State of California

AIR RESOURCES BOARD

Final Statement of Reasons for Rulemaking, Including Summary of Comments and Agency Response

ADOPTION OF THE REGULATION TO REDUCE GREENHOUSE GAS EMISSIONS

FROM HEAVY-DUTY VEHICLES

I. GENERAL

The California Global Warming Solutions Act of 2006 (AB 32) established requirements for a comprehensive program of regulatory and marke t mechanisms to achieve real, quantifiable, and cost-effective reductions of gree nhouse gas (GHG) emissions. AB 32 requires the Air Resources Board (the Board or ARB) and other state agencies to adopt regulations and other requirements that would reduc e statewide GHG emission levels to the equivalent of 1990 levels by 2020. To swiftly address GHG emission reductions in the near-term, AB 32 also directs ARB to identify a list of early action measures to be adopted by the Board by January 1, 2011, and made e nforceable by January 1, 2012. AB 32 also requires that discrete early action meas ures be identified, requiring adoption and implementation by January 1, 2010. In 2007, th e Board identified 44 early action measures, of which 9 were identified as discrete ea rly action measures. The rulemaking is one of the discrete early action meas ures.

The rulemaking was initiated on October 24, 2008, w ith the release of a notice of public hearing and staff report, entitled “Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Public Hearing to Consider Ado ption of the Regulation to Reduce Greenhouse Gas Emissions From Heavy-Duty Veh icles“ (Staff Report or ISOR). The Staff Report, which is incorporated by reference herein, describes the ARB’s rational for the regulatory proposal. The pr oposed new sections, 95300 through 95311, of title 17, California Code of Regulation ( CCR), were included as an attachment to the Staff Report. These documents were also pos ted on the ARB’s Internet site for the rulemaking at: http://www.arb.ca.gov/regact/20 08/ghghdv08/ghghdv08.htm .

The rulemaking will reduce GHG emissions by requiri ng on-road tractors and trailers operating on California highways to be equipped wit h technologies that will result in improved fuel efficiency, and thus reduce GHG emiss ions. The regulation references a federal voluntary program, called the United States Environmental Protection Agency (U.S. EPA) SmartWay Partnership Program (SmartWay p rogram), which is designed to improve the environmental performance associated wi th the ground freight delivery system in the United States. In particular, the Sm artWay program approves technologies, such as aerodynamic equipment and low -rolling resistance tires, and certifies tractors and trailers that incorporate th ese technologies. The rulemaking requires the use of SmartWay certified tractors and trailers, and SmartWay approved aerodynamic technologies and low-rolling resistance tires.- 2 -

On December 11, 2008, the Board conducted a public hearing to consider staff’s proposal as described in the Staff Report. At the hearing, staff proposed to adopt new requirements for heavy-duty vehicles to reduce GHG emissions through fuel efficiency improvements. Additionally, staff proposed various editorial corrections and several modifications to the originally proposed regulation . After consideration of the written comments received during the 45-day public comment period prior to the hearing and the testimony received at the hearing, the Board ac ted in Resolution 08-44 to adopt the proposed regulation.

Resolution 08-44 approved staff’s originally propos ed regulation as well as the suggested modifications provided at the Board Heari ng. In addition, Resolution 08-44 directed the Executive Officer to modify the regula tory language or take other steps to ensure the requirements specified in section 95303( a), title 17, CCR, for certification of tractors will take effect only if the U.S. EPA modi fies the existing SmartWay certified tractor certification requirements to establish new performance-based test requirements that will provide for comparable GHG emission reduc tions for similar certified SmartWay

tractors from different manufacturers.

Furthermore, in accordance with section 11346.8 of the Government Code, the Board in

Resolution 08-44 directed the Executive Officer to incorporate the modifications to the proposed regulatory text approved by the Board, wit h such other conforming modifications as may be appropriate, and to make th e modified text available to the public for a period of at least fifteen days. The Executive Officer was then directed either to adopt the amendments with such additional modifications as may be appropriate in light of the comments received, or t o present the regulations to the Board for further consideration if warranted in light of the comments.

On August 17, 2009, U.S. EPA provided interim Smart Way tractor certification requirements for tractor manufacturers, which estab lished both design and performance-based requirements by allowing new trac tor models to be certified if the fuel efficiency of the new tractor model meets or e xceeds the fuel efficiency of at least one current SmartWay certified tractor model from a ny manufacturer. Because a performance-based standard for U.S. EPA SmartWay ce rtified tractors was established, the tractor component of the rulemaking was retaine d.

The revised regulation, which included the new U.S. EPA interim performance-based requirements for tractors and other modifications s ince the originally proposed regulatory text of October 24, 2008, was made avail able to the public through an issuance of a “Notice of Public Availability of Mod ified Text and Availability of Additional Documents" on September 17, 2009, with a comment pe riod of 15 days. Several written comments were received during the 15-day co mment periods.

This Final Statement of Reasons (FSOR) updates the Staff Report by identifying and providing the rationale for the modifications made to the originally proposed regulatory- 3 -

text. The FSOR also contains a summary of the comm ents received on the regulatory text during the formal regulatory process and ARB’s responses to those comments.

Fiscal Impacts. The Board has determined that this regulatory act ion will not create costs or savings, as defined in Government Code sec tion 11346.5(a)(5) and 11346.5(a)(6), in federal funding to the state; or costs or mandate to any local agency or school district whether or not reimbursable by the state pursuant to Government Code, title 2, division 4, part 7 (commencing with sectio n 17500) or other non-discretionary costs or savings to local agencies. The Board has determined that the regulatory action will create costs to a state agency in the form of costs to ARB to implement and enforce the regulation and to contract with the California Highway Patrol, air quality management districts and air pollution control dist ricts for enforcement. No costs or savings affecting other state agencies were identif ied.

The Board has determined that this regulatory actio n will not have a significant statewide adverse economic impact directly affectin g businesses, including the ability of California businesses to compete with businesses in other states, or on representative private persons.

In accordance with Government Code section 11346.3, the Board has determined that this regulatory action will affect the creation or elimination of jobs within the State of California, the creation of new businesses or the e limination of existing businesses within the State of California, or the expansion of businesses currently doing business

within the State of California.

The Board has also determined, pursuant to section 4, title 1, CCR, that this regulatory action will affect small businesses use own or oper ate heavy-duty tractors pulling 53- foot or longer trailers affected by the regulation.

In accordance with Government Code sections 11346.3 (c) and 11346.5(a)(11), the Board has found that the reporting requirements of the regulation that apply to businesses are necessary for the health, safety, an d welfare of the people of the State

of California.

Consideration of Alternatives. The regulatory language proposed in the rulemakin g was the result of extensive discussions and meeting s involving staff and motor carriers, warehouse and logistics companies, equipment manufa cturers, associations, and other interested parties. In the Staff Report, ARB evalu ated and ultimately rejected two potential alternatives: (1) no action and (2) expa nd the applicability of the requirements to other types of trucks and trailers.

The first alternative to the proposal was to not ad opt a regulation to require the use of SmartWay technologies on affected heavy-duty trucks but rather to rely on tractor and trailer owners to voluntarily install SmartWay tech nologies. Although SmartWay technologies have been available for several years, most truck and trailer owners have not installed them despite available fuel savings. ARB believes the incorporation of- 4 -

aerodynamic technologies on box-type trailers will not happen in a timely manner without regulatory impetus. Real and quantifiable near-term GHG reduction benefits would be lost if the regulation is not implemented. As a result, ARB rejected the "No Action" option.

The second alternative to the proposal was to expan d the applicability of the requirements beyond 53-foot and longer box-type tra ilers and tractors that pull them to include box-type trailers of various lengths and ty pes, and straight trucks. Expanding the applicability to other types of trucks and trai lers is not possible because the current SmartWay program only applies to 53-foot and longer box-type trailers. Expanding the applicability of the rule would require ARB to deve lop an ARB certification program for tractors and trailers, low rolling resistance tires , and aerodynamic technologies. This

cannot be done in the timeframe allotted for this r ulemaking, as required for an AB 32 discrete early action measure. Therefore, ARB reje cted this alternative.

For the reasons set forth in the Staff Report, in s taff's comments and responses at the hearing, and in this FSOR, the Board has further de termined that no alternative considered by the agency would be more effective in carrying out the purpose for which the regulation is proposed or would be as effective and less burdensome to affected private persons than the adopted regulation.

II. MODIFICATIONS MADE TO THE ORIGINAL PROPOSAL

A. MODIFICATIONS APPROVED AT THE BOARD HEARING AND PROVIDED FOR

THE 15-DAY COMMENT PERIOD

At the hearing, the Board approved the originally p roposed regulatory action as well as staff’s suggested modifications presented at the he aring. Further, the Board directed the Executive Officer to modify the regulatory lang uage, as appropriate, to include new U.S. EPA performance-based test requirements for tr actors that will compare GHG emission reductions for similar certified SmartWay tractors from different manufacturers. The regulatory modifications made to the originally proposed regulatory text released on October 24, 2008 were made available to the public for a 15 day comment period by the issuance of a “Notice of Public Availability of Mod ified Text and Availability of Additional Documents” on September 17, 2009. The following is a consolidated description of the modifications and clarifications by section.

Applicability (section 95301):

Language was added to clarify that the regulation a pplies to specified parties not only when they use certain tractors and trailers in Cali fornia, but also when they cause the use of that equipment by others within the state. This modification is consistent with the substantive requirements in section 95303 and refle cts the fact that some motor carriers, brokers and shippers covered by the regul ation could arrange the use of this equipment in the state without using it themselves.- 5 -

“Refuse trailers” and “livestock trailers” have bee n added to the list of vehicles for which the requirements of this subarticle do not apply. Both refuse trailers and livestock trailers have been exempted because their design an d typical uses are not compatible with the requirements for aerodynamic technologies and low-rolling resistance tires.

Language has been added to clarify that short-haul and local-haul tractors, local-haul trailers, and drayage tractors are exempt from cert ain provisions of the regulation in

accordance with section 95305.

Definitions (section 95302):

The definition of “broker” was changed to improve c larity and to make the definition consistent with other ARB regulations.

A definition for the Diesel On-road and Off-road Re porting System (DOORS) has been added because this system is referred to in section 95307, Optional Trailer Fleet Compliance Schedules.

A definition of “fleet’ has been added to improve c larity.

The definition of “authorized emergency vehicle” ha s been changed to a definition of “emergency vehicle” to improve clarity.

The definitions of “container,” “flatbed trailer,” and “lessee” have been deleted as unnecessary. The terms “container” and “flatbed tr ailer” do not need to be defined because the terms are not used in the proposed regu lation. “Lessee” is a common term that does not need to be separately defined for pur poses of this regulation.

Definitions of ‘livestock trailer” and “refuse trai ler” have been added because both

vehicles have been added to the list of vehicles ex empted from the requirements of this

subarticle.

The definitions of “cab side extender,” “curtain-si de trailer,” “drop-frame trailer,” “dry-van trailer,” “flow control device,” “front trailer fai ring,” “refrigerated-van trailer,” “sleeper cab,” and “trailer side skirt” have been modified t o improve clarity.

The definition of “motor carrier” has been modified to reference the definition of “motor

carrier” in the California Vehicle Code.

The definition of “owner” has been modified and exp anded to provide greater clarity and additional details about which parties are responsi ble for ensuring that vehicles, including leased vehicles and federal government ve hicles, comply with the regulation’s requirements.- 6 -

The definition of “short-haul tractor” has been mod ified so the term refers only to tractors that travel less than 50,000 miles per yea r, and new definitions were added for

“local-haul tractor” and “local-haul trailer” to de scribe tractors and trailers that travel

within a 100 mile radius of their local haul base. The definition of “short-haul trailer” was deleted because the term has been replaced by “loca l-haul trailer.”

A definition of “trailer” has been added to improve clarity.

The term “U.S. EPA Approved SmartWay Technology” ha s been changed to “U.S. EPA Verified SmartWay Technology” and the term “U.S. EP A SmartWay Partnership Program” has been changed to “U.S. EPA SmartWay Tra nsport Partnership Program” to be consistent with the program’s current termino logy. Other minor modifications were made to these definitions, including an update of t he U.S. EPA contact information.

Definitions for “compliant trailer,” “compliance ye ar,” “conformance,” “delayed compliance trailer,” and “early compliance trailer” have been added to clarify the provisions of the Optional Trailer Fleet Compliance Schedules.

Definitions for “California-based broker” and “Cali fornia-based shipper” have been added to clarify the applicability of this subartic le.

The definition of “dispatch” has been modified to i mprove clarity.

Requirements and Compliance Deadlines (section 9530 3) and Refrigerated Fleet Compliance Provision (section 95308):

Subsection 95303(b), Trailer Requirements, has been restructured to specify the tire and aerodynamic technology requirements in separate subsections, and to delete an option that identified specific aerodynamic equipme nt that could be installed on dry-van trailers and refrigerated-van trailers for complian ce. ARB deleted this language because the regulation establishes performance stan dards of 5% fuel savings for dryvan trailers and 4% fuel savings for refrigerated-v an trailers, which makes specifying the aerodynamic equipment required to meet these standa rds unnecessary and potentially limiting.

In subsection 95303(b)(3), the compliance schedule requirements for a refrigerated-van trailer that is a model year 2003 through 2008 trai ler equipped with a 2003 or subsequent model year transport refrigeration unit, has been added. These requirements were previously part of referenced sub section 95308. As a result of this restructuring of the regulation, subsection 95308 i s no longer necessary and has been deleted. The subsequent subsections (formerly 9530 9 through 95312) are renumbered as 95308, 95309, 95310, and 95311, respectively.

Subsection 95303(c)(2) specifies the information a driver must provide to an authorized

enforcement official. This subsection has been mod ified to improve clarity, and to- 7 -

specify that the vehicle odometer reading is only r equired if the vehicle is an exempt

short-haul tractor.

Subsection 95303(e)(3) is no longer necessary and h as been deleted. It referenced the requirements of subsection 95308 which are now cont ained in subsection (b).

Subsections 95303(f), Requirements for California-b ased Brokers, and 95303(g), Requirements for Motor Carriers, have been modified to clarify that the requirements only apply to tractors and trailers dispatched for travel on California highways.

Subsection 95303(h), Requirements for California-Ba sed Shippers, has been modified to clarify that a California-based shipper must not ship freight from its California facility or facilities in non-compliant tractors and trailer s.

Exemptions (section 95305)

Previously, the term “short-haul” was used to descr ibe both tractors that travel less than 50,000 miles per year and those that travel within a 100 mile radius from their local haul

base. It also was used to describe trailers that a re restricted in travel within a 100 mile radius of their local haul base. To clarify the re gulation, ARB redefined “short-haul” tractor as a tractor that travels less than 50,000 miles per year, and added the terms

“local-haul” tractor and “local-haul” trailer to de scribe those tractors and trailers that are

restricted in travel within a 100 mile radius. Cha nges have been made throughout section 95305 and 95306 to reflect this change in n omenclature.

Subsection (a) has been modified to reference the s pecific subsections from which a short-haul tractor is exempt, and to delete the lis ting of the criteria that define a short

haul tractor since these criteria are identified in the definition of “short-haul tractor.”

A new subsection (b) has been added to identify the specific subsections from which a local-haul tractor is exempt, and those subsections with which it still must comply.

Subsection (b) has been renumbered to subsection (c ) and has been modified to identify the specific subsections from which a loca l-haul trailer is exempt and those subsections with which it still must comply.

Subsection (c) has been renumbered to subsection (d ) and has been modified for clarity.

A new subsection (e) has been added to identify the specific subsections from which a 53-foot or longer box-type trailer is exempted from when being pulled by a local-haul

tractor.

A new subsection (f) has been added to identify the specific subsections a 2011 or subsequent model year sleeper cab HD tractor is exe mpted from when pulling a localhaul trailer.- 8 -

Short-Haul Tractor and Short-Haul Trailer Exemption Requirements (section 95306)

As discussed above, changes have been made througho ut section 95306 to reflect the

redefinition of “short-haul” tractors and trailers as “short-haul” tractors and “local-haul”

tractors and trailers.

Subsection (a) has been modified to remove Executiv e Officer approval criteria from the short-haul and local-haul tractor and trailer exemp tion requirements. Approval is granted automatically as long as all requirements s pecified in section 95306 are met.

Subsections (b) through (e) have been modified to m ake the owner contact information required consistent with the information required i n section 95307, Optional Fleet Compliance Schedules.

Subsection (f), the requirement to provide a map of the local-haul base location, originally thought to be a useful compliance tool, has been determined to be unnecessary and was deleted.

Subsection (g) has been renumbered as subsection (f ) and has been modified to clearly identify the information required to be submitted t o the Executive Officer. The statements required to be submitted have also been modified to reflect the removal of Executive Officer approval criteria from the exempt ion requirements.

New subsection (g) has been added to clarify how lo ng the exemption will be in effect for owners of local-haul tractors or trailers; and to require owners to notify the Executive Officer of reported information changes.

Subsection (h), which defined the exemption period for all short-haul tractors and trailers as one year from the date of the approval letter, has been deleted.

New subsections (h) and (i) clarify that owners of local-haul tractors or trailers, and owners of short-haul tractors, are required to noti fy the Executive Officer and update applicable tractor and trailer fleet list informati on when these vehicles are removed from local or short haul service. The requirements stat e that this notification must occur prior to the vehicle’s change in ownership or prior to tr aveling on California highways, whichever comes first. The reason for this languag e is to ensure the exempt status of these vehicles is removed expeditiously. Also, in new subsection (i), a provision was

added that does not allow a short-haul tractor that was dropped from an owner’s shorthaul fleet to be added back into the fleet sooner t han 3 years from the removal date. This language was added to prevent circumvention of the rule by opting in and out of the short-haul exemption fleet.

New subsection (j) has been added to clarify the le ngth of time an exemption is in effect

for an owner of a short-haul tractor.- 9 -

Subsection (i) has been renumbered as subsection (k ) and has been modified to clarify that drivers must, upon demand, provide the informa tion specified in this subsection for exempt local-haul trailers.

New subsection (l) has been added to provide enforc ement personnel the authority to directly view the odometer of HD tractors when enfo rcing the short- haul exemption 50,000 annual miles travelled requirement.

New subsections (m) through (o) have been added to clarify that exceeding the applicable limits for short-haul tractors (50,000 m iles per year) and local-haul tractors and trailers (travel within a 100 mile radius of th e vehicle’s local-haul base) are

violations of this subarticle.

Optional Trailer Fleet Compliance Schedules (sectio n 95307)

Section 95307 has been restructured for clarity and to allow for referencing of the requirements defined in the introductory eight para graphs. The information contained in these paragraphs has been either deleted from this subarticle because it was redundant, transferred to new subsection (a) Traile r Fleet Compliance Schedule Applicability, transferred to section 95302 Definit ions, or transferred to new subsections (f)(19) and (f)(20). To accommodate new subsection (a), subsections (a), (b), (c), (d), and (e) have been renumbered to subsections (b), (c ), (d), (e), and (f), respectively.

In subsection (a), which has been renumbered as sub section (b), Large Fleet Compliance Schedule, and subsection (b), which has been renumbered as subsection (c), Small Fleet Compliance Schedule, the large and small fleet compliance threshold dates have been changed from December 31 to January 1. Also, for clarity the term “conformance” has replaced the term “compliance” wh ere applicable. In addition, the requirement for the fleet owner to provide evidenti ary documentation for early compliance trailers has been deleted, since informa tion identifying the early compliance trailer is required as part of the trailer fleet li st. Also, the requirements defining the maximum allowable number of delayed compliance trai lers has been deleted and replaced with requirements defining the maximum all owable number of early compliance trailers. This change has been made bec ause it is simpler for the fleet owner to determine the number of early compliance t railers, than to calculate the number of delayed compliance trailers. Finally, in subsections (b)(2) and (c)(2), the requirement for the fleet owner to provide a copy o f the registration for each trailer listed

on the trailer fleet list has been determined to be unnecessary and deleted.

In subsection (c), which has been renumbered as sub section (d), General Compliance Plan Components, the information required to be sub mitted in the trailer fleet list, subsection (d)(2), has been modified as follows:

• For clarity, the address information required to be provided has been specifically listed.- 10 -

• New subsection (L) has been added requiring the DOO RS (Diesel Off-road Online Reporting System) identification number of t he owner’s corporate parent

to be submitted.

• Subsection (K) has been renumbered to subsection (M ) and clarifies that owners that elect to participate in the large fleet compliance schedule are required to report all trailers that will operate i n California, while owners that elect to participate in the small fleet compliance schedule are required to list all trailers that will operate both inside and outside California. Previously, small fleet owners were required only to list trailers th at will operate in California. This change has been made to improve the enforceabi lity of the small fleet compliance provisions.

• Subsection (N) identifies the information required to be submitted for each trailer participating in an optional compliance pla n. Vehicle identification number, registration type, county of registration, exemption status, and California operating status were added to improve e nforceability of the regulation. The information listed that is require d for each refrigerated-van

trailer listed in the trailer fleet list has been r educed from eight to two items: transport refrigeration unit (TRU) model year and T RU engine model year. ARB determined the six deleted information requirem ents were unnecessary to ensure compliance.

Subsection (c)(3), which has been renumbered as sub section (d)(3), has been modified to clarify which trailers are to be included in the compliance plan base list.

Subsection (c)(4), which has been renumbered as sub section (d)(4), has been modified to reflect terminology changes (compliance to confo rmance) and to clarify how the

annual conformance commitment list is to be determi ned by the trailer owner. The requirement specifying how the trailers shall be li sted has been deleted because it was determined by ARB to be unnecessary and overly pres criptive.

In subsection (d), which has been renumbered as sub section (e), Calculation Methodology, the calculation methodology has been m odified. Equation 2 has been modified and renumbered to equation 3, and a new eq uation 2 has been added. These changes were made to remove trailers that will not travel on California highways from the calculation of the small fleet compliance plan base number. Equation 3 has been modified and renumbered to equation 5. The new equ ation 5 is used to calculate the maximum allowable number of early compliance traile rs, rather than the maximum allowable delayed compliance trailers. As mentione d earlier, this change has been made because it is simpler for the fleet owner to c alculate the number of early compliance trailers, than to calculate the number o f delayed compliance trailers.

In subsection (e), which has been renumbered as sub section (f), General Requirements for all Compliance Schedules, requirements have bee n added or modified that:

• update the information to be provided as part of th e trailer fleet list for clarity

and to accommodate trailers based in Mexico and Can ada,- 11 -

• clarify that an owner participating in the small fl eet compliance schedule may only operate a trailer in California that is includ ed in the owner’s trailer fleet list, unless the trailer is acquired after the compliance plan due date and is compliant with the equipment requirements of the re gulation,

• allow a trailer owner to remove a trailer identifie d in the compliance plan base list and re-designate it as a local-haul trailer,

• allow compliance plan revisions for owners whose co mpanies are affected by a merger, acquisition, split or other changed circums tance affecting operations,

• do not allow compliance plan participation for owne rs of affected businesses (i.e. motor carriers) that form after the complianc e plan submission due date,

• clarify that the Executive Officer may make public the non-confidential information submitted pursuant to the optional flee t compliance plan requirements,

• clarify that the Executive Officer may terminate a fleet’s participation in a compliance schedule if the fleet is found in violat ion of this subarticle,

• clarify the scenarios in which an owner participati ng in the large fleet compliance schedule may operate a trailer subject t o the requirements of this subarticle, and

• clearly state that any violation of the requirement s of subsection 95307 is a

violation of this subarticle.

B. MODIFICATIONS MADE SUBSEQUENT TO THE 15-DAY PUBL IC COMMENT

PERIOD

After the 15-day comment period, ARB has made sever al nonsubstantive changes to the regulation as summarized below. Each of these modifications constitutes a nonsubstantial change to the regulatory text becaus e, as described in greater detail below, each modification clarifies the text without materially altering the requirements, rights, responsibilities, conditions or prescriptio ns in the regulation as last circulated for public comment on September 17, 2009. In addition to the specific modifications described below, the regulatory text was modified t o correct formatting and punctuation errors, none of which altered the meaning of the te xt. At several locations in the text where a list of requirements appeared without punct uation, semicolons were added

after each item in the list and the word “and” was added before the final item in the list for consistency purposes. In each case where this was done, the regulatory text already made clear that the list was inclusive and that all items in the list had be to completed or provided as part of the requirement.- 12 -

1. Section 95302

(a) Deleted definitions (25) “Front trailer fairing ” and (50) “Trailer side skirt” and renumbered the remaining definitions. This change does not material alter the substance of the regulation because neither of the deleted terms were used anywhere in the modified text of the regulatio n.

(b) Deleted a stray letter that was inadvertently l eft in the text when the word

“either” was marked for deletion from the definitio n for “Short-Haul Tractor” as part of the September 17, 2009 modifications circul ated for public comment.

2. Sections 95300, 95301, 95302, 95303, 95306, and 95307 The phrases “on California highways”, “on a Califo rnia highway”, “on a highway within California”, “on a highway in California”, a nd ”on highways in California” were used interchangeably in the September 17, 2009 text. For improved consistency and clarity, the phrase “on a highway w ithin California” was substituted

for each occurrence.

3. Sections 95303, 95306, and 95307 The phrases “contact person’s name”, “name of conta ct”, and “contact’s name” were interchangeably used to designate “contact per son’s name” for the fleet owner, the motor carrier or the broker. For improv ed consistency and clarity, these phrases were replaced with the phrase “contact pers on’s name.” Similarly, the term “contact’s title” was changed to “contact pers on’s title.”

4. Section 95306(n) and (o) Replaced the phrase “in an area” with the phrase “a t a location” to improve clarity of the text. The phrase is used to identify a loca tion that is farther than 100 miles away from the local-haul base for application of on e of the regulation’s exemptions.

III. SUMMARY OF COMMENTS MADE DURING THE 45-DAY COM MENT PERIOD AND AT THE BOARD HEARING; AND AGENCY RESPONS ES

Written comments were received during the 45-day co mment period in response to the October 24, 2008 public hearing notice, and written and oral comments were presented at the board hearing. It should be noted that this rulemaking was presented to the Board jointly with another heavy-duty vehicle regul ation, Regulation to Reduce Emissions of Diesel Particulate Matter, Oxides of N itrogen and Other Criteria Pollutants, and Greenhouse Gases from In-Use Heavy-Duty Diesel- Fueled Vehicles” (Truck and Bus Regulation). Written and oral comments provide d for both rulemakings were carefully examined to determine whether they relate d to this rulemaking only, the Truck and Bus Regulation only, or both. This FSOR only a ddresses the relevant comments related to the GHG rulemaking.- 13 -

Listed below are the organizations and individuals that provided comments during the 45-day comment period.

Written Commentor (45-day Period) Affiliation Abbreviation

Alford, Charlie Alford Distributing Company Alford Altrichter, Kirk Gorden Trucking, Inc. GTI Anderson, Mike Mendicino County Board of Supervisors MendicinoCo

Anonymous None Anonymous Berry, Bob None Berry Blubaugh, Timothy A. Engine Manufacturers Associati on EMA
Bowans, Jim None Bowans
Brian, Tom None Brian Broad, Barry California Teamsters Public Affairs

Council CTPAC

Burke, Rob None Burke Burroughs, John None Burroughs
Bush, Kevin None Bush Carey, Steve National Trailer Dealers Association N TDA Charette, Larry Silver Valley Propane SVP
Cortie, Steve None Cortie Costales, Ric Siskiyou County SiskiyouCo Cox, Andy Mike Campbell & Associates MCA Crum, Michael Mike Crum Trucking MCT

D., R. None R.D.
Davies, Les None Davies DeVecchi, Randy Industrial Drayage, Inc. IDI
Denvir, Peter None Denvir DiSalvo, Sal None DiSalvo Doggett, Mike None Doggett
Eaton, Tom None Eaton
Elliff, Budd None Elliff Ellington, Ty Anza Gas Service, Inc. AGSI Faulkner, Ron Faulkner Trucking, Inc. FTI Fitzgerald, Kathy None Fitzgerald
Fleck, Jonathan Deflecktor Deflecktor Ford, Jim C.R. England, Inc. CREI

Fortier, Tim None Fortier Frank, Susan Submitted on behalf on the following organizations and individuals: Wafaa Aborashed, Bay Area Healthy 880 Communities – San Leandro; Don Anair, Union of Concerned Scientists; MULTIPLE- 14 -

Written Commentor (45-day Period) Affiliation Abbreviation

Tina Andolina, Planning and Conservation League; Diane Bailey, Natural Resources Defense Council; Nidia Bautista, Coalition for Clean Air; Brian Beveridge, West Oakland Environmental Indicators Project; Rajiv Bhatia, MD, MPH; Mara Burstein, Environment Now; Patricia Castellanos, Los Angeles Alliance for a New Economy; Tom Frantz,Association of Irritated Residents; Catherine Garoupa, Madera Coalition for Community Justice; Elina Green, MPH, Long Beach Alliance for Children with Asthma; Dede Greybeck, RN; Kevin Hamilton & Dr. David Pepper, Medical Advocates for Healthy Air; Allyson Holman, Merced/Mariposa County Asthma Coalition; Bonnie Holmes-Gen & Linda Weiner, American Lung Association of California; Andy Katz, Breathe California; Lisa Kayser-Grant, Moms Clean Air
Network; Marylia Kelley, Tri-Valley Cares; Dr. Michael Kelly, San Diego Regional Asthma Coalition; Anne Lamb, Regional Asthma Management and Prevention & Community Action to Fight Asthma;
Isaac Lieberman; Angelo Logan, East Yard

Communities for Environmental
Justice; Bill Magavern, Sierra Club; Nury Martinez, Pacoima Beautiful; Brent Newell, Center on Race, Poverty & the Environment; Jill Ratner, Rose Foundation for Communities and the Environment;- 15 -

Written Commentor (45-day Period) Affiliation Abbreviation

Betsy Reifsnider, Catholic Charities, Diocese of Stockton; Sarah Sharpe, Fresno Metro Ministry; Jim Stewart, Earth Day Los Angeles; Madelyn Weiss, MD; Ed Welch, Save the Air in Nevada County; Ryan Wiggins, EndOil; Joy Williams, Environmental Health Coalition; Barbara Young, MA, Sonoma County Asthma Coalition; Gates, Cecil Crown Fence Company CFC
Gill, Rachelle None Gill
Goliti, Rob None Goliti Grewal, Randy None Grewal
Groves Jr, William None Groves Hall, Ron C.R. England, Inc. CREI2

Heilman, Ted None Heilman Hobbs, Tony Baker Trucking, Inc. BTI Hoffman, Curt None Hoffman Howe, G. D & H Transportation DHT Iaconis, Samuel Sammy’s Transportation, Inc. STI Ingram, Bill None Ingram Jenkins, Larry None Jenkins Jones, Gary None Jones1 Jones, Guy None Jones2 Keppel, Charles None Keppel Klenske, Terry Dalton Trucking, Inc. DTI
Krauss, Kenneth None Krauss Kustin, Camille Environmental Defense Fund EDF Lawley, Rodney None Lawley Liese, Valerie Jack Jones Trucking, Inc. JJTI Lloyd, Kenny None Lloyd Long, Larry and

Dianne L & D Transportion LDT

Luiz, Tony T&L Trucking LLC TLTLLC

Malchow, Randal None Malchow
Mason, Bob None Mason McGinnis, Patrick None McGinnis Morton, Jim Morton Trucking MT Murray, Michael Glen County Board of Supervisors Gl enCo Nard, Nancy None Nard- 16 -

Written Commentor (45-day Period) Affiliation Abbreviation

Neal, Danny None Neal Nelthorpe, Ron None Nelthorpe Nielsen, Donald Nielsen Trucking Co. NTC O'Sullivan, Dennis Blue Star Gas Garberville Compan y BSGGC

Panella, Matt None Panella Perrigue, Grover None Perrigue Phillips, Andrew None Phillips1 Phillips, John None Phillips2
Rader, Eric None Rader Rasmussen, Karen Arizona Trucking Association AZTA Renner, Mike Rock Hard Transportation, Inc. RHTI
Rose Padel, Deanne None RosePadel
Ross, Karen None Ross Sambucetti, Don None Sambucetti1
Sambucetti, John None Sambucetti2
Sanders, Kit None Sanders Sargent, Marie None Sargent Sauer, Eric California Trucking Association CTA1 Schrap, Matt California Trucking Association CTA2 Senecal, Patty International Warehouse Logistics

Association IWLA

Shallenberger, John None Shallenberger Shuemake, Mike Central Valley Trailer Repair, Inc. CVTRI Simon, Roger M. Pioneer Trailer Sales PTS
Smith, Frank None Smith Smith, William N. Smith Trucking, LLC STLLC Spainhoward, John None Spainhoward Stallings, Rod Rod’s Truck Repair, Inc. RTRI Tata, Rajiv Truck Trailer Manufacturer

Association TTMA

Taylor, Cheryl Avenal Chimes Newspaper ACN

Torres Jr., Joe None Torres Torres, Chris F & L Farms Trucking, Inc. FLFTI Tunnell, Michael American Trucking Associations ATA Upfold, William None Upfold Van Wingerden, June None VanWingerden
Vasconi, Andrew None Vasconi Vercruyssen, Rene None Vercruyssen
Williamson, Daniel None Williamson Wood, Richard SOLUS-Solutions and Technologies

LLC SOLUS

Wright, C. Edmund None Wright Yandell, John Yandell Truckaway, Inc. YTI- 17 -

Written Commentor (45-day Period) Affiliation Abbreviation

Zinn, Richard Rich Zinn Trucking RZT

Additional written comments were received on the da y of the public hearing from the following commentors.

Written Commentor (Submitted at Hearing) Affiliation Abbreviation

Allen, David Allenco Consulting Group ACG
Banks, Sharon Cascade Sierra Solutions CSS
Fleck, Johnathan Deflecktor Deflecktor Ganduglia, Jim Agrium US Inc. Agruim Gaussoin, Gary Silver Eagle Manufacturing Company S ilver Eagle Kayes, David Daimler Trucks North America Daimler
Marsom, Matthew Public Health Institute PHI Smith, Andrew Advanced Transit Dynamics, Inc. ATDyn amics Smith, Neil Con-way Freight Con-way Tichelman, Robert Windyne Windyne

At the December 11, 2008 public hearing, oral testi mony was presented by the following

commentors.

Oral Commentor at Hearing Affiliation Abbreviation

Acott, Andy Laydon Composites Laydon Allen, David Allenco Consulting ACG
Anair, Don Union of Concerned Scientists UCS

Arriola, Anna None Arriola Bailey, Diane Natural Resources Defense

Council NRDC

Banks, Sharon Cascade Sierra Solutions CSS Broad, Barry California Teamsters Public

Affairs Council CTPAC

Cohen, Brian None Cohen
Collier, Michael C.C. Mathes, Inc. CDMI Cox, Andy Mike Campbell & Associates MCA Delbar, Michael County of Mendocino MendocinoCo Diaz, Charles Charles Diaz Trucking, Inc. CDTI
Drisker, Tiana Communities for Better

Environment CBE- 18 -

Oral Commentor at Hearing Affiliation Abbreviation

Faulkner, Ron Faulkner Trucking, Inc. FTI
Fleck, John Deflecktor Deflecktor Ganduglia, Jim Ganduglia Trucking/Agrium US

Inc. Agrium

Gaussoin, Gary Silver Eagle Manufacturing Co. Silve r Eagle Goliti, Rob Air Carrier Goliti Graham, Sean Freight Wing, Inc. Freight Wing Hall, Ron C.R. England, Inc. CREI2 Hansen, Jacqui Breathe California Breathe Holmes-Gen, Bonnie American Lung Association ALA Kayes, David Daimler Trucks North America Daimler Lopez, Felipe Consejo de Federaciones de

Estados Mexicanas Lopez

Magavern, Bill Sierra Club Sierra

Marsom, Matthew Public Health Insitute PHI Matheson, Mark Matheson Trucking Matheson McDaniel, Michael Continental Tire Continental Miller, Dan Save Mart Supermarket SMS Nunes, Albert J. A.C. Trucking ACT Paparian, Michael California Pollution Control Financing Authority CPCFA

Rees, Brian California Poultry Foundation CPF Reifsnider, Betsy Stockton Diocese Diocese Rose, Kathy Nose Cone Manufacturing Co. Nose Cone Schrap, Matthew California Trucking Association CTA 2 Senecal, Patty International Warehousing & Logistics Association IWLA

Shumake, Mike Central Valley Trailer Repair CVTRI Simpson, Charlie E.M. Tharp, Inc. Tharp Smith, Andrew ATDynamics ATDynamics Smith, Neal Con-Way Freight Con-Way Tichelman, Robert Windyne Windyne Trump, Paul Mike Campbell & Associates MCA2 Tunnell, Michael American Trucking Association ATA Yandell, John Yandell Truckaway YTI

Set forth below is a summary of each comment regard ing the regulatory action as well as the agency response, including the explanation o f how the regulation was changed

to accommodate the comment or of the reasons for ma king no change to the regulation. Comments not involving objections or recommendation s specifically directed toward the rulemaking or to the procedures followed by ARB in this rulemaking are not included.- 19 -

The comments summarized below are divided into 13 s ubsections: (A) General Comments, (B) Scope of the Regulation, (C) U.S. EPA SmartWay Program, (D) Standards and Test Procedures, (E) Technology, (F) Safety, (G) Economic Impact, (H) Financial Assistance/Incentives, (I) Emission Inven tory, (J) Outreach, (K) Implementation and Phase-in Schedule, (L) Complianc e and Enforcement, and (M)

Miscellaneous.

A. General Comments

1. Comment: The proposed regulation should not be adopted bec ause the current economic situation is poor and truck owners do not have the financial means to comply with the requirements. It should b e delayed and reviewed again at a later date when the economy can support such a program. (Doggett, DHT, DTI, Groves, Hoffman, JJTI, Malchow, Sargent, Shallenberger, VanWingerden, Vercruyssen, Williamson)

The state is already in bad shape. This regulation will cause more unemployment and financial hardship, especially to small businesses, in this state. (Burroughs, Bush, Denvir, Fitzgerald, Hoffm an, Jones2, Krauss, Nard, Neal, MT, PTS, TLTLLC)

The proposed regulation places a significant econom ic risk on the State and jeopardizes future viability in almost every indust ry. Your responsibility is not only to the health of the people and our environmen t but also to their financial welfare. (Vasconi)

We are in a financial crisis. Do we want to strap small businesses and run them out of business, cause the State to lose the k ind of revenue that you’re talking about here, in a time when we need to worry about the coffers of the State? (ACG, Agrium)

The proposed regulation is a sure way to add to the closure and bankruptcy

woes. We need to continue research and find additi onal ways to clean up the air. It is not timely given the economy. (Jones1)

The proposed standards are too aggressive. The eco nomy is slumbering and

will become comatose if we do not incentivize inste ad of penalize. (Torres)

Agency Response: The California Global Warming Solutions Act of 200 6 (AB32) was enacted to address the immediate need to mitigate climate change and its harmful effects. Unmitigated, climate chan ge is expected to have significant societal and ecological impacts includi ng, but not limited to, increased health care, fire fighting, and flood pre vention costs, increased public exposure to toxic air contaminants, and the destruc tion of existing environmental resources. Therefore, it is critical that we act now in order to avoid more serious consequences that we would other wise encounter in the- 20 -

future due to our inaction. Many measures will be adopted pursuant to AB32 in the coming years, but this regulation in particular is one that has been designated as a discrete early action item, which m eans it must set forth requirements that are enforceable starting January 1, 2010. Because of this statutory mandate and the urgent need to begin redu cing greenhouse gas emissions at this time, this regulation cannot be d elayed. That said, while the primary goal of this regulation is to combat climat e change and its harmful effects by reducing greenhouse gas emissions, the m easure is also expected to reduce energy costs and stimulate the economy. By requiring tractors and trailers to become more efficient, this regulation is expected to reduce longterm costs for the freight transportation industry. The cost of fuel is a significant expenditure in this industry and even modest effici ency improvements will result in very substantial fuel savings. ARB realizes the capital costs needed for compliance may be difficult for many fleets in this current economic climate. As such, to help ease these costs, the regulation prov ides gradual compliance phase-in options for 2010 and older model year trai lers, the group of vehicles expected to require the largest capital investment to bring into compliance. In addition, ARB has also been working to make financi al assistance programs available to those businesses affected by this regu lation. A summary of some available financial assistance and grant programs m ay be found in Section I of the Staff Report. See also agency responses in sec tion H, Financial Assistance/Incentives, for more information about a vailable financial assistance

resources and the current economic climate.

2. Comment: Please consider a flexible and attainable policy th at will not hurt the business environment. Consider a more manageable a pproach to support businesses. (BSGGC, Cortie, Panella, RTRI, TLTLLC)

Agency Response: See agency response to comment #1. In addition, th e regulation incorporates flexibility for businesses through the optional fleet compliance plans. These plans allow fleets to choo se to delay some of their up-front costs and phase-in compliance over several years (4 years for small fleets with less than 21 trailers, and 5 years for large fleets with 21 or more trailers; large fleets may get an additional year i f they meet certain early compliance requirements).

3. Comment: All the issues associated with the proposed regulat ion have not been considered. The Board should look at all aspe cts of the proposed regulation, including the impact on the supply chai n, the state and local economy, and unemployment rates, as well as the lon g term ramifications. The proposed regulation will devastate the trucking ind ustry and their vendors and suppliers. The Board should make decisions that wi ll be beneficial to all involved and allow businesses to continue doing bus iness in the State. (FTI)

Agency Response: As stated in the Staff Report: Initial Statement o f Reasons for Proposed Rulemaking (Staff Report), The California Global- 21 -

Warming Solutions Act of 2006 (AB 32) requires that climate change regulations must consider the impacts on the econom y of the state. The consideration should include, but not be limited to , the impacts of the regulations on jobs and businesses, and California business competitiveness. In its analysis, ARB determined that, over the cour se of an 11-year equipment lifespan, from 2010 to 2020, affected stakeholders should realize an approximate net savings of $8.6 billion in 2008-dol lar values. While there will be modest up-front costs associated with the regula tion before the fuel savings occur, ARB anticipates that with the optional compl iance phase-in programs incorporated in the regulation, businesses will be able to defer some of the costs of retrofits over a several year period. In addition, for those smaller businesses that may have difficulty financing these upgrades, financial

assistance will be available to assist them. A sum mary of some available financial assistance and grant programs may be foun d in Section I of the Staff Report. See also agency responses in section H, Financial Assistance/Incentives, for more information about a vailable financial assistance

resources and the current economic climate

The regulation will also likely increase demand for aerodynamic devices and low-rolling resistance tires, which may result in t he creation or expansion of businesses involved in the manufacturing, distribut ing, and marketing of these

devices.

4. Comment: We believe that California does not have the auth ority to impose these and any other state-specific equipment requir ements on interstate vehicles. The interstate and global nature of comm erce today requires United States motor carriers to operate equipment complian t with the laws and regulations of all states, Canada, and Mexico. (AZ TA)

Agency Response: It is true that motor carriers must use equipment t hat is compliant with the law and regulations of all state s and nations where the equipment is being operated. In the United States, individual states are allowed to adopt rules relating to operation of veh icles when there is a legitimate state interest in regulating and the rul es do not violate the Commerce

Clause of the United States Constitution.

The rulemaking record, including the Staff Report a nd the Board resolution adopting the regulation, establishes California’s s trong interest in adopting measures to curb the emissions of greenhouse gases, including through AB 32 early action items such as this one. This regulati on and others developed by ARB under authority of AB 32 represent an exercise of the state’s police powers to protect public health, traditionally a fu nction of states.

This measure only regulates tractors and trailers t hat are operating within California. It does not directly regulate or discr iminate against interstate commerce, substantially impede the flow of intersta te commerce, or have an- 22 -

effect that favors in-state economic interests over out-of-state interests. In addition, the regulation’s indirect effects on inte rstate commerce are incidental and minor, particularly when compared to the public health benefits that will be achieved as a result of the measure's implementatio n and the fact that the cost to vehicle owners of installing and maintaining the equipment will typically be recouped in a few years through fuel savings. The regulation is also designed to give operators ample time to decide what equipme nt they will operate in California and to bring that equipment into complia nce on a reasonable schedule. Considering all of this, ARB does not be lieve the regulation violates the Commerce Clause under the balancing test used b y the courts to analyze state regulations affecting interstate commerce.

ARB also notes that the regulation does not introdu ce a new state standard or certification program, but relies on an existing fe deral certification program that is known to and has been utilized by equipment manu facturers and makes use of equipment certified under that program mandatory in California.

5. Comment: Having to dedicate a fleet or portion of a fleet to one state’s requirements is extremely costly and inefficient. In today’s economic environment, the regulation imposes unacceptable co sts on the businesses least able to absorb these increases. (AZTA)

Agency Response: The regulation does not mandate how fleets from out side California may choose to comply, as long as they me et the requirements when operating in California. However, the regulation d oes offer optional compliance schedules that will allow fleets time to phase-in c ompliance, thereby deferring much of the up-front costs over several years. In addition, complying with this regulation will save fleets money, over time. As s tated in agency response to comment #3, ARB’s analysis determined that, over th e course of an 11-year equipment lifespan, from 2010 to 2020, affected sta keholders should realize an approximate net savings of $8.6 billion in 2008 dol lar values. ARB further determined that individual fleets will, on average, recoup the costs to comply over a 2.3-year period (based on a trailer-to-tract or ratio of 2.5-to-1 and an estimated fuel cost of $3.14 per gallon).

6. Comment: ARB should consider the developing national lands cape of fuel efficiency requirements and GHG emission standards for heavy-duty vehicles. Reducing GHG emissions from products like commercia l vehicles – which fundamentally operate in interstate commerce and mu st be manufactured to be sold and operated in all states – would be most eff ectively accomplished under a harmonized set of regulations across the United S tates. ARB should work with interested stakeholders, including United Stat es Department of Transportation (DOT) and the United States Environm ental Protection Agency (U.S. EPA), to develop performance-based standards, and use those as a basis of an integrated program to effectively reduc e fuel consumed by the commercial trucking industry. (EMA)- 23 -

Agency Response: AB 32 requires ARB to develop and implement the regulation in California, beginning January 1, 2010 . That timeframe cannot be delayed until a federal rulemaking is developed and implemented. That being said, ARB is collaborating with the U.S. EPA as the y enhance the SmartWay program standards, which are the basis for this reg ulation’s standards.

7. Comment: We respectfully request that the Board vote “no” on the proposed regulation because we oppose a rule that mandates u nproven and costly technologies. (AZTA)

Agency Response: The regulation’s technology requirements are base d upon the U.S. EPA SmartWay program. This program uses e stablished test methods, demonstrating the benefits of U.S EPA’s ve rified SmartWay technologies. Thus, owners can be confident in the benefits of the verified technologies and have the option of choosing any ve hicle or technology that SmartWay has certified or verified to meet the mini mum performance standard required by this rule. While there is some initial , modest up-front cost associated with the regulation before fuel gains oc cur, ARB has determined that, over the course of an 11-year equipment lifes pan, from 2010 to 2020, affected stakeholders should realize an approximate net savings of $8.6 billion

in 2008 dollar values.

8. Comment: California and its government agencies are insens itive and blind to the concerns of the trucking industry and the needs of the people. (Doggett, Elliff, Keppel, Lloyd, LDT, MT, Taylor)

Agency Response: ARB is not insensitive or blind to the concerns o f the trucking industry and the needs of the people. Req uired under California’s regulatory processes, ARB analyzes both the economi c impact and benefits on the affected business industry and the citizens of California. Throughout the process of developing the regulation, ARB sought in put from representatives of the trucking industry, as well as other stakeholder groups who will be impacted by the regulation. ARB has incorporated as much fl exibility in the regulation as is feasible (in terms of offering optional phase-in opportunities) while still meeting the goals of AB 32.

9. Comment: The United Nations Intergovernmental Panel on Cli mate Change Technical Paper VI, the technical basis for global warming, is not sufficient justification for the proposed regulation. The wor ds used in the paper, “likely,” “high confidence,”, and “assume,” are not the most convincing words of science. (Lloyd)

Agency Response: The basis for the regulation is the California Glob al Warming Solutions Act of 2006 (AB 32), which was pa ssed by the legislature and signed into law by Governor Schwarzenegger. It set into law a requirement- 24 -

to reduce greenhouse gas emissions in California to 1990 levels by the year 2020. To accomplish this, it directed ARB to devel op discrete early actions to reduce greenhouse gases while also preparing a scop ing plan to identify how to achieve the maximum technologically feasible and co st-effective reductions in greenhouse gas emissions from sources or categories of sources of greenhouse gases by 2020. The current regulation i s one of the identified discrete early action measures. It is beyond the s cope of this regulation to address the veracity of words used in the above-men tioned United Nations

document.

10. Comment: The regulations will not bring global carbon diox ide levels down by any significant level. That process is occurring n aturally, and must be given more time to occur. (Jones2)

Agency Response: As stated previously, AB 32 set into law a requir ement to reduce greenhouse gas emissions in California to 19 90 levels by the year 2020. To accomplish this, it directed ARB to develop disc rete early actions to reduce greenhouse gases while also preparing a scoping pla n to identify how to achieve the maximum technologically feasible and co st-effective reductions in greenhouse gas emissions from sources or categories of sources of greenhouse gases by 2020. The regulation is one of many measures developed by ARB to meet the requirements of AB 32, either as discrete early action measures, or through various measures identi fied in the scoping plan. Thus, while any one measure may not reduce global c arbon dioxide levels significantly to reverse climate change, the combin ed impact of all the proposed measures is designed to achieve the maximum technol ogically feasible and cost-effective reductions in greenhouse gas emissio ns from a wide range of sources by the year 2020.

11. Comment: We would like to see a “level playing field” for California-based companies in relation to out-of-state competitors. (ACT, CPF, Matheson, Goliti)

Agency Response: The regulation requires all affected fleets (trac tor-trailers with 53-foot or longer box-type trailers) that trav el long haul on California highways, regardless of their state or country of o rigin, to comply with its requirements. Thus, the regulation will not give o ut-of-state carriers that do business in California undue advantage over Califor nia-based companies.

12. Comment: These rules are late in the making and take too l ong to implement. I urge quick passage, fast and full implementation of these rules. (Cohen)

Agency Response: As one of the discrete early action measures mand ated by AB 32, the regulation must become enforceable by January 1, 2010. Implementation for new (2011 and newer model year) tractors and trailers will begin on January 1, 2010, while implementation for pre-2011 model year tractors and trailers will be phased in over severa l years, to allow fleets time to- 25 -

comply while still achieving the targeted greenhous e gas emission savings by

2020.

13. Comment: We have several trailers running across the natio n with all different types of aerodynamics on them. We think it’s a gre at thing. But we would like to see you not make it unilateral across the trucki ng industry, because aerodynamics don’t always benefit all driving situa tions. (Matheson)

Agency Response: This regulation does not impose requirements unil aterally across the trucking industry, but rather targets lo ng-haul tractors (that pull 53- foot and longer box-type trailers), because these v ehicles are more likely to benefit from using aerodynamic devices. On average , long-haul tractor-trailers tend to travel at high enough speeds to realize sig nificant fuel efficiency savings from using aerodynamic devices. The regulation als o provides exemptions for equipment that operate locally or infrequently that will not benefit from the technology and will not benefit the goals of reduci ng greenhouse gases. Fleets have the option to select the devices that best mee t their needs and circumstances from among the devices verified by th e SmartWay program. As more equipment manufacturers submit applications to have their devices verified by SmartWay, ARB anticipates that fleets w ill have even more equipment options from which to choose.

14. Comment: We object to being subjected to multiple rules (T RU, HDVGHG, Truck and Bus) impacting tractors and trailers (CDM I, MCA2, Mendocino Co, Goliti)

Agency Response: ARB recognizes that some carriers will be impacte d by multiple rules promulgated by ARB. For that reason the regulation provides optional compliance phase-in opportunities. Specif ically, rather than bring their entire trailer fleet into compliance on January 1, 2013, fleets may opt for the large fleet compliance phase-in or the small fleet compliance phase-in, both of which provide additional time to bring fleets into compliance. In addition, for fleets with refrigerated-van trailers with model ye ars 2003 through 2008 transport refrigeration units (TRUs), additional ti me to comply is provided due to the impact of the Airborne Toxic Control Measure (A TCM) for TRU and TRU
generator sets.

15. Comment: Truckers purchase new tractors and trailers that comply with regulations established by the government. Now, y ou want us to shoulder the burden of extra equipment for retrofit even though the equipment when purchased already complied with the applicable regu lations. (JJTI)

Agency Response: For 2010 and older model year tractors, the regul ation only requires the use of SmartWay verified low-roll ing-resistance tires starting January 1, 2012. ARB believes this requirement pro vides sufficient lead time

for most fleets to exhaust the usefulness of their existing tires before having to- 26 -

switch to SmartWay verified models. Therefore, ARB expects the incremental cost of this requirement to be small and primarily attributed to the cost difference between a SmartWay verified tire and a s tandard tire. Staff consulted with many fleets during the development o f this regulation, and based on the responses of those that had experience with SmartWay verified tires, the incremental cost of purchasing such tire s ranged between $0 and $50 per tire. However, despite the additional cost of SmartWay verified tire models, the general consensus was that the investment was w orthwhile due to the fuel savings that were realized.

For 2010 and older model year box-type trailers, th e regulation requires the retrofit of such trailers with SmartWay verified ae rodynamic devices, in addition to SmartWay verified tires, before January 1, 2013, or in accordance with one of the optional trailer fleet compliance schedules. This is because 1) SmartWay verified aerodynamic retrofits are available for tr ailers at reasonable cost and 2) box-type trailers can be used for many years withou t being replaced, so natural turnover of these trailers cannot be relied upon to obtain the greenhouse gas reductions needed to fulfill the goals of AB 32. A lthough retrofitting such trailers will require a substantial capital investment from affected fleets, ARB expects the technologies required by this regulation to pay for themselves over time through fuel savings. And since the optional trail er fleet compliance schedules allow fleets to gradually phase in compliance over several years, participating fleets will be able to reinvest the money they save from early retrofits into

retrofits for trailers that are scheduled for later compliance years.

16. Comment: California is too far ahead of the rest of the co untry on its regulatory requirements. As a result, it will be d ifficult for the trucking industry to comply with these requirements. (Brian)

Agency Response: ARB acknowledges that ARB often takes a leading r ole in the nation in developing regulations to curtail air pollution and protect the health and welfare of the people of California. At the sa me time, ARB has incorporated as much flexibility in the regulation as possible (within the constraints of AB 32) to allow the trucking industr y time to comply. The regulation provides optional compliance phase-in op portunities. Specifically, rather than bring their entire trailer fleet into c ompliance on January 1, 2013, fleets may opt for the large fleet compliance phase -in or the small fleet compliance phase-in, both of which provide addition al time to bring fleets into compliance. In addition, for fleets with refrigera ted-van trailers with model years 2003 through 2008 and transport refrigeration units (TRUs) with 2003 or later model years, additional time to comply is pro vided due to the impact of the Airborne Toxic Control Measure (ATCM) for TRU and T RU generator sets.

17. Comment: In lieu of the proposed regulation, it would be m ore reasonable to test individual trucks to see how much pollution is emitted and then create- 27 -

programs that will assist owners of polluting equip ment to make the needed changes. (LDT)

Agency Response: The regulation, based upon the AB 32 mandate to r educe California’s greenhouse gas emissions to 1990 level s by the year 2020, is part of an extensive program to reduce carbon dioxide em issions in California from all sources. In developing this regulation ARB was required by AB 32 to consider how to achieve “the maximum technologicall y feasible and costeffective reductions in greenhouse gas emissions.” Therefore, this regulation is designed to improve the fuel efficiency of all affe cted tractors and trailers through the use of aerodynamic technologies and low rolling resistance tires to

reduce their CO2 emissions from current levels. In regards to the commenter’s suggestion about testing individual trucks, ARB doe s not believe such testing is necessary because SmartWay verified low-rolling-res istance tires and aerodynamic technologies are expected to significan tly reduce the greenhouse gas emissions and improve the fuel economy of any l ong-haul combination vehicle regardless of its baseline emission level. Regarding the commenter’s suggestion about creating programs to assists owner s, there are a number of financial assistance programs that are currently av ailable. Please see section I of the Staff Report and agency response to comment #111 for more information about financial assistance and grant programs.

18. Comment: The way the truck rules and the Transport Refrige ration Unit (TRU)

rules are dealt with has been unfair and without re gard to the actual technology available when the rules are made and voted on. (H eilman)

Agency Response: ARB is uncertain about how this comment specifica lly pertains to the regulation, but will respond to the comment nevertheless. As illustrated in the Staff Report, ARB investigated t he types of aerodynamic technologies and low rolling resistance tires certi fied or verified by the SmartWay program and has determined that there are numerous technologies available to meet the requirements. Thus, technolog ies needed to comply with the regulation are available in the marketplace tod ay and ARB expects an even greater selection of technologies when implementati on of the regulation begins.

19. Comment: ATA’s efforts to achieve these goals are captured in our sustainable plan entitled Strategies for Reducing the Trucking Industry’s Carbon Footprint

. The recommendations set out real solutions for t he trucking industry that are achievable today to reduce greenh ouse gases. The six key recommendations set out in the report are as follow s:

• Enact a national 65 mph speed limit and govern max imum truck speeds at 65 mph;

• Decrease idling;

• Reduce highway congestion through highway infrastr ucture improvements;

• Increase fuel efficiency through U.S. EPA’s SmartW ay Program;- 28 - • Promote the use of more productive truck combinati ons; and

• Support national fuel economy standards for medium - and heavy-duty

trucks. (ATA, Con-way)

Agency Response: ARB commends the commenters for their proactive p lan and encourages them to pursue each of the six key s trategic recommendations. Any efforts taken to reduce greenhouse gases produc ed by the trucking industry beyond the requirement of this regulation can only enhance the effectiveness of the regulation and the requirement s of AB 32.

B. Scope of the Regulation

20. Comment: We identified in recent analysis that making full use of these products could improve the emission reductions by 5 0 percent. According to staff estimates, 50 percent increases in the regula tion would result in 3.5 million metric tons of greenhouse gas emission reductions i n 2020 – a significant improvement. All of these are cost effective. The y can be achieved with today’s technology. We estimated over $30,000 in n et cost savings with these technologies with payback periods as short as two y ears. We ask that the Board resolve to come back to this issue in one yea r’s time to get additional reductions and specifically to look at tractor-trai ler combinations that have not been included in the proposal and also for new truc ks and trailers not affected by the regulation. (UCS)

The Board should direct staff to return in 6 months time with further recommendations to reduce global warming emissions from heavy-duty trucks, which is not limited to the requirements of the Sma rtWay program. Staff should include an evaluation of the emission reductions po ssible from more stringent standards for new tractors, trailers, and straight trucks, such as requiring a full suite of aerodynamic and tire technologies on these vehicles. (MULTIPLE)

We urge you to adopt this regulation today, but a m ore aggressive standard is possible with the technology that’s on the market t oday. (UCS, Sierra)

Agency Response: The regulation requires new and existing 53-foot box-type trailers and the tractors that pull them to be equi pped with SmartWay approved aerodynamic and tire technologies when operating on California highways. These technologies are verified through the SmartWa y Program to meet performance and fuel efficiency requirements for lo ng-haul tractors and trailers. The requirements mirror those of the current SmartW ay Program, applying to 53-foot box-type dry-van trailers and tractors that pull them. In addition, the regulation extends these requirements to apply to a nother type of box-type trailers, 53-foot refrigerated van trailers, becaus e these trailers are similar to dry-van trailers, thereby allowing the dry-van Smar tWay verified aerodynamic- 29 -

equipment (except front trailer fairings) and tires to be applied to refrigerated van trailers without modification. Expanding the r equired use of the technologies to include even more types of trailers as suggested by the commenters, however, would require an additional ve rification program beyond the scope of the SmartWay verification program that would have to take into account performance, fuel efficiency and other fact ors. A new technology verification program would be necessary because the se types of trailers are substantially different from dry-van trailers. Suc h a program does not exist at this time and would require substantial resources a nd time to develop.

In addition, the commenter suggested the applicatio n of the full suite of technologies to tractor-trailers. The full suite o f technologies entails all the types of trailer aerodynamic technologies (front tr ailer fairings, skirts, and rear trailer fairings), a SmartWay certified tractor, an d low-rolling resistance tires. The regulation requires the latter two items as wel l as a combination of technologies which meet a minimum percentage fuel s avings, rather than all of the available technologies. Requiring the full sui te of technologies on the trailer was not part of staff’s proposal to the Board becau se some of the technologies may be too restrictive or impractical for certain t ypes of box-type trailers at this time. In addition, requiring every available type of technology may unreasonably limit the flexibility of fleets to app ly technologies that would achieve maximum fuel savings without hindering oper ational needs.

21. Comment: To increase the level of emission reductions achi eved through this proposed regulation, the Board should apply tire re quirements to all tractortrailers, not just tractors pulling van trailers an d remove the 100-mile range limit exemption. Including these two changes would incre ase overall benefits by 20 percent or more and not conflict with SmartWay prog ram requirements. (EDF, MULTIPLE)

Expand the tire requirements to additional tractor and trailer types. (UCS)

Agency Response: Because this regulation was designated as a discr ete early action measure under AB 32, ARB did not have time to evaluate the impact of the requirements on other vehicle types. For the equipment requirements of the regulation, ARB relied solely u pon the existing U.S. EPA SmartWay program, which currently only addresses th e use of efficiency technologies on combination vehicles composed of a tractor and a 53-foot van trailer. In order to expand the regulation to in clude other tractor–trailer combinations, a separate rulemaking process would b e necessary, and the owners of these other types of combination vehicles would have to be notified. That way, it would give these owners an opportunity to make ARB aware of any potential issues or problems the requirements could cause for their particular combination vehicle type. This process is necessar y to ensure that ARB develops a regulation that is both feasible and eff ective.- 30 -

ARB concurs that the 100-mile range exemption limit for tire requirements on

affected tractors and trailers be removed because t he tire requirements are cost effective and reduce GHG emissions when applie d to locally operated tractors and trailers. This modification was sugge sted at the Board Hearing and approved. It has been noticed to the public as part of the Notice of Public Availability of Modified Text (15-day Notice).

22. Comment: An extremely common truck trip is between Los Ang eles and Bakersfield, a 115 mile trip that features only 25 miles at freeway speeds since trucks can only go 35 miles per hour over the Grape vine before descending into or emerging from congested Los Angeles traffic. A 100 mile radius would close off Bakersfield to all but side skirt-equipped truc ks despite the fact that only a small proportion of travel would occur at freeway s peeds. For example, a truck making a round trip to Bakersfield only once each d ay of the year would accrue over 80,000 annual miles, but spend less than 25 pe rcent of its mileage at freeway speeds. Due to these mileage limitations, CTA is requesting that ARB increase the short haul radius exemption to 150 mil es. This will help carriers achieve maximum efficiency benefits within the stat e. (CTA)

The mileage and territory limitations on the short haul exemption are still too restrictive. The mileage restrictions appear to be based upon an assumption that trucks and trailers work five, ten hour days. In fact, trucks and trailers typically work seven-day weeks with service hours r eaching up to 20 hours per day, when multiple drivers are used. For example, grocery trucks regularly total 150,000 miles per year within a 150 mile radius and a trucking making a round trip to Bakersfield from Los Angeles only once each day of the year would accrue over 80,000 annual miles, but spend less tha n 25 percent of its mileage at freeway speeds. CTA recommends that ARB set the exemption standard for tractors at 100,000 miles per year or 150 mile radi us. (CTA2)

The mileage requirement for the short-haul exemptio n should be increased to 200 miles to protect California carriers. The curr ent short-haul exemption is too narrow to incorporate fuel-efficiency gains in urba n congestion areas. A truck trip from Los Angeles to Bakersfield, San Francisco or San Diego is more than 100 miles, which means that the truck making this t rip would be required to be compliant. However, the projected fuel efficiency gained by the proposed rule needs to be weighed against the urban congestion of the four trade corridors in California. (IWLA)

Agency Response: Since aerodynamic equipment functions optimally a t highway speeds, the regulation contains exemptions for trucks that operate primarily within a local area with mostly urban dri ving, or for trucks with low annual mileage. These exempted trucks, defined as local-haul or short-haul trucks, must operate exclusively within a 100 mile radius from their local haul base or drive less than 50,000 miles per year, resp ectively. The 100 mile radius distance is calculated in a straight line (i .e., “as the crow flies”) rather- 31 -

than by the distance on the road. The straight lin e distance between Bakersfield and Los Angeles is about 100 miles; the refore a truck traveling between these two cities may be exempt from the req uirements, depending on the starting and ending destinations.

The commenters did not provide data to substantiate their claims of mileage and driving speeds. However, assuming the informat ion is correct, the required aerodynamic improvements will still provide substan tial fuel savings. First, a truck that operates 80,000 annual miles with 25 per cent of its mileage at freeway speeds will have about 20,000 annual miles at freeway speeds. Assuming a fuel economy of 6 miles per gallon, a 7 percent increase in fuel efficiency (using a compliant day cab and refrigera ted trailer) will be achieved due to the requirements, which will result in an an nual savings of almost 220 gallons of fuel. Second, if a vehicle operates for 20 hours per day with multiple drivers, a large portion of those driving hours wil l occur during the night or midday when urban congestion is at a minimum and vehic les can operate at highway speeds. This will result in the percent of operating time at highway speeds being significantly higher than 25 percent, thereby resulting in even greater fuel savings. Note that while aerodynamic equipment provides the greatest fuel economy benefit at highway speeds, da ta show that some fuel savings will be achieved at lower cruise speeds as well.

The primary purpose of allowing a short-haul or loc al-haul exemption is to exempt vehicles that will only marginally benefit f rom aerodynamic equipment,

where the use of them will not be cost effective. Increasing the annual mileage

limit or the distance from the home base is unneces sary because it would exempt many trucks that will benefit from the requi rements.

23. Comment: Trailers should have their own short haul exempti on mileage and territory standards because a trailer may be used o nly for short haul purposes but may be pulled by a tractor that must be complia nt because of mileage or

territorial radius standards. CTA recommends that ARB set the exemption standard for trailers at 100,000 miles per year or 150 mile radius. (CTA2)

Agency Response: The regulation contains an exemption for trailers that are used for local haul purposes (i.e., operate only wi thin a 100 mile radius of their local base) but does not include a mileage exemptio n. Since trailers do not have odometers to record mileage, an annual mileage limit was not proposed. See also agency response to comment #22.

24. Comment: The mileage radius of the 53-foot short haul trai ler exemption

should be increased to 150 miles to mirror the U.S. DOT short haul radius. (YTI)

Agency Response: ARB is uncertain as to which specific U.S. DOT sh ort-haul definition the commenter is referring to since a re ference was not given.- 32 -

However, ARB is aware of a U.S. DOT 150-mile radius definition, but is applicable only for non-commercial driver’s license s. California law requires that all operators of tractors pulling 53-foot box- type trailers possess

commercial driver’s licenses. Under the Hours of S ervice regulation of the U.S. DOT, a short haul operator with a commercial driver ’s license is one that operates within a 100 air-miles of such operator’s normal work reporting location (Note that 1 air-mile is equal to 6,076 fe et, or 1.15 statue miles.) The provisions under this U.S. DOT regulation specify t he maximum driving time and minimum rest time allowable within a certain pe riod of time.

C. U.S. EPA SmartWay Program

25. Comment: The federal SmartWay program was meant as a complet e package, not individual components thereof. They r ely on 13 different strategies, including idle reduction, improved aero dynamics, improved freight logistics, automatic tire inflation systems, single wide base tires, driver training, low viscosity lubricants, intermodal shipping, long er combination vehicles, reducing highway speed, weight reduction, hybrid po wer train technology and renewable fuels. The California ARB is ignoring ma ny of the strategies that can be utilized to increase fuel efficiency and reduce pollution that contributes to climate change. The US EPA estimates that improved aerodynamics for trucks and trailers could reduce 20 metric tons (MT) of CO 2 annually. While that number is large, it accounts for less than 20% of t he total decrease in greenhouse gases through the ARB’s SmartWay recomme nded strategies that can be used to promote fuel economy. Not included in the ARB’s plans are the following CO2-reducing methods: improving freight logistics (24 MT), automatic tire inflation (1 MT), singlewide base tires (4 MT) , training (8 MT), low viscosity lubricants (5 MT), intermodal shipping (~65% reduct ion), combination vehicles (34 MT), reduced speed (10MT), weight reduction (3 MT), hybrid power trains (12 MT), and renewable fuels (varies). As you can see, a company that only trains its drivers and improves freight logistics w ill reduce 50% more GHG than a company employing aerodynamics. Choosing only on e aspect of the US EPA’s SmartWay program and ignoring the others is e ntirely ignorant in its reasoning. (MCA)

Agency Response: As one of the nine discrete early action items id entified by ARB in October 2007 to reduce GHG, the regulation w as put on the fast track for development, and earmarked by the Board to be a dopted and enforceable by January 1, 2010. The short timeframe for its de velopment necessitated that ARB rely on the existing U.S. EPA SmartWay program to identify enforceable GHG reduction requirements. As such, in establishi ng the scope of this regulation, ARB limited the regulation to two basic strategies: use of new SmartWay certified tractors and trailers; and use o f improved aerodynamics and low-rolling resistance tires for both in-use lo ng-haul heavy-duty tractors and in-use 53-foot box-type trailers. ARB chose these two strategies because they- 33 -

are commercially available, pay for themselves in a relatively short period of time, and have been verified by the SmartWay progra m to provide significant GHG emission reductions. Establishing enforceable requirements to address improved freight logistics, training, low-viscosity lubricants, and intermodal shipping would make the regulation much more comple x and greatly increase the number of different stakeholders impacted. As such, ARB concluded that it was not feasible to consider these strategies as pa rt of a discrete early action regulation. However, ARB is committed to consideri ng these strategies as part of future rulemakings.

26. Comment: There are other means available to meet the desir ed fuel efficiencies and therefore the corresponding emissi on reductions with alternative means of compliance, making use of vari ous tractor and trailer technologies in combinations that suit a particular company’s operational

characteristics rather than the one size fits all a pproach being proposed. Rather than unfunded, untested mandates, we ask tha t ARB allow alternative means of compliance, including consideration that a carrier with the highest SmartWay score possible would be considered in comp liance with the proposed rules. (Con-way)

Agency Response: The regulation is designed to be the first step i n regulating GHG emissions in California from the long-haul truc king industry. The regulation requires the use of low-rolling resistan ce tires and aerodynamic technologies on those tractor and trailer applicati ons where real, quantifiable GHG emission reductions can be gained. ARB agrees with the commenter that there are other means of reducing GHG emissions fro m a fleet, and that these should be pursued either voluntarily or under the p urview of future rulemakings. However, it was not appropriate to consider these o ptions in the current rulemaking given the short timeframe for its develo pment.

The characterization of the regulation as a “one si ze fits all approach” is not accurate. During the regulatory development proces s, staff held numerous meetings and several public workshops where concern ed stakeholders informed staff of how the operational characteristi cs of their fleets would make compliance with the regulation impractical or resul t in little GHG benefit. Staff also met with U.S. EPA SmartWay program administrat ors, fleets that are currently using the SmartWay certified and verified technologies, and manufacturers of aerodynamic technologies and low-r olling resistance tires. From the information gathered, ARB identified speci fic exemptions from the required use of aerodynamic improvements and/or low -rolling resistance tires. These included short haul and local haul fleet appl ications, drayage tractors and trailers, curtain-side trailers, solid-waste ve hicle applications, container chassis applications, and drop frame vans. Also, t he regulation allows flexibility in choosing the specific types of SmartWay verified aerodynamic technologies that can be used for compliance when retrofitting a trailer. For example, a company whose operational characteristics require t he trailer to access very- 34 -

steep loading docks may elect to retrofit their tra ilers with rear trailer fairings

rather than trailer side skirts.

The characterization that the requirements of the r egulation are untested is not

accurate. The GHG emission benefits associated with the use of these technologies has been verified by the U.S. EPA in a ccordance with industry accepted test methods as required under the SmartWa y program.

Although providing funding for compliance is not ma ndatory, ARB does provide some financial assistance to help owners purchase S martWay certified tractors and trailers, SmartWay verified aerodynamic equipme nt and low-rolling resistance tires. Additional financing assistance may be obtained through the U.S. EPA SmartWay program. For additional informat ion about financing, see agency response to comment #145.

27. Comment: I think SmartWay is being underfunded, and it’s a bit of a dilemma of a horse to hitch to right now. (Silver Eagle)

Agency Response: Much of the work to establish certification and v erification of SmartWay technologies has already been accomplis hed. There are products in the market place approved by the SmartW ay program that meet the requirements of this regulation. Congress is consi dering a bill that would appropriate additional funds to support the SmartWa y program. If for any reason U.S. EPA dissolves the SmartWay program in t he future, ARB would consider whether to make changes to its regulation to establish a certification/verification program in California to take the place of the federal

program.

28. Comment: SmartWay was designed as a system for the EPA, an d not as certain pieces that you can pull out of it. (Tharp )

Agency Response: The SmartWay program was designed to provide tool s and strategies to improve the environmental perform ance of the freight delivery system in the United States. One of the ways a car rier can improve performance is to use SmartWay certified tractors, SmartWay certified trailers, or to retrofit his or her existing fleet of trailer s with SmartWay verified aerodynamic technologies and low-rolling resistance tires. A list of current SmartWay certified and verified tractors, trailers, aerodynamic technologies, and tires is provided by the U.S. EPA and is curren tly available on their website at http://www.epa.gov/smartway/transport/what-smart way/verifiedtechnologies.htm#advanced . The current regulation establishes requirements to use SmartWay certified and verified equipment wh ile traveling in California. ARB believes that it is appropriate to require the use of SmartWay certified and verified equipment without incorporating other aspe cts of the SmartWay

program.- 35 -

29. Comment: One of the primary reasons for the success of the SmartWay Partnership program is that it allows its partner c ompanies the latitude to adopt fuel-saving technologies and strategies that are ta ilored to their individual business practices, rather than forcing them to emp loy generic approaches that may not work in their operations. The SmartWay pro gram provides tools for fleets to evaluate and reduce greenhouse gas emissi ons. These tools include more than just the aerodynamic devices. There are a host of mechanisms that

fleets can look at and evaluate what will work best for them. The HDVGHG regulation in the present case requires specific eq uipment to be installed on tractors and trailers with inadequate consideration given to operating environment, equipment performance and maintenance, and potential benefits. (ATA, Con-way)

Agency Response: The regulation establishes requirements to improv e aerodynamics and reduce rolling resistance on that segment of the long-haul trucking industry where it is feasible and practica l. During the regulatory development process, staff held numerous meetings a nd several public workshops where concerned stakeholders informed sta ff of how the operational characteristics of their fleets would make complian ce with the regulation impractical or result in little GHG benefit. Staff also met with representatives of freight carriers whose fleets are currently using t he SmartWay certified and verified technologies, and with the manufacturers o f aerodynamic technologies and low-rolling resistance tires. From the informa tion gathered, ARB identified specific exemptions from the requirements of the re gulation. These included short haul and local haul fleet applications, draya ge tractors and trailers, curtain-side trailers, solid-waste vehicle applicat ions, container chassis applications, and drop frame vans. Also, the regul ation allows flexibility in choosing the specific types of SmartWay verified ae rodynamic technologies that can be used for compliance when retrofitting a trailer. For example, a company whose operational characteristics require t he trailer to access very steep loading docks may elect to retrofit their tra ilers with rear trailer fairings

rather than trailer side skirts.

Staff’s discussions with fleets that utilize aerody namic devices on their tractors and trailers revealed that, in general, their tract ors and trailers did not require significantly more maintenance than do vehicles wit hout the devices. Most of

the fleets indicated that the maintenance needed fo r tractor fairings was minimal; and although some reported damage to trail er skirts, it was often caused by driver error, loading, and environmental conditions. ARB estimated the cost of maintenance and repair to be, on averag e, $120 per year per trailer. However, the fuel savings from installing aerodynam ic technologies and lowrolling resistance tires will allow the owner of a tractor-trailer combination to recover maintenance costs (and initial capital cost s) over time. More detailed information on the economic benefits of this regula tion can be found in Section XII of the Staff Report.- 36 -

The environmental benefit from this regulation is p rojected to be 1.0 million metric tons (MMT) of CO2 equivalent emissions in 20 20. Nationwide the benefits are projected to be 6.7 MMT of CO2 equival ent emissions in 2020. In addition to GHG benefits, reducing aerodynamic drag and rolling resistance will

also reduce NOx emissions. More detailed informati on on the environmental benefits of this regulation can be found in Section XI of the Staff Report.

30. Comment: ARB’S proposed program takes two specific aspects of SmartWay

– tractor and trailer certification – and mistakenl y assumes that those factors, by themselves, will improve the efficiency of all c arriers operating in California. ARB should recognize that the ability of shippers a nd carriers to custom tailor the multitude of factors in SmartWay to their indiv idual needs has made it successful, and ARB should include the flexible use of such multiple factors in its program. If a carrier must purchase vehicles f rom a limited list, it may no longer have access to the unique specifications tha t provide it with maximum hauling efficiency, operational efficiency, and a c onsistent platform for drivers and technicians. ARB forfeits SmartWay’s effective ness by excluding what makes it successful and does not provide a sound ba sis for improving fuel efficiency. (EMA)

Agency Response: The scope of this regulation is focused on mandat ing aerodynamic technology improvements from the long-h aul trucking industry that will result in GHG emission reductions. Specifical ly, this regulation is designed to reduce the GHG emissions from on-road long-haul heavy-duty tractors pulling 53 foot or longer box-type trailers by requ iring both the tractors and trailers to be equipped with aerodynamic technologi es and low-rolling resistance tires that improve fuel efficiency. The fuel savings associated with the required technologies has been verified by the SmartWay program using

established test methods. To the extent that a car rier uses tractors and trailers that are compliant, the fuel consumption and GHG em issions from those tractors will be reduced. Although this regulation relies on the SmartWay program to certify the GHG emission reductions of c ompliant tractors and trailers, it was never ARB’s intent to broaden the focus of this regulation to encompass all aspects of the SmartWay program.

Regarding the commenter’s concern about a carrier h aving to purchase vehicles from a limited list, a SmartWay certified tractor can be configured for specific applications (e.g. engine-size, transmissi on) allowing carriers to obtain maximum hauling efficiency. Similarly, SmartWay ce rtified trailers and existing trailers that are retrofitted with SmartWay verifie d aerodynamic devices can be configured to accommodate the specific needs of the carrier. For example, a SmartWay certified dry-van trailer can meet the req uirements by installing verified trailer side skirts, but if ground clearan ce is a concern for the carrier, a verified rear trailer fairing may be a better optio n to comply with the requirements.- 37 -

31. Comment: One of the hallmarks of the SmartWay program, and a n element of its success, has been the changing and expanding li st of measures and factors that allow shippers and carriers to tailor flexible SmartWay criteria to their unique operations. A voluntary program can be succ essful with such “continuous improvement” and evolving framework. Th e same is not true for a regulatory program – where lead-time, stability and certainty are essential elements of success. By linking its HDVGHG regulat ion to the changing and evolving elements of the SmartWay program, ARB fail s to provide the leadtime, stability and regulatory certainty that manuf acturers and users require. (EMA)

Agency Response: ARB anticipates that the regulation will result i n greater use of SmartWay certified tractors and trailers and deployment of SmartWay

devices on non-certified vehicles. But the flexibi lity in the existing SmartWay program that the commenter applauds will not be eli minated by the decision to require use of certified technologies and devices o n specified vehicles using California highways. In fact, ARB anticipates the trend noted by the commenter of expanding options and lists of available equipme nt will continue after the regulation is effective as additional products are certified and approved by U.S. EPA. If anything, greater demand for SmartWay cert ified products would be expected to increase the number and type of product s being developed and marketed. As the list of tractors, trailers, aerod ynamic equipment, and tires changes and evolves, those subject to the regulatio n will have more flexibility and choice in how they elect to comply with the reg ulation. In short, the regulation’s reliance on the existing SmartWay prog ram means that manufacturers and users can choose from an existing pool of proven and tested technologies that are expected to evolve and expand over time.

ARB has incorporated as much lead-time as possible given the immediacy of the impacts of climate change and AB 32’s direction that discrete early action measures be enforceable by January 1, 2010. Within those constraints, ARB has incorporated opportunities for fleets to phase- in compliance over a period of several years.

32. Comment: The current SmartWay program has an arbitrary lis t of several models from each manufacturer meeting a simplified set of specifications. As the program grows, it will transition from this to an objective, performancebased certification. EMA is actively working with U.S. EPA to develop a costeffective, objective, performance-based fuel effici ency measurement method. However, this is a very difficult undertaking, and a robust, repeatable and validated method of measuring fuel efficiency curre ntly does not exist. Without other measures or an appropriate certification meth od, simply requiring the use of tractors from the SmartWay list may not reduce a carrier’s overall fuel consumption. (EMA)- 38 -

Agency Response: The current list of SmartWay certified tractor mo dels

includes the most fuel-efficient tractors offered b y individual manufacturers based on an existing test protocol and scientific r easoning. To characterize the current list of SmartWay tractor models as an “ arbitrary list” is inaccurate. For each SmartWay certified tractor model, the manu facturer had to provide U.S. EPA with data supporting the manufacturer’s cl aim that it represents the most fuel efficient of their entire on-road line-up . The data had to be obtained using an industry-accepted method, e.g. computation al fluid dynamics (CFD) modeling, wind tunnel testing, or track testing in accordance with Joint TMC/SAE J1321 Fuel Consumption Test procedure Type II RP J1321 (SAE J1321). In addition, each SmartWay certified tractor must have a 2007-ornewer U.S. EPA certified engine, and be equipped wi th additional aerodynamic features (fuel tank fairings, aerodynamic bumper, i ntegrated roof fairing) and low-rolling resistance tires. Requiring the use of aerodynamic features was based on fuel-savings data from technical literatur e, including testing and analysis by the Department of Energy (DOE) Consorti um for Aerodynamic Drag of Heavy Vehicles led by Lawrence Livermore National Laboratory. Manufacturers of SmartWay certified tractors must o nly use tires that have demonstrated fuel savings as determined using one o f the following industry accepted methods: the SAE J1321 test protocol demonstrating a 3% or greater fuel savings or the SAE J1269 Tire Rolling Resistance Test demonstrating the tire’s rolling resistance coefficient complies with SmartWay target values.

However, ARB agrees that the approach described ab ove, while established on performance based test methods, is limited in th at it can only be used to identify the most fuel efficient models within one vehicle make. That is why the Board directed staff at this regulation’s hearing o n December 11-12, 2008 to work with U.S. EPA on developing a protocol under w hich the performance of all vehicles could be compared with each other. U. S. EPA has recently released an interim performance-based protocol whic h allows these comparisons, and all new tractors will have to be c ertified in accordance with this new protocol. ARB believes this new interim protocol is a valid protocol upon which to base SmartWay tractor certifications and is confident that it sufficiently addresses the concerns brought up by t he Board.

33. Comment: The SmartWay program was invented to allow person al choice and incentives to the truck owners. Allowing the Smart Way program to operate as it is intended will result in older less efficient equ ipment gradually retiring with less hardship to truck and trailer operators and ou r state’s economy. (PTS)

Agency Response: The SmartWay program has been in place since 2004

, but only a relatively small number of tractors and trailers on the road are SmartWay certified. This is especially true for tr ailers where less than one half of one percent of the inventory of 53-foot box-type trailers have been retrofitted with aerodynamic technologies. Given the conservat ive nature of the long-haul transport industry, ARB believes that implementing the regulation which- 39 -

requires a majority of the California long-haul tra ctor and trailer inventory to use aerodynamic technologies by 2020, is necessary to a chieve the GHG reductions needed to achieve the goals of AB 32. B esides significantly reducing GHG emissions, this regulation will also r esult in significant cost saving by reducing the amount of fuel trucking comp anies will need to purchase. Therefore, it is not reasonable to wait for the gradual vehicle

turnover when both GHG emission reductions and cost savings can be achieved now by retrofitting the fleet.

34. Comment: We request that ARB not make mandatory the propos ed requirements for trailers based on the SmartWay Par tnership Program. In the meantime, we suggest that California create additio nal financial incentives to help persuade companies in adopting the voluntary S martWay program. (CBTRI, NTDA)

Agency Response: See the agency response to comment #25 and #33 for a discussion of the reason for making part of the Sma rtWay program mandatory. In addition, ARB offers financial assistance for ve hicles subject to the regulation through the Providing Loan Assistance for Californi a Equipment (PLACE) Program for On-Road Vehicles. The PLACE Pr ogram provides small business owners with competitive rate loans to purc hase compliant tractors and

trailers.

35. Comment: SmartWay certification is not adequate for establ ishing mandatory requirements for trailers. Mandated technologies m ust meet not only fuel savings standard but also durability, performance, safety, and vocational requirements, elements which are currently not pres ent in the SmartWay certification. Aerodynamic trailer technologies ar e not mature enough to meet such requirements for a mandatory program; these te chnologies may be adequate for a voluntary program because truck owne rs can decide which options make business sense for them and can choose those that do. Staff has

failed to understand the differences between the ce rtification standards that are adequate for a voluntary program and those for a ma ndatory program. Also, staff’s knowledge base is not adequate to make judg ments about what mandatory combinations of aerodynamic options make sense for all 53-foot or longer trailers that serve California, such as staf f’s erroneous assumption that the joint potential benefits of different technolog ies is the sum of individual benefits. CTA recommends that ARB defer aerodynami c trailer upgrade requirements and grandfather the current trailer fl eet under the proposed rule. In the interim, ARB should work with U.S. EPA to de velop certification criteria that meet the performance, vocational, and safety r equirements needed to support a mandatory upgrade program. (CTA2)

Agency Response: ARB believes it is appropriate to base the requir ements of the regulation on the SmartWay certification and ve rification program. This regulation requires 53-foot box type trailers pulle d by heavy-duty tractors to- 40 -

either be SmartWay certified trailers or to be retr ofitted with SmartWay verified aerodynamic devices that have been demonstrated to meet or exceed a 4% to 5% fuel savings. The SmartWay program establishes industry-accepted test methods for evaluating the fuel savings potential o f using aerodynamic technologies and low-rolling resistance tires on bo th tractors and trailers. ARB believes it is appropriate, and necessary, to rely on the SmartWay program when establishing the requirements in order to ensu re GHG reductions are achieved in the timeframe dictated by AB 32. As a discrete early action measure, the regulation must be implemented no late r than January 1, 2010; it is therefore necessary to rely on the existing Smar tWay program to certify/verify fuel savings performance. Developing an ARB certif ication and verification program or waiting for the U.S. EPA to develop addi tional performance certification criteria was not considered as part o f this rulemaking because of the additional time it would take to develop and ad opt such a program.

The regulation does not mandate the use of specific aerodynamic technologies,

such as trailer side skirts or front trailer fairin gs, but instead requires the trailer owner to install any combination of SmartWay verifi ed aerodynamic technologies that will meet or exceed the fuel savi ngs requirement.

SmartWay certified trailers and verified aerodynami c technologies are currently being designed by manufacturers to stand up to the real-world durability, performance, safety, and vocational needs of tracto r and trailer fleets. Several trailer fleets have equipped their trailers with Sm artWay verified aerodynamic technologies and are currently pulling these traile rs on U.S. and Canadian highways. New and improved versions are being deve loped in response to fleet experience and needs. This process is happen ing outside of the requirements of the regulation in response to the i ncreased demand for these products because they offer fuel savings. Summarie s of fleet experiences with SmartWay certified trailers and verified technologi es can be found in Section IX of the Staff Report.

Manufacturers of aerodynamic technologies have been addressing issues of safety, durability, and vocational use (e.g. steep loading docks, inclement weather). ARB did not consider any of these issues to be significant enough to delay or stop the promulgation of this regulation. This is supported by the fleets that are currently using compliant tractors and tra ilers on the road today.

D. Standards and Test Procedures

36. Comment: We object to the greenhouse gas proposal because there actually is no test protocol or guideline for certifying Sma rtWay vehicles and there is no thorough process for certifying vehicles. (Daimler )- 41 -

Agency Response: There is a protocol in place for certifying Smart Way tractors and SmartWay trailers. The protocol for c ertifying SmartWay tractors is discussed in the agency response to Comment #32. T he process for certifying a SmartWay trailer is discussed in Appendix B of th e Staff Report

.

37. Comment: Only after developing a scientifically rigorous p rocedure should ARB regulate vehicles based on SmartWay certificati on. The SmartWay program is not based upon a scientific measure of t ractors’ aerodynamics or fuel saving capability. A clear, uniform set of te st procedures and selection

criteria is nonexistent. The selection and number of eligible vehicles for SmartWay certification are determined by individual manufacturers. Manufacturers that have not already participated in the program are not eligible for SmartWay certification. ARB should work with U .S. EPA to develop a rigorous procedure to compare the fuel efficiency o f HDVs and to determine SmartWay eligibility as well as with the DOT. (Dai mler)

The certification process for aerodynamic technolog ies should employ a broad

set of data and information sources to evaluate and certify cost-effective and operationally practical devices that reduce fuel us e and reduce emissions rather than rely on the SmartWay program. The cert ification should rely upon all aerodynamic technology test procedures of the S ociety of Automotive Engineers (SAE) and Technology and Maintenance Coun cil (TMC) of the American Trucking Association (ATA) as well as in-u se industry data for evaluation and certification of technologies. For example, SAE/TMC Type II test requirements do not account for many factors i n testing such as cross-flow or changes in speed, whereas TMC Type IV accounts f or these Type II limitations. The SmartWay program has not establis hed a clear set of industryrelative scientific, engineering, and user-based cr iteria for the certification of aerodynamic technologies. In addition, the SmartWa y criteria are highly limited and device specific and will restrict the options a vailable to fleets, stifle competition and innovation, and result in higher co sts. (SOLUS)

Agency Response: See also agency response #32. As a discrete earl y action measure, the regulation is designed to be im plemented no later than January 1, 2010, relying on the existing SmartWay p rogram to certify/verify fuel savings performance. Developing an ARB certificati on and verification program or waiting for the U.S. EPA to develop additional p erformance certification criteria was not considered as part of this rulemak ing because of the additional time it would take to develop and adopt such a prog ram.

Despite this, U.S. EPA has recently released new pe rformance-based eligibility criteria for SmartWay certification, which allows f or the comparison of vehicle models from different manufacturers. Therefore, al l new SmartWay tractor certifications will be based on this new protocol, and some of the previous limitations of the SmartWay certification program h ave been eliminated. For instance, it is now possible for one manufacturer t o certify more than two- 42 -

tractors as long as the tractors are more efficient than any existing SmartWay certified tractor. In addition, as additional trac tors are certified and more data become available, those looking to purchase tractor s will be able to compare SmartWay certified models from different manufactur ers. The commenter claims manufacturers that have not pr eviously participated in the SmartWay program are not eligible for SmartWay certification. This claim is false, as U.S. EPA has a protocol in place just for that purpose. (See agency response to comment #32).

38. Comment: The vehicles selected for the SmartWay program we re done on a sort of “you know it when you see it” idea of what constitutes an aerodynamic vehicle. It was done in such a way that there is t he very real possibility that some vehicles that are more efficient than SmartWay certified vehicles are actually not SmartWay certified and may be barred f rom pulling the most common trailers on the roads. And, therefore, you run the very real possibility of barring from California roads vehicles based upo n no scientific reason. (Daimler)

Agency Response: The SmartWay program has established a procedure for designating specific tractor models as SmartWay cer tified that is based on scientific reasoning. See the agency response to c omment #32 for a description of the procedure. Tractors that are mo re efficient than SmartWay

certified tractor models can be certified in accord ance with this procedure. All manufacturers are eligible to certify one or more t ractor models. New tractor models can be certified at any time.

39. Comment: As an alternative, or perhaps as an interim measu re, ARB can require technologies, with rigorous specifications, that have been scientifically demonstrated to improve efficiency. This may start with the U.S. EPA’s list of SmartWay add-on technologies: fuel tank side fairi ngs, cab roof fairings, cab side extenders, aerodynamic mirrors, aerodynamic bu mpers, idle reduction technologies, and low rolling resistance tires. (D aimler)

Agency Response: The regulation fulfills what the commenter is req uesting. In addition to testing showing the tractor meets th e performance requirement, SmartWay certified tractors are also required to ha ve certain components, include the components listed by the commenter. Sp ecifically, a SmartWay certified tractor must be equipped with all of the following:

• EPA-certified engine that meets 2007 or newer fede ral emission

standards

• Integrated roof fairing

• Cab side extender fairings

• Side fuel tank fairings

• Aerodynamic mirrors

• Aerodynamic bumper

• Low-rolling resistance tires- 43 - • Idle reduction system capability

40. Comment: SmartWay really doesn’t have a testing protocol. They are trying to develop one. It’s based only on test tracks. T emperature, 68 degrees to 86 degrees. So you couldn’t prove a product that migh t be the best thing going at this time of year. (Silver Eagle)

Agency Response: See agency response to comment #32.

41. Comment: I think you should have rules that regulate for p erformance, not for methodology, to keep things open. You should allow for proven devices. If people can prove to the Air Resources Board that th ese things meet your requirements, your performance requirements, you sh ould accept them. (Silver Eagle)

Agency Response: The regulation establishes levels of fuel efficie ncy savings that may be met on the basis of performance – as de termined by the U.S. EPA SmartWay program. Due to the short turnaround time associated with the development of this regulation, it was not feasible for ARB to develop our own verification program before the mandated implementa tion date of January 1, 2010. Thus, the regulation accepts the use of aero dynamic devices that have been SmartWay verified to meet certain performance requirements. As new aerodynamic technologies are verified by the SmartW ay program, they may be used to comply with the regulation.

42. Comment: What I want to take a look at, and what SmartWay vehemently supports me on, is the fact that the standards that they identified at 6.5 percent are over two and a half years old and are based aro und older technology that was low in its capabilities at the time it was orig inally developed... Don’t have a bar set so low that the transportation industry wil l put a two percent belly fairing on, a two percent gap fairing, and a two percent bo at tail, meeting their six percent number, leaving very little room to go (gro w?). Consider raising the number from 6.5 to 8.5 percent, because once SmartW ay gets their testing protocol in place, they’re going to raise that numb er themselves. (Windyne)

Agency Response: The regulation standards are based upon the level s established by the U.S. EPA SmartWay program. At t he present time, SmartWay has established a minimum aerodynamic fuel efficiency savings of 5% for dry vans and 4% for refrigerated vans (exclu ding the low rolling resistance tire requirement which adds an additiona l 1.5% per trailer). If SmartWay increases these standards in the future, A RB will likely propose to incorporate those changes in a subsequent regulatio n. In the interim, however, as technological advances provide opportunities for greater savings, nothing in the regulation limits fleets from utilizing them an d achieving greater fuel efficiency savings.- 44 -

43. Comment: Currently if you use the 6.5 percent standards an d the current products from the marketplace, you’re going to have to identify three of those areas to just meet that 6 percent, leaving very lit tle room to add another product and increase the number as it goes by. (Windyne)

Agency Response: For a dry-van trailer subject to the regulation, SmartWay specifies a 6.5% fuel efficiency savings, based on a 5% reduction from aerodynamic devices, and an additional 1.5% from lo w rolling resistance tires. A fleet may select any combination of aerodynamic d evices to meet the standard, including several devices that meet or ex ceed it or a single device,

such as the advanced trailer skirts that are estima ted to achieve at least a 5% fuel savings. In that case, a fleet has the option in achieve even greater savings by using the most efficient or additional a erodynamic devices.

44. Comment: If the SmartWay efficiency requirements are incre ased in the future, it would be unfair to the transporters who put this equipment on their trailers. Are you going to then grandfather them i n, or are you going to require

them to take the stuff off and then meet the new co mpliance numbers? (Windyne)

Agency Response: ARB anticipates that once a fleet brings a traile r into compliance with the regulation using aerodynamic eq uipment that was SmartWay verified at the time of purchase, they wou ld not be required to replace that equipment on the same trailer, should the standards become more stringent at a later time. Any future changes to t his regulation would not force the replacement of installed equipment on a trailer used to meet this rule. However, it may affect the reinstallation of equipm ent if the original equipment was damaged and needed to be replaced. Note that a ny future changes to this rule would go through the same public rulemaking pr ocess, allowing comments and suggestions by affected stakeholders.

45. Comment: All of the tests that the ARB has used to prove the fuel efficiency of SmartWay technologies were done at 62 MPH. These t ests should be thrown out, as the California truck speed limit is 55 MPH over the majority of roads, or change the California truck speed limit to 65 MPH. (MCA)

Agency Response: ARB does not believe the SmartWay verification test ing for fuel saving technologies is invalid because the testing was done at a vehicle speeds that exceed California’s speed limit for hea vy-duty tractor trailers. Nor does ARB believe it is necessary to increase the sp eed limit for heavy-duty tractor trailers from 55 mph to 65 mph. The verifi cation test method, U.S. EPA’s SmartWay Interim Test method, defines require ments that allow for the comparison of the performance of fuel savings techn ologies to a set standard. The regulation requires aerodynamic technologies to meet either a 4% or 5% fuel savings requirement, depending on their applic ation. This verification test method allows maximum speeds of up to 65mph – the a ctual speeds of the test- 45 -

vehicles were between 60 and 62 mph. Although the posted speed limit for tractor trailers on California highways is 55 miles per hour (mph), the average speed for tractor trailers that are driven on Calif ornia highways is somewhat higher. Data collected by the Freeway Performance Measurement System (PeMS), a project headed by the University of Calif ornia at Berkeley, show that the average vehicle miles traveled (VMT) weighted s tatewide average tractor trailer speed to be 59.7 mph. For southern Califor nia, the average is lower at 57.07 mph. Based on these data, the difference bet ween test vehicle speed and average speed on California highways ranges fro m 0.3 mph to 5 mph. Regardless of the actual difference between test sp eeds and the on-road speeds, the primary purpose of this test method is to evaluate the fuel efficiency performance of different aerodynamic tec hnologies under set conditions, not to predict the fuel efficiency bene fit from using a specific technology on a specific fleet under real-world con ditions. The test method provides the means to meet this goal.

46. Comment: The US EPA’s study of rolling friction vs. aerodynamic drag shows that friction is only overcome by aerodynamics at c onstant speeds above 50 MPH. Considering the average CA highway speed (48. 43 MPH), the aerodynamics do not come into play for trucks drivi ng on California highways. In fact, requiring solely these aerodynamic technol ogies on all of a fleet’s trailers that extend past a 50-mile radius will mak e the same trailers that are used for short haul applications lose fuel efficien cy, use more fuel, and cause more air pollution. In the end, the ARB’s efforts do not seem well-planned and could easily end up hurting the air quality that th e ARB is fighting for. (MCA)

Agency Response: ARB agrees with the commenter that at slower speeds the power required to overcome rolling resistance c an be greater than the power required to overcome aerodynamic drag. Howev er, ARB does not agree with the commenter that aerodynamic drag does not c ome into play for tractor trailer rigs that travel on California highways. T he commenter states that the average speed on California highways is 48.43 MPH. ARB believes the average speed is actually closer to 57 mph (See age ncy response to comment #45.) Regardless, ARB believes the regulation’s re quirement for the use of aerodynamic technologies will reduce the power requ ired (and fuel consumption rate) to operate tractor trailer rigs, even at much lower speeds.

The power required to maintain constant vehicle spe ed on a level road is equal to the sum of the power required to overcome the ae rodynamic drag plus the rolling resistance experienced at that speed, as sh own in this equation:

P = 1⁄2 ρ a C D AV 3 + μ MgV

Aerodynamic drag Rolling resistance- 46 -

Where: P = power

ρ a = air density

C D = aerodynamic drag coefficient

A= vehicle frontal area

μ = tire rolling resistance coefficient Mg= vehicle weight V= vehicle speed

Figure 1 shows graphically the power (in units of h orsepower) required to overcome both aerodynamic drag and rolling resistan ce on a level road, assuming density of air is 0.75 pounds per cubic fo ot at sea level, C D is 0.6, A is 108 square feet, μ is 0.006, Mg is 80,000 pounds and V is 20 to 80 mi les per hour (MPH), which are values consistent with a typi cal Class 8 tractor trailer rig.

The commenter stated that U.S. EPA studies shows th at rolling friction is overcome by aerodynamics at constant speeds above 5 0 mph. In the figure, this is graphically shown where the two curves inte rsect, at 55 mph. As shown, at speeds below 55 mph, rolling resistance requires more power to sustain vehicle speed than aerodynamic drag. However, a tr actor trailer rig traveling at any appreciable speeds must always overcome both fo rces, especially at highway speeds where both forces are significant.

Figure 1: Horsepower Required to Overcome Rolling Resistance and Aero Drag

0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0

20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Level Highway Speed, MPHHorsepower Aerodynamic Drag

Rolling Resistance C D =0.6

Figure 2 below shows graphically the total power re quirements to overcome rolling resistance AND aerodynamic drag. The horse power requirements of- 47 -

rolling resistance and aerodynamic drag shown above in Figure 1 are added together.

Figure 2: Sum of Horsepower Required to Overcome Ro lling Resistance and Aerodynamic

Drag

0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0

20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Level Highway Speed, MPHHorsepower C D =0.6 Aero Drag + Rolling Resistance

The regulation will require that aerodynamic techno logies be installed to reduce aerodynamic drag. Figure 3 below shows the effect of installing technologies that reduce aerodynamic drag, such that the coeffic ient of drag (C D ) for the tractor trailer rig is reduced from 0.6 to 0.5. As shown, the benefit of aerodynamic technologies at low vehicle speeds is m inimal. However, even at 48 MPH, there is still a significant benefit gained by using aerodynamic technologies.- 48 - Figure 3: Impact of Decreasing Aerodynamic Drag

0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0

20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Level Highway Speed, MPHHorsepower C D =0.6 Aero Drag + Rolling Resistance

C D =0.5

The regulatory requirements will have a positive im pact on the fuel economy of compliant tractor trailer rig that travel in Califo rnia, resulting in reduced GHG emissions and fuel consumption. However, to the ex tent a regulated tractortrailer rig travels at less-than highway speeds, th e benefit will be less and the payback on investment will be longer. To address t his issue, the regulation provides an exemption for short-haul or local-haul tractors and local-haul trailers. These tractors and trailers either opera te exclusively within a 100-mile radius of their local haul base, or travel no more than 50,000 miles per year. As short-haul and local-haul tractor-trailer rigs, they spend a significant percentage of their time traveling on city streets at less than freeway speeds.

47. Comment: It is a known fact that the maximum fuel savings be nefit for trucks and trailers equipped with aerodynamic efficiency k its occurs at 62 miles per hour. How can carriers be able to achieve the opti mum benefit when California’s maximum speed for trucks is 55 miles p er hour? Is the State prepared to increase the speed limit for trucks to 65 mph so truckers can realize the true benefits of these products? (CTA)

Agency Response: The maximum fuel savings benefit associated with th e installation of aerodynamic devices does not occur at 62 miles per hour. The faster a vehicle travels, the greater the benefit. A vehicle that travels at 70 MPH will see a greater fuel savings than a vehicle that travels at 55 MPH, but both will see benefits. See agency response to com ment #49.- 49 -

.

48. Comment: The study was based on 62 miles an hour. We as a fleet with 200 tractors average 45.7 miles per hour. We will not offset that additional cost of those fairings and those trailers with any fuel sav ings. (SMS)

Agency Response: See agency response to comment #49.

49. Comment: ARB has never conducted any studies on the proposed regulation regarding actual application. The numbers for a fe deral program are going to display different outcomes than a state whose truck speed limit is 55 MPH. All of the federal testing was performed at speeds of 6 2 MPH. This 7 MPH reduction could account for more fuel efficiency (a nd less greenhouse gas emission) than adding any aerodynamics to a trailer . (MCA)

Agency Response: ARB agrees with the commenter that the fuel effici ency improvement associated with the application of Smar tWay verified aerodynamic technologies will be less for tractor-trailers oper ating at 55 mph than 62 mph. ARB also agrees that improvement in fuel economy as sociated with reducing vehicle speed from 62 mph to 55 mph may be greater than the improvement associated with adding aerodynamics. However signi ficant improvements in fuel efficiency can be gained by improving aerodyna mics even for vehicles that typically travel at 55 mph. This relationship is s hown in Figure 4 below:- 50 - Drag Coef ficients, C D

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14

40 45 50 55 60 65 70 0.7 0.6 0.5 0.4 0.3 Figure 4: Fuel consumption rates to overcome the a erodynamic drag for a

typical Class 8 tractor traveling on a level highwa y as a function of speed, with various aerodynamic drag coefficients

Gallons

Per

Mile

Level Highway Speed

The curves in Figure 4, showing fuel consumption ra tes, were generated using engine fuel economy information and the following l oad relation equation associated with aerodynamic drag:

P = 1⁄2 ρ a C D AV 3

Aerodynamic drag

where P = power needed to overcome aerodynamic dra g

ρ a = density of air

C D = aerodynamic drag coefficient of the vehicle

A= frontal area of the vehicle V= vehicle speed

The power needed to overcome aerodynamic drag was t ranslated into fuel consumption rate (gallons per mile) by assuming the tractor was operating at a fixed specific fuel consumption of bsfc=0.34 lbs/hp -hr, which is representative of a modern Class 8 tractor-trailer powered by a mo dern turbocharged engine,- 51 -

and assuming the same values used for a typical cla ss 8 tractor, as used in the calculation in response to comment #46, at various speeds.

In Figure 4, the vertical axis presents the fuel co nsumed to overcome aerodynamic drag in gallons per mile travelled Fiv e estimates of fuel consumption are shown, corresponding to five values of aerodynamic drag coefficients (C D ) between 0.7 and 0.3. A typical tractor-trailer h as a C D of

around 0.6.

From the data illustrated in Figure 4, one can esti mate the impact of aerodynamics at 55mph and compare it to the impact of lowering the speed from 62 to 55 mph. If a tractor trailer’s C D is reduced from 0.6 to 0.5 through the application of aerodynamic technologies, the am ount of fuel saved from the reduction in aerodynamic drag would be about 10 gal lons per thousand miles travelled at 55 mph. This 10 gallon per thousand m iles travelled represents the fuel savings benefit of the regulation from the aer odynamic requirements only. Additional savings would be gained through the redu ction in rolling resistance from the use of low rolling resistance tires.

If no aerodynamic improvements are made and speed i s lowered from 62 mph to 55 mph, the corresponding fuel efficiency improv ement would be about 17 gallons per thousand miles travelled. Therefore, a s the commenter theorized, lowering speed from 62 to 55 mph has a greater effe ct on increasing fuel efficiency than adding aerodynamics. However, the data also illustrate in this example that the aerodynamic improvements mandated by the regulation and a reduction of speed would result in an additional fu el savings of 10 gallons per thousand miles (resulting in fuel savings of 27 gal lons verses only 17 gallons), a significant fuel efficiency improvement.

50. Comment: Our fleet averages 39-40 miles per hour and we’re not seeing anything from these aerodynamics. We did a test wi th three different phases. The first one was standard operation. Second one w as with side skirts. The third one was with low rolling resistance tires. T he low rolling resistance tires helped. The side skirts, going from Chino, Califor nia to Las Vegas, Nevada, we actually saw a slight reduction in fuel efficiency (with a particular unspecified brand of side skirts). Those were our tests over a month’s time. (MCA)

Agency Response: From the information provided by the commenter, i t is difficult to determine why this fleet experienced a fuel efficiency reduction associated with the application of side-skirts. Th e commenter states that a slight reduction in fuel economy was experienced on tractor-trailers traveling from Chino Hills to Las Vegas over a month’s time. Assuming the majority of

the 240 miles travelled between the two cities were on Interstate 15, ARB would expect to see some fuel efficiency gains, eve n when averaging 39 to 40 miles per hour. Nevertheless, it is inherently dif ficult to evaluate the- 52 -

performance of side skirts in a non-test environmen t because of the number of uncontrolled factors that may influence fuel effici ency, including the variation in driver’s habits (e.g. hard acceleration, timing of shifting gears), variations in load, and variations in weather. Another factor th at could affect fuel efficiency performance is the specific side skirts installed. If the side skirts were not SmartWay verified technologies, they may not meet t he design specifications and verification requirements established by the Sm artWay program and may not achieve the same reduction in aerodynamic drag that SmartWay verified technologies have shown through testing.

51. Comment: Due to the potential risk of improperly installed m odifications, have standards been set for securing any and all modific ations to the affected trailers? (ACG)

Agency Response: The regulation establishes the following good ope rating criteria for the aerodynamic technologies that are required to be installed on box-type trailers:

• The aerodynamic technology must be installed in ac cordance with the manufacturer’s specifications;

• The aerodynamic technology must be securely fasten ed to the trailer;

• The aerodynamic technology must not be missing any sections;

• The aerodynamic technology must not be used if dam aged to such an extent as to compromise aerodynamic effectiveness; and

• The rear trailer aerodynamic technology must be ca pable of being folded back against the trailer sides or otherwise be read ily compacted to allow normal functioning of the doors.

The regulation specifies that a driver cannot opera te a tractor- trailer subject to the regulation unless it is in good operating condi tion, and that a trailer owner must ensure that the trailer is in good operating c ondition prior to it traveling on a California highway.

52. Comment: With the extra length of aerodynamic modifications, have any studies been performed in regards to the ability of these trailers to move through city streets and county roads? (ACG)

Agency Response: The only aerodynamic device that will add extra l ength to the tractor-trailer when deployed is the rear trail er fairing. ARB has not performed any studies regarding the ability of trac tor-trailers to navigate city streets or county roads with deployed rear trailer fairings. However, whether rigid in structure or inflatable, these devices are designed to be compacted against the sides or rear doors of the trailer. AR B believes that should the extra length of a deployed rear trailer fairing become a concern, the driver could retract the device, as needed.- 53 -

53. Comment: Have any real world studies been performed on the e ffects of modifications on the ability of trailers to access loading docks and ramps? (ACG)

Agency Response: While ARB has not performed any studies to evalua te the impact of aerodynamic modifications on the ability of trailers to access loading docks, manufacturers of aerodynamic technologies (s ide skirts and rear trailer fairings) are acutely aware of these concerns and h ave developed workable solutions that are incorporated in many of the prod ucts available today. For example, side skirt manufacturers are using pliable and durable materials that are designed to deflect and snap back into place wh en compressed by a steep loading dock ramp. Others can be manually retracte d or folded up as necessary, or are designed to automatically retract at slow speeds. Rear trailer fairing manufacturers have designed their products to be compacted against the sides or rear doors of the trailer when approac hing loading docks and accessing cargo through the rear trailer doors. St aff spoke with representatives of several fleets that have been using aerodynamic technologies in order to ascertain what their “real-world’ experiences have been. Details of these discussions can be found in Appendix E of the Staff Report.

54. Comment: Have any technical studies been performed on the im pact of these modifications on intermodal transportation, i.e., l oading and unloading, securing to rail, etc.? (ACG)

Agency Response: ARB has not performed any studies evaluating the impact of side skirts, front trailer fairings or rear trai ler fairings on intermodal transportation. Based on the current methods of lo ading, unloading, and securing 53 foot box-type trailers onto flat cars, the only potential interference issue associated with the use of aerodynamic techno logies would be the potential for the forward end of the trailer side s kirt to interfere with the forward load point of the trailer when the trailer is lifte d onto or off of the flat car. Trailer

side skirt manufacturers have addressed this issue by developing SmartWay

verified side skirts that either mount well inboard of the forward load point, stop short of the forward load point, or can be manually retracted out of the way.

55. Comment: To date, EPA SmartWay program has not tested cert ain alternative tractor-trailer configurations to determine whether or not they are more or less efficient than SmartWay design specification. Wind tunnel analysis has demonstrated combinations with shorter tractor heig hts and Nose Cone treated trailers are equally efficient under no wind condit ions and are more efficient

under cross wind conditions. Until these other con figurations are objectively analyzed and compared, there is no basis for making these other applications non-compliant. (Nose Cone)

Agency Response: To ensure that fuel saving and GHG emission benef it claims associated with the use of specific tractor/ trailer configurations and- 54 -

technologies are real and verifiable, the regulatio n establishes performance standards that must be met exclusively through the use of SmartWay certified and verified vehicles and technologies. It is not the role of the U.S. EPA to test specific aerodynamic technologies or tractor and tr ailer configurations for inclusion in SmartWay. It is the equipment manufac turer’s responsibility to test the equipment. For SmartWay purposes, U.S. EPA ha s established an interim test method that assesses the fuel consumption impa ct of fuel-saving tractor and trailer components to determine eligibility for inclusion in SmartWay. This interim test method modifies a well-accepted indust ry test, the SAE J1321 test protocol. U.S. EPA is developing a more comprehensive tractor /trailer emissions test which, when completed, will supersed e the interim test method. Until the above described configurations are tested in accordance with the

interim test method and the test results are review ed and approved by the U.S. EPA as meeting the performance requirements establi shed by the SmartWay program, they cannot be used to meet the requiremen ts of this regulation.

56. Comment: The problem with the methodology is track testing . Track testing is deficient when it comes to proving aerodynamic perf ormance. (Nose Cone)

Agency Response: The SmartWay program evaluates the aerodynamic performance of a vehicle or aerodynamic-improving t echnology by quantifying its impact on fuel efficiency. Track testing is an industry accepted method of evaluating the improvement in fuel efficiency. Cur rently, the U.S. EPA has

established a modified version of the SAE J1321 tes t procedure as the method for quantifying the fuel consumption impact of fuel saving equipment for the purpose of SmartWay verification. The U.S. EPA’s m odification to the test method reduces variability of ambient effects on te sting and helps reduce the potential for voided tests.

57. Comment: With the addition of aerodynamic skirts to the trai ler, the effects of the new air flow needs to be studied, including:

• How does the added air flow down the sides and back affect the passenger vehicle traffic

• Does the additional air flow down the sides create a “vacuum” effect

behind the trailer

• How do the side skirts affect the handling of the t railer in heavy cross

wind situations

• With the trailer skirts installed, in heavy crosswi nds, how does it affect passenger vehicles when passing

• Do the trailer skirts increase the likelihood of in jury in a right turn accident with a passenger vehicle

• What are the effects on moisture, i.e., rain, snow, with the skirts installed

• Also, the wind and safety issues become even greate r when we begin to

move toward “doubles.” (ACG)- 55 -

Agency Response: See agency response to comment #58.

58. Comment: In addition to fuel economy testing, it is critic ally important that aerodynamic technologies be subjected to rigorous w ind tunnel testing in accordance with published procedures, guidelines, a nd criteria established by the SAE and Subsonic Aerodynamic Testing Associatio n. The wind tunnel will isolate the aerodynamic forces from all other force s acting on the vehicle. (SOLUS)

Agency Response: ARB agrees with the commenter that evaluating the effects listed in comment #57, and conducting rigor ous wind tunnel testing would provide valuable information to the manufactu rers of trailers and aerodynamic technologies. However, ARB believes th at it is not necessary to require such expensive wind tunnel testing to evalu ate safety as part of the regulation since manufacturers have addressed conce rns with the use of their products and for several years their products have been on the road and are legal for use on California and U.S. highways. In addition, several trailer manufacturers offer these products for sale to thei r customers. Currently, there are at least eight companies that offer commerciall y available SmartWay verified trailer side skirts. ARB staff has spoken with representatives of several fleets that have been using trailer side skirts on their trailers over a period of nine months to more than 2 years. The effects of rain, moisture, snow, wind force, trailer handling, and side impacts have been addressed and further improvements are being made by trailer and aerodyna mic technology manufacturers as they develop and market their prod ucts. See also agency response to comment #53.

59. Comment: ATA would like ARB’s support, in terms of financi al and personnel resources, in working with the trucking industry an d the U.S. EPA to further develop the evaluation protocols necessary to ensur e the expected benefits are real and the performance meets the demands of the t rucking industry. (ATA)

Agency Response: ARB believes the testing method established by th e U.S. EPA SmartWay program is sufficient to quantify the expected benefits from the technologies required by this regulation. SmartWay ’s test method is based on an industry accepted testing method for determining the fuel economy of trucks. With that said, ARB is willing to work with stakeho lders to developing and establishing other testing methods, especially meth ods that could be used overthe-road during service operation. As with all in- use testing, accounting for the variability of ambient, road, elevation, weight, sp eed, driver and other

conditions make it difficult for fleets to assess t he fuel-saving benefit they achieve with the technologies required by this rule

.

60. Comment: The proposed regulation should be crafted to allo w eventual independence from the SmartWay program. If U.S. EP A does not update- 56 -

SmartWay standards to reflect technological advance ment, then ARB should be able to modify the regulation independently. (A TDynamics)

Agency Response: The regulation was identified by the ARB in Octob er 2007 as one of the nine AB 32 discrete early action item s to reduce GHGs. As such, these regulations were put on the fast track for de velopment, earmarked by the Board to be adopted and enforceable by January 1, 2 010. The short time frame for development necessitated the reliance on the existing U.S. EPA SmartWay program to identify enforceable GHG reduct ion requirements. The regulatory language does not include language that allows eventual independence from the SmartWay program. However, i f ARB determines that such independence is merited, the ARB has the autho rity to modify the regulation in the future, in an open and public pro cess, and present the modified regulation to the Board for adoption.

61. Comment: Refrigerated trailers should be required to meet the same aerodynamic standard as dry van trailers. Since ov erwhelmingly the same aerodynamic technologies are available to dry van a s to refrigerated trailers, we consider this double standard to be arbitrary. The double standard is not supported by the U.S. EPA SmartWay Partnership’s la ck of specification for refrigerated trailers, which reflects a neutral pos ition. (ATDynamics)

Agency Response: The regulation requires dry van trailers to be re trofitted with aerodynamic equipment that collectively meets or exceeds a 5 percent fuel savings in accordance with test requirements define d by the SmartWay program. Refrigerated van trailers are required to be retrofitted with aerodynamic equipment that collectively meets or ex ceeds 4 percent fuel savings. The reason for the lesser requirement for refrigerated vans is that fewer aerodynamic options are available for them. Specifically, front trailer fairings are not feasible on refrigerated vans beca use the transport refrigeration unit is typically installed where the front trailer fairing would be mounted. Similarly, requiring a rear trailer fairing on all refrigerated van trailers would be too restrictive, since current SmartWay approved re ar trailer fairing technologies are not compatible with roll-up door t railers.

62. Comment: In Table IX-2 of the ISOR, the fuel savings range s are given for different types of trailer aerodynamic devices. Wh ile using the range of fuel savings may be appropriate for side skirts and fron t trailer fairings, in the case of rear trailer fairings, the range of fuel savings (1% to 5.1%) is more than four times larger than its lower bound. It would be use ful when describing fuel savings ranges to subdivide rear trailer fairings i nto long rear trailer fairings and short rear trailer fairings. (ATDynamics)

Agency Response: The categorization of aerodynamic devices provide d in the Staff Report was based upon information obtaine d from the U.S. EPA SmartWay staff prior to the drafting of the Staff R eport. Since that time,- 57 -

SmartWay has grouped their list of verified aerodyn amic technologies into the following categories: trailer gap reducers (estima ted fuel savings 1% or greater); trailer boat tails (estimated fuel saving s 1% or greater); trailer side skirts (estimated fuel savings 4% or greater); adva nced trailer end fairing (estimated fuel savings 5%); and advanced trailer s kirts (estimated fuel savings 7%). Thus, as proposed by the commenter, SmartWay has differentiated between long rear trailer fairings and short rear t railer fairings.

63. Comment: The rear trailer should be subject to 23 CFR 658. 16, “Exclusions from Length and Width Determinations,” under the pu rview of the DOT, Federal Highway Administration. The proposed regulation’s “Good Operating Condition Criteria for U.S. EPA Certified SmartWay Trailer Ae rodynamic Technologies” (95304(b)) should include a provision to the effect that, “The rear trailer aerodynamic technology must be determined by the Fe deral Highway Administration to be excluded from the length measu rements for commercial motor vehicles.” (ATDynamics)

Agency Response: The good operating condition criteria for traile r aerodynamic technologies defines what an in-field i nspector can do to evaluate the condition of a technology as it relates to its aerodynamic effectiveness. For rear trailer aerodynamic technologies, it also defi nes a criterion to ensure the technology does not interfere with the operation of the rear door. Although ARB agrees with the commenter that the length exemp tion is needed for operation on highways, ARB elected not to include t he provision as suggested by the commenter in the “Good Operating Condition C riteria for U.S. EPA Certified SmartWay Trailer Aerodynamic Technologies ” section because it is not directly related to aerodynamic effectiveness o r operation of the trailer and ARB does not have enforcement authority to regulate trailer length. However, ARB recommends that the commenter bring this issue to the U.S.EPA SmartWay Program staff, they may decide to request proof of length exemption prior to certifying rear trailer devices.

64. Comment: Encourage continued innovation in the proposed re gulatory language and formulate a process for inclusion of n ew technologies. Do not stifle new technologies by limiting the language to include only advocated technologies. Wheel covers have been overlooked in the past for economic reasons, which is about to change with our new aero dynamic wheel covers made of lightweight fabric. (Deflecktor)

Agency Response: The GHG regulation does allow for the inclusion of new technologies. However, new technologies, like the commenter’s wheel covers, must be verified by U.S EPA in accordance with the Interim Test Method for Verifying Fuel-Saving Components for SmartWay: Modi fications to SAE J1321

, EPA-420-F-09-046 (Interim Test Method). We encoura ge the commenter to contact the U.S. EPA regarding the SmartWay verific ation of their product.- 58 -

E. Technology

65. Comment: The regulation that you speak to... does not deal w ith this specific area, the wheels. The wheels are standard on every thing, regardless of the configuration. They’re on all of those things that you eliminate....This product... has been found to save one quarter of one percent p er wheel cover. I believe it is the least amount of investment for the highest p ayback than any of the technologies that are being discussed right now. ( Deflecktor)

Agency Response: The aerodynamic technologies that meet the requirements of the regulation have been verified b y the SmartWay program to meet certain fuel efficiency savings standards. If the commenter, or any other manufacturer, wishes their device to meet the aerod ynamic requirements of this regulation, they may apply to the U.S. EPA for veri fication of their device.

66. Comment: I would suggest that you work on results instead of methodology, because a methodology approach provides a barrier t o technology. For instance, we have a product that goes against the i dea of closing the gap, because it actually can create suction on the front of the trailer just like the suction on the back of the trailer and help pull it forward. So those rules don’t work very well. (Silver Eagle)

Agency Response: The technology requirements in the regulation are based on results rather than methodology, as verified by the SmartWay program. The regulation requires the use of aerodynamic technolo gies, which have been defined to include both fairings and flow control d evices. If the commenter, or any other manufacturer, wishes their device to meet the aerodynamic requirements of this regulation, they may apply to the U.S. EPA for verification

of their device.

67. Comment: You should also allow removable devices for aerod ynamics. (Silver Eagle)

Agency Response: The regulation does not specify that aerodynamic devices must be permanently installed as opposed to being r emovable. As long as aerodynamic devices are SmartWay verified, installe d according to manufacturer specifications, securely fastened to t he trailer, and in good operating condition when operating in California, t hey can be used to meet the requirements of the regulation.

68. Comment: In California, only less than 30 percent of truck s are made for the

line-haul service. A whole different class of tire s works on regional, urban or intrastate trucks. If we put the current approved SmartWay tires, and all of the manufacturers at the current tires approved, they w ill not work well on the service. So what will happen, fleets will get 30 a nd 40 percent less mileage on- 59 -

tires, which is certainly a tremendous cost to the fleet and it’s also an environmental problem of another sort. We’re recom mending that the standards be moved to regional and urban tires, a w hole different standard – so that you could have a broad range of tires. (Conti nental)

Agency Response: The requirement for low rolling resistance tires contained in the regulation is based upon the specifications of the SmartWay program, which apply to line haul trucks. As stated on the SmartWay website, “Based upon data provided by tire manufacturers and EPA te sting and research, EPA determined that certain tire models can provide a r eduction in NOx emissions and an estimated fuel savings of 3% or greater, rel ative to the ‘best selling’ new tires for line haul trucks, when used on all five a xles on long haul class 8 trucks.” The options offered include both dual tir es and single wide tires. Since the regulation applies to long haul tractor-trailer s, those who comply with the tire requirements should realize fuel savings benef its over time. Moreover, even those who travel more regionally but exceed th e short haul requirements of the regulation should realize some fuel savings benefits since they travel at least some of the time at highway speeds. If and a s U.S. EPA expands or changes their tire requirements to incorporate alte rnative applications such as regional or urban tires that meet their fuel saving s requirements, they may be used to comply with this regulation.

69. Comment: There’s no provision in the bill for retreads. E ighty-some percent of

fleets retread for economic considerations. It cut s a fleet’s costs... and reduces the impact of waste tires on the environment. (Con tinental)

Agency Response: The regulation does not specifically exclude or i nclude retread tires; however, retread tires will be consi dered compliant with the regulation as long as the casings are SmartWay veri fied. Regarding tires that will be replaced by SmartWay verified tires, those tires will continue to have a commercial value and use with other types of traile rs and tractors that are unaffected by this regulation. Thus, ARB determine d that there will not be an environmental impact since these tires can be used in other fleet operations.

70. Comment: I’m a proud SmartWay carrier. We have done thing s they have asked us to do, in low resistance tires (super sing les), all kinds of different fairings, but have we seen any benefit of it? Our c ompany has not seen the benefit. (ACT)

Agency Response: The aerodynamic devices and low rolling resistanc e tires referenced in the regulation have been verified by the SmartWay program to achieve certain minimum fuel efficiency savings. T he SmartWay program utilizes industry accepted test methods to evaluate the fuel savings potential from using aerodynamic devices and low rolling resi stance tires on both tractors and trailers. Examples of the types of devices and minimum fuel savings attributed to them include the following: trailer gap reducers (1% fuel savings- 60 -

or greater), trailer boat tails (1% or greater), tr ailer side skirts (4% or greater), advanced trailer end fairing (5%), advanced trailer skirts (7%), low rolling resistance tires (3% or better for all tires on tra ctor-trailer). There are currently several different technologies available within mos t of these categories that are verified by the SmartWay program to meet or exceed these fuel savings requirements. In order to comply with the regulati on fleets may select any individual or combination of aerodynamic technologi es, along with the low rolling resistance tires. The commenter did not st ate which method or what was used to calculate their fuel economy, so ARB ha s no way of determining why their fleet did not see any benefits. There ar e many environmental factors, such at ambient conditions, speed, load, driver and other factors that have significant affects on a tractor’s fuel economy. T hose factors, if working against the fuel economy of the truck, will mask any benefi ts achieved by having the technologies required by this regulation.

71. Comment: While aero devices may help a small number of our customers achieve greater fuel economy, most would see no imp rovement, while incurring higher maintenance costs and higher acquisition cos ts. ARB used numbers provided by manufacturers of these devices without taking into account the unique California transportation industry’s real-wo rld challenges, which include lower speed limits and heavy congestion on our road ways. (CVTRI)

Agency Response: The fuel economy information used by ARB in its ana lysis was derived from testing conducted according to est ablished U.S. EPA SmartWay test procedures. These procedures must be conducted under controlled conditions that eliminate mitigating var iables in order to allow one to more accurately measure the true fuel efficiency be nefits of the technologies being tested. While on-road testing may appear to achieve different results, these results can be misleading, since they will be influenced by such factors as wind velocity, ambient temperature, weather cond itions, season, driver behavior, topography, other road conditions, etc.

ARB has considered the challenges of the California transportation industry, by including full or partial exemptions for short haul and local haul fleets. In addition, although the speed limit for tractor-trai lers in California is 55 miles per hour, California Department of Transportation data on actual speeds travelled reveals their vehicle miles travelled weighted aver age median speeds is 59.7 miles per hour. Thus, while there certainly are ci rcumstances in California where tractor trailer rigs travel at lower speeds w ith little benefits from the aerodynamic technology, on average they do travel a t speeds high enough to benefit from the requirements of this regulation.

While there are some up-front acquisition costs ass ociated with aerodynamic technologies, ARB estimates that the fuel efficienc y savings achieved will offer payback within, on average, 2.3 years (for fleets w ith a trailer-to-tractor ratio of- 61 -

2.5-to-1). This also includes ARB estimates that a verage annual maintenance costs will be approximately $143 for tractors and $ 120 for trailers.

72. Comment: We question ARB’s assumptions about payback on the investment in various trailer technologies. We already use lo w rolling resistance tires. The assumed fuel savings are much higher than we experi enced in real-world operation. The purchase and installation costs ass umed were substantially less than we experienced. And the miles run and co st of fuel are both much lower than the assumptive modeling. (Con-Way)

Agency Response: See the agency response to comment # 70 and #71.

73. Comment: The following recommendations should be incorpora ted into the proposed regulation to allow trucking companies gre ater flexibility to direct their

financial resources to reduce GHG emissions. The B oard should direct staff to perform a more rigorous evaluation of the complianc e technologies to ensure that they perform satisfactorily and that actual co sts and benefits are considered. A report documenting this evaluation s hould be submitted to the

Board for further consideration no later than Decem ber 31, 2009. ATA surveyed its fleet maintenance managers in November 2008 and found that the trucking fleets have very limited experience with t he technologies ARB is proposing to mandate. (ATA, Con-Way)

Agency Response: ARB’s evaluation of the performance of the complian ce technologies in this regulation relies on the U.S. EPA SmartWay program, which utilizes industry-accepted test methods to ev aluate the fuel savings potential from using aerodynamic devices and low ro lling resistance tires on

both tractors and trailers. In terms of the costs and benefits associated with these technologies, ARB performed a rigorous evalua tion during the development of this rule that was presented at work shops and outlined in the Staff Report. Staff also contacted several fleets that have been using these technologies to understand the real-world experienc e (Summaries of fleet experiences with SmartWay certified trailers and ve rified technologies can be found in Section IX of the Staff Report). The info rmation collected was used in

ARB’s determination of cost and maintenance of the technologies required under this regulation. ARB is unaware and the comm enter did not provide any details regarding additional information that would be available to conduct a more rigorous evaluation of the technologies. Furt her, ARB acknowledges that trucking fleets, as a whole, have limited experienc e with the technologies, which is one of the reasons why implementation of t his regulation will generate significant GHG emission reductions.

74. Comment: Putting fairings on our 53-foot trailers reduces our access to our stores. In stores where we have pits, those fairin gs will not clear the pits. We will be forced to dispose of or replace the 53-foot trailers with smaller trailers,- 62 -

thereby increasing our loads on the road, increasin g our greenhouse gas emissions. (SMS)

We’ve seen problems with low ground clearance and w e’ve pulled the devices off because they get damaged. (Matheson)

The fairings on these trailers are not going to sta y on. They might take a side impact, but when you back into a pit dock, you’re g oing to drag them off. I have

two and a half feet of clearance from the bottom of the trailer to the cement on my tractors and trailers. That SmartWay fairing is not going to stay on there in the front when I reverse or back in or pull out of the dock. Sideways it may give. Front and back is not going to give. (FTI)

Agency Response: Manufacturers of aerodynamic technologies have designed trailer side skirts to address the issue o f low clearance, particularly when navigating in steep pits. Several alternative s, including using more flexible materials and offering a retractable skirt , are currently available. Thus, rather than downsize their trailers to avoid comply ing with this regulation and increase their loads on the highway, fleets may pur chase SmartWay verified skirts that are also designed to withstand steep gr ades without being damaged.

75. Comment: We look at some of the numbers the staff has show n on long haul and the efficiency of aerodynamics. As a regional short-haul carrier, we cannot justify the costs on the trailing equipment. (YTI)

Agency Response: The regulation provides a short-haul exemption fo r tractors that do not exceed 50,000 miles per year a nd the trailers they pull. Those owners will be able to register as short-haul , and will not have to comply with either the aerodynamic or tire requirements of the regulation. In addition, the regulation provides a partial exemption for fle ets that do not travel outside of a 100 mile radius from their base of operation ( local haul). Those fleets will only be required to install low rolling resistance tires, but not aerodynamic equipment, in order to comply with the regulation. For those fleets that exceed either of these two options, ARB anticipates that t hey will, over time, achieve sufficient benefits from using the required technol ogies to realize a cost savings.

76. Comment: With aerodynamics it’s not a one size fits all. We have trucks that run in stop and go traffic. Aerodynamics don’t hel p them a bit. (Matheson)

Agency Response: See response to comment #75.

77. Comment: These fairings that are being proposed to go on t he rear of trailers will increase that trailer’s length by four feet. How is that going to be reconciled with the overall length rule in the state of Califo rnia? And is there any kind of provision for those of us that haul 57-foot trailer s already that aren’t allowed to- 63 -

proceed past that overall length? Are those of us who haul 57-footers going to go out of business when everyone else can still be hauling a 57-footer with these fairings? (CDMI)

Agency Response: The regulation does not specifically require the use of a rear trailer fairing in order to comply with its ae rodynamic technology requirements. The regulation requires that dry van s and refrigerated vans meet a 5% and 4% improvement in fuel efficiency, respect ively. There are a number of trailer side skirts that have been verified by S martWay to meet or exceed the fuel efficiency savings required by this regulation that will not impact the overall length of trailers. Specifically, at the time of t his writing there are four different

trailer side skirts that have been verified to meet or exceed a 4% or greater fuel savings, and an additional 9 advanced trailer skirt s that have been verified to achieve an estimated fuel savings of 5% or better.

ARB is exploring the possibility of modifying the C alifornia Vehicle Code to eliminate rear trailer fairings from the calculatio n of trailer length. If approved and implemented, 57-foot trailers would be able to operate on California highways with trailer rear trailer fairings and not be cited for exceeding the California length limitation. See also agency resp onse to #93.

78. Comment: ARB should not implement the proposed regulation but rather adopt it as a voluntary program for the trucking in dustry. Further testing and analysis need to be performed before such a drastic measure should be made mandatory. There is not sufficient data available on the technologies during real world operations and what the true costs and b enefits of the technologies will be. Instead of the combination of technologie s mandated in the proposed regulation, it may be that alternative combinations of technologies will achieve the best balance of weight savings, fuel savings an d GHG reductions for particular types of trailers and cargo. (TTMA)

There are insufficient data available to demonstrat e how the various aerodynamic technologies perform in the real-world California short-haul operations and thus not enough data to support a re gulatory mandate. ARB should follow U.S. EPA’s lead and adopt a voluntary standard that is real, additional, quantifiable, permanent, verifiable, an d enforceable. This will prevent ARB from overestimating GHG reductions and focus on new equipment purchases instead of on the in-use fleet. (IWLA)

GTI is concerned with the direction that California is taking. We feel that the transportation sector has borne more than its share of costs due to the new engine standards in 2004, 2007 and 2010. We feel t hat letting the market determine implementation of aerodynamic devices or fuel efficient tires, versus legislation to mandate these items, is the most eff ective manner for implementation. The required technology is not pro ven and in the real world,- 64 -

the results will differ greatly from the costs and benefits that ARB is using to make their case. (GTI)

Agency Response: ARB cannot adopt a voluntary program in place of the regulation because this regulation is one of the di screte early action measures mandated by AB 32. AB 32 calls for the reduction o f GHG emissions to 1990 levels by the year 2020, a reduction of about 25 pe rcent. In addition, as a discrete early action measure, this regulation must become enforceable by January 1, 2010, and must support the goal of achie ving the maximum technologically feasible and cost-effective reducti ons in GHG emissions by 2020. Relying exclusively on voluntary actions wou ld not ensure that California meets these requirements.

Due to the short time frame to develop and implemen t this regulation, ARB must rely on the U.S. EPA SmartWay program, which w as already in place prior to the development of this regulation, to ver ify and certify the aerodynamic and tire technologies that meet the requirements. With regard to the comments on the need for establishing benefits with testing and analysis and the request for flexibility in using various technologies, plea se see agency response to

comment # 26.

As described in the Staff Report, staff interviewed a number of existing fleets that had used aerodynamic and tire technologies in “real world” applications. Although some of the fleets were not able to isolat e the benefits that were achieved from using these technologies exclusively, those who could isolate the benefits attributed an estimated 3 to 6 percent improvement in fuel economy with trailer side skirts – a significant im provement according to these fleet representatives. As stated in the agency res ponses to comment #3, ARB’s analysis determined that, over the course of an 11-year equipment lifespan, from 2010 to 2020, affected stakeholders should realize an approximate net savings of $8.6 billion in 2008 dol lar values. ARB further determined that individual fleets will, on average, recoup the costs to comply over a 2.3-year period (based on a trailer-to-tract or ratio of 2.5-to-1 and an estimated fuel cost of $3.14 per gallon). Although the requirements will result in cost savings for fleets over the equipment useful l ife, ARB also understands the upfront cost and the cost of other regulations that will have an impact on the trucking industry. Please see agency response to c omment #16 regarding the need for developing regulations applicable to the t rucking industry and the flexibility provided to help the industry comply.

79. Comment: The TRU rule is a perfect example of a rule that was put together in haste without enough real world testing. In tha t rule the available technology was not available to meet the requirements of the r ule and in some cases are

still not available. Do not take the word of vendo rs using tests that prove only that one product is superior to another in a partic ular situation. The real world of transportation is too diverse to say that one fi x will work for all aspects of the- 65 -

industry. Please send this rule back to staff and urge them to work with industry to achieve the goals you have set. (CVTRI )

Agency Response: Despite the fact that AB 32 required this regulat ion be developed and enforceable by January 1, 2010, the t echnologies that can be used to comply with the regulation are all certifie d or verified to meet the standards established by the SmartWay program, and are therefore ready to be used. As new technologies become available, manufa cturers must complete specific test procedures (e.g., SAE J1321) and appl y to the U.S. EPA for either

verification or certification of their vehicles or equipment before they can be used by fleets to meet the requirements of this reg ulation. At the present time SmartWay has verified 21 different aerodynamic tech nologies that fleets can utilize, including trailer gap reducers, trailer bo at tails, trailer side skirts, advanced trailer end fairings, and advanced trailer skirts. ARB anticipates that with the large and small fleet compliance plans whi ch allow fleets to phase-in compliance over several years, manufacturers will b e able to respond to demand and ramp up production as demand increases o ver time (see also agency response to comment #84.

80. Comment: The SmartWay equipment does not have a track reco rd for fuel savings. Over the years, industry has already trie d these components and has discovered the expense of repairing the fiberglass damage inherent with the lower fairing placement far outweighed any fuel sav ings realized. (Fitzgerald)

Agency Response: The equipment certified or verified by the SmartW ay program has been shown through accepted test proced ures to achieve specific fuel savings, as described on the SmartWay website. As described in the Staff Report, among the fleets that staff interviewed who currently use trailer side skirt technologies, the vast majority reported havi ng very few incidents of damage to the side skirts; among the minority who e xperienced damage, all were minor (and were often caused by driver error).

The performance and durability of side skirts has b een improving relative to the products used by industry “over the years” as manuf acturers develop newer, more flexible products. ARB anticipates that the a vailability of such options will only increase with time, fueled by increasing compe tition in the marketplace. There are already skirts that are far more flexible , resistant to breakage, as well as those that retract either manually or mechanical ly, to prevent problems when navigating steep inclines.

81. Comment: The emission reductions of the technology mandate d by the proposed regulation are questionable because few fl eets have used the required technology. In addition, the selection of technologies is arbitrary; it is

difficult to understand the rationale behind the se lection of certain types of equipment and not others, given the lack of data an d experience with these technologies. There are far less costly and more r eliable ways to reduce fuel- 66 -

use and emission, including reductions in truck spe ed. Most fleets have learned that the single most significant factor in fuel use is driver technique and behavior. Effective driver training programs can d o as much to improve fuel efficiency as any of the technologies outlined by A RB. (AZTA)

Agency Response: Although ARB agrees that there are other approach es that fleets can take to reduce GHG emissions, ARB d isagrees with the statement that the technologies required by this re gulation are questionable

because few fleets have used them. While the numbe r of fleets using them may be limited, U.S. EPA has evaluated the testing of aerodynamic technologies using established test protocols and h as verified the fuel efficiency savings associated with them. Moreover, the select ion of technologies is not arbitrary, but rather based upon those that have be en certified or verified by SmartWay to provide specific fuel efficiency saving s. As additional aerodynamic technologies and low rolling resistance tires are verified by SmartWay to achieve verified fuel efficiency saving s, they may be used to comply with the regulation. While ARB agrees that driver technique and behavior is a significant contributor to fuel effic iency, it is not something that ARB can mandate or enforce. ARB encourages fleets to add this technique to their strategy to improving fuel efficiency beyond what is required by this regulation. Such action would result in further em ission reductions and cost savings for the fleet.

82. Comment: Some of the technologies required for compliance are not yet ready to be used. (Brian)

Agency Response: ARB disagrees with this statement. The technolog ies that can be used to comply with the regulation are all c ertified or verified to meet the standards established by the SmartWay program, and are therefore ready to be used. As new technologies become available, manufa cturers must complete specific test procedures and apply to the U.S. EPA for either verification or certification of their vehicles or equipment before they can be used by fleets to meet the requirements of this regulation.

83. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. SmartWay does not test for or certify durability. The technologies are so new that there is no good data on maintenance costs from damage to side skirts. C TA recommends that staff revise its cost-effectiveness analysis to ensure th at it reflects a realistic appraisal of the costs of the program versus any cl aimed benefits. (CTA2)

Agency Response: It is true that SmartWay does not test or certify durability. Among the aerodynamic technologies, the most vulner able components to damage are the trailer side skirts. As discussed i n the Staff Report page 40 and in Appendix E, staff discussed the issue of dur ability of the technologies with fleets who have already installed trailer skir ts on their equipments. The- 67 -

majority of the fleets reported having very few inc idents of minor damage to the skirts which were mainly caused by driver error, wh ile some were caused by unavoidable accidents. Fleets reported that when d amage occurred to skirts, they were often able to repair minor damages themse lves, or they were able to easily replace the panels. ARB believes that such incidents will be minimized as drivers and warehouse personnel get familiar wit h the technologies. In addition, aerodynamic equipment manufacturers are c ontinuously taking steps to improve their products susceptibility to damage by improving the design and materials of the components. For example, some hav e changed from skirts made of aluminum to a new version that uses high de nsity polyethylene which is strong, but also flexible enough to withstand da mage. Some have developed retractable skirts that are pneumatically controlle d and that deploy at 35 miles per hour and retract when speed drops below 35 mile s per hour, reducing the chances of getting damaged at loading docks and in urban operations.

ARB believes that no annual scheduled maintenance i s needed for tractor and trailer aerodynamics other than checking and tighte ning loose fasteners. However, in calculating the cost-effectiveness of t he regulation, ARB included

costs incurred to maintain tractor and trailer aero dynamics in order to be conservative because the equipments may get damaged due to accidents. As discussed on page 61 of the Staff Report, ARB inclu ded an annual maintenance cost of $143 for the fuel tank skirts b ased on the repair and replacement of a fiberglass panel for one out of te n tractors. For trailer maintenance and repair, ARB included an average cos t of $120 per year per trailer. This amount was estimated by averaging $1 70 (about 10 percent of the cost of a trailer skirt) reported by one fleet that used trailers skirts in harsh environments of snow and ice; and $75 per year per trailer from a 2.5 year maintenance study of 20 trailers. ARB believes tha t these are very

conservative and reasonable estimates and the cost- effectiveness analysis reflects a conservative evaluation of the program c osts and claimed benefits.

84. Comment: ARB should not create a mandatory upgrade program based upon the faith that appropriate aerodynamic technologies will be developed in the future and that the small, poorly capitalized compa nies that manufacture aerodynamic technologies will have the ability to c over the costs of warranty and liability claims. (CTA2)

Agency Response: The technology requirements contained in the regula tion are not based on faith that appropriate aerodynamic technologies will be developed in the future, but rather on the specific technologies verified by the SmartWay program to provide fuel efficiency savings . There are currently, at the time of this writing, 21 different verified tec hnologies listed on the SmartWay website that may be used by fleets to comply with t his regulation.

While many of the manufacturers that provide aerody namic technologies are small companies, some have licensed their technolog ies to larger companies- 68 -

such as Carrier Corporation, which is a part of Uni ted Technologies Corporation.

ARB has no authority to require manufacturers to co ver the costs of warranty and liability claims. It is up to individual custo mers to make informed purchases and to ensure that they have appropriate liability coverage for their equipment.

85. Comment: Con-way disputes the accuracy of the fuel savings associated with tractor skirts projected by ARB, as they are based on projections that do not take into account the increase in vehicle weight th at will result from their installation. Con-way conducted a two year compari son test with a fleet of ten tractors to evaluate the fuel mileage performance o f tractors equipped with full skirts versus those equipped with half or no skirts . On average, the test trucks achieved 0.12 miles per gallon, or 2 percent, bette r fuel efficiency with half or no skirts versus full skirts during the test period . While no wind tunnel testing was performed, we believe that the improved perform ance of trucks with half or no skirts versus those with full skirts was primari ly due to a reduction in vehicle weight once the skirts were reduced or removed. In addition, full skirts cover the tractor’s fuel tank, which causes heat retentio n, increasing the temperature of the fuel and reducing its British thermal unit o utput. In the winter, full side skirts collect more ice and snow build-up, which fu rther increases the weight of the tractor and further reduces fuel mileage perfor mance. Since the test program, Con-way Truckload has primarily operated t ractors with half or no side skirts throughout its fleet and these units ha ve consistently outperformed tractors with full skirts. The company currently o perates 200 tractors with full skirts and these units are consistently the lowest performing trucks in its fleet by 0.19 miles per gallon, or 3.2 percent, for the past 12 months. ARB’s projection as to the return on investment of this technology i s inaccurate. (Con-way)

Agency Response: To be clear, the commenter’s use of the term “ski rts” is, in this case, not referring to trailer side skirts, bu t rather the tractor’s fuel tank fairings. Discussions with fleets that have used f uel tank fairings show improvements in fuel economy and no negative impact s (see Staff Report, Appendix E: Fleet Summaries, summary of phone meet ings with B & B Trucking, Inc., Cascade Transport, Inc., and Hiner Transport). One fleet, which has been using fuel tank fairings since 1999, noted at least a 0.1 miles per gallon savings at 65 miles per hour. Two other fle ets did not isolate the fuel economy benefits of the tractor fuel tank fairings alone but noted a significant

overall benefit with the combination of several tra ctor and trailer aerodynamics. The fuel economy benefits were observed even with t he added weight of aerodynamic equipment, because the testing was cond ucted on trucks with tractor fuel tank fairings and other equipment inst alled.

The commenter did not provide the actual test data or a test plan to show how the testing was performed. Therefore, ARB was unab le to analyze the data or provide an explanation for the lack of fuel economy benefit. Information such- 69 -

as the type and amount of driving by the skirted an d non-skirted tractors, the load on the trucks, the types of trailers being pul led, and maintenance records would be invaluable for analyzing the test program and explaining the results.

86. Comment: Con-way disputes the accuracy of the fuel savings associated with trailer skirts projected by ARB, as they are based on projections that do not take into account the increase in vehicle weight th at will result from their installation. Con-way Truckload has not experience d the improvement in fuel economy projected by ARB in its use of trailers equ ipped with side skirts. The Company operates over 8,000 53-foot dry van trailer s, approximately 400 of which were equipped with side skirts up until last year. The fuel economy observed in the field was less than 3 percent at hi gh speeds in excess of 60 miles per hour and none at speeds of less than 45 m iles per hour. The skirts added hundreds of pounds of extra weight to the tra iler and also had the tendency to collect snow and ice in the winter. Th is results in reduced fuel efficiency and limiting their loading capacity. Sk irts were frequently damaged, resulting in higher repair and replacement costs. Also skirts prevented sliding the trailer tandem and prevented the trailer from b eing lifted onto railroad cars. As a result of these issues, after two years of ope ration on 400 trailers, Conway Truckload has determined that it simply is not cost-effective from a return on investment perspective to install and operate th em on its trailer fleet. ARB’s projection as to the return on investment of this t echnology is inaccurate. (Conway)

Agency Response: The commenter’s claim of little or no benefit fro m trailer side skirts is contrary to the claims made by truck ing fleets that staff contacted during the development of this regulation. Of the six fleets staff contacted that use trailer side skirts, four noted about a 2 to 3 percent fuel economy benefit at high speed cruise. One fleet observed a six percen t increase in fuel economy and another observed a 10 percent increase (Staff R eport, Appendix E). These fuel economy benefits were observed over a period o f time ranging from six months to two years, depending on the fleet. The c ommenter’s fleet of trailers achieved fuel economy increases also within this ra nge. Factors that may influence fuel economy include operator driving hab its, vehicle duty cycle, the loaded weight of the trailer, other aerodynamic dev ices, and environmental conditions. While side skirts are SmartWay verifie d to achieve an estimated four percent or better fuel economy increase, real world use may obtain slightly different results depending on these factors.

The commenter also noted that trailer skirts may co llect snow and ice in the

winter. Skirt manufacturers contend that the curre nt materials from which their skirts are constructed tend to prevent ice buildup, but if it does build up, the ice can be easily scraped off. In addition, the commen ter stated that the skirts were frequently damaged. Skirt manufacturers have addressed this concern by using durable thermoplastics for all or at least th e lower part of trailer skirts such that they will bend and flex without permanent damage when they contact- 70 -

an obstacle. Also, one manufacturer produces a ret ractable skirt that can be flipped up to avoid a deep-angled dock or to access tool boxes or spare tires on the underside of the trailer. Finally, the comment er stated that skirts prevent sliding the trailer tandem and prevent the trailer from being lifted onto railroad

cars. Some skirt manufacturers have addressed the former issue of the sliding tandem by stopping the trailer skirt at the rear ta ndem or by having the skirt slaved to the trailer tandem and sliding with it. The latter issue of a trailer on a flatcar is addressed by skirt manufacturers that pr ovide an optional package for a trailer to be placed on the flatcar without damag e. Trailer owners should

review the skirt models from different manufacturer s to choose the product that best fits their needs in daily operation.

Also, staff did meet with Conway representatives du ring the rulemaking process to solicit fleet experience and data. Although Con way did mention that most of the trailer skirts they tested sustained some type of road damage, they did not provide any specifics, such as damage rates, types of damage, severity of damage, and repair costs. Therefore, ARB was unabl e to fully assess Conway’s claims. In addition, the trailer skirts t hat Conway tested were first generation trailer skirts. The trailer skirts that are currently available are much less susceptible to damage than those tested by Con way. See also agency response to comment #83 regarding trailer skirts fo r more information.

87. Comment: Our company tested low rolling resistance tires a nd side skirts on a

trailer to realize true fuel efficiencies of techno logies. Using the Turnpike System, the constants were the driver, truck, trail er, route (Chino, CA to Las Vegas, NV), average load weight and all factors mea sured by Turnpike’s GPS system. The variables were the tires and side skir ts. The results were as follows: Phase 1 (no side skirts or low rolling re sistance tires) achieved an average fuel consumption of 6.13 miles per gallon; Phase 2 (side skirts only) achieved an average fuel consumption of 6.12 miles per gallon; Phase 3 (side skirts and low rolling resistance tires) achieved a n average fuel consumption of 6.32 miles per gallon (an increase of 3.24 percent)

. Conclusions: 1) The assertions made by the US EPA, ARB and side skirt companies regarding the benefits of adding this aer odynamic technology to a trailer appear to be contraindicative of our findin gs. The side skirts we tested, overall, have no positive effects on a long haul tr actor trailer. These findings suggest that the side skirts may actually hinder fu el efficiency for tractor trailers. 2) The tires that are certified by the US EPA’s Sma rtWay program have a definite positive effect on the overall fuel effici ency of the tractor trailer that we utilized in this study. These findings suggest tha t the low rolling resistance tires can help fuel efficiency. (MCA)

Agency Response: The data provided are difficult to analyze given the lack of

detailed information. The commenter did not indica te the duration of the test program, how many test runs were completed, and wha t types of vehicle speeds were encountered during the route. Also, th e actual test results were- 71 -

not shared with ARB to analyze. Thus, ARB is unabl e to ascertain, based on the comment provided, why no fuel economy benefit w as observed with the use

of side skirts. In its discussions with other flee t operators, ARB was consistently told by companies using side skirts th at they observed a noticeable fuel economy benefit. See section E of the Staff R eport and agency response

to comment #86 for further information about staff’ s discussions of these fleets. See also agency response to comment #50 for a more detailed discussion regarding this topic.

88. Comment: There have been significant operational problems reported with the aerodynamic technologies that are currently availab le. Some of these issues concern specific transportation vocations; others a re related to freight movement infrastructure. For example, trailers wit h side skirts cannot be loaded onto railcars without the side skirts being damaged; trailers with side skirts cannot use tapered or steeply ramped loading docks without sustaining damage, docks at a large number of facilities origi nally constructed to handle

40-foot trailers. Side skirts have been found to b e easily damaged in normal usage such as crossing roadways and railroad tracks and block access to equipment such as tool boxes and spare tire racks t hat are commonly stored under the trailer body. (CTA2)

Agency Response: See agency response to comment #86.

89. Comment: Trailer skirting is ineffective and reduces paylo ad. Rate of speed is essential for aerodynamics such as trailer skirting to be effective. Trailer skirting adds 150 to 300 pounds of weight to the tr ailer and the skirts do not provide fuel economy in urban settings at lower rat es of speed. The higher weight will provide less fuel economy and increase the carbon footprint for trucks. (IWLA)

Agency Response: The maximum aerodynamic benefits of trailer skirt s are achieved during steady-state highway driving. Howe ver, operating the vehicle at lower cruise speeds has shown lower benefits as well. At urban speeds, trailer skirts may only provide nominal fuel econom y benefits. As a result, the regulation provides an exemption for trucks driven locally, primarily within the city, and for low-use vehicles, which will likely b e driven primarily in the city.

These local haul and short haul trucks would have l ow fuel economy benefits at a high cost and thus, the regulation includes exemp tion provisions for these trucks. See also agency response to comment #94 re garding the weight of the aerodynamic equipment.

90. Comment: While belly fairings will reduce drag and improve fuel economy, we have the following concerns. First, in a sliding t andem axle when the tandem is moved to comply with bridge weight laws, the fuel e conomy benefit, on some fairings, is lost because the distance between the tail end of the fairing and the front tire of a tandem-axle trailer is greater than 1-6 inches for optimal fuel- 72 -

economy. We are then left with carrying extra weig ht on a trailer. Also, the 200-500 pound weight gain by installing a belly fai ring will reduce hauling capacity. (GTI)

Agency Response: While it is true that aerodynamic equipment provi des the greatest fuel economy benefit under optimal conditi ons, more modest benefits can usually be obtained under less than optimal cir cumstances. In the case where the sliding tandem axle is moved back, which creates a greater distance between the fairing and this axle, the trailer skir t coverage will still be significant and provide partial fuel economy benefits. In addi tion, at least one skirt manufacturer has addressed this issue by having the skirt slaved to the trailer tandem and sliding with it. In the case of the tra iler skirt consisting of panels, an additional panel may be added, if appropriate, t o increase skirt coverage and maximize fuel economy benefit. See agency resp onse to comment #86 regarding trailer side skirts. See also agency res ponse to comment #94 regarding the weight of the aerodynamic equipment.

91. Comment: Most trucking companies have had little or no exp erience with retrofitted trailer skirts and fairings, even less with these items as original equipment enhancements. How will retrofitted trail er skirts and fairings hold up under normal wear-and-tear? How often will they ne ed to be replaced during the average useful life of a trailer? (For example , the average age of trailers in revenue operation throughout the United States toda y is about 7.5 years, depending upon type and utilization.) How will ret rofits affect trailer warranties? (AZTA)

Agency Response: As discussed in the Staff Report, the majority of the interviewed fleets that have used aerodynamic techn ologies stated little additional maintenance or few damage issues. In th e winter, some drivers noted ice buildup but they were easily able to remo ve the ice from the skirts. Side skirt manufacturers, aware of the need for inc reased resistance to dents and impact, are using flexible thermoplastic materi als for the entire or lower portion of the side skirts such that the material r etains its shape when impacted, especially at low speeds. One manufacturer has als o designed retractable side skirts to avoid any impact at all with angled docks or elevated railroad tracks. In addition, discussions with fleets show that many cases of side skirt damage were caused by driver error. Thus, driver educatio n would also help minimize damage incidents.

The warranty of the aerodynamic technologies will v ary by manufacturer and by product type. For example, one manufacturer of tra iler skirts will warrant its trailer skirts for 5 years while another manufactur er warrants them for 1 year. Another manufacturer of trailer skirts expects a 10 year service life in normal operation. Still another manufacturer has partnere d with a major manufacturer of refrigeration units for trailers and tractors to provide its services and warranty on aerodynamic devices. A comparison of the variou s verified SmartWay- 73 -

technologies will aid truck owners in choosing the best technology or combination of technologies. The impact of trailer retrofits on trailer warranties

is a matter to be addressed with individual trailer manufacturers and dealers.

92. Comment: According to ARB’s own research, more than one mi llion trailer retrofit devices will be needed to meet the require ments of the proposed regulation. Yet we are aware of only two manufactu ring entities that currently produce these devices. How will ARB ensure suffici ent manufacturing capacity to produce these devices within the deadlines envis ioned by the regulation? (AZTA)

Agency Response: With regard to the number of manufacturers that p roduce trailer retrofit equipment, the Staff Report, publi shed in October 2008, identified four companies that manufactured SmartWay verified trailer side skirts as well as three other companies that produced front traile r fairings and another company that produced rear trailer fairings. As of September 2009, according the SmartWay website, the number of companies with SmartWay verified trailer side skirts, front trailer fairings, and rear trail er fairings grew to nine, four, and four respectively.

While the Staff Report identified more than one mil lion impacted trailers, these trailers will not be required to be retrofitted all at once. If a fleet owner chooses to participate in an optional implementation schedu le, only a certain percentage of impacted trailers will be affected each year, be ginning in 2010. For example, in 2010, a large fleet will only be required to ret rofit five percent of its trailer fleet to comply with the requirements. Such flexibility not only allows fleets to spread the cost of implementation over several years but a lso to recover this cost through fuel savings generated by impacted trailers . The phase-in schedule will also spread the number of retrofit equipment r equired for the entire trailer fleet over many years.

93. Comment: The only available aerodynamic equipment for comp liance would add another 3 feet to the overall length of the veh icle, resulting in a total of 76 feet for the overall vehicle and exceeding the 65 f oot length restriction for state and local highways. (Upfold)

Agency Response: (Note: The commenter stated that adding the 3-fo ot aerodynamic device to the truck would total 76 feet , which implies that the truck without the aerodynamic device is 73 feet. 73 feet is greater than the 65 foot length restriction and thus will already be in viol ation of the length restriction. Therefore, ARB assumes that the commenter inadverte ntly stated 76 feet but meant 66 feet instead.) The federal government sets certain vehicle length provisions that are applicable on the National System of Interstate and Defense Highways (National Network, or NN) and its applicable Termin al Access (TA) routes. These provisions allow vehicles to exceed the State ’s own length limitations in- 74 -

order to allow for the use of 53-foot trailers. Th e provisions also exclude, from vehicle length determinations, the additional lengt h added by rear trailer fairings that meet certain safety standards, as determined b y U.S. DOT. Therefore, rear trailer fairings that comply with these standa rds are not counted towards vehicle length on NN and TA routes.

However, it is true that a trailer equipped with a rear trailer fairing could cause a combination vehicle to exceed the 65-foot length li mit currently in force on California Legal routes. Therefore, ARB is pursuin g legislation that would exclude the additional length from length determina tions on California Legal

routes as well.

Lastly, the regulation does not specifically requir e the use of rear trailer fairings in order to comply. There are other technologies a vailable, such as trailer skirts. See agency response to comment #77 regardi ng alternative aerodynamic technologies.

94. Comment: Current California and federal laws do not allow a weight or length tolerance to accommodate the trailer equipment. Ca rriers that comply with the proposed ARB regulation are at risk for violating t he state and federal weight and length restrictions. (AZTA)

Agency Response: At this time, federal and state laws do not provi de an exemption for the weight of trailer aerodynamic equ ipment. Therefore, trucks retrofitted with aerodynamic equipment must not exc eed the maximum legal weight limit of 80,000 pounds gross vehicle weight. The weight of the trailer equipment will not likely affect motor carriers tha t haul cargo with less than the maximum weight capacity; however, motor carriers th at carry cargo at the maximum weight capacity must consider the trailer e quipment weight when determining how much cargo the truck may carry (i.e ., weight-limited load).

See agency responses to comments #77 and #93 regard ing vehicle length

restrictions.

95. Comment: The fuel economy improvement of using a nose fair ing will vary greatly based upon the gap between the back of the tractor and the front of the trailer. If this gap is kept to a minimum and the tractor already carries the full aerodynamic package, it will provide nominal improv ement, if any. Finally, the nose fairing adds 50 to 150 pound weight gain, redu cing the cargo hauling capacity. (GTI)

Agency Response: This regulation does not require that fleets util ize any particular aerodynamic technology, but rather leave s the choice to the fleet owner. ARB agrees that there may be circumstances when a trailer gap reducer (nose fairing) may not offer as much fuel e conomy improvement as in other circumstances, depending on the configuration of the tractor-trailer. In- 75 -

those situations, a fleet may select one or more ot her technologies in order to meet the 5 percent (or 4%) reduction required by th is regulation. Nevertheless, several trailer front fairings have been verified b y SmartWay to achieve a one percent or greater improvement in fuel economy. Th e testing required for verification specifies that the tractor must be equ ipped with features typical of line haul combination trucks, including a high roof fairing, side cab extender fairings, and aerodynamic profile. Thus, even with these tractor features, trailer gap reducers will still be effective in maintaining smoother air flow around the vehicle and reducing aerodynamic drag. See the age ncy response to comment #94 regarding the weight of the aerodynamic equipme nt.

96. Comment: Reducing the vortex behind a trailer will improve the truck fuel economy; however, the boat tail designs that we hav e seen or evaluated are not easy or easy enough to employ. They will take man-hours each and every day. (GTI)

Agency Response: In September 2009, there were four rear trailer fai ring technologies verified through the SmartWay program. One rear trailer fairing can be opened in about six seconds and closed in ab out eight seconds while allowing drivers to swing trailer doors around to t he sides of the trailer in the usual way for full cargo access. Another type of r ear trailer fairing requires a couple of minutes to open and close to allow full a ccess for the trailer doors. Therefore, the use of the rear trailer fairing shou ld only add between a few seconds and a few minutes to load and unload, depen ding on the technology; these technologies will not require an overly burde nsome amount of man-hours each day to deploy and retract the devices. Traile r owners should review the rear trailer fairings verified through the SmartWay program and determine the best technology to meet their operation’s needs.

97. Comment: Test track results may show the fuel economy of a particular tire at a particular speed, however, when the same tire is used for an over-the road test, the results will vary greatly. First, low-ro lling resistance tires diminish the traction of the tire, which equates to greater stop ping distances and more accidents. There is a balance between rolling resi stance and fuel economy that needs to be maintained and considered by applicatio n. Second, while widebase tires will cost the same as two single tires, the longevity of the tread and the casing are half that of a set of single tires. Wide-base tires also require a different wheel. Therefore, the transition cost fr om eight single tires to four wide- base tires could cost from $3,000 to $5,000 p er piece of instrument. Finally, the rubber for a low-rolling resistant tir e is harder and will not handle impacts as well as softer rubber composition and th erefore will result in more failures on the road. (GTI)

Agency Response: As discussed in the Staff Report, the development o f lowrolling resistance tires began largely in response to the 1975 Energy Policy Conservation Act, and since 1980, the tire and rubb er industry has responded- 76 -

by reducing the rolling resistance of tires by more than 50 percent. Thus, reducing the rolling resistance of tires is not a n ew concept but has been researched and developed over several decades. Req uiring the use of the lowest rolling resistance tires through the SmartWa y program will achieve additional fuel reductions compared to conventional tires. One of the test methods for the verification of SmartWay low-rollin g resistance tires, SAE J1321 fuel consumption test, requires testing on a test track at defined speeds. While only limited vehicle speeds are tested, the t est cycle broadly represents real-world driving.

The regulation requires the use of SmartWay verifie d low-rolling resistance tires. Vehicle owners may choose to use SmartWay v erified dual tires or single wide tires (single wide tires replace the double ti re on each end of a drive or trailer axle) to comply with this requirement. The main advantage of using SmartWay verified dual tires over single wide tires is that no modification to the vehicle needs to be made. The Staff Report lists f our manufacturers that produce SmartWay verified dual tires. Anticipating that fleets will utilize this less costly option to comply with the requirements, the cost analysis included only the cost for the use of SmartWay verified dual tires.

Tire manufacturers have made improvements to both t he SmartWay verified tire casing and tread design over the years. Today ’s technology may perform and last as long as conventional tires such that st opping distances and handling impacts are not any different from convent ional tires. In fact, lowrolling resistance tire casings are subjected to le ss heat and fatigue, thereby improving the likelihood that the casings of SmartW ay tires will be good candidates for multiple retreading and thus may hav e a longer overall life than

conventional tires.

F. Safety

98. Comment: While belly fairings will reduce drag and improve f uel economy, the fairings will drag on the ground and be damaged whe n backing in or pulling out of an angled dock, depending on the make and model of the fairings, as well as being damaged due to road debris, curbs, etc. A da maged trailer cannot be moved and would require a road call to repair or to w the trailer. (GTI)

Agency Response: The SmartWay program verifies two categories of tr ailer side skirts (sometimes called belly fairings), one of which is estimated to achieve a four percent or greater fuel savings and the other a five percent or greater fuel savings. The latter category incorpor ates advanced designs and/or increased side coverage to further reduce aerodynam ic drag as compared to the four percent fuel savings category. Currently verified side skirts are made of aluminum or thermoplastic materials and may be c onstructed of a single panel or of modular panels for each side. Side ski rt manufacturers, aware of- 77 -

the need for increased resistance to dents and impa ct, are using flexible thermoplastic material for the entire or lower port ion of the side skirts such that the material retains its shape when impacted, espec ially at low speeds. One manufacturer has also designed retractable side ski rts to avoid any impact at all with angled docks or other steep inclines. In addi tion, discussions with fleets show that many cases of side skirt damage were caus ed by driver error. Thus, driver education would also help minimize damage in cidents.

If, however, the side skirt is damaged, the truck d river will have to assess

whether the vehicle is safe to drive back to its ho me or local base for repair or whether a road call is necessary to repair or tow t he trailer. The regulation requires that aerodynamic technologies be securely fastened to the trailer, must not be used with missing sections, and must not be used if damaged to such an extent as to compromise their effectiveness. Thus, if there is damage, the driver must determine the extent of the damage, and if the skirt is only dented or slightly cracked but not broken off, it may be s afe to drive. If serious damage occurs to the side skirt, a road call may be necess ary to repair or tow the trailer.

99. Comment: Staff’s cost-effectiveness calculations have not re flected the reality of the costs that regulated entities are likely to face. SmartWay does not test for or certify safety. ARB must factor in the publ ic safety consequences of requiring the mounting of equipment whose safety ha s not been certified. Also, the insurance costs associated with having to insta ll equipment that has no safety certification need to be taken into account. CTA recommends that staff revise its cost-effectiveness analysis to ensure th at it reflects a realistic appraisal of the costs of the program versus any cl aimed benefits. (CTA2)

Agency Response: The regulation specifies that any aerodynamic tec hnology used on a tractor or trailer must be in good operat ing condition such that they be securely fastened to the tractor or trailer and not be used with any missing sections. In addition, the technology must be inst alled according to the manufacturer’s specifications. Trailer owners and vehicle drivers are required to ensure that these good operating conditions are met before a vehicle is operated on California highways.

While it is true that the SmartWay program does not test for or certify safety, the aerodynamic devices are exterior components pla ced on the vehicle and do not impact the engine or any combustible component, and thus do not cause any imminent damage to the vehicle. The main conce rns are if a component falls off or cracks, or if an accident occurs. Suc h occurrences should be treated the same as if any tractor-trailer exterior compone nt failure happens. For example, for safety purposes, broken components may be detached and placed within the trailer or tractor cab and the ve hicle brought to a repair shop or to its home base for repairs. Discussions with fleets that have utilized the aerodynamic components reported very few incidents of damage and any damage incidents that did occur were minor. Some i ncidents were caused by- 78 -

driver error, which can be prevented, or at least m inimized, through driver education and experience.

100. Comment: What are the potential safety consequences of trail er retrofits that may become disconnected and fall off? (AZTA)

Agency Response: The regulations specify that any aerodynamic technologies used on the trailer must be in good op erating condition such that they must be securely fastened to the trailer and n ot be used with missing

sections. Trailer owners and vehicle drivers are r equired to ensure that these good operating conditions are met before a vehicle is operated on California highways.

If an accident occurs and the aerodynamic technolog y is damaged, the truck driver will have to assess, based on the extent and type of damage, whether

the vehicle is safe to drive back to its home or lo cal base for repair. Also, some sectional skirt fairings are hinged with removable pins, and the damaged

section can be taken down and stored inside the tra iler while the vehicle is driven back to its home or local base for repair. If the skirt fairing is only dented but not broken off, the tractor-trailer may be safe to drive. If serious damage occurs to the side skirt or other parts of the trai ler, a road call may be necessary to repair or tow the trailer.

101. Comment: In addition, nose fairing damage will occur easily when parked because at drop yards and customer locations, trail ers are parked head to tail in fairly close proximity to one another. A damage d trailer cannot be moved, requiring either a road call to repair the damage o r possibly towing the trailer. (GTI)

Our customers sometimes tear up our nose cones. (M atheson)

Agency Response: The regulation requires existing applicable trailer s to be retrofitted with aerodynamic equipment to meet a mi nimum percent fuel savings: five percent for a dry van trailer and fo ur percent for a refrigerated van trailer. The SmartWay program has verified various trailer front fairings, side skirts, and rear trailer fairings to achieve certai n fuel savings. Some of the verified technologies may achieve five percent or g reater fuel savings and thus may be used alone to meet the fuel savings requirem ents. Front front fairings, such as the nose fairing, are verified to achieve a n estimated one percent or greater fuel savings and must be used in combinatio n with other technologies to meet the requirements.

To comply with these fuel savings requirements, the trailer owner has the option to choose which aerodynamic technologies wou ld work best in its day to day operation. For example, if trailer front fairi ngs (e.g., nose cones) are not convenient for the user, the owner may choose to us e advanced side skirts- 79 -

alone, to comply with the requirements. In additio n, driver education in operating a vehicle with aerodynamic technologies m ay help minimize driver error and trailer damage.

102. Comment: With the number of accidents at truck stops and cus tomers increasing each year, the extended length of the tr ailer, in some cases, will cause more trailer swing accidents. Finally, a tra iler with a damaged boat tail cannot be moved, requiring a road call to repair th e damage or a possible tow of the trailer. (GTI)

Agency Response: The rear trailer fairing (also known as a boat ta il) is used

to streamline the air flow behind the trailer to mi nimize turbulence and may extend several feet beyond the length of the traile r. Some rear trailer fairings are designed to retract against the trailer doors w hen not in operation or when the doors are to be opened. To minimize incidental damage at truck stops or other areas where trailer movement is difficult, th e rear trailer fairing could be retracted and then redeployed prior to highway use. In addition, as with the use of any new technology, education of drivers on the use of the rear trailer fairing according to the manufacturer’s specification will lessen incidences of damage.

If the rear trailer firing is damaged, the truck dr iver will have to make the

assessment whether the vehicle is safe to drive bac k to its home or local base for repair. For example, if the fairing is only de nted but not broken off, it may be safe to drive. If serious damage occurs to the fai ring, a road call may be necessary to repair or tow the trailer.

G. Economic Impact

103. Comment: We have an economy that’s based on natural resour ces, primarily agricultural and timber. These are seasonal activi ties. And we cannot, despite your staff’s claims, simply pass on the cost of the se regulations to our consumers. We are completely dependent on heavy-du ty diesel equipment for the delivery of goods in and out of Mendocino Count y. And just like the rest of the State of California, we are struggling. And th ese proposed rules for both on- and off-road diesel equipment will absolutely c ripple our economy. We request the Board complete a detailed economic impa ct analysis for rural counties. (MendocinoCo)

The proposed regulation should not be adopted until an economic impact on rural communities has been fully addressed and miti gated. (GlenCo, MendocinoCo, SiskiyouCo)

Agency Response : Despite the fact that rural counties as well as the State of California and the nation are experiencing difficul t economic times that impact the trucking industry, implementation of the regula tion cannot be delayed- 80 -

because it is one of the discrete early action meas ures mandated by AB 32. AB 32 specifies that the regulation must become enf orceable by January 1, 2010. Implementation for new (2011 and newer model year) tractors and trailers begins on January 1, 2010, while implement ation for pre-2011 model year tractors and trailers will be phased in over s everal years, to allow fleets time to comply while still achieving the targeted G HG emission savings by 2020. In addition, while compliance with this regu lation will require an initial capital cost, it is expected that a cost savings wi ll ultimately result due to the increase in heavy-duty vehicle fuel efficiency and the resultant usage of less

fuel.

AB 32 also requires that all climate change regulat ions must consider their impacts on the economy of the state, including impa cts on jobs, businesses, business competitiveness, as well as impacts on loc al communities. The results of that analysis were presented in the Staf f Report. While it did not specifically address rural communities as a discret e entity separate from the remainder of the state, it did provide an overall p icture of the economic impacts on the economy of the state as a whole, which deter mined that the regulation will provide an overall cost savings to the state o f $8.6 billion over the course of the 11-year period ending in 2020.

104. Comment: I’m concerned about the notion that we’re going t o be able to pass the cost on to consumers. (Goliti, Agrium, CTA2)

Agency Response: As stated in the Staff Report, the cost analysis for this regulation was computed based upon an 11-year equip ment lifespan, from 2010 to 2020. Over that time span, ARB estimates a net savings of approximately $8.6 billion to the affected stakehol ders in 2008 dollar values. The net savings will be realized by truck operators because of improved fuel economy. Ultimately, the substantial operating cos t savings seen by the truck haulers should result in lower costs to ship goods and result in lower cost for consumers. ARB calculated the savings based upon t he projected retail price per gallon of ultra low sulfur diesel fuel of $3.14 in 2010 to $3.69 in 2020.

Also as stated in the Staff Report, businesses that own only trailers and no tractors may not be able to recover the cost of ret rofitting their trailers through fuel savings. Since this regulation applies to all long-haul tractors and trailers that operate in California, regardless of where the vehicles are registered, ARB believes the upfront investment cost to comply will be recovered by haulers by passing it on to their customers, who will in turn increase the cost of their merchandise to the consumer. However, ARB estimate s that the average cost to retrofit a trailer, amortized over the 11-year t ime span, would only be $30 per

month 1 , which is negligible when divided among all the me rchandise transported in an average trailer over the course o f one month.

1 Estimate based on an average price to retrofit a t railer with aerodynamic equipment and low rolling resistance tires of $2900, and a 6% interes t rate.- 81 -

105. Comment: I don’t believe we can pass along the costs to sh ippers. (YTI)

Agency Response: See response to Comment #104.

106. Comment: The trucking industry is feeling the full effects of the current economic crisis. Many companies are struggling to stay alive. Adding nondiscretionary costs to that already difficult enter prise in the midst of the current crisis doesn’t make good sense, especially since th e analysis that justifies the rule on the basis of projected savings is suspect. What is coming to be known as the “Great Crash of 2008” is beginning to presen t itself as an economic chasm of uncertain depth and length. CTA requests that ARB take some time to better assess the economic climate and delay imp lementation of this rule until a more robust analysis has been accomplished. In the interim, staff should be asked to redo its analysis using cost and saving s values that are more reflective of reality. (CTA, ACG)

Agency Response: The implementation of the regulation does not begin immediately during this economic downturn. Rather, the requirements are spread over a number of years. The first deadline, in 2010, applies only to new 2011 and later model year tractors and trailers. C ompanies that are struggling financially will not be impacted since they will no t likely be making new equipment purchases. The next deadline is in 2012 when all tractors must use low-rolling resistance tires. Some models of these tires cost the same as conventional tires and thus, this requirement may n ot cause any financial hardship for businesses. It is not until 2013 when in-use trailers (2010 and earlier model year) must comply with the requiremen ts.

To provide flexibility, trailer owners have the opt ion to participate in phase-in schedules rather than meeting the 2013 trailer dead line. The phase-in options were crafted to spread the cost of implementation o ver several years and gives

smaller fleets that have less financial resources a nd purchasing power slightly more time for implementation. If an owner-operator chooses to participate in the phase-in option, they would not be required to retrofit their 2010 and older model year trailer until 2014. For an affected tra iler fleet of 20 or fewer trailers (small fleet), the required percentages for the pha se-in option are 25 percent in 2013, 50 percent in 2014, 75 percent in 2015 and 10 0 percent in 2016. For a larger affected trailer fleet, the phase-in option begins in 2010 at 5 percent, requiring full compliance by 2015. By 2016, all af fected trailers that use the phase-in options will be in compliance. (Note that 2003 to 2008 model year refrigerated trailers with 2003 or newer TRUs have an even more delayed schedule because another regulation has concurrent requirements.) It should be noted that aerodynamic devices and low rolling-r esistance tires are expected to reduce operating costs due to fuel savi ngs and thus, over the long term, will be financially beneficial to the busines ses.- 82 -

As described in the “Costs and Economic Impact” cha pter of the Staff Report, ARB used reasonable and realistic cost and saving v alues. The estimated capital and installation costs for aerodynamic devi ces and fuel efficient tires, and the incremental cost of SmartWay certified trac tors and trailers were obtained from equipment (aerodynamic device, tire, tractor, and trailer) manufacturers and fleets that have already adopted the technologies. Although many fleets indicated that no major maintenance was needed other than inspection and tightening loose fasteners, ARB none theless considered maintenance costs of the tractor and trailer aerody namic devices to take care of damages that may occur due to driver errors and acc idents. The maintenance cost estimates were again obtained from manufacture rs and the fleets that were using the technologies. ARB also considered a dministrative costs to account for costs incurred by fleets for record kee ping, tracking of California compliant tractors and trailers, inspection costs f or shippers, and administrative costs during implementation. The estimated cost sa vings were based on the average annual miles accrued by a long haul tractor of 125,000 miles and the fuel economy improvements realized by the aerodynam ic technologies and fuel efficient tires which range from 7 percent for an i n-use tractor pulling a refrigerated van trailer to 10 percent for a SmartW ay certified tractor pulling a SmartWay certified dry van trailer. These fuel eff iciency improvements were based on SAE J1321 test protocol, modeling, and ind ustry input and the technologies have to meet these performance levels in order to be certified or verified by U.S EPA SmartWay Program. Furthermore, only 75 to 85 percent of the VMT was assumed to be accrued at highway speeds benefiting from these improvements. ARB believes that these are very con servative and reasonable estimates and the cost-effectiveness analysis refle cts a conservative evaluation of the program costs and claimed benefits. See als o response to comment

#83.

107. Comment: We want to address the probable impact on the Sta te revenue. The State of California is at its core a revenue ge nerating organization. All programs must create a revenue stream to remain eff ective, or they become a burden and ineffective. Instituting multiple costl y programs on one segment of business in California is not only disastrous to th at business, but can wreak

financial havoc on the State.

Extrapolating data available from marketing and eco nomic institutes, we produced a most likely model that 10% (15,500) of t he trucking businesses will cease to operate due to an inability to fund the ma ndatory changes. We calculated what the State of California’s approxima te revenue loss across multiple agencies would be.

a. Income taxes based on a two driver one office worke r company - $231,000

b. DMV fees, 2 tractors with 2/5 trailers per tractor - $5,525,000

c. DOT fees, 2 tractors with 2/5 trailers per tractor - $4,600,000- 83 - d. State sales tax based on paying $2,000 per company annum - $31,000,000

e. Fuel tax revenue based on paying $1500 per company in annual taxes - $23,250,000 (ACG)

Agency Response: The commenter did not provide any details on how the

cost estimates above were determined or how the inf ormation conflicts with

ARB estimates on the cost to businesses or to the i ndustry. In addition, ARB cannot comment about businesses ceasing operations, because so many

factors are involved in the success or failure of b usinesses. What ARB can say is that while the regulation will require substanti al capital outlay from affected fleets, the regulation will improve the overall eff iciency of the industry, which, in the end, is good for the industry and the economy. This regulation is also expected to stimulate innovation and growth in such industries that manufacture and distribute technologies that improv e fuel efficiency. But more importantly, the primary reason for this regulation ’s immediacy is that the cost of inaction is expected to far exceed the cost of p revention. Global warming poses a serious threat to the economic well-being, public health, natural resources, and environment of California. It is th is threat that spurred the development and enactment of AB 32.

However, ARB does recognize the severity of current economic conditions in California. Therefore, ARB developed the optional trailer fleet compliance schedules which allow fleets to spread the cost of compliance over several years. See agency response to comment #186 for mor e information regarding the optional trailer fleet compliance schedules. I n addition, there are several financial assistance programs available to help tru ck and trailer owners with the purchase of cleaner trucks and equipment. See age ncy responses to

comments #145 and #148 for more information on fina ncial assistance

programs.

108. Comment: An ATA survey of fleet maintenance managers in No vember 2008 found that the trucking fleets have very limited ex perience with the technologies ARB is proposing to mandate, and wide variations in the fuel economy improvements and costs of the technologies were als o reported. Given these limitations, it is insufficient to base the project ed benefits and costs of these technologies on a single scenario that may or may n ot reflect the operations of the affected fleets. For example, estimated cost s avings are based on an assumed average long-haul mileage accrual rate of 1 25,000 miles per year. The Truck & Bus Regulation, however, estimates aver age accrual rates for these vehicles ranging from 75,000 to 85,000 miles per year. Additional analyses are needed to determine how sensitive bene fit and cost estimates are to changes in operating speeds, annual mileage, fue l costs, capital and maintenance costs, and other factors. Other areas where additional information is needed include: (1) an assessment o f the manufacturing and- 84 -

distribution capabilities for the required technolo gies is needed; (2) affected trailers are not owned by trucking companies, but a re instead owned by shippers; and (3) the impact of the proposed regula tion on individual businesses with multi-year scenarios characterizing the timing and level of financing required for individual businesses. (ATA , Con-way)

Agency Response: During the rulemaking process, ARB staff contacte d several fleets who have already adopted the technol ogies required by this regulation to find out about their experience with the technologies. As reported in Appendix E of the Staff Report, the majority of these fleets reported positive experience with the technologies and expressed thei r desire to purchase more of these technologies and install them on more of t heir trailers. However ARB

understands that different fleets will realize diff erent benefits from the technologies depending on how and where they operat e the vehicles which include factors such as speed, annual miles per yea r, road conditions, weather conditions, and area of operation, to mention a few . For example, the benefits from the technologies required by this regulation w ere evaluated at speeds of 60 to 62 miles per hour. Since aerodynamic drag va ries with the square of the speed, the higher the speed of the vehicle, the hig her is the fuel savings realized and vice versa if the speeds are lower (se e also agency response to comment #46).

Also as discussed in agency response to comment #15 7, the Truck and Bus rule estimates of average annual mileage accrual ra tes include the mileage accrued by all tractors including short haul, seaso nal tractors, and long haul tractors. Therefore, it should be expected to be l ess than the average mileage accrual rate for long haul tractors which for the p urposes of this regulation is assumed to be 125,000 miles per year. The table be low shows how changes in mileage accrual rates and fuel cost affect the f uel savings and payback periods. Specifically the table shows fuel savings and payback periods at accrual rates of ±25 percent of the assumed average of 125,000 miles and fuel prices dropping from $3.14 to $2.82 per gallon. Th e results indicate that even

at lower accrual rates and reduced fuel costs the f uel savings are significant enough to result in a favorable payback period. AR B believes that although fuel prices fluctuate periodically, the trend is al ways towards increasing prices, which will result in a much better payback period t han that shown in the table.- 85 - Savings Payback

Months Savings Payback

Months Average

Annual Miles Fuel Savings

gallons/year @3.14/gallon @$2.82/gallon

156,250 2,266 $7,114 8.4 $6,389 9.4

125,000 1,813 $5,691 10.5 $5,111 11.7

93,750 1,359 $4,268 14.1 $3,833 15.7

Assumptions : SmartWay certified tractor-trailer combination; Incremental cost: $5,000; Fuel savings: 10 percent ; Tractor-to-trailer ratio: 1:1 Baseline fuel economy: 5.8 miles per gallon VMT at highway speed: 84 percent Projected fuel cost for 2010: $3.14 per gallon fro m Transportation Energy Forecasts for the 2007 Integrated Energy Policy Report, Calif ornia Energy Commission. Fuel cost: $2.82 per gallon is California diesel f uel cost for the week of September 21, 2009. (Energy Information Administration , Department of Energy)

As discussed in the Staff Report, businesses that o wn only trailers but not the tractors may not be able to directly recover the co st of retrofitting the trailers, and therefore, they may need to recover the investm ent by paying less to tractor owners who receive the direct fuel economy benefit or by passing it to customers by temporarily increasing the cost of the ir merchandise.

ARB also analyzed the impact of the regulation on t ypical individual businesses such as owner-operators. For a typical owner-opera tor, the cost of compliance ranges from $250, if the owner-operator owns only a tractor and thus only needs to install low rolling resistance tires, to a pproximately $9,000 for an owner-operator who owns one to two tractors (1.5 av erage) and 2 trailers (Staff Report, page 63) and replaces them with brand new S martWay certified tractors and trailers. For such businesses the pay back period is less than 2

years.

Many of the companies that manufacture trailer aero dynamic devices are small companies. As discussed in the Staff Report, page 42, staff contacted many of the manufacturing companies to assess their product ion capability to meet the demand for the technologies. Some of them indicate d that they will have the capability to meet upcoming demand for their device s in their existing facilities by increasing the number of shifts they operate or by purchasing additional production equipment to increase the number of prod uction lines. Others indicated that they have licensed their technology to other larger companies that have nationwide dealer and manufacturing netwo rks. For example, Freight Wing, Inc. has partnered with Carrier (a unit of Un ited Technologies Corporation) to sell, distribute, and install trail er fairings. Furthermore, the regulation provides an extended 6-year phase-in com pliance plan for large fleets beginning in 2010 and a 4-year phase-in comp liance plan for small fleets beginning in 2013. The compliance phase-in years a re so spread out over many years that they significantly alleviate the su rge in demand of retrofit technologies that would have occurred if full compl iance were required during- 86 -

the first 2-3 years beginning in 2010. Thus, ARB b elieves that there will be sufficient quantities of aerodynamic retrofit devic es to meet the demand when compliance begins in 2010. In discussions with tir e manufacturers, the added demand for SmartWay tires does not pose a product a vailability problem. Also, refer to Staff Report pages 32, 42, and 46 for a di scussion of product availability of the required technologies.

109. Comment: Undoubtedly many objections will be voiced regard ing the cost of the SmartWay program, its rewards and payback time based upon fuel consumption. These are valid points, due to the cu rrent financial state of our economy; the amount of freight being transported ha s seen a decline. Major carriers are beginning layoffs and load counts are down. (ACG)

Agency Response: See agency responses to comment #106 and #124.

110. Comment: The Staff Report’s cost/benefit analysis relies o n incomplete data. It is unreasonable to approve a regulation whose im plementation and benefits are unknown and dependent on future occurrences whi ch may or may not happen. More testing and analysis is required befo re placing such a significant financial burden on the businesses shipping and car rying goods to and from California. (CBTRI, NTDA)

Agency Response: The Staff Report provides a complete cost analysis of the cost and benefits of the regulation. This cost ana lysis predicts the cost of compliance for a tractor and trailer, as well as th e fuel savings and emission reductions that will occur as a result of complianc e. The assumptions used in the cost analysis were based on the best available data. Expectations for future changes noted in the Staff Report (i.e., pri ces dropping because of economies of scale and additional technology manufa cturers entering the marketplace) will decrease the price of technologie s used in the cost analysis and thus, should make implementation of the regulat ion even more practical. However, these expectations do not need to be reali zed to support the regulation since they were not used in the cost ana lysis. Regarding the comment that more testing and analysis is needed, p lease see agency response to comment #7.

111. Comment: Combined with the SmartWay program, each tractor trailer combination could cost $29,000 - $30,000 to retrofi t to meet compliance requirements. Companies with multiple trucks and t he industry standard 2.5 trailers per tractor, the cost quickly reaches in e xcess of $100,000 just to comply with the first stage. Load counts are down, costs up and money from lenders scarce; this will cause untold financial da mage to the trucking industry. (ACG)

Agency Response : The cost that the commenter is referring is the cost imposed by the Truck and Bus regulation. It is bey ond the scope of this- 87 -

regulation to respond to comments on the Truck and Bus regulation. However, this regulation is a cost savings regulation. Flee ts will recover their expenses back from fuel savings in approximately 1 year for a tractor-to-trailer ratio of 1 to 2.3 years for a tractor to trailer ratio of 2.5. I n addition, the compliance plan phase-in years are spread out over six years such t hat they provide fleets the flexibility to spread out the costs of compliance o ver several years. Also, see agency responses to comments #145 and #148 for more information on financial assistance programs.

112. Comment: Use of a real interest rate of 5 percent to calcu late the annualized cost of equipment purchases and replacement in the Initial Statement of Reasons was misleading. The real interest rates tr ucking companies are likely to face will be much higher, reflecting the loan in dustry’s view of the riskiness of lending to them. Trucking companies often face rat es of 15 to 20 percent under normal economic conditions. If the staff’s analysi s is repeated using more reasonable assumptions of higher interest rates, lo wer fuel savings and lower fuel costs, the likely analytical outcome is a meas ure that will produce a net loss, not a net savings. (CTA)

Agency Response: The estimated capital costs and operating cost sa vings reported in the Staff Report reflect the economic i mpacts of the regulation on the whole trucking industry affected by the regulat ion rather than an individual business. Therefore, when the cost-benefit analysi s of the regulation is performed on the whole affected industry, ARB belie ves that it is appropriate and also a standard practice to use the real intere st rate which accounts for the time value of money (nominal interest rate minus in flation rate) and brings the money back into present value. Nonetheless, ARB ag rees that some truckers who are not creditworthy may have higher capital co st due to high interest rates. To see the effect of higher interest rates on the payback period, ARB conducted sensitivity analyses using 5, 15, and 20 percent annual interest rates. ARB’s findings are that savings from fuel u se are significant enough to make a good business case even at interest rates hi gher than 5 percent. For example, a business that purchases a new SmartWay c ertified tractor and trailer at the incremental cost of approximately $5 ,000 (Table XII-1 of the Staff Report) with borrowed money at an interest rate of 5 percent and a loan period of 4 years would recover the cost in approximately 12 months from fuel savings. If the interest rate is increased to 15 o r 20 percent, then the payback period would increase by 3 to 5 months, which is sl ightly longer than that with a 5 percent interest rate, but still a favorable payb ack period.

113. Comment: The economic climate has changed significantly in the state and the nation since AB 32 was passed. We are here to argue about the timing of this issue. (CPF, YTI)

Agency Response: ARB agrees that the economic climate has changed significantly for the worse in the state and the na tion since AB 32 was passed.- 88 -

However, the serious challenges that we face as a s tate, nation and planet due to the impact of global warming continue to loom ov er our future. AB 32 requires ARB to take actions to reduce GHG emission in California to 1990 levels by the year 2020, by implementing an array o f regulatory actions. As one of the discrete early action measures, this reg ulation cannot be delayed. ARB has incorporated delayed phase-in opportunities into the implementation section of this regulation, which will provide flee ts with flexibility to spread out the costs of compliance over several years. Specif ically, large fleets of trailers that choose to participate in the optional Large Fl eet Compliance Phase-In, will have 6 years to bring all their trailers into compl iance (5% the first year, 15% the second year, 30% the third year, 50% the fourth year, 75% the fifth year, and 100% the sixth year). The first phase-in deadl ine is January 1, 2011; subsequent deadlines take place each year thereafte r until January1, 2016. Small fleets may choose the Small Fleet Compliance Phase-In for their trailers, over a four year period beginning January 1, 2014, and ending January 1, 2017 (the annual required percentages that must be retro fitted are 25%, 50%, 75% and 100%). Small fleets may also choose to follow the same compliance option as large fleets. These phase-in options pro vide fleets with the ability to spread out the costs of compliance over several yea rs.

114. Comment: Today, to try to ask carriers and other people in the business to retrofit, repower, replace, and do so simultaneousl y with the trailer equipment is an economic burden that I don’t think is prudent. (YTI)

Agency Response: While it is beyond the scope of this document to address the impacts of the Truck and Bus Regulation, ARB co nsidered the impacts of multiple regulations on fleets when developing the compliance strategy for this regulation. For that reason, fleets are offered th e opportunity to participate in an optional compliance phase-in as described in the response to comment #113. In addition, ARB offers financial assistance to help address some of the financial burden, as described in the responses to comments #145 and #148.

115. Comment: We want to follow the regulation. We need the mo ney to do that. I can’t qualify for any grants. If this goes through , I don’t have any choice but to fold up – and put 47 employees out of work. (FTI)

Agency Response: ARB appreciates the commenter’s desire to comply with the regulation and acknowledges the severity of the current economic climate. While there are no grants available to assist with complying with the regulation, ARB does offer a loan guarantee program as describe d in the agency response to comment #148. Additional financing information can be obtained through the U.S. EPA SmartWay program. It should also be empha sized that in the long run, trucking companies such as FTI will save money with the installation of the aerodynamic technologies required by the regulation . See agency response to

comment #126.- 89 -

116. Comment: This new regulation, timing, speed, could not be th e worst. Our customers and investors are pushing our margin to t heir lowest point. This new regulation is an additional cost that is unbearable at this time. (CDTI)

Agency Response: Several provisions in the regulation should ease the financial burden for companies, such as phase-in sc hedules for regulatory implementation, recovery of the initial upfront tec hnology costs through truck fuel savings over time, and loan assistance program s. See agency response to

comment #126.

117. Comment: What happens in the trucking industry is overnigh t these trucking companies will convert employee drivers to independ ent contractors, generally misclassifying them, in order to avoid having to co mply. So trucking companies like Rogers, that have 30 truck drivers, will have to comply. But a trucking company that’s working 135 owner-operators, no empl oyees, he won’t have to comply at the same time. What you’re going to do i s actually contribute to furthering the underground economy in this industry . What needs to happen is that you need to make sure that the carriers that a ctually employ these people, whether they’re employee drivers or they’re owner-o perators, are on the hook to comply. And you don’t create perverse incentive s in the marketplace to undermine your regulations. (CTPAC)

Agency Response: The regulations apply to all tractors that pull 5 3-foot or longer box-type trailers and the trailers they pull , unless they are exempted as short-haul or local-haul equipment. All requiremen ts apply alike to both equipment operated by employee drivers and owner-op erators except for the 2010 and older model year trailer phase-in options. The phase-in options were crafted to provide flexibility to spread the cost o f implementation over several years, giving smaller fleets that have less financi al resources and purchasing power slightly more time for implementation. If an owner-operator with one trailer chooses to participate in the phase-in opti on, they would be required to retrofit their 2010 and older model year trailer by 2014. For an affected trailer fleet of 20 or less trailers, the required percenta ges for the phase-in option are 25 percent in 2013, 50 percent in 2014, 75 percent in 2015 and 100 percent in 2016. For a larger affected trailer fleet, the pha se-in option begins in 2010 at 5 percent, requiring full compliance by 2015. By 201 6, all affected trailers that use the phase-in options will be in compliance. (N ote that 2003 to 2008 model year refrigerated trailers with TRUs have a delayed schedule because another regulation has concurrent requirements.) It should be noted that aerodynamic devices and low rolling-resistance tires are expect ed to reduce operating costs due to fuel savings and thus, in the long term, wil l be financially beneficial to the

business.

118. Comment: I think your payback results are a little exagger ated. All these tests are run at highway speeds. And of course a vehicle has an average speed that’s lower than that. And then if you take a 100 ,000 mile truck, if you divide- 90 -

by 2.5 on the trailers, you get 40,000 miles. So b e conservative on your payback calculations. (Silver Eagle)

Agency Response: The Staff Report accounted for an average truck's typical driving pattern and for a 2.5 trailer to tractor ra tio. The fuel savings were estimated to be about $3,700 to $5,400 per year for a compliant tractor-trailer combination. This fuel savings accounted for 85 pe rcent of the VMT at highway speeds that would benefit fully from the aerodynami c devices. The remaining 15 percent of VMT was not included in the aerodynam ic fuel benefit. In addition, for a tractor-trailer, it stated that the owner would be able to recover the initial costs in less than 1.5 years, and that for an owner who had more trailers than tractors, it would require additional time for the payback of the initial capital costs.

119. Comment: This is a multi-million dollar mandate without si gnificant benefits for

us or the citizens of California at a time when tru cking companies and all other businesses are dealing with the most challenging ec onomic environment since the great depression. (Con-way)

Agency Response: The projected air quality benefits of the regulat ion are significant. From 2010 to 2020, a projected cumula tive reduction of almost 8

million metric tons of CO 2 -equivalent emissions in California is expected fro m compliant trucks.

Several provisions in the regulation should ease th e financial burden for companies such as phase-in schedules for regulatory implementation, recovery of the initial upfront technology costs through tru ck fuel savings over time, and loan assistance programs. See agency response to c omment #126.

120. Comment: The Initial Statement of Reasons analysis of impa cts of the GHG regulation is misleading and not reflective of the economic benefits or circumstances trucking companies are likely to face in complying with the rules. The assumptions that ARB staff use in their analysi s support conclusions that seriously underestimate the difficulties that compa nies will face in making equipment investments and benefiting from those inv estments. (CTA)

Agency Response: To obtain the cost of the technology, data were col lected from technology manufacturers, fleets that have use d the technologies, and the U.S. EPA SmartWay program. The low, average, and h igh costs for tractor and

trailer modifications and for annual maintenance we re provided in the cost analysis found in the Initial Statement of Reasons (Staff Report). On average, the incremental cost estimate of purchasing a Smart Way certified tractor and a compliant dry-van trailer is approximately $5,000. The primary cost benefit from these investments is the fuel savings from ope rating a compliant vehicle. The expected truck fuel efficiency gain in this exa mple, would be 10 percent due to the aerodynamic and tire improvements. Thes e are the fuel savings- 91 -

estimates obtained from the SmartWay program to whi ch the equipment or technology has been verified. Many of the fleets i nterviewed (Appendix E of the Staff Report) noted fuel savings that were with in the range of those for which the product was verified through the SmartWay program. The assumptions and estimations used in the cost analys is were the best available data to calculate the cost and benefit of the requi rements.

121. Comment: The Initial Statement of Reasons states: “The fuel savings due to the proposed requirements would allow the owner to recover the initial capital

and maintenance costs for both the tractor and trai ler in less than 1.5 years.” However, the average truck owner has 2.5 trailers. This means it will take 2.5 times longer to recover costs because one tractor c annot pull each of the 2.5 trailers the equivalent of 125,000 miles per year. (CTA)

Agency Response: The Staff Report as well as staff’s presentation at the public hearing acknowledge that if an owner has mor e trailers than tractors, it would require additional time to recover the initia l capital costs. The estimated average cost for a 2.5 to 1 trailer-to-tractor rati o which includes a SmartWay certified sleeper cab tractor and 2.5 compliant dry -van trailers is stated to be $9,200 (Staff Report, page 60, Table XII-1). Such a tractor-trailer combination would achieve a 10 percent fuel efficiency improvem ent and therefore, would realize approximately $5,400 per year in fuel savin gs at fuel prices of $3.14 per gallon (Staff Report, page 63, Table XII-3). Thus, it would take approximately 2 years to recover the initial cost.

122. Comment: Use of a “projected diesel fuel cost of $3.14 per gallon” is misleading. Oil prices have crashed since the Init ial Statement of Reasons analysis so the assumption of $3.21 is too high. T he current OPEC target price of $70 per barrel crude is equivalent to $2.31 per gallon diesel and it may be too high. Lower fuel costs make for lower savings and lower costeffectiveness. (CTA)

Agency Response: The $3.14 projected diesel fuel cost was a projec tion of fuel cost in 2010 by the California Energy Commissi on. If $2.31 is used instead of $3.14 to calculate the annual fuel savings for a compliant tractor-trailer, the fuel savings would be approximately $4,000. The pa yback period would be less than 1.5 years for a tractor-trailer and less than 2.5 years for a 2.5 to 1 trailer to tractor ratio. These payback periods ar e still reasonable and costeffective for the implementation of the regulation.

123. Comment: The simplistic “addition” of projected savings of individual pieces of tested equipment is misleading. The ARB staff’s fu el savings estimate of 10 percent is not supported by empirical data because there has been no SmartWay testing that summarizes the joint effect o f adding various measures. Lower savings will further lengthen time to recover costs and reduce the- 92 -

general cost effectiveness of the measure. The ana lysis should use a lower percentage of fuel savings. (CTA)

Agency Response: In the Cost and Economic Impact Section of the Staf f Report, Table XII-3 identifies the annual operating cost savings for the regulation. Affected tractor-trailers will observe an estimated 7 to 10 percent fuel savings, depending on the required modificatio ns. The fuel savings associated with the use of low rolling resistance t ires for the tractor and trailer is about 3 percent, while the remaining savings (4%-7% ) is attributable to the aerodynamic devices. The fuel savings realized usi ng low-rolling resistance tires should not overlap with the savings realized using aerodynamic devices,

since the mechanisms which result in the vehicles b eing more fuel efficient are different for the two types of technologies. There fore, these savings can be simply added together.

Fuel savings estimates for the design features of a SmartWay tractor were developed using a combination of U.S. EPA testing a nd modeling results, review of the technical literature, and technical i nput from industry experts including truck manufactures. The estimated benefi ts of these additional features are 1 percent from fuel tank fairing, 1 pe rcent from aerodynamic mirrors and bumpers, and up to 4 percent from a bas e aerodynamic profiled tractor model with roof fairings and cab side exten ders relative to a conventional classic tractor. Based on testing and modeling, industry experts including truck manufactures estimate that a SmartW ay certified tractor can improve fuel efficiency by approximately 2 to 3 per cent due to aerodynamic improvements (excluding tires) relative to an avera ge moderately aero profiled tractor with roof fairings and cab side extenders. In estimating the cost savings from using a SmartWay certified tractor, ARB used a total of 3.5 percent improvement including 1.5 percent improvement from using low rolling resistance tires on the tractor only.

For dry van trailers equipped with a front trailer fairing and side skirts, the estimated fuel savings were based from testing the trailer with side skirts separately and both components together. For examp le, Freight Wing’s test 2 of

the side skirts alone and in combination with front trailer fairings under the modified SAE J1321 test protocol showed approximate ly 4 percent and 6 percent fuel savings improvement, respectively, at a highway speed of 65 miles per hour. Note that the improvement from the combi ned effect is higher than the 5 percent improvement ARB used to estimate the cost savings from a dry

van trailer. The U.S. EPA also conducted tests to evaluate the combined effect

2 Freight Wing, 2007. Freight Wing, Inc. Technolog y, Test Results and Benefits Summary.

2007.- 93 -

of the various trailer aerodynamic devices and low rolling resistance tires 3 . One

of U.S. EPA’s tests evaluated the combined effect o f trailer aerodynamics (side skirts, front trailer fairings, and an inflatable b oat tail) and single wide tires under the modified SAE J1321 test protocol. The te st results showed that the combined effect of the three trailer aerodynamic co mponents alone (without the single wide tires) improved the fuel efficiency by 5 percent and 12.6 percent at highway speeds of 55 miles per hour and 65 miles pe r hour, respectively. In

another test 4 , the U.S. EPA demonstrated that the combined effec t of a trailer side skirt and front trailer fairing improved fuel efficiency by 6.6 percent at highway speeds of 65 miles per hour. Thus, ARB’s u se of fuel efficiency improvements of 10 percent for a SmartWay certified tractor and trailer with side skirts and front trailer fairings, and the use of low rolling resistance tires on both the tractor and the trailer is not simplistic addition but based on tests, modeling, and input from the industry. Therefore, the fuel savings in the Staff Report are not overestimated for the tractor and tr ailer. Furthermore, it should be noted that unlike many regulations that do not h ave a cost savings, this regulation will result in fuel savings such that an owner can recover his/her

initial costs.

124. Comment: One way or another there are emissions reductions associated

with this economic downturn. VMT and fuel use is d own, and that means that emissions are down. Coupled with the fact that peo ple are going out of business, people are getting laid off, and people a re losing their benefits, it makes for a very unique situation. (CTA2)

Agency Response: The current economic downturn may cause less frei ght transport, resulting in emission reductions in the short term. However, the economic downturn cannot be relied upon as the sole means of emission reductions needed to reach the goals of AB 32 by 20 20. The regulation has been shown to be technologically feasible and cost- effective, projected to reduced GHG emissions by 1 MMT (CO 2 -equivalent) and 1.4 tons per day of NOx in 2020 statewide. Therefore, the regulation i s appropriate to reduce GHG and other pollutants despite the economic downturn.

125. Comment: Have any cost analyses of installation time of Sm artWay modifications been performed by the Mitchell Manual ? (ACG)

Agency Response: The cost analysis of SmartWay equipment installat ion time was not performed by Mitchell Manual. Rather, the installation costs used

3 Bachman, Leon J., Anthony Erb, Cheryl Bynum. Effec t of Single Wide Tires and Trailer Aerodynamics on Fuel Economy and NOx Emissions of C lass 8 Line-Haul Tractor-Trailers. Society of Automotive Engineers 2005-01-3551

4 Bachman , L J., A. Erb, C. Bynum, B. Shoffner, H. De La Fuente, C. Ensfield. Fuel Economy Improvements and NOx Reduction by Reduction of Para sitic Losses: Effect of Engine Design. Society of Automotive Engineers, 2006-01-3 474- 94 -

in the Staff Report were gathered from a variety of sources. First, fleets identified in Appendix E and other fleets with expe rience in the installation of aerodynamic components provided installation times. In addition, aerodynamic equipment manufacturers provided the installation t ime required for each verified component. The SmartWay website was also another source of information. Finally, fleet newsletters that discu ssed aerodynamic equipment provided additional information. The information o btained from these reliable

sources were used to calculate the installation tim e used in the cost analysis.

126. Comment: The proposed regulation will significantly and un reasonably increase the cost of transporting goods in the stat e. The proposed regulation is too much and too expensive for truck owners to comp ly with. (Alford, Anonymous, Bowans, Eaton, Ingram, Perrigue, Rader, R.D., Sambucetti2, TLTLLC, Wright)

Agency Response: The cost of compliance with the regulation will n ot be unreasonable or too expensive for truck owners to c omply with, for the following reasons. First, the total cost of compliance for a truck fleet will be spread over several years in order to ease the financial burden . Tractor aerodynamic requirements apply only to new 2011 and later model year tractors beginning in 2010, and low rolling resistance tires are required on older tractors two years later. Trailer aerodynamic and tire requirements b egin in 2010 only for new

2011 and later model trailers. Trailer owners have the flexibility to comply with the 2010 and older trailer requirements over a peri od of six years. Second, unlike many other regulations, the requirements wil l actually result in a fuel savings from compliant trucks. An average of 7 to 10 percent fuel savings is expected on a compliant tractor-trailer combination , which translates to approximately $4,000 to $5,700 per year on a truck with average long-haul mileage (for assumptions, see the Staff Report, pag e ES6). Depending on the ratio of tractors to trailers, the owner may be abl e to recover the initial cost in less than 1.5 years to several years. Thereafter, the owner will actually save money in fuel when operating the compliant tractor- trailer, compared to a noncompliant tractor-trailer. Finally, some financial assistance and grant programs are available to assist tractor and trailer owners, such as the ARB Providing Loan Assistance for California Equipment Program an d the U.S. EPA SmartWay Clean Diesel Fuel Finance Program.

127. Comment: The proposed regulation will put companies out of business and should not be passed. (DiSalvo, Doggett, Eaton, El lington, Gill, Hobbs, IDI, Jenkins, MCT, NTC, Panella, Phillips1, Phillips2, R ZT, Rader, Renner, RosePadel, Sambucetti1, Sanders, Smith, STI, STLLC, SVP, TLTLLC, Wright, VanWingerden)

Agency Response: See agency response to comment #126.- 95 -

128. Comment: The proposed regulation will be cost prohibitive for trucking companies to adopt and will have severely negative economic impacts at a time when trucking companies and all other businesses ar e dealing with the most challenging economic environment since the Great De pression. It is simply impractical to presume that Con-way and other compa nies will be able to pass the added costs of implementing these technologies on to their customers, particularly during the current economic climate. Many carriers may choose to stop providing service to and from California, as i t will be very expensive, if not cost prohibitive, for them to implement the technol ogies mandated by the proposed regulation. In order to comply with the p roposed regulation, Con-way will be forced to re-direct resources away from pro ven fuel saving technologies and strategies to other technologies which simply d o not work in its operation. (Con-way)

Agency Response: There are several provisions in the regulation th at should ease the financial burden for companies such as pha se-in schedules for regulatory implementation, recovery of the initial upfront technology costs through truck fuel savings over time, and loan assi stance programs. See agency responses to comment #126 for cost concerns and to comments #85 and #86 for technological feasibility concerns.

129. Comment: From an economic perspective, emission levels and timelines for compliance in the proposed changes would force expe nsive carrier equipment upgrades, the costs for which when passed along thr ough this supply chain would constitute unsustainable increases for all pa rties, causing irreparable harm to the California trucking and agricultural in dustries. (Agrium, FTI)

If the proposed regulation was initiated in its cur rent form, cost increases for companies with economic strength to stay compliant would rise 6% to 8% each year between 2010 through 2022, as compared to the current 2% to 3.5% annual increases. Companies without the economic s trength to make the proposed changes would have even more severe rate i ncreases. (Agrium)

Agency Response: The regulation contains provisions to ease the fi nancial burden for companies. The estimated cost for upgra ding existing tractors with low rolling resistance tires is negligible to $500. For existing trailers, the estimated cost is about $2,900 per trailer. Flexib ility provided in the regulation allows trailer owners to spread the implementation of the requirements over several years, from four to six years depending on the size of the applicable trailer fleet. Since compliant tractor-trailer com binations will realize a 7 to 10 percent fuel savings, one major benefit of these ph ase-in schedules is that the operating cost savings from complying vehicles in t he first phase-in year can be used to pay for the second and later phase-in compl iance years. While it is possible that the cost of regulatory implementation during the initial years may be passed to the consumer, it will not likely be a permanent cost as compliant- 96 -

trucks will cost less to operate due to fuel saving s. Also see agency response

to comment #126.

The second commenter noted that the regulation will result in a 6 to 8 percent cost increase for companies due to the changes to T itle 17. However, the data provided by the commenter were for the Truck and Bu s regulation (i.e., power equipment cost percentage and fleet modernization p ercentage) and not for the GHG rule. These two regulations were concurrently brought before the Board and approved with modifications at the December 200 9 hearing and the commenter may have confused these comments intended for the Truck and Bus regulation.

130. Comment: As a result of the high cost of compliance, many carriers will stop sending trucks to California and refuse to deliver into the State to avoid the additional costs to comply with the proposed regula tions. (Anonymous, Bowans, FTI, Mason, Upfold)

This will cause unreasonable price hikes of goods a nd services of products coming into the state from other places. (FTI)

To recover costs for regulatory compliance, it’s fe asible that some fleets could start implementing a “California surcharge” that wi ll result in higher costs of goods to California consumers. (CREI2)

Agency Response: The estimated compliance costs for a tractor-trai ler range from $2,900 to $5,000. As a result of the technolo gy changes to the vehicle, an average of 7 to 10 percent fuel savings is expected on a compliant tractortrailer combination, which translates to approximat ely $3,700 to $5,400 per year on an average long-haul truck (for assumptions, see the Staff Report, page ES6). Depending on the ratio of tractors to trail ers, the owner may be able to recover the initial cost in less than 1.5 years to several years.

In addition, flexibility provided in the regulation allows trailer owners to spread the implementation of the requirements over a perio d of 6 years, from four to six years depending on the size of the applicable t railer fleet. One major benefit of these phase-in schedules is that the ope rating cost savings achieved in the first phase-in year can be used to pay for t he second and later phase-in compliance year costs. While it is possible that t he cost of compliance during the initial years may be passed along to the consum er, it will not likely be a permanent cost as compliant trucks will cost less t o operate due to the fuel savings. See agency response to comment #126.

131. Comment: ARB is assuming that fleets operating occasionall y in California will be able to segregate their equipment, both tractor and trailer, and install upgrades to only that subset. This assumption is f alse because fleets that operate only partially in California will require f ull fleet implementation for the- 97 -

following reasons: 1) freight destined for Califor nia originates out of virtually every part of the nation, 2) trans-loading at the C alifornia border onto California compliant equipment is not an option with most of t he food products that we haul, and 3) even if compliant equipment could be p ositioned in advance, the lack of isolated trailer pools in most one-way truc king applications prohibits reserving compliant equipment for California destin ed loads. We urge ARB to consider the far reaching impact of these regulatio ns for carriers that operate only partially in California. We are concerned abo ut the implementation and maintenance costs for full fleet implementation. ( CREI2)

Staff’s cost-effectiveness calculations have not re flected the reality of the costs that regulated entities are likely to face. There is no analysis of the costs and loss of efficiencies that will be borne by companie s who would have to create and dispatch a separate fleet of compliant trailers for their California business.

CTA recommends that staff revise its cost-effective ness analysis to ensure that it reflects a realistic appraisal of the costs of t he program versus any claimed benefits. (CTA2, ACG)

Agency Response: In Section VI of the Staff Report, the impacted f leet operating on California highways is estimated at ab out 436,000 tractors and 1,090,000 trailers in 2010. The full lifetime capi tal cost of implementation of the regulation is estimated at $8.5 billion. Included in this cost is an annual administrative cost of $3.50 per affected tractor a nd $5.00 for affected trailer to account for record keeping, tracking of California compliant tractors/trailers, and other administrative costs during the first five ye ars of implementation as well as an annual maintenance cost of $143 per tractor a nd $120 per trailer.

At a 7 to 10 percent fuel savings for compliant veh icles, the lifetime savings of the regulation will be about $17.1 billion resultin g in a net cost savings of $8.6 billion over the life of the regulation. These cos ts and savings assume that an interstate company will only modify the portion of its fleet that travels on California highways since a company may choose to d edicate a certain fleet of tractors and trailers to transport freight to and f rom California. If companies choose to bring additional equipment into complianc e to enhance operational flexibility, they should also obtain even greater s avings over the useful life of the compliant equipment. For companies that only h ave a portion of their business in California, they may choose to create a sub-fleet of compliant trailers, although full fleet implementation may of fer benefits such as lower operating costs due to fuel savings, and purchasing power for aerodynamic equipment and low-rolling resistance tires resultin g in lower aerodynamic equipment and tire prices for its fleet.

132. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. The rule will put California registered trucking companies at a competitive disa dvantage vis-à-vis out-ofstate trucking companies because it will take the l ower mileage California- 98 -

companies significantly longer to recover their cos ts. The cost-effective analysis must include an estimate of the number of California registered companies that will be forced out of business by th e rule as well as the impact

of that loss to the state. CTA recommends that sta ff revise its costeffectiveness analysis to ensure that it reflects a realistic appraisal of the costs of the program versus any claimed benefits. (CTA2)

Agency Response: As stated in the Staff Report, in 2010, affected California

interstate and intrastate trucks are estimated to b e less than 10 percent of the total number of affected trucks. The remaining aff ected trucks are neighboring out-of-state and non-neighboring out-of-state truck s. Although California trucks make up less than 10 percent of the total number of trucks, in 2010, the VMT by California trucks will be about 34 percent of th e total VMT by trucks in California. Thus, California trucks are substantia l contributors to the overall truck emission inventory in California, and regulat ing these trucks is an important component of California's emission contro l program. For a response regarding whether ARB’s cost estimates are realisti c, please see agency response to comment #106.

To aid businesses whose primary economic effect is in California, some financial assistance programs are available to assi st tractor and trailer owners, such as the ARB Providing Loan Assistance for Calif ornia Equipment Program. One of the qualifications to participate in this lo an assistance program is that recipient companies must operate in California a mi nimum of 51 percent of their total annual mileage. See agency response to comme nt #126.

133. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. Companies that own trailers but no or few tractors will have no way of recovering their costs since any savings will only accrue to the tractor owner. Moreover, the actual presence and amount of savings will depend upon fac tors, such as speed at which a trailer is hauled, that are beyond a traile r owner’s ability to use to base charges for the use of their equipment. CTA recomm ends that staff revise its cost-effectiveness analysis to ensure that it refle cts a realistic appraisal of the costs of the program versus any claimed benefits. (CTA2)

Agency Response: Businesses that own only trailers but no tractors may not be able to directly recover the cost of retrofittin g their trailers through fuel savings. It should be noted, however, that the tra ctor pulling a compliant trailer will achieve a noticeable fuel savings, the extent of the fuel savings depending on the drive cycle of the truck. Trucks that will not benefit greatly from the aerodynamic equipment will likely only be those tha t operate local haul or short haul, and trailers that are used for such purposes are exempt from the requirements. A trailer owner may recover its comp liance costs by charging a higher fee for the lease of the equipment (that wou ld be offset by the lessor through a reduction in tractor fuel usage). Additi onally, some financial- 99 -

assistance is available to assist tractor and trail er owners, such as the ARB Providing Loan Assistance for California Equipment Program and the U.S. EPA SmartWay Clean Diesel Finance Program. See also r esponses to comments

#104 and #108.

134. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. There is no test evidence from SmartWay that the individual aerodynamic benef its of SmartWay technologies can be simply added together. Thus, t here is no scientific basis for staff’s projected savings percentages. CTA rec ommends that staff revise its cost-effectiveness analysis to ensure that it refle cts a realistic appraisal of the costs of the program versus any claimed benefits. (CTA2)

Agency Response: See response to comment #123.

135. Comment: My leased truck cannot be modified to comply with the proposed regulation during its lease term. When the truck i s paid for in 2010, its value will not be worth the estimated $30,000 required fo r upgrade. In this current poor economic state, funds will not be available to comply with the proposed regulation. (Upfold)

Agency Response: Although the commenter was responding to the Truc k and Bus regulation, ARB is responding to the cost the o wner will face when complying with the GHG regulation. Based on the in formation provided, the

commenter owns one truck that is a 2009 or older mo del year truck and no trailer. Based on this assumption the cost to comp ly with the regulation will be negligible to $500.

136. Comment: The proposed regulation has not considered the fo llowing added cost of the usage of single wide tires: wheel dama ge due to a tire blow out ($900 for new wheel and tire), service call for a r epair truck ($200), damage done to equipment before operating on the road, and increased potential of accidents. (Upfold)

Agency Response: The regulation does not exclusively require the u se of single wide tires. Rather, the low-rolling resista nce tire requirement can be met by the use of either SmartWay verified dual tires o r single wide tires. Using a single wide tire and rim instead of the dual wheel configuration weighs less, thus allowing for greater freight capacity. Single wide tires also provide excellent low-rolling resistance and fuel economy. However, the major disadvantage is that if the single wide tire become s deflated or destroyed, driving the truck to a service location is difficul t without risking damage to the rim. A service call for a repair truck may be nece ssary. If the commentor is concerned about this issue, compliance with the low -rolling resistance tire requirement can be met with the use of SmartWay ver ified dual tires instead of single wide tires.- 100 -

137. Comment: Your estimates on the costs to the economy are fa r off. The State has no money to subsidize these trucks to comply wi th the proposed regulation. (Lloyd)

Agency Response: The Staff Report identifies various federal, stat e, and local programs that may provide assistance for owners to comply with the regulation. One such state program, created by Assembly Bill 11 8, creates a loan guarantee program for vehicle owners to comply with this regulation and other ARB regulations. The loan may be used to purchase complying tractors, trailers, and aerodynamic equipment and tires. Veh icle owners must meet certain criteria in order to qualify for the loan. Also, see agency response to

comment #148.

138. Comment: The only companies that will be left standing aft er the regulation takes effect will be the national mega fleets. Lar ge companies will not be financially impacted by the proposed regulation bec ause they can merely send all of their new equipment into California and use their older equipment out of state. Companies that only operate in California h ave no outlet for the noncompliant equipment. Therefore, ARB will unlevel t he playing field and allow the huge companies to monopolize the state. (Lawle y)

Agency Response: The regulation applies to all affected trucks tra veling on California highways and is not biased towards out-o f-state versus in-state fleets or “mega” fleets versus smaller fleets. All long-h aul fleets, regardless of size, will be required to comply with the requirements, r esulting in improved fuel efficiency. In addition, the regulation does not r equire vehicle owners to dispose of non-compliant vehicles, but rather to re trofit them with aerodynamic devices and low rolling-resistance tires.

To provide flexibility for fleets, optional phase-i n schedules are provided for trailers, as opposed to requiring all affected trai lers to comply by a certain date. Small fleets (20 and less trailers) have added flex ibility through a later implementation and phase-in schedule (beginning in 2013, instead of 2010 for large fleets.) This allows added time to generate needed capital to bring trailers into compliance. In addition, unlike many other re gulations, compliance with the regulation will save fleets money through less fuel usage over time. In addition, California incentive programs are geared toward helping California businesses obtain loans for compliance with regulat ions, and are targeted at “small businesses” (less than 100 employees, less t han $10 million annual revenues) rather than the large businesses. Moreov er, only vehicles that operate a majority of the time on California highwa ys qualify for the programs. These and other provisions should ensure that small fleets and California fleets continue to be competitive.- 101 -

139. Comment: The proposed regulation will cause depreciation i n the value of trailers. Prospective buyers of equipment will red uce the equipment purchase price to compensate for the retrofits that the Boar d will require, resulting in a

loss of value to the seller. The net result will b e that the obsolete pieces of equipment will be kept on the road, in which the Bo ard will have invested much needed capital in an obsolete piece of equipment. The sellers of the equipment will have to increase freight rates to compensate f or the loss in trade-in value. (CREI1)

The value of my customer's trade-ins has already dr opped thousands of dollars with just the threat of this regulation. If it pas ses, the used truck market will evaporate in California leaving my customers scramb ling to stay in the business. (Fitzgerald)

This regulation would make my equipment unsalable i n California. (Spainhoward)

Mandating SmartWay type equipment will further deva lue used trailers in this poor economy. Trailers will be virtually useless i f they don’t meet the new requirements. (PTS)

Agency Response: Certain provisions in the regulations will minimi ze sudden changes to the value of the equipment. First, to s pread the cost of compliance over several years, optional trailer phase-in sched ules are provided, as opposed to requiring all affected tractors and trai lers to comply by a certain date. The large trailer fleet schedule begins in 2 011, requiring only five percent compliance by January 1, 2011; full compliance will be required by January 1, 2016. The small trailer fleet schedule begins by J anuary 1, 2013 and ends by January 1, 2017. Another benefit of the phase-in s chedules is that operating cost savings from vehicles brought into compliance in the early phase-in years can be used to pay for the costs of compliance duri ng subsequent. Second, the retrofit modifications should add monetary valu e to equipment brought into compliance because aerodynamic devices are value-ad ded items that result in lower fuel usage for the vehicle. Finally, equipme nt that is used for local haul or short haul is exempted from the provisions. Theref ore, non-complying trailers

can still be sold into the local or short haul mark et, without affecting their value.

140. Comment: Cost-effectiveness deals with several aspects, in cluding the initial cost of the aerodynamic technologies, the costs of maintaining these devices in service, the repair costs due to possible damage wh ile in service and downtime losses during repairs. The costs may also include the added weight to the trailers which would reduce the overall payload cap acity and in turn result in additional trucks and trailers on the highways in o rder to transport the same amount of cargo that is currently being transported , thereby potentially negating fuel savings and GHG reductions while increasing th e potential for more motor vehicle collisions. (TTMA)- 102 -

Agency Response: ARB’s cost-effectiveness analysis included the in itial cost of the aerodynamic technologies and the increased m aintenance and repair costs when the aerodynamic devices are damaged. Th e cost increase for a compliant sleeper tractor and trailer ranges from $ 3,000 to $7,300, with an average of $5,000. The estimated increased cost fo r maintenance and repair for a compliant sleeper tractor and trailer ranges from $105 to $399, with an average of $263.

The cost of downtime losses during repairs was not included in the calculations.

Most of the fleets indicated that maintenance and r epair needed for tractor fairings was minimal, and subsequently, the down ti me should be minimal as well. Damage to trailer side skirts, however, may occur and result in some vehicle downtime to repair the component. Some of the fleets contacted by ARB staff indicated that they had extra skirt panel s and components in stock so

that this downtime was minimized.

Regarding the comment that the added weight of aero dynamic devices will reduce the overall payload capacity of trailers the reby negating the fuel savings and GHG benefits achieved, ARB asserts that the add ed weight contributed by the aerodynamic equipment is relatively insignifica nt relative to the overall weight of a truck’s payload. For example, as state d in the Staff Report, the average weight of a set of side skirts is between 1 50 and 350 pounds. Moreover, ARB’s cost effectiveness calculations wer e based on 5 percent fuel savings, when in actuality several of the aerodynam ic technologies verified by the SmartWay program achieve 7% fuel efficiency sav ings, which will more than offset the minimal impact caused by the weight of the skirts for those vehicles that operate at maximum payload capacity.

141. Comment: The fact that ARB proposed to mandate aerodynamic technologies on all 53-foot or longer box-type trailers that ope rate in the State of California, and not just on those domiciled within the State, w ould create an extreme and

irrational burden on interstate commerce. The effe ct on interstate commerce of this proposed regulation would as a practical matte r be to mandate installation of all of these technologies on the vast majority o f trailers in use throughout the country regardless of the views of the governing ag encies in other states on the issues that ARB is seeking to address. A study of the cost-effectiveness of this proposal should therefore also include the nationwi de effects on interstate commerce. (TTMA)

Agency Response: ARB’s economic analysis of the measure did in fac t include the compliance costs for tractors and trail ers that are registered in other states but used on California highways. The compli ance costs or other burdens associated with these requirements are neither extr eme nor irrational. As with California-registered vehicles, a out-of-state flee t with a 1:1 ratio of tractors to- 103 -

trailers that are used on California highways is ex pected to entirely recoup compliance costs in an average of less than 1.5 yea rs through fuel savings.

While ARB agrees that the regulation will force the owners of vehicles registered in other states to bring those vehicles into compliance if they are going to be used in California, ARB does not agree that the vast majority of trailers will be affected. The regulation provides for compliance schedules that will allow trailer owners to spread compliance obli gations and costs out to avoid hardships.

With this regulation, ARB does not directly regulat e or discriminate against interstate commerce, substantially impede the flow of interstate commerce, or

have an effect that favors in-state economic intere sts over out-of-state interests. In addition, the regulation’s indirect effects on interstate commerce are incidental and minor, particularly when compare d to the public health

benefits that will be achieved as a result of the m easure's implementation. The regulation is also designed to give operators ample time to decide what equipment they will operate in California and to br ing that equipment into compliance on a reasonable schedule. Considering a ll of this, ARB does not believe the regulation violates the Commerce Clause under the balancing test used by the courts to analyze state regulations aff ecting interstate commerce.

142. Comment: The Staff Report states that the projected cost t o comply with the proposed trailer requirements is approximately $2,9 00 per trailer with an additional $120 annual cost for maintenance. We qu estion the veracity of these figures. In the Report itself, staff notes that th e fleets they chose to interview reported side skirts alone costing as much as $2,60 0. Compliance would also require low-rolling resistance tires and either fro nt or rear trailer fairings. (CBTRI, NTDA)

Agency Response: In the Staff Report, a range of cost estimates wa s provided for compliance with the regulation, rangin g from $1,900 to $4,200, with an average cost of $2,900. The cost estimates include side skirts, either rear or front fairings, low-rolling resistance tire s, and installation. The most variable component of the costs was that of the tra iler side skirts, due to the range of material used and different designs and op tions. In discussions with fleets that were interviewed (Appendix E of Staff R eport), the cost of side skirts ranged from $1,000 to $2,699. These and other prod uct prices were used to calculate the low, average, and high cost estimates used in the Staff Report.

143. Comment: In the discussion of costs and user concerns many conclusions seem to be based on a small sampling of anecdotal e vidence. Also, there appear to be a great many statements that begin, “s taff anticipates that...” It is clear that the staff is counting on numerous instan ces of future improvements and developments to be carried by the private secto r in order to make this regulation viable. (CBTRI, NTDA)- 104 -

Agency Response: As of the date of the Staff Report, numerous prod uct offerings were commercially available that were Sma rtWay verified, which may be used to comply with the regulation. There were SmartWay certified tractors from six different companies, four models of SmartW ay verified side skirts, three models of SmartWay verified front trailer fai rings, and one model of SmartWay verified rear trailer fairings. Staff hel d private meetings with over ten companies that used at least one type of aerodynami c technology and most found the technology mature and reasonable in cost. Some fleets even reported that they were planning to install side sk irts on all of their trailers, after successfully testing the skirts on a limited number . Therefore, the technological feasibility of the required aerodynamic products is sound as of the date of the Staff Report and does not depend on any further imp rovements or developments to meet the requirements of this regul ation.

144. Comment: The cost burden of replacing power units and retr ofitting the trailers simultaneously is a cost that cannot be justified. We have over three trailers for every one power unit. These trailers are used as a “mobile” warehouse while the customer unloads the trailers over a period of days. These trailers sometimes make only one or two trips per week. Our trailers do not travel enough miles to justify a savings in fuel because o f their limited time on the road. Companies with excess trailing equipment wil l be unfairly burdened by a cost that cannot be justified. If the law is to ha ve new trailers be manufactured with SmartWay technology, we would support that. B ut retrofitting older trailers is not a prudent business decision. (YTI)

Agency Response: In response to the comment regarding the affects of multiple rules, please see agency response to comme nt #14 and #166. The regulation aims to reduce GHG emissions by improvin g the fuel efficiency of long-haul tractors and trailers. From 2010 to 2020 , a cumulative projected

reduction of almost 8 million metric tons of carbon dioxide equivalent emissions in California is expected from compliant trucks. T hese emission reductions come at an average cost of about $2,100 per new Sma rtWay certified sleeper cab tractor and $2,900 per trailer. In the regulat ion, older model tractors are only required to use low-rolling resistance tires b ut not to be retrofitted with aerodynamic equipment; the cost of the tire upgrade ranges between negligible and $500 per tractor. However, trailers will be re quired to use both low-rolling resistance tires and be retrofitted with aerodynami c equipment, unless the trailer is exempted (used within 100 miles of its l ocal base) or is pulled by an exempted local haul or short haul tractor. Unlike most other ARB regulations, compliance with the regulation will result in a fue l savings, which will ultimately payback the initial upfront equipment costs. For t he average long-haul mileage accrual rate of 125,000 miles per year, the Staff R eport states that the fuel savings would be approximately $3,700 to $5,400 per year at fuel prices of $3.14 per gallon for a compliant tractor-trailer co mbination.- 105 -

In the case of the commenter, the total compliance cost per unit of one older model tractor and three trailers is about $9,200. The fuel savings will be at the lower end of the stated $3,700 to $5,400 savings ra nge because the tractor will not be a more fuel efficient model, only requiring the use of low rolling resistance tires. Even at $3,700 annual fuel savin gs, the commenter may still recover the initial cost in less than 3 years, maki ng this an affordable regulation.

H. Financial Assistance/Incentives

145. Comment: Even though many of the improvements have signifi cant fuel savings, the reality is that many companies do not have the credit available to qualify. Even large companies have a hard time bor rowing money as of late. In addition, more work is needed to assure that inc entives are distributed to various trucking vocations to achieve compliance. Not all trucks are the same and for some vocations, the grant is not enough. T he industry needs extended terms and easy access to financing to help them dur ing these dire economic times. (CSS)

Agency Response: ARB agrees that the recent downturn in the econom y has made obtaining financing more challenging for fleet s, and although there is evidence that conditions have improved since this c omment was submitted, fleets may still face challenges in obtaining finan cing to upgrade their equipment. However, as economic conditions improve further, financing will become more accessible. Moreover, since the option al phase-in plans will provide fleets with extra time to comply, ARB antic ipates that more financing will become available to them as the economy contin ues to strengthen.

The comment pertaining to the issue of distributing incentives to various trucking vocations does not apply to this regulatio n since the regulation only applies to long-haul tractor-trailer configurations

.

Potential sources of funding to assist fleets in co mplying with the regulation include the U.S. EPA SmartWay Finance Center, the S martWay Clean Diesel Finance Program, and the ARB Providing Loan Assista nce for California Equipment (PLACE) Program. See agency response to comment # 148 for additional information about PLACE. Fleets may als o find financing administered through their local states; some state s and nonprofit organizations (including the commenter, Cascade Sierra Solutions) have received grant funding to offer financing for SmartWay upgrades, a nd additional grant funds may be made available to them in the future.

146. Comment: The following recommendation should be incorporat ed into the proposed regulation to allow trucking companies gre ater flexibility to direct their

financial resources to reduce GHG emissions. The B oard should direct staff to include provisions in all existing and future on-ro ad vehicle incentive and loan- 106 -

programs which allow companies doing a portion of t heir business in California to apply for and leverage state funds. Current inc entive and loan programs require a vast majority, if not all, of the vehicle ’s operation to be in California in order to qualify. Yet the vast majority of affecte d equipment is based outside the state and will require large capital expenditur es to comply. (ATA, Con-way)

Agency Response: As stated by the commenters, there is an ARB incent ive program (the PLACE loan program) available to some fleets to assist them in complying with this regulation. See agency respons e to comment # 148 for

additional information about PLACE. The commenters are correct in stating that in order to obtain California funds through th e PLACE loan program, fleets must travel a majority of their annual mileage (at least 51%) in California.

Comments about developing new incentive programs or modifying existing incentive programs would require legislative change s and therefore are beyond the scope of this regulation

147. Comment: A majority of the trucks hauling freight into and f rom California are not based in the state, meaning that the bulk of th e $10.4 billion cost will be borne by non-domicile long-haul carriers. All but a small percentage of these trucks and trailers are operated by small businesse s with fewer than 20 trucks. These small carriers will likely not have the capit al resources to comply. Yet, those limited funds allocated by California to retr ofit equipment are largely not available to non-domiciled fleets. (AZTA)

Agency Response: The PLACE loan program is not exclusively offered to California-domiciled fleets. Rather, applicants mu st have their primary economic effect in California (51% or more of their total annual mileage generated in California). In addition, qualified b orrowers must be small businesses (less than 100 employees, less than $10 million annual revenues), and have no more than 20 heavy-duty tractors in the ir fleet. Thus, the fleets described by the commenter might in fact be eligibl e for PLACE loans.

Other resources that offer funding opportunities to fleets nationwide include the U.S. EPA SmartWay Finance Center and other state or nonprofit-administered programs. Cascade Sierra Solutions, a grant recipi ent of the SmartWay Clean Diesel Finance Program, offers loans to assist flee ts in complying with the regulation.

148. Comment: We are pleased to see ARB maximize the potential of this initiative by enlarging funding and broadening access availabl e to fleets that are prepared to make initial capital investment in Smar tWay-approved technologies. ARB should provide financial assista nce and grant programs to the greatest possible extent. (ATDynamics)- 107 -

Agency Response: ARB offers the Providing Loan Assistance for Cali fornia Equipment (PLACE) program for new, used and retrofi tted aerodynamic equipment that has been SmartWay certified or verif ied. The program targets

borrowers that do not fit within conventional loan standards and are “nearly bankable,” meaning they fall just outside lenders’ standard loan criteria or are unable to obtain a loan due to today’s more conserv ative credit climate. The funding is available through California Capital Acc ess Program (CALCAP) participating lenders located statewide. Qualified borrowers must be small businesses (less than 100 employees, less than $10 million annual revenues), have no more than 20 heavy-duty tractors, and the c ompany must have their primary economic effect in California (51% or more of their total annual mileage generated in California). Additional information a bout the PLACE program is available through the ARB website http://www.arb.ca .gov/ba/loan/on-road/onroad.htm

149. Comment: The State has talked about grants to offset some of the cost to upgrade existing equipment. However, trucking comp anies of our size do not qualify. We own 35 power units and over 50 trailer s. We are all for clean air. What we need is the funding to do this. (FTI)

Agency Response: There are currently no grants available through A RB to help offset some of the cost of equipment upgrades to comply with the regulation. In addition, based on the information provided by the commenter, their fleet would not qualify for financing through the PLACE program since they

exceed the fleet size limitation of not more than 2 0 heavy-duty tractors. Other resources that offer funding opportunities to fleet s nationwide include the U.S. EPA SmartWay Finance Center, and other state or non profit-administered programs. Cascade Sierra Solutions, a grant recipi ent of the SmartWay Clean Diesel Finance Program, offers loans to assist flee ts in complying with the regulation.

However, although there are up-front capitol costs to purchase and install aerodynamic technologies and low rolling resistance tires, this regulation will, over time, save money as described in response to c omments #71 and #108 is that the costs are paid for within less than 2.3 ye ars (trailer-to-tractor ratio of 2 to 1), as well as reduce our dependence on foreign oil. In fact, from 2010 to 2020, ARB has estimated the benefits of this regula tion to include: a net savings of 8.6 billion dollars; a reduction of appr oximately 8 million metric tons of carbon dioxide emissions in California and appro ximately 52 million metric tons of carbon dioxide emissions nationwide; saving s of 750 million gallons of diesel fuel from operations within California and a pproximately 5 billion gallons of diesel from nationwide operations

150. Comment: We cannot comply with the proposed regulation if we do not get loans that will even match grant funds. We cannot buy new equipment or retrofit the old if our shippers are not moving pro duct. (JJTI)- 108 -

Agency Response: See agency response to comment #148 for a descrip tion of the PLACE loan program. Other resources that of fer funding opportunities to fleets nationwide include the U.S. EPA SmartWay Fin ance Center and other state or nonprofit-administered programs. Cascade Sierra Solutions, a grant recipient of the SmartWay Clean Diesel Finance Prog ram, offers loans to assist fleets nationwide in complying with the regulation.

151. Comment: Any incentive or subsidy program must not operate to create a subprime lending scheme or create competitive disad vantages for motor carriers. First, the subsidy program should not di scriminate on the basis of fleet size. This will tend to limit such a program to pr oviding subsidies to large motor carriers using one-truck owner operators to the dis advantage of other deserving motor carriers. Second, the program must be based on sound commercial underwriting standards. The vast majority of one-t ruck owner-operators are economical marginal and at high risk for default. If the State guarantees loans

to these owners where the lenders share no risk in the event of default and the loan terms are not reasonable, then the program wil l fail in a scandalous way. (CTPAC)

Agency Response: The ARB’s incentive programs, Carl Moyer grant pr ogram and loan guarantee program, are governed by existin g statutes, which provide a legal framework for these programs. ARB, working within the legislative intent of the governing statutes, strives to create incentive programs that would maximize the air quality benefits and the number of fleets that could be assisted, while minimizing potential negative impac ts on businesses and market competitiveness. For example, the Carl Moye r program provides grant for fleets to obtain cleaner vehicles and equipment primarily on the basis of how cost effective a project is without regard to fleet size. The ARB’s heavy-duty vehicle loan guarantee program does have fleet size restriction; only fleets with 20 or fewer vehicles are eligible. However, this c riterion was included based on ARB’s interpretation of statutory requirements (Hea lth and Safety Code, Section 44274.7(c)(1)) and based on inputs received from the public.

The ARB’s heavy-duty vehicle loan guarantee program is implemented through the California Pollution Control Financing Authorit y’s (CPCFA) California Capital Access Program (CalCAP). Under CalCAP, par ticipating lenders, banks and credit unions, evaluate loan applications based on their own established underwriting standards. The ARB does n ot specify or impose any loan underwriting standards on participating lender s. The ARB, through this program, does provide a loan guarantee for the loan applications that were independently approved by the participating lenders

.

Even though the State is providing funds to help gu arantee loans for fleet owners outside normal lending criteria, the State i s putting only 14% of the loan amount into a loan loss reserve account for each pa rticipating lender to be paid- 109 -

out in case of loan defaults. Therefore, there is a built-in constraint on how many loan defaults the reserve can sustain for each lender. Through this mechanism, as well as through the CPCFA’s monitorin g of the loans enrolled under this program, participating lenders do not ha ve an incentive to engage in risky behavior. This way, loans can be provided to borrowers that fall just outside of conventional underwriting standards but not for those with the riskiest credit profiles. The ARB has confidence in the sou ndness and integrity of the CalCAP’s loan guarantee program. CalCAP has achiev ed a historical fund leveraging ratio of about seven-to-one with a loan default rate of about 4 percent. For ARB and for the fleet owners, this me ans that the total dollar

amount of loans made with lender funds will be at l east seven times greater than the funds ARB contributes to the program while maintaining low default

rates for these loans.

152. Comment: The Board should come up with a plan that would p romote buyouts of older equipment, grants, low interest loans, tax incentives, and other measures to mitigate the burden on the trucking com panies, businesses, and the California public. (TLTLLC)

Agency Response: The ARB PLACE loan program provides financial assistance for qualified fleets to comply with the regulation. See agency response to comment #148 for a description of the P LACE loan program.

Comments about developing new incentive programs or modifying existing incentive programs would require legislative change s and therefore are beyond the scope of this regulation.

I. Emission Inventory

153. Comment: The mileage restrictions in the Initial Statement of Reasons appear to be based upon an assumption that trucks and trai lers work five ten-hour days. In fact, trucks and trailers typically work seven-day weeks with service hours reaching up to 20 hours per day, when multipl e drivers are used. For example, grocery trucks regularly total 150,000 mil es per year within a 150 mile radius. (CTA)

Agency Response: ARB’s estimate of the 50,000 mile limit for the sho rt haul exemption is based on a five days per week, 50 week s per year, and 200 miles per day (roundtrip with trip length of 100 miles or a 200-mile one way trip) operation 5 . ARB believes that a tractor that accrues more th an 200 miles per day is more likely to be driven a significant porti on of its mileage at highway speeds, thereby benefiting from aerodynamic treatme nts. As in the

5 Staff assumed a tractor downtime of approximately 10 business days per year on average for

maintenance and other unforeseen situations when th e truck remains inoperable.- 110 -

commenter’s example, if a truck is operated for lon ger service hours and longer trips, and accrues approximately 150,000 miles per year, then it is even more likely to be operated at highway speeds since a sig nificant portion of its travel would occur on less congested highways during off-p eak hours, benefiting from improvements in aerodynamic drag and tire rolling r esistance. See also agency response to comments #22, 23, and 24.

154. Comment: We question the estimates used in the analysis fo r the number of trailers likely to be affected by the proposed regu lation. As the report indicates, “for trailers, no database exists that provide a co mplete inventory on the total number of box-type trailers that would be impacted by the proposed rule.” Staff then simply chose to estimate a ratio for the numbe r of trailers to tractors and extrapolate a figure. (CBTRI, NTDA)

Agency Response: ARB looked at various data sources including trai ler registration data by state provided by the United S tates Department of Transportation Federal Highway Administration (FHWA ), Polk data base, trailer registration data from the California Department of Motor Vehicles, and other published data from sources such as Commercial Carrier Journal . All of these data sources provide the total number of registered trailers operating throughout the nation during a given calendar year. However, they do not tell how many of these trailers operate during a given y ear in the state of California. In the absence of any other data, ARB estimated the number of trailers operating in California indirectly using the indust ry average trailer-to-tractor ratio and the number of tractors that operate in Ca lifornia. As discussed on page 14 of the Staff Report, the trailer-to-tractor ratio was determined using data provided in a Commercial Carrier Journal article about the top 250 carriers in the nation. The number of tractors that operate in California was based on inventory developed for the purposes of the Truck a nd Bus rule, which is the most up to date inventory of on-road heavy-duty veh icles operating in

California.

155. Comment: The data for the emission benefit in the Staff Re port is incomplete. The analysis for vehicle usage takes estimated VMT and assumes that a very high percentage of those miles are at highway speed . The test procedure for measuring the fuel efficiency improvement for aerod ynamic devices is conducted on a test track at speeds of 60 to 62 mil es per hour. Thus, ARB calculated the benefits of this proposal for vehicl es traveling 60 to 62 miles per hour; yet the speed limit for trucks in California is 55 miles per hour, assuming traffic conditions allow for traveling at the speed limit. We question whether the Staff Report data is reflective of the real world c onditions typically experienced in the State of California. It appears that the re port’s analysis clearly overstates the monetary benefit that would actually be experie nced. (CBTRI, NTDA)

Agency Response: ARB is aware that the legal speed limit for truck s in California is 55 miles per hour. However, speeds a t which vehicles are- 111 -

operated in the real world are different than the l egal speed limit. In estimating the average speed for trucks that are driven on Cal ifornia highways, staff relied on data collected by the Freeway Performance Measur ement System (PeMS), a project conducted by University of California at Berkeley, with the cooperation of the California Department of Transportation, Cal ifornia Partners for Advanced Transit and Highways, and Berkeley Transpo rtation Systems. ARB calculated a vehicle miles weighted statewide avera ge median truck speed of 59.7 miles per hour. Therefore, ARB’s estimation o f the monetary as well as the emission benefits from this regulation does not overestimate the benefits as claimed by the commenter. See also agency response to comment #156 regarding ARB response to the percent of operation at highway speeds.

156. Comment: The data for the emission benefit in the Staff Re port is incomplete. The report indicates that the VMT data the staff we re able to obtain cannot be directly applied to the fuel efficiency improvement s they show as VMT is accrued at various speeds, while the fuel efficient improvements are determined at Speeds of approximately 60 miles per hour. The report then clearly states, “...the speed-VMT distribution of the impacted tractors and fuel efficiency improvements at different speeds are nee ded in order to accurately quantify the GHG emission benefits. However, such data were not available and there staff estimated the GHG benefits using on ly the VMT accrued at highway speeds, without taking into account benefit s that occur at lower speeds.” Trucks traveling at higher rates of speed are likely to obtain much greater fuel savings from the proposed aerodynamic equipment than while traveling at lower speeds. (CBTRI, NTDA)

Agency Response: Since aerodynamic drag is proportional to the squ are of the speed, it is true that a truck with aerodynamic treatment traveling at speeds higher than 60 miles per hour is likely to obtain g reater fuel savings than those determined at 60 miles per hour. It is also true t hat the same truck will get less fuel savings when it is traveling at speeds lower t han 60 miles per hour. A

more accurate estimate of the emission benefits cou ld have been obtained if the speed distribution by VMT for long haul tractor s was available. However, to ARB staff’s knowledge, no such data is available. Therefore, ARB estimated the emission benefits assuming that 75 percent (85 percent for non-neighboring out-of-state tractors) of the VMT is accrued at hig hway speeds. As referenced in the Staff Report, this is consistent with assump tions made by other experts in the trucking industry.

157. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. In the analysis, the ratio of trailers to tractors is at least 2.5 to 1. Thus, a tractor that travels 100,000 miles will average only 40,000 miles per trailer per year . However, ARB data developed for the private fleet rule shows that the average California registered Class 8 tractor travels less than 40,000 miles per year. This means that the typical California registered trailer will travel n o more than 16,000 miles per- 112 -

year. CTA recommends that staff revise its cost-ef fectiveness analysis to ensure that it reflects a realistic appraisal of th e costs of the program versus any claimed benefits. (CTA2)

Agency Response: ARB analyzed the heavy-duty truck inventory data developed for the Truck and Bus Rule and found that the average annual mileage accrual rate of California registered tract ors is approximately 51,000 miles. However, this estimate is much lower than t he annual miles accrued by long haul tractors. This is to be expected since t he inventory data developed for the Truck and Bus rule for California registere d tractors includes all tractors including short haul, old model year tractors that operate seasonally or occasionally for a very short period of time of the year, and tractors that operate as long haul. Since the regulation applies only to long haul tractors, it is appropriate to use the mileage accrued by long haul tractors rather than the averaged estimate developed for the Truck and Bus r ule.

In a fleet survey conducted by ARB staff (refer to Staff Report, Appendix E, Fleet Summaries), annual mileage accrual rates repo rted by fleets operating long haul tractors ranged from 120,000 to 250,000 m iles per year for tractors and 80,000 to 100,000 miles for trailers. However, in estimating the costeffectiveness for California registered tractors, A RB assumed a more conservative estimate mileage accrual rate of 125,0 00 miles per year for a new tractor and 74,000 miles for an older model year tr actor. Furthermore, as discussed in Appendix C of the Staff Report, only 7 5 percent of this mileage was assumed to be accrued at highway speeds and onl y 23 percent of the California registered tractor-trailer combinations were assumed to operate in long haul service. ARB believes that these assumpt ions are conservative and ensure that the cost-effectiveness analysis in the Staff Report reflects a realistic

evaluation of the costs and claimed benefits of the regulation.

158. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. The fuel savings associated with SmartWay aerodynamic technologies a ssume a speed of 62.5 miles per hour. However, Caltrans data for I-5, th e main North-South truck route, show that the average speed for four and fiv e axle truck and trailer combinations is less than 60 miles per hour and the median speed is about 55 miles per hour. Moreover, many tractors are govern ed to go no more than 55 miles per hour, the posted speed for trucks. There is nothing in ARB’s

calculations that takes these facts into considerat ion. Instead, ARB staff dismisses trucking companies’ claims that they obse rve the posted limits. CTA

recommends that staff revise its cost-effectiveness analysis to ensure that it reflects a realistic appraisal of the costs of the program versus any claimed benefits. (CTA2)

Agency Response: See also response to comment #155. ARB can not

comment on the commenter’s claim that Caltrans data for I-5 show average- 113 -

speeds of less than 60 miles per hour and a median speed of about 55 miles per hour, since the commenter did not provide any r eference to enable ARB to verify the claims. Furthermore, the commenter does not provide any study or reference on the statistics of the governed speed a nd the number of long haul tractors with governed speed. ARB is aware of some fleets that operate tractors with governed speed. However, as indicate d by some fleets that operate long haul tractors (Appendix E of the Staff Report), the governed speed is in the range of 65 miles per hour or more rather than the 55 miles per hour claimed by the commenter. Thus, ARB does not belie ve it is appropriate to apply any corrections to the costs and benefits ana lysis to take into account tractors with speed governed at or below 55 miles p er hour.

159. Comment: Trucks accessing California shipper warehouses op erating in urban setting at lower road speeds do not achieve t he stated emission emissions in the staff report. The staff report us ed the U.S. EPA SmartWay modeling at 62.5 miles per hour whereas the speed l imit in California for a truck is 55 miles per hour. The stated emission benefits are overestimated and provide inaccurate assumptions of the truck rate of speed and topography and of driving in urban congestion. This violates AB 3 2’s requirements for reductions to be real, additional, quantifiable, pe rmanent, verifiable and enforceable. (IWLA)

Agency Response: Please see agency responses to comments 155, 156, and 158. In calculating the benefits of the regula tion, ARB considered only the VMT that is accrued at highway speeds by including only 75 to 85 percent of the total VMT. This means that 15 to 25 percent of the total VMT has been excluded assuming that it occurs at speeds lower th an highway speeds and in urban settings.

J. Outreach

160. Comment: We hope ARB will continue vigorous outreach to tr uck owners to ensure incentive programs are understood and access ible. Ensuring owners are aware of the multiple funding sources that can be leveraged to assist individual truck and fleet owners, will maximize co mpliance with the rule and minimize the economic impact on owners and business . (PHI)

Agency Response: ARB is committed to providing outreach to stakeho lders within the trucking industry. Prior to the Board H earing, numerous workshops and meetings were held in which the proposed rulema king and financial incentive options were discussed. In section XII o f the Staff Report, a summary of the current financial assistance and grant progr ams provided information to stakeholders on financing options. Since the time of the Board Hearing, outreach including meetings, fact sheets, and prese ntations at trucking

conferences has been extensive to inform stakeholde rs of the impending- 114 -

regulatory requirements, in which incentive and fin ancial programs were also discussed. In addition, a new ARB website has been launched to allow truck owners to easily understand the regulatory requirem ents applicable specifically to them and the financial options available. Durin g the implementation of the regulation, ARB will continue to provide outreach t o affected stakeholders to ensure that they are aware of available incentive p rograms and regulatory requirements.

161. Comment: ARB has not included sole operators of trucks to be involved on its committees and has chosen to ignore our pleas from the beginning. Individual

drivers have no control over the rules under which they must operate. (LDT)

Agency Response: ARB staff conducted numerous outreach efforts to inform affected parties regarding the regulation and to ob tain stakeholder comments and feedback. During 2008, ARB jointly conducted t hirty-five public workshops statewide in 9 different locations in conjunction w ith another regulatory proposal, the Truck and Bus Rule. In addition, pub lic workshops were held in San Diego/Otay Mesa with Spanish interpreters. Dur ing these public workshops, sole owner/operators of trucks as well a s other interested parties provided oral comments to ARB staff. These comment s were taken into consideration as the regulatory proposal was develo ped. For example, the optional trailer compliance phase-in schedule for s mall fleets gives additional time for an owner operator to retrofit its existing trailer. During the rulemaking process, there was no formation of any type of comm ittee and thus owner operators were not excluded. ARB will continue to provide outreach during the regulatory implementation to affected stakeholders, including owner operators, through ARB's website, email service (listserv), to ll free hotline at (866) 6DIESEL, fact sheets, workshops, and training sessions.

162. Comment: ARB should work with industry to put in place a p lan that does not

cause viable businesses in this state to either clo se or relocate to Arizona or Nevada. Use a plan proven to work. For example, l ook at the United Kingdom model. They changed the face of the trucking indus try through peer pressure. They have a program where a truck is tagged with a colored band so that everyone can see it is a gross polluter and in 5 ye ars the worst offenders are now gone. (Ross)

Agency Response: The regulation adopted by ARB applies to all truc ks and trailers that operate in California. Therefore, tr ucking businesses that choose to leave California will not be provided business adva ntage by leaving the state because of this rule. In addition, companies that comply with the requirements will have visible aerodynamic equipment showing the public that they are doing their part in protecting the environment.

163. More work with the trucking industry needs to take place to develop a better regulation. (Berry)- 115 -

Agency Response: During the regulatory development, ARB staff cond ucted numerous outreach efforts to inform affected partie s regarding the regulation

and to obtain stakeholder comments and feedback. D uring 2008, ARB jointly conducted thirty-five workshops statewide in 9 diff erent locations in conjunction with another regulatory proposal, the Truck and Bus Rule. In addition, public workshops were held in San Diego/Otay Mesa, conduct ed with Spanish interpreters. ARB staff contacted more than 60 ind ustry associations, representing the trucking, logistics, manufacturing , wholesale and retail industries as well as individual industry members t o inform them of the regulation and invite them to provide comments. AR B staff also conducted several presentations and off-site meetings targete d at specific stakeholders groups including owner operators, drivers, motor ca rriers, warehouse and logistics companies, brokers, tractor and trailer m anufacturers of aerodynamic technologies and equipment. During the implementat ion of the regulation, ARB will continue to provide outreach to affected stake holders through ARB's website, email service (listserv), toll free hotlin e at (866) 6DIESEL, fact sheets, public workshops and training sessions.

K. Implementation and Phase-in Schedule

164. Comment: The proposed implementation schedule is too short because it will be too costly. A longer timeframe is needed. (Bur ke, CFC, Fortier, FLFTI, Grewal, Ingram, Nard, Nelthorpe, Phillips2, Rader, RZT, YTI)

Agency Response: The implementation schedule for this regulation w as developed to provide maximum flexibility and abilit y to phase-in compliance over time, while still holding to the time constrai nts imposed by AB 32. As such, large fleets of trailers that choose to parti cipate in the optional Large Fleet Compliance Phase-In will have 6 years to bring all their trailers into compliance (5% the first year, 15% the second year, 30% the th ird year, 50% the fourth year, 75% the fifth year, and 100% the sixth year). The first phase-in deadline is January 1, 2011; subsequent deadlines take place each year thereafter until January 1, 2016. Small fleets may choose the Small Fleet Compliance PhaseIn for their trailers, over a four year period begi nning January 1, 2014, and ending January 1, 2017 (the annual required percent ages that must be retrofitted are 25%, 50%, 75% and 100%). Small fle ets may also choose to follow the same compliance option as large fleets. These phase-in options provide fleets flexibility and the ability to sprea d out the costs of compliance over several years. Also, see agency response to c omment #166.

165. Comment: Similar to the early compliance option, a worthwh ile option would be to reward fleets for going above and beyond the proposed 5% and 4% fuel savings requirements, for dry van and refrigerated van trailers, respectively. As with the early compliance option, the fully-equippe d trailer could be used to- 116 -

meet an optional 10% fuel savings requirement, whic h in turn allows the delay of the retrofit of another trailer for a given numb er of years, though not extending into 2016. A fully-equipped aerodynamic trailer would substantially outperform its peers; there is no better tool than competition to encourage early adoption. (ATDynamics)

Agency Response: A 10 percent fuel savings requirement would neces sitate the use of an advanced rear trailer fairing; only o ne technology in this category has been verified to date. In addition, while the commenter's proposal may allow additional flexibility for fleets to earn cre dit, such an option would exceed the requirements of the SmartWay program, upon whic h the regulation is based. For these reasons, ARB did not propose a 10 percent fuel savings compliance option. Over time, as the U.S. EPA Smar tWay program expands its requirements and more efficient technologies be come available, ARB may consider modifying the regulation to achieve greate r benefits. Until that time, however, fleets may decide to voluntarily improve t heir fuel efficiency to reach a 10 percent fuel savings.

166. Comment: Industry does not have enough funds to comply wit h multiple rules, the off-road regulation as well as the current on-r oad regulations. Extend the implementation schedule to lessen the financial imp act. (Davies)

Agency Response: The regulation already provides vehicle owners wi th more than one compliance option that extends implementat ion and spreads the financial impact over several years. First, option al phase-in schedules are provided for trailer retrofit requirements in lieu of the full compliance requirement by January 1, 2013. These phase-in sch edules spread the cost of implementation over either four or six years, depen ding on the size of the trailer fleet. While large fleets will need to bring a sma ll percentage (5%) of their trailers into compliance by January 1, 2011 and add itional percentages for each subsequent year, final compliance will not be requi red until January 1, 2016. Similarly for small trailer fleets the first compli ance deadline will require 25 percent compliance by January 1, 2014 and an additi onal 25 percent each subsequent year until January 1, 2017. Also, certa in model year refrigerated trailers subject to the Airborne Toxic Control Meas ure for In-Use Diesel-Fueled Transport Refrigeration Units are allowed additiona l years for compliance, until January 1, 2018, 2019 or 2020, depending on model y ear. It should be noted that fuel savings will be realized when a compliant vehicle is driven, which translates into an operational cost savings to the owner. As a result of the phase-in schedule, this cost savings may, in turn, be used by the owner to pay for the upfront costs of other retrofits. Financia l assistance for obtaining loans may also be available to eligible businesses. See agency response to

comments #145 and #148 for additional information o n financial assistance.

167. Comment: There’s enough CARB staff and other mechanisms, r ather than adding cost onto our side to have to go out and pol ice the equipment. (IWLA)- 117 -

Agency Response: Appendix G of the Staff Report describes the enfo rcement approach for the regulation. Enforcement authority is given only to ARB enforcement staff, peace officers, and local air po llution control district staff. The responsibility of a California-based shipper is to ship freight from its facilities using only compliant tractors and traile rs. Since a California-based shipper is typically not directly responsible for t he tractors and trailers used to carry freight from its facility, it will not be dir ectly held liable for tractors and

trailers found in violation for the first time. If , however, the violating motor carrier, tractor owner, or trailer owner fails to s ettle the notice of violation within the permitted time period, ARB will notify the affe cted shipper that, until the notice of violation is settled, it will be responsi ble for future violations involving the delinquent motor carrier, tractor owner, or tra iler owner. While the shipper is not required to "police" equipment that carries freight from its facility, once notified of a delinquent violation the shipper must take action. It may notify the delinquent violating motor carrier or equipment own er to settle the violation before it can carry freight from the shipper’s faci lity, choose to use a different motor carrier or equipment owner, or other options.

168. Comment: The Board should consider requiring compliance by the larger trucking companies first while allowing smaller com panies to use their existing equipment. As larger companies continue to purchas e new equipment, smaller companies would be able to purchase their used comp liant equipment at a better price. (FTI)

Agency Response: The regulation already contains some provisions t hat will result in smaller companies being able to purchase used compliant equipment from larger companies. First, companies (likely la rger companies) that are replacing existing equipment by purchasing new affe cted 2011 model year tractors and trailers beginning in January 1, 2010 must comply with the regulation. Companies (likely smaller companies) t hat are not purchasing new equipment in 2010 may continue using their existing equipment and need not comply with the aerodynamic requirements at that ti me. Larger companies may choose to sell their compliant equipment into the s econdary market after a few years of usage, in which case smaller companies can purchase compliant equipment at a lower cost. Second, the optional ph ase-in schedules for trailer retrofits begin on January 1, 2011 for large traile r fleets but do not begin until January 1, 2014 for small trailer fleets. This tim e frame will allow larger trailer fleets to sell compliant trailers after a couple of years, in which case smaller trailer fleets may purchase them at a lower cost.

169. Comment: Individual truck owners (owner operators) should not be allowed to avoid compliance until 2017. This will just cause employers using employee drivers to switch to owner-operators to avoid compl iance and leave the best trucking companies to comply earlier. (CTPAC)- 118 -

Agency Response: The optional compliance schedule for small traile r fleets is 25 percent by January 1, 2014, 50 percent by 2015, 75 percent by 2016, and 100 percent by 2017. Based on the compliance sched ule formula in the regulation, an individual truck owner (who owns one trailer) will be required to bring the trailer into compliance by January 1, 201 5, not 2017 as stated by the

commenter.

170. Comment: ARB should delay the implementation of the propos ed regulation until more products that can lower emissions are te sted. There are businesses with products that can lower emissions but cannot a fford to have them tested. The product testing process should be more inexpens ive. (RTRI)

Agency Response: The regulation is based on the U.S. EPA SmartWay program, which certifies tractors and trailers that have been demonstrated to use less fuel and produce lower emissions than thei r traditional counterparts. As of the publication of the Staff Report, six trac tor manufacturers had SmartWay certified tractors, four companies had Sma rtWay verified trailer side skirts; three companies had SmartWay verified front trailer fairings; and one company had SmartWay verified rear trailer fairings . The number of SmartWay products that may be used to comply with the requir ement is substantial and provides sufficient flexibility for equipment owner s to choose the appropriate combination of technologies. Furthermore, ARB does not have the authority to

set cost rates of test facilities.

171. Comment: Alternative solutions must be looked at to slow t his implementation. (CDTI)

Agency Response: The implementation schedule was developed during the regulatory process, allowing maximum flexibility fo r affected equipment owners while still meeting the statutory timeline of AB32. In particular, the optional phase-in schedules span four or six years, dependin g on fleet size, so that fleets can spread the cost of implementation over t hose years. See also agency responses to comments #166 and #168.

L. Compliance and Enforcement

172. Comment: If you do not enforce whatever rule you adopt – I don’t mean just throw it out there and do it randomly – you’re goin g to create a really bad

situation for those of us that have been in busines s for a long time. Because what’s going to be created is I’m going to pay $125 ,000 for a truck, $65,000 for a trailer, and my competitor will spend $10,000 for a truck and $5,000 for a trailer. And that’s why I hope you have a plan in p lace, whether it’s holding the shippers or receivers liable for carriers like that , because it’s going to be very hard to monitor the situation. And if you don’t, t hose of us that have been around for a long time will not be around anymore. (Goliti)- 119 -

Agency Response: The regulation contains enforcement provisions in the newly proposed section 95308, title 17, California Code of Regulations. The Staff Report also discusses the enforcement of the regulation on pages 28-29 and in Appendix G. Enforcement will be carried out primarily by authorized representatives of ARB, but peace officers and auth orized representatives of air pollution control districts will also have authorit y to enforce this rule. A violation may be issued for failure to comply with the tracto r or trailer requirements, failure to submit required information, or providin g false information. In regards to ARB, in particular, initial enforcement of the r egulation will likely occur concurrently with two existing ARB programs, the He avy-Duty Vehicle Inspection Program and the Periodic Smoke Inspectio n Program. The HeavyDuty Vehicle Inspection Program is a roadside inspe ction program that checks heavy-duty vehicles for excess smoke emissions and for engine and aftertreatment tampering, while the enforcement of the Periodic Smoke Inspection Program consists of fleet audits at truc k facilities. Over time, however, as more and more requirements of this regu lation become effective, ARB may progressively increase its rule-targeted in spections and actively look for non-compliant vehicles in the field. Moreover, enforcement personnel will also have the authority to conduct comprehensive co mpliance audits of fleets that elect to participate in one of the optional tr ailer fleet compliance schedules, so such compliance audits may occur as deemed appro priate. Although shippers will not initially be held responsible for the compliance of their carriers, they may eventually be cited if they continue to us e a particular motor carrier that has one or more outstanding violations. ARB b elieves this strategy will help level the playing field between in-state and o ut-of-state carriers. Note that any premium that a motor carrier may pay to equip t ractors and trailers with efficiency-improving devices will likely be recover ed as a result of fuel savings and will save money over the long run.

173. Comment: The following recommendation should be incorporat ed into the proposed regulation to allow trucking companies gre ater flexibility to direct their

financial resources to reduce GHG emissions. The B oard should direct staff to develop an additional compliance option which allow s companies to be deemed compliant because of their participation in the fed eral SmartWay program. Trucking companies should be allowed to include the proven measures being used in the federal SmartWay program to demonstrate compliance and any

motor carrier that has been certified under SmartWa y should automatically be deemed in full compliance with the proposed regulat ions. ARB staff should work with U.S. EPA and the trucking industry to com e up with such a compliance option so that we can reduce greenhouse gases most effectively without doing things that don’t work. (ATA, Con-way )

Agency Response: The U.S. EPA SmartWay Program is a federal volunt ary program aimed at improving energy efficiency, reduc ing GHG and air pollutant emissions, and improving energy security of the gro und freight movement- 120 -

system. While the SmartWay Program offers fleets m any different strategies to meet its qualifying criteria, simply requiring part icipation in the program would not satisfy the requirements set forth in, and our commitments made pursuant to, AB32. Firstly, ARB does not believe such an ap proach would provide

sufficient GHG benefit to meet California’s commitm ents. Secondly, ARB believes that the GHG benefit of many of the strate gies offered by the SmartWay program are not quantifiable. Therefore, it is inappropriate to allow an option for full compliance simply by participati ng in the SmartWay Program.

174. Comment: The following recommendation should be incorporat ed into the proposed regulation to allow trucking companies gre ater flexibility to direct their

financial resources to reduce GHG emissions. The B oard should direct staff to add the following credit provisions to the Optional Trailer Fleet Compliance Schedules for those companies that have taken proac tive steps to reduce greenhouse gas emissions. First, SmartWay tractors and trailers that are 2010 or older should be eligible to receive early and/or additional compliance credit.

These credits could then be accumulated and used to offset trailer requirements under the Optional Trailer Fleet Compl iance Schedules. Second, credits should be available to fleets that deploy a erodynamic technologies in excess of the proposed requirements, which can be u sed to offset trailer requirements under the Optional Trailer Fleet Compl iance Schedules. (ATA, Con-way)

Agency Response: The requirements already contain early compliance provisions for 2010 and older model year trailers b elonging to those who elect to participate in the Optional Large Trailer Fleet Compliance Schedule. However, 2010 and older model year tractors are not eligible because except for tires they are not required to retrofit with ae rodynamic devices. ARB did not incorporate the second recommendation because such an option would exceed the tractor and trailer criteria of the SmartWay pr ogram, upon which the regulation is based. In addition, applying the tec hnologies on different trailer length and types would require benefit analysis bas ed on test data, so that credits on one type could offset the emissions of n on-retrofitted 53-foot trailers.

Such data does not exist and would be needed for an y consideration. If a fleet chooses, it may voluntarily decide to improve their fuel efficiency beyond the requirements to generate more fuel savings.

175. Comment: The following recommendation should be incorporat ed into the proposed regulation to allow trucking companies gre ater flexibility to direct their

financial resources to reduce GHG emissions. The B oard should direct staff to add the following additional compliance provisions.

• A compliance provision is needed to allow 2011 and later model year sleeper cab tractors that are not SmartWay certified to bec ome compliant with the regulation. The U.S. EPA currently allows only two models of tractors from each manufacturer to be SmartWay certified. Conseq uently, a tractor may demonstrate fuel efficiency sufficient for SmartWay certification, but because- 121 - of program limits, cannot be certified. ARB should work with U.S. EPA to develop these specifications in order to ensure the technologies which comprise a U.S. EPA SmartWay truck and trailer are uniform throughout the
country.

• A compliance exception is needed for situations wh ere operational or safety considerations limit or prohibit the application of the required technologies such as operations in sunken docks, extreme cold we ather or other factors that compromise the integrity and/or performance of the technologies.

• A compliance provision is needed which allows flee ts the ability to bring equipment into shops to be repaired without being c ited for noncompliance. A fix-it citation should be incorporated into the r egulation to allow operators to safely make the necessary repairs to equipment whic h has become inadvertently damaged. (ATA, Con-way)

Agency Response: The first compliance provision suggested by the commenter was not added to the regulation because S martWay certified tractors represent the most fuel efficient model(s) from each manufacturer. The Staff Report identified six major tractor manufactu rers that offer SmartWay certified tractors, and thus vehicle owners have a diverse selection when choosing a new 2011 and later model year SmartWay c ertified tractor. In addition, U.S. EPA has recently released an interim performance-based test protocol for SmartWay tractor certifications that n o longer limits certifications to two per manufacturer. See also agency response to comment #32 and #37 for more information on U.S. EPA’s new performance-base d test protocol.

The second compliance provision suggested by the co mmenter was not included in the regulations because in discussions with fleets that have used the aerodynamic devices, the vast majority of the f leets reported very few incidents of damage to the aerodynamic equipment (A ppendix E of the Staff Report.) In the event of sunken docks or other fac tors that may damage the aerodynamic technologies, technology manufacturers have addressed this concern by using durable thermoplastics for all or at least the lower part of trailer skirts such that they will bend and flex wi thout permanent damage when they contact an obstacle. Also, one manufacturer p roduces a retractable skirt that can be flipped up to avoid a deep-angled dock or to access tool boxes or spare tires on the underside of the trailer. The c ommenter also noted that trailer skirts may be damaged in extreme cold weath er (where the side skirts will collect snow and ice.) Skirt manufacturers co ntend that the current

materials from which their skirts are constructed t end to prevent ice buildup. However, if ice does build up, it can easily be scr aped off. See also agency response to comment #85.

The regulations specify that any aerodynamic techno logy used on the trailer must be in good operating condition. If a damaged but drivable vehicle is stopped by an enforcement officer, it will be cited as violating the regulation.- 122 -

The regulation does not contain a provision for a f ix-it citation. However, enforcement discretion will be used on issuing a no tice of violation based on the inspection staff’s determination if the equipme nt damage just happened.

176. Comment: There’s no way that I believe that your staff or any other enforcement is going to be able to monitor (complia nce of all trucks from inside and outside California) and keep those trucks from polluting our air. After we’ve done all that we can do, it’s still incumbent upon your group to monitor and police it, and I don’t believe it’s possible. (ACT )

Agency Response: Enforcement by monitoring compliance on every tru ck transporting freight on California highways would b e resource-intensive and over burdensome. Rather, enforcement of the regula tion will consist of conducting roadside inspections by enforcement pers onnel and audits at fleet facilities. Violators of the requirements may be f ined for noncompliance. See also agency responses to comments #172 and #185.

177. Comment: The proposed rule is unenforceable because Califo rnia can not expect the nation to comply with a trailer concept that is not nationally accepted or commercially viable. Therefore, the reductions do not meet The Global Solutions Act of 2006, Health and Safety Code secti on 38562(d)(1-2), which requires reductions to be real, additional, quantif iable, permanent, verifiable and enforceable. (IWLA)

Agency Response: The purpose of the regulation is not to impose it s requirements on the nation, but rather on applicabl e trucks and trailers that transport freight on California highways. Out-of-s tate companies that transport freight in 53-foot box-type trailers and the tracto rs that pull them must comply with the requirements when operating on California highways. ARB enforcement staff is currently conducting inspectio ns on the road or at fleet facilities for two existing ARB programs, the Heavy -Duty Inspection Program and the Periodic Smoke Inspection Program. To enfo rce the regulation, the same staff will also inspect vehicles for complianc e once the regulation is in

effect.

178. Comment: IWLA is opposed to having the California warehous e as an enforcement arm for ARB. The proposed rule as defi ned includes the shippers as the owners of the freight, a distribution center , or a temporary freight storage facility. Our members fit the latter two categorie s. We are not cargo owners but rather third party logistics providers. ARB is transferring enforcement costs and liability to the California warehouse. The pro posed rule places the shipper warehouse into an inappropriate role and creates an untenable relationship between business parties. The warehouse does not a ctually own the cargo and has no control over cargo movement. ARB should enforce the proposed regulation with their own staff through weigh stati ons, at the state lines, roadside with the smoke testing teams, or DMV regis tration. (IWLA)- 123 -

Agency Response: Appendix G of the Staff Report describes the enfo rcement approach for the regulation. The responsibility of a California-based shipper is to ship freight from its facilities using only comp liant tractors and trailers. Since a California-based shipper is typically not directl y responsible for the tractors and trailers used to carry freight from its facilit y, ARB will not hold the shipper

liable for tractors and trailers found in violation for the first time. If, however, the violating motor carrier, tractor owner, or trailer owner fails to settle the notice of violation within the permitted time period, ARB wil l notify the affected shipper that, until the notice of violation is settled, it will be responsible for future violations when using the delinquent motor carrier, tractor owner, or trailer owner. While the shipper is not required to enforc e the regulation, once notified of a delinquent violation, the shipper will likely have to take some type of preventative measure to avoid being cited for futur e violations. It may notify the delinquent violating motor carrier or equipment own er to settle the violation before it can carry freight from the shipper’s faci lity, choose to use a different motor carrier or equipment owner, or explore other options.

179. Comment: ARB has erroneously determined that a warehouse e mployee is

trained and certified in truck or trailer mechanics . Since the trucks or trailers will not have an ARB sticker on them, the shipper w arehouse will be required to inspect all equipment. Warehouse employees do not have the knowledge to determine whether a truck is compliant with the pro posed regulation and that it is in good working order and thus, the warehouse wo uld have to hire truck mechanics to inspect and document every vehicle tha t comes into a California shipper warehouse. Some of our distribution center s have at least a hundred dock doors running on two shifts. The cumulative c ost of staff time and delays for drivers are unfairly incurred by the warehouse shipper. This additional cost was not part of the staff report and reflected in t he economic analysis. We recommend removal of California shippers and wareho uses from enforcing this rule and subsequent penalties. (IWLA)

Agency Response: The regulation does not require warehouse employe es to inspect all equipment that ships freight from the w arehouse. Rather, the responsibility of a California-based shipper is to ship freight from its facility using only compliant tractors and trailers. ARB wi ll notify the shipper if a violating motor carrier, tractor owner, or trailer owner that carries freight from its facility fails to settle a notice of violation with in the permitted time period. The shipper will then be responsible for future violati ons when using the delinquent motor carrier, tractor owner, or trailer owner, unt il the notice of violation is settled. See also agency response to comment #178.

180. Comment: The warehouse shipper, on receipt of a notice of violation, would have to assign staff to document conversations with all motor carriers and cargo interests about the notice of violation. And if for some reason equipment is still loaded out, then the warehouse is part of the penalty process. That- 124 -

would mean inspection of every single truck and tra iler, because we are going

to have to document that we talked to them and that they are aware of the rule. The cumulative costs of staff time and driver-delay hourly penalties are unfairly incurred by the warehouse. California shippers and warehouses should not be required to enforce ARB rules. (IWLA)

Agency Response: As discussed in Appendix G of the Staff Report, A RB will notify, for informational purposes, all affected Ca lifornia-based shippers involved in a shipment for which a notice of violat ion was issued to a motor carrier, tractor owner, or trailer owner. However, in the event that a violating motor carrier, tractor owner, or trailer owner does not settle the notice of violation within the permitted time period, a secon d notification will then be sent to affected shippers to notify them that if they co ntinue to use the violating motor carrier to ship freight in non-compliant vehi cles, they can be part of the penalty process for future violations.

The shipper does not need to inspect every single t ruck or trailer that loads its freight from the warehouse; the shipper only become s involved in a small subset of these trucks (i.e., violating motor carri ers that have missed the penalty deadline.) The shipper does not need to do cument conversations with the violating motor carriers but rather only to ens ure that the motor carrier's non-complying vehicles are not used to ship freight from its facility. To achieve this, the shipper may notify the delinquent violati ng motor carrier or equipment to settle the violation before it can carry freight from the shipper’s facility, choose to use a different motor carrier or equipmen t owner, or explore other options.

181. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. There is no analysis of the economy-wide legal and administrative costs that wi ll be imposed by staff’s illconceived “joint liability” enforcement approach th at will affect all parties, not just those responsible for upgrading the trailers. These costs will affect every party that takes delivery from a 53-foot or longer trailer. Thus, restaurants, small grocery stores and virtually any retail outle t will be subject to ARB fines, whose legitimacy or costs they will have no ability to assess or recover. CTA

recommends that staff revise its cost-effectiveness analysis to ensure that it reflects a realistic appraisal of the costs of the program versus any claimed benefits. (CTA2)

Agency Response: During the informal rulemaking process, the propo sal included responsibilities for the receiver of the f reight from an affected 53-foot or longer trailer. Due to comments from stakeholde rs, all the responsibilities of the receiver were deleted from the regulation that was adopted by the Board, as described in the Staff Report.- 125 -

182. Comment: California trucking businesses that have to compl y with the proposed requirements cannot compete with out-of-st ate trucks not meeting the proposed requirements. (SVP)

Out-of-state trucks will not conform to the propose d requirements as California trucks are required. (DiSalvo, Eaton)

Agency Response: Identical requirements apply to both in-state and out-ofstate trucks that transport freight on California h ighways. Enforcement of the regulation for both in-state and out-of-state truck s may occur through a roadside inspection by ARB enforcement personnel, w here a vehicle is pulled over and inspected. The inspections performed by A RB enforcement personnel may occur at border crossings, California Highway Patrol weigh stations, fleet facilities, and randomly selected r oadside locations. See also agency response to comment #172.

183. Comment: How does ARB ensure that all vehicles will be com pliant so we may have a level playing field? How will ARB enfor ce compliance? (JJTI)

Agency Response: See agency response to comment #172.

184. Comment: My concern for the proposed rule is unilateral en forcement to ensure that everyone complies. Shippers and receiv ers should be held liable for allowing non-certified equipment into their fac ilities. State vehicle truck inspection facilities should also check for certifi ed equipment as well as through the use of DMV records. (Goliti)

The California Highway Patrol and the Department of Motor Vehicles should be involved in enforcement to ensure a level playing f ield. (Berry)

Agency Response: ARB will enforce the regulation in an equitable m anner and at various locations including weigh stations, vehicle inspection facilities, rest stops, and other locations as they see fit. W hile tractor and trailer owners will hold the primary responsibility for compliance since they are the ones who purchase new vehicles and retrofit existing ones, t he regulation also places some responsibility on the driver, motor carrier, C alifornia-based broker and California-based shipper. ARB has decided not to h old receivers responsible for the compliance of delivery vehicles since recei vers, unless they operate the vehicles themselves, generally do not have any cont rol over the shipping process and, additionally, do not typically see suc h vehicles until the time their freight is delivered. As with other ARB mobile sou rce programs, the Department of Motor Vehicles will be used both as a source of information and as a tool for blocking registrations of vehicles wi th unsettled violations. Although the regulation gives the California Highwa y Patrol the authority to enforce, whether they decide to enforce the regulat ion or not is at their sole discretion. See also agency response #171.- 126 -

185. Comment: A more liberal compliance should be considered. A more doable schedule is 25 percent of a fleet by 2012, 50 perce nt by 2016, 75 percent by 2019, and full compliance by 2022. (Berry)

Agency Response: The compliance options contained in the regulatio n were developed to ensure meeting the goals of AB 32 whil e providing optional phase-in opportunities for fleets that allow them t o spread out compliance over several years. The compliance schedule proposed by the commenter would delay full compliance until 2022, which is two year s after the required deadline of 2020. The compliance options for large and smal l fleets of trailers are actually more liberal at the startup than the sched ule proposed by the commenter, as detailed in the agency response to co mment #113.

M. Miscellaneous

186. Comment: Does the aftermarket industry truly have the abilit y to supply in excess of 200,000 units for retrofit in a timely ma nner?

Agency Response: The regulation contains retrofit requirements for 2010 and earlier model year trailers. The retrofit requirem ents must be completed by 2013 or optionally can be phased-in over several ye ars. The initial year of compliance requires only a small percentage of trai lers to be retrofitted. For example, the optional phase-in schedule for trailer retrofits of fleets with 21 and more trailers begins on January 1, 2011 with 5 perc ent and slowly ramps up in percentage each subsequent year. The optional phas e-in schedule for smaller

fleets with less than 21 trailers does not start un til January 1, 2014 at 25 percent, requiring full phase-in compliance by Janu ary 1, 2017. Spreading the required compliance of retrofitting trailers over s everal years through the optional phase-in schedules will also spread the de mand for the aerodynamic devices over these years. While many of the retrof it technology manufacturers are small and have been in business for only a few years, the phase-in period provides additional time for manufacturers to incre ase production capability as demand increases. Also, some of these small compan ies have contract license agreements with larger companies to manufacture and sell their equipments.

187. Comment: The regulation exempts some of the higher-polluti ng trucks operating in California. While the use of trailer skirts and fairings offer little benefit at lower speeds, by exempting many short-ha ul trucks from the requirements, ARB is unfairly discriminating agains t long-haul trucks. (AZTA)

Agency Response: The definition of a short-haul truck was carefull y crafted in such a way that only trucks that will not substanti ally benefit from the use of aerodynamic devices were excluded. These are truck s that either infrequently operate at highway speeds or generate low mileage. As noted by the- 127 -

commenter, such trucks would achieve lower fuel sav ings with aerodynamic equipment and low rolling resistance tires, which i n turn translate into lower

GHG emission reduction. It is less cost-effective to reduce GHG emissions from short-haul trucks, and consequently, it is app ropriate to exclude this category of truck from the regulation.

188. Comment: Diesel trucks and buses should be held to the sam e air pollution laws that have been applied to automobiles. Farm v ehicles should be required to conform to these standards as well. (McGinnis)

Agency Response: This comment does not directly apply to the regul ation since buses, automobiles, and farm vehicles are not within the scope of the regulation. However, in response to the commenter, trucks and cars have been historically subjected to separate sets of air poll ution regulations because they are used and built differently. Individual automob ile manufacturers are responsible for all the components of their cars, i ncluding the engine, chassis, and transmission; they are also responsible for ens uring that their vehicles comply with applicable regulations. However, for t rucks, the engine manufacturer produces an engine that can be placed into a variety of chassis by the truck manufacturer. Air pollution regulatio ns apply to the engine and thus, the engine manufacturer is held responsible f or complying with applicable regulations. Farm equipment are subjected to simil ar emission regulations as heavy-duty diesel trucks, in that the engine is cer tified to meet certain emission standards, rather than as a whole vehicle/equipment

.

189. Comment: Within the proposed regulation, there are provisi ons that are not logical given the professed goals of the agency. F or example, the 53-foot length threshold is arbitrary, as in the exemption for chassis trailers. (TTMA)

Agency Response: The regulation is not arbitrary and illogical bec ause the regulation is based on the U.S. EPA SmartWay progra m. The SmartWay program has established specific technical guidelin es for the verification of aerodynamic improvements and low-rolling resistance tires for 53-foot and longer dry-van trailers and of heavy-duty tractors. The regulation parallels these requirements for 53-foot and longer dry-van t railers and heavy-duty tractors within an appropriate implementation sched ule. In addition, these requirements were extended to 53-foot and longer re frigerated van trailers because these trailers are most similar to dry-van trailers in that the SmartWay verified aerodynamic equipment (except front fairin gs) can be applied without modification. Other types of trailers for which Sm artWay has not verified equipment for, such as shorter trailers and chassis trailers, are exempted from the regulation. In the future, ARB plans to evalua te the benefits of these technologies for other trailer lengths and types, w hich may result in a subsequent rulemaking adding these trailers to the program.- 128 -

190. Comment: ATA disagrees with ARB staff’s assessment that th e conservative nature of the long-haul transport business is a fac tor in fleets not pursuing retrofitting their entire fleet of trailers. A mor e plausible explanation is that the competitive nature of the trucking industry forces companies to rely on proven, cost-effective methods which have been thoroughly t ested and evaluated. (ATA)

Agency Response: In the Alternatives Considered section of the Sta ff Report, the “No Action” alternative was rejected because AR B assessed that without regulatory intervention, fleets would not voluntari ly retrofit their trailers with aerodynamic technologies. ARB’s explanation for wh y this would be the case included the conservative nature of the trucking in dustry. Regardless of the reasons why fleets have not pursued retrofitting tr ailers, the reality is that currently most fleets have not voluntarily done so.

As stated in the Staff Report, discussion with most fleets that are currently using side skirts has shown that the technology is mature and cost-effective, and ready for commercial use. Many of these fleets reported that they plan to install side skirts on all of their trailers, while others were uncertain primarily due to the capital needed to retrofit their fleet, while staying competitive with fleets that are not investing in these technologies . ARB has heard numerous times that the trucking industry runs on very thin profit margins and that investing in these technologies would result in inc reasing their prices to their customers, placing them temporarily at an economic disadvantage. A limited

number of fleets have used the front or rear traile r fairings and some expressed skepticism about the ease of using them and potenti ally damaging the equipment due to misuse. As drivers and operators become more familiar with these technologies, these concerns should be minimi zed. While the required aerodynamic technologies are not yet in wide-spread use, sufficient experience with these technologies among fleets has shown that they are technologically feasible and effective. In addition, the slow phas e-in schedule for the implementation of the regulation will allow adequat e time for fleets to choose and to learn about the aerodynamic technologies tha t can be used most appropriately with in their fleet.

191. Comment: Staff’s cost-effectiveness calculations have not reflected the reality of the costs that regulated entities are likely to face. Despite a pledge to assess the cumulative impacts of other ARB programs that are or will affect the trucking industry, staff has not included the cost impacts that will be attributable to the low-carbon fuel standard rule or including t ransportation under the proposed cap-and-trade program. The costs of these other ARB programs and regulations must be included in any cumulative impa ct analysis. CTA

recommends that staff revise its cost-effectiveness analysis to ensure that it reflects a realistic appraisal of the costs of the program versus any claimed benefits. (CTA2)- 129 -

Agency Response: During the public workshops, commenters requested an analysis of the impact of the regulation along with other applicable heavy-duty truck regulations on the trucking industry. ARB an alysis showed that the only truck regulation with overlap was the Transport Ref rigeration Unit regulation. As a result, the regulation contains a separate opt ional phase-in schedule for refrigerated trailers that are subjected to both re gulations, which allows for delayed compliance with the regulation. The regula tions mentioned by the commenter (low-carbon fuel standard rule and cap-an d-trade program) have not been adopted nor formally proposed as of the da te of the Board Hearing and thus cannot be included in this analysis since the proposed provisions have

not been finalized.

IV. SUMMARY OF COMMENTS MADE DURING THE 15-DAY COMM ENT

PERIOD AND AGENCY RESPONSES

Written comments were received during the 15-day co mment period in response to the September 17, 2009 notice of public availability of modified text and availability of additional documents. Listed below are the organiz ations and individuals that provided comments pertinent to the changes proposed during t he 15-day comment period.

Written Commentor (15-day Period) Affiliation Abbreviation

Blubaugh, Timothy Engine Manufacturers Association EMA2 Butcher, Steven Rubber manufacturer’s

Association Rubber

Curbo, Rod F. PACCAR PACCAR

Gaussoin, Gary Silver Eagle Manufacturing Co. Silve r Eagle2 James, Thomas M. Truck Renting and Leasing

Associations TRALA

Jones, William B. Werner Enterprises Werner Kayes, David Daimler Trucks North America Daimler2

Lew, Stan Michelin North America, Inc. Michelin Mullett, C. Randall Con-way, Inc. Con-way2 Rose, Kathy Nose Cone Manufacturing Co. Nose Cone2 Sauer, Eric California Trucking Association CTA3 Tavares, Dave McKinney Trailers and Containers McKinney Tunnell, Michael American Trucking Associations ATA 2 Wood, Richard SOLUS –Solutions and Technologies LLC Solus2

Listed below are the individuals that provided comm ents that were not pertinent to the regulation.- 130 -

Written Commentor (15-day Period) Affiliation

Becker, Bill None
Dodds, John None Lange, Bill None

Rentie, Elmer None

Set forth below is a summary of each comment regard ing the regulatory action as well as the agency response, including the reasons for n ot making a change to the regulation. Comments not involving objections or r ecommendations relevant to the modified regulatory text or the additional document s made available by ARB in this rulemaking are not included.

The comments summarized below are divided into 5 su bsections: (A) General Comments, (B) Scope of the Regulation, (C) U.S. EPA SmartWay Program, (D) Standards and Test Procedures, and (E) Compliance a nd Enforcement.

A. General Comments

1. Comment. The definition of “California-Based Broker” is ov erly broad. Large companies are often involved in many facets of the transportation process. For example, a company may function as a logistics planner for one customer, haul freight, point-to-point, by truck fo r another, and function as a third-party broker for another. It is often not acc urate to define one company solely as a broker and another solely as a motor ca rrier. A company that moves freight in 48 states and has a trucking termi nal in California but conducts brokerage operations from locations outsid e of California should not be considered a “California-Based Broker” simply be cause it conducts other, non-related business operations at a location in Ca lifornia. We suggest that the definition of California-Based Broker be change d to the following:

“California-Based Broker” means a broker that condu cts brokerage operations out of a business location in California. (Werner)

Agency Response: Based on the definition of “Broker,” “California- based Broker,” and “Person” in the regulation, the respon sibility for compliance with this regulation will apply to any business entity t hat brokers freight loads into or out of a facility in California and has a physic al business location within the state of California, regardless of what type of bus iness is conducted at the California location. As a result, ARB did not make any changes to the language that defines a “California-based Broker” a s proposed by the

commenter.

2. Comment: The definition of “Fleet” needs to distinguish be tween various types of ownership, much like the modified language of “Owner” has done.- 131 -

For example, a fleet of trailers may be owned by a fleet operator, a leasing company or a combination of the two. The regulatio n should provide clarifying language for trailer fleets which identi fies how ownership and fleet size is to be determined and who is responsible for fleet reporting. This language should also clarify the responsible partie s for preparing the lists required in Section 95307(d). These clarifications are especially important in the case of leased equipment which can change hands multiple times within very short periods. (ATA2)

Agency Response: The owner as identified by the definition in 9530 2(a)(39) is the person that is responsible for compliance wi th all the elements of the regulation. Furthermore, the definition of a “pers on” provided in 95302(a)(40)

ties the definition of “owner” to the definition of “fleet” which is one or more trailers owned by a person or other entity. ARB be lieves there is no ambiguity in these definitions and therefore no changes were made in response to this

comment.

3. Comment: The definition of “Local-haul base” should be mod ified to include a clarification that, for a leased trailer, the “lo cal-haul base” means the lessee’s location where the local-haul trailer is g araged, maintained and routinely dispatched. (ATA2)

Agency Response: The regulation puts the responsibility for comply ing with the reporting requirements for short-haul and local -haul exemptions (section 95306) directly on the owner of the trailer fleet a s defined in subsection 95302(a)(39). If the lessee is identified as the o wner of the local-haul fleet then the location identified by the lessee will be the local-haul base of the local-haul fleet. The same applies to the lessor o r any other person or

business if he/she is identified as the owner of th e trailer. Thus, no changes were made in response to this comment.

4. Comment: Requiring the lessor to insert into the lease con tract the language specified in Section 95302 (39)(C), is unnecessary and unduly burdensome to the lessor. Rather than allow the particulars of a lease contract dictate responsibility for compliance obligations, TRLA sub mits that the registered operator of a leased or rented vehicle – who clearl y the party in position to most effectively control compliance-related activit ies – bears responsibility for compliance with the GHG Regulation. (TRALA)

Agency Response: ARB believes the provisions in Section 95302 (39) ( C), (D), and (E) regarding compliance responsibilities for l eased vehicles is a reasonable and equitable approach that will in many cases make the lessee (or operator) of a leased tractor or trailer responsible for complia nce, as the commenter urges. ARB agrees that a lessee that operates a vehicle sh ould bear most of the responsibility for the compliance with the regulati on because the operator most directly controls how, when, and where the leased v ehicle will operate. However,- 132 -

the lessor bears some responsibility for compliance , including a role in ensuring that those leasing equipment are notified of the re gulatory requirements and given an opportunity to make an informed decision w hether to lease equipment that can be used in California. That is the primar y purpose of the contractual language that the commenter objects to. ARB also b elieves it is reasonable and appropriate, in the case of trailers that were leas ed prior to January 2013, to require that a lessor either permit a lessee to bri ng the trailer into compliance or exchange the non-compliance trailer for a compliant trailer. Without this provision, a person who has a long-term trailer lea se might have no viable way to comply with the regulation. Once these requirement s are met, the lessee, not the lessor, is considered the owner of the trailer for purposes of compliance from that point on.

5. Comment: The proposed changes to the definition of “owner” would essentially treat all leases alike, whether they ar e for periods of three days or three years. Placing responsibility for compliance on the registered operator

of the vehicle would be more efficient and effectiv e approach. (TRALA)

Agency Response: The commenter is correct that the owner definition does not distinguish between the lengths of leases. (The pr ovisions for a leased trailer do vary, however, depending on when the lease was ente red into.) Essentially, the regulation does place the responsibility for compli ance on the lessee that operates the vehicle, but only when the lessor has included language in the lease agreement to notify the lessee of the regulatory re quirements (for trailers that are leased prior to January 2013, other forms of writte n notice are allowed, but must be combined with steps to allow the lessee to retro fit the leased trailer or exchange it for a compliant trailer).

6. Comment: The proposed changes to the definition of “owner” would mandate that in order to remove the default provisi on of compliance responsibility, a lessor demonstrate that either 1) the lease agreement permits the lessee to modify the trailer to be comp liant with the substantive requirements, or 2) the lessor has provided a reaso nable method to exchange the trailer for one that is compliant. Requiring s uch demonstrations (which could necessitate amendments to numerous leases) to overcome application of a default rule presents significant transaction costs without the promise of additional substantial benefits. (TRALA)

Agency Response: Neither of the provisions cited by the commenter r equire the amendment of an existing lease. For trailers t hat are leased through a lease agreement signed prior to January 1, 1013, responsi bility for complying with the regulation shifts to the lessee if the lessor: 1) provides the lessee with actual written notice of the regulation’s requirements, an d 2) either demonstrations that the lessee is allowed to make the required modifica tions in the trailer under the lease agreement, or that the lessor has provided a reasonable method for the lessee to exchange the trailer for one that complie s with the regulation. Although- 133 -

including the specified language in a lease is one way to meet the notification requirement, any actual notice outside the lease ag reement will also suffice. If the existing lease agreement prohibits the lessee f rom modifying the trailer in a way that is required by the regulation, a lessor co uld either amend the lease agreement to allow such modifications or provide a reasonable method for the lessee to exchange the trailer for another that com plies with the regulation.

For trailers leased on or after January 1, 2013, se ction 95301(E) requires that the lease contain specific language to put the lessee o n notice about the regulation’s requirements before the compliance obligation shift s from the lessor or lessee. This will allow trailer leasing companies plenty of time to amend applicable lease forms and should not require amendments to existing lease agreements.

7. Comment: The definition of “owner” should be modified to c learly provide that the lessor has no liability for any failure of the lessee to comply with the GHG Regulation in situations where the specified la nguage (Section 95302 (39)(C)) is included in the lease. (TRALA)

Agency Response: The suggested change in the definition of owner is unnecessary because under the circumstances describ ed by the commenter, the

lessor of a tractor would not be considered the “ow ner” and therefore would have no compliance obligations under the regulation exce pt in the rare circumstance where the lessor was also acting in another capacit y that does fall within the regulation (i.e. a driver, a California-based broke r, a California-based shipper or a motor carrier). That would not normally be the cas e. The same is true for lessors of trailers that are leased under an agreem ent signed on or after January 1, 2013. (Additional requirements apply for trailer s leased before this date.)

To the extent the commenter may be referring to civ il liability issues other than compliance obligations under the regulation, e.g., contractual liability, such issues are beyond the scope of this regulation.

8. Comment: Requiring an explicit provision in order for the lessee to be responsible for compliance is not keeping with the reality of many lease situations. Consider the likely situation in which use of equipment in California is not contemplated by either the lessor or the lessee at the time of the transaction. If equipment is later operated in California without the lessor’s knowledge, the lessor could be responsible for lack of compliance. Requiring specific language making explicit referen ce to the California provisions in order for responsibility to be placed with the operator presents the lessor with unnecessary risks. The GHG regulat ion should provide for situations in which the language is not included in a lease, and the lessee operates equipment in California without the lessor ’s knowledge. (TRALA)

Agency Response: ARB believes that the lessors of heavy-duty tractor s and 53-foot box-type trailers bear some responsibility for ensuring compliance with- 134 -

the regulation. ARB understands that a lessor canno t always control where a lessee chooses to operate leased equipment. The re gulation therefore allows the lessor to shift responsibility for compliance t o the lessee by including the lease language set forth in Section 95302 (38)(C) a nd (E) in a lease agreement where there is the possibility of the lessee operat ing equipment covered by the regulation on California’s highways. ARB believes the language is suitable for various types of lease agreements.

Without this requirement, an operator would be more likely to end up with equipment that could not lawfully be used in Califo rnia without even knowing that the equipment could not be used in California.

9. Comment: The definition of “owner” potentially imposes comp liance obligations on lessors that provide contract mainte nance for equipment through Vehicle Maintenance Agreements. This provi sion should be deleted. Compliance responsibility is more properly imposed upon entities directing operation of the equipment at issue in California, not an entity retained to perform maintenance that has no involvement in the operation. (TRALA)

Agency Response: The rules in section 95302(38)(C), (D) and (E) gove rning compliance responsibility for leased equipment will apply without regard to whether the lessor has a vehicle maintenance agreem ent with the lessee. A

lessor that maintains the leased vehicles can take the steps outlined in those subsections to ensure the lessee shoulders the comp liance obligations. Section 95302(38)(A) includes a provision that allows a reg istered owner to demonstrate that another party is responsible for vehicle maint enance including the modifications required by this regulation, but that subsection expressly states that it does not apply to leased vehicles.

Compliance obligations under the regulation are dis tinct from possible contractual obligations between private parties. F or example, the regulation requires the owner (and other parties) to operate c ompliant equipment, but another party not directly bound by the regulation may have contractual obligations to the owner to pay for or install requ ired equipment. Except for the limited circumstances described in section 95302(38 )(A), such private agreements do not affect which parties ARB will hol d responsible for complying.

10. Comment: We suggest changing the definition of “Trailer side skirt” to read as follows: “means a fairing that extends down from the sides or bottom of the trailer to cover part of the open space between the trailer frame and the ground. There are applications, such as Intermoda l transport, which require the skirt to be inset for lifting equipment. Interm odal use should not be discouraged by this rule. (Silver Eagle2)

Agency Response: ARB is deleting this definition in its entirety bec ause the term no longer appears in the regulation following the modifications dated- 135 -

September 17, 2009. The deletion of this definiti on is without material effect because the term does not appear anywhere. The del etion should indirectly

address the commenter’s concern that the definition was too narrow.

11. Comment: A flow control device may be either an add-on or an integrated design element. Thus the definition of “Flow contr ol device” must be modified by adding the words “device or” before “design element ”. Also, delete the phrase “around an object by changing the air flow”. (Solu s2)

Agency Response: No changes were made in response to this comment because the proposed modifications would not change the meaning of a flow control device as originally defined. A design ele ment can be an add-on device that is not integrated.

B. Scope of Regulation

12. Comment: ARB’s proposed addition to the Applicability lang uage of the phrase “or caused to be used” exposes companies to the prospect of being cited on the basis of speculation. This potential liability will require companies to incur the additional cost of a defensive legal c apability in addition to the costs of compliance already required by the rule. The language is vague and creates the possibility of mistaken violation charg es that would be dependent upon the speculations of an inspector. (CTA3)

Agency Response: The phrase, “or cause to be used,” was added to cla rify that the regulation applies to “motor carriers, Californ ia-based brokers, and California shippers that use, or cause to be used, the following equipment......HD tractors that pull 53-foot or longer box-type trailers....53-f oot or longer box-type trailers that are pulled by HD Tractors.” In this context, it is appropriate and necessary to make this distinction since the listed entities may not actually use the tractor trailers to haul freight, but instead cause it to b e used, i.e. dispatch it for use. It was clear from earlier iterations of the regulation that ARB was including parties that play a role in assigning the use of equipment to particular tasks but do not directly use the equipment. The specific requiremen ts that apply to each category of regulated party -- owners, drivers, California-b ased brokers, motor carriers, and California-based shippers -- are well defined i n Section 95303. It is these requirements that inspectors will use to evaluate c ompliance with the regulation.

13. Comment: New section 95306(i) that provides for a 36 month i neligibility for the short-haul exemption if a tractor is voluntaril y removed from an owner’s short-haul list appears punitive and has not been j ustified. At most, a shorthaul tractor should be deemed ineligible to return to that status within the 12 month period beginning when the vehicle began its s hort-haul status. (CTA3)

Agency Response: ARB believes it is appropriate to require a 36 mont h period of ineligibility for a short-haul tractor that has been removed from short-haul- 136 -

service. The intent was to provide adequate disin centive for owner’s of heavyduty tractors from adding and removing a tractor fr om the owner’s short-haul list as a way of avoiding the requirements of the regula tion. For example, let’s assume a long-haul HD tractor reaches the 50,000-mi le limit 6 months after it

was identified as a short-haul tractor. Under the existing language, the owner

could then remove the tractor from the short-haul l ist and add it back in the next day, restarting the 50,000-mile short-haul tractor limit.

The commenter suggests that deeming a tractor remov ed from the short-haul list ineligible for the remainder of its 12-month p eriod is adequate to prevent this type of regulatory requirement circumvention. ARB disagrees and believes that a 12-month ineligibility period is no t adequate disincentive. A HD tractor could continue to operate primarily outs ide California for several months, with owners willing to take the chance of b eing found in noncompliance on the few times the HD tractor would en ter and leave California during that period. However, if we increase the in eligibility period to 36 months, the increased length of time makes the prob ability of being found in non-compliance sufficiently greater and provides ad equate disincentive for identifying long-haul HD tractors as short-haul tra ctors to avoid compliance with the regulation.

14. Comment: The regulation requires exempt local-haul trailer s to have low-rolling resistance (LRR) tires. We supply 53-foot trailers that are used for storage purposes that would qualify as local-haul trailers. The cost of changing all the tires on these trailers to low-rolling resistance t ires would be cost prohibitive, while the fuel-saving benefit would be minimal sinc e they remain stationary after delivery. Would it be possible to add an additiona l local-haul exempt trailer category, “Storage Trailer”, which would exempt loc al haul storage trailers from the LRR tire requirement? Any local-haul storage tr ailer found on the road with freight would be out of compliance and a citation w ould be issued. If the trailer is empty and in route to the storage destination (loca l-haul base) the trailer would be considered in compliance. (McKinney)

Agency Response: The commenter supplies trailers that function more like storage units than typical local-haul trailers. AR B recognizes that the cost vs. fuel efficiency benefit associated with requiring s torage trailers to replace their existing tires with low-rolling resistance tires is low, but ARB does not believe a modification to the regulatory language is merite d at this time for the following reasons. (1) The cost of retrofitting st orage trailer tires can be spread out over several years. Dry-van trailers ar e not required to be in compliance until January 1, 2013. Also, the new ti res would last for the life of the trailer resulting in a negligible cost over the life of the trailer; and (2) Lack of low-rolling resistance tires would only be a com pliance issue during the delivery of the storage trailer to and from its des tination. The storage trailer owner could arrange for a short-haul tractor to pul l the trailer. The regulation currently allows an exempt short-haul tractor to pu ll the storage trailer (i.e. a- 137 -

trailer without aerodynamic technologies or low-rol ling resistance tires) to and

from its destinations without threat of violation.

15. Comment: An exemption is needed for "Low-use trailers." M any 53-foot trailers which are subject to this regulation fall into an occasional use category (such as specialized trailers, peak stock trailers, etc) or are used for the storage of goods at a location and not for over-the -road transport of cargo (storage trailers). An exemption to the trailer re quirements under Subsection 95303(b) is needed for these types of trailers to a llow for their continued use. (ATA2)

Agency Response: See response to Comment 14.

C US EPA SmartWay Program

16. Comment: We recommend the omission of the definitions in t he proposed regulation that do and/or may conflict with those d eveloped by the U.S. EPA SmartWay Program. These include but may not be lim ited to the definitions found in section 95302 definitions (a)(4) “Cab side extender”, (26) “Fuel tank fairing”, (31) “Integrated sleeper cab roof fairing ”. (PACCAR)

Agency Response: These three terms are used in one paragraph of the regulation, which sets out the requirement to maint ain SmartWay devices and tires in good operating condition (see section 9530 4(a)(1)). ARB does not agree

that the definitions need to be deleted from the re gulation. While some of the definitions do not precisely match existing defini tions used by U.S. EPA, the definitions do not conflict with those used by U.S. EPA, and ARB believes the differences are necessary to add clarity and specif icity to these terms.

17. Comment: The SmartWay Interim Tractor Requirements do not satisfy the performance–based caveat set by the Board because t hey require specific design feature be met. The design feature require ments for the SmartWay tractor will limit emerging technologies from enter ing the marketplace and stifle progress toward greater efficiency. We sugg est limiting the regulation to requiring no classic style tractors rather than req uiring all tractors to be SmartWay certified until SmartWay completes a more comprehensive test protocol. (Nose Cone2)

Agency Response: ARB disagrees with the comment that the interim t ractor requirements do not satisfy the Board’s direction t hat the tractor requirements be performance based. The current interim tractor requirements for certifying SmartWay tractors require that manufacturers conduc t the industry accepted SAE J1321 test procedure to measure the fuel effici ency of the tractor model. In order to be eligible for SmartWay certification, the tractor model must meet or exceed the fuel efficiency performance of at lea st one current SmartWay certified tractor model, of any make from any manuf acturer. It is true that- 138 -

there is not a set threshold performance criteria t o compare with. However, in order to be designated as SmartWay tractor, there i s a minimum fuel efficiency improvement that the new model has to me et which is at least the fuel efficiency of the worst performing existing Sm artWay certified tractor of any make. This enables the comparison of SmartWay tractor models across

manufacturers.

It is true that in order to be eligible for SmartWa y certification, the U.S. EPA requires that the sleeper cab tractor model have ce rtain design features that enhance the fuel efficiency of the vehicle such as aerodynamic styled cab, integrated roof fairings, fuel tank skirts, aerodyn amic mirrors and bumpers, and cab side extenders, and low rolling resistance tires. These required design features were developed by the U.S. EPA in c onsultation with truck manufacturers because they have been tested and res ulted in increased tractor fuel efficiency. ARB does not believe that these design features limit emerging technologies from entering the marketplace . If there is a technology that can perform better than the mention ed design features, then that technology can be added on its merits to the S martWay specifications by working with the U.S. EPA to verify that the techno logy meets the U.S. EPA’s SmartWay specifications.

18. Comment: The SmartWay Interim Test Method Requirements do n ot satisfy the performance–based caveat set by the Board becau se they require specific design feature be met. The test method al so results in tractor design components being tested in little to no wind condit ions and within a short period of time (usually one-day track test). This is not representative of realworld operation of these vehicles. (Nose Cone2)

Agency Response: See also response to comment #17. ARB believes t he Interim Test Method is appropriate for certificatio n or component verification purposes. It is true that like any other certifica tion test procedure, the test conditions set by the U.S. EPA to test tractor mode ls for SmartWay

certification do not include all of the conditions that would be encountered in the real world. To develop a test procedure that w ould incorporate all the real world conditions is impractical. However, certific ation or verification test procedures must be standardized and to the extent p ossible test conditions that significantly impact fuel consumption such as wind speed at test site, maximum vehicle speed, elevation, track surface con dition and grade, ambient temperature range during testing, etc. must be controlled or maintained within a specified range to minimize the variability of test results and enable the comparison of the performance of dif ferent vehicles and technologies from different manufacturers. ARB bel ieves the Interim Test

Method meet these criteria.

19. Comment: Real-world analysis by one the nations largest flee ts found trucks with fuel tank fairings to perform 3.2% lowe r in fuel economy than- 139 -

trucks with half or no skirts after 12 months of op eration. The cause for loss in performance is unknown, but may be due to the heat retention in the fuel tank caused by the skirting. Hot fuel is less volatile p roducing less energy and lowered fuel economy. This is a legitimate cause fo r concern that should be understood before a mandate requiring this design f eature is set in place. (Nose Cone2)

Agency Response: The commenter admits that the cause for loss in performance is unknown but hypothesizes that the ca use may have been due to fuel tank skirts. Furthermore, the commenter do es not provide any reference for the above mentioned analysis and ther efore, ARB can not comment on the commenter’s theory that fuel tank sk irts result in decreased fuel economy. On the contrary, ARB still believes fuel tanks skirts are an effective means to improve tractor fuel efficiency. Truck manufacturers have been providing fuel tank skirts as an optional desi gn feature for their tractor models for many years now that the majority of the tractors on the road are equipped with this fuel saving aerodynamic technolo gy. Furthermore, the U.S. EPA, which has been working with truck manufac turers for a number of years and has extensively studied the aerodynamics of heavy-duty tractors, has adopted fuel tank skirts as a feature of a Smar tWay certified tractor. Moreover, ARB staff has interviewed numerous fleet owners about their

tractors and trailers and never has the effectivene ss of fuel tank skirts come into question.

20. Comment: The requirements for semi-trailers lack EPA verific ation for nonlong haul applications. The savings percentages id entified for trailer technologies as verified by the EPA are based on th ree assumptions; 1) that the tractor pulling the trailer is a sleeper-cab wi th full aerodynamic package, 2) that the vehicles will operate in the long-haul duty cycle, and, 3) the equipment will not operate in wind conditions that exceed the maximum wind speed required for successful track testing repeata bility. Not all fleets affected by this regulation will operate sleeper cabs, in th e long-haul duty cycle, and

under no wind conditions.

The requirement forces imprudent purchases that lac k scientific validation. Not all fleets affected by the regulation operate u nder the same duty-cycle as that which the verified technologies were tested un der. Fleets should have the option to choose the solution that is most cost-eff ective for their operation. CARB acknowledges that savings for the front traile r fairings may be higher if the tractor is shorter than the full height version . Many fleets affected by this regulation have a variety of tractor configurations and could reach the 5% threshold using the front trailer fairing alone. CA RB should allow a waiver for fleets that can submit test performance that proves 5% or more with at least one of the three possible treatments; the three pos sible treatments being a front treatment, and underside treatment, or a rear treatment. (Nose Cone2)- 140 -

Agency Response: See also agency response to comments #17 and #18.

The comment that there are no U.S. EPA verification requirements for semitrailers in non-long haul applications should be di rected to the U.S. EPA. However, the reason for the focus on long-haul oper ations to reduce GHG emissions from trucks is because the impact of aero dynamic improvements is the greatest on long-haul operations which is often characterized by high speed operation, long trip distances, and high annu al miles. For this reason, this regulation does not require any aerodynamic im provements on short-haul and local haul operations and it is up to such flee ts to choose the most costeffective aerodynamic treatment for their operation . Furthermore, the drive cycle used for the Interim Test Method which is nor mally at highway speeds of 60 to 62 miles per hour is an appropriate drive cycle for long haul operations because such vehicles are operated at th ose speeds for more than 75 percent of their VMT. Moreover, as discuss ed earlier, certification and verification test procedures must be standardiz ed and the test conditions controlled to reduce variability of test results an d enable fleets to compare the performance of different technologies. Therefore, ARB cannot provide a waiver to use an alternative test procedure that wi ll result in test results that may not be useful for fleets to compare the perform ance of various technologies.

The commenter also claims that many fleets affected by this regulation have a variety of tractor configurations and could meet the 5 percent fuel savings using the front trailer fairing alone. If such a t echnology exists, the technology developer has to work with the U.S. EPA and have hi s component verified for applications on that tractor configuration. Such a technology can then be used as a means for complying with this regulation provided the technology is used on tractor-trailers with a configuration simil ar to that used for testing. This regulation is based on the U.S. EPA SmartWay p rogram and as such can only use technologies verified by that program.

21. Comment: We suggest eliminating the SmartWay tractor require ment until EPA finalizes a more comprehensive test protocol. T he “Interim” test method does not satisfy the performance-based requirement requested by the board and since engine requirements and anti-idle require ments are covered under other CARB regulations doing so will not diminish t he intended GHG

reductions of the rule. (Nose Cone2)

Agency Response: See comments 17, 18, 20, and 23 for a response to the

comment that the Interim Test Method does not satis fy the performancebased requirement requested by the board. Also as discussed above, ARB

believes that the Interim Test Method which is base d on the industry-wide accepted modified SAE J1321 test protocol is an app ropriate test method for evaluating the fuel efficiency of tractors and aero dynamic technologies. No changes were made in response to this comment.- 141 -

22. Comment: The process of selecting tractors eligible for Smar tWay certification was never subjected to the scrutiny o f a rulemaking process and therefore may not be ready for CARB’s adoption into its regulatory program

. Similarly, the new interim requirements upon which CARB bases its regulation have never been subject to a public rule making process. They were adopted over objections from Daimler Trucks No rth America (DTNA) and others, without comment or explanation from the EPA and without the possibility of public involvement. They include arb itrary and vague limitations. They have never yet been demonstrated to correspond to or correlate with improved fuel efficiency. And in fact, they never w ill be, because they contain requirements and limitations that have nothing to d o with fuel efficiency. In fact, as noted in footnote 1 of the interim require ments, the EPA acknowledges that the new “method is an interim met hod, in effect until the US Environmental Protection Agency (EPA) finalizes a more comprehensive greenhouse gas emissions test protocol for medium d uty and heavy duty commercial on highway vehicles. When the more compr ehensive test protocol is finalized, EPA plans to establish new p erformance-based eligibility criteria for SmartWay certification of Class 8 slee per-cab tractor-trailers using the new more comprehensive test method..” (See EPA, Interim Requirements to Determine Eligibility of SmartWay Tractors, EPA- 420-F-09-045, 2009.) EPA has not completed the work necessary to establi sh a reliable and fair standard. CARB should not adopt as part of its stan dard a method not yet proven by EPA to be adequate for a regulation. (Dai mler2)

Agency Response: ARB has made clear from the beginning of this rule making process that the proposed regulation involved the m andatory application in California of a voluntary federal certification pro gram that is still evolving. The U.S. EPA Smartway Transport Partnership Program is a federal certification program under which manufactures can qualify new tr actors and trailers, aerodynamic devices and tires as SmartWay certified , indicating that they incorporate or constitute features for improved fue l efficiency, which relates directly to reduced greenhouse gas emissions.

The SmartWay program thus confers a status on certa in equipment as promoting fuel efficiency. ARB’s regulation uses this status conferred by U.S. EPA to require that certain equipment operated on Californ ia highways be SmartWaycertified or use SmartWay-approved devices.

The commenter is correct that U.S. EPA did not cond uct a formal rulemaking process in selecting tractors eligible for Smartway certification or for the Interim Requirements. That is because both are elements of a voluntary program, and as such are not subject to the federal rulemaking p rocess. U.S. EPA conducted stakeholder outreach with key stakeholders over sev eral months as part of its developing the definition of a SmartWay certified t ractor and the Interim Requirements. ARB understands the outreach included truck manufacturers, engine manufacturers, environmental groups, state g roups, ARB and others.- 142 -

ARB has complied with all procedural requirements o f the Administrative Procedure Act proposing, revising and adopting the regulation. The public has had an opportunity to comment on the original propo sal and on amendments to the original proposal. The public has also been sp ecifically invited to comment on all aspects of the SmartWay program itself, incl uding the Interim Requirements announced during the course of ARB’s r ulemaking. In summary, appropriate processes have been followed by ARB and interested parties have had an opportunity to comment on all relevant parts of the regulation, including not only the regulatory language and supporting doc uments relied on by ARB, but SmartWay documents released by U.S. EPA.

ARB disagrees that the Interim Requirements contain vague or arbitrary limitations that have nothing to do with fuel effic iency. The Interim Requirements establish design requirements and performance requi rements based on criteria used to define the initial SmartWay Certified Tract ors. When added to a class 8 tractor, the design features are likely to provide certain fuel savings when used in line haul operation compared to a truck without the se features. Fuel savings estimates for the design features were developed us ing a combination of U.S. EPA testing and modeling results, review of the tec hnical literature, and technical input from industry experts including truck manufac turers themselves. Specifically, the features include: sloped hood (n ot a “classic profile” tractor), high roof sleeper cab with integrated roof fairing and side extender fairings, aerodynamic bumper, aerodynamic mirrors, fairings o ver the side fuel tanks, idle reduction system capable of providing eight or more hours idle reduction with main engine shut down, low rolling resistance tires , and a 2007 or newer U.S. EPA-certified engine.

The definition of a “classic profile” tractor is we ll-understood by industry. A review of the truck industry's own sales literature will confirm this. During the initial discussions with stakeholders, U.S. EPA and its stakeholders discussed research that indicated that classic profile tracto rs -- as generally understood -- are up to 15% less fuel efficient than aerodynamic tractors, on the basis of their inherently poorer aerodynamics, if all else is held equal. On the basis of such an inherently large difference in performance, classic profile trucks were not considered for SmartWay. ARB understands that U.S. EPA does not plan to

revisit this issue.

The combined benefits when a SmartWay tractor is pu lling a U.S. EPA Certified SmartWay Trailer are expressed as a range -- "from 10% - 20% more fuel

efficient than a tractor trailer without these feat ures" -- to account for any uncertainties in the estimates. Stakeholders gene rally agreed with these estimates during discussions with U.S. EPA. Theref ore, establishing the initial design criteria for the tractors was neither arbitr ary nor vague, but the result of a lengthy stakeholder process informed by testing, mo deling, analysis, and significant input from industry experts.- 143 -

The performance requirements require that a candida te tractor be track-tested in accordance with the requirements of the Interim Test Method. The Interim Test method requires the candidate tractor demonstrate t hat it meets or exceeds the fuel efficiency performance of at least one current SmartWay Certified tractor. The current lineup of Smartway Certified tractor m odels, which form the current baseline for performance comparison, was determined by the tractor

manufacturers. Tractor manufacturers identified on e or two base models that incorporated the SmartWay design features and were tested in-house using industry-accepted test methods or modeling (e.g. wi nd tunnel, computational fluid dynamics, and SAE J1321 track testing) to prove the y were the most aerodynamic in their fleet.

Therefore, the selection of the base models was not arbitrary or vague either, but was provided by the truck manufacturers themselves based upon their own use of an industry-accepted method. Beyond this, EPA p rovided an opportunity to manufacturers for a more rigorous demonstration, bu t the truck manufacturers

declined this invitation.

23. Comment: The newly incorporated interim SmartWay standards are not performance-based, not scientific, potentially disc riminate against fuel efficient vehicles based solely on their appearance , and hence do not meet

the criterion that CARB demanded of such standards. The EPA’s new requirements to certify new vehicles as SmartWay-el igible are not solely performance-based and hence leave open the possibil ity of very efficient vehicles being barred from eligibility. Specificall y, those requirements include the statement: “No ‘classic-style’ tractors (long n ose, flat hood, flat, squaredoff grill) will be considered eligible even if they meet other requirements.” (Id.) In other words, even if a classic-style vehicle pro ves itself the most fuel efficient vehicle on the road, it is barred from Sm artWay-eligibility because of its appearance. A standard of this sort is vague, a t best. (For example, the standard does state what length of nose is too long . Is a 125 inch “BBC”1 too long to be fuel efficient and, if so, why?) A stand ard of this sort is not scientific. And most importantly, it is not a “perf ormance-based test requirements that will provide for comparable green house gas reductions for similar certified SmartWay tractors from different manufacturers.” Consequently, it does not meet CARB’s requirements, as specified in Resolution 08-44. (Daimler2)

Agency Response: ARB disagrees with the commenter and believes the n ewly incorporated interim SmartWay standards scientifica lly evaluate the fuel efficiency performance of similar aerodynamic tract ors, are performance-based,

and hence do meet the criterion the Board demanded of such standards.

The “newly incorporated SmartWay standards” the com menter is referring to are

the Interim Requirements to Determine Eligibility of Sm artway Tractors, EPA420-F-09-045, (Interim Requirements)

. U.S. EPA developed the Interim- 144 -

Requirements earlier this year, after the Board’s d irected the Executive Officer in Resolution 08-44 to ensure that “the requirements...f or certification of tractors will take effect only if the U.S. EPA modifies the exist ing U.S. EPA Certified SmartWay Tractor certification requirements to esta blish new performance-based test requirements that will provide for comparable greenhouse gas reductions for similar certified SmartWay tractors from different manufacturers...” The Interim Requirements establish three separate sets of requi rements for SmartWay Certification: design requirements, performance req uirements, and licensing requirements. Only the design and performance requ irements are relevant to

this discussion.

The design requirements establish criteria that eve ry SmartWay-eligible tractor must meet before being considered for SmartWay cert ification. These include a sloped hood with curved features, an integrated roo f fairing, cab side extender fairings, aerodynamic side mirrors, aerodynamic bum pers, and low-rolling resistance tires. These design features have been demonstrated to U.S. EPA to improve fuel efficiency through the reduction of ae rodynamic drag and rolling resistance. (See agency response to comment #22 for further discussion on the basis for the design features.) Tractor manufactur ers evaluated the fuel efficiency of tractor models equipped with these fe atures using industry-accepted test methods, computational fluid dynamics modeling , and wind tunnel testing. As such, incorporation of these design features is a minimum requirement for SmartWay certification eligibility. Only after tra ctor models have met the design requirements is their fuel efficiency performance t o be evaluated.

The performance requirements establish new performa nce-based test requirements that allow for the comparison of fuel efficiency performance for similar SmartWay-eligible tractors from different m anufacturers. These tractors are similar in that they all meet the design requir ements. Each tractor must

demonstrate that it meets or exceeds the fuel effic iency performance of at least one current SmartWay-certified tractor model, of an y make from any manufacturer, in accordance with the Interim Test M ethod

. Consequently, ARB disagrees with the commenter and believes the newly incorporated interim SmartWay standards scientifically evaluate the fuel efficiency performance of similar aerodynamic tractors, are performance-based , and do meet the criterion

that Board demanded of such standards.

24. Comment: There is a more reasonable alternative to CARB’s pr oposed regulation, and CARB should consider that alternati ve. CARB should work with the EPA to develop a truly rigorous procedure to compare the fuel efficiency (or greenhouse gas emissions) of heavy-d uty vehicles and determine SmartWay eligibility. Daimler Trucks Nor th America (DTNA) recommends that, only after developing a rigorous p rocedure, should CARB regulate vehicles based upon SmartWay certification . DTNA suggests that CARB also work with the US Department of Transporta tion on its heavy-duty- 145 -

vehicle fuel efficiency (and greenhouse gas) measur e, as mandated under the Energy Independence and Security Act of 2007. As an alternative, or perhaps as an interim measure, DTNA suggests that C ARB require technologies, with rigorous specifications, that ha ve been scientifically demonstrated to improve fuel efficiency. We suggest CARB start with the EPA’s list of SmartWay add-on technologies: fuel ta nk side fairings, cab roof fairings, cab side extenders, aerodynamic mirrors, aerodynamic bumpers, idle reduction technologies, and low rolling resistance tires. However, while a scientific tractor standard is still nonexistent, w e recommend CARB refrain from requiring certain tractors. (Daimler2)

Agency Response: ARB disagrees with the commenter that an alternativ e to the regulatory requirements for tractors should be considered. The Interim Requirements, as discussed in the response to Comme nt 20, scientifically evaluate the performance of candidate SmartWay trac tor models. Further, the alternative approach that the commenter suggests is incorporated into the existing Interim Requirements. Candidate SmartWay tractor models are required to incorporate the add-on technologies listed by th e commenter. The Interim Requirements then require that the candidate SmartW ay tractor demonstrate that it meets or exceeds the fuel efficiency performance of at least one current SmartWay-certified tractor model, of any make from any manufacturer, in

accordance with the Interim Test Method

.

Regarding the suggestion to work with federal agenc ies, ARB is working with the U.S. EPA to develop a more comprehensive greenhouse gas emission test protocol for medium and heavy-duty commercial on-hi ghway vehicles. And, ARB has also met with the U.S. DOT regarding its effort s to improve heavy-duty vehicle fuel efficiency.

25. Comment: ARB should suspend section 95303(a)(1) of the GHG r egulation. The Interim SmartWay Requirements (EPA-420-F-09-45) and Test Method (EPA-420-F-09-046) do not establish new performance -based test requirements as the Board properly required before moving ahead with the implementation of section 95303(a)(1). EPA’s Smart Way certification still lacks an objective, verifiable procedure that the B oard noted was necessary for its regulatory program. This conclusion is bas ed on the following points:

a. The Interim Requirements do not modify the existing SmartWay tractor certification requirements. The current li st of models that are SmartWay certified will not change for some tim e, and there is not yet any method by which the performance of thos e existing

tractors can be verified.

b. The Interim SmartWay Requirements are ultimately s ubjective and not performance-based. Design elements, e.g. slope d hood, no- 146 - “classic-style’ tractors, are still included in the technical specifications.

c. The Interim SmartWay Test Method will not verifiabl y measure performance. A new tractor model must demonstrate that it meets or exceeds the fuel efficiency performance of a cur rent SmartWay Certified tractor model. The performance here simp ly is that the tractor must be better than an unverified, arbitrar ily certified model. (EMA2)

Agency Response: ARB disagrees with the commenter that section 95303(a)(1) should be suspended based on arguments presented. See responses to comments 17-18, 20, 22 and 23, above.

Regarding point a in the comment, it is true that t he interim requirements do not modify the SmartWay Tractor certification requireme nts for tractors that are already certified. Nothing in the Board’s directio n to the Executive Officer on this issue suggested the Board wanted the tractor requir ement dropped if existing SmartWay tractors were not de-certified. Rather, t he Board wanted to see U.S. EPA adopt a new standard that would be more perform ance-based. The current list of SmartWay Certified Tractors will remain U.S . EPA Certified SmartWay tractors for the purposes of the SmartWay program a nd the regulation. Their fuel efficiency performance was verified by U.S. EPA sta ff as part of the SmartWay certification process. The fuel savings estimate f or the existing Smartway tractors was based upon the added features and the aerodynamic profile of the candidate tractor. The quantification itself was b ased upon U.S. EPA testing, modeling and analysis, a review of technical litera ture, and input from industry experts. Prior to the Interim Requirements, a man ufacturer had to confirm to the

U.S. EPA that the candidate tractor model or models were the most fuel-efficient

model or models offered in that tractor make. Each manufacturer evaluated the fuel efficiency of its tractor models using industr y accepted test methods including the SAE J1321 test procedure, the TMC RP 1109 Type IV Fuel Economy Test procedure, computational fluid dynamic s modeling, and wind tunnel testing. Additionally, the candidate tracto r models had to be equipped with specified aerodynamic features, low-rolling resista nce tires, and an idle reduction system. Thus, the certification process prior to t he existence of the new Interim Requirements was not a subjective arbitrary process as the commenter has

characterized it to be.

Regarding point b in the comment, the interim requi rements do include design requirements and performance requirements. The des ign requirements are not subjective or arbitrary as the commenter suggests, but are set to ensure candidate tractors incorporate design features that have been demonstrated to U.S EPA to improve fuel efficiency. The performanc e requirements ensure the

candidate tractor is at least as fuel efficient as a current SmartWay certified tractor. See the response to Comment 20 for furthe r discussion.- 147 -

Regarding point c in the comment, the commenter is accurate in stating that the Interim Test Method is designed to ensure the candi date SmartWay tractor model meets or exceeds the fuel efficiency performa nce of any currently certified SmartWay tractor. But, to characterize a current S martWay Certified tractor model as unverified and arbitrary is inaccurate. S ee response to point a for a discussion of current SmartWay tractor certificatio n requirements.

26. Comment: ARB should suspend section 95303(a)(1) of the GHG r egulation. The existing SmartWay tractor certification require ments, even with the new Interim Requirements for new models, are inappropri ate for a regulatory program. The Interim Requirements and Test Method a re part of the continuous improvement and evolving framework that have made the voluntary SmartWay program flourish. That flexible certification method works well for a voluntary program; however, it fal ls short of the clarity and verifiability needed for a mandatory regulation. (E MA2)

Agency Response: ARB disagrees that the requirement in section 95303(a)(1) that sleeper-cab HD tractors of model y ear 2011 or later should be suspended as inappropriate for a regulatory prog ram. ARB believes the certification method as recently revised by U.S. EP A is clear, and certainly

there can be no confusion about which tractors have been certified and which have not, which is what owners, drivers and other p arties subject to ARB’s regulation need to know for compliance purposes. Fo r further response to the view that the SmartWay program is not suitable for use in the regulation, see responses to comments 22-25, above.

27. Comment: ARB should suspend section 95303(a)(1) of the GHG r egulation. The tractor certification requirements do not provi de adequate due process. The Smartway Interim Requirements and Test Method w ere developed and published outside the notice and comment structures that would be required for a mandatory program. As such, EPA did not prov ide public notice that it was proposing the new Interim Requirements. EPA di d not provide the public with the opportunity to review and comment on the p roposal. And, EPA did not consider any public input before it finalized t he requirements. And, presumably, EPA also can unilaterally change the re quirements without notice or opportunity to comment. Linking the GHG regulation’s requirements to voluntary program that was developed without due process is ignoring the rulemaking requirements in California’s Administrat ive Procedure Act. See Cal. Gov’t Code, section 11340 et seq . A tractor manufacturer’s product may comply with the Regulation only if it is awarded Sm artWay certification, which is subjective, flexible, and subject to change with out notice. Consequently, the Tractor requirements altogether fail to provide the clarity the Act requires “so that the meaning of regulations will be underst ood by those persons directly affected by them.” See, Cal. Gov’t Code, s ection 11349.1(a)(3). (EMA2)- 148 -

Agency Response: See response to comment 22, above, for a detailed discussion of the process followed by U.S. EPA in d esigning the SmartWay program and the process followed by ARB in adopting the regulation.

ARB, not U.S. EPA, is adopting this regulation, so the relevant question is whether ARB has proceeded in its rulemaking as requ ired by law. It has. ARB complied with the requirements of the Californi a Administrative Procedure Act (APA) by, among other things, making the original and modified versions of the regulation available for p ublic comment during two periods as required by the APA. It also identified and made available all documents relied upon in the rulemaking, including SmartWay documents. Interested parties and the public generally had amp le opportunity to raise questions and concerns about the proposed action, t o suggest changes in the regulation, and to voice their objections to the re gulation. ARB considered comments received and explained how the comments we re incorporated into the proposal or why they were rejected. This proce ss not only met the requirements of any applicable constitutional right to due process, it complied with the letter and spirit of the APA.

As noted in response to comment 22, the U.S. EPA’s SmartWay program is evolving and ARB anticipates that the list of Smart Way certified tractors, trailers and technologies will continue to expand. By certifying certain vehicles and equipment as SmartWay approved, the vo luntary federal program confers a status that is mandatory under AR B’s rule. The APA does not prohibit California agencies from including suc h “conferred status” requirements in their regulations.

ARB disagrees that the SmartWay tractor standards a re subjective or inappropriate for “conferred status” use in ARB’s r egulation. See responses to comments 17, 18, 22 and 23 for ARB’s response on this issue.

D Standards and Procedures

28. Comment: It is our understanding that trailer requirements h ave been modified to split the 5% required aerodynamic impro vement from the lowrolling-resistance tire requirement of 1.5% into tw o parts wherein neither improvement can be counted toward the other. Pleas e clarify that this interpretation is accurate. (Con-way2)

Agency Response: The required 5 percent aerodynamic improvement an d 1.5 percent tire improvement are not changed in the modified language, but have been modified for clarity purposes. The tire requirements were independent of the aerodynamic requirements in the original language and remained independent in the modified language. The commenter is also correct that neither improvement can be counted tow ards the other. See also agency response to comment #31. The only thing tha t is changed in section- 149 -

95303 (b) is that the modified language removed the language that specified the specific aerodynamic equipments (trailer side s kirts, front trailer fairings, and rear trailer fairings) required for compliance, allowing fleets to use any combination of the verified aerodynamic technologie s to meet the requirements.

29. Comment: We request that the modified language include confi rmation that low-rolling-resistance tires that have been recappe d are in compliance so long as the tire casing originally qualified as a L RR tire. (Con-way2)

Agency Response: Please see agency response to comment #32.

30. Comment. The rule seems to have conflicting definitions of s hort-haul tractors; those that operate less than 50,000 miles annually as well as those that operate within a 100 mile radius. Federal DOT regulations for maintaining duty-logs specify a 100 air-mile radius . This is already well established within the trucking industry and the en forcement community. We request that the modified language specify that tra ctors qualify as “short haul” if they meet either of these requirements and that the 100 mile radius conform with the Federal statute as air miles. (Con-way2)

Agency Response: The modified regulatory language uses the term “s horthaul tractor” to refer solely to a tractor that tra vels less than 50,000 miles per year. A tractor or trailer that operates strictly within a 100-mile radius is now

referred to as “local-haul tractor” or “local-haul trailer,” respectively. Since the regulatory requirements on these two types of opera tions are different, ARB

believes the use of the two different terms will he lp clarify these two distinct types of operation that qualify vehicles for differ ent exemptions under this regulation. Regarding the issue of using air-mile instead of mile for the operating radius of local-haul vehicles, ARB does n ot believe such a modification is necessary. ARB believes that mile, or statute mile (5,280 feet), is more commonly understood, and most distan ce measurement tools, such as those found on the internet, display their results in mile rather than air-mile. ARB expects that many of the businesses affected by this rule and

authorized enforcement entities will use these tool s to determine if vehicles qualify for the local-haul exemption.

31. Comment. It is our interpretation that Subsection 95303 (b ) now states that trailers no longer have to adopt trailer skirts, no se cones or boat tails as the only approved technology for improving fuel savings by the required 5% and that any combination of EPA SmartWay technologies a chieving that goal will qualify the trailer as CARB compliant. Please clari fy this interpretation in the modified language. (Con-way2)

Agency Response: Subsection 95303(b) requires trailers to use U.S. EPA verified SmartWay tires and any combination of U.S. EPA SmartWay verified- 150 -

aerodynamic technologies verified to meet or exceed 5 percent fuel savings for a dry van and 4 percent for a refrigerated van trailer. To be compliant the combination of technologies can only be SmartWay ve rified aerodynamic technologies and not any other technologies that ar e not aerodynamic even if these non aerodynamic technologies are SmartWay ver ified. Currently, U.S. EPA verified aerodynamic technologies for trailers include skirts that achieve 4 percent and 5 percent fuel savings, front trailer fairings that achieve 1 percent fuel savings, and rear trailer fairings tha t achieve 5 percent fuel savings. Thus, a fleet may comply with the dry van requirements by equipping its trailer fleet with either a skirt tha t is verified to meet a 5 percent fuel savings, or a skirt and a front trailer fairin g that are verified to meet a 4 percent and a 1 percent fuel savings respectively, or a rear trailer fairing that is verified to meet a 5 percent fuel savings.

32. Comment: The definition of “Low-rolling-resistance tires” should provide

clarification as to the use of retreads. At a work shop on September 14, 2009,

CARB staff indicated that the use of retread tires is a compliance option as long as the tire’s original casing has been SmartWa y certified. The ability to use retread tires is an important component of this regulation from both a cost and reuse/waste reduction perspective. Language cl arifying the use of retread tires as a compliance option should be eith er included in the regulation or addressed in a formal guidance docume nt. (ATA2)

Agency Response: ARB agrees with the commenter’s assertion that th e ability to use retread tires is very important from the economic and environmental point of views. The U.S. EPA SmartWa y Program is currently working with the tire retread industry to develop s pecifications for SmartWay retread tires. As soon as the specifications are d eveloped, ARB plans to update the regulation to include the requirements f or SmartWay retread tires. Until then, ARB plans to provide an interim guidanc e or advisory that retread tires may be used as long as the casings of the ret readed tire are made from an originally SmartWay verified low rolling resista nce tire. Regarding tires that will be replaced by SmartWay verified tires, t hose tires will continue to have a commercial value and use with other types of trailers and tractors that are unaffected by this regulation. Thus, ARB deter mined that there will not be an environmental impact since these tires can be us ed in other fleet operations.

33. Comment: It is not clear why local-haul equipment continues to be subject to the low-rolling-resistance tire (LRRT) requireme nts. Local-haul equipment is not likely to accumulate the mileage necessary t o achieve the benefits from LRRTs to justify their additional expense. Consequ ently, local-haul equipment, or equipment pulled by or pulling local- haul equipment, should be exempted from the LRRT requirements as well. (ATA2 )- 151 -

Agency Response: Most of the local haul tractors are deployed in u rban local haul operations and normally operate at low a verage speeds compared to tractors that operate in regional or long haul o perations. As discussed earlier, since aerodynamic drag varies with the squ are of the speed, requiring aerodynamic devices on local haul tractors and trai lers does not justify the expenses since the low average speeds of the tracto rs provide minimal or negligible GHG benefits. However, at lower speeds rolling resistance is dominant (see Figure 1, agency response to Section III, comment #46) and thus reducing rolling resistance of tires at the lo w average speeds of local haul tractors could result in meaningful GHG benefi ts. ARB agrees that if the annual mileage accrued by a vehicle is very small t hen requiring low rolling resistance tires does not justify the expenses beca use the benefits are not significant due to the low mileage of the vehicle. Thus, a low mileage vehicle may be exempt from tire requirements based on the s hort-haul exemption criteria. However, local haul tractors and trailer s that accrue more than 50,000 miles per year, but stay within 100-mile ope rating range, are more likely to be traveling some portion of their mileag e at highway speeds and will achieve greenhouse gas reductions. Even if tractor s are operated at lower average speeds, benefits will accrue due to high tr uck utilization and the relatively low or no incremental cost of the tires which justifies the tire requirements for local haul tractors.

34. Comment: A few of the concerns with the EPA Interim Test M ethod are:

● does not measure in-service performance of a vehic le or vehicle component,

● can not provide valid fuel consumption data, and

● has a precision error of at least 6%. For these reasons listed above and based upon addit ional information provided below the CARB should immediately modify the existi ng technology verification process and procedures.

According to the SAE and TMC the precision of the s ubject test method is not reduced by testing on a roadway. The provision to test on “test track” only

serves to increase test costs that will result in a n increase in the cost of products and thereby limiting the number of options availabl e to the industry. If CARB continues to rely solely upon the subject test meth od then CARB should allow for

test results from all sources. The Interim Test Me thod should be modified to remove testing requirements on a “test track”; repl ace “test track” with “test route” to include testing on a roadway; remove limits on t rack grade, test site altitude, track surface condition, and precipitation; remove ambient temperature limits during testing, instead require a temperature range not to exceed 30 ° F for the duration of the test; modify maximum wind speed and wind gusts from 12 miles per hour to 5 miles per hour; and test trailers and test tractors must be same model, mileage, and configured the same. (Solus2)

Agency Response: ARB does not believe the comments made merit chan ging the Interim Test Method for the following reasons.- 152 -

ARB does not agree with the commenter’s conclusion that the Interim Test Method does not provide valid fuel consumption data . U.S. EPA’s Interim Test

Method which is based on the SAE J1321 is establish ed to evaluate the performance of a vehicle or vehicle component under standardized conditions. In addition to the provisions specified by SAE J132 1 test procedures, the Interim Test Method specifies additional conditions or cons traints on variables such as grade, wind speed, length of test track, track surf ace conditions, ambient temperature, elevation, etc., that have significant impact on fuel consumption performance of the vehicle. Controlling these vari ables reduces the variability of the measurement, helps ensure the validity of the t est results, and enables fleets to compare the performance of one device against th at of the other tested under

the same conditions. This is consistent with SAE J 1321 test procedure which as a rule recommends the control of as many variables as possible in order to get conclusive results (see section 1 of SAE J1321 test protocol.)

The purpose of the Interim Test Method is not to me asure the in-service performance of a vehicle or technology but to measu re the performance of a technology for the purposes of certification or ver ification of the technology. Furthermore, the commenter’s claim that the test me thod has a precision error of 6 percent is not substantiated. Rather, as indicat ed in SAE J1321 test protocol 6

, based on test experience of long haul trucks, fuel consumption measurement using portable weigh tank methods is considered to have an overall accuracy of ±1 percent.

SAE J1321 permits testing on a roadway or a test tr ack. It also states that the

more variables controlled the more conclusive the t est results and better repeatability of the test. Conducting testing on a test track rather than on a roadway enables controlling more variables such as track shape, surface, grade, and altitude, provides better monitoring and record ing of weather conditions, and minimizes the impact of other vehicles on the test vehicles. The length of the test track is recommended by testing experts to reduce u ndue lateral forces on the vehicle and maintain a neutral speed appropriate fo r the drive cycle. We agree that zero or reduced wind speeds are ideal to reduc e measurement errors. However, setting wind speed and wind gust at 12 mil es per hour balances what is optimum speed with what is practical so as not t o increase unduly the cost and time needed to conduct testing. The Interim Test M ethod requires that the test trailers to be of the same age, same model, mileage , and condition. Similar requirements apply to the test tractor. All of the specifics of the test plan including tractor-trailer gap, tire tread depth (in cluded in tire condition), and other details would be worked out by the technology devel oper and the U.S. EPA before the testing is conducted.

6 See SAE J1321 Joint TMC/SAE Fuel Consumption Test Procedure - Type II, Section 7, Test Accuracy.- 153 -

35. Comment: The U.S. EPA has not verified any aerodynamic devic es based on the “General Requirements” specified in the Interim Test method. According to the SAE J1321, there have not been any valid tests performed and thus there are not any verified EPA technologies and therefore the re are no CARB verified technologies. SAE J1321 states: “A single test is inconclusive regardless of the results. A single test should be taken as an indic ator. Test results must be repeatable to have validity.” SAE J1321 also state s: “If a number of tests do not show consistent results, then one must conclude tha t the changes caused by the component or vehicle system are less than can be me asured by the test procedure.” The EPA has violated its own Interim Te st Method by failing to require that J1321 tests be repeated, as instructed by the SAE J1321 standard, in order to develop a valid test result with quanti fiable fuel use measurements. (Solus2)

Agency Response: ARB disagrees with the above comment. The Interi m Test Method does not affect the existing devices that ar e already verified by the U.S. EPA. This is because the guidance that was used to verify these technologies was exactly the same as the Interim Test Method. L ike the “General Requirements” in the Interim Test Method, the guida nce (Appendix B of the Staff Report) also required manufacturers of the product to conduct an SAE J1321 test protocol and to follow all provisions in the protoc ol which includes the provision to repeat the tests until at least 3 valid T/C (Test V ehicle Fuel Used/Control Vehicle Fuel Used) ratios were obtained (section 6.10 of SA E J1321 test protocol.) In addition to complying with all the requirements in the SAE test procedure, the initial guidance also required manufactures to meet additional provisions such as testing vehicle on a test track, ambient temperatur e range during testing, grade changes, altitude of test facility, test speed, pre cipitation on test track during testing, etc. Based on these test conditions, a nu mber of manufacturers were able to verify their technologies as SmartWay compl iant technologies. Examples are Freightwing, Inc., Laydon Composites, Ltd., and Advanced Transit Dynamics to mention a few. The commenter may refer to the t est reports published (referenced in the Staff Report) by these manufactu res to verify the test protocol followed by these manufacturers in verifying their technologies, which are consistent with SAE J1321 test procedures.

36. Comment: Currently none of the aerodynamic technologies on t he EPA verified list have satisfied the published EPA Interim Test Method based upon the SAE J1321 standard. SAE J1321 clearly states the follo wing; “A test is inconclusive regardless of the results. A single test should be taken as an indicator. Test results must be repeatable to have validity”. EPA v erification does not require that TEST be repeated to validate the fuel savings. The failure of EPA to require this fundamental and critical step in the process r esults in test results that do not satisfy either SAE J1321 or the EPA Interim test me thod and therefore the verification of device by EPA is not supported by v alid test data. (Solus2)- 154 -

Agency Response: The above comment is incorrect. As indicated in agency response to comment #35, manufacturers followed all provisions of SAE J1321 test protocol including the statements quoted in th e above comment when verifying their products. Published test reports b y Freight Wing, Advanced Transit Dynamics, and others document that tests we re repeated several times

until at least 3 valid T/C ratios were obtained as required by SAE J1321 test protocol (section 6.10 of SAE J1321 test protocol.

37. Comment: CARB’s strict reliance on the voluntary EPA SmartWa y program to identify viable aerodynamic technologies has and wi ll continue to adversely affect the programs success. CARB should provide itself a n option for a waiver of the EPA verification process based upon a body of data provided by a fleet or fleets that desire to use non EPA verified technology. Th is waiver is critical to ensure that CARB does not arbitrarily restrict the use of technology that has continually demonstrated high fuel saving performance and opera tional performance in the real-world operational environment. This waiver op tion is critically important due to the unreliability of the EPA verification proces s based upon SAE J1321 test data. Language should be added to the regulation t o allow any combination of dry-van aerodynamic technologies that has been demo nstrated to the U.S. EPA or CARB to meet or exceed a 5 percent fuel savings in accordance with industry standards and based upon preferred in-service testi ng. (Solus2)

Agency Response: ARB does not arbitrarily restrict the use of tech nology that demonstrates high fuel savings performance. Any te chnology that is verified according to the U.S. EPA’s Interim Test Method wou ld qualify as a compliant technology to meet the requirements of this regulat ion. Thus, ARB does not believe it is necessary to provide a waiver of U.S EPA verification test procedure. Furthermore, ARB does not agree with the commenter’ s statement that the U.S.

EPA verification is unreliable. The U.S. EPA verif ication method was developed with input from the trucking industry and technolog y developers and is based on the industry-wide accepted SAE J1321 test protocol. Allowing various test methods and in-service testing would limit the abil ity to compare the performance of technologies since they will be subject to diffe rent test conditions. Therefore, no change was made to the regulatory language to al low alternative means of testing procedures.

E Compliance and Enforcement

38. Comment: The definition of “Compliant trailer” in Section 95302 (a)(9) unnecessarily takes away flexibility large fleets n eed in order to remain competitive in a rapidly changing marketplace by el iminating the provision previously found in the second paragraph of Section 95307 allowing for bringing a trailer into compliance by “retiring suc h trailer from California service.” We recommend the definition of compliant trailer be modified to state that, for the purposes of the fleet trailer c ompliance schedule, methods- 155 -

of bringing a trailer into compliance include retir ing it from California service. (Werner)

Agency Response: Although not explicitly stated in the regulation, retiring a

trailer from California service will still be an ac ceptable method of complying with an optional trailer fleet compliance schedule.

39. Comment: Section 95307(f)(20) prohibits a large fleet part icipating in the large fleet compliance schedule from operating any trailer in California after July 1, 2010 unless such trailer is (a) compliant, (b) listed on the owner’s fleet list, (c) a refrigerated van, or (d) otherwise exem pt under the regulation. This restriction effectively accelerates the compliance date for non-compliant trailers not in the designated California fleet fro m January 1, 2013, to July 1, 2010. The prior version of this regulation include d no such prohibition. Under the prior version, trailers not identified as part of a carrier’s California fleet could have operated on California highways until Ja nuary 1, 2013. This would have allowed such a carrier more time to adjust to the new conditions and perfect its methods of segregating its fleet into C alifornia and non-California operating units. More troubling than this seemingl y arbitrary restriction is the equally arbitrary provision added at 95307(f)(13) t hat places a similar restriction on owners participating in the small fl eet compliance schedule. The restriction on small fleet owners, however, does no t take effect until July 1, 2012, a full two years after large fleets are affec ted. We recommend that the requirements set forth in (f)(20) and (f)(13) be re moved entirely from the regulation. In lieu of a complete deletion of these provisions, they should at least be made consistent so that large fleets, also , have until July 1, 2012, to make the necessary, drastic revisions to their oper ations. (Werner)

Agency Response: ARB does not believe it is necessary to allow flee ts participating in the large fleet compliance schedul e to create a separate pool of vehicles subject to the January 1, 2013 hard dea dline. This is because ARB believes it could actually hurt the flexibility of fleets that allocate too many trailers into a hard deadline pool initially t o avoid bringing trailers into compliance in the early years of the large fleet co mpliance schedule. By doing so, a fleet owner could end up being forced t o retrofit a large percentage of his/her fleet before January 1, 2013 because he/she still needs such trailers to operate in California after such d ate. Alternatively, if a fleet owner designates all trailers into a single complia nce plan pool, as will likely be the case under the current regulation, the fleet owner would have the flexibility to decide for each individual trailer w hether to retrofit or retire such trailer from California service when its particular compliance deadline approaches. Not only would this spread the require ment to retrofit or retire the fleet over a six year period, it would also all ow the owner to return a retired trailer back into California service by sim ply retrofitting such trailer with the required SmartWay verified technologies at that time. In addition, the phase-in schedule begins slowly, so even if a fleet ’s early retrofits are to- 156 -

trailers that he/she eventually removes from Califo rnia service, such trailers would probably only represent a small portion of th e fleet.

As to the restrictions set forth in section 95307(f )(13), in addition to the reasons given above, ARB believes they are also ne cessary to prevent large fleets from underreporting the number of trailers t hey own in order to qualify for the small trailer fleet compliance schedule. B ecause they are expected to

have more limited financial resources to retrofit t heir fleets, small fleets are given additional time to comply with this regulatio n. If a large fleet is able to participate in the small trailer fleet compliance s chedule, it would undermine the intent of the regulation to restrict large flee ts from taking advantage of the additional compliance time given to small fleets.

40. Comment: The regulation specifies that the diesel on-road and off-road reporting systems (“DOORS”) will be used as the onl ine reporting tool for this regulation. Unlike off-road equipment, the tractor s and trailers affected by this regulation are required to be registered with motor vehicle agencies in order to receive operating credentials. As a result, fle ets are already devoting considerable resources to adding, modifying and del eting equipment registrations. (ATA2)

Agency Response: Although ARB realizes that reporting requirements often require a substantial resource commitment from affe cted businesses, such reporting is necessary in order for ARB to provide flexibility without compromising the regulation’s effectiveness or enfo rceability. ARB continues to work on DOORS with the goal of simplifying the r eporting process, and we encourage affected fleets to continue to provide us with comments and suggestions.

41. Comment: It is not clear how compatible DOORS is with the current systems being used by motor carriers and motor vehi cle agencies. In the interest of conserving fleet resources and avoiding duplication, ATA requests that CARB work with fleets, registration agents, le asing companies, motor vehicle agencies and others to ensure DOORS is eith er interfaced with existing equipment registration systems or, alterna tively, compatible with such systems. In addition, the data confidentiality pro tections of DOORS must be equivalent to those which have been established by the motor vehicle agencies. (ATA2)

Agency Response: Currently, ARB is working to harmonize the reporti ng required by this regulation with that of the Statew ide Truck and Bus Regulation to prevent the need for fleets to enter vehicles subject to both regulations twice. In addition, ARB has formed a p ublic-private subcommittee dedicated to improving DOORS and making it more use r-friendly. Regarding the commenter’s concern about information security, access to DOORS is currently through a connection that is secured thro ugh a protocol that is- 157 -

widely used on the internet. ARB understands the commenter’s concerns about information security and welcomes any additio nal comments or suggestions as to how to improve upon the security protocol that is currently in place.

42. Comment: Although not stated in the regulation, with the exception of exempt equipment and trailers included in the fleet compliance schedules, it is our interpretation that equipment which conforms to the requirements of the regulation is not subject to any reporting requirem ents. Please confirm that this is in fact correct. (ATA2)

Response: A fleet is only required to report a compliant tra iler if such fleet elects to participate in the small fleet compliance schedule. Reporting such trailer as part of the large fleet compliance sched ule is optional. However, for any fleet participating in an optional trailer flee t compliance schedule, reporting such trailer is to the fleet’s benefit si nce the trailer may be used to

meet annual fleet conformance thresholds and could be eligible for early compliance credit under the provisions of the large fleet compliance schedule. If a fleet, however, is not participating in an opt ional trailer fleet compliance schedule, the trailers do not need to be reported.

43. Comment: While tractors and/or trailers that meet certain operating conditions are eligible for specific exemptions, a mechanism to allow the movement of exempt equipment beyond its operating r adius is needed. For example, a local-haul trailer may be purchased or l eased at a location beyond

100 miles of its local-haul base. This trailer wil l need to travel outside of its exempt operating range, yet provisions are not curr ently in place to allow this. CARB staff has acknowledged the need for such a sol ution. ATA would like to ensure an operating solution for this situation is either provided in the regulation or addressed through a formal guidance d ocument. (ATA2)

Agency Response: ARB does not believe movement of exempt equipment will prove to be a problem in practice. If a probl em should emerge, ARB is committed to working with the affected party and, i f warranted, will consider addressing the issue in a future amendment of the r egulation.

44. Comment: In addition, with demand for equipment ranging fr om planned expansions to instant response, the interaction bet ween registration and

enforcement needs to be seamless to allow for the m ovement of equipment. With DOORS being envisioned as the primary link bet ween the regulated fleets and the enforcement agency, ATA encourages C ARB to develop a system which allows for the nearly instantaneous mo vement of equipment when placed in service or when changes in service s tatus occur (i.e., moving exempt equipment out of state). The ability to qui ckly add, delete or modify the registration status of equipment is especially important. In the case of leased equipment, multiple lessees may operate the same piece of- 158 -

equipment during a one-week period. This will requ ire the ability to add and delete lessee information through DOORS in order to keep the equipment inservice and accurately registered. (ATA2)

Agency Response: Because some information entered into DOORS will require ARB review before being made available to e nforcement personnel, there is the potential for database synchronicity i ssues during the enforcement of this regulation. However, since all new data entered into DOORS will be time stamped, any questions that aris e regarding reported data can easily be resolved through a more detailed investigation.

45. Comment: It is not clear how trailer fleet compliance sche dules can be adjusted to accommodate growth or reductions. Trai ler owners will need to make compliance plan revisions when they add purcha sed trailers and remove sold or retired trailers throughout the year . A modification allowing

such revisions should be included in this section. (ATA2)

Agency Response: A fleet may add trailers at any time, but a newly- added trailer may not be added to an existing compliance plan once the due date for that compliance plan has passed. The optional trai ler fleet compliance schedules are only available to trailers that exist in the owner’s fleet at the time of the compliance plan due date. Therefore, f or a newly-added trailer, the owner will have three options: 1) bring the tra iler into compliance before operating such trailer in California, 2) register t he trailer as a local-haul trailer before operating such trailer in California, or 3) dedicate such trailer to only short-haul and local-haul tractors when operating i n California. Regarding sold and retired trailers, they will not have to be removed from our database. For a sold trailer or a trailer completely taken ou t of service, once the fleet officially relinquishes custody of the trailer, the y will no longer be held responsible for it. However, the fleet should main tain evidence documenting the transfer should questions of ownership arise in the future. For a trailer that is simply retired from California service, as long as the trailer does not operate on a California highway after such time, th e trailer will be considered compliant.

46. Comment: The requirement to report trailers that will not operate in California should be eliminated. With today’s corp orate structures, the breadth of this requirement could capture trailers that are outside the North

America continent. There is no nexus between the r eporting of these trailers and the goals of this state regulation. Therefore, the requirements to report trailers that will not operate in the state, as wel l as their California operating status, are unnecessary. (ATA2)

Agency Response: For fleets participating in the large fleet compli ance schedule, they are no longer required to report tra ilers that do not operate within California. However, for fleets participati ng in the small fleet- 159 -

compliance schedule, it is still required to report such trailers. This reporting is necessary to help ensure large fleets do not und erreport trailers to qualify for the small fleet compliance schedule.

47. Comment: There does not appear to be a means, provision, o r requirement in the regulations whereby exempt trailers or tract ors can be identified as such by individuals who must verify whether a tract or or trailer is compliant. There is no provision for a certificate or other do cumentation for a responsible person to refer to protect themselves from using orshipping in a noncompliant tractor or trailer. (CTA3)

Agency Response: ARB is currently developing a web portal for the p ublic to look up the expected compliance or exemption status of any reported trailer.

48. Comment: Section 95303 does not contain specific provision s entitling drivers, California-based brokers, motor carriers, or California-based shippers to use exempt equipment. (CTA3)

Agency Response: Drivers, California-based brokers, motor carriers , and California-based shippers are required to only oper ate and/or dispatch vehicles that comply with section 95303. Pursuant to the regulation, a vehicle meeting the exemption provisions set forth in secti on 95305 also complies with section 95303. Therefore, the regulation does entitle the aforementioned entities to operate or dispatch vehicles that are e xempt pursuant to section

95305.

49. Comment: The proposed regulation in Section 95306(d)(2) an d Section 95307(c)(2)(N) requires tractor and/or trailer owne rs to provide, among other information, VIN and license plate numbers. While CTA has no objection to such information being provided, ARB must keep this information confidential at a level equal to the standard established by the DMV by not making it available for public access. This data can be used by competitors and vendors to put companies at a competitive disadvant age. (CTA3)

Agency Response: Proprietary and trade secret information that a com pany provides to ARB when reporting as required by this regulation, and that the company clearly identifies as confidential, will ge nerally not be released to the public without ARB following procedural safeguards against the release of confidential information. Air pollution emissions data, however, including such data that a company may believe constitutes tr ade secrets, are public

records that must be disclosed under Government Cod e 6254.7(e). Information used to calculate air pollution data is not “emission data” and will not be released to the public if that information q ualifies as a trade secret.

ARB expects to hold the following information as co nfidential whenever companies assert a claim of confidentiality when th ey submit the information:- 160 -

fleet composition, vehicle or fleet age, fleet size , and other confidential data used to determine the estimated cost of compliance. Title 17, California Code of Regulations (CCR), Sections 91000 to 91022, and the California Public Records Act (Government Code 6250 et seq.), set for th procedural safeguards for those who submit information to ARB that they have identified as confidential. If ARB receives a request for dis closure or seeks to disclose data that the originating company has identified as confidential, ARB will ask the fleet owner to provide written confirmation tha t the information is indeed proprietary or a trade secret, along with documenta tion supporting the claims of confidentiality. ARB may release fleet informat ion to the U.S. EPA, which protects trade secrets as provided in Section 114(c ) of the Clean Air Act and amendments thereto (42 USC 7401 et seq.) and in fed eral regulation, as well as other public agencies including, but not limited to, law enforcement and public health agencies, provided those agencies pre serve the protections

afforded the information which is identified as a t rade secret or is otherwise exempt from disclosure by law (Section 39660(e)).

ARB may make information available to the public re lating to 1) violations that have been issued, 2) the reported exemption status of a vehicle, 3) the expected compliance status of a trailer being broug ht into compliance in accordance with an optional trailer fleet complianc e schedule, and 4) the

make and model of a vehicle based on its vehicle id entification number or license plate number.

50. Comment: The regulation needs to discuss the requirements for ARB to ensure the process of adding and removing tractors and trailers from exempt and compliance lists can be accomplished electronic ally so that the consequences of changes can be reflected instantly. This is especially critical for large fleets that will undergo thousands of cha nges each year. For large fleets, a paper intensive process is problematic. (CTA3)

Agency Response: Regarding exemption reporting only, ARB is current ly working on an online reporting system that will all ow fleets to enter and/or edit their reported information at any time. The aforem entioned online reporting system will also be available to fleets for submitt ing their compliance plans pursuant to one of the optional trailer fleet compl iance schedules. However, a

fleet owner will not be able to add or delete trail ers from a compliance plan once the due date for such compliance plan passes. See agency response #45 for more information about adding and deleting trailers.

51. Comment: Section 95307(b)(3) states “....a trailer owner may r edistribute trailers among the final three annual conformance c ommitment lists (but) the trailer owner may not alter the number of trailers identified on each list.” Under this provision, it is unclear how a large fle et compliance schedule would be adjusted for a growing or shrinking large fleet in which there could be thousands of fluctuations every year. (CTA3)- 161 -

Agency Response: See agency response #45.

52. Comment: If the only reason for an owner to report all the trailers is to determine eligibility for the Large Fleet Complianc e Plan yet the only trailers that must comply are those that visit California, i t is not reasonable or necessary to require large companies to report all the trailers in their corporate families. Reporting should only be requi red for the subsidiaries that plan on operating trailers in California once the r egulations become effective. (CTA3)

Agency Response: ARB agrees with the commenter. The current regula tory language does not require large fleets to report tr ailers that will not operate in

California.