28650 Federal Register / Vol. 79, No. 96 / Monday, May 19, 2014 / Proposed Rules 

1The 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. 

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 Doc. 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 EPA– 

R09–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(l) 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 PM2.5 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,’’ EPA– 

240–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 

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2See email dated March 31, 2014, from Stephanie 

Johnson, USDA Office of General Counsel, to Kerry 

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

April 23, 2014, from Joshua Schnell, USDA Office 

of General Counsel, to Jeanhee Hong, USEPA 

Region 9, Office of Regional Counsel, RE: 

‘‘Summaries of 1619 and EQIP’’. 

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 PM2.5 SIP for 1997 PM2.5

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.gov/ 

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.gov/ 

bonds/gmbond/docs/gm_

accountability_with_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. 3839aa– 

3839aa–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 

through Incentive Programs.

06/20/13 06/26/13 

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. 

Rule 9610 establishes requirements 

and procedures for the District to 

quantify, for air quality planning 

purposes, emission reductions achieved 

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3Rule 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. 

4Rule 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. 

5Accordingly, Rule 9610 is not intended to 

implement the reasonably available control 

technology (RACT) standard or any other control 

standard under the Act. 

6A ‘‘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. 

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 

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 

permanent) 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. 

III. EPA’s Evaluation of the State’s 

Submittal 

A. SIP Procedural Requirements 

Sections 110(a)(2) and 110(l) 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. 

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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. 

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 

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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8See n. 4, supra. 

9See n. 7, supra. 

10To 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. 

‘‘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 

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 

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11See n. 4, supra. 

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.11 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 

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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12CARB’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/

mop9610_idx.htm. 

13Section 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.’’ 

14CARB’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. 

15Our TSD provides a detailed evaluation of the 

2013 Annual Demonstration Report and our 

recommendations for improvement. 

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 

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 

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16The 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. 

17The general Freedom of Information Act 

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

EQIP information. 

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 

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 

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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28658 Federal Register / Vol. 79, No. 96 / Monday, May 19, 2014 / Proposed Rules 

18EPA 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. 

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(l) and 193 of the Act 

Section 110(l) 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(l) 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: 

• 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); 

• 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] 

BILLING CODE 6560–50–P 

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