## Appendix D

Proposed Amendments to the Truck and Bus RegulationD-1

PROPOSED AMENDMENTS TO THE TRUCK AND BUS REGULATION

On December 12, 2008, the California Air Resources Board (ARB) approved a new regulation to significantly reduce emissions from e xisting on-road diesel vehicles operating in California. On December 9, 2009, staf f provided the Board with an analysis of the impact of the recession on emissions from he avy-duty diesel powered vehicles. This analysis also showed that vehicle activity and emissions are both below the levels estimated when the regulation was developed. The a nalysis also showed that the 2014 emissions goals could now be met with fewer emissio n reductions from heavy-duty vehicles and the Board directed staff to develop re gulatory provisions to provide economic relief to affected fleets. Finally, based on feedback and comments from affected fleets and other stakeholders, as well as analysis by staff, a number of other provisions of the regulation that require clarifica tion or modification have been identified. Staff believes these clarifications and modificatio ns are appropriate for the successful implementation of the regulation.

A. Existing Regulation
The current regulation requires owners to upgrade t heir fleets to meet specified best available control technology (BACT) standards for P M and NOx. The BACT standard for PM, phased in from 2011 to 2014, is an engine r etrofit with the highest level VDECS (PM filter) or an engine originally equipped with a PM filter by the engine manufacturer. The BACT standard for NOx, phased in from 2013 to 2 023, is an engine newly manufactured in 2010 or later or a 2010 emissions e quivalent engine.

Fleets may meet the annual requirements by retrofit ting vehicles with a PM filter that will achieve PM or NOx reductions, or both, replacing ve hicles with newer cleaner ones, or repowering vehicles with newer, cleaner engines. F leets may also retire older vehicles or operate higher emitting vehicles less often by d esignating them as low-use vehicles.

During the first four years of the regulation, star ting January 1, 2011, fleets are required to install PM filters for certain engine model year s so that by 2014 nearly all engines will have a PM filter. The regulation then requires own ers to reduce NOx emissions from the fleet by accelerating engine or vehicle replace ment or by retrofitting engines starting January 1, 2013. By January 1, 2023, all vehicles would be upgraded to vehicles with 2010 model year engines or equivalent.

Each year, fleets must demonstrate compliance with any of the regulation’s three compliance options, and may change compliance optio ns from one year to the next and may use a different option for PM than for NOx. Th e options are: (a) A BACT schedule that prescribes which vehicles must be equipped with a PM filter or replaced based on engine model year; or (b) A BACT percentage limit option that sets the mi nimum number of PM filters to be installed and the minimum number of vehicles to meet NOx BACT each
year; orD-2

(c) A fleet averaging option that allows a fleet to reduce fleet emissions by meeting a fleet average emissions target for PM and one for NOx. The fleet emission targets decline over time so that by 2014, nearly a ll engines will meet PM BACT and by 2023, all engines will meet NOx BACT.

The regulation never requires the purchase of new v ehicles and is structured so that the requirements can be met through the purchase of use d vehicles.

The existing BACT compliance schedule allows fleets to comply by installing PM filters and upgrading to 2010 model year equivalent engines according to the schedule shown in Table 1.

Table 1: Best Available Control Technology Complia nce Schedule

Compliance Deadline, as of January 1 Engine Model Years BACT Requirements

2011 Pre-1994 PM BACT 2012 2003 – 2004 PM BACT 2005 – 2006 PM BACT 2013 1994 – 1999 NOx and PM BACT 2000 – 2002 NOx and PM BACT 2014 2007 and later

that do not meet PM BACT NOx and PM BACT

2015 Pre-1994 NOx and PM BACT 2003 – 2004 NOx and PM BACT 2016 2005 – 2006 NOx and PM BACT 2017 1994 – 1999 NOx and PM BACT 2018 All pre-2007 NOx and PM BACT 2019 All pre-2007 NOx and PM BACT 2020 All pre-2007 NOx and PM BACT 2021 2007 or equivalent NOx and PM BACT 2022 2008 NOx and PM BACT 2023 2009 NOx and PM BACTD-3

The specific requirements of the BACT Percentage Li mit Option are shown in Table 2.

Table 2: Percent of Fleet That Must Comply with PM and NOx BACT Standard
Percent of Total Fleet Complying with

BACT Compliance Deadline As of January 1 PM BACT NOx BACT 2011 25% N/A 2012 50% N/A 2013 75% 25% 2014 100% 50% 2015 100% 50% 2016 100% 60% 2017 100% 80% 2018 100% 80% 2019 100% 80% 2020 100% 90% 2021 100% 90% 2022 100% 90% 2023 100% 100%

Small fleets with three or fewer vehicles have an a lternative compliance option that delays the first compliance date until January 1, 2 014, as described below:

• A one truck owner electing this option is required to have a 2004 model year or newer engine equipped with a PM filter by January 1 , 2014.

• A fleet with two trucks is required to have one 20 10 model year engine and one truck equipped with a PM filter, or both trucks hav ing a 2004 model year or newer engine and equipped with a PM filter by Janua ry 1, 2014.

• A fleet with three trucks can elect to comply by h aving all vehicles equipped with 2004 model year engines or newer with PM filters by January 1, 2014, or choose to delay the PM filter requirement for one truck un til January 1, 2016 if another truck is equipped with a 2010 model year engine by 2014.

All small fleets would need to meet the same BACT s chedule as other fleets starting January 1, 2019.

School buses are exempt from any NOx reduction requ irements but must meet PM BACT requirements. School buses would have three c ompliance options to meet PM BACT starting January 1, 2011 so that all school bu ses would have PM filters by January 1, 2014.

The regulation also includes a number of special pr ovisions that delay some or all of the requirements for certain fleets and vehicle uses. These provisions are available for:

• Low-use vehicles

• Agricultural vehicles

• Vehicles operating exclusively in designated NOx e xempt areasD-4

• Motorcoaches

• Unique vehicles

The regulation also provides credits for:

• Vehicle retirements that have occurred since 2008

• Adding fuel efficient hybrid vehicles

• Alternative fueled vehicles

• Early PM retrofit installations

B. Proposed Regulatory Amendments
The proposed amendments would simplify the regulati on by eliminating the fleet averaging and percent limit options, by modifying t he BACT compliance schedule and proposing a new phase-in option. It would also del ay the initial compliance requirements and delay the phase in of 2010 engines . These delays eliminate the need for the NOx exemptions in the current regulation wh ich were based on phasing in the NOx requirements at a later date.

About 150,000 lighter trucks (trucks with a GVWR of 14,001 to 26,000 pounds) would be exempt from the PM BACT requirements and replace ment requirements would be delayed for all vehicles until 2015. The proposed amendments would treat heavier trucks (trucks with a GVWR greater than 26,000 poun ds) differently than lighter weight trucks.

Other amendments are proposed to reduce or delay co mpliance requirements for various types of vehicles or uses. Generally, the proposed amendments substantially simplify the regulation while retaining flexibility for fleets to determine which vehicles to retrofit or replace. A more detailed discussion of all the amendments staff is proposing is provided below.

1. Compliance Schedule for Lighter Trucks
Staff is proposing a new requirement for lighter tr ucks that would exempt them from the PM BACT requirements. Upgrading these vehicles wou ld not be required until the engines are at least 20 years old. Starting Januar y 1, 2015, and continuing each year thereafter until 2020, engines with model years tha t are 20 years old or older would need to be replaced with a 2010 model year engine o r equivalent. Then, from 2020 to 2023, all remaining pre-2010 model year engines wou ld be required to be 2010 model year engine equivalent according to the following s chedule.

• 2003 and older engine model years by January 1, 20 20

• 2006 and older engine model years by January 1, 20 21

• 2009 and older engine model years by January 1, 20 22D-5

By January 1, 2023 all vehicles in the fleet must b e 2010 model year emissions equivalent. Any vehicle brought into the fleet mus t be in compliance with the previous year’s requirements.

Any vehicle that is equipped with a PM filter by 20 14 would be exempt from the replacement requirements until 2020 and would have to be reported.

2. Compliance Schedule for Heavier Trucks
Staff is proposing to amend the existing BACT compl iance schedule to phase in the requirement to install diesel particulate filters f rom 2012 through 2014. Beginning 2015 through 2023, staff is proposing to phase in the re quirement to upgrade to 2010 or newer model year vehicles. The proposed amendments would require heavier trucks with 1998 to 2006 model year engines, to meet PM BA CT between January 1, 2012 and January 1, 2014. The proposed compliance schedule is shown in Table 3 below.

Table 3: Proposed BACT Schedule for Heavier Trucks

Compliance Dates Engine Model Install PM Filter By 2010 Engine By Pre 1994 N/A January 1, 2015 1994-1995 N/A January 1, 2016 1996-1997 N/A January 1, 2017 1998-2000 January 1, 2012 January 1, 2020 2001-2004 January 1, 2013 January 1, 2021 2005-2006 January 1, 2014 January 1, 2022

2007-2009 January 1, 2014 if not

originally equipped with a PM filter January 1, 2023

Any vehicle that is equipped with a PM filter by 20 14 would be exempt from the replacement requirements until 2020 and would have to be reported.

3. Phase-in Option for Small Fleets
Staff is proposing to replace the existing optional small fleet provision for fleets with one to three vehicles with a new optional phase-in for vehicles with a GVWR greater than 26,000 pounds that would simplify and ease the requ irements. The proposed option is applicable only to heavier trucks. A small fleet w ould be allowed to delay meeting PM BACT for heavier vehicles until January 1, 2014 and be exempt from meeting the 2010 model year emissions equivalent requirement until J anuary 1, 2020. The simplified requirements for PM filters would follow the schedu le shown in Table 4 below.D-6

Table 4: Small Fleet PM Phase-In Option Schedule f or Heavier Vehicles

Compliance Date Vehicles Meeting PM BACT January 1, 2014 1 vehicle January 1, 2015 2 vehicles January 1, 2016 3 vehicles

Beginning January 1, 2020, all vehicles in the flee t would need to comply with the 2010 model year emissions equivalent requirements of the BACT schedule shown in Table 5.

Table 5: Compliance Dates for Heavier Vehicles tha t Must be Modernized

Engine Model Year 2010 Engine By 2000 and older January 1, 2020 2001 – 2004 January 1, 2021 2005 – 2006 January 1, 2022 All Vehicles January 1, 2023

Fleets using this provision are subject to the repo rting requirements which have been amended as specified in the revised reporting requi rements at the end of this appendix.

4. Phase-in Option for Large Fleets
Staff is proposing a new phase-in option for vehicl es with a GVWR greater than 26,000 pounds to provide additional compliance flexibility . The fleets utilizing this provision must report information for all heavier vehicles in the fleet starting January 31, 2012. This option would allow fleets to decide the order in which vehicles would be retrofit and replaced, regardless of their age. This would prov ide additional flexibility to fleets so they may be able to keep older, more expensive or s pecialized vehicles in their fleet longer than would be allowed under the BACT schedul e. It would also provide flexibility to fleets that have most or all of the vehicles in one or two of the model year ranges in the BACT schedule. The heavier vehicles in the flee t would need to comply with PM BACT according to Table 6.

Table 6: Phase-In Option Schedule

Compliance Date Vehicles Meeting PM BACT January 1, 2012 30% January 1, 2013 60% January 1, 2014 90% January 1, 2015 90%

January 1, 2016 All Must Comply with BACT ScheduleD-7

Any vehicle brought into the fleet must be complian t with the previous year’s requirements. Staff is also proposing to allow flee ts with both drayage and non-drayage trucks to include all their vehicles in the phase-i n option. Fleets using this provision are subject to the reporting requirements which have be en amended as specified in the revised reporting requirements at the end of this a ppendix.

5. Relief for Fleets that have Reduced their Fleet Size
This amendment would provide expanded credits until 2016 for fleets that have fewer trucks than they had in 2006, and is intended to re duce the annual requirements for fleets most affected by the recession. Until Janua ry 1, 2016, and in conjunction with the optional Phase-in schedule for heavier trucks, a fl eet would be able to reduce its requirement for a compliance year by the same perce ntage that the fleet has downsized from its 2006 baseline fleet. Table 7 shows how th e fleet size reduction credit would reduce the compliance requirements for a business t hat has 25 percent fewer vehicles than it did in 2006. Because the fleet is 25 perce nt smaller, the fleet would subtract 25 percent from the annual phase-in option requirem ent each year until 2016. The second column in the table shows the phase-in optio n requirements without credits and the far right column shows the requirements adjuste d for a fleet with a 25 percent smaller fleet. If the fleet size changes from year to year the credit would adjust.

Table 7: Example of Relief for Fleet Downsized 25 P ercent

Compliance Date Vehicles Meeting

PM BACT (No Credits) Fleet Size

Compared to 2006 Baseline PM BACT

Required for Reduced Fleet January 1, 2012 30% -25% 5% January 1, 2013 60% -25% 35% January 1, 2014 90% -25% 65% January 1, 2015 90% -25% 65% January 1, 2016 All Must Comply with BACT Schedule

The proposed changes would provide fleets with addi tional credits by extending the baseline year back from 2008 (the baseline year for determining credits in the current regulation) to 2006. This would provide more credi t since nearly all fleets had more vehicles in 2006 than 2008. The proposed amendment s would also increase the credit by allowing non-operational vehicles to be counted as retired (that is, excluded from the calculation of fleet size). The credit would also continue until January 1, 2016 rather than expiring January 1, 2014 as provided in the cu rrent regulation. To take advantage of these credits, fleets would be required to repor t information about all trucks over 26,000 pounds GVWR in the fleet and comply with the optional phase-in compliance schedule starting in January 2012.D-8

6. Credits
a) Credits for Early PM Retrofits
Fleets that have already installed a PM filter or i nstall them prior to July 2011 would be able to treat another vehicle as compliant until 20 17. This credit would encourage early action and get early emissions reductions, would re ward fleets who have already installed PM retrofits, and would spread out retrof it purchases and installations. The vehicle that was retrofitted early would also be co mpliant until 2020. The proposed amendments would also extend the expiration date of the credit in the existing regulation from 2014 to 2017. However, credits tow ards another vehicle would not be available for action taken to comply with other reg ulations or for PM retrofits partially paid for by public funding according to the funding contract terms.

This credit could be used by fleets in a number of ways, for fleets using the optional phase-in compliance schedule, the retrofitted vehic le and the credit would each count towards compliance. For example, a fleet with two early retrofits would be treated as having four PM filters until 2017. Alternatively, a fleet that complies with the BACT requirements and doesn’t report could claim the cre dit by reporting information about the truck equipped with the PM retrofit and the tru ck that would be treated as compliant using the provided credit. Additionally, a fleet t hat retrofits a lighter vehicle prior to July 1, 2011, could treat a heavier vehicle as comp liant until January 1, 2017.

Overall, the amendment would increase the value of the existing early retrofit credit provision by providing a one for one credit that is good until January 1, 2017, rather than providing a credit like the existing regulation tha t declines each year until it expires January 1, 2014.

In addition, any lighter or heavier vehicle that ha s a PM retrofit installed prior to 2014 would be compliant until 2020. Fleets can use this option to keep older trucks until 2020 even if the BACT compliance schedule would require the vehicle to be replaced between 2015 and 2020. Credit towards another vehi cle would not be given for partially state funded vehicle retrofits according to the fun ding program guidelines.

b) Fuel Efficient Hybrids, Alternative Fueled Vehic les, and Heavy-Duty Pilot Ignition Engines
Fleets that purchase fuel efficient hybrid vehicles , alternative fueled vehicles, or vehicles equipped with pilot ignition engines any time prior to 2017 would be able to treat another vehicle as compliant until 2017. This credit could be used with the optional phase-in compliance schedule where the credit for another ve hicle would count towards compliance. In addition, a fleet that complies wit h the BACT requirements and doesn’t need to report the entire fleet could claim the cre dit by reporting information solely about the hybrid vehicle and the vehicle that would be tr eated as compliant using this credit. Like the early PM retrofit credit, this amendment w ould increase the value of the credits by providing a one for one credit rather than the c redit value in the existing regulation that declines each year. A fleet could receive cre dit for action taken on a lighter vehicle prior to July 1, 2011 and apply the credit for a he avier vehicle as compliant until JanuaryD-9

1, 2017. Credit towards another vehicle would not be given for partially state funded vehicle replacements according to the funding progr am guidelines.

7. School Bus Provision
Staff is proposing amendments to the school bus pro vision, which are designed to provide relief while still protecting the children in our state. These amendments will exempt the lighter school buses (buses with a GVWR of 14,001 to 26,000 pounds) from the regulatory provisions and provide a one year de lay in the implementation of PM filters for the heavier school buses (buses with a GVWR greater than 26,000 pounds).

The other proposed changes are similar to the relie f proposed for other vehicles subject to the regulation. The BACT Percentage Limits opti on and the Fleet Averaging option would be eliminated and the existing BACT complianc e schedule would be replaced with the phase-in compliance schedule shown in Tabl e 8 below.

Table 8: BACT Compliance Schedule for Heavier Schoo l Buses
Compliance Deadline, as of January 1 Minimum Percent of Total Fleet Complying with PM BACT 2012 33% 2013 66% 2014 100%

The proposed amendments also include credits for in stallation of a PM filter, such that a heavier school bus would be considered compliant fo r each lighter school bus that has an OEM filter or a retrofit installed, provided tha t the funding of those buses allows the use of these credits. The proposed amendments also include credit for one heavier school bus to be considered compliant for each hybr id, heavy-duty pilot ignition, and alternative-fueled school bus over 14,000 pounds GV WR in the fleet, provided that the funding of those buses allows credits. For each sc hool bus that earns any of the credits described above, the fleet could treat another scho ol bus as compliant because of the credit until January 1, 2014. The fleet would be r equired to keep records on the school buses receiving credit and the school buses to be t reated as compliant.

Similar to the proposal for other vehicle categorie s, staff is proposing a provision that offers economic relief to school bus fleets that ha ve reduced their fleet size relative to their fleet size on October 1, 2006 – the new basel ine year proposed in the amended regulation. Until January 1, 2014, a fleet would b e able to reduce its requirement in a compliance year by the same percentage that the fle et has downsized from the 2006 baseline fleet. The fleet may include all school b uses over 14,000 pounds GVWR when determining this credit. Except for fleets needing a compliance extension based on unavailability of PM filters, staff proposes to req uire no reporting for school bus fleets – only recordkeeping.

Staff is not proposing to change some of the origin al components of the regulation including:D-10

(1) The school bus exemption from NOx BACT, (2) The provision for school buses that cannot be r etrofitted with a PM filter, to have until January 1, 2018, to meet PM BACT, and (3) The requirement for school buses greater than 1 4,000 lbs GVWR that were manufactured before April 1, 1977, to be retired by January 1, 2012.

8. Agricultural Vehicle Provisions
a) Use of Small Fleet Provisions and other Credits, Exemptions, and Extensions
Staff is proposing to make several changes the agri cultural vehicle provision to streamline the language to make the provision easie r to understand. The proposed changes would delete the concepts of low and limite d mileage vehicles and place the mileage restrictions associated with those vehicles directly into the language of the provisions. Staff is also proposing to redefine th e agricultural fleet to include only the vehicles using the agricultural vehicle provisions and not the vehicles that do not qualify for the provision as the regulation is currently wr itten. In addition, Staff is proposing to extend the deadline for reporting agricultural vehi cles until March 31, 2011 to allow another opportunity for eligible fleets to apply. Staff is also proposing to amend the definition of an agricultural vehicle to clarify th e definitions. The definitions would clarify that any truck transporting a load of unprocessed c rops between the farm and the first point of processing would be eligible and would sti ll be eligible if making interim movements between the farm and the processor and wo uld include yard trucks.

Staff is proposing to make a number of smaller chan ges to the regulation which would separate the vehicles that qualify for the agricult ural vehicle provision from the vehicles would not qualify and would need to comply with the general requirements of the regulation. As a result of this change, the vehicl es that do not qualify for the agricultural provision would be able to use any of the exemption s, extensions, or credits provided to the fleets that comply with the general requirement s of the regulation.

Staff is also proposing to change the definition of specialty agricultural vehicles to remove the restriction that feed trucks or mixer-fe ed trucks be used exclusively at cattle or calf feedlots. In addition, staff is proposing to amend the language to clarify that when replacing an agricultural vehicle the vehicle being removed from the agricultural vehicle provision may be shifted to the non-agricul tural vehicle fleet as long as it complies with the general requirements of the regul ation.

Staff is also proposing to extend the deadline for reporting agricultural vehicles until March 31, 2011. The current regulation requires al l vehicles that will utilize the agricultural vehicle provisions to report informati on regarding the business and the vehicles in the fleet by March 31, 2010. The early reporting was necessary because the number of specialty agricultural vehicles in state was capped at 2200 and 1100 in the San Joaquin Valley. However, after analysis of all the vehicles reported it was determined that less that 2200 and 1100 vehicles ha d requested to be classified asD-11

specialty vehicles. If the number of specialty veh icles reaches the caps, priority will be given to those who reported during 2010. Fleets us ing this provision are subject to the reporting requirements which have been amended as s pecified in the revised reporting requirements at the end of this appendix.

b) Provision for Log Trucks
Staff is proposing to add a new provision under the agricultural vehicle section for log trucks and a definition of log trucks in the defini tions section. As shown in Table 9, the provision would exempt log trucks from the requirem ent of installing PM filters, but instead require the log truck fleet to accelerate N Ox BACT (replacement to 2010 model year emissions equivalent engines). Instead of pha sing in PM filters beginning in 2012, as required by the BACT compliance schedule in the general requirements, log truck fleets would be required to meet NOx BACT at a rate of 10 percent per year from 2014 to 2023. Unlike other agricultural vehicles, log t rucks would have no mileage restrictions.

Table 9: Percentage of Log Trucks that must have 20 10 Model Year Emissions Equivalent

Compliance Deadline as of January 1 Percent of Total Fleet

Complying with BACT

2011 0% 2012 0% 2013 0% 2014 10% 2015 20% 2016 30% 2017 40% 2018 50% 2019 60% 2020 70% 2021 80% 2022 90% 2023 100%

9. Inclusion of Drayage Trucks
Staff is proposing to amend the regulation to allow fleets with drayage trucks to include these trucks along with their other trucks when com plying with the Truck and Bus regulation. Drayage trucks must still comply with the Drayage Truck regulation, but fleets would now be able to count cleaner drayage t rucks toward the compliance with the Truck and Bus regulation. Staff is also propos ing to amend the date by which drayage trucks would be subject to the Truck and Bu s regulation from January 1, 2021 to January 1, 2017.D-12

Staff is proposing to amend the Drayage Truck regul ation to delay the phase 2 requirements that require drayage trucks to meet or exceed the 2007 engine standards by January 1, 2014. The existing regulation requir es all drayage trucks to meet PM BACT by January 1, 2014, so the delay will allow dr ayage trucks meeting PM BACT to operate at ports and intermodal rail yards until re quired to upgrade to 2010 model year emissions equivalent engine as required by the Truc k and Bus regulation. Staff is proposing that the Drayage Truck regulation sunset on January 1, 2016.

10. Provision for Two-Engine Street Sweepers
Staff is proposing to amend the two-engine sweeper provision to clarify that the auxiliary engine is required to meet PM BACT whenever the dri ve engine is required to either meet PM BACT or be upgraded to a 2010 model year em issions equivalent. However, street sweepers would need to follow the requiremen ts of the regulation based on the GVWR of the sweeper. Sweepers with a GVWR of 14,00 1 to 26,000 pounds would follow the requirements for vehicles of that weight class and sweepers with a GVWR greater than 26,000 pounds would follow the require ment for vehicles of that weight class. The operating restrictions for two-engine s weepers greater than 14,000 pounds GVWR with Tier 0 auxiliary engines would remain the same. Fleets using this provision are subject to the reporting requirements which hav e been amended as specified in the revised reporting requirements at the end of this a ppendix.

11. Low-Use Vehicle Definition
Staff is proposing to amend the definition of a low -use vehicle to delete the requirement that these vehicles drive less than 1,000 miles and 100 hours in the 12 month period preceding the compliance year. The proposal would change the time period in which the mileage restriction applies from the previous c ompliance year to the current compliance year. Therefore, if a fleet designates a vehicle on January 1, 2012, as low use, the vehicle cannot operate more than 1,000 mil es between January 1 and December 31, 2012. Fleets must report vehicle info rmation annually and the provision expires January 1, 2023.

Staff is also proposing language that would require low-use vehicles operate less than 1,000 miles per year and 100 hours if the vehicle i s equipped with power take off that is designed to operate while stationary, such as drill rigs or cranes. Vehicles that have PTO that are operated only to load and unload produ cts such as lift gates would not be subject the 100 hour limitation. Fleets using this provision are subject to the reporting requirements which have been amended as specified i n the revised reporting requirements at the end of this appendix.

12. NOx Exempt Area Provisions
Staff is proposing to amend the NOx exempt area pro vision to allow vehicles that operate exclusively in the NOx exempt area to conti nue the same exemption as the current regulation but would clarify how the exempt ion aligns with the proposed changes to general requirements.D-13

Staff is proposing to modify the NOx exempt area pr ovision to show that the proposed change to the general requirements only impact 1997 and older vehicles with a GVWR greater than 26,000 pounds operating in the NOx exe mpt areas. The narrow impact is a result of the extended deadlines of the general r equirements. A separate compliance schedule is being proposed and would identify which model year engines would need to meet PM BACT by which specific calendar year deadli nes.

Staff is also proposing to add an optional labeling requirement for fleet owners with 1997 and older vehicles that meet PM BACT rather th an requiring reporting.

13. Unique Vehicle Extension
Staff is proposing to add a provision that would re place the unique vehicle provision. The new provision would streamline and clarify that a fleet owner may apply for a one year exemption from replacing the vehicle or engine if:

• A used vehicle or suitable cab and chassis that pe rforms a similar function with a 2010 equivalent emissions engine is not available, and

• A suitable PM filter was not available to be insta lled by 2014.

14. Deleted Provisions
a) BACT Percent Limits
Staff is proposing to delete the BACT percent limit s option which allowed fleets to meet PM and NOx BACT with vehicles of their choice provi ded they meet the annual percentage set forth in percent limits table and ha s replaced it with the phase-in option.

b) Fleet Averaging Option
Staff is proposing to delete the fleet averaging op tion because it is no longer needed.

c) Cab-Over-Engine Trucks with 57’ Trailers
Staff is proposing to delete this section because t he proposed BACT compliance schedule and phase-in option eliminates the need fo r this provision. Because the last model year that a cab-over-engine truck was built w as 2006, these vehicles can never be replaced with a vehicle that meets the 2010 mode l year emission equivalent.

d) NOx Mileage Exempt Vehicles
Staff is proposing to delete the provision that pro vided an exemption from meeting the requirement to upgrade to a 2010 model year emissio ns equivalent engine for vehicles that traveled less than 7,500 miles per year. This provision is no longer necessary since the proposed amendments allow vehicles that m eet PM BACT by 2014, to operate until January 1, 2020, regardless of the an nual mileage.D-14

e) Motorcoaches
Staff is proposing to delete this section because t he compliance requirements are now reduced under the proposed amendments. The propose d BACT compliance schedule allows an additional two years before requiring fle et to begin to upgrade to 2010 model year engines and provides additional flexibility by allowing the fleets to keep older motor coaches longer. Staff estimates that less than 50% of the vehicles in most motorcoach fleets are 1997 or older, so the proposed BACT comp liance schedule would be easier to comply with than the existing motorcoach provision. For this reason staff is proposing to delete the motorcoach provision.

15. Revised Reporting Requirements
a) Reporting Dates for Fleets Claiming Credits
Staff is proposing that fleets only be required to submit information for vehicles that qualify for the agricultural provisions rather than reporting information about all vehicles in the fleet. In addition, staff is proposing to e xtend the deadline for claiming the agricultural vehicle provisions to March 31, 2011.

Staff is also proposing to amend the reporting requ irements for sweepers. The early reporting deadline of March 31, 2010, for fleets wi th two engine street sweepers remains unchanged; however, staff is proposing that fleets be only required to report information about the two engine street sweepers wi th Tier 0 engines rather than all two engine sweepers in the fleet.

16. Clarifications and Minor Modifications
Staff is also proposing to modify and make minor mo difications to other sections to clarify existing requirements and improve enforceab ility of the regulation and streamlining reporting and recordkeeping.

a) General Reporting and Record Keeping Requirement Changes
The reporting requirements have been amended to do the following:

• Add the requirements for reporting under the propo sed phase-in, credits, and exemption and extension provisions

• Identify new initial reporting dates and new repor ting dates for subsequent compliance years

• Identify new information required to demonstrate c ompliance with proposed new credits

• Modify existing reporting requirements to improve enforceability

• Delete reporting requirements no longer needed for provisions deleted from the regulation

The following record keeping requirements have been amended to improve enforceability:D-15

• Specific that owners who keep records outside of C alifornia are subject to the requirements for audits

• Add record keeping and audit requirements for the proposed new compliance options

• Specify that records be kept to verify PM filter’s failure and replacement

• Specify that records be kept by owners claiming th e emergency support vehicle exemption