Appendix 1

State of California

AIR RESOURCES BOARD

Executive Order R

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Relating to the Emergency Regulatory Amendments to the Tractor

- Trailer Greenhouse Gas Regulation

WHEREAS, the Air Resources Board adopted the Heavy

- Duty Vehicle Greenhouse Gas (GHG) Emission Reduction regulation (Tractor

- Trailer GHG regulation) on October 23, 2009 to reduce GHG emissions from 53

- foot or longer box

- type trailers

and the tractors that haul such trailers on California highways;

WHEREAS, the Tractor

- Trailer GHG regulation is set forth in sections 95300 to 95312

of t itle 17, California Code of Regulations;

WHEREAS, the Tractor

- Trailer GHG regulation required 2010 and earlier model year

53

- foot or longer box

- type trailers pulled by a tractor on a California highway to either be a SmartWay certified trailer or retrofitted with SmartWay approved technologies by January 1, 2013, or alternatively, a trailer owner could elect to comply with an optional

tr ailer fleet compliance schedule ;

WHEREAS, the Tractor

- Trailer GHG regulation contained an optional tr ailer fleet compliance schedule (Option 1 of the Large Fleet Compliance Plan, “Option 1”) that

allowed owners of trailer fleets comprised of 21 or more 2010 or older model

- year trailers

to retrofit those trailers over several years (from January 1, 201 1 through January 1, 2016) in lieu of fully complying with the trailer requirements by January 1, 2013

, if they supplied specified information s upporting their request by July 1, 2010;

WHEREAS, the compliance costs associated with the trailer requirements are estimated

to range from approximately $1900 to $4200 per trailer;

WHEREAS, the Option 1 compliance schedule provide s trailer fleet owners flexibility

to better manage their capital expenditures needed to comply with the regulation

, in comparison to the general requirement requiring all trailers to be compl i ant by January 1, 2013;

WHEREAS, the Tractor

- Trailer GHG regul ation was approved by the Office of Administrative Law (OAL) on December 9, 2009, and became effective on January 1, 2010;

WHEREAS, as ARB staff began implementing the Tractor

- Trailer GHG regulation, it received substantially fewer requests from trailer fleet owners to participate in the optional compliance schedules than anticipated, which led staff to believe that many trailer fleet owners were simply un aware of the regulation

, and may have therefore missed the opportunity to participate in th e complian ce phase

- in option;Executive Order R

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WHEREAS, in December 2010, the Board found that the economic environment in California and in the nation had not substantially improved since the Board approved

the Tractor

- Trailer GHG regulation in December 2008, and that the current recession

ha d significant ly impact ed overall trucking activities

, and specifically those companies that operate on

- road heavy

- duty vehicles i n the normal course of business;

WHEREAS, on October 26, 2011, the Board, in consideration of the above mentioned findings, adopted amendments to the Trac tor

- Trailer GHG regulation that it found would provide affected fleets with additional flexibility to comply with the regulation’s requirements without significantly affecting the GHG bene fits of the existing regulat ion;

WHEREAS, one the primary amendments adopted by the Board on October 26, 2011 established another compliance schedule for large trailer fleets (Option 2 of the Large Fleet Compliance Plan, “Option 2”) that would allow large trailer fleet owners to pha se in compliance from January 1, 201 2 t hrough January 1, 2016, provided the owners provide specified information supporting their request by July 1, 2011 ;

WHEREAS, another amendment adopted by the Board on October 26, 2011 provided flexibility for owners of fleets participating in both Option 1 and Option 2 to report conformance on an annual basis, rather than submitting a one

- time plan that covers the entire phase

- in submitted by the registration deadline of July 1, 2010;

WHEREAS, both Option 1 and Opti on 2 specify compliance schedules and reporting requirements that participating large trailer fleet owners must meet;

WHEREAS, OAL approved the 2011 amendments on December 12, 2011, and the

amendments becam e effective on January 11, 2012;

WHEREAS, s ubsequent to OAL’s approval of the 2011 amendments, ARB staff

discovered that due to an oversight, the 2011 amendments specified a registration deadline for Option 2 (July 1, 2011) that preceded the effective date of the amendments (January 11, 2012);

WH EREAS, this oversight creates an emergency situation that requires immediate action because it immediately and adversely affects trailer fleet owners who waited for OAL’s approval of the 2011 amendments before submitting their registration requests,

as wel l as fleet owners that had not timely submitted registration requests, by requiring

them to retrofit their entire trailer fleets by January 1, 2013;

WHEREAS, ARB did not become aware of this oversight in sufficient time to address the oversight through no nemergency regulations adopted in accordance with the provisions of Article 5, Chapter 3.5, Part 1, Division 3, Title 2 of the Government Code;Executive Order R

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WHEREAS, a number of large trailer fleet owners have stated their desire to utilize Option 2, but were nonethe less unwilling to register their trailer fleet until the amendments were formally approved by OAL;

WHEREAS, large trailer fleet owners have also stated that the logistics associated with retrofitting thousands of trailers by January 1, 2013 poses a diffic ult problem and would significantly reduce the number of available trailers to service the needs of California;

WHEREAS, the July 1, 2011 registration deadline for Option 2 effectively vitiates the Board’s intent in adopting Option 2, which was to provid e economic relief to an industry that is experiencing the adverse effects of the prolonged economic recession by allowing large trailer fleets to spread their compliance costs across 5 years, rather than requiring full compliance by January 1, 2013;

WHERE AS, ARB has received requests from eight large trailer fleet owners seeking to participate in the Option 2 compliance plan, but that had not submit ted registration requests b y the July 1, 2011 deadline;

WHEREAS, as of January 11, 2012, these eight large t railer fleet owners collectively operated over 73,000 trailers , which represent approximately 182% of t he number of

trailers registered in Option 2, and 11% of the total number of trailers projected to be impacted by the regulation in calendar year 2010 ;

WHEREAS, several large trailer fleet owners have stated that their preclusion from Option 2 would impose severe problems arising from the reduced number of available

trailers to service the need s of California;

WHEREAS, such a situation will likely result in financial hardship for those fleets, as

well as California businesses and members of the public that rely on those trailer fleets to bring goods into the state;

WHEREAS, based on the a forementioned facts , I find tha t an emergency situation

exists ;

WH EREAS, I have further determined that the adoption of emergency amendments to title 17, California Code of Regulations section s 95307 (b), (f), and (g) is necessary to

address that emergency;

WHEREAS, the emergency amendments allow owners of large trailer fleets to submit

their Option 2 Large Fleet Compliance Plan until June 1, 2012;

WHEREAS, the emergency amendments require owners of large trailer fleets participating in Option 2 to ensure that the percentage of compliant trailers in their compliance plan base is at least 20 percent by June 1, 2012;Executive Order R

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WHEREAS, the emergency amendments require owners of large trailer fleets participating in Option 2 to report to the Executive Officer the applicable compliance method for each trailer brought into compliance in order to meet the minimum fleet conformance threshold for compliance year 2011 by June 1, 2012;

WHEREAS, the emergency amendments require owners of large trailer fleets to provide the Executive Officer by June 1, 2012, the trailer identification number or vehicle identification number of each trailer in the compliance plan base that is redesignated

into local

- haul or storage trailer service in a specific compliance year;

WHEREAS, the emergency amendments would allow owner s of trailer fleet s that have elected to participate in Option 1, to withdraw their participation from Option 1 and to instead participate in Option 2

, provided the Executive Officer receives the notice s to withdraw by May 1, 2012 and the owner s submit their request s to participate in Option 2 by June 1, 2012;

WHEREAS, the emergency amendments require owners of trailer fleets participating in Option 2 that have identified exempt storage trailers or exempt local

- haul trailers in their trailer fleet lists, in accordanc e with section 95307(d)(2)(N), to register those exempt

trailers in accordance with section 95306 , Short

- Haul Tractor, Local

- Haul Tractor,

Local

- Haul Trailer, and Storage Trailer Registration Requirements, by June 1, 2012 ;

WHEREAS, none of the emergency amendments constitute emission standards or test procedures for new or used motor vehicles;

WHEREAS, on February 22, 2012

, the Board, in accordance with Government Code section 11346.1(a)(2), sent a notice of the proposed emergency action to every person who had filed a request for notice of r egulatory action with the Board;

WHEREAS, I find that this emergency regulatory action is necessary to preserve the public peace, health and safety, and general welfare of the people of California;

WHEREAS, the eme rgency amendments to title 17, California Code of Regulations

section s 9530 7(b)

, (f), and (g), as set forth in Attachment A hereto

, effectuate my direction and intent; and

WHEREAS, the Statement of Emergency as set forth in Attachment B hereto.

NOW THEREFORE, IT IS ORDERED that emergency amendments to title 17, California Code of Regulations sections 95307(b), (f), and (g) are adopted as set forth in

Attachment A.Executive Order R

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IT IS FURTHER ORDERED, that the emergency amendments be submitted to the

Offic e of Administrative Law as expeditiously as possible.

Executed this day of February 2012, at Sacramento, California

.

_______________________ James N. Goldstene

Executive Officer

Attachments

Attachment A: Emergency Regulatory Amendments to the Tractor

- Trailer Greenhouse Gas Regulation Attachment B: Statement of Emergency