated, will be made available to the public, for written comment, at least 15

days before it is adopted.
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The public may request a copy of the modified regulatory text from the ARB’s Public

Information Office, Air Resources Board, 1001 I Street, Visitors and Environmental

Services Center, 1st Floor, Sacramento, California 95814, (916) 322-2990.

CALIFORNIA AIR RESOURCES BOARD

/s/

Catherine Witherspoon

Executive Officer

Date: July 19, 2005

The energy challenge facing California is real. Every Californian needs to take immediate action to reduce energy

consumption. For a list of simple ways you can reduce demand and cut your energy costs see our Web –site at

www.arb.ca.gov.