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Citation: 80 Fed. Reg. 19020 2015

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-- The search text of this PDF is generated from uncorrected OCR text.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 ofdirect finalrule.

SUMMARY: On February 10, 2015, the Environmental Protection Agency (EPA) published adirect finalrule approving revisions to the NewMexico 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 AirAct (CAA). The direct final rule was published without prior proposal because EPA anticipated no adverse
comments. EPA statedin the direct final rule that ifEPA 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 isbeing taken pursuant to section 110 ofthe CAA.
DATES: The direct finalrule published

onFebruary 10, 2015 (80FR 7341), is withdrawn effective April 8, 2015.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, EPApublished a direct final rule approving revisions to the NewMexico 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 finalrule that ifrelevant, adverse
comments were received by March 12, 2015, EPA would publish atimely withdrawal in the Federal Register. EPA received a comment on March 10, 2015 from the Sierra Club stating inrelevant part, thatan Acting Regional Administrator cannot sign approvals, disapprovals, or any combination of approvals or disapproval, in whole or in part, due tothe factthat the authority
to act on agency actions on state implementation plans isdelegated only to, and therefore can onlybe signed by, the Regional Administrator. EPA considers this a relevant, adverse
comment and accordingly is withdrawing the direct final rule. In a separate subsequent finalrulemaking EPA will address the comment received. The withdrawal isbeing taken pursuant to section 110 ofthe CAA.

List ofSubjects 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, RegionalAdministrator, 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.

[FRDoe. 2015-07995 Filed4-8-15; 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]

Revisionstothe 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 alimited approval and limited disapproval ofa revision to the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) portion ofthe California State Implementation Plan (SIP). This regulation establishes requirements and procedures for the District's quantification ofemission reductions achieved through incentive funding programs implemented in the San Joaquin Valley. The effect ofthis action would be to make these requirements andprocedures federally enforceable as part ofthe California SIP. Under authority ofthe 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: EPAhas established docket number EPA-R09-OAR-2013-0754 for this action. Generally, documents in the docketfor this action are available electronically at http:// www.regulations.govorin hard copy at EPA Region IX, 75 Hawthorne Street, SanFrancisco, California 94105-3901. While all documents inthe docket are listed athttp://www.regulations.gov,

some information maybe 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 inspectthe hard copy materials, please schedule an appointment during normalbusiness 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 ofContents

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 9610based on a proposed conclusion that therule satisfied the applicable CAA requirements. We noted, however, that section 6.2 ofthe rule contained an incorrect statutory reference and inaccurately described the statutory obligations ofthe U.S. Department of Agriculture's Natural Resources Conservation Service (NRCS) with respect to disclosure ofinformation concerning implementation ofthe Environmental Quality Incentives Program (EQIP). See 79 FR 28650 at 28657 (May 19, 2014). We strongly recommended thatthe District revise section 6.2 ofthe rule at its earliest convenience toremove the incorrect reference and to provide an accurate description ofNRCS's statutory obligations with respect to disclosure of information related to EQIP. Seeid.

Based on additional evaluation ofthis 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 ofthe rule, as described in our proposed rule, necessitate a limited disapproval. We provide ourrationale 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 ourresponses below. Comment1:Earthjustice states that EPA should withdraw itsproposed approval ofRule 9610 because approval ofthe rule will "create legal confusion

over the requirements thatmust be met for approval ofvoluntary incentive

measures into the State Implementation Plan ('SIP')." Earthjustice further claims that therule adds no value tothe SIP andthat EPA's proposal does not fully identify all ofthe "legal defects" in the rule. "At best," according to Earthjustice, "EPA's approval ofRule 9610 does nothing, because compliance with Rule 9610 will notbe enough to support approval offuture incentive programs into the SIP," and atworst "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. Webelieve 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 whichEPA provides national leadership, sets standards for environmental protection and conducts oversight ofstate implementation, while states play a larger role in implementation ofthese standards including developing SIPs and adopting emission reduction

measures. See CAA sections 101 and 102. Under section 110 ofthe Act, states have broad discretion to choose the mix ofemission limitations and other control measures, means, or techniques (including economic incentive programs) that they will implement to provide for attainment ofthe national ambient air quality standards (NAAQS). See UnionElectricCo.v. EPA,427 U.S. 246 (1976) ("Solong as the national standards are met,the State may select whatever mix ofcontrol 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 ofemission reductions achieved through incentive programs andto provide opportunities for EPA, CARB, and the public to review and comment onthe District's evaluations on an annual basis. See 79 FR 28650 at 28652. Webelieve 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) ofthe Act. See 40 CFRpart 51,subpart U. For discretionary ELPs, EPA has issued guidance entitled "Improving Air Quality with Economic Incentive Programs," U.S. EPA, Office of Airand Radiation, January 2001 (EPA-45/R-01-001) ("2001 EIP Guidance"). Because the 2001 EIP Guidance is non-binding and does notrepresent final agency action on incorporation ofRule 9610 into the SIP, the requirements and procedures in the rule become federally enforceable against the District, enabling EPA and citizens tohold the District accountable for compliance with these requirements.

As we also stated in the proposed rule, nothing in Rule 9610 supplants the applicable requirements ofthe CAA, andEPA 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 ofthe 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 (notingthat Rule 9610 does not specifically address CAA requirements concerning funding, personnel, and implementation authority) and 28657 (discussing incorrect statutory reference in section 6.2 ofRule 9610). To the extent our proposal did not make clear thatRule 9610 in no way substitutes for the requirements ofthe CAA, we hereby clarify that the requirements ofthe CAA continue to apply to each SIP submitted by the State and District, notwithstanding any provision in Rule 9610, andthat our action on this rule does not constitute an endorsement of its content as an adequate representation oftherequirements of the Act.Additionally, we are finalizing

alimited approval and limited disapproval ofRule 9610 because ofthe deficiencies in section 6.2 concerning disclosure ofrecords related to the NRCS's implementation ofthe EQIP program. We explain ourreasons for disapproving the rule on thisbasis in Response 3.h below.

Given that theDistrict'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
extentto which the requirements and procedures contained in the rule

discretionaryEIPs, EPA uses the2001 EIP Guidance

as aninitial screentoevaluate potential approvability issues. Finalaction on any discretionaryEIPoccurs when EPA acts on itafter its submissionas aSIPrevision. 

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establish a framework for development ofSIP submittals that satisfy the requirements oftheAct, 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 ofthe specific incentive program guidelines listed in Section 3.1 ofthe rule, as a "preliminary guide to assistthe District in its effort to address CAA requirements in SIP submittals thatrely

onincentive programs going forward." 79 FR 28650 at 28654; see alsoU.S. EPA Region 9 Air Division, "Technical SupportDocument 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 Creditfor 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; toinform the District ofboth provisions in Rule 9610 that adequately represent these requirements and shortcomings in the rule that shouldbe corrected to avoid confusion; and to invite public
comment on EPA's understanding ofthe way in which the Districtwould implement Rule 9610 going forward. See, e.g., 79 FR 28650 at 28653 (discussingEPA'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 ofthe rule

as a substitute for CAA requirements.

Section 110 ofthe CAA requires each
state to submit to EPA for approval a "plan which provides for implementation, maintenance, and enforcement" ofeach primary and secondary NAAQS, and EPA isrequired
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 ofreductions in emissions ofNAAQS 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. SeegenerallySan Joaquin Valley Unified Air Pollution Control District, Final StaffReport, "Proposed Rule 9610 (State Implementation Plan Credit for Emission Reductions Generated through Incentive Programs)," June 20, 2013. With the exception ofthe deficiencies in section 6.2 ofthe rule, Rule 9610 satisfies the requirements concerning enforceability in section 110(a)(2)(A) and SIP revisions in section 110(1) ofthe Act. See 79 FR 28650 at 28652 (summarizing rule provisions enforceable against theDistrict) and 28658 (explaining that approval ofRule 9610 would not interfere with applicable requirements concerning attainment and other CAA requirements) and Proposal TSD at 3-8;

see alsoResponse 3.h (discussing deficiencies in section 6.2 ofRule 9610). Additionally, EPA has reviewed Rule 9610 for conflicts with CAA requirements and identified one provision (section6.2 ofthe rule) that clearly conflicts with the requirements ofthe Act. Based onthese 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 ofthe CAA in each individual SIP submittal thatrelies

on incentive programs, and our recommendations inboth the proposal and today's final rule are intended to provide the District with general guidance onhow these requirements, as interpreted in EPA guidance, apply to future SIP submittals developed pursuant toRule 9610 and the requirements ofthe Act.To the extent

our action on Rule 9610 and the related public process provide a forum forEPA 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 goingforward. In any case, as EPA stated in the proposed rule, EPA will review each SIP submittal developed pursuant to Rule 9610 (including thenecessary evaluation of the applicable incentive program guidelines) on a case-by-case basis, following notice-and-comment rulemaking, to determine whether the applicable requirements ofthe Act are met. See 79FR 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. Comment2: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 toredefine these four integrity elements for "SIP creditability." Quoting EPA's statement that "[n]othing in Rule 9610 supplants the applicable requirements ofthe 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 actionbeg the question why EPA is approving Rule 9610 and claims thatthe purpose ofthe rule and EPA's action are not evident inthe proposal. In support ofthese claims, Earthjustice cites a statement in the Proposal TSD in which EPA disagrees with the District's claims thatRule 9610 identifies "pre-approved incentive program guidelines" for claiming SIP credit and thatcertain Carl Moyer programs provide SIP creditable emission reductions. Earthjustice further asserts that theDistrict's definitions in Rule 9610 do not meet all ofEPA's criteria andthat EPA's analysis oftheDistrict's definitions "notes some ofthese deficiencies but ignores others," leaving readers to "puzzle through" the

reason for EPA's approval ofthe rule.

Response2:We agree thatthe CAA requires emission reductions resulting from incentive programs tobe "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 oftheterms "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 ourproposed action, the SJVUAPCD's statedintent 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 ofRule 9610 into the SIP, its requirements willbecome federally enforceable under the CAA and thereby supplement, but not supplant, the requirements ofthe Act. 

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As we explained in the proposed rule andfurther in the Proposal TSD, Rule 9610 does not represent all ofthe CAA requirements applicable to SIPs thatrely

onincentive 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 inRule 9610 does not necessarily mean that agiven incentive program is, in fact, SIP creditable under the CAA. Additionally,

asEarthjustice notes, EPA's Proposal TSD identifies several statements in the District's 2013 Annual Demonstration Report that improperly characterize the effect ofcompliance with the rule (e.g., the District's statement that "Section 3.1 ofRule 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 istaking 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 ofthese guidelines for approval intothe SIP. See 79 FR 28650 at 28653, n. 7and 28654. It follows thatEPA cannot, in today's action, approve (or "pre-approve") any ofthese guidelines for use in quantifying SIP emission reduction credit.2

We continue to believe, however, that the definitions oftheterms "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 thebases for our limited approval oftherule.3 Ifthe District implements Rule 9610 (includingits definitions) in a manner thatis consistent with EPA's interpretation and the recommendations provided in our proposed and final rulemaking documents, we expect thatfuture SIPs developed in accordance with Rule 9610 would adequately address EPA's

2We understand that CARB and the District do

not intend to submit anyincentive program guidelines to EPA forapproval into the SIP,given that SIP-approval ofan incentive program guideline
perseis notnecessary to demonstrate that the emission reductions associated with that program satisfy CAArequirements for SIPemission reduction credit.

3Should theDistrict's implementation ofRule 9610 going forward reveal a conflictbetween a provision ofthe rule and the requirements ofthe CAA, EPA mayexercise 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 ofthe rule and related recommendations, we expect such future SIPs would not adequately address the requirements ofthe Act. Although we make no determination today concerning SIP emission reduction credit for any particular incentive program, we believe that our interpretations ofRule 9610, ourrelated recommendations for corrections or clarifications tothe rule, and our preliminary reviews ofthe incentive
program guidelines referenced in the rule (asdiscussed in the Proposal TSD) provide general guidance to the State and District that will help clarifythe applicable CAArequirements for future SIPs, compared to EPA inaction on Rule 9610. Comment3:Earthjustice claims that Rule 9610 does not ensure "surplus" and "enforceable" emission reductions and disagrees with several aspects of EPA's evaluation oftherule's definitions ofthese terms.

Response3:EPA isfinalizing a limited approval and limited disapproval ofRule 9610 based on our conclusion that the rule relates to the requirements ofCAA section 110 and, with one exception, satisfies the statutory criteria for approval into the SIP. SeeResponse 1and Response 2, above; seealsoResponse 3.h (discussing deficiencies in section 6.2 ofRule 9610).

Nonetheless, the commenter raises a number ofimportant concerns regarding the adequacy ofRule 9610 as a legal framework for quantifying SIP emission reduction credit for incentive programs, and in an effortboth to respond to these
comments and to provide the District with specific guidance on the requirements ofthe Act that each SIP
must satisfy, we respond below (in Response 3.a through Response 3.j) to each ofthese concerns. Comment3.a:Earthjustice states that according to EPA, "emission reductions

are surplus only ifthey 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 ofa criteria pollutant

or its precursors, and thatmeasures are only surplus for "the remaining useful life ofthe vehicle, engine, or equipment being replaced." Rule 9610, on the other

4Nothingin the comments submitted bythe District onEPA's proposed rule (seeComment 6) indicates that theDistrict disagrees withEPA's interpretation ofRule 9610, asprovided in the proposed rule and Proposal TSD. hand, defines "surplus" to mean that the emission reductions are "not otherwise required by any federal, state,

orlocal regulation, or other legal mandate, and are in excess ofthe baseline emission inventories underlying a SIP attainment demonstration" (citing Rule 9610, section 2.27). Earthjustice claims that this definition in Rule 9610 isnot consistent with EPA's definition, for example because "the District's definition leaves outvarious 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" tothese differences and provides

an unsupported claim thatthe District's

new definition will "treat as 'surplus' onlythose emission reductions" that
meet EPA's definition ofthe term.

Response3.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" ofemission 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 ofthe 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 ofa criteria pollutant or itsprecursors (e.g.,

anew 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 ofthese types oflegal obligations from being treated as "surplus." Second, we understand thatthe phrase "baseline emission inventories underlying a SIP attainment demonstration" means the projection year emission inventories that provide the basis forthe attainment-related demonstrations in a SIP. Read accordingly, emission reductions "in excess ofthe 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 aSIP-related program (e.g., an attainment or reasonable further progress plan or a transportation conformity demonstration) would notbe treated as "surplus."

Read in its entirety, section 2.27 provides that only those emission reductions that are nototherwise required by orassumed 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 ofthe term in longstanding guidance. See,e.g., "Guidance on Incorporating Voluntary Mobile Source Emission Reduction Programs in State Implementation Plans (SIPs)," EPA, Office ofAir and Radiation, October 24, 1997 (hereafter "1997 VMEP") at 6; "Improving Air Quality with Economic Incentive Programs," EPA, Office ofAir and Radiation, January 2001 (hereafter "2001 EIP Guidance") at 35; "Incorporating Emerging and Voluntary Measures in a State Implementation Plan," EPA, Office ofAir andRadiation, 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 ofTransportation and Air Quality,February 2014 (hereafter "2014 Diesel Retrofits Guidance") at 27.

One component ofEPA's various policy recommendations that the definition of"surplus" in section 2.27 does not explicitly address isthe recommendation concerning the remaining useful life ofthe 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" tomean "the period oftime over which an incentive program project achieves SIP-creditable emission reductions" and states that "[p]roject life shall not exceed the useful life ofequipment, vehicles, or practices funded through incentive programs, and mayvary across incentive programs and project types." As we explained in the Proposal TSD, in future SIP submittals developed pursuant toRule 9610, we expect the State and/orDistrict will demonstrate: (1)How the "project life" for each funded project relied onfor SIP credit takes into account theremaining useful life ofthe 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 ofthereductions 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.
Comment3.b:Earthjustice asserts that EPA's analysis ofthe District's definition of"enforceable" is arbitrary. Quoting from section 110(a)(2)(A) ofthe CAA and EPA's interpretative
statements in "State Implementation Plans; General Preamble for the Implementation ofTitle I ofthe Clean Air Act Amendments of 1990" (57FR 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 EPAhighlights the importance ofthe EPA and citizen enforcement authorities established by Congress to

ensure compliance with CAA requirements and states that SIP provisions that function tobar effective enforcement by the EPA or citizens for violations wouldbe inconsistent with the regulatory scheme established in title I ofthe Act.Earthjustice quotes from this memorandum to support its assertion thataccording to EPApolicy, SIPs mustbe 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 toinclude 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 ofthese arguments.

Response3.b:We agree that underthe CAA, asinterpreted in EPApolicy, all

measures approved into a SIP, including those "nontraditional techniques" for reducing pollution identified in section 110(a)(2)(A) ofthe Act, mustbe "enforceable" to qualify for SIP emission reduction credit and thatEPA and citizens mustbe able tobring enforcement actions to assure compliance. See,e.g., General Preamble
at 13556. We disagree, however, with the claim that EPA's analysis ofthe 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 tobe generally consistent with EPA's recommendations. See 79 FR 28650 at 28654 (discussing components ofRule 9610, section 2.8 that reflect EPA recommendations) and Proposal TSD at 8-11.Specifically, we highlighted key components ofEPA's policy recommendations concerning enforceability and found thatthe District's definition ofthe term "ensures that theDistrict will treat as 'enforceable' onlythose emission reductions thatcan, as a practical matter, be independently verified and that result from a program or measure that defines violations clearly, allows for identification ofresponsible parties, requires grantees toprovide allrecords needed to demonstrate thatemission 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 ofany particular incentive program or air quality plan thatrelies on incentive programs, as no such program or plan is before us in this action, but ratherto 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 (notingDistrict's obligation to demonstrate, in each SIP submittal that relies on an incentive program, that the 

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emission reductions relied uponto satisfy SIP requirements are surplus, quantifiable, enforceable, and permanent). 5Thatis, we highlighted these provisions of section 2.8 ofRule 9610 in an effort to ensure thatfuture SIPs thatrely on incentive programs in the SJV will, atminimum, 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 ofan "applicable implementation plan" 6and certain requirements oftheAct. See CAA sections 113 and 304(a), 42 U.S.C. 7413, 7604(a). Specifically, under section 113 ofthe Act, EPA may bring an enforcement action against any individual or government agency for violation of"any requirement or prohibition ofan applicable implementation plan," 7and under section 304(a) citizens maybring suit against any individual or government agency alleged to be inviolation of "an emission standard or limitation," including a schedule or timetable of compliance which is in effectunder an applicable implementation plan.8 To the

5Such documentation is necessary to hold the District accountable for any SIP commitments developed inaccordance with Section 7.0 ofRule 9610, as explained further in Response 3.h.

6 Section 302(q) ofthe CAA defines "applicable implementation plan," inrelevant part, as "the portion (or portions) ofthe implementation plan, or mostrecent revision thereof,which has been approved undersection 110 of [title I ofthe Act]

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

7Section 113 ofthe CAA authorizes EPA to issue notices and compliance orders, assess administrative penalties, and bringcivil actions against any "person," including a state agency, who "has violated oris inviolation ofany requirement

or prohibition ofan 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 orpolitical subdivision thereof).

8 Section 304(a)(1) ofthe CAA authorizes any
person to bring a civil action against any "person," including a stateagency (tothe extent permitted by the Eleventh Amendment to the Constitution), "who is alleged to have violated or to bein violation of.

. . anemission standard or limitation.

. 42 U.S.C. 7604(a)(1); CAA 302(e), 42 U.S.C. 7602(e) (defining "person" to include a Stateor 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 ofan "applicable implementation plan"-e.g., the requirements ofan 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 onlyto theDistrict.

. . [and] would become federally enforceable againsttheDistrict
upon EPA's final approval ofthe 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 ofSIP requirements against

a pollution source.

We understand thatEarthjustice may have intended to argue thatRule 9610 would encouragefuturedevelopment of
programs that preclude EPA or citizen enforcement against pollution sources, rather than to comment on the enforceability ofRule 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 ofthe Act requires that each SIP include "enforceable emission limitations and other controlmeasures, means, or techniques (including economic incentives such asfees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance, as may be necessary or appropriate" to meetthe Act's requirements. CAA 110(a)(2)(A), 42 U.S.C. 7410(a)(2)(A). Thus, according
to the plain language ofthe statute, SIPs may contain "means" or "techniques" including economic incentives and/or "schedules and timetables for compliance" thatEPA 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 theNAAQS. See,e.g., BCCA

in relevant part, to mean "a schedule or timetable ofcompliance" 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 ofrequired measures including

an enforceable sequence ofactions or operations leading to compliance with an emission limitation, other limitation, prohibition, or standard." 42 U.S.C. 7602(p).

9Earthjustice does not appear to question EPA's
statement that Rule 9610 itselfis enforceable against theDistrict and that ourapproval ofthe rule would make itfederally enforceable by EPA and citizens under the CAA. Appeal Groupv. EPA, 355F.3d 817 (5th Cir. 2003), reh'gdenied,BCCAAppeal Groupv. EPA,2004 U.S. App. LEXIS 215 (5th Cir. 2004); Conservation Law Foundation, Inc.v. JamesBuseyet al., 79 F.3d 1250, 1258 (1stCir. 1996) (citing, interalia,Wilderv. EPA, 854 F.2d 605 at 613-14) and Citizens fora BetterEnv'tv. Deukmejian,731 F. Supp. 1448, 1454-59 (N.D. Cal.), modified, 746 F. Supp. 976 (1990).

Nothing in Rule 9610 undermines the ability ofEPA 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 applyto SIP requirements. To the contrary, section 7.0 ofRule 9610 requiresthat 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 pastand courts have enforced these commitments against states that failed to comply with them. See, e.g.,AmericanLungAss'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. StateDept.of Env.Cons., 668 F. Supp. 848 (S.D.N.Y. 1987); Citizens foraBetterEnv'tv. Deukmejian, 731 F. Supp. 1448, recon. Granted in par, 746 F. Supp. 976 (N.D. Cal. 1990); Coalition forCleanAirv. 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 relyin its SIP on voluntary incentive programs, provided the State and/or District retain clear responsibility through an enforceable commitment to ensure thatthe emission reductions necessary to meet applicable CAA requirements are achieved, which EPA or citizens may enforce under sections 113 or 304 oftheAct, respectively.

As we noted previously, following the State's submittal ofa specific air quality plan or measure that relies on incentive programs for necessary emission reductions, EPA will evaluate thatplan

ormeasure to determine whether it satisfies the enforceability requirements oftheAct. We provide these responses to the commenter's concerns only as a preliminary explanation ofthe enforceability requirements thatfuture 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.

Comment3.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,' andtherefore 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 ifEPA and the public haveto rely entirely on the State and local air District to ensure source compliance," andthat this runs counter to EPA's longstanding policy and statutory interpretations, under which EPA "has onlybeen willing to allow such programs with a cap onthe SIP credit that canbe claimed."

Response3.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; 2004Emerging 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 ofemission reductions from certain voluntary and other nontraditional measures that maybe credited in a SIP. Specifically, for voluntary mobile source emission reduction programs (VMEPs),1O EPA has identified a presumptive limitofthree percent (3%) ofthe total projected future year emission reductions required to attain the appropriate NAAQS, and for any particular SIP submittal to demonstrate attainment or maintenance ofthe NAAQS or progress toward attainment (RFP), 3%ofthe specific statutory requirement. See 1997 VMEP at 5. As explained in the 2001 EIP Guidance, EPA recommended this

10Avoluntary mobile source emission reduction

program (VMEP) is a mechanism that supplements traditional emission reduction strategies through voluntary, nonregulatory changes inlocal transportation sector activity levels or changes in in-use vehicle and engine fleetcomposition, among other things. See 1997 VMEP at 3. 3%cap (per pollutant)on the credit allowed for VMEPs because states are "not required toplay 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 1997VMEP 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 of6% ofthe total amount ofemission reductions required for RFP, attainment,

or maintenance demonstration
purposes. See 2004 Emerging and Voluntary Measures Guidance at 9 ("EPA believes itis appropriate to limit these measures to a small portion ofthe SIP given the untested nature ofthe 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 ofvoluntary and emerging measures"). EPA has also long stated, however, that states mayjustify higher amounts ofSIP emission reduction credit for voluntary programs

on a case-by-case basis, and that EPA may approve measures for SIP credit in

excess ofthepresumptive limits "where

a clear and convincingjustification 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 also2005 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 mayjustify 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 maybe 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, ifCalifornia intends to satisfy a SIP requirement through reliance on an incentive program that EPA and citizens maynot 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 ofthe commitment into the SIP. EPA continues to believe thatvoluntary incentive measures accompanied by an enforceable commitment to monitor emission reductions achieved and timely rectify any shortfall meet the SIP control measure requirements ofthe Act. See Response 3.b above.

Should California submit a SIP that relies onincentive programs to satisfy a CAA requirement, EPA intends to evaluate the submittal to determine whether thenecessary emission reductions maybe enforced byEPA 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 toevaluate the SIP submittal to determine whether the State and/or District have provided a clear and convincingjustification for suchhigher amounts.

Comment3.d:Citingboth the 2001 EIP Guidance and the 2004 Emerging andVoluntary 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

canbe identified; (4) the District, State andEPA 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 forviolations; and (7)they are practicably enforceable in accordance with other EPA guidance on practicable enforceability. Earthjustice states that EPA's proposed rule recites all ofthese criteria except for citizen suit enforceability and questions whether this was an oversight or a deliberate attempt to mislead thepublic 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 onlyrequire thatviolations be defined through contracts, [which] can only be 

### 19026Federal Register/Vol. 80, No. 68/Thursday, April 9, 2015/Rules and Regulations

enforced bythe parties to the contract." Earthjustice asserts thatcitizens would have no recourse to "file suits against

sources forviolations," and thatEPA's proposal includes "no explanation of how this requirement ismet or whyit does not apply." To the extent EPA believes it isthe latter, Earthjustice states, "it has now afforded the public

no opportunity to respondto any reasoning behind that assertion."

Response3.d:First, tothe 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) ofthe Act explicitly includes "economic incentives" among the "control measures, means, or techniques" that states may useto meet SIP requirements, and EPA has long interpreted theAct to allow SIPs to rely

onnontraditional emission reduction techniques-including voluntary

measures that are not directly enforceable against emitting sourcesprovided the State submits enforceable mechanisms to assure thatthe requirements oftheAct are met. See Response 3.b and Response 3.c, above. As Earthjustice correctly notes, EPA's 2001 EIP Guidance states thatemission 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 Aswith 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. Seeid. at 12, 19, and 119. Moreover, in several other policies concerning nontraditional measures, EPA has indicated thatprovisions for citizen suits against a state or other responsible entity (other thanthe 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 otherrequired actions are enforceable if": (1) They are independently verifiable; (2) program violations are defined; (3) those liable for violations canbe 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 filesuits against sources for violations; and (7) they are practicably enforceable in accordance with other EPA guidance onpracticable 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 actionfrom theStatewhere applicable and the Statemaintains the [ability to] secure appropriate corrective action with respect to portions ofthe
program that are directly enforceable against the source.. " 2004Emerging and Voluntary Measures Guidance at 3, 4 (emphases added); see also2005 Bundled Measures Guidance at 25 (also discussing EPA enforcement against State) and 1997 VMEP at 6-7 ("[a] State'sobligations with respect to VMEPs mustbe enforceable atthe State and Federal levels") (emphasis added). In otherguidance concerning nontraditional emission reduction
measures, EPAhas indicated that provisions for enforcement against a "responsible party" may be acceptable in lieu ofenforcement 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 partyresponsiblefor 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 theresponsible partyfor violations") (emphases added). Thus, a number ofEPA 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 toidentify 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 onlybe enforced bythe parties to the contract" overlooks an important provision in the rule that requires the Districtto provide a mechanism for EPA and citizen

pollutant reductions aremore 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 ofRule 9610 requires that each SIP submission in which the District relies on projections ofSIP-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 tobe achieved through the use ofsecured or reasonably anticipated incentive program funding and the estimated availability ofprojects and willing participants, based on historical participation and estimates ofremaining equipment; (3)is specifically adopted by theDistrict as part ofthe SIP and accounted for in annual demonstration reports; and (4) states that "ifeither the District or EPA finds thatthere 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 (citingRule 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 ofthe Act, respectively. SeeResponse 3.b. Thus, although Rule 9610 does not require that incentive programs provide for citizen enforcement directly against emission sources for contract violations,' 3 therule 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 ofthe SIP.We therefore disagree with the commenter's suggestion that Rule 9610 deprives citizens ofthe ability to enforce SIP emission reduction requirements.

Finally, withrespect to Earthjustice's claim thatEPA's proposal provides "no explanation ofhow this requirement is
met or why itdoes not apply," it
appears thatEarthjustice isreferring to

13Underthe CarlMoyer,Prop 1B, andEQIP funding programs, each grantee must sign a contract specifying terms and conditions ofthe grant which

are enforceable bythe funding agency. See,e.g., CARB, "The Carl Moyer Program Guidelines, Approved Revisions 2011," Release Date:July 11, 2014, atChapter 3, Section Y ("Minimum Contract Requirements") (available electronically athttp:// www.arb.ca.gov/msprog/moyer/guidelines2011 g1/ 2011cmpgl 12 30 14.pdfl. 

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EPA's policy recommendation concerning citizen suits against emissionsourcesas 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, nordo EPA's guidance documents establish
any requirement thatnontraditional 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 thatthe emission reductions necessary tomeet applicable CAA requirements are achieved." 79 FR 28650 at 28653 (citing, interalia,1997 VMEP, 2004 Emerging andVoluntary Measures Guidance, and 2005 Bundled Measures Guidance). Consistent with these guidance documents, our proposed rule highlighted the importance ofthe enforceable "backstop" commitment from the State tomonitor 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 ofa SIP submittal that relies on nontraditional emission reduction measures). Our proposed rule also discussed the requirements concerning enforceable SIP commitments in section 7.0 ofRule 9610 and provided specific recommendations for theDistrict to consider in its development and adoption ofsuch commitments, to

ensure that therequirements ofthe Act

are met. Id.at 28655. We believe these explanations are adequate to inform the public ofEPA's policies concerning enforceability ofnontraditional emission reduction measures and to provide a preview ofthe 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 ofthe applicable incentive
program guidelines) on a case-by-case basis, following notice-and-comment rulemaking, to determine whether the applicable requirements ofthe 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 whichEPA takes final action on air quality plans or

measures that rely on incentive program emission reductions. Nothing in our approval ofRule 9610 today deprives the public ofthese opportunities to comment onthese future SIP actions. Comment3.e:Earthjustice states that "[t]he structure ofthe CAA reinforces EPA's conclusion that Congress was not willing to rely on states alone to guarantee thatthe claimed emission reductions would occur or be enforced." According toEarthjustice, section 113 of the Act gives EPA authority to ensure compliance whenever any person isin violation ofany requirement ofthe Act and section 304 allows citizens to enforce the requirements ofthe Act. Earthjustice also quotes from the Supreme Court's decision in Pennsylvaniav. Del. ValleyCitizens' Council forCleanAir,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 verybroad opportunities to participate in the effort to prevent and abate air pollution."

Response3.e:We do not dispute the importance offederal enforcement under section 113 ofthe Act and citizen enforcement under section 304 ofthe Act. As explained in ourproposed rule and further in these responses to comments, EPAhas consistently stated in longstanding guidance that SIP credit
may be allowed for avoluntary 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 underCAA 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 pollutionby requesting information from the District concerning the commitments ithas adopted under Rule 9610 and enforcing these commitments in the U.S. district courts in accordance with section 304 ofthe Act. Comment3.f.Earthjustice claims that the Rule 9610 definition of "enforceable" would not only waive any notion thatcitizens canfile a suit to enforce the reductions but "would also waive any requirement thatEPAhave
any 'ability to apply penalties and

secure appropriate corrective actions' against the source." The commenter asserts that EPA cannot enforce the conditions ofa 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 toEarthjustice, "EPA simply has no claim that itcan apply penalties

or secure corrective actions against the

sources responsible for reducing emissions" and "no basis for asserting that [the enforceability] criterion is met."

Response3.f:Although we agree that EPA cannot enforce the conditions ofa contract issued by the District pursuant to a state incentive program thatis 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 requiresthe District to provide a mechanism for EPA and citizen enforcement in each submitted SIP thatrelies on an incentive
program. Specifically, section 7.0 of Rule 9610 requires that each SIP submission in which the Districtrelies

onprojections ofSIP-creditable emission reductions to satisfy a CAA SIP requirement contain, among other things, an "enforceable commitment" containing specific provisions to ensure that theDistrict remains accountable for the required emission reductions. Upon EPA's approval ofan enforceable SIP commitment by the District, section 113 oftheAct authorizes EPA to apply penalties and secure appropriate corrective actions to enforce the requirements ofthe commitment against the District. SeeResponse 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-andcommentrulemaking. SeeCAA section 110(1); 5U.S.C. 553;40 CFR 51.105. Consequently, should the District's amendment or rescission ofcontracts issued to participating sources resultin

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 ofRule 9610, section 7.0). EPA would not approve a submitted SIP revision under Rule 9610 that did not contain such a schedule.

Comment3.g:Earthjustice states that "EPA seems to imply thatitis enough that EPA can push for the Districtto fulfill any shortfall in emission reductions through other means" but claims thatEPA "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.

Response3.g:Because we are not approving any State or District commitments in today's action, itisnot necessary toevaluate this SIP submittal in accordance with the criteria thatEPA has historically applied in approving enforceable commitments. We will applythe 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 oftheAct. Comment3.h:Earthjustice claims that the Rule 9610 definition ofenforceable does not allow for independent verification oreven the identification of liable sources. Earthjustice states that EPA identified several defects inthe District's rule thatwould limit the disclosure ofinformation 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 thatitis unclear why EPA is still proposing to approve the rule.

Response3.h:We continue to believe that the definition of"enforceable" in Rule 9610 generally allows for independent verification of emission reductions and identification ofliable

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 [ofRule 9610]." 79 FR 28650
at 28654 (citing Rule 9610, section 2.8). Additionally, Rule 9610 requires that each SIP in which theDistrict relies on emission reductions achieved through incentive programs contain an "enforceable commitment" by the District to adopt and submit substitute

measures to EPAby 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 ofRule 9610 obligate theDistrict 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 andthe provisions concerning commitments in section 7.0 ofRule 9610, in addition to the applicable requirements ofthe Act.

One significant exception to the general enforceability provisions in Rule 9610 isthe provision in section 6.2 that categorically prohibits public disclosure ofrecords related to NRCS's implementation ofthe EQIP program. As explained in ourproposed rule (see 79 FR 28650 at 28657 andProposal 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 findthat this provision necessitates a limited disapproval ofRule 9610 because, in addition to stating NRCS's statutory obligations incorrectly, the provision
creates a potential conflictbetween the requirements ofRule 9610 and the requirements ofthe 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 onthe basis ofthis 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 ofpart D, title I ofthe Act

orin response to a finding of substantial inadequacy as described in CAA section 110(k)(5) (i.e.,a "SIP Call"), but itdoes trigger an obligation on EPAto promulgate a federal implementation plan (FIP)tocorrect the deficiency, unless the State submits and EPA approves a corrective SIP revision within two years ofthe disapproval (see CAA section 110(c)(1)(B)). EPA expects the District torevise section 6.2 at its earliest opportunity tocorrect the errors in this provision and to ensure that the rule does not preclude disclosure of emission data related tothe EQIP program.

With respect to any future SIP submittal thatrelies 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 thatenables EPA and the public toverify the emissions of participating sources with an adequate level ofaccuracy and to determine whether theDistrict 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 tobe enforceable under the CAA, the District will have to submit an enforceable SIP commitment to specifically describe the information obtained from NRCS in therelevant 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. Seeid. andRule 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) ifitdoes notprovide for public availability ofemission 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

14See "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 andthe San Joaquin Valley Air PollutionControl District" ("NRCSAddendum"). 

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development ofany SIP commitments under section 7.0 ofRule 9610 to ensure that these commitments willbe legally andpractically enforceable by EPA and citizens, in accordance with the requirements oftheAct. 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 theDistrict to consider these recommendations as itdevelops its annual demonstration reports for future years. Comment3.i:Earthjustice argues that EPA's analysis ignores "the more fundamental defect which is thatEPA and citizens can only rely on data submitted to, or collected by the District" andthat 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 andthe source-i.e., EPA cannot collect its own information, conduct inspections, demand additional reporting, or enforce the failure to submit required reports. Earthjustice contends thatEPA's ability
to verify any ofthese emission reductions islimited because the emission reductions are secured through
contracts that do notinclude EPA. Thus, Earthjustice claims, EPA "lacks the abilityto independently verify compliance and instead must rely on the District and State to determine compliance." For example, withrespect to information regarding sources of EQIP funding, Earthjustice argues that because EPA and thepublic will not be provided with any information thatcan be independently verified or that identifies theparticipating sources, there isno way for EPA or the public
to "verify compliance by 'the source' as EPA's definition ofenforceability requires" or to "even identify sources liable forviolations."

Response3.i:We disagree with the commenter's claim that EPA's definition ofenforceability "requires" that EPA andthe 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 inResponse 3.d., the 2004 Emerging andVoluntary Measures Guidance recommends provisions authorizing citizen suits against sources for "emerging measures" butstates 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 EPAhas indicated in a number ofotherguidance documents that provisions forEPA and citizen enforcement against a state or against some other "responsible party" (otherthan the source) may satisfy the Act's requirements for enforceability. SeeResponse 3.d above.

We continue tobelieve thatRule 9610 generally ensures thatcitizens 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 ofthe rule. As

we explained in the proposed rule, section 6.1 ofRule 9610 specifically requires the Districtto keep and maintain "[a]ll documents created and/

or used in implementing the requirements ofSection 4.0" ofthe rule and to make these documents available for public review consistent with the requirements ofthe California Public Records Act and related requirements. See 79 FR 28650 at 28657 (citing Rule 9610, section 6.1). Section 4.0 ofRule 9610, in turn, requires theDistrict to annually prepare a public report that contains, among other things, identification ofthe amounts of"SIPcreditable emission reductions" from incentive programs that theDistrict is relying on for SIP purposes; descriptions ofthe 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 (citingRule 9610, sections 4.0-4.6). Additionally, section 7.0 ofthe rule requires the Districtto make enforceable commitments that enable EPA and citizens to obtain records adequate to independently confirm whether necessary emission reductions have occurred. SeeResponse 3.d and Response 3.h, above. Many of the incentive program guidelines identified in section 3.1 ofRule 9610 require that the District maintain specific documentation ofpre-project and post-project inspections for each funded project and that all grantees submit detailed compliance-related

penalties and secure appropriate corrective action from theStatewhere applicable and the State maintains the [ability to] secure appropriate corrective action withrespect to portions ofthe
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 ofCarl Moyer program guidelines) and 44-45 (discussing provisions ofProp 1B program guidelines). Provided the District commits to make these project records and other compliance-related documents available to the publicupon request, consistent withthe requirements of sections 6.1 and 7.0 of Rule 9610, EPA and citizens wouldhave

access toemissions-related information that theDistrict obtains from participating sources. 16

Finally, we disagree with the commenter's claim that EPA lacks authority tocollect information relevant
to source compliance with the contracts issued by the District. Rule 9610 requires the District to maintain, with respect to all projects thatthe District relies upon for SIP emission reduction credit, reports submittedby grantees and records ofall inspections and enforcement actions, among other things. See Rule 9610, section 6.1. Upon EPA's approval ofa District commitment into the SIP, section 114(a) oftheAct authorizes EPA to require information from "any person" who may have information necessary for the
purpose ofdetermining whether the District has violated such a SIP commitment-including allcompliancerelated documentation that the District maintains in accordance with the applicable incentive program guidelines. SeeCAA section 114(a) (authorizingthe EPA to require submission ofinformation 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. SeeRule 9610, section 6.1. Thus, although EPA is not authorized to enforcethe individual
contracts between the District and the
source, both EPA and citizens may collectinformation concerning source compliance from theDistrict and, in

16AlthoughEPA orcitizen enforcement ofa SIP
commitment adopted in accordance with section 7.0 ofRule 9610 generally depends upon projectrelated information maintained bythe District, this does notpreclude independent verification ofthe emission reductions ifthe applicable incentive
program guidelines require participating sources to regularly submit compliance-related documentation
to the District and require the District to maintain these records forspecified amounts oftime. 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, 17to 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 andrecordkeeping requirements would

ensure that emission reductions canbe independently verified. In any case, EPA will review each submitted SIP commitment on acase-by-case basis to determine whether the commitment is legally and practically enforceable by EPA and citizens, in accordance with the requirements ofthe Act. Comment3.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 policyfor reviewing and approving those,but the analysis of Rule 9610 is not consistent with those policies.

Response3.j:We disagree with the commenter's suggestions thatemission 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 maybe allowed for avoluntary or other nontraditional

measure onlywhere 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 ofthe commitment into the SIP. Thatis, 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

Forexample, under certain Prop 1B program guidelines, eachgrantee mustbe subject to detailed
contract provisions requiringthe grantee to maintain certain documents for specified periods and/or submit these documents to theDistrict on

aregular basis. See, e.g., 2008 Prop 1B guidelines
at Section IILD ("LocalAgency Project Implementation Requirements"), Section IV ("GeneralEquipment 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 ("GeneralEquipment Project Requirements"), and Appendix A, Section F ("Recordkeeping Requirements") and Section G ("Annual Reporting Requirements"). Earthjustice refers to isnot a specific regulatory cap but ageneral 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. SeeResponse 3.c and EPA guidance documents referenced therein.

In any case, we are not approving any State orDistrict commitments in today's action andtherefore do nothave 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 79FR 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 ofthe Act,nor does anything in EPA's approval ofRule 9610 alter the requirements ofthe Act

as they apply to SIPs thatrely on emission reductions achieved through voluntary incentive programs. Comment4: Earthjustice claims that the "best option for proceeding... would be to adoptbackstop 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 ofincentive 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 itmay have concerning "backstop" control
measures, tothe State and/or District during their state and local rulemaking
processes on air quality plans that rely

on incentive programs for necessary emission reductions. Comment5:Earthjustice claims that "Rule 9610 is a flawed attempt to make programs 'SIP creditable' byfiat" and that this is not legitimate underthe CAA. Earthjustice also asserts that "EPA's inconsistent analysis oftherule does not help in this effort." In conclusion, Earthjustice asserts thatif the desired goal is topromote the adoption ofincentive programs, EPA, the State, andthe District shouldgo back to the drawing board and work with stakeholders to come up with a legally viable approach." Response5:Forthe reasons provided in Response 1through Response 3 above, we disagree with Earthjustice's claims thatRule 9610 is a flawed attempt to make programs SIP creditable byfiatand thatEPA hasprovided an inconsistent analysis ofthe rule. As previously explained, nothing in Rule 9610 supplants the applicable requirements ofthe 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 ofthe Act are met. See 79FR 28650 at 28654, 28658.

We agree, however, with Earthjustice's suggestion that EPA, the State, the District and interested stakeholders should worktogether toward the development ofair quality plans andmeasures that satisfy CAA requirements as applied to discretionary incentive programs and other nontraditional emission reduction

measures. We lookforward to the public's continued involvement, both during the State and local rulemaking
processes through which the District andARB adopt these plans and during the EPArulemakings through which EPA takes final action on theseplan submittals under section 110 ofthe CAA. Comment6:The SJVUAPCD states that incentive funds toreduce mobile

source emissions have become a critical component oftheDistrict's clean air strategy in the SJV and expresses appreciation for EPA's workwith the District and with CARB, NRCS, and other stakeholders throughout the development ofRule 9610 and related documents. The District states thatit supports EPA's proposal to fully
approve Rule 9610 as a revision to the California SIP.

Response6:Forthe 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 ofRule 9610. We look forward to the District's submittal ofa revised rule thatcorrects the deficiencies we have identified in section 6.2 ofthe rule and addresses the recommendations provided in our proposed rule and Proposal TSD.

EPA supports and encourages the continuing efforts by CARB, the District, andNRCS to make voluntary economic incentive programs an effective part of the SJV's strategy for clean air. We committo continue our work with these agencies to develop reliable methods for documenting and verifying the emission reductions achieved through these
programs and to ensure thatfuture air 

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quality plans for the SJV area thatrely

on economic incentives will satisfythe requirements oftheAct.

III. Final Action

Under CAA sections 110(k)(3) and 301(a) ofthe Act and for the reasons set forth above and in ourMay 19, 2014 proposed rule, EPA is finalizing a limited approval and limited disapproval ofRule 9610 as submitted June 26, 2013. We are finalizing a limited approval ofthe submittedrule because we continue to believe thatthe 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 ofthe federallyenforceable California SIP.

We are finalizing a limited disapproval ofRule 9610 because section 6.2 ofthe 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 ofthe CAA concerning public availability of emission data. Our reasons for disapproving the rule on thesebases are explained in theproposed 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 arequirement ofpart D, title I ofthe Act orin 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)tocorrect the deficiency, unless the State submits and EPA approves a corrective SIP revision within two years ofthe disapproval (see CAA section 110(c)(1)(B)). EPA expects the District torevise section 6.2 at its earliest opportunity tocorrect 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 hasbeen 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 ofthe rulefrom being incorporated byreference into the federally enforceable SIP as discussed in

aJuly 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 thatincludes incorporation by reference. In accordance with therequirements of 1 CFR 51.5, EPA isfinalizing the incorporation by reference ofthe SJVUPACD rule described in the amendments to40 CFR 52 set forth below. EPA has made, and will continue
to make, these documents available electronically through www.regulations.govand inhard copy at the appropriate EPA office (see the ADDRESSES section ofthis preamble for

more information).

V. Statutory and Executive Order Reviews

A. Executive Order12866,Regulatory PlanningandReview

The Office ofManagement and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled "Regulatory Planning and Review."

B. Paperwork ReductionAct
This action does not impose an information collection burden under the provisions ofthe Paperwork Reduction Act, 44U.S.C. 3501 etseq. Burdenis defined at 5CFR 1320.3(b).

C.RegulatoryFlexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency to conduct

a regulatory flexibility analysis ofany rule subject tonotice and comment rulemaking requirements unless the agency certifies thatthe rule willnot have a significant economic impact on

a substantial number of small entities. Small entities include smallbusinesses, 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 ofthe 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, Icertify that this action will not have a significant economic impact on a substantial number of small entities.

Moreover, due to the nature ofthe Federal-State relationship under the Clean Air Act, preparation offlexibility analysis would constitute Federal inquiry into the economic reasonableness ofState action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. UnionElectricCo., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

D. UnfundedMandatesReformAct

Under sections 202 ofthe 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, ortribal governments in the aggregate; orto the private sector, of $100 million or more. Under section 205, EPA must select the most costeffective and leastburdensome alternative that achieves the objectives ofthe rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments thatmay be significantly

oruniquely 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, orto the private sector. This Federal action approves pre-existing requirements under State or local law, andimposes no newrequirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result fromthis action.

E.Executive Order13132,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 ofregulatory policies that have federalism implications." "Policies that have federalism implications" is defined in the Executive Order to include regulations thathave "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 ofgovernment." Under Executive Order 13132, EPA may not issue a regulation thathas federalism implications, that imposes substantial direct compliance costs, and thatis not required by statute, unlessthe Federal government provides the funds necessary topay 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 ofdeveloping theproposed regulation. EPA also may not issue a regulation thathas federalism implications and thatpreempts State law unless the Agency consults with State and local officials early in the
process ofdeveloping theproposed regulation.

This rule will not have substantial direct effects on the States, onthe relationship between the national government and the States, or on the distribution ofpower and responsibilities among the various levels ofgovernment, as specified in Executive Order 13132, because it merely approves a State rule implementing a Federal standard, and does not alter the relationship orthe distribution ofpower and responsibilities established in the Clean Air Act. Thus, therequirements of section 6 ofthe Executive Order do not applyto this rule.

F.Executive Order13175, Coordination WithIndian TribalGovernments

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 inputby tribal officials in the development of regulatory policies thathave tribal implications." This final rule does not have tribal implications, as specified in Executive Order 13175. Itwill not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or onthe distribution of
power and responsibilities between the Federal government and Indian tribes. Thus, Executive Order 13175 does not applyto this rule.

G.

Executive Order13045,Protectionof ChildrenFromEnvironmentalHealth Risks andSafetyRisks

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 thatthe analysis required under section 5-501 ofthe 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 Order13211,Actions That Significantly Affect EnergySupply, 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 NationalTechnologyTransferand AdvancementAct

Section 12 oftheNational Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies toevaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use "voluntary

consensus standards" (VCS)ifavailable and applicable when developing programs andpolicies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPAbelieves thatVCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to theuse ofVCS.

J.

Executive Order12898:Federal Actions ToAddressEnvironmental JusticeinMinorityPopulations and Low-Income Population

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its mainprovision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part oftheir mission by identifying and addressing,

as appropriate, disproportionately high and adverse human health or environmental effects oftheir programs, policies, and activities onminority populations and low-income populations in the United States.

EPA lacks the discretionary authority
to address environmental justice in this rulemaking.

K. Congressional ReviewAct

The Congressional Review Act, 5 U.S.C. 801 etseq., as added bythe Small Business Regulatory Enforcement Fairness Act of 1996, generally provides thatbefore a rulemay take effect, the agency promulgating the rule must submit a rule report, which includes a copy ofthe rule, to each House ofthe Congress and tothe Comptroller General ofthe United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House ofRepresentatives, and the Comptroller General ofthe United States prior to publication ofthe rule in the Federal Register. A major rule
cannot take effect until 60 days afterit is published in theFederal Register. This action is not a "major rule" as defined by 5U.S.C. 804(2). This rule will be effective onMay 11, 2015.

L. Petitions forJudicial Review

Under section 307(b)(1) ofthe Clean Air Act, petitions forjudicial review of this action must be filed inthe United States Court ofAppeals for the appropriate circuit byJune 8, 2015. Filing a petition for reconsideration by the Administrator ofthis final rule does
not affect the finality ofthis rule for the
purposes ofjudicial review nor does it extend thetime within which apetition forjudicial review maybe filed, and shall not postpone the effectiveness of suchrule 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 CFRPart52

Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting andrecordkeeping requirements.

Dated: February 26, 2015.
JaredBlumenfeld, RegionalAdministrator, RegionIX.

Part 52, Chapter I, Title 40 ofthe Code ofFederal Regulations is amended as follows:

PART 52-APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

m 1. The authority citationfor part52 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 Identificationofplan.

* * * * *

(c) * * * (455) New and amended regulations for the following APCDs were submitted

onJune 26, 2013.

(i) Incorporation by reference. (A) SanJoaquin ValleyUnified Air Pollution Control District. (1)Rule 9610, "State Implementation Plan Credit for Emission Reductions Generated through Incentive Programs," adopted on June 20, 2013.

[FRDoe. 2015-07972 Filed4-8-15; 8:45 am]

BILLING CODE 6560-50-P 

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