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Federal Register/Vol. 79, No. 96/Monday, May 19, 2014/Proposed Rules

Regulations section of this Federal

Register, we are approving these local

rules in a direct final action without

prior proposal because we believe these

SIP revisions are not controversial. If we

receive adverse comments, however, we

will publish a timely withdrawal of the

direct final rule and address the

comments in subsequent action based

on this proposed rule. Please note that

if we receive adverse comment on an

amendment, paragraph, or section of

this rule and if that provision may be

severed from the remainder of the rule,

we may adopt as final those provisions

of the rule that are not the subject of an

adverse comment.

We do not plan to open a second

comment period, so anyone interested

in commenting should do so at this

time. If we do not receive adverse

comments, no further activity is

planned. For further information, please

see the direct final action.

Dated: March 21, 2014.

Jared Blumenfeld,

Regional Administrator, Region IX.

[FR Doe. 2014-11428 Filed 5-16-14; 8:45 am]

BILLING CODE 6560-50-P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[EPA-R09-OAR-2013-0754; FRL-9911-01-

Region-9]

Revision to the California State

Implementation Plan; San Joaquin

Valley Unified Air Pollution Control

District; Quantification of Emission

Reductions From Incentive Programs

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: The Environmental Protection

Agency is proposing to approve a

regulation submitted for incorporation

into the San Joaquin Valley Unified Air

Pollution Control District (SJVUAPCD

or District) portion of the California

State Implementation Plan (SIP). This

regulation establishes requirements and

procedures for the District's

quantification of emission reductions

achieved through incentive funding

programs implemented in the San

Joaquin Valley. The effect of this action

would be to make these requirements

and procedures federally enforceable as

part of the California SIP. We are taking

comments on this proposal and plan to

follow with a final action.

DATES: Written comments must be

received on or before June 18, 2014.

ADDRESSES: Submit your comments,

identified by Docket ID Number EPAR09-OAR-2013-0754, by one of the

following methods:

1. http://www.regulations.gov: Follow

the on-line instructions for submitting

comments.

2. Email: steckel.andrew@epa.gov.

3.Fax:415-947-3579.

4. Mail or deliver: Andrew Steckel

(AIR-4), U.S. Environmental Protection

Agency, Region IX, 75 Hawthorne

Street, San Francisco, CA 94105-3901.

Deliveries are only accepted during the

Regional Office's normal hours of

operation.

Instructions: All comments will be

included in the public docket without

change and may be made available

online at http://www.regulations.gov,

including any personal information

provided, unless the comment includes

Confidential Business Information (CBI)

or other information whose disclosure is

restricted by statute. Information that

you consider CBI or otherwise protected

should be clearly identified as such and

should not be submitted through http://

www.regulations.gov or email. http://

www.regulations.gov is an anonymous

access system, and EPA will not know

your identity or contact information

unless you provide it in the body of

your comment. If you send email

directly to EPA, your email address will

be automatically captured and included

as part of the public comment. If EPA

cannot read your comment due to

technical difficulties and cannot contact

you for clarification, EPA may not be

able to consider your comment.

Docket: Generally, documents in the

docket for this action are available

electronically at www.regulations.gov

and in hard copy at EPA Region IX, 75

Hawthorne Street, San Francisco,

California. While all documents in the

docket are listed at

www.regulations.gov, some information

may be publicly available only at the

hard copy location (e.g., copyrighted

material, large maps), and some may not

be publicly available in either location

(e.g., CBI). To inspect the hard copy

materials, please schedule an

appointment during normal business

hours with the contact listed in the FOR

FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT:

Idalia Perez, EPA Region IX,

perez.idalia@epa.gov, (415) 972-3248.

SUPPLEMENTARY INFORMATION:

Throughout this document, "we," "us"

and "our" refer to EPA.

Table of Contents

I. Background

II. The State's Submittal

III. EPA's Evaluation of the State's Submittal

A. SIP Procedural Requirements

B. EPA Policy on Economic Incentives

C. Sections 110(1) and 193 of the Act

IV. Proposed Action and Public Comment

V. Statutory and Executive Order Reviews

I. Background

The San Joaquin Valley (SJV) 1 is

currently designated as nonattainment

for several of the national ambient air

quality standards (NAAQS)

promulgated by EPA under the Clean

Air Act (CAA) for ozone and fine

particulate matter (PM2.

5). See 40 CFR

81.305. Despite numerous air pollution

control measures and programs that the

SJVUAPCD has implemented over the

years to reduce air pollution, the SJV

continues to experience some of the

worst air quality in the nation. See, e.g.,

76 FR 57846 (September 16, 2011)

(discussing California ozone plan for

SJV) and 76 FR 41338 (July 13, 2011)

(discussing California PM 2.5 plan for

SJV). As a result, the District has

increasingly relied upon incentive

programs and other innovative strategies

to reduce air pollution in the SJV. See

San Joaquin Valley Unified Air

Pollution Control District, "Final Staff

Report: Proposed Rule 9610 (State

Implementation Plan Credit for

Emission Reductions Generated through

Incentive Programs)," dated June 20,

2013 ("Rule 9610 Staff Report") at 2, 3.

In recent years, federal, state and local

governments have begun to use a

broader array of tools to manage

environmental quality, including

market-based economic incentives and

other innovative strategies to reduce air

pollution. Economic incentives are

defined broadly as instruments that use

financial means to motivate polluters to

reduce the health and environmental

risks posed by their facilities, processes,

or products. See U.S. EPA (Office of

Policy, Economics, and Innovation) and

National Center for Environmental

Economics, "The United States

Experience with Economic Incentives

for Protecting the Environment," EPA240-R-01-001, January 2001, Executive

Summary. In light of the increasing

incremental cost associated with further

stationary and mobile source emissions

reductions in many nonattainment

areas, EPA supports and encourages the

development of innovative approaches

to air quality improvement, including

economic incentives, to supplement

traditional regulatory programs. See,

e.g., "Guidance on Incorporating

1 The SJV encompasses over 23,000 square miles

and includes all or part of eight counties in

California's central valley: San Joaquin, Stanislaus,

Merced, Madera, Fresno, Tulare, Kings, and the

valley portion of Kern.

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Voluntary Mobile Source Emission

Reduction Programs in State

Implementation Plans (SIPs)," October

24, 1997 ("1997 VMEP"); "Incorporating

Emerging and Voluntary Measures in a

State Implementation Plan (SIP),"

September 2004 ("2004 Emerging and

Voluntary Measures Guidance"); and

"Guidance on Incorporating Bundled

Measures in a State Implementation

Plan," August 16, 2005 ("2005 Bundled

Measures Guidance").

To qualify for emission reduction

credit in a SIP, however, economic

incentive programs and other innovative

emission reduction control measures

must satisfy certain minimum CAA

requirements for SIP creditability. See

id. In prior rulemaking actions on

several California SIP submissions, EPA

has noted that California's incentive

programs would not qualify for SIP

emission reduction credit without the

requisite demonstration of SIP

creditability. See, e.g., 76 FR 69896 at

69915 (November 9, 2011) (final action

on SJV PM 2.5 SIP for 1997 PM 2.

5

NAAQS) and 76 FR 26609 at 26613

(May 9, 2011) (final action on

SJVUAPCD Rule 9510, "Indirect Source

Review (ISR)"). The SJVUAPCD's stated

intent in adopting Rule 9610 was to

establish a regulatory framework to

address these requirements for SIP

creditability and obtain SIP emission

reduction credit for incentive programs

implemented in the SJV, including 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) implemented by the

U.S. Department of Agriculture. See

Rule 9610 Staff Report at 2-13.

The Carl Moyer Program is a

California grant program established in

1998 that provides funding to encourage

the voluntary purchase of cleaner-thanrequired engines, equipment, and other

emission reduction technologies. See

generally CARB, "The Carl Moyer

Program Guidelines, Approved

Revisions 2011," Release Date: February

8, 2013, at Chapter 1 (available

electronically at http://www.arb.ca.govl

msprog/moyer/moyer.htm). In its first

12 years, the Carl Moyer Program

provided over $680 million in state and

local funds to reduce air pollution from

equipment statewide, e.g., by replacing

older trucks with newer, cleaner trucks,

retrofitting controls on existing engines,

and encouraging the early retirement of

older, more polluting vehicles. Id.

The Prop 1B Program is a California

grant program established in 2007, as a

result of State bond funding approved

by voters, which provides $1 billion in

funding to CARB to reduce air pollution

emissions and health risks from freight

movement along California's priority

trade corridors. Under the enabling

legislation (California Senate Bill 88 and

Assembly Bill 201 (2007)), CARB

awards grants to fund projects proposed

by local agencies that are involved in

freight movement or air quality

improvements associated with goods

movement activities. Upon receipt of

such grants, the local agencies are then

responsible for providing financial

incentives to owners of equipment used

in freight movement to upgrade to

cleaner technologies, consistent with

program guidelines adopted by CARB.

See generally "Strategic Growth Plan

Bond Accountability, Goods Movement

Emission Reduction Program,"

Approved February 27, 2008 (available

electronically at http://www.arb.ca.govl

bon ds/gmbon d/docs/gm_

accountabilitywith links 2-27-08.pdf).

The U.S. Department of Agriculture

(USDA) administers the Environmental

Quality Incentives Program (EQIP),

which Congress established under

section 334 of the Federal Agriculture

Improvement and Reform Act of 1996

(Pub. L. 104-12, 16 U.S.C. 3839aa3839aa-9). USDA has delegated

authority to administer the program to

the Natural Resources Conservation

Service (NRCS). 7 CFR 2.61(a)(13)(viii).

The purpose of EQIP is to promote

agricultural production, forest

management, and environmental quality

as compatible goals, and to optimize

environmental benefits. 16 U.S.C.

3839aa. Through this voluntary

program, NRCS assists enrolled

agricultural producers in implementing

conservation measures on their private

land to address soil, water, air, and

related natural resources concerns,

wildlife habitat, surface and

groundwater conservation, and related

natural resource concerns. 7 CFR

1466.1(a). The financial and technical

assistance provided by NRCS under the

program helps producers comply with

environmental regulations and enhance

agricultural and forested lands in a costeffective and environmentally beneficial

manner. Id. Funding for EQIP is

currently authorized by section

2601(a)(5) of the Agricultural Act of

2014 (Pub. L. 113-79, 16 U.S.C.

3841(a)(5).2

Since 1992, the District has disbursed

over $500 million in incentive funds

through the Carl Moyer and Prop 1B

programs, which has been matched by

over $400 million in cost-sharing

investments by participants and has

resulted in the retrofit or replacement of

hundreds of trucks, buses, tractors,

forklifts and other equipment operating

in the SJV. See 2013 Annual

Demonstration Report at 4 and Data

Sheet. Similarly, since 2009, NRCS has

provided over $105 million in incentive

grants through EQIP to replace over one

thousand high-emitting pieces of farm

equipment in the SJV. See Rule 9610

Staff Report at 11 and 2013 Annual

Demonstration Report, Appendix B.

II. The State's Submittal

Table 1 lists the rule addressed by this

proposal with the dates that it was

adopted by the SJVUAPCD and

submitted by the California Air

Resources Board (CARB).

TABLE 1-SUBMITTED RULE

Local agency Rule No. Rule title Adopted Submitted

SJVUAPCD ........... 9610 State Implementation Plan Credit for Emission Reductions Generated 06/20/13 06/26/13

through Incentive Programs.

On December 26, 2013, the submittal

for SJVUAPCD Rule 9610 was deemed

by operation of law under CAA section

110(k)(1)(B) to meet the minimum

completeness criteria in 40 CFR Part 51

Appendix V, which must be met before

formal EPA review.

2 See email dated March 31, 2014, from Stephanie April 23, 2014, from Joshua Schnell, USDA Office

Johnson, USDA Office of General Counsel, to Kerry of General Counsel, to Jeanhee Hong, USEPA

Drake, EPA Region 9, Air Division, and email dated

Rule 9610 establishes requirements

and procedures for the District to

quantify, for air quality planning

purposes, emission reductions achieved

Region 9, Office of Regional Counsel, RE:

"Summaries of 1619 and EQIP".

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Federal Register/Vol. 79, No. 96/Monday, May 19, 2014/Proposed Rules

through implementation of incentive

programs in the San Joaquin Valley. The

stated purpose of the rule is to "provide

an administrative mechanism for the

District to receive credit towards State

Implementation Plan requirements for

emission reductions achieved in the San

Joaquin Valley Air Basin through

incentive programs administered by"

the District, NRCS, or CARB. Rule 9610,

section 1.0; see also Rule 9610 Staff

Report at 12.

Rule 9610 contains several key

components designed to establish a

regulatory framework for the District's

quantification of emission reductions

achieved through incentive programs

and to provide opportunities for EPA,

CARB, and the public to review and

comment on the District's evaluations

on an annual basis. First, the rule

establishes definitions of key terms that

apply to the District's evaluations and

actions under Rule 9610, including

definitions for the terms "surplus," "quantifiable," "enforceable," and

"permanent." See Rule 9610, section

2.0. As explained elsewhere in this

notice, these terms apply to all

discretionary EIPs and innovative

measures that are relied on for SIP

purposes and are intended to ensure

that such programs and measures

comply with the Act.

Second, the rule identifies a number

of incentive program "guidelines" 3 that

specify, among other things, the terms

and conditions that apply to each grant

of incentive funds under three specific

incentive funding programs

implemented in the SJV: (1) The Carl

Moyer Memorial Air Quality Standards

Attainment Program (Carl Moyer

Program), which is implemented jointly

by CARB and the District; (2) the

California Proposition 1B Goods

Movement Emission Reduction Program

(Prop 1B Program), also implemented

jointly by CARB and the District; and (3)

the Environmental Quality Incentives

Program (EQIP), implemented by NRCS.

See Rule 9610, section 3.1.

Third, the rule contains provisions

requiring the District to make publicly

available a "Manual of Procedures" that

identifies each of the incentive program

guidelines the District uses to quantify

emission reductions under Rule 9610,

i.e., any guidelines specifically listed

under section 3.1 of the rule and any

additional program guidelines not

specifically listed that satisfy the

3 Rule 9610 defines the term "incentive program

guidelines" as "administrative procedures,

quantification methodologies, eligibility criteria,

cost effectiveness criteria, reporting practices, and/

or other procedures and methodologies used to

implement incentive programs." Rule 9610, section

2.15.

conditions in section 3.2. See Rule 9610,

sections 3.2 and 3.3.

Fourth, the rule contains provisions

requiring the District to submit each

year to CARB and EPA, following public

review, an "annual demonstration

report" that provides updated

information on emission reductions

achieved in the SJV through these

incentive programs and the District's

progress in satisfying related SIP

commitments. See Rule 9610, section

4.0.

Finally, Rule 9610 specifies minimum

requirements that the District must

address in each SIP submittal that relies

on projections of emission reductions

from incentive programs to satisfy CAA

requirements. Among other things, each

such SIP submittal must contain a

demonstration that the applicable

incentive program guidelines provide

for "SIP-creditable emission reductions"

(i.e., emission reductions that are

surplus, quantifiable, enforceable, and

ermanent) 4 and must contain an

"enforceable commitment" on the

District's part to track emission

reductions on an annual basis and to

adopt and submit substitute measures to

EPA by a date certain if there is any

shortfall in required emission

reductions. See Rule 9610, section 7.0;

see also Rule 9610 Staff Report at 23.

In sum, Rule 9610 establishes an

administrative mechanism designed to

ensure that each SIP submittal in which

the District relies upon emission

reductions achieved through

implementation of incentive programs

in the SJV will adequately address the

requirements of the Act. The rule does

not establish any emission limitation,

control measure, or other requirement

that applies directly to an emission

source (e.g., any farm or truck that is the

subject of an incentive grant).5 As

discussed elsewhere in this notice, the

requirements and procedures in the rule

apply only to the District and lay the

groundwork for the District's

incorporation of incentive programs into

air quality plans going forward. These

requirements and procedures would

become federally enforceable against the

District upon EPA's final approval of the

rule into the California SIP.

4 Rule 9610 defines the term "SIP-creditable

emission reduction" to mean "reductions of

emissions achieved through incentive programs that

are Surplus, Quantifiable, Enforceable, and

Permanent, as those terms are defined in this rule."

Rule 9610, section 2.25.

5 Accordingly, Rule 9610 is not intended to

implement the reasonably available control

technology (RACT) standard or any other control

standard under the Act.

III. EPA's Evaluation of the State's

Submittal

A. SIP Procedural Requirements

Sections 110(a)(2) and 110(1) of the

Act require that revisions to a SIP be

adopted by the State after reasonable

notice and public hearing. EPA has

promulgated specific procedural

requirements for SIP revisions in 40

CFR part 51, subpart F. These

requirements include publication of

notices, by prominent advertisement in

the relevant geographic area, of a public

hearing on the proposed revisions, a

public comment period of at least 30

days, and an opportunity for a public

hearing.

CARB's June 26, 2013 SIP submittal

includes public process documentation

for Rule 9610, including documentation

of a duly noticed public hearing held by

the District on June 20, 2013 on the

proposed rule. On June 26, 2013, CARB

adopted SJVUAPCD Rule 9610 as a

revision to the California SIP and

submitted it to EPA for action pursuant

to CAA section 110(k) of the Act. We

find that the process followed by the

SJVUAPCD and CARB in adopting Rule

9610 complies with the procedural

requirements for SIP revisions under

CAA section 110 and EPA's

implementing regulations.

B. EPA Policy on Economic Incentives

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 sections 172(c)(6), 183(e)(4).

Economic incentive programs (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.6 See 59 FR 16690 (April 7, 1994)

(codified at 40 CFR part 51, subpart U)

and "Improving Air Quality with

Economic Incentive Programs," U.S.

6

A "discretionary economic incentive program"

is "any EIP submitted to 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.

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EPA, Office of Air and Radiation,

January 2001 (EPA-452/R-01-001)

("2001 EIP Guidance").

In light of the increasing incremental

cost associated with further stationary

and mobile source emissions reductions

and the difficulty of identifying such

additional sources of emissions

reductions in many areas, EPA

encourages innovative approaches to

generating emissions reductions through

EIPs and other nontraditional measures

and programs, including "voluntary"

and "emerging" measures. See generally

1997 VMEP; "Guidance on SIP Credits

for Emission Reductions from ElectricSector Energy Efficiency and Renewable

Energy Measures," August 5, 2004

("2004 Electric-Sector Guidance"); 2004

Emerging and Voluntary Measures

Guidance; 2005 Bundled Measures

Guidance; "Roadmap for Incorporating

Energy Efficiency/Renewable Energy

Policies and Programs into State and

Tribal Implementation Plans," July 2012

("2012 EE/RE Guidance"); and "Diesel

Retrofits: Quantifying and Using Their

Emission Benefits in SIPs and

Conformity," February 2014 ("2014

Diesel Retrofits Guidance"). EPA

recognizes, however, that these

nontraditional measures raise novel

issues related to enforceability and

quantification of the associated

emission reductions. Accordingly,

EPA's policies addressing

nontraditional measures provide for

some flexibility in meeting established

SIP requirements for enforceability and

quantification, provided the State takes

clear responsibility for ensuring that the

emission reductions necessary to meet

applicable CAA requirements are

achieved. See, e.g., 1997 VMEP at 5-7;

2004 Emerging and Voluntary Measures

Guidance at 9; 2005 Bundled Measures

Guidance at 7; and 2012 EE/RE

Guidance at 37-38.

Importantly, EPA has consistently

stated that nontraditional emission

reduction measures submitted to satisfy

SIP requirements under the Act must be

accompanied by appropriate enforceable

"backstop" commitments from the State

to monitor emission reductions

achieved and to rectify shortfalls in a

timely manner. See, e.g., 1997 VMEP at

4-5; 2004 Emerging and Voluntary

Measures Guidance at 8-12; 2005

Bundled Measures Guidance at 7-12;

and 2004 Electric-Sector Guidance at 6-

7. For example, where a SIP submittal

relies on emission reductions achieved

through a program dependent on

voluntary actions that the State does not

directly implement, the State must be

obligated to monitor, assess and report

on the implementation of the program

and the associated emission reductions,

and to remedy emission reduction

shortfalls in a timely manner should the

voluntary measure not achieve the

projected emission reductions. See 1997

VMEP at 6-7.

We provide below a summary of 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 these incentive program

guidelines themselves are not part of

Rule 9610, 7 EPA has 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. Our Technical Support Document

(TSD) contains a more detailed

evaluation of the rule and each of the

three incentive programs that it

addresses, including the applicable

guidelines. 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.

1. Programmatic "Integrity Elements"

Where a State relies upon a

discretionary EIP or other nontraditional

emission reduction measure in a SIP

submittal, EPA evaluates the

programmatic elements of the measure

to determine whether the resulting

emission reductions are quantifiable,

surplus, enforceable and permanent.

See, e.g., 2001 EIP Guidance at Section

4.1. These four fundamental "integrity

elements," which apply to all

discretionary EIPs and other innovative

measures relied on for SIP purposes, are

designed to ensure that such programs

and measures satisfy the applicable

requirements of the Act. See, e.g., 2001

EIP Guidance at Section 4.1; 1997 VMEP

at 6-7; 2004 Emerging and Voluntary

Measures Guidance at 3-4; and 2014

Diesel Retrofits Guidance at 27-29. EPA

has generally defined the four

fundamental integrity elements for

7The 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.

discretionary EIPs and other innovative

emission reduction programs as follows:

* Quantifiable: Emission reductions

are quantifiable if they are measured in

a reliable manner and can be replicated;

* 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,

emission reductions are "surplus" only

for the remaining useful life of the

vehicle, engine, or equipment being

replaced.

* 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 all emissions-related information

obtained from participating sources; and

the required reductions/actions are

practicably enforceable consistent with

EPA guidance on practical

enforceability.

* 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 6-7; 2004 Emerging and

Voluntary Measures Guidance at 3-4;

and 2014 Diesel Retrofits Guidance at

27-29.

Rule 9610 contains specific

definitions for each of these terms that

are consistent with EPA policy. First,

with respect to the term "quantifiable,"

the rule states that "emission reductions

are quantifiable if they can be reliably

determined through the use of wellestablished, publicly available emission

factors and calculation methodologies."

Rule 9610, section 2.23. This definition

ensures that the District will treat as "quantifiable" only those emission

reductions that can consistently be

measured in a reliable manner using

widely available methods and

assumptions, consistent with EPA's

policy definition of this term.

Second, with respect to the term

"surplus," Rule 9610 states that

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"emission reductions are surplus when

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." Rule 9610, section

2.27. This definition ensures that the

District will treat as "surplus" only

those emission reductions that 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

or local regulation, a consent decree, or

a federal rule designed to reduce

emission of a criteria pollutant or its

precursors, consistent with EPA's policy

definition of this term.

Third, with respect to the term

"enforceable," Rule 9610 states that

"emission reductions are enforceable if

the incentive program includes

provisions for ensuring the following:

[1] The emission reductions are

independently and practicably

verifiable through inspections,

monitoring, and/or other mechanisms;

[2] Incentive program violations are

defined through legally binding

contracts, including identifying the

party or parties responsible for ensuring

that emission reductions are achieved;

[3] Grantees are obligated to provide all

records needed to demonstrate that

emission reductions are achieved; and

[4] The public has access to all

emissions-related information for

reductions claimed in the annual

demonstration report, as outlined in

Section 4.0 [of the rule]." Rule 9610,

section 2.8. Consistent with EPA's

policy definition of the term

"enforceable," this definition ensures

that the District will treat as "enforceable" only those emission

reductions that can, as a practical

matter, be independently verified and

that result from a program or measure

that defines violations clearly, allows

for identification of responsible parties,

requires grantees to provide all records

needed to demonstrate that emission

reductions are achieved, and provides

for public access to emissions-related

information.

Finally, with respect to the term

"permanent," Rule 9610 states that

"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." Rule 9610,

section 2.18. This definition ensures

that the District will treat as "permanent" only those emission

reductions for which both the State/

District and EPA can ensure that the

reductions will occur for as long as they

are relied upon in the SIP, consistent

with EPA's policy definition of this

term.

These definitions in Rule 9610

adequately represent the four

fundamental "integrity elements" that

EPA has defined as guidelines for

discretionary EIPs and other innovative

emission reduction programs. Under

Rule 9610, the term "SIP-creditable

emission reductions" 8 incorporates

these integrity elements and is at the

core of the key substantive requirements

in the rule. For example, sections 3.1

and 3.2 of Rule 9610 require the District

to quantify emission reductions in

accordance with incentive program

guidelines that "provide for SIPcreditable emission reductions"; section

7.0 identifies required SIP elements

"[w]here the District intends to rely on

projections of SIP-creditable emission

reductions under this rule to satisfy a

federal Clean Air Act SIP requirement";

and section 4.0 requires the District to

"annually prepare a report that

demonstrates the quantity of SIPcreditable emission reductions." Rule

9610, sections 3.0, 4.0, 7.0. These

provisions in Rule 9610 ensure that, in

each SIP submittal that relies on an

incentive program and in each

subsequent annual demonstration

report, the District will be obligated to

demonstrate that the emission

reductions relied upon to satisfy SIP

requirements are surplus, quantifiable,

enforceable, and permanent.

Rule 9610 does not specify the

requirements that govern the incentive

programs themselves and instead makes

clear that the program "guidelines,"

which specify (among other things) the

terms and conditions that apply to each

grant of funds to an owner/operator of

an emission source, contain the

provisions necessary to determine

whether a particular incentive program

provides for "SIP-creditable emission

reductions." For example, section 3.1 of

the rule requires the District to quantify

emission reductions in accordance with

specified "incentive program guidelines

that provide for SIP-creditable emission

reductions," and similarly section 3.2

states that the District may quantify

emission reductions using other

guidelines "provided the District

submits to EPA, pursuant to Section 7.0,

a demonstration that each such

guideline provides for SIP-creditable

emission reductions." Rule 9610,

sections 3.1 and 3.2. In the TSD

accompanying this proposed rule, EPA

8 See n. 4, supra.

has evaluated the guidelines listed in

section 3.1 of the rule, together with

several guidelines listed in the District's

"Manual of Procedures," for consistency

with the four integrity elements.

Although EPA is not proposing to take

any particular action on these

guidelines, 9 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.

Many of the guidelines that we have

reviewed establish emission reduction

quantification protocols, reporting

requirements, administrative

procedures, and other requirements that

are generally consistent with EPA's

recommendations for nontraditional

emission reduction programs. 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.

2. Required Components of SIP

Submittals

EPA policies identify several key

components that should be included in

each SIP submittal that relies on an EIP

or other innovative emission reduction

program, to ensure that the program

satisfies the requirements of the Act.

First, the SIP submittal should contain

a demonstration that the emission

reductions resulting from the program

are quantifiable, surplus, enforceable

and permanent and should include

reliable methodologies for quantifying

the emission reductions 10-i.e.,

assumptions and protocols for

measuring emission reductions that can

be understood and replicated by

different users. See, e.g., 1997 VMEP at

6-9; 2001 EIP Guidance at 34-36 and

61-67; 2004 Emerging and Voluntary

Measures Guidance at 2-4; and 2014

Diesel Retrofits Guidance at 27-29; see

also discussion above in Section III.B.1

("Programmatic 'integrity elements').

Second, the SIP submittal should

include enforceable commitments by

the State to monitor emission reductions

9 See n. 7, supra.

10 To account for uncertainties in the emission

reduction estimates, EPA recommends that states

apply an appropriate downward "adjustment" to

calculations of projected emission reductions. See,

e.g., 2004 Emerging and Voluntary Measures

Guidance at 16 (identifying an assumed discount of

20 percent) and 1997 VMEP at 7. The actual amount

of the discount factor should reflect: (1) The degree

of uncertainty associated with quantifying the

emissions reductions from the measures; (2) the

amount of the emissions reductions being credited

in the SIP; and (3) the degree of uncertainty

associated with verifying the emissions reductions

actually achieved by the measure(s). See 2005

Bundled Measures Guidance at 16.

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achieved and to rectify any shortfall in

required emission reductions in a timely

manner. See, e.g., 1997 VMEP at 5-7;

2005 Bundled Measures Guidance at 7,

11-12, and 22; and 2014 Diesel Retrofits

Guidance at 28, 31-32. EPA policy

places clear responsibility on the State

to ensure that the emission reductions

necessary to meet applicable CAA

requirements are achieved. See id. To

this end, the State's commitment should

ensure that any shortfall in required

emission reductions will be corrected as

soon as possible, and generally no later

than 1 year after the State learns of a

shortfall. See 2005 Bundled Measures

Guidance at 11 and 2004 Emerging and

Voluntary Measures Guidance at 12.

Importantly, however, if the emission

reductions from the measure are

necessary to show attainment or

reasonable further progress (RFP), the

deadline for correcting a shortfall

cannot extend past the statutory

attainment or RFP milestone date for the

nonattainment area. See id.

Third, the SIP submittal should

include documentation that clearly

shows how the emission reductions will

be addressed in the emissions

inventory, RFP plan, and attainment or

maintenance plan, as applicable. See,

e.g., 1997 VMEP at 8-9 and 2014 Diesel

Retrofits Guidance at 27. Such

documentation is important for purpose

of demonstrating that the program or

measure is consistent with SIP

attainment, RFP, or maintenance

requirements and other applicable

requirements of the Act. See id. For

example, to address potential doublecounting of emission reductions, the SIP

submittal should explain how the State

will ensure that emission reductions

already accounted for in the projected

"baseline" emissions underlying an

attainment or RFP demonstration will

not also be relied upon for SIP credit in

the control strategy. See 2005 Bundled

Measures Guidance at 24 ("emission

reductions are not surplus for [ ] an

attainment demonstration if they have

already been assumed in that same

attainment demonstration") and 2004

EE/RE Guidance at 13-14 (noting that

states may seek SIP credit only for

emission reduction measures "beyond

[those] already included in the baseline

assumptions").

Finally, the SIP submittal must

demonstrate that the State has adequate

funding, personnel, implementation

authority, and other resources to

implement the program/measure on

schedule. See CAA section

110(a)(2)(E)(i) (requiring that each SIP

provide "necessary assurances that the

State [or local government as

appropriate] will have adequate

personnel, funding, and authority under

State (and, as appropriate, local) law to

carry out such implementation plan

* * * ); see also 1997 VMEP at 7; 2005

Bundled Measures Guidance at 22, 26;

and 2014 Diesel Retrofits Guidance at

29-30.

Rule 9610 contains several provisions

designed to ensure that each SIP

submittal in which the District seeks to

rely on incentive programs for emission

reduction credit will contain the

necessary components and supporting

documentation described in these

policies. First, under section 7.0, each

SIP submittal in which the District

relies on projected emission reductions

from incentive programs must "contain

a demonstration that the applicable

incentive program guideline(s)

continues to provide for SIP-creditable

emission reductions"-i.e., emission

reductions that are surplus, quantifiable,

enforceable, and permanent." See Rule

9610, section 7.0. This demonstration

must identify the specific guideline(s)

applicable to the relevant projects (by

title, year, and relevant chapters) and

provide the District's rationale for

concluding that the identified

reductions are "SIP-creditable emission

reductions" in accordance with the

requirements of Rule 9610. EPA expects

that the District's integrity

demonstration will reflect appropriate

adjustments to emission reduction

calculations to account for uncertainties

in the emission reduction estimates, in

particular where the District seeks to

rely on incentive programs for larger

amounts of SIP credit and/or there is a

high degree of uncertainty in the means

for verifying the emissions reductions

actually achieved. See 2005 Bundled

Measures Guidance at 16 ("[t]he greater

the uncertainty or amount of reductions

claimed, the greater the appropriate

adjustment factor"). Additionally,

consistent with the definition of "SIPcreditable emission reductions" in the

rule, the demonstration must show that

reliance on the identified Carl Moyer

Program source categories for SIP

emission reduction credit is consistent

with SIP attainment, RFP, or

maintenance requirements.

For the specific guidelines currently

identified in the District's Manual of

Procedures (including a number of those

listed under section 3.1 of Rule 9610),

we expect the District to rely as

appropriate on the technical discussion

in EPA's TSD, which contains EPA's

preliminary assessment of whether the

specified guidelines provide for SIPcreditable emission reductions and

whether additional documentation is

11 See n. 4, supra.

needed to ensure the integrity of the

emission reductions. For all other

guidelines not specifically addressed in

the TSD, EPA commits to work with the

District to develop the necessary

demonstrations consistent with the

requirements of Rule 9610 and the CAA,

in the context of specific SIP submittals

that rely on emission reductions

quantified pursuant to those guidelines.

Second, section 7.0 of Rule 9610

requires that each SIP submittal in

which the District relies on projected

emission reductions from incentive

programs contain an "enforceable

commitment" that: (1) Identifies

incentive program guidelines used to

generate projected SIP-creditable

emission reductions; (2) identifies

emission reductions not to exceed the

amount projected to be achieved

through the use of secured or reasonably

anticipated incentive program funding

and the estimated availability of

emission reduction projects and willing

participants, (3) is specifically adopted

by the District as part of the SIP and

accounted for in the annual

demonstration reports, and (4) states

that "if either the District or EPA finds

that there is a SIP shortfall for a

particular year, the District will adopt

and submit to EPA, by specified dates,

substitute rules and measures that will

achieve equivalent emission reductions

as expeditiously as practicable and no

later than any applicable

implementation deadline in the [CAA]

or EPA's implementing regulations."

Rule 9610, sections 7.1-7.4; see also

Rule 9610 Staff Report at 23. To ensure

that any necessary substitute measures

are implemented by the statutory

implementation deadline(s), we note

that each SIP commitment should

identify specific dates, well in advance

of the applicable implementation

deadline(s), by when the District will

determine whether a SIP shortfall

necessitates the development of

substitute measures.

Third, each SIP submittal in which

the District relies on projected emission

reductions from incentive programs

must "identify specific amounts of SIPcreditable emission reductions for a

particular year or years in the relevant

SIP." Rule 9610, section 7.0. For

example, if the District intends to seek

SIP credit in an ozone attainment plan

for NOx emission reductions achieved

through the Carl Moyer program, the

ozone SIP submittal must specifically

identify, among other things, the years

for which the District is relying on those

NOx reductions; the amounts of NOx

reductions projected to be achieved in

each of those years; the specific source

categories relied on to achieve those

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NOx reductions; and the specific Carl

Moyer Program guidelines applicable to

those source categories (identified by

title, year, and relevant chapters).

Consistent with the definition of "SIPcreditable emission reductions" in the

rule, the SIP submittal must include a

demonstration that reliance on the

identified Carl Moyer Program source

categories for SIP emission reduction

credit is consistent with SIP attainment,

RFP, or maintenance requirements for

the relevant years (e.g., that there is no

double-counting of emission

reductions).

Finally, with respect to the required

demonstration that the State has

adequate funding, personnel,

implementation authority, and other

resources to implement the program/

measure on schedule, this is a statutory

requirement that is not specifically

addressed by Rule 9610 but nonetheless

applies to each SIP submitted by a State.

See CAA section 110(a)(2)(E)(i). Once

the State submits an adequate

demonstration that the State and District

have adequate personnel, funding, and

legal authority to carry out their

implementation responsibilities with

respect to the relevant incentive

programs, we expect that future SIP

submittals may rely, as appropriate, on

such prior demonstration to satisfy this

requirement.

3. Procedures for Public Disclosure of

Information

Like all other SIP control measures,

discretionary incentive programs and

other innovative emission reduction

measures relied on for SIP purposes

must ensure that EPA and the public

have access to emission data in

accordance with the requirements of

section 114 of the CAA and EPA's

implementing regulations in 40 CFR

section 2.301. See, e.g., 2001 EIP

Guidance at 59, 60 and 2004 Emerging

and Voluntary Measures Guidance at 23

(Attachment A). To this end, EPA has

recommended that discretionary EIPs

contain program components such as

the following: (1) Requirements for

participants to disclose violations to the

responsible state/local agency in an

annual certification of compliance or

non-compliance; (2) requirements for

sources that violate program provisions

to notify the affected community of the

violations; (3) procedures for the

responsible state/local agency to

compile these disclosures into an

annual comprehensive report on

emissions and violations; and (4)

procedures to submit these reports to

EPA and make them available to the

public. See id. EPA has also

recommended that states disclose

information in a manner that is

transparent, allowing the public to

easily and accurately calculate the

emissions of the participating sources or

source categories and to adequately

assess the effectiveness of the program.

See id.

Rule 9610 contains several provisions

designed to ensure that EPA and the

public have access to adequate

information regarding the specific

incentive programs and associated

emission reductions that the District

intends to rely upon for SIP purposes.

First, under section 3.3 of the rule, the

District is required to make publicly

available a "Manual of Procedures" 12

that includes each of the incentive

program guidelines the District uses to

quantify emission reductions under

Rule 9610, i.e., both those guidelines

specifically listed under section 3.1 of

the rule and any additional program

guidelines not specifically listed that

satisfy certain conditions. See Rule

9610, section 3.3; see also section 3.2

(allowing for use of other guidelines not

listed 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 * * ").

Under subsection 3.3.2, the Manual of

Procedures must "include[] a

description of how the incentive

program guidelines ensure that

incentive program emission reductions

are SIP-creditable." EPA expects that

the information in the MOP, together

with the project-specific information in

the annual demonstration reports, will

enable the public to calculate the

emission reductions for each project

relied upon for emission reduction

credit in a SIP.

Second, under section 4.0 of Rule

9610, each year the District must

prepare an "annual demonstration

report" that provides updated

information on emission reductions

achieved through implementation of

incentive programs in the SJV and

includes the following: (1) A description

of each incentive program guideline

used by the District, NRCS, or CARB to

implement those programs that the

District seeks to rely upon for SIP

purposes; (2) information about the

12 CARB's initial Rule 9610 SIP submittal

included a Manual of Procedures dated June 20,

2013, which the District had made publicly

available during its rulemaking process. On March

4, 2014, the District submitted a revised and

clarified Manual of Procedures. Throughout this

proposed rule, references to the Manual of

Procedures (or "MOP") are to the revised version

submitted March 4, 2014 (dated January 31, 2014),

which is available in the docket for this rulemaking

and online at http://www.valleyair.org/MOP/

mop961 idx.htm.

types and quantities of emission

reductions generated through these

programs (e.g., the specific pollutants at

issue, the years that the emission

reductions occur, the relevant funding

amounts, and the project types); (3)

adjustments to emission reductions

calculated for prior annual

demonstration reports, as necessary to

reflect updated project information or

the adoption of new local, state, or

federal requirements; (4) identification

of SIP commitments adopted by the

District that it has satisfied, in whole or

in part, through SIP-creditable emission

reductions; (5) specific information

concerning each project 13 relied upon

for emission reductions (including the

unique project identification number,

project location, project type, and

project life); (6) identification of projects

that do not satisfy contractual

requirements; and additional project

details as necessary to demonstrate that

the emission reductions relied upon for

SIP purposes are surplus, quantifiable,

enforceable, and permanent. See Rule

9610, sections 4.0-4.6. Under section

5.0 of Rule 9610, the District must

submit this annual demonstration report

and information described in section 4.0

of the rule to both CARB and EPA no

later than August 31 of each year, after

providing an opportunity for public

review of a draft report, and the final

report must be made publicly available

on the District's Web site. See Rule

9610, sections 5.1-5.3.

EPA has reviewed the "2013 Annual

Demonstration Report" 14 submitted by

the District as supporting material for

Rule 9610 and believes it contains most,

though not all, of the information

required by Section 4.0 of Rule 9610.15

To ensure that EPA and other interested

parties can track the District's progress

13 Section 2.19 of Rule 9610 defines the term

"project" as follows: "for purposes of this rule,

actions taken to reduce emissions through incentive

programs, as contracted between the Grantee and

the District, NRCS, or CARB using incentive

program guidelines at the time of contracting. Such

actions include, but are not limited to,

replacements, retrofits, new purchases, new

practices, and repower."

14 CARB's initial Rule 9610 SIP submittal

included a "2013 Annual Demonstration Report"

dated June 20, 2013, which the District had made

publicly available (in draft form) during its

rulemaking process. On February 20, 2014, the

District submitted a revised annual demonstration

report containing technical clarifications

recommended by EPA. See "2013 Annual

Demonstration Report," dated January 31, 2014.

Throughout this proposed rule, references to the

"2013 Annual Demonstration Report" are to the

revised version dated January 31, 2014. For

informational purposes, however, we provide both

versions of the report in the docket for this

rulemaking.

15 Our TSD provides a detailed evaluation of the

2013 Annual Demonstration Report and our

recommendations for improvement.

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in satisfying its SIP commitments, we

expect that going forward each annual

demonstration report will identify the

specific projects (by unique project

identification number) that the District

has relied upon for emission reduction

credit in a particular SIP, including

necessary adjustments to emission

reduction calculations.16 See Rule 9610,

Section 4.3 and Section 4.5. EPA

believes that a list of individual projects

relied upon for each specific SIP would

enable EPA and the public to enforce

the District's SIP emission reduction

commitments but requests public

comment on other possible mechanisms

for tracking compliance with SIP

commitments through the annual

demonstration reports.

Finally, under section 6.1 of Rule

9610, "[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 requirements of the California

Public Records Act and related

requirements. See Rule 9610, section

6.1. Additionally, the annual

demonstration report must include

information regarding the process for

public review of such records. See id.

Consistent with this requirement, the

2013 Annual Demonstration Report

submitted by the District states that the

public may request documents created

and/or used in implementing the

requirements of Section 4.0 (of Rule

9610) through the District's Public

Records Release Request form, which is

available on the District Web site. See

2013 Annual Demonstration Report at 8.

Rule 9610 appears to contain one

exception to the general public

disclosure requirement in section 6.1

that applies only to documents

associated with NRCS's implementation

of the EQIP program. Section 6.2 of Rule

9610 states that "[r]ecords 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. section 608d(2) concerns

16 The key purpose of the annual demonstration

report is to specifically document the District's

progress in achieving necessary emission

reductions and to enable EPA and citizens to

enforce the SIP emission reduction commitments by

requesting project-specific documentation. It is not

necessary, however, for the list of projects relied on

in a particular SIP to be identical from year to year,

as the District may appropriately eliminate those

projects found to be in violation of contract

requirements or otherwise not achieving expected

emission reductions. See Rule 9610, Section 4.3.

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. The key

statutory provision that governs

disclosure of 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). 17 See

email dated April 23, 2014, from Joshua

Schnell, USDA, to Jeanhee Hong, EPA

Region 9, RE: "Summaries of 1619 and

EQIP." We discuss below this statutory

provision and certain information that

we understand NRCS may make

publicly available consistent with this

provision.

Under section 1619 of the Food,

Conservation, and Energy Act of 2008

(Pub. L. 110-246, 7 U.S.C. 8791),

Congress has prohibited the Secretary of

USDA and any officer or employee of

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. See

email dated March 31, 2014, from

Stephanie Johnson, USDA, to Kerry

Drake, EPA Region 9, RE: "Summaries

of 1619 and EQIP."

Taking these statutory prohibitions

into account, in March 2014, NRCS,

EPA, CARB and the District 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" ("2014 Addendum").

The purpose of the 2014 Addendum is

to identify information and

documentation that NRCS will,

consistent with its statutory

responsibilities under 7 U.S.C. 8791,

make publicly available to ensure that

EPA and the District can carry out their

17 The general Freedom of Information Act

exemptions in 5 U.S.C. section 552(b) also apply to

EQIP information.

respective implementation

responsibilities under the CAA and Rule

9610. Among other things, the 2014

Addendum states that NRCS will

provide to EPA and the District an

annual report that includes information

regarding emission reductions achieved

by individual EQIP projects and that

will be certified by the NRCS California

State Conservationist. We believe the

certified annual reports described in the

2014 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 verify

the emissions of participating sources

and to adequately assess the

effectiveness of the EQIP program.

To avoid confusion, however, EPA

strongly recommends that the District

revise section 6.2 of Rule 9610 at its

earliest opportunity to remove the

incorrect reference to 7 U.S.C. section

608d(2) and to provide an accurate

description of NRCS's statutory

obligations with respect to disclosure of

information under 7 U.S.C. section

8791.

Our TSD contains a more detailed

discussion of the 2014 Addendum and

EPA's understanding of the informationsharing activities that the signatory

agencies have agreed to undertake, to

enable the public to verify emission

reductions relied upon for SIP purposes.

See TSD at 10-11. Additionally, the

TSD contains a more detailed evaluation

of both the 2013 Annual Demonstration

Report and the Manual of Procedures

and provides recommendations for

improvement to ensure that these

documents provide the information

necessary to satisfy CAA requirements

concerning public availability of

emission data. See TSD at 52-55.

4. Provisions To Measure and Track

Programmatic Results

EPA recommends that each SIP

submittal that relies on an EIP or other

innovative emission reduction program

contain specific evaluation procedures

to retrospectively determine the overall

effectiveness of the program and

procedures to correct emissions

projections as appropriate. See, e.g.,

1997 VMEP at 9; 2001 EIP Guidance at

70-76; 2005 Bundled Measures

Guidance at 17-20; and 2014 Diesel

Retrofits Guidance at 33. For example,

EPA recommends that the SIP submittal

include a State commitment to conduct

program evaluations at least once every

3 years, to determine whether the

program is in fact achieving projected

emissions benefits; a schedule for

submitting the results of these

evaluations to EPA, following

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opportunities for public comment; and

"reconciliation procedures" to correct

any differences between forecasted and

actual emission reductions. See id.

Rule 9610 establishes procedures for

the District to annually report on the

emission reductions achieved through

specified incentive programs and to

evaluate programmatic effectiveness on

a periodic basis. Specifically, the

provisions concerning annual

demonstration reports under section 4.0

of the rule contain both substantive and

procedural requirements for the

District's development and submission

of these reports to EPA. See discussion

above in Section III.B.3 ("Procedures for

public disclosure of information").

Additionally, under section 4.7 of the

rule, the District is required to "perform

a retrospective assessment of the

performance of its incentive program to

evaluate overall incentive program

performance and develop

recommendations for future

enhancements to incentive program

implementation" and to include in this

assessment "a summary of the public

process to receive comments on the

draft [annual demonstration] report, as

required by Section 5.0." Rule 9610,

section 4.7.

EPA supports the District's effort to

keep EPA, CARB, and the public

informed of its incentive program

evaluations on an annual basis through

the annual demonstration reports

developed pursuant to section 4.0 of

Rule 9610. It is not clear, however, what

sort of "retrospective assessment" the

District intends to conduct under

section 4.7 of the rule and how this

provision differs, if at all, from the

requirements of section 4.0. We

recommend that the District revise

section 4.7 to clarify its procedures for

evaluating program performance and

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. Our TSD

provides more detailed

recommendations for these program

evaluations. As previously explained,

EPA will review each SIP submittal

developed pursuant to Rule 9610 on a

case-by-case basis, following notice-andcomment rulemaking, to determine

whether the applicable requirements of

the Act are met.

C. Sections 110(1) and 193 of the Act

Section 110(1) 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

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. Nothing in

Rule 9610 supplants the applicable

requirements of the CAA.18 We propose

to determine that our approval of Rule

9610 would comply with CAA section

110(1) 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.

IV. Proposed Action and Public

Comment

Under section 110(k)(3) of the Act,

EPA is proposing to fully approve the

submitted rule as a revision to the

California SIP. We will accept

comments from the public on this

proposed action until the date noted in

the DATES section above.

V. Statutory and Executive Order

Reviews

Under the Clean Air Act, the

Administrator is required to approve a

SIP submission that complies with the

provisions of the Act and applicable

Federal regulations (42 U.S.C. 7410(k);

40 CFR 52.02(a)). Thus, in reviewing SIP

submissions, EPA's role is to approve

State choices, provided that they meet

the criteria of the Clean Air Act.

Accordingly, this proposed action

merely proposes to approve State law as

meeting Federal requirements and does

not impose additional requirements

beyond those imposed by State law. For

that reason, this proposed action:

0 Is not a "significant regulatory

action" subject to review by the Office

of Management and Budget under

Executive Order 12866 (58 FR 51735,

(October 4, 1993);

18 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.

* does not impose an information

collection burden under the provisions

of the Paperwork Reduction Act (44

U.S.C. 3501 et seq.);

* is certified as not having a

significant economic impact on a

substantial number of small entities

under the Regulatory Flexibility Act (5

U.S.C. 601 et seq.);

* does not contain any unfunded

mandate or significantly or uniquely

affect small governments, as described

in the Unfunded Mandates Reform Act

of 1995 (Pub. L. 104-4);

* does not have Federalism

implications as specified in Executive

Order 13132 (64 FR 43255 (August 10,

1999));

* is not an economically significant

regulatory action based on health or

safety risks subject to Executive Order

13045 (62 FR 19885 (April 23, 1997));

* is not a significant regulatory action

subject to Executive Order 13211 (66 FR

28355 (May 22, 2001));

* is not subject to requirements of

Section 12(d) of the National

Technology Transfer and Advancement

Act of 1995 (15 U.S.C. 272 note) because

application of those requirements would

be inconsistent with the Clean Air Act;

and

* does not provide EPA with the

discretionary authority to address

disproportionate human health or

environmental effects with practical,

appropriate, and legally permissible

methods under Executive Order 12898

(59 FR 7629 (February 16, 1994)).

In addition, this proposed action does

not have tribal implications as specified

by Executive Order 13175 (65 FR

67249(November 9, 2000)), because the

SIP is not approved to apply in Indian

country located in the State, and EPA

notes that it will not impose substantial

direct costs on tribal governments or

preempt tribal law.

List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Incorporation by

reference, Intergovernmental relations,

Reporting and recordkeeping

requirements.

Authority: 42 U.S.C. 7401 et seq.

Dated: May 6, 2014.

Jared Blumenfeld,

Regional Administrator, Region IX.

[FR Doc. 2014-11481 Filed 5-16-14; 8:45 am]

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