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Federal Register/Vol. 80, No. 68/Thursday, April 9, 2015/Rules and Regulations

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[EPA-R06-OAR-2011-0938; FRL-9925-86-

Region 6]

Approval and Promulgation of

Implementation Plans; New Mexico;

Transportation Conformity and

Conformity of General Federal Actions

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Withdrawal of direct final rule.

SUMMARY: On February 10, 2015, the

Environmental Protection Agency (EPA)

published a direct final rule approving

revisions to the New Mexico State

Implementation Plan (SIP). These

revisions amend the State transportation

conformity provisions and remove the

State general conformity provisions

from the SIP, as allowed by the 2005

amendments to the Clean Air Act

(CAA). The direct final rule was

published without prior proposal

because EPA anticipated no adverse

comments. EPA stated in the direct final

rule that if EPA received relevant,

adverse comments by March 12, 2015,

EPA would publish a timely withdrawal

in the Federal Register. EPA received a

relevant, adverse comment on March 10,

2015, and accordingly is withdrawing

the direct final rule, and in a separate

subsequent final rulemaking will

address the comment received. The

withdrawal is being taken pursuant to

section 110 of the CAA.

DATES: The direct final rule published

on February 10, 2015 (80 FR 7341), is

withdrawn effective April 8, 2015.

FOR FURTHER INFORMATION CONTACT: Mr.

Jeffrey Riley (6PD-L), Air Planning

Section, telephone (214) 665-8542, fax

(214) 665-6762, email:

riley.jeffrey@epa.gov.

SUPPLEMENTARY INFORMATION: On

February 10, 2015, EPA published a

direct final rule approving revisions to

the New Mexico SIP. These revisions

amend the State transportation

conformity provisions and remove the

State general conformity provisions

from the SIP, as allowed by the 2005

amendments to the CAA. The direct

final rule was published without prior

proposal because EPA anticipated no

adverse comments. EPA stated in the

direct final rule that if relevant, adverse

comments were received by March 12,

2015, EPA would publish a timely

withdrawal in the Federal Register. EPA

received a comment on March 10, 2015

from the Sierra Club stating in relevant

part, that an Acting Regional

Administrator cannot sign approvals,

disapprovals, or any combination of

approvals or disapproval, in whole or in

part, due to the fact that the authority

to act on agency actions on state

implementation plans is delegated only

to, and therefore can only be signed by,

the Regional Administrator. EPA

considers this a relevant, adverse

comment and accordingly is

withdrawing the direct final rule. In a

separate subsequent final rulemaking

EPA will address the comment received.

The withdrawal is being taken pursuant

to section 110 of the CAA.

List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Carbon Monoxide,

Incorporation by reference,

Intergovernmental relations, Lead,

Nitrogen dioxides, Ozone, Particulate

matter, Reporting and recordkeeping

requirements, Sulfur oxides, Volatile

organic compounds.

Dated: March 31, 2015.

Ron Curry,

Regional Administrator, Region 6.

Accordingly, the amendments to 40

CFR 52.1620 published in the Federal

Register on February 10, 2015 (80 FR

7341), which were to become effective

on April 13, 2015, are withdrawn.

[FR Doe. 2015-07995 Filed 4-8-15; 8:45 am]

BILLING CODE 6560-50-P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[EPA-R09-OAR-2013-0754; FRL-9924-69-

Region 9]

Revisions 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: Final rule.

SUMMARY: The Environmental Protection

Agency (EPA) is finalizing a limited

approval and limited disapproval of a

revision to the San Joaquin Valley

Unified Air Pollution Control District

(SJVUAPCD) 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. Under

authority of the Clean Air Act (CAA or

the Act), this action simultaneously

approves the local rule and directs

California to correct rule deficiencies.

DATES: This rule will be effective on

May 11, 2015.

ADDRESSES: EPA has established docket

number EPA-R09-OAR-2013-0754 for

this action. Generally, documents in the

docket for this action are available

electronically at http://

www.regulations.gov or in hard copy at

EPA Region IX, 75 Hawthorne Street,

San Francisco, California 94105-3901.

While all documents in the docket are

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

some information may be publicly

available only at the hard copy location

(e.g., copyrighted material, large maps,

multi-volume reports), and some may

not be available in either location (e.g.,

confidential business information

(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 P6rez, EPA Region IX, (415) 972-

3248, perez.idalia@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Proposed Action

II. Public Comments and EPA Responses

III. Final Action

IV. Incorporation by Reference

V. Statutory and Executive Order Reviews

I. Proposed Action

On May 19, 2014 (79 FR 28650), EPA

proposed to fully approve the following

rule, which the California Air Resources

Board (CARB) submitted for

incorporation into the California SIP.

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Local agency Rule # Rule title Adopted Submitted

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

erated through Incentive Programs.

We proposed to fully approve Rule

9610 based on a proposed conclusion

that the rule satisfied the applicable

CAA requirements. We noted, however,

that section 6.2 of the rule contained an

incorrect statutory reference and

inaccurately described the statutory

obligations of the U.S. Department of

Agriculture's Natural Resources

Conservation Service (NRCS) with

respect to disclosure of information

concerning implementation of the

Environmental Quality Incentives

Program (EQIP). See 79 FR 28650 at

28657 (May 19, 2014). We strongly

recommended that the District revise

section 6.2 of the rule at its earliest

convenience to remove the incorrect

reference and to provide an accurate

description of NRCS's statutory

obligations with respect to disclosure of

information related to EQIP. See id.

Based on additional evaluation of this

rule and in response to public

comments, we continue to believe that

Rule 9610 largely satisfies the

applicable CAA requirements but find

that the deficiencies in section 6.2 of the

rule, as described in our proposed rule,

necessitate a limited disapproval. We

provide our rationale for this limited

disapproval in our responses to

comments below.

II. Public Comments and EPA

Responses

EPA's proposed rule provided a 30-

day public comment period. During this

period, we received comments from the

following entities:

1. Paul Cort, Earthjustice; letter dated

June 18, 2014.

2. Seyed Sadredin, SJVUAPCD; letter

dated June 17, 2014.

We summarize these comments and

provide our responses below.

Comment 1: Earthjustice states that

EPA should withdraw its proposed

approval of Rule 9610 because approval

of the rule will "create legal confusion

over the requirements that must be met

for approval of voluntary incentive

measures into the State Implementation

Plan ('SIP')." Earthjustice further claims

that the rule adds no value to the SIP

and that EPA's proposal does not fully

identify all of the "legal defects" in the

rule. "At best," according to

Earthjustice, "EPA's approval of Rule

9610 does nothing, because compliance

with Rule 9610 will not be enough to

support approval of future incentive

programs into the SIP," and at worst "it

will create legal confusion over the

governing criteria" and waste resources

by encouraging the development of

faulty programs.

Response 1: We disagree with these

comments. We believe Rule 9610 is

consistent with the flexibility accorded

states in incorporating discretionary,

innovative and non-traditional emission

reduction programs in their SIPs, under

CAA sections 110(a)(2)(A) and 172(c)(6).

The CAA establishes a system of

cooperative federalism in which EPA

provides national leadership, sets

standards for environmental protection

and conducts oversight of state

implementation, while states play a

larger role in implementation of these

standards including developing SIPs

and adopting emission reduction

measures. See CAA sections 101 and

102. Under section 110 of the Act, states

have broad discretion to choose the mix

of emission limitations and other

control measures, means, or techniques

(including economic incentive

programs) that they will implement to

provide for attainment of the national

ambient air quality standards (NAAQS).

See Union Electric Co. v. EPA, 427 U.S.

246 (1976) ("So long as the national

standards are met, the State may select

whatever mix of control devices it

desires.").

As we explained in our proposal, Rule

9610 contains key provisions 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. See 79

FR 28650 at 28652. We believe the

criteria and procedures in Rule 9610

establish a useful starting point for the

District's development of such programs

and for public participation in the

District's development of air quality

plans that rely on such programs.' Upon

1 EPA has promulgated regulations for statutory

ELPs required under section 182(g) of the Act. See

40 CFR part 51, subpart U. For discretionary ELPs,

EPA has issued guidance entitled "Improving Air

Quality with Economic Incentive Programs," U.S.

EPA, Office of Air and Radiation, January 2001

(EPA-45/R-01-001) ("2001 EIP Guidance").

Because the 2001 EIP Guidance is non-binding and

does not represent final agency action on

incorporation of Rule 9610 into the SIP,

the requirements and procedures in the

rule become federally enforceable

against the District, enabling EPA and

citizens to hold the District accountable

for compliance with these requirements.

As we also stated in the proposed

rule, nothing in Rule 9610 supplants the

applicable requirements of the CAA,

and EPA will review each SIP submittal

developed pursuant to Rule 9610 and

EPA guidance on a case-by-case basis,

following notice-and-comment

rulemaking, to determine whether the

applicable requirements of the Act are

met. See 79 FR 28650 at 28658. EPA

specifically identified a number of

shortcomings in Rule 9610 to ensure

that the State and District are aware of

the rule's limitations. See, e.g., 79 FR

28650 at 28656 (noting that Rule 9610

does not specifically address CAA

requirements concerning funding,

personnel, and implementation

authority) and 28657 (discussing

incorrect statutory reference in section

6.2 of Rule 9610). To the extent our

proposal did not make clear that Rule

9610 in no way substitutes for the

requirements of the CAA, we hereby

clarify that the requirements of the CAA

continue to apply to each SIP submitted

by the State and District,

notwithstanding any provision in Rule

9610, and that our action on this rule

does not constitute an endorsement of

its content as an adequate

representation of the requirements of

the Act. Additionally, we are finalizing

a limited approval and limited

disapproval of Rule 9610 because of the

deficiencies in section 6.2 concerning

disclosure of records related to the

NRCS's implementation of the EQIP

program. We explain our reasons for

disapproving the rule on this basis in

Response 3.h below.

Given that the District's stated

purpose in adopting Rule 9610 was to

establish an administrative mechanism

for crediting emission reductions

achieved through incentive programs

toward SIP requirements, EPA

discussed in the proposed rule "the

extent to which the requirements and

procedures contained in the rule

discretionary EIPs, EPA uses the 2001 EIP Guidance as an initial screen to evaluate potential

approvability issues. Final action on any

discretionary EIP occurs when EPA acts on it after

its submission as a SIP revision.

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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." 79 FR 28650 at 28653. In the

Technical Support Document (TSD),

EPA also provided evaluations of the

specific incentive program guidelines

listed in Section 3.1 of the rule, 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."

79 FR 28650 at 28654; see also U.S. EPA

Region 9 Air Division, "Technical

Support Document for EPA's Notice of

Proposed Rulemaking for the California

State Implementation Plan, San Joaquin

Valley Unified Air Pollution Control

District's Rule 9610, State

Implementation Plan Credit for

Emission Reductions Generated through

Incentive Programs," May 2014

(hereafter "Proposal TSD"). We

provided these evaluations to explain

the minimum statutory requirements

that apply to SIPs that rely on economic

incentive programs; to inform the

District of both provisions in Rule 9610

that adequately represent these

requirements and shortcomings in the

rule that should be corrected to avoid

confusion; and to invite public

comment on EPA's understanding of the

way in which the District would

implement Rule 9610 going forward.

See, e.g., 79 FR 28650 at 28653

(discussing EPA's recommended

programmatic "integrity elements" for

innovative measures), 28654 (discussing

EPA's recommended SIP components

for innovative measures); and 28657

(recommending rule corrections to

avoid confusion concerning NRCS's

statutory obligations and requesting

public comment on mechanisms for

tracking the District's compliance with

SIP commitments). EPA's limited

approval and limited disapproval of

Rule 9610 into the SIP does not, in any

way, constitute endorsement of the rule

as a substitute for CAA requirements.

Section 110 of the CAA requires each

state to submit to EPA for approval a "plan which provides for

implementation, maintenance, and

enforcement" of each primary and

secondary NAAQS, and EPA is required

to approve a SIP submittal that relates

to these purposes and satisfies the

applicable federal requirements. See

CAA section 110(k)(3), 42 U.S.C.

7410(k)(3) and 40 CFR 52.02(a). Rule

9610 establishes requirements and

procedures for the District's

quantification of reductions in

emissions of NAAQS pollutants (e.g.,

nitrogen oxides (NOx) and fine

particulate matter (PM2.

5)) achieved

through incentive programs and,

therefore, relates to the requirements of

CAA section 110. See generally 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)," June 20, 2013.

With the exception of the deficiencies in

section 6.2 of the rule, Rule 9610

satisfies the requirements concerning

enforceability in section 110(a)(2)(A)

and SIP revisions in section 110(1) of the

Act. See 79 FR 28650 at 28652

(summarizing rule provisions

enforceable against the District) and

28658 (explaining that approval of Rule

9610 would not interfere with

applicable requirements concerning

attainment and other CAA

requirements) and Proposal TSD at 3-8;

see also Response 3.h (discussing

deficiencies in section 6.2 of Rule 9610).

Additionally, EPA has reviewed Rule

9610 for conflicts with CAA

requirements and identified one

provision (section 6.2 of the rule) that

clearly conflicts with the requirements

of the Act. Based on these evaluations,

we conclude that Rule 9610 satisfies the

statutory requirements for approval into

the SIP, except for the disclosure

provision in section 6.2, which we are

disapproving. See Response 3.h.

We expect the District to address the

applicable requirements of the CAA in

each individual SIP submittal that relies

on incentive programs, and our

recommendations in both the proposal

and today's final rule are intended to

provide the District with general

guidance on how these requirements, as

interpreted in EPA guidance, apply to

future SIP submittals developed

pursuant to Rule 9610 and the

requirements of the Act. To the extent

our action on Rule 9610 and the related

public process provide a forum for EPA

and the public to comment on the

statutory requirements that the District

must address in future SIP submittals

that rely on incentive programs, we

view this as an important step toward

clarifying the applicable CAA

requirements and ensuring transparency

in SIP actions going forward. In any

case, as EPA stated in the proposed rule,

EPA will review each SIP submittal

developed pursuant to Rule 9610

(including the necessary evaluation of

the applicable incentive program

guidelines) on a case-by-case basis,

following notice-and-comment

rulemaking, to determine whether the

applicable requirements of the Act are

met. See 79 FR 28650 at 28654, 28658.

Nothing in today's action prohibits EPA

from disapproving a SIP relying on

incentive-based emission reductions

that fails to satisfy the requirements of

the CAA.

Comment 2: Earthjustice states that

the CAA requires emission reductions

resulting from incentive programs to be

"quantifiable, surplus, enforceable and

permanent" and asserts that the

District's new definitions for these terms

in Rule 9610 are an attempt to redefine

these four integrity elements for "SIP

creditability." Quoting EPA's statement

that "[n]othing in Rule 9610 supplants

the applicable requirements of the

CAA," Earthjustice states that

"compliance with the SIP -creditability

definitions in Rule 9610 does not mean

that a given incentive program is, in

fact, SIP creditable." Earthjustice claims

that the potential confusion and conflict

caused by EPA's action beg the question

why EPA is approving Rule 9610 and

claims that the purpose of the rule and

EPA's action are not evident in the

proposal. In support of these claims,

Earthjustice cites a statement in the

Proposal TSD in which EPA disagrees

with the District's claims that Rule 9610

identifies "pre-approved incentive

program guidelines" for claiming SIP

credit and that certain Carl Moyer

programs provide SIP creditable

emission reductions. Earthjustice

further asserts that the District's

definitions in Rule 9610 do not meet all

of EPA's criteria and that EPA's analysis

of the District's definitions "notes some

of these deficiencies but ignores others,"

leaving readers to "puzzle through" the

reason for EPA's approval of the rule.

Response 2: We agree that the CAA

requires emission reductions resulting

from incentive programs to be

"quantifiable, surplus, enforceable and

permanent" in order to qualify for

emission reduction credit in a SIP. We

disagree, however, with the

commenter's claim that the definitions

of the terms "quantifiable," "surplus," "enforceable" and "permanent" in Rule

9610 represent an attempt by the

District to redefine the CAA's

requirements for SIP creditability. As

we stated in our proposed action, the

SJVUAPCD's stated intent in adopting

Rule 9610 was to establish a regulatory

framework to address the CAA's

requirements for crediting incentivebased emission reductions in SIPs. See

79 FR 28650 at 28651. Upon

incorporation of Rule 9610 into the SIP,

its requirements will become federally

enforceable under the CAA and thereby

supplement, but not supplant, the

requirements of the Act.

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As we explained in the proposed rule

and further in the Proposal TSD, Rule

9610 does not represent all of the CAA

requirements applicable to SIPs that rely

on incentive programs for emission

reduction credit (see, e.g., 79 FR 28650

at 28656, 28657 and Proposal TSD at

50-52), and we agree with Earthjustice

that compliance with the SIPcreditability definitions in Rule 9610

does not necessarily mean that a given

incentive program is, in fact, SIP

creditable under the CAA. Additionally,

as Earthjustice notes, EPA's Proposal

TSD identifies several statements in the

District's 2013 Annual Demonstration

Report that improperly characterize the

effect of compliance with the rule (e.g.,

the District's statement that "Section 3.1

of Rule 9610 identifies pre-approved

incentive program guidelines"). See

Proposal TSD at 53. As we explained in

both the proposed rule and the Proposal

TSD, EPA is taking no action on the

incentive program guidelines as the

guidelines themselves are not part of

Rule 9610, and the State has not

separately submitted any of these

guidelines for approval into the SIP. See

79 FR 28650 at 28653, n. 7 and 28654.

It follows that EPA cannot, in today's

action, approve (or "pre-approve") any

of these guidelines for use in

quantifying SIP emission reduction

credit.2

We continue to believe, however, that

the definitions of the terms

"quantifiable," "surplus," "enforceable"

and "permanent" in Rule 9610 generally

represent the four fundamental

"integrity elements" defined in EPA

guidance for discretionary EIPs and

other innovative emission reduction

programs, provided the District

interprets these terms consistent with

our interpretations in this rulemaking,

which are the bases for our limited

approval of the rule. 3 If the District

implements Rule 9610 (including its

definitions) in a manner that is

consistent with EPA's interpretation and

the recommendations provided in our

proposed and final rulemaking

documents, we expect that future SIPs

developed in accordance with Rule

9610 would adequately address EPA's

2 We understand that CARB and the District do

not intend to submit any incentive program

guidelines to EPA for approval into the SIP, given

that SIP-approval of an incentive program guideline

per se is not necessary to demonstrate that the

emission reductions associated with that program

satisfy CAA requirements for SIP emission

reduction credit.

3 Should the District's implementation of Rule

9610 going forward reveal a conflict between a

provision of the rule and the requirements of the

CAA, EPA may exercise its authorities under CAA

sections 110(k)(5) or 110(k)(6) to issue a SIP call or

to revise this action as appropriate.

policy recommendations with respect to

these four integrity elements. 4

Conversely, to the extent the District

implements Rule 9610 in a manner that

departs significantly from EPA's

understanding of the rule and related

recommendations, we expect such

future SIPs would not adequately

address the requirements of the Act.

Although we make no determination

today concerning SIP emission

reduction credit for any particular

incentive program, we believe that our

interpretations of Rule 9610, our related

recommendations for corrections or

clarifications to the rule, and our

preliminary reviews of the incentive

program guidelines referenced in the

rule (as discussed in the Proposal TSD)

provide general guidance to the State

and District that will help clarify the

applicable CAA requirements for future

SIPs, compared to EPA inaction on Rule

9610.

Comment 3: Earthjustice claims that

Rule 9610 does not ensure "surplus"

and "enforceable" emission reductions

and disagrees with several aspects of

EPA's evaluation of the rule's

definitions of these terms.

Response 3: EPA is finalizing a

limited approval and limited

disapproval of Rule 9610 based on our

conclusion that the rule relates to the

requirements of CAA section 110 and,

with one exception, satisfies the

statutory criteria for approval into the

SIP. See Response 1 and Response 2,

above; see also Response 3.h (discussing

deficiencies in section 6.2 of Rule 9610).

Nonetheless, the commenter raises a

number of important concerns regarding

the adequacy of Rule 9610 as a legal

framework for quantifying SIP emission

reduction credit for incentive programs,

and in an effort both to respond to these

comments and to provide the District

with specific guidance on the

requirements of the Act that each SIP

must satisfy, we respond below (in

Response 3.a through Response 3.j) to

each of these concerns.

Comment 3.a: Earthjustice states that

according to EPA, "emission reductions

are surplus only if they are not

otherwise required by or assumed in a

SIP-related program," any other adopted

State air quality program, a consent

decree, or a federal rule designed to

reduce emissions of a criteria pollutant

or its precursors, and that measures are

only surplus for "the remaining useful

life of the vehicle, engine, or equipment

being replaced." Rule 9610, on the other

4 Nothing in the comments submitted by the

District on EPA's proposed rule (see Comment 6)

indicates that the District disagrees with EPA's

interpretation of Rule 9610, as provided in the

proposed rule and Proposal TSD.

hand, defines "surplus" to mean that

the emission reductions 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" (citing Rule 9610,

section 2.27). Earthjustice claims that

this definition in Rule 9610 is not

consistent with EPA's definition, for

example because "the District's

definition leaves out various other

assumptions built into SIP-related

programs, such as growth factors in

attainment and other plans, turnover

assumptions in conformity

demonstrations, etc." and does not

incorporate the "useful life" concept

into its definition. Earthjustice claims

that EPA's proposal gives only "short

shrift" to these differences and provides

an unsupported claim that the District's

new definition will "treat as 'surplus'

only those emission reductions" that

meet EPA's definition of the term.

Response 3.a: We disagree with the

commenter's claims about the definition

of "surplus" in Rule 9610 and believe

that this definition is generally

consistent with EPA's guidance on "additionality" of emission reductions,

provided the District interprets the term

consistent with EPA's interpretation, as

explained further below.

Section 2.27 states that "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." First, we understand

that "any federal, state, or local

regulation, or other legal mandate"

would include: (1) Any federal rule

designed to reduce emissions of a

criteria pollutant or its precursors (e.g.,

a new source performance standard or

federal mobile source requirements); (2)

any State or local regulation concerning

air pollutant emissions; and (3) any

obligation in a consent decree,

settlement agreement, or other legal

mandate. Read accordingly, the

definition would prohibit emission

reductions required by any of these

types of legal obligations from being

treated as "surplus." Second, we

understand that the phrase "baseline

emission inventories underlying a SIP

attainment demonstration" means the

projection year emission inventories

that provide the basis for the

attainment-related demonstrations in a

SIP. Read accordingly, emission

reductions "in excess of the baseline

emission inventories underlying a SIP

attainment demonstration" would mean

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emission reductions that go beyond

those already assumed in a SIP-related

program, taking into account growth

factors, assumptions concerning fleet

turnover, and other relevant planning

assumptions-that is, any emission

reductions assumed in a SIP-related

program (e.g., an attainment or

reasonable further progress plan or a

transportation conformity

demonstration) would not be treated as "surplus."

Read in its entirety, section 2.27

provides that only those emission

reductions that are not otherwise

required by or assumed in a SIP-related

program, any other adopted State air

quality program, a consent decree, or a

federal rule designed to reduce criteria

pollutant or precursor emissions will

qualify for treatment as "surplus"

emission reductions, consistent with

EPA's definition of the term in

longstanding guidance. See, e.g.,

"Guidance on Incorporating Voluntary

Mobile Source Emission Reduction

Programs in State Implementation Plans

(SIPs)," EPA, Office of Air and

Radiation, October 24, 1997 (hereafter

"1997 VMEP") at 6; "Improving Air

Quality with Economic Incentive

Programs," EPA, Office of Air and

Radiation, January 2001 (hereafter

"2001 EIP Guidance") at 35;

"Incorporating Emerging and Voluntary

Measures in a State Implementation

Plan," EPA, Office of Air and Radiation,

September 2004 (hereafter "2004

Emerging and Voluntary Measures

Guidance") at 3; and "Diesel Retrofits:

Quantifying and Using Their Emission

Benefits in SIPs and Conformity," EPA,

Office of Transportation and Air

Quality, February 2014 (hereafter "2014

Diesel Retrofits Guidance") at 27.

One component of EPA's various

policy recommendations that the

definition of "surplus" in section 2.27

does not explicitly address is the

recommendation concerning the

remaining useful life of the vehicle,

engine, or equipment being replaced.

See 2014 Diesel Retrofits Guidance at 30

(recommending that states "consider

factors that may affect emission

reductions and their surplus status

overtime, including changing patterns of

operations or use, vehicle deterioration

factors, equipment useful life, and

government emission standards"). Rule

9610 does, however, contain a

definition of "project life" in section

2.20 that addresses this

recommendation. Specifically, section

2.20 defines "project life" to mean "the

period of time over which an incentive

program project achieves SIP-creditable

emission reductions" and states that

"[p]roject life shall not exceed the

useful life of equipment, vehicles, or

practices funded through incentive

programs, and may vary across

incentive programs and project types."

As we explained in the Proposal TSD,

in future SIP submittals developed

pursuant to Rule 9610, we expect the

State and/or District will demonstrate:

(1) How the "project life" for each

funded project relied on for SIP credit

takes into account the remaining useful

life of the vehicle, engine, or equipment

being replaced, and (2) how the State

and/or District ensure that the emission

reductions relied on for SIP credit are in

excess of the reductions attributed to

normal fleet turnover and other

assumptions built into future year

emissions inventories (i.e., that the same

emission reductions are not "double

counted"). See Proposal TSD at 18 and

48.

Comment 3.b: Earthjustice asserts that

EPA's analysis of the District's

definition of "enforceable" is arbitrary.

Quoting from section 110(a)(2)(A) of the

CAA and EPA's interpretative

statements in "State Implementation

Plans; General Preamble for the

Implementation of Title I of the Clean

Air Act Amendments of 1990" (57 FR

13498, April 16, 1992) (hereafter

"General Preamble"), Earthjustice states

that even those "nontraditional

techniques" for reducing pollution

authorized by section 110(a)(2)(A) must

be "enforceable." Additionally,

Earthjustice quotes from an EPA docket

memorandum for a rulemaking entitled

"State Implementation Plans: Response

to Petition for Rulemaking; Findings of

Substantial Inadequacy; and SIP Calls to

Amend Provisions Applying to Excess

Emissions During Periods of Startup,

Shutdown, and Malfunction," February

4, 2013 (hereafter "2013 SSM Memo"),

in which EPA highlights the importance

of the EPA and citizen enforcement

authorities established by Congress to

ensure compliance with CAA

requirements and states that SIP

provisions that function to bar effective

enforcement by the EPA or citizens for

violations would be inconsistent with

the regulatory scheme established in

title I of the Act. Earthjustice quotes

from this memorandum to support its

assertion that according to EPA policy,

SIPs must be built upon emission

reductions that are "enforceable,"

meaning that "EPA and citizens must

have the ability to bring enforcement

actions to assure compliance." For

example, Earthjustice states, EPA will

not approve control measures that

include "director discretion" to define

or redefine compliance requirements

and also will "not allow SIPs to include

state affirmative defenses that would

foreclose EPA or other enforcement."

Earthjustice further asserts that "[a] state

cannot claim SIP credit from control

measures that shield pollution sources

from independent enforcement actions."

Earthjustice also references the 2001 EIP

Guidance in support of these arguments.

Response 3.b: We agree that under the

CAA, as interpreted in EPA policy, all

measures approved into a SIP, including

those "nontraditional techniques" for

reducing pollution identified in section

110(a)(2)(A) of the Act, must be

"enforceable" to qualify for SIP

emission reduction credit and that EPA

and citizens must be able to bring

enforcement actions to assure

compliance. See, e.g., General Preamble

at 13556. We disagree, however, with

the claim that EPA's analysis of the

definition of "enforceable" in Rule 9610

is arbitrary.

In our proposed rule and Proposal

TSD, we compared the Rule 9610

definition of "enforceable" with EPA's

recommended enforceability factors for

voluntary and other nontraditional

emission reduction measures, and we

found the Rule 9610 definition to be

generally consistent with EPA's

recommendations. See 79 FR 28650 at

28654 (discussing components of Rule

9610, section 2.8 that reflect EPA

recommendations) and Proposal TSD at

8-11. Specifically, we highlighted key

components of EPA's policy

recommendations concerning

enforceability and found that the

District's definition of the term "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." See 79 FR 28650 at 28653,

28654. We provided these analyses not

to support a regulatory determination

concerning the enforceability of any

particular incentive program or air

quality plan that relies on incentive

programs, as no such program or plan is

before us in this action, but rather to

highlight the District's obligation under

Rule 9610 to ensure that any incentive

program relied upon in a SIP requires

documentation adequate for EPA and

the public to independently verify that

the necessary emission reductions have

occurred. See 79 FR 28650 at 28654

(noting District's obligation to

demonstrate, in each SIP submittal that

relies on an incentive program, that the

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emission reductions relied upon to

satisfy SIP requirements are surplus,

quantifiable, enforceable, and

permanent). 5 That is, we highlighted

these provisions of section 2.8 of Rule

9610 in an effort to ensure that future

SIPs that rely on incentive programs in

the SJV will, at minimum, satisfy the

rule's enforceability requirements,

which reflect important components of

EPA's recommendations concerning

enforceability under the CAA. See 79 FR

28650 at 28654.

Earthjustice asserts generally that "[a]

state cannot claim SIP credit from

control measures that shield pollution

sources from independent enforcement

actions." But nothing in Rule 9610

shields pollution sources from

independent enforcement actions and

Earthjustice does not identify any

provision that does so. As further

explained in Response 3.d., the CAA

authorizes EPA and citizens to enforce

requirements of an "applicable

implementation plan" 6 and certain

requirements of the Act. See CAA

sections 113 and 304(a), 42 U.S.C. 7413,

7604(a). Specifically, under section 113

of the Act, EPA may bring an

enforcement action against any

individual or government agency for

violation of "any requirement or

prohibition of an applicable

implementation plan," 7 and under

section 304(a) citizens may bring suit

against any individual or government

agency alleged to be in violation of "an

emission standard or limitation,"

including a schedule or timetable of

compliance which is in effect under an

applicable implementation plan.8 To the

5 Such documentation is necessary to hold the

District accountable for any SIP commitments

developed in accordance with Section 7.0 of Rule

9610, as explained further in Response 3.h.

6 Section 302(q) of the CAA defines "applicable

implementation plan," in relevant part, as "the

portion (or portions) of the implementation plan, or

most recent revision thereof, which has been

approved under section 110 of [title I of the Act]

. . . and which implements the relevant

requirements of [the Act]." 42 U.S.C. 7602(q).

7 Section 113 of the CAA authorizes EPA to issue

notices and compliance orders, assess

administrative penalties, and bring civil actions

against any "person," including a state agency, who

"has violated or is in violation of any requirement

or prohibition of an applicable implementation

plan .. " CAA 113(a)(1)-(2), 42 U.S.C. 7413(a)(1)-

(2); CAA 302(e), 42 U.S.C. 7602(e) (defining "person" to include a State or political subdivision

thereof).

8 Section 304(a)(1) of the CAA authorizes any

person to bring a civil action against any "person,"

including a state agency (to the extent permitted by

the Eleventh Amendment to the Constitution),

"who is alleged to have violated or to be in

violation of. . . an emission standard or limitation. 42 U.S.C. . 7604(a)(1); CAA 302(e), 42 U.S.C.

7602(e) (defining "person" to include a State or

political subdivision thereof). An "emission

standard or limitation" is defined in section 304(f),

extent Earthjustice intended to argue

that Rule 9610 would "shield" pollution

sources from an action to enforce the

requirements of an "applicable

implementation plan"-e.g., the

requirements of an EPA-approved SIPwe disagree as Rule 9610 does not apply

to any pollution source. See 79 FR

28650 at 28652 ("the requirements and

procedures in [Rule 9610] apply only to

the District. . . [and] would become

federally enforceable against the District

upon EPA's final approval of the rule

into the California SIP") (emphases

added). Earthjustice does not identify

any provision in Rule 9610 that would

apply to a pollution source or preclude

enforcement of SIP requirements against

a pollution source.

We understand that Earthjustice may

have intended to argue that Rule 9610

would encourage future development of

programs that preclude EPA or citizen

enforcement against pollution sources,

rather than to comment on the

enforceability of Rule 9610 itself.9

Under CAA section 110(a)(2)(A),

however, the relevant inquiry is not

whether EPA or citizens may directly

sue pollution sources but whether the

"measure," "means," or "technique" for

reducing emissions is "enforceable."

Section 110 of the Act requires 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

Act's requirements. CAA 110(a)(2)(A),

42 U.S.C. 7410(a)(2)(A). Thus, according

to the plain language of the statute, SIPs

may contain "means" or "techniques"

including economic incentives and/or

"schedules and timetables for

compliance" that EPA considers

"appropriate" for attainment, so long as

they are "enforceable." Courts have long

held that citizen suits can be brought to

enforce specific measures, strategies, or

commitments by state or local agencies

that are designed to ensure compliance

with the NAAQS. See, e.g., BCCA

in relevant part, to mean "a schedule or timetable

of compliance" which is in effect under the Act "or

under an applicable implementation plan." 42

U.S.C. 7604(f)(1). "Schedule and timetable of

compliance" is broadly defined in section 302(p) to

mean "a schedule of required measures including

an enforceable sequence of actions or operations

leading to compliance with an emission limitation,

other limitation, prohibition, or standard." 42

U.S.C. 7602(p).

9 Earthjustice does not appear to question EPA's

statement that Rule 9610 itself is enforceable

against the District and that our approval of the rule

would make it federally enforceable by EPA and

citizens under the CAA.

Appeal Group v. EPA, 355 F.3d 817 (5th

Cir. 2003), reh'g denied, BCCA Appeal

Group v. EPA, 2004 U.S. App. LEXIS

215 (5th Cir. 2004); Conservation Law

Foundation, Inc. v. James Busey et al.,

79 F.3d 1250, 1258 (1st Cir. 1996)

(citing, inter alia, Wilder v. EPA, 854

F.2d 605 at 613-14) and Citizens for a

Better Env't v. Deukmejian, 731 F. Supp.

1448, 1454-59 (N.D. Cal.), modified, 746

F. Supp. 976 (1990).

Nothing in Rule 9610 undermines the

ability of EPA or citizens to bring

enforcement actions to assure

compliance with SIP requirements, nor

does the rule contain or authorize the

District to develop any "director

discretion" or "affirmative defense"

provision that will apply to SIP

requirements. To the contrary, section

7.0 of Rule 9610 requires that the

District maintain responsibility for

ensuring that SIP emission reductions

occur through an "enforceable

commitment," which becomes federally

enforceable by EPA and citizens upon

approval into the SIP under CAA

section 110(k). See 79 FR 28650 at

28655 (citing Rule 9610, section 7.0).

EPA has approved enforceable

commitments in the past and courts

have enforced these commitments

against states that failed to comply with

them. See, e.g., American Lung Ass'n of

N.J. v. Kean, 670 F. Supp. 1285 (D.N.J.

1987), aff'd, 871 F.2d 319 (3rd Cir.

1989); NRDC, Inc. v. N.Y. State Dept. of

Env. Cons., 668 F. Supp. 848 (S.D.N.Y.

1987); Citizens for a Better Env't v.

Deukmejian, 731 F. Supp. 1448, recon.

Granted in par, 746 F. Supp. 976 (N.D.

Cal. 1990); Coalition for Clean Air v.

South Coast Air Quality Mgt. Dist., No.

CV 97-6916-HLH (C.D. Cal. Aug. 27,

1999). We believe it is appropriate to

allow California to rely in its SIP on

voluntary incentive programs, provided

the State and/or District retain clear

responsibility through an enforceable

commitment to ensure that the emission

reductions necessary to meet applicable

CAA requirements are achieved, which

EPA or citizens may enforce under

sections 113 or 304 of the Act,

respectively.

As we noted previously, following the

State's submittal of a specific air quality

plan or measure that relies on incentive

programs for necessary emission

reductions, EPA will evaluate that plan

or measure to determine whether it

satisfies the enforceability requirements

of the Act. We provide these responses

to the commenter's concerns only as a

preliminary explanation of the

enforceability requirements that future

SIPs developed through the Rule 9610

process must satisfy, and we encourage

the commenter and the public at large

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to participate in future rulemakings on

specific air quality plans or measures

that rely on incentive programs for SIP

emission reduction credit.

Comment 3.c: Citing a 2004 guidance

entitled, "Incorporating Emerging and

Voluntary Measures in a State

Implementation Plan" (September 2004)

(hereafter "2004 Emerging and

Voluntary Measures Guidance"),

Earthjustice states that according to

EPA, "emission reductions are 'voluntary,' and therefore subject to a

cap on SIP credit, when the emission

reductions are not enforceable against

individual sources." According to

Earthjustice, "Rule 9610 suggests that

measures could be SIP creditable even

if EPA and the public have to rely

entirely on the State and local air

District to ensure source compliance,"

and that this runs counter to EPA's

longstanding policy and statutory

interpretations, under which EPA "has

only been willing to allow such

programs with a cap on the SIP credit

that can be claimed."

Response 3.c: We agree with

Earthjustice's characterization of

"voluntary" measures as those that are

not directly enforceable against

individual emission sources. See, e.g.,

1997 VMEP at 4; 2004 Emerging and

Voluntary Measures Guidance at 1, 19;

and 2005 Bundled Measures Guidance

at 2, n. 1. We disagree, however, with

the commenter's suggestion that

emission reductions from voluntary

measures are "subject to" a specific cap

on SIP emission reduction credit

because they are unenforceable for SIP

purposes under the CAA.

Under longstanding guidance, EPA

has recommended presumptive limits

(sometimes referred to as "caps") on the

amounts of emission reductions from

certain voluntary and other

nontraditional measures that may be

credited in a SIP. Specifically, for

voluntary mobile source emission

reduction programs (VMEPs),1O EPA has

identified a presumptive limit of three

percent (3%) of the total projected

future year emission reductions

required to attain the appropriate

NAAQS, and for any particular SIP

submittal to demonstrate attainment or

maintenance of the NAAQS or progress

toward attainment (RFP), 3% of the

specific statutory requirement. See 1997

VMEP at 5. As explained in the 2001

EIP Guidance, EPA recommended this

10 A voluntary mobile source emission reduction

program (VMEP) is a mechanism that supplements

traditional emission reduction strategies through

voluntary, nonregulatory changes in local

transportation sector activity levels or changes in

in-use vehicle and engine fleet composition, among

other things. See 1997 VMEP at 3.

3% cap (per pollutant) on the credit

allowed for VMEPs because states are "not required to play a direct role in

implementing these programs, the

programs are not directly enforceable

against participating parties, and there

may [be] less experience in quantifying

the emission benefits from these

programs." 2001 EIP Guidance at 158;

see also 1997 VMEP at 5 (recommending

3% cap due to "innovative nature of

voluntary measures and EPA's

inexperience with quantifying their

emission reductions"). For voluntary

stationary and area source measures,

EPA has identified a presumptive limit

of 6% of the total amount of emission

reductions required for RFP, attainment,

or maintenance demonstration

purposes. See 2004 Emerging and

Voluntary Measures Guidance at 9

("EPA believes it is appropriate to limit

these measures to a small portion of the

SIP given the untested nature of the

control mechanisms") and

"Incorporating Bundled Measures in a

State Implementation Plan (SIP),"

August 2005 (hereafter "2005 Bundled

Measures Guidance") at 8

(recommending limits "[d]ue to the

innovative nature of voluntary and

emerging measures"). EPA has also long

stated, however, that states may justify

higher amounts of SIP emission

reduction credit for voluntary programs

on a case-by-case basis, and that EPA

may approve measures for SIP credit in

excess of the presumptive limits "where

a clear and convincing justification is

made by the State as to why a higher

limit should apply in [its] case." 2004

Emerging and Voluntary Measures

Guidance at 9; see also 2005 Bundled

Measures Guidance at 8, n. 6 and 2014

Diesel Retrofits Guidance at 12. Thus,

the presumptive "cap" on SIP credit

referenced by Earthjustice is not a

specific regulatory cap but a general

policy recommendation, which states

and EPA may justify departing from on

a case-by-case basis, subject to noticeand-comment rulemaking on a

particular SIP.

Importantly, EPA has consistently

stated that SIP credit may be allowed for

a voluntary or other nontraditional

measure only where the State submits

enforceable mechanisms to ensure that

the emission reductions necessary to

meet applicable CAA requirements are

achieved-e.g., an enforceable

commitment to monitor and report on

emission reductions achieved and to

rectify any shortfall in a timely manner.

See 79 FR 28650 at 28653 (citing, inter

alia, 1997 VMEP at 4-7; 2004 Emerging

and Voluntary Measures Guidance at

8-12; 2005 Bundled Measures Guidance

at 7-12; and 2004 Electric-Sector EE/RE

Guidance at 6-7). Thus, if California

intends to satisfy a SIP requirement

through reliance on an incentive

program that EPA and citizens may not

directly enforce against participating

sources, the State/District must take

responsibility for assuring that SIP

emission reduction requirements are

met through an enforceable

commitment, which EPA and citizens

may enforce against the State/District

upon EPA's approval of the

commitment into the SIP. EPA

continues to believe that voluntary

incentive measures accompanied by an

enforceable commitment to monitor

emission reductions achieved and

timely rectify any shortfall meet the SIP

control measure requirements of the

Act. See Response 3.b above.

Should California submit a SIP that

relies on incentive programs to satisfy a

CAA requirement, EPA intends to

evaluate the submittal to determine

whether the necessary emission

reductions may be enforced by EPA and

citizens through an enforceable State/

District commitment. Additionally,

should such a SIP rely on incentivebased emission reductions in amounts

that exceed EPA's presumptive limits,

as discussed in EPA's longstanding

guidance, EPA intends to evaluate the

SIP submittal to determine whether the

State and/or District have provided a

clear and convincing justification for

such higher amounts.

Comment 3.d: Citing both the 2001

EIP Guidance and the 2004 Emerging

and Voluntary Measures Guidance,

Earthjustice states that emission

reductions are "enforceable" against the

source if: (1) They are independently

verifiable; (2) program violations are

defined; (3) those liable for violations

can be identified; (4) the District, State

and EPA maintain the ability to apply

penalties and secure appropriate

corrective actions where applicable; (5)

citizens have access to all the emissionsrelated information obtained from the

source; (6) citizens can file suits against

sources for violations; and (7) they are

practicably enforceable in accordance

with other EPA guidance on practicable

enforceability. Earthjustice states that

EPA's proposed rule recites all of these

criteria except for citizen suit

enforceability and questions whether

this was an oversight or a deliberate

attempt to mislead the public on the

criteria for enforceability. In any case,

Earthjustice contends that "nothing in

Rule 9610 would require incentive

programs to provide for such citizen

enforcement" and that the rule "would

only require that violations be defined

through contracts, [which] can only be

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enforced by the parties to the contract."

Earthjustice asserts that citizens would

have no recourse to "file suits against

sources for violations," and that EPA's

proposal includes "no explanation of

how this requirement is met or why it

does not apply." To the extent EPA

believes it is the latter, Earthjustice

states, "it has now afforded the public

no opportunity to respond to any

reasoning behind that assertion."

Response 3.d: First, to the extent the

commenter argues that all SIP emission

reduction techniques must provide for

citizen suits directly against emission

sources, we disagree. Section

110(a)(2)(A) of the Act explicitly

includes "economic incentives" among

the "control measures, means, or

techniques" that states may use to meet

SIP requirements, and EPA has long

interpreted the Act to allow SIPs to rely

on nontraditional emission reduction

techniques-including voluntary

measures that are not directly

enforceable against emitting sourcesprovided the State submits enforceable

mechanisms to assure that the

requirements of the Act are met. See

Response 3.b and Response 3.c, above.

As Earthjustice correctly notes, EPA's

2001 EIP Guidance states that emission

reductions and related actions are "enforceable" if, among other things,

"[c]itizens can file suits against sources

for violations .. " 2001 EIP Guidance

at 35-36.11 As with all guidance,

however, the 2001 EIP Guidance

provides only non-binding

recommendations and does not

represent final agency action concerning

the requirements for SIPs containing

discretionary EIPs. See id. at 12, 19, and

119. Moreover, in several other policies

concerning nontraditional measures,

EPA has indicated that provisions for

citizen suits against a state or other

responsible entity (other than the

emission source) may suffice to meet the

Act's enforceability requirements. See

Response 3.c above. For example, the

2004 Emerging and Voluntary Measures

Guidance recommends provisions

authorizing citizen suits against sources

for "emerging measures" 12 but states

11 The 2001 EIP Guidance states that '[e]mission

reductions use, generation, and other required

actions are enforceable if": (1) They are

independently verifiable; (2) program violations are

defined; (3) those liable for violations can be

identified; (4) the State and EPA maintain the

ability to apply penalties and secure appropriate

corrective actions where applicable; (5) citizens

have access to all the emissions-related information

obtained from the source; (6) citizens can file suits

against sources for violations; and (7) they are

practicably enforceable in accordance with other

EPA guidance on practicable enforceability. See

2001 EIP Guidance at 35-36.

12 EPA has described "emerging measures" as

new emission reduction measures for which

that for "voluntary measures," emission

reductions and other required actions

are enforceable if, among other things,

"EPA maintains the ability to apply

penalties and secure appropriate

corrective action from the State where

applicable and the State maintains the

[ability to] secure appropriate corrective

action with respect to portions of the

program that are directly enforceable

against the source .. " 2004 Emerging

and Voluntary Measures Guidance at 3,

4 (emphases added); see also 2005

Bundled Measures Guidance at 25 (also

discussing EPA enforcement against

State) and 1997 VMEP at 6-7 ("[a]

State's obligations with respect to

VMEPs must be enforceable at the State

and Federal levels") (emphasis added).

In other guidance concerning

nontraditional emission reduction

measures, EPA has indicated that

provisions for enforcement against a "responsible party" may be acceptable

in lieu of enforcement directly against

the emitting source. See, e.g., "Guidance

on SIP Credits for Emission Reductions

from Electric-Sector Energy Efficiency

and Renewable Energy Measures,"

August 5, 2004 (hereafter "2004

Electric-Sector EE/RE Guidance") at 5, 6

(distinguishing emission reductions that

are "enforceable directly against the

source" from those that are "enforceable

against another party responsible for the

energy efficiency or renewable energy

activity") and 2014 Diesel Retrofits

Guidance at 28 (emission reductions are

federally enforceable only if, among

other things, "[c]itizens can file lawsuits

against the responsible party for

violations") (emphases added). Thus, a

number of EPA policies concerning

nontraditional measures indicate that

provisions for EPA and citizen

enforcement against the State or against

some other "responsible party" other

than the source may satisfy the Act's

requirements for enforceability.

Earthjustice fails to identify any

statutory or regulatory support for a

claim that all emission reduction

measures approved into a SIP must

provide for citizen suits directly against

emitting sources.

Second, Earthjustice's claim that Rule

9610 "would only require that

violations be defined through contracts"

which "can only be enforced by the

parties to the contract" overlooks an

important provision in the rule that

requires the District to provide a

mechanism for EPA and citizen

pollutant reductions are more difficult to accurately

quantify than traditional SIP emission reduction

measures. See 2004 Emerging and Voluntary

Measures Guidance at 13 and 2005 Bundled

Measures Guidance at 2.

enforcement in each submitted SIP that

relies on an incentive program.

Specifically, section 7.0 of Rule 9610

requires that each SIP submission in

which the District relies on projections

of SIP-creditable emission reductions to

satisfy a CAA SIP requirement contain,

among other things, an "enforceable

commitment" that: (1) Identifies the

applicable incentive program

guidelines; (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 projects and

willing participants, based on historical

participation and estimates of remaining

equipment; (3) is specifically adopted

by the District as part of the SIP and

accounted for in 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 Clean air Act or EPA's implementing

regulations." See 79 FR 28650 at 28655

(citing Rule 9610, sections 7.1-7.4). A

District commitment adopted in

accordance with these requirements

would, upon approval into the SIP,

become enforceable by EPA and citizens

under sections 113 and 304 of the Act,

respectively. See Response 3.b. Thus,

although Rule 9610 does not require

that incentive programs provide for

citizen enforcement directly against

emission sources for contract

violations,' 3 the rule does require that

each SIP in which the District relies on

incentive program emission reductions

contain, among other things, an

enforceable commitment that enables

EPA and citizens to hold the District

accountable for violations of the SIP. We

therefore disagree with the commenter's

suggestion that Rule 9610 deprives

citizens of the ability to enforce SIP

emission reduction requirements.

Finally, with respect to Earthjustice's

claim that EPA's proposal provides "no

explanation of how this requirement is

met or why it does not apply," it

appears that Earthjustice is referring to

13 Under the Carl Moyer, Prop 1B, and EQIP

funding programs, each grantee must sign a contract

specifying terms and conditions of the grant which

are enforceable by the funding agency. See, e.g.,

CARB, "The Carl Moyer Program Guidelines,

Approved Revisions 2011," Release Date: July 11,

2014, at Chapter 3, Section Y ("Minimum Contract

Requirements") (available electronically at http://

www.arb.ca.gov/msprog/moyer/guidelines 2011 g1/

2011cmpgl 12 30 14.pdfl.

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EPA's policy recommendation

concerning citizen suits against

emission sources as a "requirement." As

discussed above in this response,

however, the CAA does not limit SIPs

to those emission reduction techniques

that citizens may directly enforce

against an emission source, nor do

EPA's guidance documents establish

any requirement that nontraditional

emission reduction measures provide

specifically for citizen suits against

sources. In our proposed rule, we

referenced numerous EPA guidance

documents addressing nontraditional

emission reduction measures that

"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." 79 FR 28650 at 28653 (citing,

inter alia, 1997 VMEP, 2004 Emerging

and Voluntary Measures Guidance, and

2005 Bundled Measures Guidance).

Consistent with these guidance

documents, our proposed rule

highlighted the importance of the

enforceable "backstop" commitment

from the State to monitor emission

reductions achieved and to rectify

shortfalls in a timely manner, which

must accompany any nontraditional

emission reduction measure submitted

for SIP purposes. Id. and 79 FR 28650

at 28654-55 (discussing necessary

components of a SIP submittal that

relies on nontraditional emission

reduction measures). Our proposed rule

also discussed the requirements

concerning enforceable SIP

commitments in section 7.0 of Rule

9610 and provided specific

recommendations for the District to

consider in its development and

adoption of such commitments, to

ensure that the requirements of the Act

are met. Id. at 28655. We believe these

explanations are adequate to inform the

public of EPA's policies concerning

enforceability of nontraditional

emission reduction measures and to

provide a preview of the factors that

EPA intends to apply in reviewing

enforceable commitments submitted by

the District going forward. As EPA also

explained at proposal, EPA will review

each SIP submittal developed pursuant

to Rule 9610 (including the necessary

evaluation of the applicable incentive

program guidelines) on a case-by-case

basis, following notice-and-comment

rulemaking, to determine whether the

applicable requirements of the Act are

met. See 79 FR 28650 at 28654, 28658.

To the extent the commenter

disagrees with EPA's interpretations of

the Act, we encourage the commenter to

submit comments on the SIP

rulemakings through which EPA takes

final action on air quality plans or

measures that rely on incentive program

emission reductions. Nothing in our

approval of Rule 9610 today deprives

the public of these opportunities to

comment on these future SIP actions.

Comment 3.e: Earthjustice states that

"[t]he structure of the CAA reinforces

EPA's conclusion that Congress was not

willing to rely on states alone to

guarantee that the claimed emission

reductions would occur or be enforced."

According to Earthjustice, section 113 of

the Act gives EPA authority to ensure

compliance whenever any person is in

violation of any requirement of the Act

and section 304 allows citizens to

enforce the requirements of the Act.

Earthjustice also quotes from the

Supreme Court's decision in

Pennsylvania v. Del. Valley Citizens'

Council for Clean Air, 478 U.S. 546, 560

(1986), to support its statement that

Congress enacted section 304

specifically to encourage citizen

participation in the enforcement of

standards and regulations established

under the Act and "to afford citizens

very broad opportunities to participate

in the effort to prevent and abate air

pollution."

Response 3.e: We do not dispute the

importance of federal enforcement

under section 113 of the Act and citizen

enforcement under section 304 of the

Act. As explained in our proposed rule

and further in these responses to

comments, EPA has consistently stated

in longstanding guidance that SIP credit

may be allowed for a voluntary or other

nontraditional emission reduction

measure only where the State submits

enforceable mechanisms to ensure that

the emission reductions necessary to

meet applicable CAA requirements are

achieved (e.g., an enforceable

commitment to monitor and report on

emission reductions achieved and to

timely rectify any shortfall), which EPA

and citizens may enforce under CAA

sections 113 and 304, respectively, upon

approval into the SIP. See 79 FR 28650

at 28653-28655 and Response 3.b

above. We encourage citizens to

participate in the effort to prevent and

abate air pollution by requesting

information from the District concerning

the commitments it has adopted under

Rule 9610 and enforcing these

commitments in the U.S. district courts

in accordance with section 304 of the

Act.

Comment 3.f. Earthjustice claims that

the Rule 9610 definition of

"enforceable" would not only waive any

notion that citizens can file a suit to

enforce the reductions but "would also

waive any requirement that EPA have

any 'ability to apply penalties and

secure appropriate corrective actions'

against the source." The commenter

asserts that EPA cannot enforce the

conditions of a contract between the

District and the source and that "the

State and District are free to shield

sources from enforcement, or even

amend or rescind these contracts

altogether without EPA oversight."

According to Earthjustice, "EPA simply

has no claim that it can apply penalties

or secure corrective actions against the

sources responsible for reducing

emissions" and "no basis for asserting

that [the enforceability] criterion is

met."

Response 3.f: Although we agree that

EPA cannot enforce the conditions of a

contract issued by the District pursuant

to a state incentive program that is not

approved into the SIP under CAA

section 110, we disagree with the claim

that this renders the emission

reductions achieved by such a program

unenforceable by citizens under the Act.

As explained in response to comment

3.d., above, Rule 9610 requires the

District to provide a mechanism for EPA

and citizen enforcement in each

submitted SIP that relies on an incentive

program. Specifically, section 7.0 of

Rule 9610 requires that each SIP

submission in which the District relies

on projections of SIP-creditable

emission reductions to satisfy a CAA

SIP requirement contain, among other

things, an "enforceable commitment"

containing specific provisions to ensure

that the District remains accountable for

the required emission reductions. Upon

EPA's approval of an enforceable SIP

commitment by the District, section 113

of the Act authorizes EPA to apply

penalties and secure appropriate

corrective actions to enforce the

requirements of the commitment against

the District. See Response 3.b. A SIPapproved commitment cannot be

modified except through a SIP revision

adopted by the State after reasonable

notice and public hearing and approved

by the EPA through notice-andcomment rulemaking. See CAA section

110(1); 5 U.S.C. 553; 40 CFR 51.105.

Consequently, should the District's

amendment or rescission of contracts

issued to participating sources result in

a shortfall in the emission reductions

required under a SIP commitment, EPA

may enforce the District's obligation to

implement a remedy, provided the

District's SIP commitment includes a

schedule for adoption and submittal of

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substitute measures to remedy any

shortfalls as required by Rule 9610. See

Rule 9610, section 7.4; see also

Response 3.d above (discussing

requirements of Rule 9610, section 7.0).

EPA would not approve a submitted SIP

revision under Rule 9610 that did not

contain such a schedule.

Comment 3.g: Earthjustice states that

"EPA seems to imply that it is enough

that EPA can push for the District to

fulfill any shortfall in emission

reductions through other means" but

claims that EPA "has not analyzed this

rule through the relevant criteria for

enforceable SIP commitments, which

are subject to limits on quantity, etc."

As a result, Earthjustice asserts that

commenters have no basis for

unraveling EPA's legal rationale.

Response 3.g: Because we are not

approving any State or District

commitments in today's action, it is not

necessary to evaluate this SIP submittal

in accordance with the criteria that EPA

has historically applied in approving

enforceable commitments. We will

apply the relevant criteria for evaluating

enforceable SIP commitments when we

take action on a SIP that relies on a

commitment to satisfy the control

measure requirements of the Act.

Comment 3.h: Earthjustice claims that

the Rule 9610 definition of enforceable

does not allow for independent

verification or even the identification of

liable sources. Earthjustice states that

EPA identified several defects in the

District's rule that would limit the

disclosure of information necessary to

verify compliance, such as "problems in

[the] Annual Report" and "the District's

mistaken interpretation of, and

reference to, the Federal Food Security

Act." Based on these defects alone, the

commenter claims that it is unclear why

EPA is still proposing to approve the

rule.

Response 3.h: We continue to believe

that the definition of "enforceable" in

Rule 9610 generally allows for

independent verification of emission

reductions and identification of liable

sources. As we explained in our

proposed rule, 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 Rule 9610]." 79 FR 28650

at 28654 (citing Rule 9610, section 2.8).

Additionally, Rule 9610 requires that

each SIP in which the District relies on

emission reductions achieved through

incentive programs contain an "enforceable commitment" by the

District to adopt and submit substitute

measures to EPA by specified dates if

there is a shortfall in required emission

reductions for a particular year, among

other things. See Rule 9610, section 7.4.

Read together, these provisions of Rule

9610 obligate the District to include,

with each SIP submittal that relies on

incentive programs for necessary

emission reductions, an enforceable

commitment that enables EPA and

citizens to obtain records adequate to

independently confirm whether

necessary emission reductions have

occurred. Going forward, we intend to

review each SIP commitment submitted

by the District for compliance with

these "enforceability" requirements in

section 2.8 and the provisions

concerning commitments in section 7.0

of Rule 9610, in addition to the

applicable requirements of the Act.

One significant exception to the

general enforceability provisions in Rule

9610 is the provision in section 6.2 that

categorically prohibits public disclosure

of records related to NRCS's

implementation of the EQIP program.

As explained in our proposed rule (see

79 FR 28650 at 28657 and Proposal TSD

at 9-10), section 6.2 of Rule 9610 does

not accurately describe NRCS's statutory

obligations with respect to disclosure of

information concerning the EQIP

program. Based on further evaluation of

this provision and in response to

Earthjustice's comments, we find that

this provision necessitates a limited

disapproval of Rule 9610 because, in

addition to stating NRCS's statutory

obligations incorrectly, the provision

creates a potential conflict between the

requirements of Rule 9610 and the

requirements of the CAA concerning

public availability of emission data. See

CAA 114(c) and 40 CFR 2.301(a)(2); see

also 2001 EIP Guidance at section 5.1d

("Procedures for public disclosure of

information"). Therefore, EPA is

finalizing a limited approval and

limited disapproval of Rule 9610 on the

basis of this deficiency in section 6.2 of

the rule. This limited disapproval does

not trigger any sanctions clocks under

CAA section 179(a) because Rule 9610

was not submitted to address a

requirement of part D, title I of the Act

or in response to a finding of substantial

inadequacy as described in CAA section

110(k)(5) (i.e., a "SIP Call"), but it does

trigger an obligation on EPA to

promulgate a federal implementation

plan (FIP) to correct the deficiency,

unless the State submits and EPA

approves a corrective SIP revision

within two years of the disapproval (see

CAA section 110(c)(1)(B)). EPA expects

the District to revise section 6.2 at its

earliest opportunity to correct the errors

in this provision and to ensure that the

rule does not preclude disclosure of

emission data related to the EQIP

program.

With respect to any future SIP

submittal that relies on emission

reductions achieved through EQIP to

satisfy a CAA requirement, we expect

that the annual reports certified by

NRCS, as described in the March 2014

Addendum signed by NRCS, EPA,

CARB and the District, 14 will provide

information that enables EPA and the

public to verify the emissions of

participating sources with an adequate

level of accuracy and to determine

whether the District has violated any

SIP emission reduction commitment.

See 79 FR 28650 at 28657 and Proposal

TSD at 10-11. Additionally, in order for

emission reductions achieved through

EQIP to be enforceable under the CAA,

the District will have to submit an

enforceable SIP commitment to

specifically describe the information

obtained from NRCS in the relevant

annual demonstration reports, to

incorporate project-specific information

obtained from NRCS in the electronic

"Data Sheet" associated with each of

these annual demonstration reports, and

to make the NRCS's certified annual

reports themselves available to the

public upon request. See id. and Rule

9610, sections 6.1 and 7.0. EPA would

not approve any SIP submittal that

relies on emission reductions achieved

through EQIP (or any other incentive

program) if it does not provide for

public availability of emission data

consistent with CAA requirements. 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. We encourage the

District to consult with us during its

14 See "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"

("NRCS Addendum").

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development of any SIP commitments

under section 7.0 of Rule 9610 to ensure

that these commitments will be legally

and practically enforceable by EPA and

citizens, in accordance with the

requirements of the Act. See Response

3.i, below.

With respect to the 2013 Annual

Demonstration Report, we provided

suggestions for future reports in the

Proposal TSD. See Proposal TSD at 52-

55. We expect the District to consider

these recommendations as it develops

its annual demonstration reports for

future years.

Comment 3.i: Earthjustice argues that

EPA's analysis ignores "the more

fundamental defect which is that EPA

and citizens can only rely on data

submitted to, or collected by the

District" and that this defect

undermines any claim that the rule will

ensure that citizens have access to all

emissions-related information obtained

from participating sources. According to

Earthjustice, EPA has no authority to

inspect sources for compliance with the

contracts between the District and the

source-i.e., EPA cannot collect its own

information, conduct inspections,

demand additional reporting, or enforce

the failure to submit required reports.

Earthjustice contends that EPA's ability

to verify any of these emission

reductions is limited because the

emission reductions are secured through

contracts that do not include EPA. Thus,

Earthjustice claims, EPA "lacks the

ability to independently verify

compliance and instead must rely on

the District and State to determine

compliance." For example, with respect

to information regarding sources of

EQIP funding, Earthjustice argues that

because EPA and the public will not be

provided with any information that can

be independently verified or that

identifies the participating sources,

there is no way for EPA or the public

to "verify compliance by 'the source' as

EPA's definition of enforceability

requires" or to "even identify sources

liable for violations."

Response 3.i: We disagree with the

commenter's claim that EPA's definition

of enforceability "requires" that EPA

and the public have the ability to verify

compliance by "the source." The

commenter cites two guidance

documents (the 2001 EIP Guidance and

2004 Emerging and Voluntary Measures

Guidance 15) to support its claim that, to

15As explained in Response 3.d., the 2004

Emerging and Voluntary Measures Guidance

recommends provisions authorizing citizen suits

against sources for "emerging measures" but states

that for "voluntary measures," emission reductions

and other required actions are enforceable if, among

other things, "EPA maintains the ability to apply

be "enforceable," an emission reduction

measure must allow citizens to "file

suits against sources for violations." As

explained above in Response 3d,

however, the CAA does not limit SIPs

to those emission reduction techniques

that citizens may directly enforce

against emission sources, and EPA has

indicated in a number of other guidance

documents that provisions for EPA and

citizen enforcement against a state or

against some other "responsible party"

(other than the source) may satisfy the

Act's requirements for enforceability.

See Response 3.d above.

We continue to believe that Rule 9610

generally ensures that citizens will have

access to all emissions-related

information obtained by the District

from sources participating in incentive

programs, with one significant

exception in section 6.2 of the rule. As

we explained in the proposed rule,

section 6.1 of Rule 9610 specifically

requires the District to keep and

maintain "[a]ll documents created and/

or used in implementing the

requirements of Section 4.0" of the rule

and to make these documents available

for public review consistent with the

requirements of the California Public

Records Act and related requirements.

See 79 FR 28650 at 28657 (citing Rule

9610, section 6.1). Section 4.0 of Rule

9610, in turn, requires the District to

annually prepare a public report that

contains, among other things,

identification of the amounts of "SIPcreditable emission reductions" from

incentive programs that the District is

relying on for SIP purposes;

descriptions of the applicable incentive

program guidelines; and detailed

information about the individual

projects relied upon to achieve the

required emission reductions. See 79 FR

28650 at 28656 (citing Rule 9610,

sections 4.0-4.6). Additionally, section

7.0 of the rule requires the District to

make enforceable commitments that

enable EPA and citizens to obtain

records adequate to independently

confirm whether necessary emission

reductions have occurred. See Response

3.d and Response 3.h, above. Many of

the incentive program guidelines

identified in section 3.1 of Rule 9610

require that the District maintain

specific documentation of pre-project

and post-project inspections for each

funded project and that all grantees

submit detailed compliance-related

penalties and secure appropriate corrective action

from the State where applicable and the State

maintains the [ability to] secure appropriate

corrective action with respect to portions of the

program that are directly enforceable against the

source .... " 2004 Emerging and Voluntary

Measures Guidance at 3, 4 (emphases added).

documentation to the District on an

annual or biennial basis. See, e.g.,

Proposal TSD at 15-16 (discussing

provisions of Carl Moyer program

guidelines) and 44-45 (discussing

provisions of Prop 1B program

guidelines). Provided the District

commits to make these project records

and other compliance-related

documents available to the public upon

request, consistent with the

requirements of sections 6.1 and 7.0 of

Rule 9610, EPA and citizens would have

access to emissions-related information

that the District obtains from

participating sources. 16

Finally, we disagree with the

commenter's claim that EPA lacks

authority to collect information relevant

to source compliance with the contracts

issued by the District. Rule 9610

requires the District to maintain, with

respect to all projects that the District

relies upon for SIP emission reduction

credit, reports submitted by grantees

and records of all inspections and

enforcement actions, among other

things. See Rule 9610, section 6.1. Upon

EPA's approval of a District

commitment into the SIP, section 114(a)

of the Act authorizes EPA to require

information from "any person" who

may have information necessary for the

purpose of determining whether the

District has violated such a SIP

commitment-including all compliancerelated documentation that the District

maintains in accordance with the

applicable incentive program

guidelines. See CAA section 114(a)

(authorizing the EPA to require

submission of information from "any

person" who may have information

necessary for the purpose of

determining whether a SIP requirement

has been violated) and section 302(e)

(defining "person" to include a State or

political subdivision thereof).

Additionally, both EPA and citizens

may obtain compliance-related records

from the District under the California

Public Records Act. See Rule 9610,

section 6.1. Thus, although EPA is not

authorized to enforce the individual

contracts between the District and the

source, both EPA and citizens may

collect information concerning source

compliance from the District and, in

16 Although EPA or citizen enforcement of a SIP

commitment adopted in accordance with section

7.0 of Rule 9610 generally depends upon projectrelated information maintained by the District, this

does not preclude independent verification of the

emission reductions if the applicable incentive

program guidelines require participating sources to

regularly submit compliance-related documentation

to the District and require the District to maintain

these records for specified amounts of time. See,

e.g., 2011 Carl Moyer Guidelines at 3-31 and

Proposal TSD at 15.

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some cases directly from participating

sources, 17 to the extent this information

is necessary for the purpose of

determining whether the District has

violated a SIP commitment.

We expect an enforceable

commitment that obligates the District

to comply with adequate monitoring

and recordkeeping requirements would

ensure that emission reductions can be

independently verified. In any case,

EPA will review each submitted SIP

commitment on a case-by-case basis to

determine whether the commitment is

legally and practically enforceable by

EPA and citizens, in accordance with

the requirements of the Act.

Comment 3.j: Earthjustice argues that

"[t]o the extent EPA wishes to allow

credit for unenforceable emission

reduction programs, it has a policy for

doing so"Ii.e., "[t]hese programs can

be included with a cap on the credit

they can receive." Alternatively,

Earthjustice contends, to the extent EPA

wishes to treat these programs as

enforceable SIP commitments, it also

has a policy for reviewing and

approving those, but the analysis of

Rule 9610 is not consistent with those

policies.

Response 3.j: We disagree with the

commenter's suggestions that emission

reductions from voluntary incentive

measures are entirely "unenforceable"

under the CAA or subject to a specific "cap" on the credit allowed in a SIP. As

explained above in Response 3.c, EPA

has consistently stated in longstanding

guidance that SIP credit may be allowed

for a voluntary or other nontraditional

measure only where the State takes

responsibility for assuring that SIP

emission reduction requirements are

met through an enforceable

commitment, which EPA and citizens

may enforce upon EPA's approval of the

commitment into the SIP. That is,

emission reductions achieved by

voluntary measures are enforceable

under the Act where they are

accompanied by such an enforceable

commitment. In addition, the "cap" on

SIP credit for voluntary measures that

17 For example, under certain Prop 1B program

guidelines, each grantee must be subject to detailed

contract provisions requiring the grantee to

maintain certain documents for specified periods

and/or submit these documents to the District on

a regular basis. See, e.g., 2008 Prop 1B guidelines

at Section IILD ("Local Agency Project

Implementation Requirements"), Section IV

("General Equipment Project Requirements"), and

Appendix A, Section C ("Recordkeeping

Requirements") and Section D ("Annual Reporting

Requirements"); 2010 Prop 1B guidelines at Section

IV.A ("Project Implementation Requirements"),

Section VI ("General Equipment Project

Requirements"), and Appendix A, Section F

("Recordkeeping Requirements") and Section G

("Annual Reporting Requirements").

Earthjustice refers to is not a specific

regulatory cap but a general policy

recommendation. States and EPA may

justify departing from these caps on a

case-by-case basis, subject to notice-andcomment rulemaking on a particular

SIP. See Response 3.c and EPA guidance

documents referenced therein.

In any case, we are not approving any

State or District commitments in today's

action and therefore do not have reason

to evaluate this SIP submittal in

accordance with EPA's policy criteria

for approving enforceable commitments.

As EPA stated in the proposed rule, 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. See 79 FR 28650 at

28654, 28658. We will apply the

relevant criteria for evaluating SIP

commitments when we take action on a

SIP that contains such a commitment.

Nothing in Rule 9610 supplants the

applicable requirements of the Act, nor

does anything in EPA's approval of Rule

9610 alter the requirements of the Act

as they apply to SIPs that rely on

emission reductions achieved through

voluntary incentive programs.

Comment 4: Earthjustice claims that

the "best option for proceeding...

would be to adopt backstop control

measures that are fully SIP-creditable

and use incentive programs to address

cost-effectiveness concerns and

incentivize early adoption and

turnover."

Response 4: We continue to support

the use of incentive programs to address

cost-effectiveness concerns and to

incentivize early adoption and turnover

to cleaner, less-polluting mobile

sources, and we encourage the

commenter to provide these

recommendations, together with any

recommendations it may have

concerning "backstop" control

measures, to the State and/or District

during their state and local rulemaking

processes on air quality plans that rely

on incentive programs for necessary

emission reductions.

Comment 5: Earthjustice claims that

"Rule 9610 is a flawed attempt to make

programs 'SIP creditable' by fiat" and

that this is not legitimate under the

CAA. Earthjustice also asserts that

"EPA's inconsistent analysis of the rule

does not help in this effort." In

conclusion, Earthjustice asserts that if

the desired goal is to promote the

adoption of incentive programs, EPA,

the State, and the District should go

back to the drawing board and work

with stakeholders to come up with a

legally viable approach."

Response 5: For the reasons provided

in Response 1 through Response 3

above, we disagree with Earthjustice's

claims that Rule 9610 is a flawed

attempt to make programs SIP creditable

by fiat and that EPA has provided an

inconsistent analysis of the rule. As

previously explained, nothing in Rule

9610 supplants the applicable

requirements of the Act, and 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. See 79 FR 28650 at 28654, 28658.

We agree, however, with

Earthjustice's suggestion that EPA, the

State, the District and interested

stakeholders should work together

toward the development of air quality

plans and measures that satisfy CAA

requirements as applied to discretionary

incentive programs and other

nontraditional emission reduction

measures. We look forward to the

public's continued involvement, both

during the State and local rulemaking

processes through which the District

and ARB adopt these plans and during

the EPA rulemakings through which

EPA takes final action on these plan

submittals under section 110 of the

CAA.

Comment 6: The SJVUAPCD states

that incentive funds to reduce mobile

source emissions have become a critical

component of the District's clean air

strategy in the SJV and expresses

appreciation for EPA's work with the

District and with CARB, NRCS, and

other stakeholders throughout the

development of Rule 9610 and related

documents. The District states that it

supports EPA's proposal to fully

approve Rule 9610 as a revision to the

California SIP.

Response 6: For the reasons provided

in our proposed rule (79 FR 28650 at

28657) and further explained in

Response 3.h, EPA is finalizing a

limited approval and limited

disapproval of Rule 9610. We look

forward to the District's submittal of a

revised rule that corrects the

deficiencies we have identified in

section 6.2 of the rule and addresses the

recommendations provided in our

proposed rule and Proposal TSD.

EPA supports and encourages the

continuing efforts by CARB, the District,

and NRCS to make voluntary economic

incentive programs an effective part of

the SJV's strategy for clean air. We

commit to continue our work with these

agencies to develop reliable methods for

documenting and verifying the emission

reductions achieved through these

programs and to ensure that future air

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quality plans for the SJV area that rely

on economic incentives will satisfy the

requirements of the Act.

III. Final Action

Under CAA sections 110(k)(3) and

301(a) of the Act and for the reasons set

forth above and in our May 19, 2014

proposed rule, EPA is finalizing a

limited approval and limited

disapproval of Rule 9610 as submitted

June 26, 2013. We are finalizing a

limited approval of the submitted rule

because we continue to believe that the

rule improves the SIP and is largely

consistent with the applicable CAA

requirements. This action incorporates

the submitted rule, including those

provisions identified as deficient, into

the SJV portion of the federallyenforceable California SIP.

We are finalizing a limited

disapproval of Rule 9610 because

section 6.2 of the rule incorrectly

describes NRCS's statutory obligations

with respect to disclosure of

information concerning the EQIP

program and creates a potential conflict

with the requirements of the CAA

concerning public availability of

emission data. Our reasons for

disapproving the rule on these bases are

explained in the proposed rule and

further in our responses to comments

above.

This limited disapproval does not

trigger any sanctions clocks under CAA

section 179(a) because Rule 9610 was

not submitted to address a requirement

of part D, title I of the Act or in response

to a finding of substantial inadequacy as

described in CAA section 110(k)(5) (i.e.,

a "SIP Call"). The limited disapproval

does trigger an obligation on EPA to

promulgate a federal implementation

plan (FIP) to correct the deficiency,

unless the State submits and EPA

approves a corrective SIP revision

within two years of the disapproval (see

CAA section 110(c)(1)(B)). EPA expects

the District to revise section 6.2 at its

earliest opportunity to correct the errors

in this provision and to ensure that the

rule does not preclude disclosure of

emission data related to the EQIP

program.

Note that the submitted rule has been

adopted by the SJVUAPCD, and EPA's

final limited disapproval does not

prevent the local agency from enforcing

it. The limited disapproval also does not

prevent any portion of the rule from

being incorporated by reference into the

federally enforceable SIP as discussed in

a July 9, 1992 EPA memo found at:

http://www.epa.gov/nsr/ttnnsrOl/gen/

pdf/memo-s.pdf.

IV. Incorporation by Reference

In this rule, EPA is finalizing

regulatory text that includes

incorporation by reference. In

accordance with the requirements of 1

CFR 51.5, EPA is finalizing the

incorporation by reference of the

SJVUPACD rule described in the

amendments to 40 CFR 52 set forth

below. EPA has made, and will continue

to make, these documents available

electronically through

www.regulations.gov and in hard copy

at the appropriate EPA office (see the

ADDRESSES section of this preamble for

more information).

V. Statutory and Executive Order

Reviews

A. Executive Order 12866, Regulatory

Planning and Review

The Office of Management and Budget

(OMB) has exempted this regulatory

action from Executive Order 12866,

entitled "Regulatory Planning and

Review."

B. Paperwork Reduction Act

This action does not impose an

information collection burden under the

provisions of the Paperwork Reduction

Act, 44 U.S.C. 3501 et seq. Burden is

defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA)

generally requires an agency to conduct

a regulatory flexibility analysis of any

rule subject to notice and comment

rulemaking requirements unless the

agency certifies that the rule will not

have a significant economic impact on

a substantial number of small entities.

Small entities include small businesses,

small not-for-profit enterprises, and

small governmental jurisdictions.

This rule will not have a significant

impact on a substantial number of small

entities because SIP approvals and

limited approvals/limited disapprovals

under section 110 and subchapter I, part

D of the Clean Air Act do not create any

new requirements but simply approve

requirements that the State is already

imposing. Therefore, because this

limited approval/limited disapproval

action does not create any new

requirements, I certify that this action

will not have a significant economic

impact on a substantial number of small

entities.

Moreover, due to the nature of the

Federal-State relationship under the

Clean Air Act, preparation of flexibility

analysis would constitute Federal

inquiry into the economic

reasonableness of State action. The

Clean Air Act forbids EPA to base its

actions concerning SIPs on such

grounds. Union Electric Co., v. U.S.

EPA, 427 U.S. 246, 255-66 (1976); 42

U.S.C. 7410(a)(2).

D. Unfunded Mandates Reform Act

Under sections 202 of the Unfunded

Mandates Reform Act of 1995

("Unfunded Mandates Act"), signed

into law on March 22, 1995, EPA must

prepare a budgetary impact statement to

accompany any proposed or final rule

that includes a Federal mandate that

may result in estimated costs to State,

local, or tribal governments in the

aggregate; or to the private sector, of

$100 million or more. Under section

205, EPA must select the most costeffective and least burdensome

alternative that achieves the objectives

of the rule and is consistent with

statutory requirements. Section 203

requires EPA to establish a plan for

informing and advising any small

governments that may be significantly

or uniquely impacted by the rule.

EPA has determined that the limited

approval/limited disapproval action

promulgated does not include a Federal

mandate that may result in estimated

costs of $100 million or more to either

State, local, or tribal governments in the

aggregate, or to the private sector. This

Federal action approves pre-existing

requirements under State or local law,

and imposes no new requirements.

Accordingly, no additional costs to

State, local, or tribal governments, or to

the private sector, result from this

action.

E. Executive Order 13132, Federalism

Federalism (64 FR 43255, August 10,

1999) revokes and replaces Executive

Orders 12612 (Federalism) and 12875

(Enhancing the Intergovernmental

Partnership). Executive Order 13132

requires EPA to develop an accountable

process to ensure "meaningful and

timely input by State and local officials

in the development of regulatory

policies that have federalism

implications." "Policies that have

federalism implications" is defined in

the Executive Order to include

regulations that have "substantial direct

effects on the States, on the relationship

between the national government and

the States, or on the distribution of

power and responsibilities among the

various levels of government." Under

Executive Order 13132, EPA may not

issue a regulation that has federalism

implications, that imposes substantial

direct compliance costs, and that is not

required by statute, unless the Federal

government provides the funds

necessary to pay the direct compliance

costs incurred by State and local

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governments, or EPA consults with

State and local officials early in the

process of developing the proposed

regulation. EPA also may not issue a

regulation that has federalism

implications and that preempts State

law unless the Agency consults with

State and local officials early in the

process of developing the proposed

regulation.

This rule will not have substantial

direct effects on the States, on the

relationship between the national

government and the States, or on the

distribution of power and

responsibilities among the various

levels of government, as specified in

Executive Order 13132, because it

merely approves a State rule

implementing a Federal standard, and

does not alter the relationship or the

distribution of power and

responsibilities established in the Clean

Air Act. Thus, the requirements of

section 6 of the Executive Order do not

apply to this rule.

F. Executive Order 13175, Coordination

With Indian Tribal Governments

Executive Order 13175, entitled

"Consultation and Coordination with

Indian Tribal Governments" (65 FR

67249, November 9, 2000), requires EPA

to develop an accountable process to

ensure "meaningful and timely input by

tribal officials in the development of

regulatory policies that have tribal

implications." This final rule does not

have tribal implications, as specified in

Executive Order 13175. It will not have

substantial direct effects on tribal

governments, on the relationship

between the Federal government and

Indian tribes, or on the distribution of

power and responsibilities between the

Federal government and Indian tribes.

Thus, Executive Order 13175 does not

apply to this rule.

G. Executive Order 13045, Protection of

Children From Environmental Health

Risks and Safety Risks

EPA interprets Executive Order 13045

(62 FR 19885, April 23, 1997) as

applying only to those regulatory

actions that concern health or safety

risks, such that the analysis required

under section 5-501 of the Executive

Order has the potential to influence the

regulation. This rule is not subject to

Executive Order 13045, because it

approves a State rule implementing a

Federal standard.

H. Executive Order 13211, Actions That

Significantly Affect Energy Supply,

Distribution, or Use

This rule is not subject to Executive

Order 13211, "Actions Concerning

Regulations That Significantly Affect

Energy Supply, Distribution, or Use" (66

FR 28355, May 22, 2001) because it is

not a significant regulatory action under

Executive Order 12866.

L National Technology Transfer and

Advancement Act

Section 12 of the National Technology

Transfer and Advancement Act

(NTTAA) of 1995 requires Federal

agencies to evaluate existing technical

standards when developing a new

regulation. To comply with NTTAA,

EPA must consider and use "voluntary

consensus standards" (VCS) if available

and applicable when developing

programs and policies unless doing so

would be inconsistent with applicable

law or otherwise impractical.

The EPA believes that VCS are

inapplicable to this action. Today's

action does not require the public to

perform activities conducive to the use

of VCS.

J. Executive Order 12898: Federal

Actions To Address Environmental

Justice in Minority Populations and

Low-Income Population

Executive Order (EO) 12898 (59 FR

7629 (Feb. 16, 1994)) establishes federal

executive policy on environmental

justice. Its main provision directs

federal agencies, to the greatest extent

practicable and permitted by law, to

make environmental justice part of their

mission by identifying and addressing,

as appropriate, disproportionately high

and adverse human health or

environmental effects of their programs,

policies, and activities on minority

populations and low-income

populations in the United States.

EPA lacks the discretionary authority

to address environmental justice in this

rulemaking.

K. Congressional Review Act

The Congressional Review Act, 5

U.S.C. 801 et seq., as added by the Small

Business Regulatory Enforcement

Fairness Act of 1996, generally provides

that before a rule may take effect, the

agency promulgating the rule must

submit a rule report, which includes a

copy of the rule, to each House of the

Congress and to the Comptroller General

of the United States. EPA will submit a

report containing this rule and other

required information to the U.S. Senate,

the U.S. House of Representatives, and

the Comptroller General of the United

States prior to publication of the rule in

the Federal Register. A major rule

cannot take effect until 60 days after it

is published in the Federal Register.

This action is not a "major rule" as

defined by 5 U.S.C. 804(2). This rule

will be effective on May 11, 2015.

L. Petitions for Judicial Review

Under section 307(b)(1) of the Clean

Air Act, petitions for judicial review of

this action must be filed in the United

States Court of Appeals for the

appropriate circuit by June 8, 2015.

Filing a petition for reconsideration by

the Administrator of this final rule does

not affect the finality of this rule for the

purposes of judicial review nor does it

extend the time within which a petition

for judicial review may be filed, and

shall not postpone the effectiveness of

such rule or action. This action may not

be challenged later in proceedings to

enforce its requirements (see section

307(b)(2)).

List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Incorporation by

reference, Intergovernmental relations,

Reporting and recordkeeping

requirements.

Dated: February 26, 2015.

Jared Blumenfeld,

Regional Administrator, Region IX.

Part 52, Chapter I, Title 40 of the Code

of Federal Regulations is amended as

follows:

PART 52-APPROVAL AND

PROMULGATION OF

IMPLEMENTATION PLANS

m 1. The authority citation for part 52

continues to read as follows:

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

Subpart F-California

* 2. Section 52.220 is amended by

adding paragraph (c)(455) to read as

follows:

§52.220 Identification of plan. * * * * *

(c) * * *

(455) New and amended regulations

for the following APCDs were submitted

on June 26, 2013.

(i) Incorporation by reference.

(A) San Joaquin Valley Unified Air

Pollution Control District.

(1) Rule 9610, "State Implementation

Plan Credit for Emission Reductions

Generated through Incentive Programs,"

adopted on June 20, 2013.

[FR Doe. 2015-07972 Filed 4-8-15; 8:45 am]

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