TITLES 13 AND 17. CALIFORNIA AIR RESOURCES BOARD 

NOTICE OF PUBLIC HEARING TO CONSIDER THE ADOPTION OF PROPOSED 

REGULATIONS TO REDUCE EMISSIONS FROM DIESEL ENGINES ON 

COMMERCIAL HARBOR CRAFT OPERATED WITHIN CALIFORNIA WATERS AND 

24 NAUTICAL MILES OF THE CALIFORNIA BASELINE 

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

and place noted below to consider adoption of regulations to reduce emissions of diesel 

particulate matter (PM) and oxides of nitrogen (NOx) from the use of diesel engines on 

commercial harbor craft operating in any California port, roadstead or terminal facility or 

within all California inland waters; all California estuarine waters; and within 24 nautical 

miles, except as otherwise specified in this proposal, of the California baseline 

(collectively referred to hereinafter as “Regulated California Waters”). Any person who 

sells, supplies, offers for sale, purchases, owns, operates, leases, charters, or rents any 

commercial harbor craft that operates in any of the Regulated California Waters would 

be subject to and have responsibilities under these regulations. This notice summarizes 

the proposed regulations. The Staff Report and Technical Support Document present 

the regulations and information supporting the adoption of the regulations in greater 

detail. 

DATE: October 25, 2007 

TIME: 9:00 a.m. 

PLACE: California Environmental Protection Agency

 Air Resources Board 

Byron Sher Auditorium, Second Floor 

1001 I Street 

 Sacramento, CA 95814 

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

9:00 a.m., October 25, 2007, and may continue at 8:30 a.m., October 26, 2007. This 

item may not be considered until October 26, 2007. Please consult the agenda for the 

meeting, which will be available at least 10 days before October 25, 2007, to determine 

the day on which this item will be considered. 

For individuals with sensory disabilities, this document is available in Braille, large print, 

audiocassette or computer disk. Please contact ARB's Disability Coordinator at 

(916) 323-4916 by voice or through the California Relay Services at 711, to place your 

request for disability services. If you are a person with limited English and would like to 

request interpreter services, please contact ARB's Bilingual Manager at (916) 323-7053. 
2

INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT 

OVERVIEW

Sections Affected: Proposed adoption of new section 2299.5, title 13, California Code 

of Regulations (CCR) and new section 93118.5, title 17, CCR. The following 

documents would be incorporated in the regulations by reference: (1) International 

Standard ISO 8178-4(E):1996, “Reciprocating Internal Combustion Engines – Exhaust 

Emission Measurement – Part 4: Test Cycles for Different Engine Applications”; 

(2) International Standard ISO 8178-2(E):1996, “Reciprocating Internal Combustion 

Engines – Exhaust Emission Measurement – Part 2: Measurement of Gaseous and 

Particulate Exhaust Emissions at Site;” (3) U.S. Environmental Protection Agency 

(U.S. EPA) Marine Engine standards, Tier 1 and Tier 2, as set forth in 40 Code of 

Federal Regulation (CFR) Part 94; (4) U.S. EPA proposed Marine Engine standards, 

Tier 3 and Tier 4, as set forth in “Control of Emissions of Air Pollution from Locomotive 

Engines and Marine Compression-Ignition Engines Less Than 30 Liters Per Cylinder” 

(72 Federal Register 15937 et seq. (April 3, 2007)); (5) the following National Oceanic 

and Atmospheric Administration (NOAA) Nautical Charts, as authored by the NOAA 

Office of Coast Survey: (A) Chart 18600, Trinidad Head to Cape Blanco (January 2002), 

(B) Chart 18620, Point Arena to Trinidad Head (June 2002), (C) Chart 18640, San 

Francisco to Point Arena (August 2005), (D) Chart 18680, Point Sur to San Francisco 

(June 2005), (E) Chart 18700, Point Conception to Point Sur (July 2003), (F) Chart 

18720, Point Dume to Purisima Point (January 2005), and (G) Chart 18740, San Diego 

to Santa Rosa Island (April 2005); (6) ASTM D975-81, "Standard Specification for 

Diesel Fuel Oils" (as modified in May 1982); (7) "Control of Emissions of Air Pollution 

from New Marine Compression Ignition Engines At or Above 37 KW” (64 FR 73299 et 

seq., December 29, 1999); and (8) “Verification Procedure, Warranty and In-Use 

Compliance Requirements for In-Use Strategies to Control Emissions from Diesel 

Engines," 13 CCR 2700 et seq. 

Background: Over 90 percent of Californians breathe unhealthful air at times. To 

improve air quality and human health, ARB establishes requirements to reduce 

emissions from new and in-use on-road and off-road vehicles, engines, and other 

sources. To reduce emissions from off-road sources, such as marine vessels, ARB has 

adopted a series of regulations since 2004 that: (1) require diesel fuel sold for use in 

harbor craft comply with CARB diesel specifications1

 and, (2) require ocean-going 

vessels with diesel auxiliary engines to comply with specified diesel fuel and other 

requirements while operating in Regulated California Waters.2

 Although those 

regulations are reducing air pollution from marine vessels, significant opportunities exist 

to further reduce emissions from the thousands of commercial harbor craft vessels that 

operate within the State and in Regulated California Water 

 

1

 ARB’s fuel standards for harbor craft are codified at title 13, CCR, section 2299. 

2

 ARB’s fuel standards and other requirements for diesel auxiliary engines on ocean-going vessels are 

codified at title 13, CCR, section 2299.1 and title 17, CCR, section 93118. 
3

Control of Criteria Air Pollutants 

Health and Safety Code (HSC) sections 43013 and 43018 direct ARB to adopt 

standards and regulations that the Board has found to be necessary, cost-effective, and 

technologically feasible for various mobile source categories, including off-road diesel 

engines and equipment such as marine vessels, through the setting of emission control 

requirements. Specifically, HSC section 43013(b) directs ARB to adopt such standards 

and regulations for marine vessels to the extent permitted by federal law. 

Control of Toxic Air Contaminants 

The California Toxic Air Contaminant Identification and Control Program (Air Toxics 

Program), established under California law by Assembly Bill 1807 (Stats. 1983, ch. 

1047) and set forth in HSC sections 39650 through 39675, requires ARB to identify and 

control air toxicants in California. The identification phase of the Air Toxics Program 

requires ARB, with participation of other state agencies such as the Office of 

Environmental Health Hazard Assessment, to evaluate the health impacts of, and 

exposure to substances, and to identify those substances that pose the greatest health 

threat as toxic air contaminants (TACs). The ARB’s evaluation is made available to the 

public and is formally reviewed by the Scientific Review Panel (SRP) established under 

HSC section 39670. Following ARB’s evaluation and the SRP’s review, the Board may 

formally identify a TAC at a public hearing. Following identification, HSC sections 

39658, 39665, and 39666 require ARB, with participation of the air pollution control and 

air quality management districts (districts), and in consultation with affected sources and 

interested parties, to prepare a report on the need and appropriate degree of regulation 

for that substance (a “needs assessment”) and to adopt airborne toxic control measures 

(ATCMs). 

In 1998, the Board identified diesel PM as a TAC with no Board-specified threshold 

exposure level. A needs assessment for diesel PM was conducted between 1998 and 

2000, which resulted in ARB staff developing and the Board approving a Risk Reduction 

Plan to Reduce Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles 

(Diesel RRP) in 2000. The Diesel RRP presented information that identified the 

available options for reducing diesel PM and recommended control measures to 

achieve further reductions. The scope of the Diesel RRP was broad, addressing all 

categories of engines, both mobile and stationary, and included control measures for 

private and public fleets of off-road diesel engines, such as those covered by the 

proposed regulations. The ultimate goal of the Diesel RRP is to reduce California’s 

diesel PM emissions and associated cancer risks from 2000 baseline levels by 

85 percent by 2020. 

The purpose of this proposed regulatory action is to reduce emissions of diesel PM and 

NOx. Diesel PM emission reductions are needed to reduce the potential cancer risk 

and other adverse effects from PM exposure to people who live in the vicinity of 

California’s major ports, harbors, and shipping lanes. Reductions in diesel PM and NOx 

(which forms “secondary” nitrate PM in the atmosphere) will also contribute to regional 
4

PM reductions that will assist in California’s progress toward achieving State and federal 

air quality standards. Reductions in NOx, an ingredient in the formation of ozone 

pollution, will also help reduce regional ozone levels. 

Diesel engines on commercial harbor craft vessels are a significant source of diesel PM 

and NOx emissions in California. A recent ARB exposure study for the ports of 

Los Angeles and Long Beach showed commercial harbor craft to be the third highest 

source for elevated cancer risk at the ports. The United States Environmental 

Protection Agency (U.S. EPA) has proposed “Tier 3” standards for new marine engines, 

such as those used in commercial harbor craft, beginning in 2009 and more stringent 

“Tier 4” standards for new engines beginning in 2014.3 However, the U.S. EPA 

proposed standards, even if promulgated, apply only to new marine engines and would 

not affect in-use engines. Thus, significant opportunities exist to further reduce 

emissions from the approximately 1900 diesel engines on in-use ferries, excursion 

vessels, tugboats, and towboats that currently operate in the State. 

Attainment of Ambient Air Quality Standards

The federal Clean Air Act (CAA) requires U.S. EPA to establish National Ambient Air 

Quality Standards (Standards) for pollutants considered harmful to public health, 

including fine particulate matter (PM2.5) and ozone. Set to protect public health, the 

Standards are adopted based on a review of health studies by experts and a public 

process. Ambient PM2.5 is associated with premature mortality, aggravation of 

respiratory and cardiovascular disease, asthma exacerbation, chronic and acute 

bronchitis and reductions in lung function. Ozone is a powerful oxidant. Exposure to 

ozone can result in reduced lung function, increased respiratory symptoms, increased 

airway hyper-reactivity, and increased airway inflammation. Exposure to ozone is also 

associated with premature death, hospitalization for cardiopulmonary causes, and 

emergency room visits for asthma. 

Areas in the State that exceed the Standards are required by federal law to develop 

State Implementation Plans (SIPs) describing how they will attain the standards by 

certain deadlines. The NOx emission reductions are needed because NOx leads to 

formation in the atmosphere of both ozone and PM2.5; diesel PM emission reductions 

are needed because diesel PM contributes to ambient concentrations of PM2.5. At this 

time, the South Coast and San Joaquin Valley air basins are both required to attain the 

PM2.5 standard by 2015. The U.S. EPA further requires that all necessary emission 

reductions be achieved one calendar year sooner – by 2014 – in recognition of the 

annual average form of the standard. By contrast, San Joaquin Valley and South Coast 

air basins are expected to have until 2023 to attain the federal ozone standard, by 

invoking the “bump-up” provision in the CAA. 

The ARB and the districts are working to complete the ozone and PM2.5 SIPs and 

expect to submit them to the U.S. EPA by this fall and April 2008, respectively. Air 

 

3

 See Control of Emissions of Air Pollution from Locomotive Engines and Marine Compression-Ignition 

Engines Less Than 30 Liters Per Cylinder (72 Fed.Reg. 15937 et seq. (Apr. 3, 2007)). 
5

quality modeling indicates that significant reductions of NOx are crucial to help meet 

both these standards. At this time, staff estimates that a 60 percent reduction in NOx 

emissions from 2006 levels (i.e., a total reduction of hundreds of tons per day) and a 

12 percent reduction in direct PM2.5 emissions will be necessary for attainment of the 

PM2.5 standards in the South Coast Air Basin. Emission reduction targets have not yet 

been set for achieving the PM2.5 standard in the San Joaquin Valley Air Basin, but are 

expected to be significantly lower. While all sources of NOx emissions are important 

contributors to PM2.5, marine vessels, which include commercial harbor craft engines, 

constitute one of the key categories that will determine whether California is able to 

meet the 2014 deadline for PM2.5 attainment in the South Coast Air Basin. 

Control of Emissions from Goods Movement-related Activities 

In January 2005, a Goods Movement Cabinet Workgroup, created by Governor 

Schwarzenegger and led by the California Environmental Protection Agency and the 

Business, Transportation and Housing Agency, established a policy for goods 

movement and ports to improve and expand California’s goods movement industry and 

infrastructure while improving air quality and protecting public health. The workgroup 

worked collaboratively with the logistics industry, local and regional governments, 

neighboring communities, business, labor, environmental groups, and other interested 

stakeholders to create a two-phased Goods Movement Action Plan (GMAP), which 

outlines a comprehensive strategy to address the economic and environmental issues 

associated with moving goods via the state’s highways, railways, and ports. In a related 

activity, the Board adopted the Goods Movement Emission Reduction Plan (GMERP) in 

April 2006. The GMERP identified a variety of measures to be investigated by ARB for 

reducing goods movement-related emissions, including regulations for commercial 

harbor craft. The final phase of the GMAP was completed in January 2007 and 

includes a framework for action, which identifies projects needed to reduce emissions 

from goods movement-related sources, including those from commercial harbor craft 

engines. 

The California Global Warming Solutions Act of 2006

The California Global Warming Solutions Act of 2006 established the first-in-the-world 

comprehensive program of regulatory and market mechanisms to achieve real, 

quantifiable, cost-effective reductions of greenhouse gases (GHG).4,5 The legislation 

gave ARB responsibility for monitoring and reducing GHG emissions. The statute 

requires ARB to adopt regulations and other requirements that would reduce by 2020 

statewide greenhouse gas emissions to the equivalent of 1990 levels. 

 

4

 Established under California law by Assembly Bill 32 (Stats. 2006, ch. 488) and set forth in HSC 

§ 38500 et seq. 

5

 Greenhouse gases are those that tend to increase average global temperatures through absorption of 

infrared radiation or other mechanisms. These include, but are not limited to, carbon dioxide (CO2) and 

methane (CH4).
6

Some actions required by the proposed regulations may result in slightly increased 

carbon dioxide (CO2) for some applications. This may occur, for example, if vessel 

operators choose to comply with the regulations by using exhaust treatment 

technologies that use vessel power (e.g., scrubbers, selective catalytic reduction), 

increase the weight of the vessel, or require a larger engine to be installed on the 

vessel. However, other actions required by the rule will likely offset this effect. For 

instance, the accelerated phase in of newer engines, which employ modern, less 

polluting technologies, should reduce GHG emissions from each new engine relative to 

the older, in-use engines. In addition, the proposed regulations will reduce emissions of 

black carbon (a component of diesel PM and a likely contributor to global warming), 

which will further offset the minor increases in CO2 emissions that may occur in some 

applications. Thus, staff expects the proposed regulations to have an overall negligible 

effect on global warming. 

Authority 

The ARB has authority under California law to adopt the proposed regulations. Health 

and Safety Code sections 43013(b) and 43018 provide broad authority for ARB to adopt 

emission standards and other regulations to reduce emissions from new and in-use 

vehicular, nonvehicular and other mobile sources. Under HSC sections 43013(b) and 

43018, ARB is directly authorized to adopt emission standards and other regulations for 

marine vessels, as expeditiously as possible and to the extent permitted by federal law, 

to meet state ambient air quality standards. The ARB is further mandated by California 

law under HSC section 39666 to adopt ATCMs for new and in-use nonvehicular 

sources, including marine vessels such as commercial harbor craft, for identified TACs 

such as diesel PM. 

Emission Reductions and Public Health Benefits Projected 

The proposed regulations are expected to significantly reduce emissions of diesel PM 

from in-use commercial harbor craft engines. Diesel PM emission reductions are 

needed to reduce premature mortality, cancer risk, and other adverse impacts from 

exposure to this TAC. The proposal would help achieve the 2020 goal set forth in the 

2000 Diesel RRP of reducing diesel PM by 85 percent from 2000 baseline levels and 

the 2015 and 2020 goals of the GMAP. Staff projects that, by 2020, the proposed 

regulations, in conjunction with U.S. EPA cleaner marine new engine standards, use of 

low sulfur fuel in harbor craft, port clean air plans, engine replacement incentive 

programs, and a negative growth factor for California’s fishing fleet, would reduce in-use 

commercial harbor craft diesel PM emissions about 70 percent and NOx emissions 

about 60 percent relative to the 2004 baseline. These emission reductions will occur in 

areas along waterways and near ports where environmental justice concerns are 

especially prevalent, as well as further inland. 

The proposed regulations would also reduce diesel PM and NOx emissions that 

contribute to exceedances throughout the State of ambient air quality standards for both 
7

PM2.5 and ozone. These reductions will assist California in its goal of achieving state 

and federal air quality standards. 

The diesel PM and NOx emission reductions from the proposal, along with the other 

efforts and factors mentioned above, are expected to reduce the number of people 

exposed to a cancer risk of 10 in a million within the 20 square miles surrounding the 

Los Angeles/Long Beach Ports from 1.7 million in 2004, to 940,000 in 2015, and 

630,000 in 2020. Statewide, the emission reductions due specifically to the regulations 

would be expected to prevent 310 premature deaths and 8,100 cases of asthma-related 

and other lower respiratory symptoms by the year 2025, as well as other health 

benefits. The economic benefit for these avoided premature deaths and health costs is 

estimated to be $1.3 to $2.0 billion. 

In contrast to the diesel PM and NOx reductions, we are not projecting significant 

reductions in oxides of sulfur (SOx) from the proposed action. Currently, all diesel fuel 

sold to harbor craft is required to meet ARB’s on-road diesel specifications (CARB 

diesel). These specifications help reduce SOx emissions, among other pollutants. 

However, the existing regulation (title 13, CCR section 2299) only prohibits the sale of 

noncomplying diesel to harbor craft operators; it does not actually require the use of 

CARB diesel by operators while their vessels are operating in Regulated California 

Waters. Thus, to supplement the existing diesel fuel regulation, the proposed action will 

require harbor craft operators to fuel their diesel engines only with CARB diesel or 

equivalent fuel, as specified in the proposal. 

Staff Report and Further Information 

As described in more detail below, ARB staff has prepared two documents as part of 

this rulemaking, a Staff Report: Initial Statement of Reasons (Staff Report) and a 

Technical Support Document. Together with the needs assessment (i.e., the Diesel 

RRP), these two documents serve as the report on the need and appropriate degree of 

regulation for new and in-use commercial harbor craft in Regulated California Waters. 

Description of the Proposed Regulatory Action

Under the approach proposed by staff, the Board would adopt a regulation, pursuant to 

its authority under HSC sections 43013 and 43018, which would apply to the emissions 

from diesel engines on commercial harbor craft operating within any of the Regulated 

California Waters (as defined in the proposal). The Board would also approve adoption 

of essentially identical provisions as an ATCM, pursuant to its authority under 

HSC section 39666, which would complement the regulation and provide maximum 

notice to the regulated community of the regulatory requirements on commercial harbor 

craft. These measures will hereinafter sometimes be referred to collectively as “the 

proposed regulations.” 
8

Applicability 

The proposed regulations apply to any person who owns or operates a commercial 

harbor craft operating within any of the Regulated California Waters, which include all 

California inland waters, all California estuarine waters, and all waters within a zone 

24 nautical miles seaward of the California coastline, except for specified areas along 

the Southern California coastline. Regulated California Waters also include all ports, 

roadsteads, and terminal facilities in California. In general, commercial harbor craft 

include a variety of vessel types such as ferries, excursion vessels, tugboats, oceangoing tugboats, tow boats, crew vessels, work boats, fishing boats, barges, and others. 

Industries that use these vessels, such as those providing ferry services, offshore 

platform suppliers, commercial fishing, touring and excursion services, and many others 

would be subject to these regulations. Government agencies that own or operate diesel 

powered harbor craft, such as those engaged in fire protection, dam inspections and 

repair, marine research and education, and ferry services operated by local 

municipalities would also be affected. 

The proposed regulations include language explicitly stating and clarifying that the 

proposal does not change or supersede any existing United States Coast Guard 

(U.S.CG) regulations and that vessel owners and operators are responsible for ensuring 

that they meet all applicable U.S.CG regulations, as well as the proposed regulations.

Exemptions 

The proposed regulations include a number of exemptions. First, the proposal does not 

apply to vessels that travel within the 24 nautical mile boundary off California’s coastline 

without stopping or anchoring. This exemption includes vessels that stop or anchor 

within 24 nautical miles only under limited situations, such as when the vessel is in 

distress or must stop to comply with U.S.CG regulations. Also, the following vessel 

types are exempted from this proposal in its entirety: temporary emergency 

rescue/recovery vessels, recreational vessels, ocean-going vessels that are not oceangoing tugboats (i.e., ocean-going tugboats and tow boats are subject to the proposal), 

vessel engines registered with the ARB Portable Engine Registration Program at the 

time the proposed regulation is approved by the Office of Administrative Law, military 

tactical support vessels, and all U.S. Coast Guard vessels. Further, temporary 

replacement vessels and registered historic vessels are exempt from the proposed 

engine standards and compliance schedule but are otherwise subject to all other 

requirements. Similarly, low use engines (i.e., those used less than 300 hours per year) 

would not be subject to the proposed engine standards and compliance schedule but 

are otherwise subject to all other requirements. 

 

Emission Limits 

A regulated diesel engine generally would be limited to the U.S. EPA marine engine 

standards in effect at the time the engine is due to be brought into compliance with the 

proposal’s requirements. The proposal specifies the compliance schedule for regulated 
9

engines. The proposal’s requirements involving U.S. EPA’s proposed Tier 3 and Tier 4 

standards would come into effect only if U.S. EPA finalizes and promulgates those 

standards as they were specified in 72 Fed.Reg. 15937 et seq. (Apr. 3, 2007). If 

U.S. EPA promulgates different Tier 3 and Tier 4 standards, a separate rulemaking will 

be needed to incorporate those Tier 3 and Tier 4 standards. 

Newly Acquired Engines and Vessels 

The proposed regulations include requirements for newly acquired commercial harbor 

craft vessels and those engines acquired for use on a vessel after the vessel’s initial 

purchase. These requirements cover both the acquisition of diesel engines for use in 

harbor craft and the acquisition of new and in-use harbor craft vessels. These 

requirements are included to ensure that California’s commercial harbor craft fleet 

becomes cleaner as vessels are added to the California fleet and engines are replaced. 

The proposed regulations require that only engines meeting the applicable U.S. EPA 

marine engine standards on the date of engine acquisition (e.g., date when a contract 

for the purchase of the engine by the vessel owner was executed) be sold for 

installation on in-use commercial harbor craft. A limited sell-through provision is 

included in the regulation. The engines on new harbor craft would be required to meet 

the standards in effect on the date of vessel acquisition (e.g., date when a contract to 

buy the vessel was executed). The sale of in-use vessels would be subject to the 

engine compliance schedule but would not be otherwise restricted. The propulsion 

engines on new ferries would have additional requirements for NOx or PM emissions to 

be cleaner than the U.S. EPA marine engine standards in effect on the date of vessel 

acquisition. 

In-Use Vessels 

In addition to the above, the proposed regulations would require that currently 

unregulated (a.k.a. “Tier 0”) and Tier 1 in-use propulsion and auxiliary marine engines 

on ferries, excursion vessels, tugboats, and towboats meet emission limits equal to or 

cleaner than the U.S. EPA marine engine standards in effect for the year that in-use 

engine compliance is required under this proposal. In other words, engines that are not 

currently subject to any emission standards (Tier 0) will eventually be brought into 

compliance with standards specified in the proposal. A compliance schedule, designed 

to clean up the oldest dirtiest high use engines first, would be based on the in-use 

engine model year and hours of operation. The proposed regulations include an 

accelerated compliance schedule for harbor craft with homeports in the South Coast Air 

Quality Management District to provide early benefits for the South Coast Air Basin, 

which is in non-attainment for both ozone and PM2.5. 

While there are other options available in the proposal, ARB staff believes that most 

owners and operators of regulated harbor craft will choose to replace their existing 

engine with a new Tier 2 or Tier 3 engine. However, some operators may choose one 

of the other compliance options, such as demonstrating that the current engine meets 

the applicable emission limits. Options are also provided to extend the compliance 
10

date, such as implementing an emission control strategy and demonstrating that the 

engine was previously rebuilt to a cleaner standard. The proposed regulations also 

include a provision governing the failure of a diesel emission control strategy employed 

through an elected compliance option. 

Compliance Extensions 

The proposed regulations provide for owners and operators to apply to ARB for an 

extension of the compliance date in certain cases. These circumstances are specified 

in the proposal and include situations when a vessel is near retirement, there is a 

change in operation or ownership, there is no suitable replacement engine available, 

difficulties occur in obtaining or installing a replacement engine, and owners with 

multiple vessels would need to comply in the same year for all the vessels. 

Recordkeeping 

Starting on January 1, 2009, owners or operators of commercial harbor craft operating 

within the Regulated California Waters will be required to maintain specified records for 

a minimum of three years. 

Monitoring, Reporting, and Recordkeeping 

The proposed regulations would require that diesel engines on all commercial harbor 

craft have a properly operating, non-resettable hour meter installed so that hours of 

operation can be monitored. 

The recording and maintenance of specified information would begin on January 1, 

2009. All owners or operators of commercial harbor craft would be required to submit 

an initial report containing specified information, including a plan for compliance with the 

regulation if applicable, by February 28, 2009. An additional report would be required 

upon compliance with the required engine emission limits, upon changes in engine or 

vessel operation, or if there are changes in ownership or use. This required reporting 

will provide staff with more complete up-to-date information on commercial harbor craft 

vessels to be used in developing the emission inventory and for the consideration of 

further regulatory measures. Owners or operators of commercial harbor craft would 

also need to supply additional information as requested that may be necessary to 

determine compliance with the proposed regulations. The specified information that 

owners or operators will be required to record and maintain would have to be supplied 

to an agent or employee of ARB upon request. Finally, for enforcement purposes, 

owners or operators would have to provide vessel access to ARB employees or officers 

or the local air districts. 

Alternative Control of Emissions 

The proposed regulations contain an alternative control of emissions (ACE) option, 

which would allow an owner or operator to submit for approval by the Executive Officer 
11

an alternative compliance approach. Under the ACE, owners or operators would be 

required to achieve and demonstrate equivalent or greater emission reductions than 

that which would have been achieved with direct compliance with the emission limits. 

Alternative emission control strategies may include any feasible and enforceable 

strategy not otherwise required by law, regulation, or statute. The detailed application 

process is specified and includes substantial public participation. 

Fuel Requirement 

The proposed regulations would require that commercial harbor craft engines be fueled 

with diesel fuel meeting ARB’s on-road diesel fuel standards (CARB diesel), an 

alternative diesel fuel, a diesel fuel meeting ARB’s Verification Procedure requirements, 

a CARB diesel used with fuel additives that meets the requirements of the Verification 

Procedure, or any combination of the above. 

Test Methods and Other Incorporated Documents 

The proposal would incorporate by reference Parts 2 and 4 of International Standard 

ISO 8178, as revised in 1996 by the International Organization for Standardization 

(ISO). This standard includes test methods for reciprocating internal combustion 

engines. The proposal would also incorporate by reference the U.S. EPA marine 

engine standards, Tiers 1 and 2, as set forth in 40 Code of Federal Regulation (CFR) 

Part 94, and the proposed U.S. EPA Marine Engine standards, Tiers 3 and 4, as set 

forth in 72 Feg. Reg. 15937 et seq. (April 3, 2007). 

Violations 

The proposal specifies that any violation of the requirements or other provisions would 

subject the person who committed the violation to the penalties, injunctive relief, and 

other remedies available under Health and Safety Code section 42400 et seq., other 

applicable sections of the Health and Safety Code, and other applicable provisions of 

California law for each violation. The proposal further specifies that each failure to meet 

a requirement, criteria, or provision of the regulations would constitute a single, 

separate violation for each hour that a person operates the commercial harbor craft 

within Regulated California Waters until the provision, criteria, or requirement has been 

met. 

Severability 

This proposed regulation states that if any part of the regulation is held to be invalid, the 

remainder of the regulation shall continue to be effective. 

At the hearing, the Board may consider other elements that may provide additional 

flexibility to affected owners and operators. 
12

COMPARABLE FEDERAL REGULATIONS

As noted above, U.S. EPA has already promulgated Tier 1 and Tier 2 standards for new 

marine engines. And U.S. EPA has recently proposed Tier 3 and Tier 4 standards for 

new marine engines to become effective beginning in 2009 and 2014, respectively. 

However, no federal standards have been promulgated addressing emission reductions 

from in-use commercial harbor craft engines. Under federal Clean Air Act (CAA) 

section 213, U.S. EPA is without authority to adopt in-use standards for nonroad 

engines, including marine engines.6

California is the only governmental entity in the United States authorized by the CAA, in 

the first instance, to adopt emission requirements for in-use off-road engines.7 Section 

209(e)(1) of the CAA conclusively preempts states, including California, from adopting 

requirements for new off-road engines less than 175 horsepower that are used in farm 

or construction equipment. However, the proposed regulations address off-road 

engines used in marine vessels, rather than those used in farm or construction 

equipment. Under section 209(e)(2), California may adopt and enforce emission 

standards and other requirements for off-road engines and equipment not conclusively 

preempted by section 209(e)(1), so long as California applies for and receives 

authorization from the Administrator of U.S. EPA. To obtain authorization, the Board 

must make a finding that the California adopted standards will be, in the aggregate, at 

least as protective of public health and welfare as applicable federal standards.8

 The 

Administrator must grant a request for authorization from California unless he finds that 

ARB’s protectiveness finding is arbitrary and capricious, that California does not need 

the standards to meet compelling and extraordinary conditions, or that the standards 

and accompanying enforcement procedures are not consistent with CAA section 209. 

AVAILABILITY OF DOCUMENTS AND AGENCY CONTACT PERSONS

As noted above, the Board staff has prepared two documents for the proposed 

regulatory action: a Staff Report, which includes a summary of the economic and 

environmental impacts of the proposal, and a Technical Support Document, which 

describes the basis of the proposed action in more detail. The Staff Report is entitled, 

“Staff Report: Initial Statement of Reasons for the Proposed Rulemaking – Regulations 

to Reduce Emissions from Diesel Engines on Commercial Harbor Craft Operated Within 

California Waters and 24 Nautical Miles of the California Baseline.” The Technical 

Support Document is entitled, “Technical Support Document: Technical Support for the 

Proposed Rulemaking – Regulations to Reduce Emissions from Diesel Engines on 

Commercial Harbor Craft Operated Within California Waters and 24 Nautical Miles of 

the California Baseline.” 

 

6 The California term “off-road” and the federal term “nonroad” refer to the same sources and are used 

interchangeably. 

7

 See Engine Manufacturers Association v. U.S. EPA (D.C. Cir. 1996) 88 F.3d 1075, 1089-1091. 

8

 CAA section 209(e)(2)(A). Other states may subsequently opt into the California program, but their 

regulations must be identical to California’s requirements. CAA section 209(e)(2)(B). 
13

Copies of the Staff Report with the full text of the proposed regulatory language and the 

Technical Support Document may be accessed on the ARB’s web site listed below, or 

may be obtained from the Public Information Office, Air Resources Board, 1001 I Street, 

Visitors and Environmental Services Center, 1st Floor, Sacramento, CA 95814, 

(916) 322-2990 at least 45 days prior to the scheduled hearing on October 25, 2007. 

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

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

accessed on the ARB’s web site listed below. 

Inquiries concerning the substance of the proposed regulation may be directed to the 

designated agency contact persons, Cherie Rainforth, Manager of the Control 

Strategies Section, at (916) 327-7213, or by email at crainfor@arb.ca.gov, or 

Todd Sterling, Air Pollution Specialist, at (916) 445-1034, or by email at 

tsterlin@arb.ca.gov. 

Further, the agency representative and designated back-up contact persons to whom 

nonsubstantive inquiries concerning the proposed administrative action may be directed 

are Alexa Malik, Manager, Board Administration & Regulatory Coordination Unit, 

(916) 322-4011, and Amy Whiting, Regulations Coordinator, (916) 322-6533. The 

Board has compiled a record for this rulemaking action, which includes all the 

information upon which the proposal is based. This material is available for inspection 

upon request to the contact persons. 

This notice, the Staff Report, Technical Support Document, and all subsequent 

regulatory documents, including the FSOR, when completed, are also available on the 

ARB Internet site for this rulemaking at www.arb.ca.gov/regact/2007/chc07/chc07.htm

COSTS TO PUBLIC AGENCIES AND TO BUSINESSES AND PERSONS AFFECTED

Costs to Businesses and Private Individuals 

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

necessarily incurred by public agencies and private persons and businesses in 

reasonable compliance with the proposed regulations are presented below. 

The total cost of regulation compliance is expected to be about $140 million in 2006 

expenditure-equivalent dollars (2006 dollars). This represents the total cost of the 

regulation if all money required to comply with the proposed regulation were spent in 

2006. The total regulation cost is based on costs associated with early retirement or 

replacement of engines, the addition of diesel exhaust control systems (DECS) to new 

ferry propulsion engines, and reporting and recordkeeping. The costs associated with 

engine early retirement include the residual value of the replaced engine; any recent 

major engine maintenance costs, also referred to as engine rebuild; and the time-valueof-money to pay for an early engine repower. The costs associated with the addition of 

DECS to new ferry propulsion engines include the purchase and installation of the 
14

control systems and costs for recurring control technology maintenance. These costs 

would be spread over the years 2009 to 2022. On an annual basis, the cost would vary 

between $2.5 million and $26 million per year, averaging about $10 million per year. 

Approximately 70 percent of the compliance costs will be incurred by the ferry and 

excursion fleets and 30 percent by the tugboat and tow boat fleets. 

No costs were included for additional fuel use for the new ferry vessels with added 

control technology. This was balanced by the fact that no fuel savings were included for 

replacing old engines with more efficient new Tier 2 or Tier 3 engines. For vessels that 

are repowered (i.e., the engines are replaced with a new engine), no costs were 

included for vessel out-of-service time to install the engine due to the difficulty in 

assigning a value to this cost (i.e., the down time and installation costs are highly 

variable and case-dependent). 

New equipment and reporting and recordkeeping costs for owners or operators of 

commercial harbor craft, which would include purchasing and installing new engines in 

existing vessels, installing DECS in new ferries, and reporting and recordkeeping, are 

approximately $460 million. This cost would be spread over the years 2009 to 2022, 

with an average annual cost of about $33 million. These costs are the estimated out-ofpocket costs to vessel owners and operators, which include costs that are normal and 

customary costs of doing business with or without the proposed regulations in place. 

Specifically, a portion of these costs – the new equipment costs for purchasing and 

installing a new engine – are costs that the vessel owner would eventually pay, but the 

proposed regulation requires this service to be performed earlier than normal. In 

contrast, the total regulation cost of $140 million (2006 dollars) includes those costs 

related to performing this service early, but not the normal and customary costs of doing 

business. 

Staff estimates the cost-effectiveness of the proposed regulation in terms of dollars per 

pound of PM emission reduction to be $29 per pound if all the total annualized cost is 

attributed solely to the PM reduction. Since the proposal would also result in NOx 

emission reductions, staff also evaluated cost-effectiveness by attributing half the total 

annualized cost to the PM emission reductions and half to the NOx emission reductions. 

The resulting cost-effectiveness values using the latter method are $14 per pound of 

PM and $1,800 per ton of NOx. These values are based on the cost of regulatory 

compliance. 

California businesses are affected by the proposed annual cost of the regulation to the 

extent that the implementation of the proposed regulation reduces their profitability. 

Overall, most affected businesses will be able to absorb the costs of the proposed 

regulation with no significant adverse impacts on their profitability. This finding is based 

on the staff’s analysis of the estimated change in “return on owner’s equity” (ROE). Dun 

and Bradstreet financial data were used for the analysis, when available, to determine 

the change in ROE for typical businesses from each industry category. The staff found 

that the overall change in ROE ranges average from negligible to a four percent decline. 

The decline in ROE was highest for ferries and excursion fleets and lowest for tugboat 
15

fleets. This range in ROE reduction is not considered to represent a significant impact 

on profitability. Because the proposed regulation would not alter significantly the 

profitability of most businesses, we do not expect a noticeable change in employment, 

business creation, elimination, or expansion, and business competitiveness in California 

for these industries. The change in ROE is expected to be larger for a small business. 

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

action will not have a significant statewide adverse economic impact directly affecting 

businesses, including the ability of California businesses to compete with businesses in 

other states, or on representative private persons based on the estimated change in 

ROE. A number of businesses are integrally linked to California ports. However, we do 

not believe that the added costs of the proposed regulations are high enough for harbor 

craft operators to consider alternate ports outside of California. The ARB staff has 

considered proposed alternatives that would lessen any adverse economic impact on 

businesses and invites you to submit proposals. Submissions may include the following 

approaches for consideration: 

(i) Establishment of differing compliance or reporting requirements or timetables 

that take into account the resources available to businesses. 

(ii) Consolidation or simplification of compliance and reporting requirements for 

businesses. 

(iii) Use of performance standards rather than prescriptive standards. 

(iv) Exemption or partial exemption from the regulatory requirements for 

businesses. 

Alternatives that staff considered are described in more detail in the Staff Report. 

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

determined that the proposed regulatory action may affect the creation or elimination of 

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

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

currently doing business within the State of California. Some businesses that provide 

vessel repower services could expand due to the volume of business created by the 

regulatory requirements. 

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

proposed regulatory action would affect small businesses. 

In accordance with Government Code sections 11346.3(c) and 11346.5(a)(11), the 

Executive Officer has found that the reporting requirements of the regulations which 

apply to businesses are necessary for the health, safety, and welfare of the people of 

the State of California. 

In accordance with Health and Safety Code sections 43013(a) and (b), the Executive 

Officer has determined that the standards and other requirements in the proposed 
16

regulations are necessary, cost-effective, and technologically feasible for diesel engines 

on commercial harbor craft operated within Regulated California Waters. 

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

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

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

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

burdensome to affected private persons than the proposed action. 

Costs to Local and State Government Agencies 

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

Officer has determined that the proposed regulatory action would create costs to some 

State and local agencies. Most State and local agencies will incur only reporting costs. 

Staff has estimated these one-time reporting costs to range from about $100 to $3,000 

depending on the number of vessels operated by the agency. Agencies operating 

ferries, excursion vessels, tugboats, or towboats with diesel engines would also incur 

engine replacement costs ranging from a total compliance cost of $100,000 to 

$10 million. These agencies include the City of Vallejo, which operates the Baylink 

Ferry; the Golden Gate Bridge and Highway Transportation District; the Port of Los 

Angeles; and the California Department of Transportation. 

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

be found in the Staff Report. 

SUBMITTAL OF COMMENTS

Interested members of the public may also present comments orally or in writing at the 

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

written comments submissions not physically submitted at the meeting must be 

received no later than 12:00 noon, Pacific Standard Time, October 24, 2007, and 

addressed to the following: 

Postal mail: Clerk of the Board, Air Resources Board 

1001 I Street, Sacramento, California 95814 

Electronic submittal : http://www.arb.ca.gov/lispub/comm/bclist.php 

Facsimile submittal: (916) 322-3928 

Please note that under the California Public Records Act (Government Code 

section 6250 et seq.), your written and oral comments, attachments, and associated 

contact information (e.g., your address, phone, email, etc.) become part of the public 

record and can be released to the public upon request. Additionally, this information 

may become available via Google, Yahoo, and other search engines. 
17

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

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

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

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

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

STATUTORY AUTHORITY AND REFERENCES

This regulatory action is proposed under the authority granted to ARB in Health and 

Safety Code sections 39600, 39601, 39650, 39658, 39659, 39666, 41511, 43013, and 

43018. This action is proposed to implement, interpret, or make specific Health and 

Safety Code sections 39000, 39001, 39515, 39516, 39650, 39658, 39659, 39666, 

41510, 41511, 43013, 43016, and 43018; and Western Oil and Gas Ass’n v. Orange 

County Air Pollution Control District, 14 Cal.3rd 411, 121 Cal.Rptr. 249 (1975). 

HEARING PROCEDURES

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

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

the Government Code. 

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

proposed, or with non-substantial or grammatical modifications. The Board may also 

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

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

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

proposed regulatory action. In the event that such modifications are made, the full 

regulatory text, with the modifications clearly indicated, will be made available to the 

public for written comment at least 15 days before it is adopted. 

The public may request a copy of the modified regulatory text from the ARB’s Public 

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

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

 CALIFORNIA AIR RESOURCES BOARD 

 /s/ 

 Tom Cackette 

 Acting Executive Officer 

Date: August 28, 2007 

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

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

www.arb.ca.gov.