# Final Statement of Reasons for Rulemaking

Including Summary of Comments and Agency Responses

PROPOSED AMENDMENTS TO THE

AIRBORNE TOXIC CONTRO L MEASURE FOR IN-USE

DIESEL-FUELED TRANSPORT REFR IGERATION UNITS (TRU) AND

TRU GENERATOR SETS , AND FACILITIES WH ERE TRUs OPERATE

Public Hearing Date: October 21, 2011 Agenda Item No.: 11-8-4

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Contents Page

I. Gener al ................................................................................................................. 1

II. Modifications Made to the Original Proposal ........................................................ 6

III. Summary of Comments and Agency Res ponses ............................................... 13

A. Responses to Comments Received During the 45-Day Comment Period and

Public Hear ing ............................................................................................... 13

B. Responses to Comments Received During the First 15-Day Public Comment

Period ............................................................................................................ 48

C. Responses to Comments Receiv ed During the Second 15-Day Public

Comment Peri od ........................................................................................... 58

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AIR RESOURCES BOARD

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

PUBLIC HEARING TO CONSIDER PR OPOSED AMENDMENTS TO THE

AIRBORNE TOXIC CONTROL MEASU RE FOR IN-USE DIESEL-FUELED TRANSPORT REFRIGERATION UNITS (T RU) AND TRU GENERATOR SETS, AND

FACILITIES WHERE TRUs OPERATE

Public Hearing Date: October 21, 2011 Agenda Item No.: 11-8-4

I. GENERAL

The Staff Report: Initial Statement of Reasons for Proposed Rulemaking (Staff Report), entitled "2011 Amendments for t he Airborne Toxic Control Measure for In-Use Diesel-Fueled Transport Refrigeration Units (TRU) and TRU Generator Sets, and Facilities Where TRUs Operate," rel eased August 31, 2011, is incorporated by

reference herein.

In this rulemaking, the Air Resources Boar d (ARB or Board) approved the adoption of amendments to the regulatio n affecting transport refri geration units (TRU) and TRU generator sets (TRU gen sets). Collectively, TRUs and TRU gen sets shall be referred

to as TRUs. 1 The amendments primarily provi de model year (MY) 2001 through 2003 TRU engines that complied with applicab le Low Emission TRU (LETRU) in-use performance standards by specified time peri ods, a one or two year extension from the more stringent Ultra-Low Emission TRU (ULE TRU) in-use performance standards. This

extension would serve to rest ore competitive fairness to t hose businesses that elected to comply with the regulat ion during 2008 through 2010, although other businesses opted to defer their compliance efforts given the United States Envi ronmental Protection Agency’s (U.S. EPA) delay in issuing ARB an authorization to enforce the regulation. The amendments also clarify manual reco rdkeeping requirements for electric standby-equipped TRUs, and ultimately requi re automated electronic tracking systems for such TRUs; establish requirements for bu sinesses that arrange, hire, contract, or dispatch the transport of goods in TRU-equip ped trucks, trailers, or containers (i.e., brokers, shippers, or receiver s); and clarify several issues t hat were identified during the implementation of the regulation.

1 Title 13, CCR section 2477 et seq. is known as t he Transport Refrigeration Unit Airborne Toxic Control Measure and establishes in-use performance st andards, recordkeeping, and facility reporting requirements for TRUs and TRU generator sets.2 On August 31, 2011, ARB published a notice fo r an October 20, 2011 public hearing to consider the proposed regulator y action. The Staff Report was also made available for public review and comment beginning August 31, 2011. The Staff Report provides the rationale for the proposed amend ments. The text of the proposed amendment to title 13, California Code of Regulations (CCR), section 2477 and the proposed adoption of sections 2477.1, 2477.2, 2477.3, 2477.4, 2477.5, 2477. 6, 2477.7, 2477.8, 2477.9, 2477.10, 2477.11, 2477.12, 2477.13, 2477.14, 2477.15, 2477.16, 2477.17, 2477.18, 2477.19, 2477.20, and 2477.21 was included as an Appendix to the Staff Report. These documents were also posted on ARB’s website for the rulemaking at http://www.arb.ca.gov /regact/2011/tru2011/tru2011.htm

On October 20, 2011, the Board conduct ed a public hearing and received oral

and written comments. At the conclusi on of the hearing, the Board adopted

Resolution 11-35 that cove red the proposed amendment of title 13, CCR section 2477 and the proposed adoption of sections 2477. 1, 2477.2, 2477.3, 2477. 4, 2477.5, 2477.6, 2477.7, 2477.8, 2477.9, 2477.10, 2477.11, 2477.12, 2477.13, 2477.14, 2477.15, 2477.16, 2477.17, 2477.18, 2477.19, 2477.20, and 2477.21 that we re initially proposed by staff and described in the Notice of Publ ic Hearing (45-Day Public Notice) and Staff Report, along with modifications suggested by staff in a document entitled “Staff’s Suggested Modifications to the Original Prop osed Amendments” that was distributed at the hearing and that was Attachment B to the Resolution. 2

In accordance with Government Code secti on 11346.8, Resolution 11-35 directed the Executive Officer to adopt the proposed amendm ent to title 13, CCR section 2477 and to adopt new sections title 13, CCR sect ions 2477.1 through 2477.21 as proposed by

staff and as modified in accordance with Attachment B to Resolution 11-35, to

determine if additional modifi cations to the originally proposed regulation and incorporated certification procedure were appropriate, and if the Executive Officer so determined, to make the modi fied regulatory language availa ble for public comment for a period of at least 15 days before taking fi nal action to adopt the regulation. The

Executive Officer was also directed to cons ider such written comments that were submitted during the public co mment period, to make such modifications as may be appropriate in light of the comments received, or to present the regul ations to the Board

for further consideration if warr anted in light of the comments.

Resolution 11-35 further directed the Execut ive Officer to prepare and approve written responses to comments received, including co mments raising significant environmental issues, as required by Government Code se ction 11346.9, Public Resource Code section 21080.5(d)(2)(D), and the Califor nia Code of Regulations, title 17, section 60007, to determine whether there ar e feasible alternatives or mitigation measures that could be implemented to re duce or eliminate any potential adverse environmental impacts, to make findings as required by Public Resources Code

2 This document was inadvertently identified as Attachment D to Resolution 11-35 at the October 21, 2011 public hearing, but the text of this document clearly indicates that it presents staff’s suggested modifications to the originally proposed amendments to the regulatory text set forth in Appendix A to the Staff Report: Initial Statem ent of Reasons (released August 31, 2011).3 section 21081 if the proposed amendments woul d result in one or more significant adverse environmental impacts, and to ta ke final action to adopt the proposed amendment to title 13, CCR section 2477 an d to adopt new sections title 13, CCR sections 2477.1 through 2477.21 as modified in the publicly noticed 15-day changes.

Subsequent to the hearing, st aff proposed two sets of modi fications to the regulatory text and incorporated certificati on procedures. The text of t he first set of modifications to the originally proposed amendments was made available for a supplemental 15-day comment period by issuance of a “Notice of Public Av ailability of Modified Text.” This

Notice and the attachments thereto we re mailed on Februar y 28, 2012 to all stakeholders, interested parties, and to other persons generally interested in ARB’s rulemaking requirements applicable to TRUs. The “Notice of Public Availability of

Modified Text” listed the ARB website from which interest ed parties could obtain the complete text of the regulation that would be affected by the modifications to the original proposal, with all of the modifications clear ly indicated. These documents were also published on ARB’s website for this rulemaking http://www.arb.ca.gov/r egact/2011/spcn11/spcn11.htm

.

Three written comments were received dur ing this first 15-day comment period.

The text of the second set of modifications to the originally proposed amendments was made available for a supplemental 15-day comm ent period by issuance of a “Notice of Public Availability of Modified Text.” Th is Notice and the attachments thereto were mailed on June 15, 2012 to all stakeholders, interested parties, and to other persons generally interested in ARB’s rulemaking requirements applicable to TRUs. The “Notice of Public Availability of Modified Text” listed the ARB website from which interested parties could obtain the complete text of t he regulation that woul d be affected by the modifications to the original proposal, with a ll of the modifications clearly indicated. These documents were also published on ARB’s website for this rulemaking http://www.arb.ca.gov/r egact/2011/spcn11/spcn11.htm . One written comment was received during this second 15-day comment period.

After considering the comments received du ring both the first and the second 15-day comment period, the Executive Officer issued Executive Order R-12-007, adopting amendments to title 13, CCR section 2477 and adopting new sections title 13, CCR sections 2477.1 through 2477.21

This Final Statement of Reasons (FSOR) updates t he Staff Report by identifying and providing the rationale for the modifica tions made to the originally proposed regulatory text, including non- substantial modifications and clarifications made after the close of the first and second 15-day comm ent periods. This FSOR also contains a summary of the comments received by the Board on the proposed amendments

and the modifications and ARB’s responses to those comments.4 Fiscal Impacts of Proposed Changes.

Pursuant to Government Code secti ons 11346.5(a)(5) and 11346.5(a)(6), the

Executive Officer has determi ned that the regulatory ac tion will not affect any federally funded State agency or program, but may create savings to the California Department of Corrections. The Department of Corrections operates refrigerated

trucks and trailers to service correctional facilities, and owns three TRUs that complied with the LETRU standards on time and are therefore eligible for the ULETRU extension which may produce cost savings of $582 in FY 2015/16. The California Department of Corrections also operates 14 TRUs which use electric standby as the compliance method, which may produce cost savings of $32,200 split

between FY 2012/13 and FY 2013/14. Staff is unaware of any other state agency being affected by the amendmen ts. There would be no additi onal cost impacts to

ARB.

The amendments may impact local school di stricts and municipalit ies that own and operate TRUs, by providing cost savi ngs dependent on the number of TRUs and compliance method utilized. The San Marcos School District operates two TRUs that are eligible for the ULETRU extension, wh ich may produce cost savings of $388 in FY 2015/16. In addition, 65 TRUs with the el ectric standby option are operated by the Elk Grove Unified School District (4 TRUs), the Kern High School District (1 TRU), the San Diego Unified Sc hool District (2 TRUs) and the Los Angeles Unified School District (58 TRUs), which may produce cost savi ngs of $149,500 split between FY 2012/13 and

FY 2013/14.

Pursuant to Government Code sections 1134 6.5(a)(5) and 11346.5(a)(6 ), the Executive Officer has determined that this regulatory action will not create co sts or mandates to any local agency or school district, whether or not reimbursable by the state pursuant to part 7 (commencing with section 17500), division 4, title 2 of the Go vernment Code, or other non-discretionary costs or savings to local agencies.

Consideration of Alternatives.

ARB staff considered three alternative strate gies to the proposed rulemaking action but ultimately rejected those alternatives after determining that those alternatives would not be more effective in reducing emissions t han the proposed rulemaking action. This

section discusses each of the alternatives and provides reasons for rejecting those

alternatives.

The first alternative was to not amend the exis ting regulation. This alternative would not address the need to clarify the current requirements, would not take any actions to improve the compliance rates for the existing regulation, and would not allow the Board

to consider modifications that stakeholde rs have requested during implementation to streamline implementation of t he ATCM and to improve clarit y. This alternative was rejected because it would adversely delay the reductions of TRU emissions near

distribution centers where TRUs congregate, because enforcement efforts would be5 less efficient, because it would not provide consideration to owners of pre-MY 2003 TRUs who complied with the LETRU St andards by Decemb er 31, 2009 or December 31, 2010, and because the Executiv e Officer would not have the flexibility to address delays beyond the contro l of the owner by extending the compliance date up to

four months.

The second alternative considered was to suspend the original regulation and rely on existing federal and State non-road/off-road engine emission standards to reduce diesel PM emissions and public health risks near dist ribution centers. An emissions analysis prepared in the original staff report compared the original regulation to the then-pending Tier 4 new engine emissions standards and s hows a dramatic difference in emission reductions between these two options (ARB, 2003). This alternative was rejected because ARB’s 2003 analysis, updated for the 2011 TRU amendments, shows that the goal of reducing diesel PM emissions by 85 percent, and the corresponding potential cancer risks, would not be achieved by the 2020 deadline. Furthermore, the Tier 4 final new engine standards for <25 hp engines does not require PM aftertreatment control. Diesel PM emissions from these new engin es will remain 10 times greater than the >25 hp engines.

The third alternative considered was to delay compliance with the ULETRU in-use standard by one, two, or three years fo r MY 2004 and newer TRUs, extending the operational life of TRU engines from the current seven years to eight, nine, or ten years. Industry requested this alternative at t he November 2010 Board Hearing and the Board directed staff to evaluate this proposal in consideration of emission and public health impacts. This alternative was rejected bec ause staff’s updated emissions inventory and public health impact analysis indicated that the public health risk at the seven-year operational life still resulted in potential cancer risk levels of concern in communities near facilities where TRUs congregate. Theref ore, relaxing the in-use requirements by delaying compliance and ext ending the operational life of TRU engines would only increase this risk and likely exacerbate concerns regarding elevated risk levels in nearby communities. In addition, owners of older TRUs (e.g. MY 2001 and older, MY 2002, and MY 2003) have been required to meet the in-use standards by 2008, 2009, and 2010, respectively, using a seven-y ear operational life, so there would be fairness issues if the operational life was changed. Also, retrofit device manufacturers that have invested significant resources verify ing diesel particulate filters would be left

with no market for one or more years; this would most lik ely force them to abandon the TRU market. DPFs are a lower-cost compli ance option and their total non-availability may cause the cost of other compliance optio ns to increase. Additionally, the TRU’s PM

emissions reductions also contribute to ARB’s 2014 State Implementation Plan for meeting the federal PM 2.5 standard, so any delayed impl ementation could jeopardize

those commitments and result in lo ss of federal highway funding.

For the reasons set forth in the Staff Report, in staff’s comments and responses at the hearing, and in this FSOR, the Board has determined that no alternative considered by the agency or brought to the at tention of the agency would be more effective in carrying6 out the purpose for which the regulatory acti on was proposed or would be as effective

and less burdensome to affect ed private persons than the action taken by the Board.

II. MODIFICATIONS MADE TO THE ORIGINAL PROPOSAL

As previously discussed, at the October 20, 2011 public hearing, the Board adopted

Resolution 11-35 which directed the Executive Officer to adopt the amendments initially proposed by staff, and to determine if additional modifications to the originally proposed amendments were appropriate, and if the Execut ive Officer so determined, to make the modified regulatory language ava ilable for public comment fo r a period of at least 15 days prior to taking final ac tion to adopt the amendments.

Subsequent to the hearing, st aff proposed two sets of modi fications to the regulatory

text. The first set of modifi cations were explained in detail in the Notice of Public Availability of Modified Text that was issued for a 15-day public comment period that began on February 28, 2012, and ended on March 14, 2012. The second set of modifications was explained in detail in the No tice of Public Availability of Modified Text that was issued for a 15-day public comm ent period that began on June 15, 2012 and ended on July 2, 2012. In order to provide a complete FSOR for this rulemaking, the most significant modifications and clarific ations are summarized below. Sections A through C summarize changes made pursuant to the first 15-day public comment period, and Sections D and E summarize c hanges made pursuant to the second 15-day public comment period.

A. Requirements for Owners or Operators [13 CCR section 2477.5]

1. In section 2477.5(g)(3), subparagraph (C) was added to provide an additional means to submit an app lication to the Executive Officer electronically through ARB’s ARBER website.

2. In section 2477.5(j)(1)(C), s ubparagraph 3. was added to provide an additional means to submit an app lication to the Executive Officer electronically through ARB’s ARBER website.

3. In section 2477.5(k)(1)(A)6., subp aragraph c. was added to provide an additional means to submit an app lication to the Executive Officer electronically through ARB’s ARBER website.

4. In section 2477.5(k)(1)(A), subpar agraph 7. was added to require TRUs and TRU gen sets to be registered in ARBER under section 2477.5(e) if the owner chooses to apply for a co mpliance extension because there is no suitable compliance technology availabl e. Registration provides a way to track these units in ARBER while a compliance extension is in effect, and provides a mechanism for an inspector to check ARBER and determine that a citation for noncompliance should not be issued if an7 extension is in effect. In addition, registration prov ides for verification that compliance has been achieved after the extension has expired.

5. In section 2477.5(l)(1)(C)5., s ubparagraph c. was added to provide an additional means to submit an app lication to the Executive Officer electronically through ARB’s ARBER website.

6. In section 2477.5(m)(1)(G), s ubparagraph 3. was added to provide an additional means to submit an app lication to the Executive Officer electronically through ARB’s ARBER website.

7. In section 2477.5(n)(1)(E), s ubparagraph 3. was added to provide an additional means to submit an app lication to the Executive Officer electronically through ARB’s ARBER website.

B. Requirements for TRU and TRU Gen Set Original Equipment Manufacturers [13 CCR section 2477.13]

1. Section 2477.13(a)(3) has been modified to require the original equipment manufacturer (OEM) to provide a wri tten disclosure to be shipped with the TRU or TRU gen set if a TRU or TRU gen set is equipped with a flexibility engine. The modification also requires the OEM to instruct the dealer that sells the TRU or TRU gen set that they are required by California law to notify the ultimate purchaser of this disclosure prior to sale, and to pass the OEM-provided written disclosure to t he ultimate purchaser at point of sale. The originally proposed amendm ent required the OEM to provide a written disclosure to the ultimate purc haser prior to sale of a TRU or TRU gen set that is equipped with a flex ibility engine. An OEM provided comments during the 45-day public comm ent period that they do not sell TRUs and TRU gen sets directly to most ultimate purchasers and therefore do not have an opportunity to directly provide a written disclosure to most ultimate purchaser s prior to sale. Instead, the OEM’s dealers sell TRUs and TRU gen sets to most ultimate purchasers and

would therefore have direct contact with these ultimate purchasers and be able to provide the required notificati on. This modification therefore

accommodates OEMs such as the commenter.

2. New sections 2477.13(c)(2)(D) and 2477.13(c)(3)( D) have been added, which allow TRU or TRU gen set OEMs to request Executive Officer approval of an alternative web-based, on-line look-up system to provide registration information to TRU and T RU gen set owners. The Executive

Officer must find the alternative to be at least as effective as the originally proposed amendment, which r equired the OEM to provide a registration information document with each new TRU or TRU gen set. An OEM suggested this approach during t he 45-day public comment period8 because its system is not compatib le with the originally proposed

amendment.

C. Requirements for TRU, TRU Gen Set, and TRU-Equipped Truck and Trailer Dealers [13 CCR section 2477.14]

1. Section 2477.14(a)(1) was modified to require dealers to provide a print-out of the registration informati on from the OEM’s web-based look-up for a new TRU or TRU gen set if the OEM does not provide the registration information document wit h the new TRU or TRU gen set. Dealers would need to obtain approval fr om the Executive Officer for the alternative under section 2477.13(c)(2 )(D) to provide registration information through a web-based look-up.

2. Section 2477.14(a)(2) was modifi ed to require dealers to provide a print-out of the registration informati on from the OEM’s web-based look-up for a new replacement engine or rebuilt replacement engine if the OEM does not provide the registration information document with the new replacement engine or rebuilt replac ement engine. Dealers would need to obtain approval from the Executive Officer for the alternative under section 2477.13(c)(3)(D) to provide registra tion information through a web-based look-up.

3. New section 2477.14(a)(4) has b een added to require TRU and TRU gen set dealers to notify the ultimate purc haser, prior to sale, of the OEM’s disclosure that a new TRU or TRU gen set is equipped with a flexibility engine. The modification also requir es dealers to pass the OEM’s written disclosures, under section 2477.13(a)(3), that the TRU or TRU gen set is equipped with a flexibility engine, to the ul timate purchaser at point of sale. This requirement is related to and consistent with the modification described in B.1., above, and therefor e meets the Board’s direction to propose additional conforming modifi cations for comment and adoption.

D. Exemption for Noncompliant, Non-Op erating Refrigerated Railcar TRUs Passing Through California, if Certain Conditions and Criteria are Met [13 CCR section 2477.3]

Comments were received regarding noncom pliant TRUs on re frigerated railcars that travel through Calif ornia without operating. For example, railroads occasionally need to move such noncom pliant TRUs on em pty refrigerated railcars from Arizona to Oregon or Washi ngton. Allowing such noncompliant TRUs to pass through California if they are not operated would avoid having to

route them around Calif ornia borders over a much long er and more costly route. These TRUs are already equipped with el ectronic tracking systems that can be used to monitor the TRU location, date and time using global positioning systems (GPS), and automated recorder s to capture the engine run status (e.g. “engine9 on” or “engine off”). Ex isting trackside readers and data acquisition and storage systems can collect this data and use it to demonstrate that the TRU engines never operate while inside of California.

Subsection (e) is proposed to be added to 13 CCR, section 2477.3 to provide an exemption for such TRUs, provided the Executive Officer has previously approved a written compliance plan, submitt ed by the railway carrier. The written compliance plan would clearly identify the monitoring, recordkeeping, and reporting procedures that the railway ca rrier would implement and utilize to ensure noncompliant TRUs on refrigerated railcars will not oper ate at any time while in California. The compliance pl an would include, without limitation: the procedures for tracking and recording routes and dates of travel within California of each noncompliant TRU, information identifying each noncompliant TRU, a description of the automated monitoring and recordkeeping system for reporting the TRU “engine on” and “engi ne off” status, and the proc edure for expeditiously reporting violations observed or discover ed by the railway carrier to ARB. A statement would be requir ed, signed by an authorized railroad representative, declaring that the railway carrier agrees to be bound by the compliance plan. Compliance verification records would be maintained for three years and would be provided to authorized enforce ment personnel upon request.

E. Add an Exemption for a Railway Ca rrier Exempting Them from the Owner or Owner/Operator Requirements of Section 2477.5 for Any TRU or TRU Gen Set that is Not Owned by the Railway Carrier [13 CCR section 2477.3(f)]

The TRU ATCM’s in-use performance standards in section 2477.5 apply to owners or operators of TRUs that operate a TRU or TRU gen set in California.

The 2011 TRU Amendments added language to the definition of “operate” to make it clear that a TRU or TRU gen set that is operable (capable of being operated) shall be considered to operat e if it is in California.

A railway carrier may be under contract to per form some activities that presently

fall under the definition of “ operate”, such as fueling, monitoring, or keeping the unit operating; and, may perform these activities on behalf of the owner to ensure safe transit of their customers’ peris hable goods. For example, if there is a derailment, or other kind of delay in mo vement, the railway carrier may monitor

the TRUs’ fuel levels and refuel them if necessary. But railway carriers do not load or unload perishable goods being tr ansported and do not set the equipment operating programs of t hese third party TRUs.

Staff is proposing to add section 2477.3(f) , to exempt a railwa y carrier from the owner or owner/operator r equirements of section 2477. 5 for refrigerated railcar TRUs that are owned by third parties, w here the railway carrier is only moving the refrigerated equipment for a customer. This exempti on would not apply if the rail carrier is leasing the TRU, in which case the lessee requirements of section 2477.12 would apply to the rail carri er. This exemption would also only10 apply if the railway carrier or its agent is only fueling, monitoring to assure proper operation, keeping in operation, arranging repairs at the request of the owner, or restarting the TRU or TRU gen set engi ne after an unscheduled shut-down or repair, and is not performing any of the ot her activities list ed under the definition of “operate.”

It is not staff’s intent to exempt rail carriers from t he freight broker and freight forwarder requirements of section 2477.8 if the rail carrier is the business entity that hires, contracts for, or dispatc hes the transport of perishable goods in TRU-quipped or TRU gen set-equipped tr ucks, tractor-trailers, shipping containers, or railcars on California highw ays or railways. For example, if a rail carrier, its parent company, or subsidiary arranges drayage at the ends of the rail leg of perishable food transport, the fr eight broker or freight forwarder requirements of section 2477.8 would apply to the rail carrier.

F. OTHER MINOR CHANGES

Staff also made various minor modifications to the r egulatory text to remove typographical errors and to improve clarity. These modifications were described in the first 15-day notice and are set forth below.

1. Exemptions [13 CCR section 2477.3]

a. Subsection (d) included an inco rrect reference to “subsection 2477.5(o)” and has been corrected to read “subsection 2477.5(j).”

2. Requirements for Ow ners or Operators [ 13 CCR section 2477.5]

a. In section 2477.5(a)(2), a double underline was added to the subparagraph outline heading “(A)” because the underline was omitted in the original version.

b. In section 2477.5(b)(3), a double underline was added to subparagraph outline headings “(A)” and “(B)” because the

underline was omitted in t he original version.

c. In section 2477.5(b)(4)(A), a double underline was added to subparagraph outline headings “1.” and “2.” because the underline was omitted in the original version.

d. In section 2477.5(b)(5)(B), a double underline was added to subparagraph outline headi ng “1.” because the underline was omitted from the original version.11 e. In section 2477.5(d)(3)(A), the subparagraph numbering was corrected by deleting the numeric al outline headings “(1)” through “(6)” and replacing them with num erical outline headings “1.” through “6.” because the wrong outline hierarchy was used for this

list.

f. In section 2477.5(d)(3)(B), the subparagraph numbering was corrected by deleting the numeric al outline headings “(1)” through “(7)” and replacing them with num erical outline headings “1.” through “7.” because the wrong outline hierarchy was used for this

list.

g. In section 2477.5(e)(1)(B), a double underline was added to the subparagraph outline headi ng “1.” because the underline was omitted from the original version.

h. In section 2477.5(g)(2), the se cond instance of subparagraph (E) was corrected to be subparagraph (F).

i. In section 2477.5(h)(1), “O wner/Operator” was capitalized (lowercase letters “o” was replac ed with uppercase letters “O”) to be consistent with section title formatting requirements.

j. In section 2477.5(h)(1)(D), at the end of the last sentence, a comma and space were placed between “2477.5(e)” and “2477.5(f)”.

k. In section 2477.5 (j)( 1)(G), the numbering of subparagraph 3. was corrected to be subparagraph 2.

3. Requirements for California-Based Shippers [13 CCR section 2477.10]

a. In section 2477.10(a), a duplicate “that” was deleted.

4. Requirements for California-Based Receivers [13 CCR section 2477.11]

a. In section 2477.11(a), a duplicate “that” was deleted.

5. Requirements for TRU and TRU Gen Set Original Equipment Manufacturers [13 CCR section 2477.13]

a. In section 2477.13(b)(1)(B), a double underline was added to the subparagraph outline headi ng “3.” because the underline was omitted from the original version.12 b. In section 2477.13(b)(2)(C), subparagraph heading number “9.” was added because it had been incorrectly struck out in the earlier

version.

c. In section 2477.13(d), change the wo rd “disclose” to “disclosure.”

G. Non-Substantial Modifications

Subsequent to the first and second 15-day public comment periods mentioned above,

staff discovered that it had not correctly cited the titl es of documents cited as references for this rulemaking, and had also erroneously included an ARB staff person as a participant in a telephone conference call t hat also serves as a reference for this rulemaking. Staff has therefor e modified these references (all of which are cited in the Staff Report) to correct t hese oversights as follows:

1. (ARB, 2008a). California Air Re sources Board, TRU Advisory 08-01. The previously cited title, “Using Model Year to Determine TRU ATCM Requirements,” has been corre cted to “Using Model Year to Determine TRU ATCM Compliance Date.”

2. (ARB, 2008e). California Air Resources Board, TRU Advisory 08-05. The previously cited title, “Using Rebuilt Engines for TRU ATCM Compliance,” has been corrected to “Using Rebuilt/Remanufactured Engines for TRU ATCM Compliance.”

3. (OEHHA, 2009). The previously cited title “The Air Toxics Hot Spots Program Risk Assessment Guidelines : Part II [Technical Support Document for Describing Available C ancer Potency Fact ors.] May, 2009”

has been corrected to “Technical S upport Document for Describing Available Cancer Potency Factors: Methodologies fo r derivation, listing of available values, and adjustments to a llow for early life stage exposures.”

4. (Thermo King, 2011). ARB staff person Richard Boyd was erroneously listed as a participant of three telephone conference calls, and his name has been removed from that list of par ticipants to those telephone calls.

Staff also modified a reference listed at the end of Appendix C of the Staff Report.

1. (USEPA, 2008). The previously cited title, “NONROAD Model (Nonroad engines, equipment and vehicles). Model version 2008a” has been

corrected to “NONROAD 2008a Model. Median Life, Annual Activity, and Load Factor Values for Nonroad Engi ne Emissions Modeling, NR-005d (EPA-420-R-10-016, July 2010).” United States Environmental Protection Agency. Retrieved on June 5, 2011 from http://www.epa.gov/oms/nonrdmdl.htm ”13 The above described modifications constitute non-substantial change s to the regulatory text because they more accurately reflect t he titles of documents or more accurately reflect participants to telephone conference calls, but do not materially alter the requirements or conditions of t he proposed rulemaking action.

III. SUMMARY OF COMMENTS AND AGENCY RESPONSES

A. Responses to Comments Recei ved During the 45-Day Comment Period and at the Public Hearing

Written comments were received during the 45-day comment period in response to the October 20, 2011 public hearing notice, and written and oral comments were presented at the pub lic hearing.

Table 1, below, lists the organizations and individuals that pr ovided comments.

Table 1. List of Individuals and Businesses Submitting Written and Oral Comments During the 45-day Comment Pe riod and at the Public Hearing

Commenter

Name Affiliation Identification

Code Clabaugh, Jim Individual JC Lund, Kenneth Allen Lund Company ALC Voltmann, Robert Transportation Intermediaries Association TIA

Brezny, Rasto Manufacturers of Emi ssion Controls Association MECA-RB

Kubsh, Joe Manufacturers of Emi ssion Controls Association MECA-JK Gilliland, Kenneth Western Growers Association, Agricultural Council of California, California Association of Winegrape Growers, California Citrus Mutual, California Farm Bureau Federation, California Grape and Tree Fruit League, California Pear Growers Association, California Poultry Association, California State Floral Association, Grower-Shipper Association of Central California, Grower-Shipper Association of Santa Barbara and San Luis Obispo Counties, Neisi Farmers League, Pacific Egg and Poultry Association, Ventura County Agricultural Association, and Western Agricultural Processors

Association WGA

Lyons, James Sierra Research, Inc., California Trucking

Association SRI14 Yip, Kathleen Natural Resources Defense Council, Union of Concerned Scientists, East Yard Communities for Environmental Justice, Environmental Health Coalition, Coalition for Clean Air, American Lung Association, Central Valley Air Quality Coalition, Sierra Club, Bayview Hunters Point Community

Advocates NRDC

Shimoda, Chris California Trucking Association CTA Tunnell, Michael American Trucking Associations ATA Long, Bryan Foster Poultry Farms and TRU Industry FF Shuemake, Mike Central Valley Trailer Repair and CTA CVTR Cramer, Jon Certified Freight Logistics, Inc. CFL

Miller, Dan Save Mart SM Smith, Patrick Harris Ranch HR Babineau, Thomas Rypos RTB

Bransfield, Peter Rypos RPB Bush, Kara California Grocers Association CGA Holmes-Gen, Bonnie American Lung Association ALA Jack, Crystal Nisei Farmers League, California Citrus Mutual, California Grape and Tree Fruit League, Western Agricultural Processors Association NFL

Maddox, Bill Carrier Transicold CT

Set forth below is a summary of each comment regar ding the regulatory action and the agency response to that comment, including an explanation of how the regulation was changed to accommodate t he comment or the reason(s) for not making a change to the regulation. Co mments not involving objections or recommendations specifically directed toward this rulemaking or to the procedures followed by ARB in this rulemaking are not included.

Availability and Reliability of Retrofits

1. Comment : TRU retrofit devices are a proven technology based on the same types of filter designs as have been co mmercialized in other off-road and on-road applications. We believe there is an e ffective plan in place for the sufficient supply of Level 3 filters to meet the expected demand for these devices. Currently, there are two Level 3 VDECS available for TRU engines. MECA members are in the process of verifying with ARB additional retr ofit devices that can meet ULETRU requirements. These units are extensions of the current LETRU designs, with only slight mechani cal and filter medium modifications required in order to achieve the higher efficiency required for ULETRU performance. They will incorporate all of the durability impr ovements identified during the LETRU program. And currently, there are over 5,000 LETRU devices out in the field demonstrating excellent resu lts. The latest versions of ULETRU

demonstration units have accumulated t housands of hours, also with very good reliability, and fuel consumption impac ts of less than about five percent. Although early designs of these technologies have identified some issues, these15 were easily addressed through redesigns. Currently, our members' experience

with TRU retrofits has been excellent and c onsistent with what we've seen with

other retrofit devices -- fleets that have comprehensive ma intenance programs for their engines and their devices get ex cellent performance from their retrofit units. We urge the Board to continue to support the resources for the verification process in order to ensure that the Level 3 devices that are in the pipeline get through as fast as possible. (MECA-RB, MECA-JK)

We are one of the VDECS supplier s. We've been developing and supplying electrically regenerated filters for California's market for over ten years. We have built an installation and support network t hat covers the western United States and Mexico. We have supplied over 5,200 f ilters to the field. And collectively

these filters have accumulated over 20 million operating hours and removed 215 tons of PM, at a current rate of 90 tons per year . Independent lab test data shows the fuel consumption increased 4. 8 percent with our f ilter system. The general success of the program didn't co me without mistakes, but we moved quickly to voluntarily exchange 100 perc ent of the units, whether they were having problems or not, and we have not c harged a single dollar for any repair or replacement. We have been completely transparent with our customers and ARB staff regarding issues and recovery plans. ARB staff immediately got involved and has been great about addressing these issues when notified by us or industry that there were problems. Our efforts to fix the issues have worked. Our mean time between repairs has improv ed. Our failure rate was a high of 6.2 percent for a short peri od, but overall, with 5,200 uni ts in the field, we had 318 failures. We are now down to a 3.7 per cent failure rate. While that is still unacceptable, the operators have work ed with us to resolve problems and educated themselves as part of the soluti on. Today, 95 percent of the failures are due from the engine side not providing quality electricity to the filter. If they use the recommended parts - the recomm ended high-efficiency alternator, belts, and pulleys with the recommended belt tensi oning - we have a reliable system. VDECS are not mufflers – they are s ophisticated pieces of equipment. (RTB)

Agency Response: ARB is committed to thor oughly evaluating VDECS through

the Verification Procedure 3 to confirm emissions redu ctions and assure they are reliable. We complete the verification ev aluations as expeditiously as possible, using our available resources. We conti nue to monitor their use in the field and encourage operators to repor t to us if they believe that reliability or safety issues

need to be resolved. If issues ar ise, we coordinate with the VDECS

manufacturer and affected TRU owners to make sure they are expeditiously

resolved.

2. Comment: Carriers have expressed dissa tisfaction with retrofits due to maintenance and operational issues. (ATA)

3 Verification Procedure, Warranty, and In-Use Complianc e Requirements for In-Use Strategies to Control Emissions From Diesel Engines, under title 13 Ca lifornia Code of Regulations, sections 2700-2710.16 In 2010, Foster Farms inve sted approximately $900,000 on f ilters to retrofit our refrigerated trailers to gain compliance wit h California regulations. During the past 11 months, we've experienced 41 fuel pump failures on our 200 filter units.

Our current failure rate of fuel pumps on non-filter units is approximately two percent. In addition, we have experie nced an increase in fuel consumption,

which we attribute to the f ilters. Equipment failure to a refrigerated carrier can be one of their worst nightmares. The loads ar e often valued at over $100,000. If failure happens while in transit, the TRU shuts down and our customers could reject the load. The food safety issue is our number one concern. We believe we only have one viable option, and that is to repower. T he ULETRU filter will not be a viable option due to total operati ng cost, filter product reliability, and importantly, food safety. (FF)

We're concerned with the retr ofit device that is approv ed today. This device requires a shut-down of equipment once ever y eight hours for 30 to 40 minutes. Also it's putting a strain on that piece of equipment because of the electronic side

of it. We're concerned because our cu stomers put a temp erature recording

devices in the trailer to monitor th e temperature during transport. When we deliver, they read that device and can refuse to accept the load if the temperature has exceeded 40 degrees. Then we have to buy the rejected load. We're very

concerned that this retrofit device will shut the TRU dow n and it won't start again, resulting in temperature spikes an d potential load damage claims. (CFL) Originally, we tried to get to 85 percent compliance (Level 3) instead of the Level 2 that was required at the time; but, they weren't practical for our operation, so we had to go back to Level 2. There were two options for us: retrofit or engine replacement. Engine replacement was approxim ately 50 percent higher cost, so we chose to retrof it. We retrofitted 49 units at a cost of approximately $300,000. In 14 months of operation, we had the following failures: 51 electronic control units, 104 percent failure rate; 30 particulate filters, 61 percent failure rate; 44 alternators, 90 percent failure rate; 35 batteries, 73 percent failure rate; six engines, twelve percent failure rate. In all of our years of operation, we have never replaced an engine. These fa ilures caused down time and required emergency action to maintain temperatur e control for food safety. We have a system in our trailers called temperat ure tracker which gives us real-time readings. When a TRU goes down and the ambient temperatures are 90 degrees and above, within an hour the in ternal trailer temperatures are 65 degrees. Our product has to be deliver ed at 40 degrees or less. Our TRUs will be out of compliance soon unless the rule is extended. If not extended, they will have to be retrofitted for 85 percent par ticulate reduction. I'm very doubtful that the technology will be available for 85 percent particulate reduction, considering the failures we experience with 50 percent particulate reduction. (HR)

Agency Response: ARB shares the commenter’s concerns regarding potential

VDECS failures that could cause food safety issues and damages. We have incorporated rigorous field demonstrati on requirements into the verification17 protocols for VDECS used on TRUs to ens ure VDECS are sufficiently robust for the TRU application.

By law, VDECS must only be installed on engines and applications that meet the

terms and conditions of the verificati on Executive Order. TRU owners that

choose VDECS need to be aware that these systems require careful compatibility assessment to ensur e a good match between the VDECS and engine. TRU engines need to have been well-maintained and in good condition

at time of retrofit. After installation , engine maintenance is critical and greater operator vigilance over the VDECS is necessary. We provide training for operators to ensure they understand that choosing to comply with the in-use requirements by retrofitting with a VDEC S means that TRU operations may be different than they were previously. Ea ch of these considerations is expanded upon below.

Engine condition at time of retrofit must be assessed because engine emissions

increase over time due to wear on emissions-related components and lube oil consumption increases wit h age. Fuel injector deposits can build up and compromise the fuel spray pattern in the combustion chamber. Also, fuel injector leakage increases and fuel pumps de liver less pressure as they age.

Manufacturers of VDECS for TRUs set limits on lube oil consumption and require injector tips to be replaced at time of retrofit to ensure good fuel spray pattern and a lower soot loading rate. If a fuel pump is close to the end of its life, replacing old fuel injectors may inadvert ently cause the fuel pump to fail sooner than it would have otherwise, because t he fuel pressure load on the pump may be greater with new in jectors than it was with old, leaky out-of-specification injectors.

Electrically regenerated VDECS require co nsistent, high-quality electric power. One VDECS manufacturer (Rypos) initially recommended over-sized, high-quality alternators, al ternator belts and pulleys, and batteries and offered these high-quality components, which are co mpatible with their systems. But, when many customers ignored the reco mmendation and subsequent failures occurred, they began including these parts in their installation kits. Alternatively, when TRU fleets prefer to purchase these parts at fleet discount rates through the TRU OEM, Rypos requires proof that they are installed as a condition of warranty coverage. The more robust systems have reduced failure rates.

After retrofitting is completed, the engine’s fuel injection system must be maintained to continue to perform within the engine manufacturer’s specifications, air filters must be mainta ined, and intake and exhaust valves must be properly adjusted. If the operator fails to complete the recommended emissions-related engine maintenance, t he soot loading rate increases and the VDECS may be unable to control exhaust ba ckpressure, which would then affect engine performance and reliability. The operator must continue good18 maintenance practices and pay attention to the VDECS backpressure monitoring system and respond appropriately to system warning notices.

The commenter’s reference to a VDEC S that requires a 30- to 40-minute shut-down every eight hours is much greater than we have seen in actual use for TRUs. The only Level 3 DPF used in tr ailer TRUs that requires shut-down to regenerate the filter is the Huss MK 50 f ilter, which regenerat es in ten minutes, every 10 hours. The greater regeneration times referr ed to by the commenter apply to much larger Huss filters that are used on off-road equipment, not TRUs.

A ten minute shut-down every 10 hours should not cause an unacceptable temperature increase for most TRU app lications. To date, none of the TRU operators that have HUSS filters have r eported any such issues to ARB.

The commenter expressed concern about the engine having to shut down to regenerate and the potential failure to re -start. Since the October 21, 2011, Board hearing, the Rypos DPF/ULETRU ( Level 3) VDECS was verified, which does not require the engine to shut down to regenerate.

If a TRU owner does not believe the VDECS compliance option provides satisfactory reliability or engine shut- down time is unacceptable, they may choose an alternative compliance option, such as engine repower or unit replacement.

3. Comment: There is only one ULETRU comp liance option on the market, which

is to retrofit with a filter. There is no way to change our engine and comply with the ULETRU component. The repower compliance option does not meet ULETRU, so all that does is restart t he compliance clock again and seven years later we have to deal with compliance again. (CVTR, SM)

We would certainly welcome a “one-and-done” concept. (HR)

For the vast majority of TRU operator s, there is curr ently no “one and done” compliance solution. Retrofits, which we re previously touted as the most likely in-use compliance approach, have, for the most part, not been able to meet operational demands. With new ULETRU compliance requirements scheduled to take effect this year, retr ofit options are currently limited to one system which requires the refrigeration system to shut down during filter regeneration (which can be an issue when transporting perishable goods). As a result, compliance is being achieved primarily through engine repow ers or TRU replacements. Both of these options have resulted in signific antly higher compliance costs which are expected to increase even more when TR U engines meeting the Tier 4 final emissions standards (or ULETRU complia nt) become available in 2013. (ATA)

Agency Response: Going forward, model year 2004 and newer trailer TRU engines must meet ULETRU. When a T RU engine meets ULETRU, there are no19 further in-use standard requirements, which is what the commenter refers to by

“one-and-done.”

Compliance options were discussed in the Executive Summary and Chapter II of the Staff Report. Further discussion is provided below in the context of “one-and-done” and compliance option availability, going forward.

Retrofitting with a Level 3 VDECS, wh ich meets ULETRU, is a “one-and-done” compliance solution. The Huss MK 35 and MK 50 DPFs are Level 3 DPFs and were conditionally verified on July 2, 2010, while extensive field demonstrations were completed, and final approval o ccurred on August 22, 2011. The Huss MK 35 and MK 50 VDECS have been verified for use on all TRU engine models. The Rypos DPF/ULETRU is also a Lev el 3 DPF and was fully verified on December 12, 2011. This DPF has been verified for all single-temperature Thermo King and Carrier Transicold model s. Single-temper ature TRU models refrigerate a single cargo space to a set-point temperature and make up approximately 80 to 85 percent of the T RU market. A third VDECS manufacturer is currently working to obtain verificati on of a Level 3 DPF t hat does not require engine shut-down during regeneration.

Using an electric standby-equipped TRU, hybrid electric TRU, or hybrid cryogenic temperature control system in a wa y that eliminates the diesel engine operation at nonretail facilities and lim its diesel engine operation to less than 30 minutes at retail delivery points is a compliance option that meets ULETRU

and is therefore also a “one- and-done” compliance strategy.

Unit replacement is also a compliance optio n, albeit more expensive, that may be appropriate for higher use TRUs that ar e near or beyond their useful lives and need to be replaced for economic and reliability reasons. New 25 to 50 horsepower engines manufactured for installation in new TRUs after January 1, 2013, must meet the Tier 4 final emissions standards, which meet ULETRU. Replacing a noncomp liant unit with a new unit that is equipped with an engine that meets ULETRU is a “one-and-done” compliance strategy. Replacing a noncompliant unit with a new unit that is equipped with an engine that meets the current Tier 4 interim new engi ne standard would not meet ULETRU and

would therefore need to be retrofitted with a Level 3 VDEC S by December 31 st of the seventh year after the engine’s model y ear. At that point in time, however, the age of the trailer would be near 14 years, so the chassis undercarriage may be worn out, and the van insulation and door seals would be degraded to the point that the trailer may need to be re tired due to poor operating economics.

The commenter correctly notes that k eeping an in-use TRU in compliance by repowering with a new replacement engine t hat meets the current Tier 4 interim

emission standards would not meet ULET RU and would therefore need to be

retrofitted with a Level 3 VDECS by December 31 st of the seventh year after the replacement engine’s model year. At that point in time, however, the age of the20 trailer and refrigeration system would be appr oaching 14 years, so in addition to the previously-discussed trailer deterio ration issues, the efficiency of the refrigeration compressor, evaporator and condenser coils would have deteriorated significantly and the trailer would likely need to be retired due to poor operating economics. If an owner finds the economics of engine repowering to be unfavorable for its bus iness plan, then the other compliance options discussed above are av ailable for consideration.

Enforcement Issues

4. Comment : Our members estimate that less than 40 percent of the TRUs that have been impacted by this regulation are in compliance. And that's why we urge the Board to continue to support t he enforcement program to ensure that those that have chosen to comply ar e not financially di sadvantaged in the marketplace. Going forward, we urge t he Board to continue to provide sufficient resources to these programs to enable the agency to maintain a verified retrofit technology portfolio that provides end-users with a variety of proven, cost-effective, retrofit opt ions from a number of supp liers and enforcement of a level economic playing field for end us ers. Our members experience has shown that market adoption by fleets is heavily influenced by the regulatory deadlines and few if any operators elect to comply early. LETRU systems were available in mid-2008; however, minimal compliance ac tivity was experienced even 60 days prior to the actual compliance date. (MECA)

Agency Response: Staff agrees and the St aff Report discusses that compliance rates are unacceptably low for TRUs that have passed a compliance date. We are enforcing the TRU ATCM to maintain a level playing field. We routinely send notices to TRU owne rs reminding them of approaching compliance deadlines and notifying noncompli ant owners that they may be cited and penalized if they are found to be operating nonc ompliant TRUs in California.

5. Comment : The compliance rate, which was presented last November (2010) was around 90 percent, from actual check po ints on the road. And now it's being presented as 60 percent. I think that 60 perc ent is for all affected vehicles, which

includes out-of-state carrier s and the number of units involved. I believe that the actual California compliance for those people that are operating in California is much, much higher than that. (CVTR)

Agency Response: The Staff Report discusses compliance rates for engines that have passed a compliance deadline. Those compliance rates exclude TRUs that are in compliance because they hav e not passed the seven year in-use compliance threshold. We agree that the compliance rate based only on field inspections would be greater than the va lue reported in the Staff Report because

that value would include TRUs that have not passed a compliance deadline and were not yet required to take action to comply.21 Looking at this issue from the perspec tive of noncompliance may be more instructive because that perspective woul d consider the units that have passed a compliance deadline and failed to comply. This distinction is relevant because poor compliance rates contribute to t he need for the propos ed amendment that adds requirements for driv ers, brokers, freight forwarders, shippers, and receivers, if they are the party res ponsible for arranging the transport of perishable goods on California Highways (s ee Staff Report page II-12). It should

be noted that the comment submitted by Transportation Intermediaries Association indicates they bel ieve the compliance rate for the carriers that their members hire is only six percent (see Comment 30).

The compliance rate for only California-bas ed TRUs is of secondary interest to

the need for this amendment. Therefor e, no change was made in response to

this comment.

6. Comment: The proposed regulation was developed pursuant to AB 32 and any violation would be subject to the penalties set forth in Article 3 (starting with Section 42400) of Chapter 4 of Part 4 of Division 26 of the California Health and Safety Code. The code reads:

“any person who violates this part, or any rule, regulation, permit, or order of the state board or of a district, incl uding a district hearing board, adopted pursuant to Part 1 (co mmencing with Sect ion 39000) to Part 4(commencing with Section 41500), inclusive, is guilty of a misdemeanor and is subject to a

fine of not more than one thousand dollars ($1,000) or impr isonment in the county jail for not more than six months, or both.”

TIA is extremely concerned with this se vere penalty structure and would request

reassessment of t he language. (TIA)

Agency Response: The commenter is incorrect in stating that the proposed regulation was developed pursuant to AB 32. As discussed in Section I of the Staff Report, several sections of the H ealth and Safety Code authorize ARB to adopt and enforce the TRU ATCM and t he proposed amendments, including Health and Safety Code sections 39650 through 39675 (California Air Toxics Program). Accordingly, violations of the proposed amendment s would be subject to the provisions of the Health and Safety Code sections 39674 and 39675, which prescribe maximum penalties of $1,0 00 or $10,000 per day of violation, or the provisions of Health and Safety Code section 42400, 42400.1, 42400.2, and 42402.2. No change was made in response to this comment as ARB does not have the authority to amend thes e penalty provisions that are set forth in existing

statutes.22 Emissions Inventory Issues

7. Comment : The updated TRU emissions inv entory, and in particular the emission factors selected for use by CA RB staff in the updated inventory, are generally based on the OFFROAD2007 model . The OFFROAD2007 model has previously been shown to overestimate emissions for specific types of equipment—for example, equipment subject to the in-use, off-road regulation. The original OFFROAD2007-based inventor y vastly overstated PM emissions; this was acknowledged by CARB staff, who subsequently revised the inventory drastically downward to address flaws in OFFROAD2007. Although CARB staff have attempted to revise the TRU inv entory to address similar issues with OFFROAD2007 and to improve the accuracy of the TRU inventory, Sierra’s review has identified the following three ar eas of concern that appear to lead to

an overestimation of ba seline TRU emissions:

The basic emission factors used to estima te TRU emissions appear to overstate TRU PM emissions;

During the original development of the TRU regulation in 2003 and 2004, the fact that TRU engines operate over a duty cycle t hat is different than that of similar engines used in different applications was an issue that was raised and accepted by CARB staff and the staff of the U.S. Environmental Protection Agency (EPA). This led to EPA’s adoption of a specia l four-mode test cycle for engines used exclusively in TRU applicatio ns and the acceptance of that cycle by CARB. This four-mode cycle is found in t he EPA regulations in Sect ion 1039.645 of Title 40, Code of Federal Regulations. That CARB staff accepts that the four-mode cycle is representative of T RU operation is documented on pages C-27 to C-33 of Appendix C of the ISOR, w here CARB describes how it used the four mode cycle to estimate engine load factors, a key parameter in the em ission inventory update.

Although CARB staff acknowledges that the four-mode cycle is representative of TRU operation, the basic emission factor s used by CARB staff in the emission inventory are based on the eight-mode test that is used to characterize the operation of similar engines used in other app lications. That this is the case is confirmed by CARB staff’s statement on page C-66 of Appendi x C of the ISOR, which acknowledges that emission fact ors and deteriorati on rates from the

OFFROAD2007 model were used to prepare the updated TRU emission inventory.

In order to estimate the impact of the four-mode cycle versus the eight-mode cycle on emissions, modal emissions data ar e required. Fortunately, the modes of the four-mode cycle are also part of the eight-mode cycle that is used to certify the engines used in TRU and other applications. Therefore, all that is required to

estimate the emissions differences are the modal data that underlie the emission values and that must be reported to CA RB staff in order to obtain emissions23 certification of new TRU engines, whic h are limited in number as shown in Table 23 of Appendix C of the ISOR. Howe ver, despite the fact that the existing TRU regulation requires the submission of modal data (see sections 2477(d)(14), (e)(1)(A)1.a.1., and (e)(1 )(A)2.a.1., Title 13, California Code of Regulations), it is Sierra’s understanding that CARB st aff apparently failed to require the

submission of those data.

The potential impact of the difference in TRU emissions over the four mode cycle as compared to the eight mode cycle, upon which the updated TRU inventory is based, could be substantial. Given that CA RB staff indicates that it has no modal emissions data from TRU engines upon which to gauge the impacts of the four-mode test cycle relative to the eight -mode cycle, Sierra Research solicited such data from engine manufacture rs and was able to obtain data on a confidential basis for three indirect-injec tion diesel engines, similar to those used in TRU applications certified to current Tier III emissi on standards. The results of Sierra’s analysis for the three engines for which Sierra had data indicated average impacts of 58 percent lower PM emissions and 15 percent higher NO
x emissions for the four-mode cycle compar ed to the eight-mode cycle. These results are generally consist ent with what CARB staff reported in the original

TRU ISOR.

We converted the 8-mode data from a Ti er III, 35 hp, IDI engine to a 4-mode weighted average (shown in a slide not reproduced here). The 8-mode weighted average for PM for this engine is 0.14 g/ kW-hr. The conver ted 4-mode weighted average for PM is 0.06 g/ kW-hr. The ratio of 4 -mode to 8-mode is 0.42.

All of this information has to be generat ed for each emission factor and underlies the new engine certification process. This data is collected by the engine manufacturers routinely in order to cert ify their engines. Engine manufacturers don’t certify using the four-mode test cycl e because they would only be able use those engines on TRUs. They need to build these engines to go into other equipment. The eight-mode data should be readi ly available to CARB staff. All they would have to do is ask the manufactu rers to provide the data to ARB and then analyze it. This should only take a fe w weeks. I recommend that you direct

staff to obtain this modal certification data from the engine manu facturers, use it to revise the inventory, and then to re -analyze the regulatory options. (SRI)

We urge the Board to direct staff to adjust the emissi ons inventory, using 4-mode test cycle results. Quite simply, the in ventory is based on the 8-mode test cycle, which includes operating modes that TRUs never use. As a re sult, the inventory may be overstating PM emissions from 25 percent to as much as 60 percent, depending on the engine model. With the inventory serving as the basis for analysis and recommendations before you today, it needs to be adjusted to more accurately reflect TRU operations. ATA ur ges the Board to dire ct staff to adjust the emissions inventory to be more repr esentative of the way TRUs actually operate. (ATA)24 CTA’s Refrigerated Carrier Conference cont racted with Sierra Research to model the emission inventory when adjusting for a four mode test cycle instead of the eight mode test cycle staff utilized to m odel emissions. The resulting inventories are hugely disparate. It should be noted that the four m ode test cycle is acknowledged, by staff itself, to be mo re representative of real-world TRU emissions. Staff argued as such in the 2003 Initial Statement of Reasons for the original rule. After 2003, U.S. EPA has since disallowed engines to be certified for use in TRUs if “the engine is sold in a configuration that allows the engine to operate in any mode not covered by the test cycle described in this section. For example, this section does not apply to an engine sold without a governor limiting operation only to those modes covered by the test cycle described in this section” (40 CFR 1039.645(f)(3)). Ther efore, you cannot accurately model the emissions

from TRU fleets without us ing the updated EPA four mo de test cycle. ARB has had eight years since the last revision to remedy this problem and has taken no reasonable steps to do so and no such steps are documented in the ISOR. (CTA)

Agency Response: Sierra Research’s comment is based on confidential modal data from a Tier 3 indirect injecti on engine that Staff believes may not be representative of the TRU eng ine fleet. Sierra indica tes that this engine is “similar to those used in TRU applicati ons.” There are no known Tier 3 TRU engines certified in the 25 to 50 horsepower category. The emissions standards for this category include Tier 1, Tier 2, Tier 4 Interim, and Tier 4 Final, but not

Tier 3.

Sierra Research also claims to have modal data for three engine families that use indirect injection and indicates thes e are representative of the engines used in TRUs. Staff has found only one indirect injection (IDI) engine family that has

been used in trailer TRUs in the 25 to 50 hp category in each model year between 2002 and 2011. Direct injecti on engines (DI) have been used in the vast majority of the engine famili es used in TRUs since 2002.

Sierra Research’s claim that the deta ils of the modal data they have are confidential makes it impossible to confirm that it correctly converted the 8-mode data to 4-mode weighted av erage data. For exampl e, the actual power measured during each mode would need to be kn own. Staff does not believe the limited results provided by the commenter are repres entative of TRUs in the aggregate.

Sierra Research indicates the weighted average for a Tier 3, 35 hp IDI engine is 0.14 g/kW-hr (0.10 g/hp-hr) us ing 8-mode data. Staff’s re view of TRU engines in the 25-50 hp category that were certified to the 8-mode test cycle found the following certification value ranges:

 Tier 1 engines: 0.27 to 0.60 g/ kW-hr (0.20 to 0.45 g/hp-hr)

 Tier 2 engines: 0.27 to 0.39 g/ kW-hr (0.20 to 0.29 g/hp-hr)25  Tier 3 – Not applicable to this horsepower range

 Tier 4i engines: 0.21 to 0.31 g/kW-hr (0.16 to 0.23 g/hp-hr)

Staff has been unable to ident ify which engines the comm enter’s data applies to.

Sierra Research also claims the data was obtained on a confidential basis, so they did not share the deta ils about these engines. Without this information staff cannot adequately assess the validity of the comment.

As the 2003 Staff Report clearly indicates, the 4-mode test cycle may be more representative of actual TRU operations than the 8-mode test cycle, particularly

for older units. Based on what staff has been told by TRU original equipment manufacturers, staff believes that TRUs don’t operate at 100 percent of rated torque at either rated speed or inte rmediate speed, and they do not idle (zero load), except for a few seconds at start-up. There are several other modes that may also not be applicable to actual TRU operations. Manufacturers had the option to use the 4-mode test cycle, but with the exception of a single engine, chose to certify to the 8-mode test cycle. Staff believes that many TRU engines may not qualify to use the 4-mode test cycle due to the way TRU engine loads currently vary in actual use. TRU manuf acturers have indicated to staff that for newer generation TRUs, in stead of operating at discr ete speed and load modes, the engine load varies along a continuum that falls outsi de the criteria required

for use of the 4-mode discrete te st cycle, described under 40 CFR section 1039.645(b)(1), respectively. Staff believes the updated emissions inventory captures what is currently known about these operating modes, and while data is limited, we continue to collect more refined data as we move

forward.

Sierra Research indicates that engine ma nufacturers must report modal data to

CARB staff in order to obtai n emissions certification of new TRU engines. This is not true. Engine manufacturers are not required to, nor do they, submit modal emissions test data to CARB as part of their engine certification applications. CARB must make a special request to get this data. Similarly, U.S. EPA had not required modal emissions data to be subm itted until early 2012. Instead, past modal certification data is only submi tted upon a special request from ARB or

U.S. EPA.

Sierra Research also indicates that the TRU ATCM requires manufacturers to

submit modal emissions data under sect ions 2477(d)(14), (e)(1)(A)1.a.I. and (e)(1)(A)2.a.I.. The commenter has misi nterpreted the regulat ory language for the TRU ATCM, which states:

“Only engines for which certification data and deterioration factors have been provided to ARB shall be considered when determining compliance. The

Executive Officer will consider such subm ittals, publish, and make available a list of qualifying engines.”26 The intent of this language is that in-use engines could be considered for compliance with the in-use standards, if the modal certification data and

deterioration factors are made available to staff for conversi on from 8-mode data to 4-mode weighted average and deterioration effects throughout the life of the engine. If compliance with the TRU ATCM’s LETRU In-Use Performance Standard is to be achieved by using the engine certification approach, then it must be shown that these engines m eet this standard throughout the LETRU compliance period (i.e. until the engine is required to meet the more stringent

Ultra-Low Emission TRU In-Use Perfo rmance Standard (ULETR U), or until the engine is replaced, whichever is longe r). For example, 2001 and older engines must meet LETRU in-use perform ance standards starting the end of 2008 through the end of 2015 (seven years); then, they must meet ULETRU

standards. In the absence of modal ce rtification data and valid in-use deterioration factors, in-use engine test ing would be necessary to show these engines meet LETRU.

Staff requested modal cert ification data, but only received limited data for

evaluation. Deterioration fa ctors were also found to be problematic. Staff made attempts to obtain a more robust set of modal emission s data and tried to resolve

deterioration factor issues with a workgroup of engine manufacturers and TRU OEMs. Workgroup stakeholders incl uded the TRU OEMs and their engine suppliers, who expressed data confident iality concerns and would not commit emissions test engines and test equipment resources. These major barriers made it impossible to complete the assessment.

Where 4-mode test data is available to staff (2008 to 2011), it matches ARB’s emission factors within two percent. A more complete set of emissions test data is needed to ensure a statistically valid comparison and evaluation. We believe

we need to look at a more robust set of TRU engines, possibly considering all TRU engines that were ce rtified with the 8-mode test cycle, which would go back to model year 1999. Given the difficult y in obtaining the necessary data from engine manufacturers and TRU OEMs, it is unclear when such an evaluation would be completed.

The stakeholders’ statements regarding the emissions factors used in the updated emissions inventory are not supported by the data provided by the commenter. However, staff has committ ed to looking closely at the 8-mode versus 4-mode issue and reporting back to the Board. A special request to each engine manufacturer is required for each engine family. The request process has been initiated for all engine families that have been used in TRUs since new engine certification began for off-road engi nes. This process may take some

time because some of these records are over ten years old. Engine manufacturers are not required to maintain these records for more than 8 years. Additionally, staff is working with TRU m anufacturers to collect information on the time spent in each mode, which is nece ssary to understand the overall emission

factor. Additional time will be needed to evaluate this new data, if it is provided.27 8. Comment : The magnitude of the increase in emissions expected from TRU units over time, (which is also referred to as the emi ssions deterioration rate) is overstated, leading to over estimates of TRU PM and NO
x emissions.

In estimating emissions deterioration fo r TRU engines, CARB staff indicates on page C-66 of the ISOR that it assumed a 20,000-hour [sta ff corrected units] life for TRU engines and further assumed t hat emissions deterioration would continue unabated throughout that period. However, Se ction 1039.101, Title 40, Code of Federal Regulations (which is incorporated by reference into CARB regulations applicable to TRU engine certific ation) sets the useful life of smaller engines used in TRU and other applicati ons (rated at less than 25 horsepower) at 3,000 hours and that for la rger engines used in TRU and other applications at 5,000 hours. What these usef ul lives imply is that, in order to achieve a total lifetime of 20,000 hours, TRU engines under go several “rebuilds” in which the engines and emission-related components are refurbished. As a result of each of these refurbishments, emissions woul d be expected to be lowered from their

deteriorated rate toward the emission rates associated with the engines when new. In any case, a more reasonable a ssumption would be to cap deterioration at 3,000 and 5,000 hours, respectively, for smaller and larger TRU engines. Sierra strongly recommends that the Board direct CARB staff to revise the TRU inventory to correct this problem with det erioration rates in or der to improve the accuracy of the TRU emission inventory. (SRI)

Deterioration calculations need to be revi sed to account for engine rebuilds at roughly 3,000 hours for less than 25 horsepower engines and 5,000 hours for 25-50 horsepower engines. (ATA)

Agency Response: Staff disagrees with the comm enters’ claims that in order for TRU engines to reach a total lifetim e of 20,000 hours, these engines are rebuilt every 3,000 hours, for less than 25 hp engines, or every 5,000 hours, for 25 to 50 hp engines. Staff also disagrees that at these rebuild intervals, emissions-related components are refurbis hed, which restores the emissions back to the emissions rates associated with new engines. There are several

issues related to this claim that call for discussion.

Sierra Research is incorrectly interpreting the regulatory definiti on of useful life.

40 CFR section 1039.801 includes the following definition:

“ Useful life means the period during whic h the engine is designed to properly function in terms of reliability and fuel consumption, without being remanufactured, specified as a num ber of hours of operation or calendar year, whichever comes first. It is the period during which a new nonroad engine is required to comply with applicable emissions standards. See section 1039.101(g).”28 40 CFR section 1039.101(g)(1) requires engi nes in the less than 25 hp category

to meet the emissions standards over the full useful life of 3,000 hours or five years (whichever occurs first) and requires engines in the 25 to 50 hp category that operate at speeds below 3,000 rpm to meet the emissions

standards over the full useful life of 5,000 hours or seven years (whichever occurs first). No overhaul inte rval is recommended by TRU engine

manufacturers under 40CFR section 1039.101(g)(2), because TRU engines operate much longer than the minimum r equired useful life cited above. A recommended overhaul interval is only requi red if a shorter useful life than the minimum required useful life is request ed by the engine manufacturer, in cases where they can show the engines rarely operate longer than the manufacturer’s requested alternative useful life.

Based on discussions with TRU manufacture rs and their dealers, rebuilding of TRU engines is very rare in actual pr actice because most fleets that have repair shops don’t have the specialized equipment needed to bore out engine cylinders and complete the other machining nece ssary to bring engines back to new engine specifications that would reduce emissions to meet new engine standards. In practice, only a handful of TRU engines are rebuilt; instead, TRUs are typically repowered with a new replac ement engine (aka “service engine”) if there is an issue with the original engine.

Based on stakeholder comments to staff, the real life of T RU engines averages about 12,000 to 15,000 hours for bobtail TR Us (less than 25 hp) and about 20,000 hours for trailer TRUs (25-50 hp). Emissions deterioration therefore continues to occur beyond the usef ul life (3,000 hours and 5,000 hours, respectively).

For certification purpose s, deterioration factors are determined by engine manufacturers under 40 CFR 1039.245. They are required to conduct a series of emissions tests, starting with a test at ze ro hours and ending with a test after the test engine has accrued only 35 percent of the useful life hours discussed above (e.g. 35 percent of 5,000 hours equals 1, 750 hours for 25-50 hp engines). Two additional tests are required at equally spaced intervals between the zero-hour and end-point tests. Certain emissions-rela ted maintenance is then allowed after the end of service accumulation test (e.g . cleaning injector tips at 1,750 hours) and then another post-maintenance test oc curs. The average emissions value for the pre- and post-maintenance tests is used with the results from the previous three emissions tests in a least-squares linear regression calculation. The resulting straight line equation is t hen used to extrapolate to determine the

emissions at the end of the useful life (e.g. 3,000 or 5,000 hours). The difference between the extrapolated emissions at us eful life and the zero-hour value is calculated and reported as the deterioration factor. The extrapolated value at the

end of the useful life is the certif ication value and must be less than the

emissions standard.29 Staff does not believe these same deterio ration factors have any predictive value beyond the end of the regulator y useful life. These reasons are discussed below. In addition, these deterioration factors are not directly applicable to estimating emissions from TRU engines. Emission in ventory deterioration factors account for the amount that an engine’s emissions in crease over time as a result of the engine components aging, poor maintenan ce, malfunction and tampering.

Critical emissions-related engine maintenan ce, including periodic fuel injector cleaning, testing, and replacement, has a si gnificant effect on in-use emissions. Emissions deterioration occurs as oper ating hours accrue throughout an engine’s operational life and if this maintenance is not performed, emissions rates can exceed the new engine emissions standards significantly. For example, carbon deposits on or near the fuel injector spray tips can spoil the fuel spray pattern. Also, worn injector tips cause the fuel spray to become coarse droplets instead of the optimum fine spray produced by new injector tips.

Engine manufacturers are required to prov ide to the ultimate purchaser of new engines critical emissions-related maintenan ce instructions. These maintenance

instructions must be consistent with the emissions-related maintenance that they performed during the deterioration factor emissions test service accumulation (e.g. cleaning injector tips at 1,750 hours). One of staff’s concerns is that TRU engine manufacturers have successfully appealed for longer emissions-related maintenance intervals (e.g. interval exte nded to 3,000 hours) than were used in the deterioration factor tests. The adjus ted deterioration factors were based on extrapolation methods, not additional test data. Staff believes this engineering evaluation approach introduces signific ant uncertainty without data-based justification. Another c oncern about in-use emissions deterioration is that

anecdotal information from TRU manufactu rers and dealers indicates that many TRU owners do not complete emissions-related maintenance in accordance with the engine manufacturers recommended sc hedule unless there is a performance problem. In addition, the major TRU or iginal equipment manufacturers’ owners’ manuals have, until recently, used longer emissions-related maintenance intervals (10,000 to 12,000 hours) than t he engine manufacturers recommended

maintenance intervals.

Oil consumption also increases with age due to piston ring, cylinder wall, and intake/exhaust valve stem and valve guide w ear. As more lube oil is allowed into the combustion chamber, exhaust emissions increase. A major engine rebuild is necessary to return lube oil consumption back to specification, which includes machining these wear surfaces and repl acing pistons, rings, valves, and valve guides.

Staff believes that the commenter’s claim that we should cap emissions deterioration at 3,000 or 5, 000 hours is not reasonable orjustified. Any cap on

emissions deterioration would need to be justified by a robust in-use engine emissions test program using a represent ative sample of in-use engines that30 have accrued a range of operating hours bey ond the useful life and that have

well-documented maintenance histories. The commenters have not provided any such data.

9. Comment : The assumed annual hours of operation by TRU units have been updated using suspect data that appear to overestimate TRU PM and NO
x emissions.

As described in Appendices B and C to the ISOR, CARB’s assumed annual activity values for TRUs are derived from da ta collected from “facility reports” that 80 “large” facilities were required to submit to CARB pursuant to the TRU regulation. As indicated on page B-2 of the ISOR, data from 22 of these

80 facilities had to be discarded because t hey were “unusable,” according to CARB staff. Although CARB staff cl aims to have reviewed and corrected questionable data, there is no documentation of the c hanges that were made or the criteria used by the staf f to conclude that the dat a were reliable for use in developing emissions inventories.

We evaluated the data in the ISOR Appen dix B, looking spec ifically at the average annual operating hours by facility ty pe and the percent of total TRUs in the facility report accounted for by each fac ility type. We looked at the maximum, minimum, and standard deviations associat ed with the individual facility values for each facility type. The variation in average operating hours per TRU varies widely between facility types. Ratios of the maximum to the minimum annual average TRU operation reported by facility type vary dramatically. For example, for facility types where three or more fac ilities reported, the ratios of maximum to minimum average TRU operation for differ ent facilities are 3, 7, and 32 for foodservice, grocery distri bution, and produce distribution, respectively. These large ratios and the lack of detail regarding the facility reports suggest that while the average annual TRU operating hour val ues may appear reasonable, that may be happenstance and the actual val ues may differ significantly.

Another problem with CARB’s analysis is that the staff has provided no data to suggest that the percentage of total TRUs r eported by facility type in the facility reports bears any relationship to the perc ent of TRUs actually operating in California in transporting those types of products.

A further problem with facility survey dat a is that they include only the total

number of truck and trailer based TRUs operating at each facility and the total annual hours of operation of all TRUs at t he facility. As a result, these data are completely unsuited for determining annual hours of either truck or trailer TRU operation, which should have been recorded di rectly if they were intended for use in emission inventory development. CARB staff attempts to remedy this problem using statistical methods as described on pages C-22 through C-25 of the ISOR; however, this statistical approach is inappropriate because it separates facilities

with trucks and trailers from those that had only trailers , and the results of CARB31 staff’s methodology are clearly erroneous when applied to subsets of the facility survey data. For example, when applie d to the food service and produce fleets, with 15 facilities reporting, the annual hours estimated at food service facilities for trailer TRUs was 1,619 hours while that for truck TRUs was a much greater 2,686 hours. Conversely, at produce fleet facilities, the result was a trailer TRU operation rate of 1,975 hours and a truck TRU operation rate of 556 hours, or

more than five times less than the estimate obtained for food service facilities using exactly the same methodology.

Overall, while the facility data are more recent than the data used in the previous TRU inventory, CARB staff has failed to dem onstrate that they ar e either valid or that they have been properly analyzed. I recommend the Board direct staff to use the 2003 activity estimates or collect new data. (SRI)

Actual activity data needs to be collect ed rather than using 2006 facility surveys which are not publicly available for review , do not have data for individual TRUs,

and do not differentiate between truck and trailer TRUs. With the inventory serving as the basis for analysis and recommendations, it needs to be adjusted to more accurately reflect TRU operations. ATA urges the Board to direct staff to adjust the emissions inventory to be mo re representative of the way TRUs actually operate. (ATA)

Agency Response: Staff disagrees with the comm enters’ contention that there is no documentation of the changes that were made during the screening of the raw data from the facility reports. St aff provided a reasonabl e explanation in Appendix B as to why some dat a was screened out, as follows: “ Data was missing when the facility contracted for carr ier service, the carrier sent equipment from their “pool” of equipment, so the sa me equipment was not used consistently and data for the annual hours of TRU engine r un time attributable to the facility

was not available. ”

Sierra Research looked at various st atistical measures of the annual hourly activity hour data that they believe indica tes the data varies dramatically. Staff’s experience indicates that actual data fo r annual hourly activity can vary because companies own varying numbers of TRUs at varying ages, and as a result utilize their equipment very differently. These trends are consistent with other off-road

sectors ARB has studied. For exam ple, many fleets may keep “spare” equipment that is used only occasionally when newer equipment breaks down or during peak capacity periods, while other fleets may rent such equipment instead of owning it.

Sierra Research indicates that sta ff did not provide data to suggest the percentage of TRUs reported by facili ty type bears any relationship to the percentage of TRUs actually operating in California, transporting those types of products. Staff received responses from applicable facilities, which had 20 or more loading spaces in 2005. The sample represented just less than 7,000 truck32 and trailer TRUs. Staff’s emissions in ventory update found there were close to 30,000 TRUs based in California in 2006. Therefore, the survey represented about 23 percent of the TRUs based in California, which is a fairly robust sample size. There is no comprehensive database for TRUs that cover all types of products and all sizes of refrigerated fleet s. Therefore, su ch a comparison is difficult if not impossible to make. Regardless, understanding the relationships for each type of product is not relev ant to understanding the average annual hours of TRU operation for t he aggregate TRU population.

Sierra Research indicates that becaus e the survey did not request separate annual TRU activity by truck and trailer, that staff’s efforts to estimate these

values from the combined data are inva lid and make the results unsuitable for

use for either trucks or trailers. Staff disagrees. Separate data for truck and trailer TRUs weren’t required becaus e this would have created a burdensome level of complexity on the reporting facilit ies. Staff evaluated the data for trucks and trailers together and separate only to find similar results for activity level. As indicated in the Staff Report (Appendi x C, page C-24section I.C.3.a) on page C-24), “While staff considered using an av erage activity and applying it to all TRUs, feedback from stakeholde rs suggested that activity for refrigerated trucks would likely be lower than activity for TRUs used on trailers.” Staff believes the statistical methods used to separate this data are appropriate and sufficient to improve the accuracy of the emissions inventory.

Sierra Research states that another problem with the ARB analysis is an unsupported finding that the facility survey is representative of the industries operating in California. T he representation of the indus tries using TRUs in the survey responses were compared against freight data from the Federal Highway

Administration. Staff conclu ded that the survey was a fair representation of TRU activity as discussed in the Staff Report.

Staff disagrees with the commenters’ recommendation to disregard the facility report data and use the 2003 annual activi ty estimate instead of the updated estimate. The facility report data prov ides a much more complete and robust data set than the data set used in 2003. While the activity data used in 2003 was the best available at the time, it wa s based on national surveys. The updated activity estimates are bas ed on California operators.

10. Comment : The revised baseline PM emission inventory, as well as the inventory with a three-year delay in implementati on of the TRU rule, falls below CARB’s

current assessment of emissions with the T RU regulation in place. Similarly, the

revised NO
x inventory with the three-year del ay is essentially equivalent to

CARB’s current assessment of emissions wi th the TRU regulation in place. (SRI)

Agency Response: The TRU ATCM is designed to reduce emissions of diesel PM, a toxic air contaminant (TAC). The 2003 Staff Report and the 2011 TRU Amendments Staff Report discuss the need for the regulation to control33 emissions of a TAC. Staff’s analysis, conducted as part of these amendments, showed that the public health risk under the ATCM’s existing seven-year TRU operational life still results in potential cancer risk levels of concern in

communities near facilities where TRUs c ongregate. If the in-use requirements were to be relaxed by delaying compliance and extending the op erational life of TRU engines, this risk would be even greater and likely exacerbate concerns regarding elevated risk levels in nearby communities.

11. Comment : Health risk is a direct result of the facilities report, which shows that originally, about 80 facilities reported; but for 30 of them, the information was

unusable. It came down to 56 facilities that staf f used. I looked at the data and noticed there's a 218 trailer fleet reported thr ee times. It's pretty obvious it's the

same fleet because it's the same number of hours each time. It probably is three different facilities, but the sa me trailers assigned to all three facilities. So we're getting impacted by those hour s, which are on the same trailers. The numbers aren't quite adding up, and that's what's k illing our industry and forcing us to not get the extended operational life that we really need to provi de relief from the cost that we're having to incur. (CVTR)

Agency Response: When the facility report in question was received, staff contacted the company to question this dat a and learned that t hey “float” their

TRUs between their 3 facilities. This m eans that the TRUs are not assigned to any one of the three facilities, but may operate at any of the three facilities at any time. The facility reported 218 TRUs, 316,912 total annual TRU hours for all of their TRUs, and 1,454 hours/year/TRU as t he average annual ho urs per year per TRU for each facility, so the commenter is correct that these values are duplicated.

These duplicated numbers have the following effects:

A. The number of TRUs repor ted at each of the three fa cilities (218) inflates the total TRUs involved in the survey by 436. So the total TRUs involved in the survey should be adjusted dow nward from 6,963 to 6,527.

B. The total annual hours for all facilitie s (11,927,142 hrs), shown at the bottom of the spreadsheet in Staff Report Appendi x B, Attachment 1 was overstated by 316,912 hrs x 2 = 633,824 hrs. Howeve r, this value is not used in any

other calculated value and was not used in the results or conclusions of Appendix B, Summary of 2006 Facility Reports.

C. Since the average annual hours per TRU for these three facilities (1,454 hrs/yr/TRU) is less than the aggregated average (1,665 hrs/yr/TRU), removing these two values has the e ffect of increasing the aggregated average to 1,673 hrs/yr/TRU. So this error does not have the effect of over-estimating the average annual TRU engine hours. The error actually34 causes a less than one percent under-e stimation of the overall average annual hours of TRU engine operation.

It is important to note that the values fo r weekly TRU engine activity at each of

the three affected facilities are not duplicated because the company conducted separate recordkeeping for each facility and reported activity that is specific to each facility. Therefore, these results did not affect the av erage hours per week

at each of these facilities nor does it affect the aggregat ed average hours per

week for all facilities. Ther efore, public health risk due to TRU activity at facilities

was not over-stated as a result of these three facility reports.

Furthermore, staff confirmed that there are no other fa cilities that also floated their TRUs between facilities and reported similarly and we found there are no

similar errors that would conf ound the results and conclusions.

Economic Issues

12. Comment : Staff's revised cost estimates as sociated with the TRU rule is now four to eight times higher than original ly forecasted in 2003. Cost-effectiveness was estimated to be $10 to $20 per pound reduced emissions in the original ISOR and was estimated to be $88 per pound reduced emissions, as expressed in 2011 dollars in this current ISOR. So, what was originally estimated to be a very cost effective rule now looks much less so, with the TRU rule being almost twice as expensive as the truck and bus ru le on a per-pound basis. If you look at the cost-effectiveness using the EPA four-mode test cycle for TRUs, PM emissions are 25 to 60 percent less, so the cost-effectiveness of the rule gets closer to a range of $120 to $222 per pound reduced, which would make this one of the, if not the, most ex pensive rule ever considered by the Board. We believe that's a pretty conservative estimate. With a nine-year operational life, ARB can meet the 2003 emission reduction goals and save California TRU owners millions of dollars. Extending the operational life by two to three years more closely aligns the rule with the original cost-effectiveness estimates. (CTA)

Staff has left us with only one compliance op tion at a cost close to 400 percent higher than the original estimate. (FF)

The rule is not cost effective. The es timates on the filters and repowers are over the estimates presented by the st aff a number of years ago. (SM)

Given the mixed results fleets are havi ng with retrofits and t he scarce number of ULETRU options, fleets are having to invest in temporary compliance solutions. This has significantly increased the cost of compliance to $638 million, which is four to seven times higher than origina lly projected $87 - $156 million figure used when the regulation was originally adopted. This is mainly attributed to the combined effects of higher costs in m eeting the compliance requirements and greater numbers of TRUs affected. Acco rding to the staff report, a two-year35 extension of the compliance requirement s is estimated to reduce compliance cost by $430 million while a three-year extension reduces these costs by $530 million. The revised PM cost-effect iveness of the TRU regulation is roughly double what was approved for either the Tr uck and Bus or Off-Road regulations. In other words, for each dollar spent on TRU compliance you get half the PM emissions reductions of these other regul ations. Once the adjustments are made to the emission inventory, the regulation becomes even le ss cost effective. (ATA)

Obviously, having an accurate inventory is vital to assessing the regulatory impacts of any regulation, as well as t he cost effectiveness of those regulatory options. The 2003 staff report used $10 to $20 per pound of PM emissions

eliminated. The 2011 staff report showed $83 per pound. My calculations, with the inventory adjusted using the 4-mode emissions results in $406 per pound of emissions reduced. (SRI)

Agency Response: The commenters are correct that the compliance costs have turned out to be higher than anticipated. The Staff Report discusses updated compliance costs and cost-effectiv eness estimates, which did increase from the originally es timated $10-$20 per pound to $88 per pound of diesel PM

reduced. Staff is comfortable with t hat discussion and the emissions reduction

estimates that are used in that cost-e ffectiveness calculation. Staff does not agree with the commenters’ estimated cost-effectiveness using the 4-mode emissions factors, because Staff’s emissi ons factors were within two percent of what was proposed by the commenter and not five times greater, as the commenter’s calculations suggest.

13. Comment : We've incurred, as operators, additional main tenance costs to service these units. (SM)

Carriers have expressed dissatisfaction with retrofits due to maintenance and operational issues as well as increased fuel costs. (ATA)

Since retrofitting our TRUs, fuel consum ption is 33 percent higher. I suspect lower operating RPMs do not facilitat e regeneration, causing more back pressure, increasing fuel consumption. Our maintenance provider informed us our maintenance rates are goi ng up 50 percent. (HR)

Agency Response: Maintenance costs were incl uded in the economic analysis in the Staff Report. Maintenance cost s should not increase for owners that choose to repower or replace TRUs . Instead, maintenance costs should decrease as a result of using more e fficient and more reliable new engines and refrigeration systems. ARBER data, as discussed in the Staff Report, Appendix C, indicate s that about 79 percent of Ca lifornia-based trailer TRUs complied by choosing the repower option. Owners chose to retrofit about 20 percent of the TRUs that complied. Staff expects these compliance trends to continue for the next few years. Sta ff agrees that the maintenance costs36 increase after retrofitting with a VDECS, but the extent of that increase depends on having good baseline data. Fuel c onsumption increases for VDECS are typically in the one to five percent r ange, but again, good bas eline data is needed to accurately determine the percent incr ease. It should be noted that Harris Ranch provided only overall numbers. T hey did not provide the detailed baseline

data for each retrofitted unit necessary to confirm the fu el use rate increase they

cited.

14. Comment : The real world experience from new OEM-installed DPF technologies since 2007 and passive retrof it DPFs integrated into the exhaust systems of on-road and off-road vehicles has shown a fuel economy impact attributed to increased backpressu re of only 1-2 percent. (MECA)

Agency Response: Staff agrees that the ba ckpressure-only fuel economy impacts should be in the one to two per cent range. However, for active regeneration VDECS, additio nal fuel is used to provide the energy needed to

burn the accumulated soot off the filters. As indicat ed above, fuel use typically increases one to five percent with the use of a VDECS.

TRU Original Equipment Ma nufacturer Requirements

15. Comment: For the proposed amendment in se ction 2477.13(a)(4), as an OEM whose products are sold by an independ ent dealer network, Carrier Transicold generally does not have visibility of, or cont act with, the ultimate purchaser prior

to sale. Carrier Transicold would s uggest that the language st ate that the OEM updates their owner and/or operator’s manual if the unit is equipped with a flexibility engine and it is t he responsibility of the TRU deal er to notify the ultimate purchaser prior to sale. (CT)

Agency Response: Although the comment refers to section 2477.13(a)(4), the issue actually addresses section 2477.13( a)(3) of the proposed amendments. Staff agrees with the comment and modi fied the proposed language in section 2477.13(a)(3) for the reasons cited by t he commenter. This modified language was included as part of Notice of Public Availability of Modified Text (15-day changes).

16. Comment : For the proposed amendment in section 2477.13(c)(2), Carrier Transicold would like to suggest an al ternative means of providing the registration information. Instead of r equiring a printed registration document, Carrier Transicold would like to pur sue an on-line lookup system as an

alternative. This alternative would prevent the need to provide paper documents

and save on natural resources. This wo uld ultimately provide the purchaser

more direct and accurate access to the information since the written documents have a great potential to get lost during equipment inst allation at a third party, such as a trailer body OEM. (CT)37 Agency Response: Staff agrees with the comment and modified the proposed language in section 2477.13(c)(2) and (c)( 3) for the reasons cited by the

commenter. The modified r egulatory language allows an alternative to providing the registration information document with the TRU or TRU gen set. Instead, the OEM may choose to provide the regist ration information on an Internet-based on-line look-up system, as long as that approa ch is at least as effective providing the registration information document with eac h new unit or each new and rebuilt replacement engine, as determined by ARB. Regulatory language was also added to section 2477.14(a)(1) and (a)(2) wh ich requires dealers to provide a print out of the registration information from the OEM’s Internet-based look-up system. This modified language was in cluded as part of Notice of Public Availability of Modifi ed Text (15-day changes).

Health Risk Issues

17. Comment : Diesel pollution contributes to serious health impacts throughout the state and particularly in communities wit h concentrated freight activity where TRUs are frequently used, including war ehouses, rail yards, port terminals and other transportation services. Diesel engines, including those used by TRUs, are a major source of fine particulate matte r (PM), which has been strongly linked by

numerous studies to increased risk of emergency room visits, hospital admissions, asthma attacks, cardiovascu lar disease, respiratory disease, adverse birth outcomes, cancer, and pr emature death. In addition to these health impacts, diesel exhaust also cont ains many hazardous and carcinogenic chemicals, as well as smog-forming gases. Finally, diesel engines in California are the largest source of black ca rbon, a potent global warming pollutant.

The more than 175,000 TRUs in operation in California contribute significantly to air pollution and resulting health impac ts. We applaud ARB for taking the

initiative to control emissions from TRUs . This regulation as originally adopted would reduce over 3,000 tons of fi ne PM and almost 12,000 tons of NO
x emissions through 2025. These emission re ductions will be responsible for more

than:

 370 Lives Saved

 125 Hospitalizations Avoided

 5,600 Cases of Asthma and other Low er Respiratory Symptoms Averted

 470 Cases of Acute Bronchitis Prevented

The total economic benefit of these air quality and health improvements tops $2.6 billion. In the futu re, we urge staff to quantif y and report these important

health benefits related to the initia l regulation and proposed changes, as has been done for other diesel regulations (e.g. see December 2010 amendments to

the Statewide Diesel Truck and Bus regulation and the Off-Road Diesel regulation). (NRDC)38 Agency Response: No response required.

18. Comment: Sierra Research performed a sensitivity analysis to assess the magnitude of the impacts a ssociated with the factors i dentified using a modified version of CARB’s updated TRU emission inventory The Board should direct

staff to revise the risk asse ssment to reflect the change in PM emission factors. (SRI)

Agency Response: As discussed at the Board Hearing, staff will consider revising the health risk assessment if t here is a significant change in PM

emissions at facilities as a result of furt her evaluation of the issues raised in this rulemaking or any other considerations t hat may affect health risk at facilities.

19. Comment: The amendments proposed by sta ff allow for some additional time for most TRUs to comply, while mainta ining the major emission reductions and

health benefits of the initial regulation. We recogni ze the need for flexibility, but we cannot afford major del ays in implementation due to the health impacts of TRUs. The amendments strike the right bal ance. Maintaining these public health benefits is critical, as large distribution centers with many TRUs running still pose significant health risks to nearby residents. Note that the average large facility, with TRUs running almost 2, 000 hours per week, will continue to pose very high cancer risks above 100 per million to resi dents living within 1,000 feet through 2016 with the current regulation in place (see ISOR page III-9). (NRDC)

Agency Response: Staff agrees with these co mments, which are generally consistent with the Staff Report.

Operational Life Extension

20. Comment: We are strongly opposed to ext ending “useful lifetimes” for high emitting equipment, as called for by industry representatives at the November 2010 hearing – whic h would amount to as mu ch as a three-year compliance delay. We are very concer ned about industry’s e fforts to lengthen equipment lifetimes that l ead to compliance delays and greatly diminish health and air quality benefits of this important regulation. This is a major health concern, particularly in communities wit h concentrated freight activities where TRUs are frequently used, including war ehouses, rail yards, port terminals, and other transportation services. One exam ple is the dull berth and container storage area on the other side of the terminal from Cesa r Chavez Park (in Los Angeles). Trucks and TRUs are parking and idling in the lot immediately adjacent to the park, which is used a lot for soccer games by the community. In addition, many facilities are in close proximity to homes, schools, and other

sensitive sites. Even with t he current regulation in plac e, TRU activity at these large facilities poses very high cancer risks above 100 per million to residents living within a thousand feet. Without i ndustry’s proposed delay, this regulation can provide important air quality and public health benefits with an economic39 boost of $2.6 billion through 370 lives saved, 125 hospitalizations avoided,
5,600 cases of asthma and other lowe r respiratory ailments averted and 470 cases of acute bronchitis prevented. We strongly urge you to preserve these benefits by adopting the carefully craft ed staff-proposed amendments. We have seen great progress with 2003 and older TRUs cleaning up. We need the 2004 and newer TRUs to be cleaned up as we ll. There are many compliance pathways available for 2004 TRUs, as staff has presented. We greatly appreciate the effort to preserve t he health and air quality benefits of this important regulation. We urge you to adopt sta ff’s proposed amendments without any further delays, lengthened equipment lifetimes, or weakened compliance obligations that would prol ong exposure to emissions from TRUs. (NRDC)

We oppose the industry proposals to further delay the implement ation of the TRU requirements. We are pleased to hear the testimony of the Manufacturers of

Emission Controls and others about the Level 3 emission control devices that are moving forward and progress that has been made with these applications. We think that proves the feasibility of this r egulation and supports the direction of the

staff. We've also learned a lot about the health impacts and the serious dangers of diesel exposures to communities, es pecially to children - especially about the

serious risk from the concentration of these units in hot spot areas. I appreciate your focus, Chairman Nichols, about taking a look more closely at what we can do to address these areas with high concent rations of diesel sources and units. We need to keep moving towards cleaner go ods movement, especially towards zero emission goods movement, which is a very high priority for the Lung

Association. We know that the avoi ded health costs of this regulation are extremely high. Your last estimation was topping 2.6 billion dollars in lives saved and asthma attacks avoided. These are tremendous benefits, and we believe they far exceed the costs of the regulation. We can' t afford major delays and weakened compliance. We urge you to move forward today and stay on track with the Diesel Risk Reduction Program. (ALA)

Agency Response: Staff agrees with these comments and the

recommendation.

21. Comment: We believe that any further delays in the implementation of this rule would be counterproductive to ARB's PM reduction goals, and also would stifle further technology development efforts to bring additional technologies to the marketplace, such as the Level 3 ULETRU devices. (MECA)

Agency Response: Staff agrees with these comments.

22. Comment : Staff was directed by the Boar d last fall to consider several amendments, including extend ing the operational life of TRUs. There is a significant cost savings associated with extending operational life. It should be noted that any TRU operational life between seven and nine years will achieve40 the emission reduction goals you had origi nally set out to achieve in 2003. A seven-year operational life, as recomm ended by staff, actually achieves a significantly higher reduction, albeit at a significantly higher cost.

CTA recommends considering a nine-year o perational life for TRUs. The current emissions inventory supports regulatory relief of at least a 2-year full delay. In aggregate, a two-year full delay (nine-year operational li fe) achieves the emission reductions required to meet the State Implementation Plan requirements. A nine-year operational life still achieves a higher emission reduction than you set

out to achieve in 2003 and would save businesses who utilize TRUs $430 million

between now and 2029. Those are staff's figures.

We believe a nine-year operational life for TRUs is a fair compromise which

achieves environmental and economic bal ance and can fix many of the issues we've been dealing with since this rule was first introduced almost a decade ago. It would allow a one-and-done OEM ULETRU compliance option to come to

market so these carriers would no l onger have to spend money on repowering and retrofitting down the road. And it would allow fleets w ho do choose to retrofit

additional time to assess available ULETRU retrofit options for cost-effectiveness and the kind of reliability necessary when dealing with temperature-sensitive food products that are sensitive to contaminati on. Please consider directing staff to look at the nine-year operational life. (CTA)

We simply ask that you accept the fact that we are ahead of the curve in cleaning the air and allow us to improve our cash flow by granting us the extra years of useful life. We would like you to have st aff look at the nine-year operational life, which will give us time to get a TRU engine that is compatible with the rule. (FF, CFL)

The updated TRU inventory supports a two- year additional life. I ask the Board to look at extending the TRU life an additional two years. (SM)

We would certainly welcome a longer operational life for TRUs. (HR)

We urge the Board to provide a minimum two- year extension to the operating life. We believe that emissions inventory adjustm ents further justify th is extension. A two-year extension to the compliance requirements will still meet the emission reduction targets of the regul ation while a three-year extension, because of the

issues associated with the emissions inventor y, is likely to as well. In addition, this extension will provi de additional time for compliance options to become

available.

The amendments presented t oday do not address the core issue. What is needed is a solution that manages the engi ne's operating cycle with its emission control system, not a bolted-on solution that compromises overall efficiency. This solution becomes available in 2013, and not only meets the ULETRU standards,41 but lowers NO
x emissions as well. We ask that you address our core issue today -- the lack of viable long-term compliance options -- by granting the two-year extension to operating life. (ATA)

Agency Response: Staff considered eight, nine, and ten year operational lives, which would extend the operat ional life one, two, or three additional years, respectively, from the current complianc e deadlines. Staff’s evaluation, as discussed in the Staff Report, showed thes e increases in operational life would increase the potential health risks over 11 percent, 23 percent, and 42 percent, respectively. While extending the implem entation is less costly, the significant increase in emissions and pot ential public health risks made these alternatives unacceptable.

Legal Issues

23. Comment: ARB should take appropriate action to comply with Health and Safety Code section 39665(b)(1).

Health and Safety Code 39665(b)(1) requi res reports on regulations adopted as Air Toxic Control Measures, such as t he one currently in question, address “to

the extent data can be r easonably made available”:

“ The rate and extent of present a nd anticipated future emissions, the estimated levels of human exposure, and the risks associated with those levels.”

As noted above, since 2003, ARB has known it was incorrectly modeling particulate matter emissions by 25-60 perc ent above real world emission factors by using an eight mode test cycle which is inconsistent wit h the EPA’s required four mode test for TRU engines. (CTA)

Agency Response: ARB has complied with the requirements of Health and Safety Code section 39665(b). That sect ion applies to a report referenced in Health and Safety Code section 39665(a), which in turn references a public hearing and determination whether a substa nce is a toxic air contaminant. As

discussed in Section I. of the Staff R eport, California's Air Toxics Program, set forth in Health and Safety Code se ctions 39650 through 39675, mandates the

identification and control of air toxics in California. The identif ication phase of the Air Toxics Program requires the ARB, with the participation of other state agencies, such as the Office of Envi ronmental Health Hazard Assessment (OEHHA), to evaluate the health impacts of, and exposure to, substances and to identify those substances that pose t he greatest health threat as TACs. The ARB's evaluation is made available to the public and is formally reviewed by the Scientific Review Panel (SRP) establis hed under Health and Safety Code section 39670. Following the ARB's evaluation and the SRP's review, the Board may formally identify a TAC at a public hear ing. Following the i dentification of a substance as a TAC, Health and Sa fety Code sections 39658, 39665, 39666,42 and 39667 requires ARB, with the participati on of the air pollution control and air quality management districts, and in c onsultation with affected sources and interested parties, to prepare a repor t on the need and appropriate degree of regulation for that substance.

In August 1998, the Board identified di esel PM as a TAC with no specified threshold exposure level below which adverse health impacts would be expected, pursuant to Health and Safe ty Code (HSC) sections 39650 through

39675. A needs assessment for diesel PM was conducted between 1998 and 2000 pursuant to HSC sections 39658, 39665, and 39666. This resulted in ARB staff developing, and t he Board approving, the Risk Reduction Plan to Reduce

Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles (Diesel RRP) in 2000 (ARB, 2000). The Diesel RR P addressed the issues listed in Health and Safety Code section 39665(b).

Moreover, U.S. EPA does not require the use of the TRU Test Cycle for TRUs. Engine manufacturers may elect to use the TRU Test Cycle if the application qualifies to use it. See the responses to Comments 7 and 24.

24. Comment : Government Code 11349(d) requires that regulations be consistent and “in harmony with, and not in conflict with or contradict ory to, existing statutes, court decisions or other provisions of law.” Continuing to model TRUs emission factors using an eight mode cycle is not consistent with 40 CFR 1039.645 which states that an engine may not be certified fo r sale in a TRU unless it is tested and governed to operate on a four mode test cycle. Furthermore, it is impossible to satisfy the requirements of HSC 39665(b )(1) to estimate levels of human exposure and the risks associated with thos e levels without forecasting the rate and extent of present and ant icipated future emissions on the best, statutorily required tests available. (CTA)

Agency Response: The response to Comment 23 is incorporated by reference herein. The commenter has misinterpret ed both the provisions of Health and Safety Code 39665(b)(1) and 40 CFR 1039.145. Health and Safety Code section 39665(b)(1) applies to a report referenced in Health and Safety Code section 39665(a), which in turn refer ences a public hearing and determination

whether a substance is a toxic ai r contaminant. 40 CFR 1039.145 allows

manufacturers to choose to use the 4 -mode test cycle for engines that are used in TRUs, provided certain conditions are met but does not mandate that the 4- mode test cycle to be used, and ARB has no authority to require its use. To date, only one engine manufacturer has elec ted to use the four-mode test cycle for one of their engines.

25. Comment: The economic analysis is flawed and does not comply with

Government Code 11346.3. Staff incorrect ly reports a net cost savings to

business in the section titled “Estimated Co sts to Businesses” (page V-11) of the Staff Report. Because the cost-effec tiveness assumptions have been revised43 upwards by a factor of 4-8 times since their original rulemaking, it would be appropriate for staff to re visit the potential for significant adverse economic impacts on California business enterprise associated with these grossly inflated costs, not simply [report] the modest sa vings associated with their amendments. (CTA)

Agency Response: As required by Government Code 11346.3, staff conducted

an assessment of costs or cost savi ngs associated with each one of the proposed amendments being considered by the Board. Some amendments

resulted in cost increase while others resu lted in cost savings. Staff’s analysis showed that the proposed amendments result in net cost savings to affected businesses as shown in Chapter V (Ec onomic Impacts), Section F (Estimated Costs to Businesses) on page V-11 of the Staff Report.

However, per the Board’s directio n, staff also performed an updated cost-effectiveness estimate for the origin al regulation adopted in 2004. Current emission reduction benefits, compliance equipment co sts, maintenance costs and compliance method utilization were used in the updated estimate. This

estimate was included in the Staff R eport in Chapter V, Section H (Methodology for Updating Estimated Costs Associat ed with the TRU ATCM). The updated

cost-effectiveness of the TRU ATCM is still within the range of ARB regulations as shown in the Staff Repor t in Table V-10 (page V-16).

Broker, Shipper, Receiver Issues

26. Comment: TIA is appreciative of your sta ff’s understanding and intent to not make brokers and freight forwarders physically inspect TRUs to determine compliance. We agree that it is not the role of third-party logistics providers (3PL) to physically inspect trucks; rather the obligation should be on the trucking companies to ensure only compliant TRUs are on California highways. (TIA, ALC)

Agency Response: The Staff Report states on page II-13 that it is not staff’s intent to make brokers, forwarders, shippers, and receivers inspect TRUs to determine compliance or turn away noncompliant TRUs.

27. Comment: Before this mandate becomes la w, there needs to be a further

clarification of how enforce ment would be applied to the 3PL industry. Your staff

has indicated that a first offense will re sult in a letter of non-compliance being sent to the shipper, broker, and receiver. There is no process in place to appeal such a letter, no way to verify the allegations, nor any due process afforded to the warned party. A non-compliance lette r would tarnish the broker’s standing with its customers, hurt future busine ss, and cause continuing economic damage to California based companies and compan ies doing business in California. (TIA, ALC)44 Agency Response: Staff discussed several possible enforcement processes during workshops and in follow-up confer ence calls. ARB’s Enforcement Division has a settlement process in place that provides a forum for cited parties to discuss and to appeal a citation. Owners have the opportunity to present their side of the case and provide documents or evidence that may have a bearing in

whether the citation stands or is withdrawn.

28. Comment: We appreciate staff’s intent to develop guidance for what brokers need to do to demonstrate due diligence – steps that brokers could use to remove them from being responsible for noncompliant carriers. (TIA)

The majority of shipping transactions are arranged by the consignee (buyer), either directly or through broker arr angements. We do not believe that the ultimate responsibility for enforcem ent-related information rests with the California-based shipper, but rather, it rests with the consignee, broker, or the actual carrier for which this regulation is designed. California produce industry shippers need assurance that they can exer cise due diligence, to the best of their ability, and not be held liable or other wise penalized if the equipment is subsequently found to be non-compliant. The va st majority of refrigerated trailers used to transport perishable agricultura l commodities are domiciled outside the state of California. Under the regulations , an out-of-state regi stered refrigerated trailer is not required to register thr ough the ARBER system, and is not required to provide identification on t he refrigeration unit. Theref ore, the California shipper must rely on the representation of the carrier or its repres entative that its equipment is compliant with the TRU regulations. Requi ring California shippers to perform activities beyond requesting, or self-attestation, t hat the carrier is compliant would place them in an untenable position. An inquiry by a California shipper should be defined as meeting due d iligence. We would like the Board to direct staff to issue guideli nes that would more fully ex plain what constitutes due diligence so that if we meet that criteria , we would not be cit ed for a violation. (WGA)

We don’t agree that brokers should be hel d responsible for hiring compliant carriers. If [Allen Lund Company] ALC books a load on a truck with assurances

from the carrier that the truck is compliant the carrier can still switch the truck to be used on the ALC-booked load. ALC is unclear about what proof will be required to avoid a fine. Clearly, a brok er is not a carrier, they have no trucks, they do not employ drivers, they cannot exercise control over the carrier, their trucks, drivers, or operations. A broker cannot select certain trucks or drivers when tendering loads to a carrier. (ALC)

Agency Response: The Staff Report discusses why these new requirements are needed in Chapter II. O perating TRUs that do not comply with California’s in-use TRU engine emissions standards exposes the public to potential cancer

risk and is a violation of State law. Co mpliance rates for TRU engines that have passed a compliance deadline have been declining since the in-use45 requirements began to be phased in starting in 2009. Noncompliance is most significant among the carriers that are hi red by brokers, fr eight forwarders, shippers, and receivers. W hen brokers, forwarders, sh ippers, and receivers hire carriers that have noncompliant equipment, they contribute to the low compliance rates. Additionally, carriers with noncompl iant equipment are able to offer lower refrigerated truck rates and, as a resu lt, obtain unfair competitive advantages compared to compliant carriers that need to charge higher rates to pay their in-use compliance costs. Compliant ca rriers have expressed their frustration about this unfair competition, and about seeing many noncompliant TRUs at loading docks. Compliant fleets and their trade associations have requested that the TRU ATCM include requirements for br okers, freight forwarders, shippers, and receivers that would require them to only hire or contract with compliant

reefer carriers.

The Staff Report also discusses on page II-13 stakeholders’ request for guidelines that explain t he requirements that broker s, freight forwarders, shippers, receivers, carriers, and their drivers must meet. The staff report

discusses that staff is committed to dev elop such guidelines, which would also include due diligence criteria for hiring and contracting for compliant refrigerated

carriers. If such criteria are met, they would be consid ered by enforcement staff, along with other facts of the case, in whether a citation should be issued or not and whether a penalty or warning is warrant ed. Concepts are listed in the Staff Report on page II-14. These concepts incl ude several provisions that could provide tools to quickly identify compli ant carriers. Staff believes these compliance assistance provisions and possi bly other tools have the potential for helping brokers comply wit h the new requirements.

29. Comment : As we understand the requirements of section 2477.10, shipper responsibility would only apply if the shi pper is the business ent ity that hires or contracts with the carrier to transport per ishable goods on California highways. It is our further understanding that due dili gence by a California-based shipper would be met if it conspicuously in serts the following language on the bill of lading: “Carrier or its agent certifies that any TRU equipment furnished will be in compliance with California Regulations.” A typical bill of lading will have the shipper name, origin, receiver name and destination; however, individual names and their telephone numbers ar e rarely available. In many instances, most shipments are less than truckload and have mu ltiple drops and destinations. The information currently contained on t he bill of lading provides adequate

information to enable ARB staff to contact an y of the involved parties. For this reason we are requesting that 2477.10(a)(3 )(D) (i.e. contact person’s name and phone number at the shipper, broker, or re ceiver with knowledge of the transport arrangements.) be deleted. (WGA)

Agency Response: Staff disagrees with the commenter’s request to delete section 2477.10(a)(3)(D), which requires the shipper to provide the shipper’s contact person name and phone number if the shipper is the business entity that46 arranges, hires, contracts for, or dispat ches the transport of perishable goods. A shipper would have this information readily available since it is the entity hiring the carrier. The shipper also fills out the bill of lading, which includes the shipper’s information. The shipper also gi ves the bill of lading to the driver. No change to the language in se ction 2477.10(a)(3)(D) was made.

30. Comment: The amendment would add require ments for brokers and freight forwarders to only contract or hire wit h compliant carriers. TIA is concerned

because this means that our members would be limited to contract/hire only six percent of the available carriers in an already very tight capacity market. A

broker cannot exercise control over the carrier or its trucks or operation. Our members doing business in California ar e already being hurt due to the highest sales tax in the nation, strict c limate change laws, and countless employer

mandates. In these hard ec onomic times, when the Stat e of the California is faced with an unemployment rate of 12 perc ent, TIA believes this is not the time to create another requirement that would create a further hindrance for companies doing business in California. In addition to having an adverse effect on companies in California seeking to transport their products and companies seeking to do business in California, t he proposal would have a severe impact on small trucking companies. Approximately 80 percent of trucking companies in the United States operate five or fewer trucks. It is no wonder, therefore that only six percent of the cu rrent California fleet is compli ant with the regulation. While the goal of clear air is laudable, taki ng drastic steps quickly may result in

thousands of small California businesses bei ng forced to close. The result would be to exacerbate an already intolerably hi gh California unemployment rate. (TIA)

The proposed amendments ex tend beyond trucking companies to parties that arrange the transport of goods in a refrigerated trailer. This is unfair, unworkable, will most certainly result in increas ed transportation costs, and will lead to more businesses leaving California. Produce must be moved quickly to ensure that the produce is delivered in a timely manner. Adding a new requirement for verifying carrier compliance will not allo w brokers to move loads for a reasonable and acceptable cost. This will increase the consumer’s final cost of the produce. This proposal is an economic blow to al ready struggling California businesses. Allen Lund Company (ALC) employs more than 100 people in high paying jobs

that can be moved to another state t hat works with business, rather than California, which oftentimes makes wo rking in this state a burden. We respectfully request that the TRU Act not be expanded, as proposed, as such a course of action will unfairly punish companies such as Allen Lund Company, Inc. (ALC)

Agency Response: The commenters indicate that if brokers are required to only hire compliant carriers, they would be limited to only six percent of the

available carriers. This st atement indicates that 94 per cent of the carriers they currently hire are noncompliant. If this is true, the noncompliance rate is worse than what was reported in the Staff Repor t. Such a high noncompliance rate47 substantiates staff’s position in the Sta ff Report that brokers play a significant role in fostering unfair competition betw een compliant and noncompliant carriers. If the number of available compliant carrier s is small, then it is appropriate for brokers to take steps that help increas e compliance rates. That may involve providing financial assistance to carrier s or increasing truck rates (e.g. the amount brokers pay carriers to haul cargo) . The broker, shipper, and receiver requirements don’t go into effect until Januar y 1, 2013, to allow time for brokers, shippers, and receivers to help increase the number of compli ant carriers. A level playing field is necessary for thos e carriers that have chosen to comply. Staff understands that compliance costs could be passed on through to the

consumer.

31. Comment: It must be noted t hat the TRU Act itself is in question based upon

CARB’s own letter to the lead author of the 2008 study that overstated issues

with diesel exhaust. The NOTICE OF ADVERSE ACTION to Hien T. Tran dated April 9, 2009 from Linda Smith, Chief of the Health and Exposure Assessment Branch, in the ‘Statement of Facts’ section states:

“Your dishonesty regarding your educ ation has called into question the validity of the report ‘Methodology for Estimating Premature Deaths Associated with Long-term Exposure to Fi ne Particulate Matter in California’ in which you were the project coordinator and lead author. This report in turn supports other controversial and critic al regulation adopted by Air Resources Board (ARB). Your actions could creat e long lasting and damaging reflection

on ARB and the California Envi ronmental Protection Agency.”

The report, authored by Mr. Tran, has been problematic and has been called into question several times by other properly credentialed scientists. To use and rely upon such a problematic report to extend th e enforcement of this act to those who do not own the trucks is unwise and unju st. Additional scientific study must be conducted before expanding the TRU Act to parties other than truckers and trucking companies. (ALC)

Agency Response: Mr. Hien Tran did not participat e in this rulemaking nor did he author any documents that served as reference documents in this rulemaking.

General Comments

32. Comment : All trucks should use biodiesel or at least 50 percent biodiesel when in the basin or port vicinity. (JC)

Agency Response: This comment is not specif ic to the proposed amendments.

33. Comment: Several commenters indicated support for the proposed amendments or appreciation for staff’s efforts. (NRDC, MECA, ALA, NFL)48 Agency Response: No response necessary.

34. Comment: Several commenters indicated support for the goal of clean air efforts that promote improv ed air quality. (ATA, TIA)

Agency Response: No response necessary.

35. Comment: Several commenters expressed t hanks for staff’s work to address their concerns. (CGA, NFL, WGA, TIA)

Agency Response: No response is necessary.

B. Responses to Comments Received Du ring the First 15-Day Public Comment

Period

List of Individuals and Busine sses Submitting Written Comments Received During the Firs t 15-day Comment Period

Commenter

Name Affiliation Identification

Code

Sean Galleher Miramar Truck – National Lease MT-NL

Kirk Marckwald California Environmental Associates on behalf of Union Pacific Railroad Company and BNSF Railway Company CEAUP/BNSF

Shimoda, Chris California Trucking Association CTA

36. Comment: Since smaller units like Carrier 550’s have no retrofit filter, it seems like a waste to force repower with temporary units only good for seven years. These units are generally low hour user s, and the harm to the environment by forcing more units to be manufactured ve rses the gain to repower (minimal) is actually a step backward. Not to mention throwing $6,000 to $7,000 dollars down the drain. This makes no sense, please reconsider this unnecessary burden being placed on California business. Waivers should be granted on this class until either a true clean burning unit is available or a filter. (MT-NL)

Agency Response: These comments are outside t he scope of the modifications that were made available during the fi rst 15-Day Public Comment Period; therefore, staff is not lega lly required to respond. Howe ver, it is not true that

there is no verified diesel emissions c ontrol strategy for the engines used in Carrier Transicold’s TRU model Supra 550, which uses a Kubota model Z482-E engine in the [X]KBXL.719KCB engine family , where [X] indicates the model year (e.g. 5 indicates model year 2005). Hu ss, Inc. has been verified by ARB to sell their MK-35 and MK-50 diesel particulate filters for use on these engines. Huss has been evaluating installation kits for sm all TRU engines. In the event that

these installation kits are not avail able soon enough, owners of smaller bobtail49 TRUs may apply for a compliance ex tension based on u navailability of compliance technology, under 13 CCR section 2477.5(k). However, new replacement engines are readily available, which would provide the owner with an additional seven years of compliance. At that point, the TRU will be worn out

and the van insulation and door seals wo uld be in a deteriorated condition. Replacement of the entire unit or the entire van may make better economic

sense.

37. Comment: Railway carriers need to move TRU-equipped refrigerated railcars owned by third parties through California. The third party owner may hire the railroad to monitor the TRU’s proper operat ion and fuel level. The railway carrier may activate the third-party’s or the railwa y carrier’s contractor to re-fuel, repair, and/or restart TRUs or TRU gen sets as needed to prevent loss of perishable cargo. Those activities are included in the definition of “oper ate”, which puts the railroad under the requirem ents of an operator for TRUs they don’t own. Monitoring, repairing, ref ueling, and/or re-starting a TRU on behalf of the owner

to ensure safe transit of perishable goods should not crea te a new and significant compliance obligation for the railroads. The compliance obligations of the third party TRU owners/operators should not be shifted to the railroads simply because the railroads are hired to perform necessary functions. We request that ARB clarify through rule l anguage that the ra ilroads do not “operate” third-party TRUs transported by rail. (CEA – UP/BNSF)

Agency Response: These comments are outside th e scope of the modifications that were made available during the fi rst 15-Day Public Comment Period; therefore, staff is not lega lly required to respond. However, it was not staff’s intent to trigger operator requirements under the circumstances described by the

commenter.

Staff elected to propose additional modifica tions to clarify this issue by adding section 2477.3(f), to exempt rail carri ers from the owner or owner/operator requirements of section 2477.5 for refri gerated railcar TRUs that are owned by third parties, where the rail carrier is onl y moving the refrigerated equipment for a customer. This exemption wo uld not apply if the rail carrier is leasing the TRU, in which case the lessee requirements of section 2477.12 would apply to the rail carrier. This exemption would also only apply if the railway carrier or its agent is only fueling, monitoring to assure pr oper operation, keeping in operation, arranging repairs at the request of the owner, or restarting the TRU or TRU gen set engine after an unscheduled shut-down or repair, and is not performing any

of the other activities listed under the definitio n of ‘operate.’

It is not staff’s intent to exempt rail carriers from t he freight broker and freight forwarder requirements of section 2477.8 if the rail carrier is the business entity that hires, contracts for, or dispatc hes the transport of perishable goods in TRU-equipped or TRU gen set-equipped tr ucks, tractor-trailers, shipping containers, or railcars on California highw ays or railways. For example, if a rail50 carrier, its parent company, or subsidiary arranges drayage at the ends of the rail leg of perishable food transport, the fr eight broker or freight forwarder requirements of section 2477.8 would apply to the rail carrier.

38. Comment: The railroads need to move noncompliant, non-operating (empty), railroad-owned TRU-equipped refr igerated railcars through California. It is critical for unimpeded rail operations and for effici ent operation of interstate commerce, that the railroads can move non-comp liant, non-operating railroad-owned TRUs through California. The T RU ATCM’s definition of “ operate” includes a sentence that says: “A TRU that is operational (e.g. capable of being operated) shall be considered to operate if it is in California.” The effect is that all TRUs that are in California and capable of being operated must meet the in-use emissions standards, regardless of whether the engine is r unning. The railroad’s refrigerated railcars are equipped with sophisticated trackside monitors, GPS technology, and computer programs. T hese systems can moni tor whether the TRU engine is running or not. These systems can be used to ensure that a noncompliant TRU does not operate in California and can be used to

demonstrate this with automated records. The railroads request that ARB amend the rule with a second 15-Day Modification to revise the definition of “operate” so that it only applies to a moto r carrier. (CEA – UP/BNSF)

Agency Response: These comments are outside th e scope of the modifications that were made available during the fi rst 15-Day Public Comment Period; therefore, staff is not lega lly required to respond. Ho wever, staff believes that additional clarity can be provided. The s entence in the definition for “operate,” which is referred to by the commenter is necessary for enforceability. Staff believes the approach that the railroads pr oposed is overly broad and may cause the owner/operator requirements to be unenf orceable for other types of carriers that don’t have the sophisticated tracking, monitoring and repo rting systems that

the rail carriers now have.

Staff has met with the railroads to discu ss an alternative approach, based on the use of automated TRU engine run status monitoring systems, GPS tracking technology, and trackside data acquisi tion and communication systems with computer data storage systems. Based on thes e discussions, staff made

additional modifications available dur ing a second 15-Day Public Comment

Period that creates an exemption under 13 CCR section 2477.3(e) for noncompliant TRUs on refrigerated railcar s that are not operat ing while traveling through California, provided the Executive Officer has previously approved a written compliance plan that is proposed by the railway carrier.

The written compliance plan would clearly identify the monitori ng, recordkeeping, and reporting procedures that the railway carrier would implement and utilize to ensure noncompliant TRUs on refrigerated railcars will not oper ate at any time while in California. The compliance plan would include, without lim itation: routes of travel within California, dates of travel, information identifying each51 noncompliant TRU by the railroad’s r eporting mark and the one-to-six-digit number which uniquely identifies each ra ilcar, a description of the automated monitoring and recordkeeping system fo r reporting the TRU “engine on” and “engine off” status, and the frequency of re porting to ARB, including expedited reporting for violations observed or discovered by the railway carrier. A statement would be requir ed, signed by an authorized railroad representative, declaring that the railway carrier agrees to be bound by the compliance plan. Compliance verification records would be maintained for three years and would be provided to authorized enforce ment personnel upon request.

39. Comment: The railroads need to move noncompliant, non-operating (empty),

railroad-owned TRUs to a location within California for the exclusive purpose of retrofitting the units to comply with the TRU ATCM’s in-use standards. The railroads are willing to provide advance wri tten notification to AR B that it will bring a non-running, noncompliant TRU into Californ ia to be retrofit to comply with the TRU rule. (CEA – UP/BNSF)

Agency Response: These comments are outside th e scope of the modifications that were made available during the fi rst 15-Day Public Comment Period; therefore, staff is not lega lly required to respond. Howe ver, staff believes that the solution that was proposed in response to Comment 38 (immediately above)

would also resolve this issue.

40. Comment: The railroads request ARB confirm in writing that a number of definitions do not apply to t he railroads: “Broker” (e.g. railroads are not brokers); “Freight Broker” (e.g. railroads are not fr eight brokers); “Carrier” (e.g. railroads are not carriers); “Motor Carrier” (e.g. ra ilroads are not motor ca rriers); “Dispatch” (e.g. railroads do not dispatch freight or cargo); “Facility” (e .g. railroads do not own or operate facilities); “Freight Fo rwarder” (e.g. railroads are not freight forwarders); “Receiver” (e.g . railroads are not receivers); “California-Based Receiver” (e.g. railroads are not Califo rnia-based receiver s); “Shipper” (e.g. railroads are not shippers); and “California-Bas ed Shipper” (e.g. railroads are not California-based shippers). (CEA – UP/BNSF)

Agency Response: These comments are outside th e scope of the modifications that were made available during the fi rst 15-Day Public Comment Period; therefore, staff is not l egally required to respond. However, staff believes the

definitions in the TRU ATCM that the railroads are refe rring to are clear and that no changes are necessary. The definitions fo r “Broker,” “Freight Broker,” “Freight Forwarder,” “Receiver,” California- Based Receiver,” “Shipper,” and “California-Based Shipper” do not apply to the railroads, provided the railroads do not arrange for the transport of perishable goods, do not hire motor carriers for the transport of perishable goods, and do not warehouse, ship, or receive perishable goods. The railroads are not a “Carrier” or “Motor Carrier” provided they do not provide motor vehicle transpor tation for compensation. Railroads do not “Dispatch” provided they do not coordi nate delivery, pickup, and drop-off52 schedules of vehicles, and monitor the deliv ery of freight from these vehicles.

Railroads are not a “Facil ity” provided they don’t hav e a cold storage warehouse where TRU-equipped trucks, trailers, shi pping containers or railcars are loaded or unloaded with per ishable goods.

41. Comment: ARB’s usage of the Office of Environmental Health Hazard Assessment (OEHHA) “Air Toxics Ho t Spots Program Risk Assessment

Guidelines” to “characterize the health risk impact of TRUs congregating at

distribution centers violates California Rulemaking Law under the Administrative

Procedures Act in the following ways:

Authority CTA believes that “the scope of the rulemaking proceeding exceeded the authorities granted to ARB under the current law.”

“OEHHA’s ‘Air Toxics Hot Spots Progr am Risk Assessment Guidelines’ were promulgated pursuant to Health and Safety Code section 44360, which was codified into law by AB 2588 (Connelly- 1987) and subsequently amended by SB 1731 (Calderon-1992)”, which requires “that toxic air emissions from stationary sources (facilities) be quantif ied and compiled into an inventory according to criteria and guidelines devel oped by the ARB, that each facility be prioritized to determine whether a ri sk assessment be conducted, and that the risk assessments be conducted according to methods developed by OEHHA.”

OEHHA has stated that mob ile sources and rail lines do not come under the purview of the Hot Spots program [the Air Toxics “Hot Spots” Information and Assessment Act (AB 2588, Connelly, sta t. 1987; Health and Safety Code Section 44300 et seq.)].

Attempts to include mobile sources in the Air Toxics “Hot Spots” Information and Assessment Act, including AB 2546 (De La Torre [1987]) and AB 1101 (Oropeza [2006]) have failed at the legislature.

TRUs are classified as mobile sources by Health and Safety Code section 39618, and accordingly, “ARB clea rly lacks the authority to introduce the Guidelines into a rulemaking proceeding pertaining to mobile sources...” (CTA)

Agency Response: No modification was made in response to this comment. As explained below, the commenter is c onflating the issue of whether toxic air

contaminants emitted from mobile sour ces fall within the purview of the Air Toxics “Hot Spots” Information and A ssessment Act with the separate and distinguishable issue of whether ARB is precluded fr om using OEHHA’s “Air Toxics Hot Spots Program Risk Assessm ent Guidelines” in the instant rulemaking. The answer to the latter issue is no.

ARB disagrees that the scope of this rulemaking action exceeded the specific statutory authorities under which the proposed amendm ents were enacted. ARB53 expressly specified in the Staff Report, Initial Statement of Reasons and in the Notice of Public Hearing for this rulemaking action that the proposed amendments were being proposed under t he authority of Health and Safety Code sections: 39600, 39601, 39618, 39658, 39659, 39666, 39667, 39674, 39675, 42400, 42400.14, 42400.2, 42400. 3.5, 42402. 42402.2, 42410, 43013,

43018.

ARB also discussed its authority to pr omulgate the amendment s in Chapter I,

Section C of the Staff R eport, and explained there that Health and Safety Code (HSC) sections 39600 and 39601 confer to ARB the general authority and obligation to adopt rules and measures nece ssary to execute the Board's powers and duties imposed by State law, that HSC sections 43013(b) and 43018 provide ARB broad authority to adopt measures to reduce air pollutant emissions from vehicular and other mobile sources, and HSC section 39618 classifies refrigerated trailers as o ff-road mobile sources under AR B jurisdiction. Moreover, California's Air Toxics Program, estab lished under California law by AB 1807 (Stats. 1983, Ch. 1047) and set forth in Health and Safety Code sections 39650 through 39675, mandates the ident ification and control of ai r toxics in California. The identification phase of the Air Toxics Program requires ARB, with participation of other state agencies, such as the Office of Environmental Health Hazard Assessment (OEHHA), to eval uate the health impacts of, and exposure to, substances and to identify those s ubstances that pose the greatest health threat as toxic air contaminants (TACs). ARB's evaluation is made available to the public and is formally reviewed by the Scientific Review Panel (SRP) established under Health and Safety Code section 39670. Following ARB's evaluation and SRP's review, the Board may formally identify a TAC at a public hearing. Following the identif ication of a substance as a TAC, Health and Safety Code sections 39658, 39665, 39666, and 39667 requires ARB, with the participation of the air pol lution control and air quality management districts, and

in consultation with affected sources and interested parties, to prepare a report on the need and appropriate degree of regulation for that substance.

In 1998, ARB identified diesel PM as a TAC with no specified threshold exposure level below which adverse health impacts would be expected, pursuant to HSC sections 39650 through 39675. A needs assessment for diesel PM was conducted between 1998 and 2000 pursuant to HSC sections 39658, 39665, and

39666. This resulted in ARB staff dev eloping, and the Board approving, the Risk

Reduction Plan to Reduce Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles (Diesel RRP) in 2000. The Diesel RRP presented information on the available options fo r reducing diesel PM and recommended regulations to achieve these reductions. In the Diesel Risk Reduction Plan, ARB

identified TRU emissions associated wit h refrigerated warehouse distribution centers as creating potent ial cancer risks and included off-road engines in the plan to reduce diesel PM emissions.54 None of the statutor y provisions cited above prohi bits ARB from utilizing OEHHA’s “Air Toxics Hot Spots Pr ogram Risk Assessment Guidelines” (Guidelines) to evaluate the health risks associated with TRU emissions in its rulemaking actions involving TRUs. Instead, pursuant to the broad scope of authority provided to ARB by those stat utory provisions, AR B’s usage of the Guidelines to estimate the potential heal th impacts of emissions generated from TRUs was entirely consistent with the statutory provisio ns cited in the Authority notes for this rulemaking action.

ARB also notes that the commenter’s implication that the Guidelines are completely inapplicable to mobile sour ces is not accurate. The commenter quoted section 2.3.1.2 of the “Air Toxics Hot Spot s Program Risk Assessment Guidelines, Technical Support Docu ment for Exposure Assessment and Stochastic Analysis”, Scient ific Review Panel Draft, February 2012 to support its

statement that “mobile s ources and rail lines do not co me under the purview of the Hot Spots program.” However, the commenter neglected to cite the remaining portion of the langu age, which is shown below in italicized text.

“Mobile sources and rail lines do not come under the purview of the Hot Spots

program, but they are required to be evaluated under SB-352. SB-352 requires a risk assessment performed und er the Hot Spots risk assessment guidance for proposed school sites wit hin 500 feet of a busy roadway. Dedicated air dispersion models are av ailable for motor vehicle emissions from roadways which are a special type of line source. These models (i.e., CALINE3, CAL3QHCR, and CALINE4) are designed to simulate the mechanical turbulence and thermal pl ume rise due to the motor vehicle activity on the roadway. However, these dedicated models use the Pasquill-Gifford dispersion stability classes for dispersion; the AERMOD dispersion model uses a more advanced continuous stability estimation

method based on observations. The limita tion with AERMOD is that the user needs to estimate initial mixing (Szo, and Syo) for mechanical turbulence and thermal plume rise is not available. Consult with the Di strict prior to conducting roadway modeling to determine model use.

For practical information on how to simulate roadway emission dispersion using these models, see the Califor nia Air Pollution Control Officer’s Association (CAPCOA) website at http ://www.capcoa.org or the Sacramento Metropolitan AQMD (SMAQMD) website at http://www.airquality.org/ ceqa/RoadwayProtocol.shtml . The SMAQMD has a document titled, “Recommended Protocol for Evaluating the Location of Sensitive Land Uses Adjacent to Ma jor Roadways”(January, 2010). The ARB

recommends this document for SB-352 risk assessments.

This section shows that ev en if mobile sources are be yond the purview of the Hot Spots program, they are not therefore conclusively barred from being included in risk assessments conducted using the Hot Spots risk assessment guidance55 under other statutory provisions, as evidenced by Senate Bill 352 (Escutia, 2003) [Section 17213 of the Educ ation Code and Section 21 158.1 of the Public Resources Code].

Consistency

42. Comment: The ARB’s usage of the Guidelines to promulgate regulation is not

consistent with the intent of AB 2588 or the subsequently adopted Health and Safety Code sections which codified the Act.

The ARB’s usage of the Guidelines to, in part, regulate mobile sources manages to not only be inconsistent with the l egislative intent of AB 2588, but also manages to exceed the intended authorit y granted to promulgate regulations based on information gathered pursuant to the Act. Assemblyman Connelly was quite clear on this matter: The Act gather s information: it does not regulate.” (CTA)

Agency Response : No modification was made in response to this comment. The response to Comment 41 is hereby incorporated by reference herein.

As discussed in the response to Comment 41, this rulemaking action is entirely

consistent with and does not conflict with those provisions of the Health and Safety Code that the ARB has cited as authorizing its pr omulgation of the

amendments.

This rulemaking action is also consistent with and does not conflict with the provisions of the Air Toxics Hot Spot s Program Risk Assessment Guidelines. The Air Toxics “Hot Spots” Informati on and Assessment Act (AB 2588, Connelly, stat.1987; Health and Safety Code Secti on 44300 et seq.) is designed to provide

information on the extent of airborne em issions from stationary sources and the potential public health impacts of those emissions. Facilities provide emissions inventories of chemicals specifically list ed under the “Hot Spot s” Act to the local Air Pollution Control and Air Quality M anagement Districts and ultimately to the state Air Resources Board. Following prio ritization of facilities by the Districts, facilities may be required to conduct a health risk assessment. Because this rulemaking action proposes amendments to existing regulations applicable to TRUs, which the legislature has classified as mobile sources, it is clear that the proposed amendments do not conflict with the information gathering provisions of AB 2588 which apply to st ationary sources.

As explained in the response to Co mment 41, ARB is promulgating this rulemaking action pursuant to the authority of cited provisions of the Health and Safety Code, including those provisions of California's Air Toxics Program, set forth in Health and Safety Code sections 39650 through 39675, which mandates

the identification and control of air toxics in California. Also, as explained in the response to Comment 41, none of those stat utory provisions prohibits ARB from56 utilizing OEHHA’s “Air Toxics Hot Spot s Program Risk Assessment Guidelines”

to evaluate the health risks associated with TRU emissions in its rulemaking actions involving TRUs.

Reference

43. Comment: The ARB failed to reference Heal th and Safety Code Section 44360, the underlying statute whic h enables the Guidelines. Any portion of the rulemaking proceeding on which the B oard relied upon these guidelines to adopt, amend, or repeal the regulation or were influenced by the health risk assessment promulgated according to these guidelines would fail the “Reference” standard in Government Code 11349.1(a)(5). (CTA)

Agency Response : No change was made in response to this comment. See the responses to Comments 41 and 42.

As explained in the responses to Comments 41 and 42, ARB promulgated the proposed amendments pursuant to the statutory authority of specific provisions of the Health and Safety Code, including provisions of California's Air Toxics Program, set forth in Health and Safety Code sections 39650 through 39675,

which mandates the identificat ion and control of air toxics in California. Although ARB used a methodology to assess potentia l cancer risks from TRU emissions

that is consistent with OEHHA’s Air Toxics Hot Spots Program Risk Assessment Guidelines, it disagrees with the commenter ’s assertion that such usage rises to the requisite level requiring it to in clude HSC 44360 within the list of statutory provisions listed within the “reference” se ction of this rulemaking action because the proposed amendments neither implement, interpret, or make specific that statutory provision.

Guidelines Substantially Influenced Rulemaking Proceeding

44. Comment: The ARB “based its health risk characterization in the Initial

Statement of Reasons on methodology promulgated pursuant to the Air Toxics “Hot Spots” Information and Assessment Ac t. This health risk assessment went on to substantially influence both the ru lemaking package itself and the Board’s subsequent deliberations.

ARB Staff then went on to present info rmation to the Board based on the OEHHA methodology in question. As demonstr ated in the transcript from the October 21, 2011 Board Hearing, ARB sta ff specifically cites the health risk characterization, per the Guidelines, as the determinant fact or on the operational

life amendment:

‘With respect to extending the operational life for model year 2004 and newer engines, our evaluation show ed that the estimated pot ential cancer risk near many distribution centers is still a c oncern at the existing seven-year57 requirement. Increasing t he operational life one, two, or three years would

erode cancer risk reductions by 11, 23, and 42 percent. ’

We believe this focus on ‘near source ri sk’ is a clear break with the traditional purpose of an Air Toxic Control Measure which falls squarely under the purview of the Air Toxic ‘Hot Spots’ Information and Assessment Act. As cited previously, OEHHA specifically states that ‘mobile sources and rail lines do not come under the purview of the Hot S pots program.’ “ (CTA)

Agency Response : No modifications were made in response to this comment. See the responses to Comments 41, 42, and 43.

As the commenter notes, ARB staff perfo rmed a health risk assessment in this rulemaking action to determine the 70-year potential cancer risks associated with exposures to diesel PM emissions from TRU engines at a distribution center. Staff estimated the potential cancer risk using OEHHA risk assessment procedures based on the annual average concentration of diesel PM predicted by the air dispersion model and a health ri sk factor (referred to as a cancer potency factor) that correlates cancer ri sk to the amount of diesel PM inhaled. The ARB recommended methodology used to estimate the potential cancer risks is consistent with procedures in OEHHA ’s Air Toxics Hot Spots Program Risk

Assessment Guidelines.

ARB staff presented the findings from it s health risk assessment in the Staff Report: Initial Statement of Reasons for th is rulemaking action, but notes that it

concluded that there were no alternat ive means to the proposed amendments that would provide similar economic relie f to stakeholders with less emissions or public health impacts based on several factors other than the health risk assessment. Specifically, in recommendi ng against the Board’s adoption of the

alternative identified as Alternative 3 in the Sta ff Report (which would have delayed compliance with the Ultra-Low-E mission TRU (ULETRU) in-use standard

for MY 2004 and newer TRUs for one to thr ee years) staff ident ified the following

factors:

“[t]he analysis showed that the public health risk at the seven-year operational life still resulted in potential cancer risk levels of concern in

communities near facilities where TRUs c ongregate. Therefor e, relaxing the in-use requirements by delaying comp liance and extending the operational life of TRU engines would only make th is risk greater and likely exacerbate concerns regarding elevated risk levels in nearby communities. In addition, owners of older TRUs (e.g. MY 2 001 and older, MY 2002, and MY 2003) have been required to meet the in-use standards by 2008, 2009, and 2010, respectively, using a seven-year operati onal life, so there would be fairness issues if the operational life is changed at this point. Also, the retrofit device manufacturers that have invested signifi cant resources into verifying diesel particulate filters would be left with no market for one or more years, which58 would most likely force them to abandon the TRU market. DPFs are a lower-cost compliance option and their total non-availability may cause the cost of other compliance options to in crease. Additionally, the TRU ATCM’s

PM emissions reductions also contribut e to ARB’s 2014 State Implementation Plan for meeting the federal PM 2.5 st andard, so any delayed implementation could jeopardize those commitments and result in loss of federal highway funding. Based on the adverse impacts identified above and discussed in greater detail in Chapter IV, staff re jected Alternative 3. ” (ISOR, p II-35.)

ARB disagrees with the comment that focusing on the “near source risk” presented by particulate emissions from diesel-fueled engines is inconsistent with the “traditional purpose of an Air To xic Control Measure.” As explained in the response to Comment 41, ARB ident ified diesel PM as a TAC with no specified threshold exposure level below which adverse health impacts would be expected, and consequent ly ARB approved the Risk Reduction Plan to Reduce

Particulate Matter Emissions from Diesel-Fueled Engines and Vehicles (Diesel RRP) in 2000. The Diesel RRP identif ied TRU emissions associated with refrigerated warehouse distri bution centers as creating potential cancer risks and included off-road engines in the plan to reduce diesel PM emissions. ARB

therefore believes that its consideration of such near source risks is entirely

consistent with the trad itional purpose of an air toxic control measure.

See response to Comment 41 for ARB’s regarding the assertion that “mobile

sources and rail lines do not come under t he purview of the Hot Spots program.”

C. Responses to Comments Received During the Second 15-Day Public

Comment Period

List of Individuals and Busine sses Submitting Written Comments Received During the Second 15-D ay Public Comment Period

Commenter

Name Affiliation Identification

Code
Voltmann, Robert Transportation Intermediaries Association TIA

45. Comment: TIA supports the Board’s efforts to improve compliance rates. (TIA)

Agency Response: No response necessary.

46. Comment: TIA supports the exemption for noncompliant, non-operating railcar TRUs passing through California. (TIA)

Agency Response: No response necessary.59 47. Comment: TIA has concerns with amendment s extending responsibilities to brokers. (TIA)

Agency Response: These comments are essentia lly the same as those made by TIA for the 45-day proposal, which st aff responded to, above. See responses to Comments 6, 26, 27, 28, and 30.