Final Statement of Reasons for Rulemaking 

Including Summary of Comments and Agency Responses 

PUBLIC HEARING TO CONSIDER THE ADOPTION OF REGULATIONS 

TO REDUCE EMISSIONS FROM DIESEL ENGINES ON 

COMMERCIAL HARBOR CRAFT OPERATED WITHIN CALIFORNIA 

WATERS AND 24 NAUTICAL MILES OF THE CALIFORNIA BASELINE 

Public Hearing Date: October 26, 2007, Continued to November 15, 2007 

Agenda Item No.: 07-10-6 
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TABLE OF CONTENTS

Contents Page

I. General................................................................................................................. 1 

II. Modifications Made to the Original Proposal and Additional Documents 

Made Publicly Available........................................................................................ 6 

A. Availability of Modified Text ....................................................................... 7 

B. Nonsubstantial Changes.......................................................................... 10 

III. Summary of Comments and Agency Responses to the Original Proposal......... 13 

A. Authority................................................................................................... 19 

B. Applicability.............................................................................................. 24 

C. Exemptions.............................................................................................. 27 

D. Definitions................................................................................................ 29 

E. Engine Hour Meters................................................................................. 31 

F. Best Available Control Technology (BACT) ............................................. 31 

G. New and In-use Harbor Craft Requirements............................................ 37 

H. Compliance Schedule.............................................................................. 40

I. Compliance Methods ............................................................................... 52

J. Compliance Extensions ........................................................................... 52 

K. Alternative Control of Emissions.............................................................. 57 

L. Economic Burden and Impact on California’s Economy .......................... 57 

M. Incentives................................................................................................. 65 

IV. Summary of Comments and Agency Responses – Notice of Modified Text....... 68 

A. Engine’s “Model Year + 5” Method of Determining Effective 

 Model Year .............................................................................................. 69 

B. Acceleration of Compliance Schedule for 1996-1999 Model Year Ferry 

Engines.................................................................................................... 72 

C. Vessel Owners or Operators with Multiple Vessels Requiring In-use 

Engine Compliance in Either 2009 or 2010.............................................. 72 

D. Reporting Requirements.......................................................................... 75 

E. Appendix H: Estimated Ticket Price Increase for Ferry/Excursion 

Businesses .............................................................................................. 75 

F. Appendix G: Assumptions for Estimating Greenhouse Gas Emissions 

from Commercial Harbor Craft Operating in California ............................ 79 

G. Miscellaneous.......................................................................................... 79 
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TABLE OF CONTENTS (CONTINUED) 

Contents Page

List of Tables 

Table I: Comments Received During the 45-day Comment Period That Received a 

Response...................................................................................................... 14 

Table II: Comments Received During the 15-day Comment Period That Received a 

Response...................................................................................................... 68 
1 

I. GENERAL 

In this rulemaking, the Air Resources Board (ARB or Board) is adopting a new 

regulation and an essentially identical airborne toxic control measure (ATCM) to reduce 

emissions of diesel particulate matter (PM) and oxides of nitrogen (NOx) from 

commercial harbor craft within 24 nautical miles of the California baseline (referred to as 

“Regulated California Waters”). The regulation and ATCM are hereinafter collectively 

referred to in the singular “regulation” unless otherwise noted. 

The regulation will apply to commercial harbor craft operating within Regulated California 

Waters beginning January 1, 2009. Regulated California Waters include all California 

internal waters, estuarine waters, ports, and coastal waters within 24 nautical miles of the 

California coastline. The regulation establishes in-use emission limits for both auxiliary 

and propulsion diesel engines on ferries, excursion vessels, tugboats, and towboats 

consistent with the United States Environmental Protection Agency (U.S. EPA) marine 

engine emission standards. All engines in new harbor craft and replacement engines 

purchased for in-use harbor craft must meet emission limits equal to, or more stringent 

than, the U.S. EPA marine engine emission standards in effect at the time the new vessel 

or engine is purchased. 

The regulation supports the “Risk Reduction Plan to Reduce Particulate Matter 

Emissions from Diesel-Fueled Engines and Vehicles” (Diesel Risk Reduction Plan) 

adopted by the Board on September 30, 2000, the “Goods Movement Emission 

Reduction Plan” adopted by the Board in April 2006, and the State Implementation Plan. 

The regulation will reduce the public’s exposure to diesel PM and NOx by requiring 

vessel owners to repower or replace in-use engines with cleaner Tier 2 and Tier 3 

engines; in addition, ferry owners are required to install best available control 

technology (BACT) on propulsion engines on new ferries. 

 

This rulemaking was initiated by the September 7, 2007, publication of a notice for a 

public hearing on October 25-26, 2007 (“45-day Notice”). A “Staff Report: Initial 

Statement of Reasons” (Staff Report or ISOR) and “Technical Support Document” were 

also made available for public review and comment by September 7, 2007. The Staff 

Report, which is incorporated by reference herein, described the rationale for the 

proposal. Appendix A to the Staff Report contained the text of the originally proposed 

regulation, which adds a new section 2299.5 to title 13, California Code of Regulations 

(CCR) and a new section 93118.5, title 17, CCR. The Technical Support Document, 

which is incorporated by reference herein, described the basis of the proposal in more 

detail. These documents were also posted by September 7, 2007, on the ARB’s internet 

site for the rulemaking at: http://www.arb.ca.gov/regact/2007/chc07/chc07.htm (“ARB’s 

internet site”). 

On September 11, 2007, ARB staff published an errata to correct an error in the internet 

address for ARB’s internet site as it appeared in the 45-day notice. On 

September 25, 2007, ARB staff published a second errata to correct the information in 
2 

various tables contained in the Staff Report and Technical Support Document. These 

errata were to correct errors associated with the incorrect use of “Tons/year” (corrected 

to show “Tons/day”) and errors resulting from the conversion of the Staff Report and 

Technical Support Document from Microsoft Word to Portable Document Format (PDF). 

On October 26, 2007, the Board conducted a public hearing to consider adoption of the 

staff’s proposal, including staff’s suggested changes to the original proposal. Those 

modifications were set forth in a two-page document entitled, “Staff’s Suggested 

Modifications to the Original Proposal – To Be Presented at the October 26, 2007 

Hearing,” which was distributed at the hearing and included as Attachment B to 

Resolution 07-47. Written and oral comments were received at the hearing, and several 

stakeholders suggested additional changes to the proposed regulation. At the 

conclusion of public testimony, the Board requested staff to review two issues that were 

raised during the public comment period and to report its findings at the next Board 

meeting. The Board then closed the rulemaking record on the proposal and continued 

the hearing to consider the staff’s proposal to the staff’s November 15, 2007 meeting. 

At the November meeting, staff provided the information the Board requested on 

October 26, 2007. At the conclusion of the continued hearing, the Board adopted 

Resolution 07-47, in which it approved the adoption of the originally proposed regulation 

with suggested modifications discussed on both hearing dates. Modifications proposed 

by staff in response to the Board’s questions raised on October 26, 2007 were set forth 

in a two-page document entitled, “Staff’s Suggested Modifications to the Original 

Proposal – To Be Presented at the November 15, 2007 Hearing,” distributed at the 

hearing and included as Attachment C to Resolution 07-47. In accordance with section 

11346.8 of the Government Code, the Board directed the Executive Officer to 

incorporate the modifications included in Attachments B and C into the proposed 

regulatory text and to make such modifications available for a supplemental comment 

period of at least 15 days. The Executive Officer was then directed either to adopt the 

regulation with such additional modifications as may be appropriate in light of the 

comments received, or to present the regulation to the Board for further consideration if 

warranted in light of the comments. 

The text of the modifications to the originally proposed regulation, the incorporated 

documents, and additional supporting documents were made available for a 

supplemental 15-day comment period by issuance of a “Notice of Public Availability of 

Modified Text and Availability of Additional Documents” (“15-day Notice”). The 15-day 

Notice with five attachments was mailed on June 18, 2008 to all parties identified in 

section 44(a), title 1, CCR, and to other persons generally interested in ARB’s 

rulemaking concerning commercial harbor craft. These five attachments included a 

copy of Resolution 07-47 with Attachments B and C entitled “Staff’s Suggested 

Modifications to the Original Proposal,” the revised regulatory language, and three 

documents that staff added to the rulemaking record. All these documents were also 

published on June 18, 2008, on ARB’s Internet site. An email message announcing and 

linking to this posting was transmitted to the more than 1,300 parties that have 
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subscribed to ARB’s “harborcraft” listserve for notification of postings pertaining to 

commercial harbor craft. 

The 15-day Notice gave the name, telephone, and fax number of the ARB contact 

person from whom interested parties could obtain the complete texts of the additional 

incorporated documents and the modifications to the original proposal, with all of the 

modifications clearly indicated. The deadline for submittal of comments on the staff’s 

suggested modifications was July 3, 2008. 

Ten written comments were received during the 15-day comment period. Two of the 

ten comments did not specifically address the proposed modifications in the 15-day 

Notice. Eight comments specifically addressed the proposed modifications, but ARB 

decided not to make additional modifications in response to those comments. 

After considering the comments received during the supplemental 15-day comment 

period and making the modifications described below, the Executive Officer issued 

Executive Order R-08-007, adopting new section 2299.5 in title 13, CCR, and new 

section 93118.5, title 17, CCR, and adopting the incorporated documents. 

This Final Statement of Reasons (FSOR) updates the Staff Report by identifying and 

explaining the modifications that were made to the original proposal as a result of public 

comment and staff analysis after the Staff Report was issued. The FSOR also 

summarizes written and oral comments the Board received on the proposed regulatory 

text during the formal rulemaking process and ARB’s responses to those comments. 

Documents Incorporated by Reference. 

The following documents are incorporated by reference in the regulation: 

(1) International Standard ISO 8178-4(E):1996, “Reciprocating Internal Combustion 

Engines – Exhaust Emission Measurement – Part 4: Test Cycles for Different Engine 

Applications”; (2) International Standard ISO 8178-2(E):1996, “Reciprocating Internal 

Combustion Engines – Exhaust Emission Measurement – Part 2: Measurement of 

Gaseous and Particulate Exhaust Emissions at Site;” (3) U.S. EPA Marine Engine 

standards, Tier 1 and Tier 2, as set forth in "Control of Emissions of Air Pollution from 

New Marine Compression Ignition Engines at or Above 37 kW” (64 Federal Register 

(FR) 73299-73373, December 29, 1999)(40 Code of Federal Regulation (CFR) Part 94); 

(4) U.S. EPA Marine Engine Standards, Tier 3 and Tier 4, as set forth in “Final Rule: 

Control of Emissions of Air Pollution from Locomotive Engines and Marine 

Compression-Ignition Engines Less Than 30 Liters Per Cylinder” (73 FR 25245 et seq., 

May 6, 2008); (5) the following National Oceanic and Atmospheric Administration 

(NOAA) Nautical Charts, as authored by the NOAA Office of Coast Survey: (A) Chart 

18600, Trinidad Head to Cape Blanco (January 2002), (B) Chart 18620, Point Arena to 

Trinidad Head (June 2002), (C) Chart 18640, San Francisco to Point Arena (August 

2005), (D) Chart 18680, Point Sur to San Francisco (June 2005), (E) Chart 18700, Point 

Conception to Point Sur (July 2003), (F) Chart 18720, Point Dume to Purisima Point 

(January 2005), and (G) Chart 18740, San Diego to Santa Rosa Island (April 2005); 
4 

(6) ASTM D975-81, "Standard Specification for Diesel Fuel Oils" (as modified in 

May 1982); and (7) “Verification Procedure, Warranty and In-Use Compliance 

Requirements for In-Use Strategies to Control Emissions from Diesel Engines," 13 CCR 

§2700-2710.

The seven documents listed above consist of an updated international test method for 

measuring emissions from reciprocating internal combustion engines, marine engine 

emission standards promulgated by U.S. EPA, seven updated nautical charts defining 

sections of the California baseline (i.e., the coastline), and ARB procedures and 

requirements for diesel engine control strategies. Each instance of incorporation 

identifies the incorporated document by title and date. The documents are readily 

available from ARB upon request and were made available in the context of this 

rulemaking in the manner specified in Government Code section 11346.5(b). Also, the 

referenced ISO documents are published by the International Organization for 

Standardization, a well-established and prominent organization. Similarly, the nautical 

charts are available from NOAA, another prominent and long-established national 

agency. Further, ARB is a well-known public agency, and its verification procedure is 

easily obtained from ARB through various channels, including ARB’s general web site. 

Finally, the U.S. EPA regulations are readily available from that agency. Therefore, all 

the incorporated documents are reasonably available to the affected public from 

commonly known sources. 

The documents are incorporated by reference because it would be cumbersome, unduly 

expensive, and otherwise impractical to print them in the CCR. Existing ARB 

administrative practice has been to have specifications, test procedures, and similar 

documents incorporated by reference rather than printed in the CCR because these 

specifications and procedures are highly technical and complex. These include “nuts 

and bolts” engineering protocols and laboratory practices and have a very limited 

audience. Because ARB has never printed complete test procedures and similar 

documents in the CCR, the directly affected public is accustomed to the incorporation 

format utilized in the regulation. These test procedures and similar documents as a 

whole are extensive, and it would be both cumbersome and expensive to print these 

lengthy, technically complex procedures in the CCR for a limited audience. Printing 

portions of the test procedures and other documents that are incorporated by reference 

would be unnecessarily confusing to the affected public. For similar reasons, ARB is 

also incorporating by reference the detailed NOAA nautical charts specified above. 

Fiscal Impacts. Pursuant to Government Code sections 11346.5(a)(5) and 

11346.5(a)(6), the Executive Officer has determined that the regulatory action will 

create costs to some State and local agencies. Most State and local agencies will incur 

only reporting costs. Staff has estimated these one-time reporting costs to range from 

about $100 to $3,000 depending on the number of vessels operated by the agency. 

Agencies operating ferries, excursion vessels, tugboats, or towboats with diesel engines 

would also incur engine replacement costs ranging from a total compliance cost of 

$100,000 to $10 million. These agencies include the City of Vallejo, which operates the 
5 

Baylink Ferry; the Golden Gate Bridge and Highway Transportation District; the Port of 

Los Angeles; and the California Department of Transportation. However, the regulatory 

action will not result in costs or savings, as defined in Government Code section 

11346.5(a)(5) and 11346.5(a)(6), to any state agency, or in federal funding to the state, 

or create costs 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 Government Code, or other non-discretionary costs or savings to 

local agencies.

The Executive Officer has determined that there will be costs to the ARB to implement 

and enforce the regulation. Staff estimates that ARB’s cost to implement the reporting 

program (initial report) would be approximately $25 to $50 per engine for the entire 

population of 8,300 engines. These costs would be spread over the first two years of 

implementation. An additional cost on the order of $10 to $100 per engine (spread out 

over the 14 years from 2009 to 2022) is estimated for implementing the in-use engine 

compliance requirement. This would include providing technical assistance to 

stakeholders in compliance efforts and processing report updates at the time of final 

compliance with the regulation. Approximately 1,900 engines would be involved. Both 

of these implementation costs will be absorbed within existing budget and resources. 

Additionally, there will be travel and materials costs during the initial years of the 

regulation for outreach and educational efforts to economically disadvantaged or hard-to 

reach stakeholders, estimated at $25,000 per year for two years. A budget 

augmentation request has been made for these funds for the first year. Enforcement 

costs, including inspection and verifying reporting, are estimated at approximately 

$80 per engine per year for the 1,900 engines required to comply with in-use engine 

emission limits, or about $160,000 per year starting in 2009. The Enforcement Division 

is submitting a request for one additional staff person for the enforcement of this 

regulation in a Budget Change Proposal that encompasses their need for additional 

staff to enforce multiple, newly adopted regulations. 

Consideration of Alternatives. The regulation proposed in this rulemaking was the 

subject of discussions involving ARB staff, local air districts, affected vessel engine 

owners, operators, manufacturers, dealers, and others. A discussion of two alternatives 

to the regulatory proposal is found in Analysis of Alternatives, Section I, Chapter VIII 

(pp. VIII-27 through 32) of the Technical Support Document. Staff recommended 

against both alternatives. 

Both alternatives considered replacing pre-Tier 1 (unregulated or Tier 0) engines on 

uniform statewide in-use compliance schedules. One alternative removed the 

SCAQMD accelerated compliance schedule, such that vessels with homeports in 

SCAQMD as well as all other vessels in the State would be subject to a 15-year life 

compliance schedule. This alternative would accelerate Tier 0 engine replacements, 

but not as quickly as the SCAQMD compliance schedule. It was found to reduce the 

number of engine replacements in the first six years, unacceptably eliminating the early 

emission reductions necessary to help meet PM2.5 attainment goals by 2014. The 

other alternative placed all vessels in the State of California on the proposed SCAQMD 
6 

accelerated compliance schedule. This alternative was found to be infeasible because 

accelerating engine replacements statewide would exceed California’s boat yard and 

maintenance facilities’ capabilities. Staff also found that accelerating the compliance 

schedule for Tier 0 engines was found to provide short-term benefits at the expense of 

greater long-term reductions. The Board agreed with staff’s recommendation against 

these two alternatives, but the Board suggested that ferry Tier 0 engine replacements 

be accelerated for the health and safety of ferry passengers. 

During the October 26, 2007 hearing, the Board instructed staff to analyze a third 

alternative, namely to accelerate replacement of ferry Tier 0 engines while maximizing 

Tier 3 engine replacements. Under the original compliance schedule, ferry vessel 

1996-1999 model year Tier 0 engines would be replaced in 2015 and 2016. Tier 3 

engines become available in 2014, so accelerating the replacement of those engines 

1 to 2 years would accelerate emission reductions with no loss in long-term benefits. 

This change would not adversely affect the repower capacity since fewer than 10 ferries 

would be affected by this acceleration. However, it would increase the economic impact 

of the rule on ferry owners. The 2000 model year Tier 1 engines would still be replaced 

in 2015 and 2016, maintaining a 15-year life for Tier 1 engines. 

 

For the reasons set forth in Chapter VIII of the Technical Support Document, in staff's 

comments and responses during the hearing, and in this FSOR, the Board determined 

that the alternative of accelerating ferry vessel 1996-1999 model year Tier 0 engines by 

1 to 2 years would be effective in carrying out the purpose for which the regulatory 

action was proposed. The Board therefore adopted the proposal to accelerate the ferry 

vessel compliance schedule for 1996-1999 model year Tier 0 engine replacements. 

The Board has determined that no other alternatives considered by the agency or that 

have otherwise been identified and brought to the attention of the agency would be 

more effective in carrying out the purpose for which the regulatory action was proposed 

or would be as effective and less burdensome to affected private persons than the 

action taken by the Board. 

II. MODIFICATIONS MADE TO THE ORIGINAL PROPOSAL AND ADDITIONAL 

DOCUMENTS MADE PUBLICLY AVAILABLE 

Various modifications were made to the original proposal to address comments 

received during the 45-day public comment period and to clarify the regulatory 

language. These modifications are described below and include staff-proposed 

modifications that were approved by the Board on November 15, 2007, changes that 

the Board directed staff to make, and subsequent modifications made in response to 

public comments and to improve the proposed regulation’s clarity. The 15-day Notice 

together with a copy of the proposed regulation with changes indicated was posted on 

June 18, 2008 for period of public review and comment through July 3, 2008. 

Notification was sent to persons who had expressed an interest in the regulation during 

the course of rule development and review, including all individuals described in 

subsections (a)(1) through (a)(4) of section 44, Title 1, CCR. By these actions, the 

modified regulations were made available to the public for a supplemental comment 
7 

periods pursuant to Government Code section 11346.8. ARB decided not to make 

additional substantial changes in response to public comments received June 18-July3, 

but certain nonsubstantial changes were subsequently made and are detailed in 

subsection B below. 

A. Availability of Modified Text 

The following is a description of the substantive modifications provided for public 

comment from June 18, 2008 through July 3, 2008, arranged by section number. 

Essentially identical modifications were made to proposed section 2299.5, title 13, CCR 

and to the proposed Airborne Toxic Control Measure in section 93118.5, title 17, CCR. 

All references below to section 2299.5 and section 93118.5 are to the indicated sections 

in title 13 and 17, CCR, respectively, unless otherwise noted. 

Definitions, Subsections 2299.5(d) and 93118.5(d) 

The definitions for “excursion vessel” and “ferry” were changed to help differentiate 

between the two vessel types. 

Also, the definition for “ocean-going vessel” was modified to delete references to a 

registry and foreign-flagged vessels because the remaining three definitions for “oceangoing vessels” sufficiently describe such vessels. 

The definition for “Regulated California Waters” was modified to correct a slight error in 

the coordinates for the overwater Mexico-California border. 

Definitions for “Tier 3 Standards” and “Tier 4 Standards” were corrected for minor 

changes in the finalized standards and for one error, along with appropriate citations to 

the federal rulemaking, to reflect the recent U.S. EPA adoption of these standards in 

May 2008. Also, the definitions for “Tier 1 Standards,” “Tier 2 Standards,” “Tier 3 

Standards,” and “Tier 4 Standards” were modified to make it clear that in the event of a 

conflict between a particular standard in the summaries of those standards in this 

regulation and the actual corresponding U.S. EPA standard, the U.S. EPA standard will 

control. 

In-Use Engines and Vessels: Pre-Tier 1 and Tier 1-Certified Engines (Applicability 

and General Requirements), Subsections 2299.5(e)(6)(A) and 93118.5(e)(6)(A) 

This subsection was modified to clarify the applicability of the in-use engine and vessel 

requirements and to clarify the applicable compliance date. 

In-Use Engines and Vessels: Compliance Schedules and Determination of 

Engine Model Year, Subsections 2299.5(e)(6)(C) and 93118.5(e)(6)(C) 

To improve clarity, this subsection’s heading was changed from “Compliance Schedules 

and Determination of Engine Model Year” in the original proposal to “Compliance 
8 

Dates,” and it was moved to become subsection (e)(6)(D). (Note: An automated 

paragraph numbering function resulted in original subsection (e)(6)(C) being 

erroneously renumbered as subsection (e)(6)(D) in the version of the regulations 

indicating 15-day modifications, but this error appeared in text that was correctly 

identified for deletion and was therefore judged by staff to be of no consequence.) 

Use of the “Engine Model Year + 5” method to determine engine model year was 

restricted to vessel engines with homeports outside the SCAQMD. This modification 

ensures the regulation will not delay engine replacement emission reductions in the 

SCAQMD. 

Table 7 was modified to accelerate the compliance dates for specific ferry vessel (1996-

1999 model year) engines with homeports outside the SCAQMD. In the originally 

proposed compliance schedule, 1996-1999 model year ferry engines were required to 

comply in 2015 or 2016, depending on the annual engine hours of operation. The 

Board directed staff to accelerate the compliance schedule for these ferry engines to 

2014. These engines will still be replaced with Tier 3 engines, maintain a 15-year 

engine life on the original engines, and accelerate the emission reductions by 1 to 

2 years. 

 

In-Use Engines and Vessels: Compliance Requirements, Subsections 

2299.5(e)(6)(D) and 93118.5(e)(6)(D) 

This subsection’s title was changed from “Compliance Requirements” in the original 

proposal to “Compliance Methods,” and was moved to become subsection (e)(6)(C). 

The compliance option involving demonstration that the in-use engine meets Tier 2 

standards was clarified by dividing this option into two separate options. One option, 

named Method C2 in the modified regulation, specifies engines may be brought into 

compliance by demonstrating that the in-use engine meets Tier 2 engine emission 

standards as long as the demonstration is made prior to the effective date of Tier 3 

engine emission standards, even if the engine’s compliance date occurs after the Tier 3 

effective date. The other option, Method C3, specifies that engines may be brought into 

compliance by demonstrating the engine meets the Tier 2 or Tier 3 engine emission 

standards, whichever is in effect at the time of the engine’s compliance date. 

In-Use Engines and Vessels: Compliance Extensions, Subsections 

2299.5(e)(6)(E)(4) and 93118.5(e)(6)(E)(4) 

The compliance extension for same fleet vessel engines that share compliance dates 

was modified by adding an extension for owners with multiple vessels who will need to 

comply in the first two compliance years (2009 and 2010). The extension will allow a 

phased compliance schedule providing an additional three to four years for compliance 

while ensuring that all engines are in compliance by the end of 2013. This maintains 

the early reductions necessary in the SCAQMD and the rest of California. 
9 

In-Use Engines and Vessels: Special Provisions for DECS, Subsections 

2299.5(e)(6)(F) and 93118.5(e)(6)(F) 

A repair requirement was added to apply when a diesel emission control strategy 

(DECS) fails. This requirement gives the option to repair the DECS within 90 days of a 

failure or, if it cannot be repaired, to either replace it with another working DECS or use 

a different compliance method that meets the requirements of the section. 

 

Initial and Compliance Plan Reporting Requirements, Subsections 2299.5(h) and 

93118.5(h) 

The date when ferry, excursion vessel, tugboat, and towboat owners are required to 

report how they will comply with the in-use emission limit requirements was changed 

from the time of the initial reporting in 2009 to February 28 of the year compliance is 

required. This would allow vessel owners to develop a plan based on technology 

available at the time compliance is required and their current economic status. Vessel 

owners who choose to comply early can report compliance at that time. 

Violations, Subsections 2299.5(i) and 93118.5(i) 

This provision was modified to make it clear that violations are also subject to the 

penalties prescribed in Health and Safety Code §42402 et seq. 

Supporting Documents and Information 

In accordance with Government Code section 11347.1, the following documents were 

added to the rulemaking record with public notification provided in the 15-day Notice: 

• “Assumptions for Estimating Greenhouse Gas Emissions from Commercial 

Harbor Craft Operating in California” -- This document was appended to the 

15-day Notice as Attachment 3 and serves as new Appendix G to the Technical 

Support Document. 

• “Estimated Ticket Price Increase for Ferry/Excursion Businesses” -- This 

document is appended to the 15-Day Notice as Attachment 4 and serves as new 

Appendix H to the Technical Support Document. 

• “Survey of Ferry Vessel Owner/Operators” -- This document is appended to the 

15-Day Notice as Attachment 5 and serves as new Appendix I to the Technical 

Support Document. 

Other Changes in Modified Text

In addition, certain subsections and paragraphs were rearranged and other minor 

modifications were made throughout the regulatory text to improve clarity; to correct 

spelling, typographical errors, punctuation, and grammar; to make numbering 
10 

adjustments; and to correct citations and references. For example, staff modified the 

subsections (b) and (c) in both regulations to make the regulatory text easier to read. 

These modifications were included in the strikeout/underline version of the regulatory 

text that was provided for public comment with the 15-day Notice. 

B. Nonsubstantial Changes 

Certain nonsubstantial changes were made in the proposed regulations subsequent to 

circulation of the modified text for public comment. These changes are detailed 

paragraph by paragraph below, except that the following changes are not individually 

identified by location in the proposed regulations: (1) Correction of spelling errors, 

including replacing “home port” with “homeport” for consistency, adding hyphens to the 

terms “ocean-going,” “compression-ignition,” and “low-use,” and adding an “s” to the 

word “emission” in the term “emissions data”; and (2) Punctuation and formatting 

corrections including adding spaces after periods at the end of sentences and after 

colons, adding commas between the last two items in a list of items, changing periods 

to semicolons, changing the form of quotation marks, removing spaces before and after 

the slash in the term rescue/recovery, adding and removing blank lines between 

paragraphs, adding a return and blank line between a paragraph title and text, and 

changing paragraph title font to bold and italicized. 

The following grammatical corrections and changes to improve clarity were made to the 

final regulation order, shown below in underline to show additions and strikeout to show 

deletions: 

2299.5(c)(5) 

93118.5(c)(5) 

(5) A recreational vessel is exempt from this section in its entirety; 

2299.5(c)(13) 

93118.5(c)(13) 

(15) Near-Retirement Vessels. A harbor craft is exempt from the requirements 

of subsection (e)(6)(C) and (e)(6)(D) if all of the following criteria have been met: 

2299.5(d)(13),(14), and (15) 

93118.5(d)(13),(14), and (15) 

(13) “Category 1 engine” means any marine engine with a displacement of less 

than 5.0 liters per cylinder and with a maximum horsepower (hp) rating of 50 hp 

or greater. 

(14) “Category 2 engine” means any marine engine with a displacement of 5.0 to 

less than 30 liters per cylinder. 

(15) “Category 3 engine” means any marine engine with a displacement of 

greater than 30 liters per cylinder. 
11 

2299.5(e)(4) 

93118.5(e)(4) 

(4) All New Harbor Craft (Including All New Ferries) – Requirements for Newly 

Acquired Vessels. 

Beginning January 1, 2009, a person subject to this section may not sell, 

purchase, offer for sale, lease, rent, import, or otherwise acquire a new harbor 

craft for use in any of the Regulated California Waters unless each of the diesel 

engines on the vessel meets the applicable Tier 2, Tier 3, or Tier 4 standards in 

effect on the date of vessel acquisition. The person must also meet the 

additional requirements set forth in subsection (e)(5) below for diesel propulsion 

engines in newly acquired new ferries. 

2299.5(e)(6)(A)2 

93118.5(e)(6)(A)2 

2. General Requirements. . . . 

For purposes of this subsection, “applicable compliance date” is either the 

compliance date, as set forth in subsection (e)(6)(D) for the in-use engine, or the 

compliance date from subsection (e)(6)(D) for the in-use engine, as extended 

pursuant to subsection (e)(6)(E), whichever applies and occurs later. 

2299.5(e)(6)(C)1 

93118.5(e)(6)(C)1 

1. Method C1 – Replacement of the in-use engine with a U.S. EPA certified 

Tier 2 engine or one with a higher certification level (e.g., Tier 3-certified). . . . 

Once the in-use engine has been replaced with an engine that is U.S. EPAcertified to meet at Tier 2 or Tier 3 standards, as set forth above, the engine is 

deemed to be in compliance with this subsection (e)(6) and no further 

replacements of this engine are required under this subsection. Tier 3-certified 

engines may be used as the replacement engine to comply with this paragraph, 

even if Tier 4-certified engines become available by the applicable compliance 

date; 

2299.5(f)(1)(F)3 

93118.5(f)(1)(F)3 

3. documentation, calculations, emissions test data, or other information that 

establishes the diesel PM and NOx reductions, expressed in pounds, are equal to 

or greater than the emission reductions that would have been achieved upon 

compliance with subsection (e), including but not limited to the requirements 

specified in subsection (e)(6)(C) and (e)(6)(D); and 

2299.5(f)(1)(J) 

93118.5(f)(1)(J) 

(J) A person subject to an approved ACE may not operate any harbor craft 

under the ACE unless the person has first been notified in writing by the E.O. of 

the ACE’s approval. Prior to such approval, the applicant must comply with the 
12 

provisions of this section, including the requirements in subsection (e)(6)(C) and 

(e)(6)(D). 

2299.5(g)(9) 

93118.5(g)(9) 

(9) For each engine for which an owner or operator is claiming an extension 

pursuant to subsection (e)(6)(E)3, the purchase order or signed contract between 

the owner or operator and seller of the new engine or equipment that has been 

purchased to comply with subsection (e)(6)(C) and (e)(6)(D). 

2299.5(h)(2) 

93118.5(h)(2) 

2. Compliance Plan. By February 28 of the year vessel engine compliance is 

required, a person subject to the requirements of subsection (e)(6)(C) and 

(e)(6)(D) must submit a Compliance Plan to the E.O. that describes in detail the 

engine replacements, rebuilds, upgrades, use of DECS, and any other measures 

the person plans to use to meet the requirements of subsection (e)(6)(C) and 

(e)(6)(D) for each of the person’s engines and harbor craft. The person may 

revise the Compliance Plan, as needed, but the person must notify the E.O. 

within 10 business days of any changes to the Compliance Plan after the initial 

Compliance Plan is submitted. The Compliance Plan is for the E.O.’s 

informational and planning use only, and the substantive contents of the plan are 

not binding on either the E.O. or the person who submitted the Compliance Plan. 

The E.O.’s receipt and acceptance of a submitted Compliance Plan shall not 

constitute or be interpreted as evidence of compliance with the requirements of 

subsection (e)(6)(C) or (e)(6)(D). 

2299.5(e)(6)(E)4 

93118.5(e)(6)(E)4 

4. Multiple Engines on Multiple Vessels Within Same Fleet and With Same 

Compliance Dates. 

This provision applies only to fleets of 2 or more vessels that are owned by the 

same person. Upon written request, the E.O. may grant to the person an 

extension to the nominal compliance date(s) for engines on vessels within such 

fleets, as set forth below; 

Explanation: A verb was missing in the second sentence of paragraph (e)(6)(E)4. 

The verb “may” was inserted because it is clear from surrounding provisions that the 

E.O. must determine whether the applicant has met criteria to qualify for an 

extension. 

2299.5(i)(2) 

93118.5(i)(2) 

(2) Any failure to meet any provision, standard, criteria, or requirement in this 

section, including but not limited to the applicable emission limits; 

recordkeeping requirements; and ACE provision, including the requirements of 

any approved ACE plans, shall constitute a single, separate violation of this 
13 

section for each hour that a person operates an ocean-going vessel within the 

Regulated California Waters until such provision, standard, criteria, or 

requirement has been met. 

Explanation: In a typographical error, the term “ocean-going” was included in 

paragraph (i)(2) to describe the word “vessel.” It is clear from the balance of the 

paragraph, particularly the language at the beginning of the paragraph stating it 

applies to “[a]ny failure to meet any provision, standard, criteria or requirement in 

this section,” that the described violations will apply to vessels that are: (1) subject 

to the regulation, and (2) fail to comply with requirements in the regulation, and not 

to a category of vessels that is expressly excluded from the provisions of the 

regulation. See also the applicability provision at section 2299.5(b)(1), the definition 

of “harbor craft” in section 2299.5(d)(36), and the definition of “ocean-going vessel” 

in section 2299.5(d)(50). 

III. SUMMARY OF COMMENTS AND AGENCY RESPONSES TO THE ORIGINAL 

PROPOSAL 

The Board received numerous written and oral comments during the 45-day rulemaking 

comment period (September 7, 2007 to October 26, 2007). A list of commenters is set 

forth in Table I below, identifying the date and form of all comments that were timely 

submitted. This list does not include commenters who submitted only supportive 

comments. Following the list is a summary of each objection or recommendation made 

regarding the proposed action, together with an explanation of how the proposed action 

has been changed to accommodate the objection or recommendation, or the reasons 

for making no change. The comments have been grouped by topic. Comments not 

involving objections or recommendations specifically directed towards the rulemaking or 

to the procedures followed by ARB in this rulemaking are not summarized below. 

Additionally, documents that were referred to in comments are not separately 

summarized and responded to because the referenced documents did not contain 

objections or recommendations specifically directed towards the rulemaking or the 

procedures followed by ARB. 

Comments were received from the following government agencies, vessel operators, 

industry representatives, and environmental organizations supporting and objecting to 

specific terms of the proposed regulation. Six commenters included in Table I below 

expressed general support for the regulation. These comments also included 

suggested modifications to the regulatory text. Specifically, ARB received four 

supportive comment letters from environmental groups. One of the comments was 

signed by a coalition of nine environmental groups, of which seven did not submit their 

own individual comments. In addition, the SCAQMD and the California Air Pollution 

Control Officers Association (CAPCOA) submitted supporting comments. Suggestions 

received included weakening and delaying the requirements, as well as strengthening 

and accelerating the requirements. 
14 

For purposes of the following comment summaries and responses, any reference to 

provisions in section 2299.5, title 13, CCR also apply to the equivalent provisions in 

section 93118.5, title 17, CCR, and vice versa, unless the statement clearly applies only 

to the section that is cited. 
15 

Table I

Comments Received during the 45-day Comment Period

(Excluding Statements in Support of the Regulation)

Abbreviation 

Reference 

Number Commenter 

 

AWO AWO1 Jason A. Lewis 

The American Waterways Operators 

Written testimony: October 24, 2007 

 

AWO AWO2 Jeff Browning 

Sause Bros. Ocean Towing Co., Inc. 

The American Waterways Operators 

Oral testimony: October 26, 2007 

 

BAYLINK BAYLINK1 Martin Robbins 

Marine Services Manager 

Baylink 

Written testimony: October 26, 2007 

 

BAYLINK BAYLINK2 Martin Robbins 

Marine Services Manager 

Vallejo Baylink Ferry Service 

Oral testimony: October 26, 2007 

 

BLUEGOLD BLUEGOLD Carolyn Horgan 

Vice President – Operations 

Blue and Gold Fleet 

Oral testimony: October 26, 2007 

 

CAPCOA CAPCOA Larry Allen 

President 

California Air Pollution Control Officers 

Association 

Written testimony: September 14, 2007 

 

CATALINA CATALINA Greg Bombard 

President 

Catalina Channel Express 

Oral testimony: October 26, 2007 

 

CCA CCA Tim Carmichael 

Coalition for Clean Air 

Oral testimony: October 26, 2007 
16 

 

COALITION COALITION Bonnie Holmes-Gen 

American Lung Association of California 

Written testimony: October 24, 2007 

David Marshall 

Senior Counsel 

Clean Air Task Force 

Written testimony: October 24, 2007 

Tom Plenys 

Research and Policy Manager 

Coalition for Clear Air 

Written testimony: October 24, 2007 

Jesse N. Marquez 

Executive Director 

Coalition for a Safe Environment 

Written testimony: October 24, 2007 

Joel Bush 

Executive Director 

Communities for Clean Ports 

Written testimony: October 24, 2007 

John Kaltenstein 

Clean Vessels Program Associate 

Friends of the Earth 

Written testimony: October 24, 2007 

Diane Bailey 

Scientist 

Natural Resources Defense Council 

Written testimony: October 24, 2007 

Bill Magavern 

Senior Representative 

Sierra Club of California 

Written testimony: October 24, 2007 

Don Amir 

Senior Vehicles Analyst 

Union of Concerned Scientists 

Written testimony: October 24, 2007 

 
17 

FOTE FOTE1 John Kaltenstein 

Friends of the Earth 

Written testimony: October 24, 2007 

 

FOTE FOTE2 John Kaltenstein 

Friends of the Earth 

Oral testimony: October 26, 2007 

 

GGF GGF1 Jim Swindler 

Deputy General Manager 

Golden Gate Bridge Highway and 

Transportation District 

Written testimony: October 20, 2007 

 

GGF GGF2 Jim Swindler 

Deputy General Manager 

Golden Gate Bridge Highway and 

Transportation District 

Oral testimony: October 26, 2007 

 

HORNBLOWER HORNBLOWER1 Terry A. MacRae (signed letter) 

Joe Wyman (submitted online) 

President/CEO 

Hornblower Cruises and Events 

Written testimony: October 25, 2007 

 

HORNBLOWER HORNBLOWER2 Joe Wyman 

Manager, Planning and Development 

Hornblower Cruises and Events 

Oral testimony: October 26, 2007 

 

HORNBLOWER HORNBLOWER3 Richard Allard 

Bay Area Marine Director of Operations 

Hornblower Cruises and Events 

Oral testimony: October 26, 2007 

 

MECA MECA Joseph Kubsh 

Executive Director 

Manufacturers of Emission Controls 

Association 

Written testimony: October 25, 2007 

 

NRDC NRDC Diane Bailey 

Scientist 

Natural Resources Defense Council 

Oral testimony: October 26, 2007 
18 

SAUSE SAUSE Jeff Browning 

Sause Bros. Ocean Towing Co., Inc. 

The American Waterways Operators 

Written testimony: October 24, 2007 

 

SCAQMD SCAQMD Henry Hogo 

South Coast Air Quality Management 

District 

Oral testimony: October 26, 2007 

 

WESTAR WESTAR1 Richard Smith 

General Manager 

Westar Marine Services 

Written testimony: October 25, 2007 

 

WESTAR WESTAR2 Richard Smith 

General Manager 

Westar Marine Services 

Oral testimony: October 26, 2007 
19 

A. Authority 

1. Comment: AWO believes that the harbor craft regulation is unconstitutional 

because it requires companies to allow CARB staff to board their vessels, when 

this authority is solely under the jurisdiction of the U.S. Coast Guard. AWO 

believes the state is overstepping its regulatory authority by requiring companies 

to allow CARB staff to board their vessels to ensure compliance with the 

regulation. First, the authority to board the vessel is under the domain of the 

U.S. Coast Guard. Second, because of the post-September 11, 2001 

atmosphere of heightened security and resultant security requirements, there are 

many instances in which CARB personnel would not be allowed to board the 

vessel. It is critical that the rule be written so that it protects the integrity of 

existing federal security regulations, requirements and procedures. (AWO1) 

(SAUSE) 

Response: We disagree. The regulation is a valid exercise of the State’s traditional 

police power to protect the health, welfare, and safety of its citizens and environment. It 

is authorized and mandated under State law. (H&S §43013(b), §43018, and §39666.) 

And the regulation’s emission standards and related requirements are permissible 

under section 209(e)(2) of the Clean Air Act (CAA), provided ARB obtains authorization 

to enforce the standards and related requirements from the U.S. EPA. As noted in 

Resolution 07-47, the Board made findings in accordance with CAA section 209(e)(2), 

evidencing the Board’s intent to petition U.S. EPA for such authorization. 

Because the affected engines are located aboard vessels, it is necessary for the 

regulation to require that vessel operators provide inspector access to the engines. 

Without such access, it effectively would be impossible for ARB inspectors to determine 

if vessel operators have met the emission standards and other regulatory requirements. 

State law authorizes such on-site inspections. (H&S §41510 and §41511.) While the 

U.S. Coast Guard conducts most vessel inspections, it does not have exclusive 

authority to conduct all such inspections. In fact, vessels are currently inspected by 

other California agencies, including the California State Lands Commission in its 

enforcement of ballast water rules. Some of California’s local air districts have boarded 

vessels to enforce visible emission regulations, such as the South Coast Air Quality 

Management District’s Rule 401. ARB enforcement staff will coordinate inspection 

activities with other state or federal agencies to the extent feasible. ARB does not 

believe its inspections will complicate compliance with security regulations, as ARB 

inspectors will meet all applicable federal requirements such as security checks. 

2. Comment: AWO believes that portions of the regulation are unconstitutional. 

First, California’s proposed regulation of vessels up to 24 miles offshore is 

unconstitutional. The Submerged Lands Act of 1953 granted coastal states 

ownership of the lands and resources out to three nautical miles offshore. The 

Outer Continental Shelf Lands Act of 1953 established federal jurisdiction over 

the resources beyond three nautical miles offshore. AWO believes that CARB is 

violating the Submerged Lands Act and exceeding its authority by regulating 
20 

vessels up to 24 miles off its coast. Therefore, subsections (E), (F) and (G) of 

the definition of “Regulated California Waters” in paragraph (65) of the harbor 

craft regulation should be deleted. (AWO1) (SAUSE)

3. Comment: It is unreasonable and potentially unconstitutional to impose this 

onerous regulation on a vessel whose homeport is in another state that is 

participating in interstate commerce. These vessels routinely stay outside of the 

three-mile limit of state authority and are often outside the 24-mile limit outlined in 

this regulation. (AWO1) (SAUSE) 

4. Comment: We oppose the state regulating vessels beyond its constitutionallymandated limit. (AWO1) (SAUSE) 

5. Comment: We believe some sections are unconstitutional based on interstate 

trade. (AWO2) 

Response: We disagree. There are two basic objections contained in these comments 

involving: (a) ARB’s regulatory authority beyond 3 nautical miles, and (b) preemption 

under the Constitution’s “dormant” Commerce Clause. With regard to Comments A.2, 

A.3, and A.4, other than citing these federal statutes, the commenters have provided no 

specific legal bases supporting the claim that either the Submerged Lands Act of 1953 

(SLA) or the Continental Shelf Lands Act of 1953 (OCSLA) preempts the ARB 

regulation. These statutes were enacted specifically to address the partitioning of 

subsea and mineral rights between the states and federal government and to establish 

the federal government’s rights to explore and exploit oceanic and subsea resources in 

accordance with international law. There is nothing contained in either the text of those 

statutes or their legislative history to indicate a Congressional intent to limit the scope of 

a state’s authority to exercise its traditional police powers in waters adjacent to the 

state. 

On the contrary, the Board believes that California may exercise its traditional police 

powers beyond 3 nautical miles under the Clean Air Act (provided authorization is 

obtained; see Response to Comment 1 above) and under case law applying the “effects 

test” to uphold regulations that reach beyond territorial waters. Under the “effects test,” 

the application of a state law beyond the state’s 3 nautical mile boundary has been 

upheld if the regulated activity has a substantial effect on the state and the regulation is 

reasonably tailored to regulate such activity. For example, in State of Florida v. 

Stepansky (FL 2000) 761 So.2d 1027, the Florida Supreme Court held that Florida's 

sovereign authority includes the ability to exercise criminal jurisdiction over acts 

committed outside the territorial limits of the state under the effects doctrine as long as 

the exercise of jurisdiction does not conflict with federal law and the exercise of 

jurisdiction is a reasonable application of the effects doctrine. 

With that said, it appears that the commenters misunderstand the purpose of 

subsections (E), (F), and (G) of 2299.5(d)(65). The primary aspect of harbor craft 

operations that is affected beyond 3 nautical miles is the required use of low sulfur 
21 

CARB diesel fuel out to 24 nautical miles. This is a use and operational requirement 

permitted under section 209(d) of the Clean Air Act and does not require authorization 

under CAA section 209(e). 

In any case, the comments do not appear to be directly challenging the use and 

operational requirements of the regulation as much as they are challenging the 

imposition of engine standards on the basis of the SLA or OCSLA. The engine 

standards calling for replacement or retrofitting of engines and equipment, which do 

require CAA section 209(e) authorization, apply irrespective of whether the affected 

vessel is operating outside 3 miles of California; as long as the vessel operates within 3 

nautical miles of a California port, it is subject to the engine emission standards. 

Therefore, even if the SLA or the OCSLA did apply to limit the regulation’s reach 

beyond state boundaries, the issue of applying the engine standards to vessels beyond 

3 nautical miles is largely irrelevant. 

With regard to Comments A.3 and A.5, the commenters provide no specific basis for the 

objection other than general references to “interstate commerce” and “interstate trade.” 

We assume these comments refer to constitutional constraints on state regulations that 

impermissibly interfere with interstate commerce under the dormant Commerce Clause 

and will respond accordingly. 

Where, as in this rulemaking, Congress has not explicitly prohibited state regulations on 

a particular matter affecting interstate commerce, a state regulation may still be held 

invalid under well-established case law interpreting the dormant Commerce Clause if: 

(1) the regulation is discriminatory (e.g., the regulation favors California vessels at the 

expense of non-California vessels), or (2) the regulation’s putative benefits are clearly 

outweighed by the burdens imposed on the regulated industry and interstate commerce. 

With regard to discrimination, a regulation that discriminates against interstate 

commerce (e.g., targets out-of-state businesses or vessels) is virtually per se invalid 

under the dormant Commerce Clause. Dean Milk Co. v. Madison (1951), 340 U.S. 349. 

However, this regulation on its face is non-discriminatory since it applies to all harbor 

craft that operate in California waters and within California ports. That is, it does not 

matter whether an affected harbor craft is from California or originally from elsewhere – 

if it operates in California waters and docks at a California port, or has its homeport in 

California, that vessel is subject to the regulation’s requirements. There are no 

advantages or disadvantages to being a California-based harbor craft under this 

regulation. Therefore, because it applies equally to all affected harbor craft, the 

regulation is non-discriminatory on its face. 

State regulations that are non-discriminatory can still be held invalid under the so-called 

“Pike balancing test.” Pike v. Bruce Church, Inc. (1970), 397 U.S. 137. Under this test, 

a state regulation can be held invalid if the regulation’s putative benefits are clearly 

outweighed by the burdens imposed on interstate commerce. ARB has clearly 

demonstrated that this regulation’s benefits range from $1.3 to $2.0 billion, accounting 

only for the value of avoiding 310 premature deaths and no other benefits. ISOR at ES-
22 

2 and ES-3. By contrast, ARB estimated that total out-of-pocket costs to the regulated 

industry would be about $460 million. Ibid. Thus, even if all the regulation’s costs are 

viewed as burdening interstate commerce, these burdens do not clearly outweigh the 

benefits; in fact, the staff has shown the opposite -- the benefits clearly outweigh the 

costs and other burdens to be imposed on interstate commerce. 

As noted, the Board intends to request and obtain an authorization from U.S. EPA 

pursuant to CAA §209(e)(2)(A). Presently, no federal court has ruled on the question as 

to whether California’s authorization to set standards for new and in-use off-road, or 

nonroad, engines under CAA §209(e)(2)(A) exempts ARB emission standards and other 

emission-related requirements from limitations imposed on state regulation by the 

dormant Commerce Clause. Several California courts have opined that such an 

exemption exists under CAA §209(b). The exemption is argued in that Congress has 

made its intent unmistakably clear by establishing a comprehensive legislative scheme 

in the CAA that provides that California may adopt its own emission standards and other 

emission-related requirements for in-use nonroad engines upon obtaining authorization 

from U.S. EPA. 

In such cases, the authorized California regulations should not be subject to preemption 

under the dormant Commerce Clause. In place of a Commerce Clause review, 

Congress created in section 209(e)(2)(A) a review procedure requiring the Administrator 

of U.S. EPA to review California’s regulations and authorize it to adopt and enforce 

emission standards and other related requirements for the control of emissions from, 

among other things, all in-use nonroad engines. Obtaining authorization from the 

U.S. EPA effectively waives federal preemption for California from the prohibition that 

the states may not regulate such engines. Congress, in fashioning the waiver from 

preemption, made a determination that interstate commerce would not be disrupted by 

California having exclusive authority among the states to establish separate, more 

stringent regulations than adopted by U.S. EPA for the rest of the nation. 

Indeed, Congress, in section 209(e)(2)(A), granted California and no other state the 

authority to regulate emissions from non-new nonroad engines in section 209(e)(2)(A). 

Section 209(e)(2)(B) requires that other states, if they choose to regulate nonroad 

engines, must adopt regulations identical to California’s. By entrusting California with 

exclusive authority to formulate state-applied controls, Congress assured itself of 

uniform national regulations and avoided the possibility of the country facing 50 different 

sets of regulations. In sum, it is therefore reasonable to conclude that Congress, by 

enacting section 209(e)(2)(A), expressly exempted California’s nonroad regulations that 

have received EPA authorization from the limitations imposed by the Commerce 

Clause. 

6. Comment: It is the responsibility of CARB to adopt a regulation that adheres to 

the spirit and letter of the Clean Air Act 209(e)(2), which states: 

No such authorization shall be granted if the Administrator finds that - 

(i) the determination of California is arbitrary and capricious, 
23 

(ii) California does not need such California standards to meet compelling 

and extraordinary conditions, or 

(iii) California standards and accompanying enforcement procedures are 

not consistent with this section. 

 

The regulation is not consistent with the Clean Air Act because it exceeds federal 

standards while severely negatively impacting the towing industry. The impact to 

industry is to reach goals far beyond federal standards. (AWO1) (SAUSE,) 

7. Comment: The department is attempting to impose an excessive, unreasonable 

regulation that exceeds the state’s authority under the U.S. Constitution. 

(AWO1) (SAUSE) 

Response: We disagree. It is Congress that established under CAA section 209(e)(2) 

the framework within which California has the ability to go beyond federal standards on 

nonroad sources, provided the State has received authorization from U.S. EPA. See 

Response to Comments A.1 through A.5 above and Comment A.8 below. Thus, CAA 

section 209(e)(2) explicitly provides for and permits California, and California only, to 

impose emission standards that can go far beyond similar federal standards on in-use 

nonroad sources, such as the existing harbor craft subject to the regulation. This is in 

recognition of California’s traditional role as a “laboratory” for exploring innovative and 

stringent air pollution controls for vehicular, nonroad, and other sources. 

Under CAA section 209, California has often led the nation on setting emission 

standards on engines for a variety of equipment and applications and has required 

additional emission controls on a wide range of industries. The marine harbor craft 

industry is one of the few remaining industries to face regulations aimed at cleaning up 

diesel engine emissions. The regulation relies heavily on the Federal emissions 

standards and, aside from accelerating the replacement of engines to meet current 

Federal standards, the regulation only goes beyond those standards in the case of ferry 

propulsion engines built after January 1, 2009. 

As noted previously, ARB will apply for an authorization from U.S. EPA to allow 

enforcement of this regulation. 

See Response to Comments A.2 through A.5 above for additional discussions of why 

the Board believes the dormant Commerce Clause does not preempt this regulation and 

why the regulation does not impose excessive and unreasonable requirements on 

affected industries. See also responses to Comments L1, L3, H.13, and H.20 for 

discussions on why the Board believes the regulation is both commercially and 

technologically feasible. 

8. Comment: AWO believes that because many of the businesses in California 

operate in multiple states, it makes more sense to tackle the problem of engine 

emissions at the federal level. This alleviates the burden of a company trying to 
24 

adhere to a patchwork of state regulations to achieve significant emissions 

reductions. (AWO1) (SAUSE) 

Response: Of course, decisions about the scope and timing of federal regulation are 

not within ARB’s control. But we disagree with the suggestion that ARB’s action 

adopting this regulation will lead to patchwork of state regulations. In adopting this 

regulation, ARB is taking action that is consistent with federal law and that cannot result 

in a patchwork of state laws as the comment suggests. Under CAA 

section 209(e)(2)(A), California is permitted to impose emission standards and related 

requirements on nonroad sources, such as marine vessels, provided the State obtains 

the necessary authorization from the U.S. EPA. Section 209(e)(2)(B) further provides 

that, upon California receiving such authorization, no other state may impose emission 

standards and related requirements on the same nonroad sources unless that state 

imposes the exact same emission standards and related requirements as in the 

California regulation, with additional lead-time as provided for in section 209(e)(2)(B). 

As previously noted, ARB intends to seek and obtain authorization from U.S. EPA for 

this regulation. See Response to Comment A.1 above. Thus, it will be impossible for a 

patchwork of regulations to develop for harbor craft engine standards: Once California 

receives its authorization, there will simply be a California standard and a 49-state 

federal standard. States wishing to achieve more reductions in a faster timeframe than 

the federal standards can opt into the California standard but cannot adopt their own 

standards, so companies will not need to worry about complying with varying standards 

of multiple states. 

See Response to Comments A.2 through A.5 above for additional discussion of why 

ARB believes the dormant Commerce Clause does not prohibit it from adopting and 

enforcing this regulation. 

B. Applicability 

1. Comment: We strongly recommend that oceangoing tug boats be removed from 

the harbor craft regulation and placed in oceangoing regulation. (AWO2) 

(SAUSE)

Response: We disagree with the comment because while most ocean-going tugboats 

do not perform harbor tugboat duties, they are functionally equivalent or otherwise very 

similar to their harbor tugboat counterparts. Additionally, they do not meet the definition 

for “ocean-going vessel” in ARB’s pending proposed regulations for ocean-going 

vessels that require the use of low sulfur fuel (e.g., see Title 13 CCR section 

2299.2(d)(24)) We note that ocean-going tugboats would arguably meet the definition 

for "ocean-going vessel" in the existing regulation for auxiliary diesel engines on oceangoing vessels (see Title 13 CCR section 2299.1(d)(21)). However, that regulation was 

recently held to be preempted under the federal Clean Air Act, section 209(e)(2), and is 

not being enforced by the State. Pacific Merchant Shipping Ass'n v. James Goldstene,

No. 07-16695 (9th Cir. Feb. 27, 2008). Further, it was never ARB’s intention during the 

development of the ocean-going auxiliary engine regulation to cover ocean-going 
25 

tugboats. These vessels were not surveyed in the 2004 Ship Survey for ocean-going 

vessels, nor were they discussed in the staff report prepared for the auxiliary engine 

ocean-going regulation. 

Certain ocean-going tugboats, which pull barges over long distances, may have met the 

definition of an ocean-going vessel in the originally proposed Commercial Harbor Craft 

regulation because they have a “registry” (foreign trade) endorsement on their United 

States Coast Guard Certificate of Documentation. However, this prong of the definition 

was deleted as part of the June 18, 2008 modifications to further clarify ARB’s intent to 

cover ocean-going tugboats in this regulation and exclude them from the definition of 

ocean-going vessels. ARB believes that the remaining three descriptors, which are 

physical in nature, sufficiently describe ocean-going vessels while omitting ocean-going 

tugboats from the definition. 

As noted, staff included ocean-going tugboats in the harbor craft regulation because of 

their functional equivalence to harbor tugboats and the frequency of their visits to 

California ports. Based on available data, we estimate these ocean-going tugboats 

made over 500 visits to California ports last year. 

2. Comment: Tugs . . . don’t even operate in harbors. They come in and do port 

calls and leave and should not be included in the regulation. (AWO2) 

Response: We disagree with this comment because, as discussed in the response to 

Comment B.1, these vessels made over 500 visits to California ports last year. This 

indicates that a significant number of these vessels spend time in California ports. 

3. Comment: The regulation unfairly requires ocean-going tugs to comply with the 

low-sulfur fuel regulation. (AWO1) 

Response: We interpret this comment as addressing compliance with the fuel 

requirement in this Commercial Harbor Craft regulation. We disagree with this 

comment. See response to Comment B.1. 

4. Comment: The regulation unfairly requires ocean-going tugs to comply. 

(SAUSE) 

Response: We disagree with this comment. See response to Comment B.1. 

5. Comment: Ocean-going tugs should only be required to comply with the fuel 

requirements contained in the harbor craft regulation. (AWO1) 

Response: We disagree with this comment. See response to Comment B.1. 

6. Comment: We recommend that ocean-going tugboats be required to adhere to 

the low-sulfur fuel guidelines contained within the [auxiliary engine] regulation. 

Ocean-going tugs operate in similar fashion to ships, in that they make calls to 
26 

California ports but their home ports are often outside California waters . . . are 

involved in interstate commerce and are not utilized in ship assist work or other 

duties generally assigned to harbor craft. The growing demand on the national 

transportation system means that ocean-going tugs will be a major component of 

the future of commodity transportation, and including them into the harbor craft 

regulation will only limit the number of vessels able to service California ports. 

(AWO1) (AWO2) (SAUSE) 

Response: We disagree with this comment for reasons provided in the response to 

Comment B.1. There is adequate compliance flexibility provided in the regulation to 

allow sufficient numbers of ocean-going tugboats to be available to service California 

ports. In addition, there are multiple options available for compliance with the in-use 

engine requirements besides engine replacement. These include rebuilding and/or 

retrofitting the engine to meet the required emission limits (discussed in more detail in 

the response to Comment H.13) and using an alternative control of emissions (ACE) 

plan. An ACE plan allows more flexibility in complying with the regulation but requires 

that emission reductions be equivalent or greater. 

7. Comment: Delivery times for a set of EMD engines is currently one year after 

order and getting worse. Other manufacturers quote 6 months plus. Installation 

of engines takes 60 to 90 days and shipyards are backed up. Clean kits are 

behind schedule as many of the parts are sourced from these same engine 

manufacturers. Ocean-going tugs have only recently been added to the Harbor 

Craft regulation. Previously included in the ocean-going vessels regulation, 

these tugs could comment and anticipate changes while the regulation is being 

drafted. Being added to this regulation as an afterthought, the ocean-going tugs 

have not been afforded the time to comment or anticipate changes. In addition, 

these tugs do not have funding available to assist in coming into compliance. 

Most funding, such as Carl Moyer limit the area of use for the tugs to a port or 

requires a large percentage of the operation time to be in their region, while 

ocean-going tugs travel interstate and cannot usually meet the requirements. 

(SAUSE) 

Response: We disagree that delivery delays will make it difficult to comply with the 

regulation and that ocean-going tugboats were added in this regulation as an 

afterthought. The regulation includes provisions for renewable compliance extensions 

beyond the nominal compliance date specified in the regulation for engine manufacturer 

delays or due to installation difficulties. 

The inclusion of ocean-going tugboats in the regulation was not an afterthought. 

Requirements for ocean-going tugboats have been in the draft commercial harbor craft 

regulatory language and discussed at workshops since early 2007. At a public 

workshop on April 24, 2007, ARB staff introduced a draft regulation that included oceangoing tugboats in the tugboat definition and specified in-use engine requirements for 

these vessels. A representative of the national trade association for the U.S. tugboat, 

towboat, and barge industry (American Waterways Operators or AWO), which includes 
27 

ocean-going tugboat operators in its membership, participated in this workshop by 

phone. Contact information for ARB staff was presented at that workshop to allow the 

public an opportunity to ask follow-up questions and provide comments on this and 

other harbor craft topics. Also, all workshop materials relating to the commercial harbor 

craft regulation have been posted on the commercial harbor craft website and a notice 

of its availability emailed to the public listserve for commercial harbor craft activities 

prior to each workshop. Staff provided the required 45-day notice prior to the Board 

hearing, giving the public an opportunity to comment on the proposed regulation, and 

the commenter responded to the notice. Additionally, ARB staff notified James Lewis of 

the AWO, of which Sause Brothers is a member, in a letter dated March 7, 2007, that 

ocean-going tugboats would be included in the commercial harbor craft regulation. This 

was 6 months prior to the beginning of the formal 45-day public comment period for the 

rulemaking. 

Public funding is generally meant for obtaining emission reductions surplus to regulatory 

compliance. None of the entities subject to the regulatory requirements is eligible for 

public funds to pay for complying with the regulation. However, there is public funding 

available for projects that bring engines into compliance early or achieve emission 

reductions in excess of those required for regulatory compliance. While the majority of 

Carl Moyer Program funding is administered by the local air districts, ARB may reserve 

up to ten percent of Carl Moyer Program funding for multidistrict projects, which can be 

used to clean up engines that traverse district boundaries. For example, two 

multidistrict marine engine repower projects, totaling over $800,000, were selected for 

funding under the 2007-2008 Carl Moyer Program Multidistrict Program. 

8. Comment: ARB should require full regulatory compliance for ocean-going 

tugboats and towboats. Exemptions should only be extended in rare cases and 

for compelling reasons. (FOTE1) (COALITION) (FOTE2) 

Response: It appears that the commenters were not aware that ocean-going tugboats 

and towboats are included in the commercial harbor craft regulation and are subject to 

the in-use engine requirements. This is explicit in the regulatory language and was 

discussed in the Staff Report. However, we disagree that the granting of extensions for 

ocean-going tugboats should be more stringent than for other vessel types. Extensions 

will be granted only when all conditions required are met. All vessel types will be 

treated equally. 

C. Exemptions 

1. Comment: According to local district inventory and compliance data, crew and 

supply boats that service offshore oil platforms in Ventura and Santa Barbara 

County waters emitted about 220 tons of NOx, and 17 tons of PM in 2006. The 

draft harbor craft rule would require “excursion vessels” such as dive boats and 

whale watching boats to repower beginning in 2010. It would not require crew 

boats, supply boats, or work boats to repower. In the case of Ventura County 

these boats are docked next to each other at the harbor and travel to the same 
28 

destinations. Crew and supply boats often burn more fuel than the dive boats 

and whale watching boats. We believe that the exemption of crew and supply 

vessels from the proposed harbor craft regulation should be reevaluated. 

(CAPCOA) 

Response: The commenter is correct in that the regulation does not include in-use 

engine requirements for crew and supply vessels, although these vessels are not 

specifically exempted from the regulation. 

For this regulation, we focused on the largest emitters contributing to near-source risk. 

In the baseline 2004 statewide harbor craft emissions inventory, ferries and excursion 

vessels were estimated to contribute over 25 percent of the statewide PM and NOx 

commercial harbor craft emissions. Tugboats and towboats were estimated to 

contribute over 20 percent. In contrast, crew and supply vessels were estimated to 

contribute only two and three percent of the total statewide commercial harbor craft NOx 

and PM emissions, respectively, as documented by the emissions inventory provided in 

Appendix B of the Technical Support Document (Table III-1, page B-29). The crew and 

supply vessel category is estimated to have just over 60 vessels out of a total harbor 

craft population of about 4,200 vessels. However, we recognize that while the crew and 

supply vessel population is smaller than the categories covered by the in-use engine 

requirements of this regulation, these vessels are concentrated in a few air districts and 

are a source of concern in those air districts. We will be evaluating other vessel types, 

including crew and supply, in the future for further controls. Until that time, both Carl 

Moyer Program funding and Proposition 1B funding are available for projects aimed at 

reducing emissions from crew and supply vessels. See the response to Comment M.1 

for further discussion of available incentive funding. 

2. Comment: ARB should eliminate the exemption for crew boats, supply boats, 

and work boats in the regulation; or, in the alternative, ARB should quickly gather 

and/or reconsider data about these boats’ impact and subsequently reevaluate 

their exempt status. Due to issues of equity and cumulative environmental 

impact, these categories of marine vessels should be subject to all requirements 

set forth in the regulation. (FOTE1) 

Response: We disagree with the comment for reasons provided in the response to 

Comment C.1. 

3. Comment: In light of the availability of numerous compliance extensions (e.g., 

temporary replacement vessels, near-retirement vessels) included in this 

regulation, it is imperative that this regulatory latitude is not abused or 

unnecessarily broadened. One way of ensuring that this does not occur is for 

ARB to create a process that evaluates the cumulative emissions from 

compliance extensions so as to assure their contributions are not significant and 

do not forestall expected public health improvements and the attainment of 

regulatory goals. Their regulations should be clear that if ARB finds that 

compliance extensions are hindering regulatory objectives, the agency is 
29 

reserving the right to scale back, cap or eliminate those extensions, as needed. 

ARB should evaluate compliance exemptions and extensions to ensure that they 

do not interfere with the regulation’s goals. (FOTE1) 

Response: We do not believe provisions need to be added to the regulation to 

establish a process for evaluating the impacts of compliance extensions or to reduce 

the availability of extensions. Compliance extensions, such as for temporary 

replacement vessels and near-retirement vessels, are necessary in order to not 

severely restrict business in California which, if allowed to happen, could negatively 

affect the transportation of goods and services in California. However, staff will 

maintain records of the extensions granted and evaluate the impact of these extensions 

on the emission reduction goals of the regulation. Currently, the compliance 

exemptions that could be quantified were included in the analysis of the emission 

benefits of the regulation. The regulation will clearly reduce emissions compared to the 

existing baseline, so the proposed action will not cause or cumulatively contribute to 

significant adverse environmental effects or to adverse impacts on public health. 

D. Definitions 

1. Comment: We request that CARB use the California Historic Register for this 

State mandated regulation. (BAYLINK1) 

Response: Requirements for registration with the California Register of Historical 

Resources are very similar to requirements for registration with the National Register. 

However, the California register allows registration of some resources that the National 

Register does not. The primary difference that would relate to commercial harbor craft 

is the integrity requirements. Integrity is evaluated with regard to the retention of 

location, design, setting, materials, workmanship, feeling, and association. To retain 

historic integrity, the National Register requires that the property possess several, and 

usually most, of the aspects of integrity. It is possible that historical resources may not 

retain sufficient integrity to meet the National Registry’s criteria, but may still be eligible 

for the listing in the California Register. ARB believes that the more stringent 

requirements of the National Registry are more appropriate for exemption from the inuse engine limits due to the contribution of these older engines to the public health risk. 

Also, while the California Register can include historically significant harbor craft, there 

are currently no such harbor craft listed in the California Register to our knowledge. 

However, ARB staff is aware of at least two vessels that are included in the National 

Historic Registry: These include a 1925 classic fireboat that is still a vital part of the 

Los Angeles Fire Department’s fleet and a 1940 harbor tug that was at one time 

operating as a fireboat at the Port of Oakland. The 1940 vessel was built entirely of 

welded steel and is diesel-electric powered. 

2. Comment: The regs that are in front of you say that if an owner can go get his 

boat on the National Register, then he could be exempted from an engine 

replacement. We don’t know the viability of that. We don’t know how many 
30 

vessels can actually be placed on the National Register. If you look at the 

National Register, the types of vessels that you have there are masted ships, 

historic vessels of limited operations. Our vessels, you know, run on a weekly 

basis and are not of the same caliber and quality those vessels are. 

(HORNBLOWER2) 

Response: ARB believes that the exemption from the in-use engine limits for vessels 

registered in the National Registry is appropriate, as discussed in response to 

Comment D.1 above. The creation of a broader exception for a relatively large number 

of older vessels would substantially undermine the regulation’s purpose of emissions 

reductions and public health benefits. 

3. Comment: Exclude either “Classic Vessel” engines or any engines operating 

less than 1,000 hours per year or burning less than 8,000 gallons per year 

(similar to antique/classic motor vehicle policy of the DMV) from the proposed 

replacement schedule. (HORNBLOWER1) (HORNBLOWER2) 

Response: We disagree because engines on “classic vessels” tend to be older, higher 

polluting engines that contribute a disproportionate amount of emissions. If the vessel 

is of historic significance, the vessel owner may apply to have the vessel included in the 

National Historic Registry, which would then exempt the vessel from these 

requirements. 

The regulation includes a low-use exemption from the in-use engine requirements for 

engines operated for less than 300 hours. ARB does not believe it is appropriate to 

increase the low-use exemption to include all engines that operate less than 

1,000 hours or consume less than 8,000 gallons of diesel fuel. ARB chose the 300 hour 

low-use exemption limit to minimize the emission reductions lost due to the exemption 

while still exempting those engines that would be least cost effective to bring into 

compliance. The required emission reduction goals would not be met if the exemption 

were increased to 1,000 hours or the 8,000 gallon fuel limit. 

4. Comment: Modify the definitions of vessels covered by policy. Change the 

definition of a “historic vessel” from a vessel listed on the National Register of 

Historic Places, to a vessel “older than 40 years with significant historic or 

cultural features”. (HORNBLOWER1) 

Response: We disagree because, as shown in Appendix D of the Technical Support 

Document (Figure 1, page D-6), the average age for the surveyed tugboats and 

towboats was just over 30 years for tugboats and close to 40 years for towboats. Ferry 

and excursion vessels were somewhat newer, with an average age of about 27 years. 

Consequently, changing the definition of “historic vessel” to a vessel older than 40 years 

with significant historic or cultural features would lead to a vast number of harbor craft 

owners claiming their vessels to be historic vessels. Additionally, determining if a 

vessel has “significant historical or cultural features” is not within ARB’s expertise. The 
31 

National Historic Registry, by contrast, already has the criteria and process for 

determining the historical significance of a vessel. See response to Comment D.1. 

E. Engine Hour Meters 

1. Comment: We recommend that [the section pertaining to Installation and Use of 

Non-Resettable Hour Meters] be clarified so that existing engine hour meters are 

accepted to comply with the regulation. Many other regulations rely on records 

and reporting from the companies. Records would be the backup in the event 

the meters failed. (AWO1) (SAUSE) 

2. Comment: The regulation does not explicitly accept existing engine hour meters 

to comply with the regulation. (AWO1) (AWO2) (SAUSE) 

Response: We do not believe the regulatory text is unclear or needs revision. The 

regulation requires an installed and properly operating non-resettable hour meter. The 

regulation does not require the installation of a new hour meter if a previously installed 

hour meter is fully operational and non-resettable. This is reiterated in the posted fact 

sheet for the regulation and will be further clarified as necessary during the regulation 

implementation. This regulation uses recordkeeping and reporting in addition to the 

non-resettable hour meters as enforcement mechanisms. 

F. Best Available Control Technology (BACT) 

1. Comment: I would like to request the Board to consider adding the word 

“proven” when referencing “best available control technology” as the mere offer 

of a technology does not ensure its reliability or effectiveness. (GGF1) 

2. Comment: We would like to see the word “proven” involved with best available 

control technology, because the technology that we tried in the past that one of 

my colleagues will speak about just did not work. (GGF2) 

3. Comment: We request that the phrase “Best Available Control Technology” be 

changed to read “Best Available Proven Control Technology” throughout the 

regulation, and that objective thresholds be established to define “Proven” --- for 

example a Reliability Threshold of >98%, and a Durability Threshold of “time to 

overhaul for the control technology equal to or greater than time to overhaul of 

the engine served.” (BAYLINK1) 

4. Comment: We believe until we can include the phrase “proven” along with best 

available control technology, we risk technology failures. The vessel Solano 

today produces more pollutants than our sister vessels do simply for the fact 

she’s carrying a system that no longer works. Reliability and durability are going 

to be key objective measures that should somehow be written into this regulation 

to quantify in some way what’s best in a proven technology for vessels. 

(BAYLINK2) 
32 

5. Comment: We need to actually add into that equation where it talks about best 

available control technology, the word “proven” needs to go in there. 

(CATALINA) 

Response: We disagree with the request that the word “proven” should be added to 

the regulatory language in reference to the best available control technology (BACT). 

BACT is the best level of control that has been achieved in practice, evaluated on a 

case-by-case basis where the data is sufficient to ensure that the unique elements of 

each situation have been considered. It is also a widely applied standard for emissions 

control devices. The environmental operating conditions that the technology is exposed 

to can vary significantly from one application to another. Consequently, ARB believes 

that making a BACT determination on a case-by-case basis for every new ferry that is to 

be added to the California fleet will provide for the most successful applications of these 

technologies. The maturity of the available technologies will be considered in this 

determination. 

Further, the suggestion for reliability and durability thresholds would require a 

statistically significant number of demonstrations with accompanying testing. We are 

not aware that such demonstrations have occurred for emission control technologies on 

small, high-speed ferries. It is expected that the ferry owner will negotiate a warranty 

with the technology provider that is sufficiently protective of the owner’s investment. 

6. Comment: We have first hand experience in visiting some of the ferry lines in 

the Baltic Sea. And they have been using SCR technology as well as other 

water emulsification and water injection technologies for many years now. And to 

me, at least, it’s proven technology. It was just unfortunate that the tests on the 

one ferry that’s out here was using a particular technology and we hadn’t had a 

chance to look at it very closely. But we have given to your staff several reports 

relative to some of the experiences with the technology. So we think when staff 

evaluates BACT it will be proven technology. (SCAQMD) 

Response: We cannot say at this time that selective catalytic reduction (SCR) 

technology is proven for all marine applications. As was the case with the SCR failure 

mentioned by the commenter, and as discussed in the response to Comments F.1 

through F.5, the environmental operating conditions that a technology is exposed to can 

vary significantly from one application to another. ARB believes that making a BACT 

determination on a case-by-case basis for every new ferry that is to be added to the 

California fleet will provide for the most successful applications of these technologies. 

7. Comment: Because of the SCR experience with marine engines, MECA 

believes that DOC + SCR systems should be BACT for the propulsion engines 

on new ferries built and brought into service in California after January 1, 2009. 

(MECA) 
33 

Response: We do not believe that we can predetermine what will be BACT for new 

ferries prior to reviewing the vessel description and duty cycle. See responses to 

Comments F.1 through F.6. 

8. Comment: ARB should allow for public comments on BACT applications before 

they are decided upon, and, if needed, create an inter-agency or interstakeholder body to most effectively determine BACT. ARB may consider 

revising section (e)(5) to enhance BACT decision-making and improve the public 

process surrounding that decision. If ARB goes forward with the rather 

ambiguous case-by-case BACT approach, we propose that section (e)(5) be 

amended to include an informal inter-agency or inter-stakeholder consulting 

process – potentially consisting of state and federal pollution control officials, 

scientists, and academics – which would help to ensure that a diesel emission 

control strategy achieves the “greatest reduction feasible of NOx or diesel PM 

when used with the ferry’s propulsion diesel engine.” 

 In addition, in contrast to section (f) regarding Alternative compliance Plans and 

section (e)(6)(E) concerning Compliance Extension requirements, the BACT 

determination does not include a sufficiently thorough public process. With due 

consideration given to proprietary and other sensitive business information, 

Section (e)(5) should be revised to incorporate sufficient public process such that 

interested stakeholders can review and publicly comment on the BACT 

application before it being decided upon by the Executive Officer. (FOTE1) 

Response: BACT determinations are based on engineering evaluation and 

consideration of the best available information. The regulation specifically identifies the 

requirements the ARB must follow in making the BACT determination and specific 

timeframes within the staff must act in establishing completeness and approving or 

denying the request. These requirements specifically engage the applicant. In addition, 

ARB staff is committed to working with technical experts within the applicable local 

districts to assist with the evaluation. The commenter suggests that the regulatory 

language be amended to include an “informal-inter-agency or inter-stakeholder 

consulting process.” However, including this requirement in the regulatory text would 

formalize the process. 

The commenter suggests that BACT determinations follow a public process similar to 

that defined for the approval of an ACE plan. However, the two processes are very 

different. BACT timelines may be significantly more critical than those of an ACE plan 

and may require swifter action than preparing a document for public review could allow. 

Additionally, a BACT determination may involve the technical assessments of propriety 

information. The regulation requires that the BACT determination be made available to 

the public on ARB’s internet site, however using a public process similar to that used for 

an ACE plan is not feasible. 

9. Comment: The proposed regulation does not go far enough in achieving 

specific Action Plan goals due to the regulation’s lengthy compliance timeline, 
34 

modest ferry emissions standard, exemptions, and compliance extensions; 

therefore, we request that ARB revise the regulation to increase DPM and NOx 

emission reductions in the near term, strengthen the ferry emission standard, 

shorten the engine compliance timeline and eliminate extensions and 

exemptions . . . The lengthy compliance schedule and prolonged rulemaking 

process have delayed critical environmental and public health benefits. Further 

postponement will not only detrimentally impact affected communities and natural 

resources, but also inhibit technological development and do little to address 

future costs. (FOTE1) 

Response: The compliance schedule delivers the needed emission reductions in the 

South Coast Air Basin (South Coast) prior to 2014 to help meet PM2.5 attainment goals. 

In addition, compliance with the statewide schedule in the rest of the State achieves the 

2015 and 2020 goals for harbor craft in the Goods Movement Action Plan, as 

referenced in Chapter IV of the Technical Support Document. 

The statewide compliance timeline spans 14 years because it requires in-use Tier 1 

engines just recently purchased and installed to comply with more stringent standards. 

All unregulated engines (pre-Tier 1) are brought into compliance by 2013 in the 

SCAQMD, and by 2016 in the rest of the State. The useful life of newer Tier 1 engines 

is shortened by five to seven years due to these requirements, depending on whether 

they have a homeport in the SCAQMD or elsewhere in the State. In ARB’s view, it 

would be unreasonable to shorten their useful life further by compressing the 

compliance schedule without a compelling reason. 

The vessel exemptions provided in the regulation do not constitute a significant number 

of vessels. The low-use and minimum power rating exemptions for the in-use engine 

requirements are set at levels that minimize the loss in emission reductions while 

exempting those engines that are truly not cost effective to bring into compliance. The 

temporary replacement vessel exemption requires Executive Officer approval and is for 

a limited term. Other exemptions are for safety reasons, such as temporary emergency 

rescue/recovery vessels, U.S Coast Guard vessels, and military tactical support 

vessels. The exemption for harbor craft near retirement is included to provide practical 

consideration of a business’s equipment replacement plan. The historic vessel 

exemption covers only a handful of vessels. 

The compliance extensions provided in the regulation were carefully selected as only 

those necessary to allow businesses to continue to operate when difficulties occur 

outside of their control, which prevent them from completing compliance requirements. 

The rules guiding these extensions are very specific and require that all reasonable 

steps toward compliance have been completed. 

Regarding the new ferry emission standards, aftertreatment technologies for marine 

applications are not currently mature enough to specify levels of compliance. The caseby-case BACT determination is appropriate for marine applications because marine 

applications vary significantly in their operational requirements. 
35 

We do not believe that the compliance timeline inhibits technological developments. 

The timeline allows vessel owners to comply earlier than required using incentive 

funding. This provides both more incentive for technology development and mitigates 

future costs. 

10. Comment: ARB should adopt a Tier 4 or, at a minimum, 85 percent below Tier 2 

emission standard for ferries built as of January 1, 2009. We urge that all newly 

built ferries comply with an additional propulsion engine standard that is, at a 

minimum, equivalent to the San Francisco Bay Area Water Transit Authority (Bay 

Area Authority) standard of 85 percent cleaner than EPA tier 2, or equivalent to 

proposed US EPA Tier 4 standards. We prefer the more stringent Tier 4 

standard option. We support strong emission standards for ferries because their 

emissions are predominately near shore and adversely impact the health and 

welfare of coastal populations, especially marginalized communities. 

Furthermore, the 85 percent standards should apply separately to NOx and PM 

to achieve the most health protective levels, rather than allowing averaging. We 

contend that if the Bay Area Authority can institute this requirement and has a 

ferry under construction expected to meet the standard, then the State of 

California should be able to adopt the same standard. Moreover, while 

acknowledging potential design challenges for new technology, the successful 

operation of a Staten Island ferry since 2005 with the same technology (Selective 

Catalytic Reduction and a diesel oxidation catalyst) as the ferry currently being 

built by the Bay Area Authority argues in favor of adopting the 85 percent 

standard. We are extremely disappointed that ARB has backtracked on the ferry 

standard. The proposed case-by-case Best Available Control Technology 

(BACT) option does not have specific standards to drive industry toward existing 

or new technology that achieves the highest emission reductions. We strongly 

disagree with this approach. Selective Catalytic Reduction and diesel oxidation 

catalyst technology are available commercially, so by not requiring that ferries 

use it, ARB may be eliminating greater market development for this technology in 

California and out-of-state. (FOTE1) 

Response: We agree with the commenter’s support for strong emission standards for 

ferries because of their near-shore emissions and the resulting adverse health impact. 

It was for this reason that we included unique requirements for the propulsion engines 

on new ferries and that we, as part of the 15-day Notice, accelerated the compliance 

date for newer Tier 0 ferry engines by one to two years. However, we disagree with the 

suggestion to require Tier 4 or, at a minimum, 85 percent below Tier 2 for new ferries. 

See responses to Comments F.1 through F.5 and F.9 regarding the maturity of 

aftertreatment technology for small, high-speed ferries. 

Requiring new ferries to meet Tier 4 standards is not reasonable. The effective dates 

for Tier 4 standards were set by the U.S. EPA as 2014 and beyond because the 

technology is not sufficiently mature to require these standards at this time. However, 

we believe that the BACT requirement will drive industry towards developing more 

effective aftertreatment for these engines. 
36 

The San Francisco Bay Area Water Emergency Transportation Authority (WETA) is 

pioneering technology on fast ferry propulsion engines that is at least 85 percent 

cleaner than Tier 2 standards. This technology has not yet been successfully 

demonstrated and as such is not at the maturity level that would justify a specified 

standard of performance in the regulation. Additionally, it is not necessary to prescribe 

this standard since, if this technology is successful, it will become the BACT standard 

for similar new ferry applications. The WETA requirement for new ferries to be 

85 percent cleaner than the Tier 2 standards does not deliver separate 85 percent 

reductions in both NOx and PM, as recommended in the comment. The WETA 

requirement is that the combined NOx plus PM emission levels are to be 85 percent 

cleaner than the combined emissions from the standard. The ferry being built is 

predicted to achieve a combined NOx and PM emission level 85 percent lower than the 

combined emission levels of the Tier 2 standards (see Technical Support Document, 

Appendix E). 

The Staten Island ferry, which has been operating with a combination system of SCR 

and diesel oxidation catalyst (DOC) technology, is a large, slow-speed ferry, with a 

passenger capacity of over 1,000 persons. Most California ferries are much smaller, 

with capacities of up to a few hundred passengers. The Staten Island ferry does not 

represent operating conditions comparable with those of the small, high-speed ferries in 

use in California. Additionally, the control system employed on this vessel has not been 

shown to achieve the 85 percent reduction in both NOx and PM that the commenter 

requests as the standard. Emissions testing of the engines on this vessel showed that 

the overall trip NOx reduction ranged from 69 to 81 percent, and the PM reduction was 

estimated at about 25 percent overall, both less than the 85 percent standard being 

requested (see Technical Support Document, Appendix E and Alice Austin Final Report 

referenced in Appendix E.). 

While the BACT requirement does not prescribe a specific standard, we believe that the 

BACT requirement will drive industry towards developing more effective aftertreatment 

for these engines since it requires the best available. By requiring BACT for new ferries 

rather than specifying SCR and DOC technology, the requirement pushes the market to 

develop technologies that provide more significant diesel PM reductions than this 

technology combination in order to achieve a higher level of control. 

11. Comment: We would like to see the Board advance a more progressive position 

with regard to ferries beyond the Tier 2 BACT to either 85 percent of Tier 2 or 

Tier 4 if feasible. (FOTE2) 

Response: We disagree with the comment for the reasons provided in the response to 

Comment F.10. 

12. Comment: We propose that feasibility considerations be predominately 

technological as opposed to economic, and that ARB define the term “feasible” in 

the regulation. (FOTE1) 
37 

Response: Feasibility considerations will be primarily based on technical 

considerations. It is not necessary to define the term feasible because the process by 

which BACT will be determined is clearly defined in the regulation. 

G. New and In-Use Harbor Craft Requirements 

1. Comment: The proposed rule for ferries uses a non-industry standard threshold 

of seventy-five (75) passengers . . . this threshold seems to be arbitrary. We 

suggest that CARB use the 150 passenger threshold used by the United States 

Coast Guard for vessel construction and safety standards. This threshold would 

conform the CARB regulation to a traditional Coast Guard and maritime industry 

break point, and it is very likely that any new ferry built for California service 

would be at or above the 150 passenger capacity, and would thus be covered by 

the new regulation. (BAYLINK1) 

Response: The regulation requires that new ferries with a 75 or more passenger 

capacity incorporate the use of Best Available Control Technology (BACT) with their 

new Tier 2 or Tier 3 propulsion engines because ferries are often built with capacities 

under the U.S. Coast Guard 150-passenger determination. For example, as discussed 

in Appendix E of the Technical Support Document, WETA is building two 

149-passenger ferries to be delivered later this year that incorporate emission control 

technology resulting in 85 percent lower air emissions than federal EPA requirements. 

The 75-passenger determination is appropriate because ferry emissions are significant, 

and it is important that the regulation include the ferries that are built with capacities 

between 75 and 150 passengers. We also note that the 75-passenger threshold has 

previously been used in proposed legislation in California. 

2. Comment: We don’t understand or want an understanding of where the 

300-hour rule of justification comes from. Excursion vessels are quite different 

than ferry vessels. Ferry vessels operate a huge number of hours. They burn a 

lot of fuel. Whereas excursion vessels operate a limited number of hours in a 

given week and go at very slow paces. We think that to be lumped into larger 

duty cycle vessels, such as commuter ferries and tug boats, is an onerous 

implication for an excursion vessel operator. (HORNBLOWER2). 

Response: ARB chose the 300-hour low-use exemption limit based on minimizing the 

emission reductions lost due to the exemption while still exempting those engines that 

would be least cost effective to bring into compliance. 

We believe that categorizing excursion vessel with ferries is appropriate. Ferries and 

excursion vessels are categorized together by the U.S. Coast Guard as passenger 

vessels. Similar to ferries, excursion vessels operate close to shore a large percentage 

of the time. This was an important factor in determining which vessel types to include in 

the in-use engine requirements due to the impact on the health risk to nearby 

communities. 
38 

The regulation does require that higher use engines comply earlier than lower use 

engines of the same model year grouping in some cases. The compliance schedule for 

vessels with homeports outside of the South Coast requires engines that operate 

1,500 hours annually or more to comply one year earlier than engines that operate less 

than 1,500 hours annually. This is the case for all engines that are not on ferries and 

required to comply prior to 2017. 

3. Comment: Putting our elegant, slow, classic yachts in the same regulatory 

bucket with Tugs, High Speed Ferries, and other similar vessels is bad public 

policy. We believe that any policy that puts all vessels in the same class, ends 

up penalizing numerous vessels that have substantially different duty cycles and 

operational characteristics. (HORNBLOWER1) 

 

Response: We disagree for the reasons provided in the response to Comment G.2 

above. 

4. Comment: We are confused or actually concerned that a dinner charter vessel 

that has a very low duty cycle would be included in other excursion crafts and 

probably more concerned that we’re included with ferries and tug boats that 

produce a much larger quantity and are available to this other subsidy. What 

we’re concerned about are those boats that go around at three knots for the 

comfort and enjoyment of our passengers. (HORNBLOWER3) 

Response: See response to Comment G.2 for a discussion on the reasons that 

excursion vessels are required to comply with the in-use engine requirements. 

The subsidy mentioned in the comment refers to Carl Moyer Program funding. 

Carl Moyer Program funding is available to excursion vessels. See response to 

Comment M.4 for additional information on the application of Carl Moyer Program 

funding to excursion vessel projects. 

5. Comment: A separation of the proposed harborcraft regulation into distinct NOx 

and DPM rules would provide states other than California with much needed 

flexibility to consider adoption of one or the other of these rules, depending on 

their particular air quality situation. We note that the Board accepted a similar 

recommendation and adopted this approach recently by dividing its regulation for 

In-Use Off-Road Diesel Vehicles into separate rules for NOx and DPM. We urge 

ARB to divide the proposed harbor craft regulation into separate NOx and DPM 

rules, thereby facilitating the adoption of in-use marine diesel emission reduction 

measures by other states around the nation. (COALITION) (FOTE1) (FOTE2) 

Response: We disagree with dividing the regulation into separate rules for NOx and 

diesel PM, since the regulation requires that engines meet federal certification limits, 

which achieve both NOx and diesel PM emission reductions at the same time. This 

should not preclude the states that wish to reduce only diesel PM or only NOx from 
39 

adopting the rule, since they would simply achieve simultaneous reductions of the other 

pollutant. 

6. Comment: I also want to note there’s a significant opportunity with this rule to 

get similar emission reductions in other states. I hope that the attorneys can pay 

close attention to the final regulatory language to ensure that or facilitate the 

adoption of this rule by other states. I don’t have direct suggestions on how to do 

that, but I hope that the attorneys can give it a close look and try to do that. 

(NRDC) 

Response: We are not aware of any specific issues with the regulatory language that 

would create problems for other states. See response to Comment G.5. 

7. Comment: ARB should specify marine emission standards independent of EPA 

rulemakings. This is necessary because the EPA rulemaking is not final, and the 

ARB regulation must be implemented regardless of whether EPA’s rulemaking is 

ever finalized. (FOTE1) 

Response: This is not necessary because the U.S. EPA finalized their rulemaking in 

March 2008, with final publication in May 2008, as referenced in the 15-day Notice. 

8. Comment: I would urge you to direct staff to include shore side power for harbor 

craft directly in the greater shore side power regulation [and] in the harbor craft 

regulation. (NRDC) 

Response: We disagree with the recommendation that shore side power for harbor 

craft be included in this regulation as it is out of the scope of this rulemaking. However, 

staff is considering including shore power requirements for at-berth commercial harbor 

craft as part of another rulemaking and will evaluate technical feasibility, costs, and 

emission reductions as part of that effort. 

9. Comment: The regulation also does not take into account the environmental 

benefits of transporting goods along the waterways as opposed to on land. 

(AWO1) (SAUSE) 

Response: The benefits of transporting goods along the waterways as opposed to on 

land have been debated. However, for the benefit of public health, the emissions from 

both sources must be reduced. The Diesel Risk Reduction Plan charged ARB with 

reducing diesel PM from diesel engines throughout California. For the protection of 

public health, it is imperative that these emissions be reduced from all sectors 

throughout California. The Diesel Particulate Matter Exposure Assessment Study for 

the Ports of Los Angeles and Long Beach, provided as Appendix C of the Technical 

Support Document, concluded that commercial harbor craft are the third largest source 

of diesel PM emissions in the combined ports of Los Angeles and Long Beach 

(POLA/LB). As reported in the Staff Report, page 5, based on a 2002 POLA/LB 
40 

inventory, over 1.5 million people are exposed to a cancer risk of greater than 10 in a 

million due to harbor craft diesel PM emissions in the Los Angeles/Long Beach area. 

H. Compliance Schedule 

1. Comment: We have concerns over the compliance option which is based on the 

implementation of emission control strategies . . . with a minimum of 25% 

reduction efficiency in NOx and PM . . . with compliance dates extended for up to 

5 years . . . this compliance option, if selected, will not achieve equivalent 

emission reductions compared to the requirement for replacement of existing 

engines with Tier 2 or 3 engines . . . we recommend that this compliance option 

be revised to require equivalent emission reductions based on the application of 

emissions control technologies for existing engines. (CAPCOA) 

Response: The “Engine’s Model Year + 5” method is a method for determining the 

“effective model year” on which the in-use engine compliance date would be based. It 

is not a compliance option and so is not meant to achieve equivalent reductions. A 

vessel owner that utilizes the “Engine’s Model Year + 5” method is still required to take 

further action to meet the in-use engine requirements of the regulation. For example, 

the owner of a 1995 model year engine on a tugboat with a homeport outside of the 

SCAQMD and which operates in Regulated California Waters for 750 hours in 2013, 

would normally be required to meet a December 31, 2014 compliance date. However, if 

a diesel emission control strategy (DECS) that meets the requirements of the “Engine’s 

Model Year + 5” provision of the regulation is implemented with this engine prior to the 

2014 nominal compliance date, the engine’s effective compliance date would be 

extended to the compliance date for a 2000 model year engine (i.e., the 1995 model 

year + 5). Accordingly, in that scenario, the engine’s effective compliance date would 

be December 31, 2016, an extension of two years. Vessels with a homeport within the 

SCAQMD are not eligible for this method. 

The method, as originally proposed, adds an additional two to four years to the 

compliance date for older unregulated engines that qualify for this method and an 

additional 5 years for cleaner Tier 1 engines (model years 2000 and later) that use this 

method. 

This optional method for determining compliance date was included to encourage the 

use and consequent development of DECS for marine applications. Since there are no 

DECS verified for marine vessel applications, commercial harbor craft owners who 

employ this method do not have the assurance that accompanies a verified strategy. 

However, this optional method provides an opportunity for DECS manufacturers to 

verify their systems. The minimum 25 percent emission reduction level was chosen to 

be consistent with a Level 1 verified emission control device (VDECS). The 

requirement that there be no more than a 10 percent increase in NOx or PM is also 

consistent with the Level 1 VDECS requirements. These DECS and VDECS could be 

used to help reduce emissions from other vessel types which are not subject to the in-
41 

use engine requirements and result in larger overall emission reductions. ARB believes 

that use of this method will ultimately provide additional public health benefits. 

2. Comment: With respect to the regulation’s provision for Compliance Schedules 

and Determination of Engine Model year and its “Engine’s Model Year + 5” 

method (e)(6)(C), we have reservations concerning the limited amount of 

pollution control that could trigger a compliance extension thus potentially 

vitiating overall emission reductions. For example, an owner can achieve a 

25 percent reduction in DPM and a 9 percent increase in NOx for a net emissions 

reduction of 14 percent and thus have a legitimate emissions control strategy, 

entitling him or her to use of the “Engine Model Year + 5” method. In some 

instances, the election of this method can postpone compliance requirements 

two years. The overall benefits of this alternative compliance strategy seem 

questionable, and the strategy furthermore offers another way in which an owner 

or operator can extend his or her compliance timeline–timelines, which as 

referenced previously, have already been pushed back and prolonged 

considerably. ARB should reform its “Engine’s Model Year +5” method so that 

emissions reductions are equivalent to those achievable from engine 

replacement (repowering). (FOTE1) 

Response: We disagree with the recommendation to modify this method. See 

response to Comment H.1 regarding the benefits resulting from this optional method for 

determining compliance model year and the selection of the required emission reduction 

requirements. See response to Comment F.9 regarding the length of the compliance 

timelines. 

3. Comment: We recommend that the provision for extending the compliance 

dates under this option be removed to avoid potential delay in achieving the 

needed reductions. (CAPCOA) 

Response: We disagree with this recommendation to remove this method. This 

comment is referring to the “Engine Model Year + 5” method to determine the engine 

model year for compliance. See response to Comment H.1 regarding the actual length 

of the compliance date extension. This method could produce emission control devices 

for future use on older marine vessels not required to meet the regulation compliance 

timeline. This will provide emission reductions beyond those required by the regulation. 

Ultimately, owners or operators using the “Engine Model Year + 5” method will be 

required to bring these engines into compliance with either the U.S. EPA Tier 2 or Tier 3 

emission limits. 

4. Comment: We recommend that the “Engine’s Model Year +5” model be 

changed so that five years are added to the compliance date instead of to the 

engine model year [allowing] engines built before 2003 to have more time to 

comply with the regulation. The operators using older equipment are often doing 

so out of necessity because they are small businesses or lack the financial 

resources to upgrade their engines. It is reasonable to request that these small 
42 

operators be given more time to comply with the regulation. After the 2003 

model year date, the +5 formula would apply to both engine model year and 

compliance dates. This would also allow companies to replace the engines 

during a major overhaul cycle. (AWO1) (SAUSE) 

Response: The commenter is suggesting that this method be modified such that five 

years are added to the compliance date rather than to the effective model year used for 

determining the compliance date for all unregulated (pre-Tier 1) and Tier 1 engines built 

before 2003 that use this method. We disagree with this comment because for many of 

the pre-Tier 1 engines, the compliance date prior to applying the “Model Year + 5” 

method already affords at least a 20-year useful life. In the cases where this is not true, 

applying this method as originally proposed does provide at least a 20-year useful life. 

In fact, the oldest engines, those that are pre-1982 model year, are afforded a minimum 

30-year useful life with the application of this method. Adding five years to the 

compliance date instead of the model year would further delay compliance for these 

older engines. This would delay the emission reductions and associated health risk 

reductions achieved through compliance with the regulation. 

The method, as originally proposed, adds an additional two to four years to the 

compliance date for older unregulated engines that qualify for this method and an 

additional 5 years for cleaner Tier 1 engines (model years 2000 and later) that use this 

method. This is appropriate considering that these older engines have already been in 

service for a significant number of years whereas the newer Tier 1 engines have not. 

The impact of the regulation on businesses is addressed n the responses to Comments 

L.1 and L.3. 

5. Comment: If an engine has been retrofit from Tier 0 to Tier 1, we request that 

the engine be given an additional five years until compliance rather than adding 

five years to the model year. We currently have a Carl Moyer grant for just such 

a retrofit, and the compliance date for the engines is only extended from 2009 to 

2011, even though the engine would now meet Tier 1 requirements. 

(WESTAR1) 

Response: We believe that the commenter is mistaking the “Engine Model Year + 5” 

method of determining effective model year with the “Engine Tier 1 Rebuild” effective 

model year method. Based on the compliance dates cited in the comment, we believe 

that the comments are directed at the “Engine Model Year + 5” method. See response 

to Comment H.4 regarding the reasons why we have chosen to add five years to the 

effective model year rather than extending the compliance date by five years. 

The reason we do not believe this comment is directed at the “Rebuild to Tier 1” method 

is that if the Westar engine were rebuilt to Tier 1 standards, then the effective model 

year would become the date of the Tier 1 rebuild. A compliance date of 2011 indicates 

that the rebuild to Tier 1 standards occurred in 1998 if the vessel is in the SCAQMD, or 

1996 if in another part of the State. Tier 1 standards were not promulgated by the 

U.S. EPA until 1999 so it is unlikely that engines were rebuilt to this standard prior to 
43 

that time. If the rebuild occurred in 2000, the compliance date would be much later, 

2013 in SCAQMD or 2015 in the rest of the State. On the other hand, an engine 

compliance date of 2009 indicates that the engine is a high-use 1975 or earlier model 

year engine. A retrofit with an emission control device would then only extend the 

effective model year to that of a 1980 model year or earlier, which would be required to 

comply in 2011. This scenario is consistent with the compliance dates cited in the 

comment and indicates that the commenter is referencing the effective model year 

method for applying diesel emission control technologies. See response to Comment 

H.4 for reasons why ARB believes this method should not be modified to add an 

additional five years to the compliance date. 

6. Comment: We recommend that CARB increase the compliance schedule for 

Tier 0 to Tier 1 engines from January 2008 till July 2009. There will be not 

enough time to comply with the January 2008 timeline. (AWO1) 

Response: We interpret this comment to refer to the method for determining engine 

model year for unregulated engines that have been rebuilt to meet the Tier 1 engine 

emission standards. The Engine Tier 1 rebuild model year method allows a 15-year 

useful engine life for those engines that have been rebuilt to Tier 1 standards. It is not a 

compliance extension option to allow extended life for unregulated engines. 

7. Comment: We recommend that CARB increase the voluntary compliance 

schedule for Tier 0 to Tier 1 engines from January 2008 till July 2009. There will 

be not enough time to comply with the January 2008 timeline due to the delivery 

schedule of either parts to upgrade or engines to re-power and the shipyards 

inability to accommodate us. (SAUSE)

Response: We disagree for reasons provided in the response to Comment H.6. 

8. Comment: We request a year and a half extension . . . to the

December 31, 2007, date for voluntary compliance retrofitting engines from 

Tier 0 to 1 with resulting change in engine model year . . . to July 1st, 2009. 

(WESTAR2) 

Response: We disagree for reasons provided in the response to Comment H.6. 

9. Comment: We request that CARB allow twenty (20) full years of operation for 

any engine in any vessel installed under Carl Moyer (or other port-sponsored 

clean air offset program), before requiring replacement of that engine. 

(BAYLINK1) 

Response: We disagree with this request. Engines funded through the Carl Moyer 

Program are required to meet a specified project life to ensure that these public funds 

are spent in a cost-effective manner and gain near-term emission reductions that go 

above and beyond, or in advance of, a regulation’s requirements. The Carl Moyer 

Program guidelines establish a minimum project life of three years and a maximum 
44 

project life of five years for marine projects. The in-use engine compliance schedule 

allows a 15-year useful life for all Tier 1 engines outside the SCAQMD and 13 years 

within the SCAQMD. The compliance date for an engine rebuilt to Tier 1 standards 

prior to January 1, 2008, is based on an effective model year which is the same as the 

rebuild date. Consequently, all Tier 1 engines, and engines rebuilt to Tier 1 standards, 

will have fulfilled their Carl Moyer Program project lives (5 years maximum) prior to 

required compliance with the regulation. Since the project life required for the Carl 

Moyer Program will be fulfilled prior to the required compliance date, these engines 

should be treated on an equal basis to other Tier 1 engines. 

10. Comment: We have acted proactively by replacing all of our two stroke engines 

with cleaner burning Tier 1 four-stroke engines. The eight main engines and 

eight auxiliary engines have been replaced over the past seven years at a cost of 

almost $2 million. The Carl Moyer program financed a portion of the cost of 

these engines. We feel that we acted in good faith by replacing our polluting 

engines. We ask CARB to allow 20 full years of operation for any engine and 

any vessel installed under Carl Moyer Program, before the engine would be 

required to be replaced. (BLUEGOLD) 

Response: While we applaud those owners/operators who have replaced older engine 

with Tier 1 engines, reducing engine replacement timelines is a mechanism that ARB 

has employed for many industries to reduce emissions. If these Tier 1 engines are 

replaced per the compliance schedule, they will be replaced with engines that meet 

Tier 3 emission standards. This will result in about a 75 percent PM emission reduction 

and a 40 to 50 percent NOx emission reduction. Staff evaluated the cost of these 

reductions, including reduced engine life, to be $29 per pound of reduced PM if all costs 

are associated with the PM reduction. These costs are within the range of other recent 

regulatory measures. Also, see response to Comment H.9 regarding the replacement 

of engines originally funded through the Carl Moyer Program. 

11. Comment: We request that a Tier 1 engine installed since 2001, particularly one 

that was funded from the Carl Moyer Program, have a phase out of 15 years 

from the effective date of the regulation. (BLUEGOLD) 

Response: The effective date of the regulation is January 1, 2009. Allowing 15 years 

from that date for the first compliance requirement would delay the turnover of a Tier 1 

engine installed in 2002 by an additional 7 years, or until 2024. This would delay the 

emission reductions necessary to meet the goals of the Diesel Risk Reduction Plan and 

the Goods Movement Emission Reduction Plan and the associated health benefits. 

See the response to Comment H.9 regarding the use of Carl Moyer Program funding 

and the associated project life. See the response to Comment H.10 regarding the 

magnitude of emission reductions that would be delayed under this scenario. 

12. Comment: For those of us who were pro-active in installing Tier 1 or better, we 

believe that the regulation cuts our life cycle in those engines and that dollars 

that were expended by at least 25 percent, we believe all of those engines went 
45 

in with the thought in mind of at least lasting 20 years. That’s the normal turn 

over period of a good engine. (CATALINA) 

Response: We disagree with the suggestion that compliance dates be extended for 

Tier 1 or better engines for the reasons provided in the response to Comment H.10. 

13. Comment: We recommend that engines with the model year 1996 and newer 

should have a compliance extension of five additional years. By taking into 

account those companies that have been purchasing new engines for their 

vessels using a company replacement cycle, CARB will help offset the fiscal 

impact those companies will face. An engine with a model year 2003 would then 

be subject to compliance on December 31, 2023. This engine life cycle still does 

not reflect the true life cycle of a tug engine; however, it does reflect a 

compromise that will reduce the financial burden on the industry. (AWO1, 14) 

(SAUSE) 

Response: The ARB does not agree with the proposal to give model year 1996 and 

newer a compliance extension of five additional years. Reducing engine replacement 

timelines is a mechanism that ARB has employed for many industries to reduce 

emissions and provide needed public health protection. Staff evaluated the cost of 

these reductions, including reduced engine life, to be $29 per pound of reduced PM if all 

costs are associated with the PM reduction. These costs are within the range of other 

recent regulatory measures. Engines of model year 1996 through 1999 are unregulated 

(pre-Tier 1) engines. Compliance with Tier 2 standards will provide 25 to 30 percent 

reduction in PM and 40 to 45 percent reduction in NOx emissions for these engines. 

See response to Comment H.10 regarding the reductions obtained when a Tier 1 

engine is brought into compliance with Tier 3 standards. Extending compliance dates 

for these engines by five years delays these reductions similarly. 

In the evaluation of the economic impact of the regulation, staff used a useful life of 

25 years to determine the lost value of the reduced engine life for a tugboat propulsion 

engine, as discussed in Chapter VIII of the Technical Support Document. ARB staff 

developed the useful life values based on the results of a statewide survey of 

commercial harbor craft administered in 2004 (Appendix D of the Technical Support 

Document). See responses to Comments L.1 and L.3 regarding the evaluation of the 

fiscal impact on affected companies. 

Staff’s analysis of the economic impact of the regulation assumed the most costly option 

for regulatory compliance will be used. However, engine replacement is not the only 

compliance option for meeting the in-use engine requirements. Retrofit technology and 

rebuild-to-a-cleaner-standard kits can be employed to meet the required emission limits. 

The U.S. EPA has certified kits to remanufacture large locomotive engines to a cleaner 

standard. The propulsion engines used on many tugboats are marinized locomotive 

two-stroke engines. There are currently rebuild kits available for these engines, as well 

as for some other two-stroke engines widely used in marine vessels. While these kits 
46 

do not bring the engines to Tier 2 standards, it is expected that engine manufacturers 

will develop engine upgrade rebuild kits that will clean engines to the Tier 2 level in 

response to this ARB regulation and requirements recently finalized in the U.S. EPA 

marine and locomotive engine rulemaking (40 CFR Part 1042). The U.S. EPA 

rulemaking specifies new remanufacture requirements for engines at or above 800 hp, 

Tier 2 and earlier, manufactured in 1973 or later. If a rebuild kit that has been certified 

to reduce PM emissions by at least 25 percent is available for an engine at the time of 

rebuild, this kit must be used. This ruling, in conjunction with the ARB requirement that 

certain in-use marine engines meet Tier 2 standards, has created a market for these 

rebuild kits. It is anticipated that kits to rebuild to a Tier 2 standard will be developed 

and available in the near future. As one example of industry’s efforts to develop new 

rebuild kits, Caterpillar’s rebuild kit for their 3500 series marine engines has been 

recognized by the U.S. EPA as an emerging technology. This kit is for engine model 

years 1984 to 2008 with maximum power rating greater than 750 horsepower. This kit 

will not rebuild to Tier 2 standards. However, once such kits are available, rebuilding 

the engine to meet Tier 2 standards will bring the engine into compliance with the in-use 

engine requirements if compliance occurs before Tier 3 standards become effective for 

the engine. 

 

14. Comment: Delay enacting one size fits all policy. Regulations should be based 

on duty cycle or fuel consumption rather than age of engines. As written, the 

legislation unfairly penalizes low use vessels. 

The philosophy behind the timetable of phase-out dates for existing pre-Tier 1 

and Tier 1 engines is to give owners a certain amount of time/operation to take 

advantage of at least a portion of the engine’s useful life. However, using the 

year as the measure works better for a vessel/engine in service many hours of 

the day. This results in a large number of actual operational hours and 

corresponding emissions. In contrast, the vessel/engine that operates less 

frequently or only a short time per day gets considerably fewer actual hours of 

operation over the remaining regulatory life granted to the engine. Thus, with a 

ferry and a dinner boat both having the same phase-out date, the dinner boat 

gets far fewer hours of actual operation before the required engine replacement 

than does the ferry, incurring a substantial economic penalty while operating 

without subsidy. 

A year in the life of a dinner excursion vessel is not the same as a year in the life 

of a ferry vessel. Hornblower charter and dining cruise vessels rarely travel 

above 6 knots and burn very little fuel. A vessel that makes 200 trips a year at 

this speed will burn substantially less fuel than a ferry vessel making 300 trips at 

20 knots. 

For example, comparing two classes that have been lumped together in the 

Regulation: 
47 

Characteristic Typical New Ferry Vessel Classic Charter Vessel 

Age 1-20 Years 40-90 Years 

Appearance Contemporary Classic 

Construction Aluminum Wood 

Drive Engine BHP 4,000 to 20,000 200-600 

Annual Days of Use 250-300 100-150 

Annual Hours of Use 2,000 to 4,000 500-1,200 

Annual Fuel Use-Gallons 200,000 to 1,000,000 5,000-10,000 

Relative Emission Factor 1,000 1 

Repower $/% of Vessel $ 20%-40% 50% to 150% 

(HORNBLOWER1) 

Response: The regulation provides a low-use exemption for engines that operate less 

than 300 hours annually. The in-use engine compliance schedule requires that the 

oldest and highest use engines comply first. These oldest engines required to comply 

in the first two years have already been in operation much longer than a 20-year useful 

life. These are unregulated (pre-Tier 1) engines that generate significantly more 

pollution, about 40 percent more NOx and 25 to 30 percent more PM, than a Tier 1 

engine that will be required to comply in a later year. Additionally, as an engine ages, it 

experiences wear, which increases clearances and introduces more variability into 

engine operation. Generally, the older an engine is, the more pollution it emits. 

Consequently, an older engine operating fewer hours may generate more emissions 

than a newer engine operating more hours. 

Further, the emissions comparison provided in the comment is unrealistic. For 

example, an unrealistically high horsepower range of 4,000 to 20,000 horsepower was 

cited for the total vessel propulsion horsepower for California ferries. As provided in 

Chapter III of the Technical Support Document, the 2004 ARB Statewide Commercial 

Harbor Craft Survey indicated the average total vessel propulsion horsepower for a 

typical California ferry is about 2,200 horsepower (based on two 1,100 horsepower 

propulsion engines). Conversely, the commenter underestimates the average power 

rating for an excursion vessel at 200 to 600 horsepower whereas the survey indicated 

an average propulsion engine power rating of 800 horsepower (two 400 horsepower 

engines). Also, the survey data indicated that excursion vessels operate an average of 

about 1,000 hours annually, which would indicate that the range cited in the comment is 

underestimated. 

Consequently, the annual days of use and fuel use could be similarly adjusted to reflect 

more realistic vessel horsepower and hours of operation. We do not know how the 

commenter estimated their “relative emission factor.” However the 1,000 to 1 value is 

not realistic, as demonstrated by the high range of the vessel horsepower presented for 

ferries and the low horsepower and hours of operation presented for excursion vessels. 

None of the data provided in the comment addresses the difference in emission levels 

from a 40- to 90-year-old engine and a much newer engine, one less than 20 years old. 

Taking this into account makes the emission levels significantly more comparable. 
48 

Based on excursion vessel average engine size, average annual engine use, average 

engine age, and operation proximity to shore (a factor in determining health risk impact), 

ARB determined that excursion vessels should be included in the in-use engine 

requirements of the regulation. 

As discussed above, “duty cycle” was taken into account in determining regulation 

requirements. “Fuel consumption” would be an inappropriate parameter to determine 

regulation requirements because, as discussed above, the associated emissions can 

vary significantly depending on engine age. 

15. Comment: The SCAQMD timeline should be removed from this regulation. It is 

unreasonable to expect companies operating within California waters to adhere 

to two separate and unique timelines. This will undoubtedly limit the number of 

tugs able to operate in southern California and place even more burden on those 

companies attempting to conduct business in California. (AWO1) (SAUSE) 

Response: The SCAQMD timeline is necessary in order to provide early emission 

reductions in the South Coast Air Basin which is in non-attainment for the federal annual 

PM2.5 and PM10 ambient air quality standards and 8-hour ozone standard. The South 

Coast Air Basin is required to attain the PM2.5 standards by 2015 but must demonstrate 

that goals are met in 2014. This is because the U.S. EPA requires that all necessary 

emission reductions be achieved one calendar year sooner – by 2014 – in recognition of 

the annual average form of the standard. NOx emission reductions are needed 

because NOx leads to formation in the atmosphere of both ozone and PM2.5. Diesel 

PM emission reductions are needed because diesel PM contributes to the ambient 

concentrations of PM2.5. 

We understand that having a different compliance schedule for the SCAQMD does 

create added complexity to the rule. However, staff’s evaluation indicated that requiring 

the entire State to adhere to the SCAQMD compliance schedule would overburden the 

State’s resources for bringing these engines into compliance. The accelerated 

SCAQMD timeline is two years faster than the rest of the State. However, as discussed 

above, the two year acceleration is necessary. This two year acceleration should not 

limit the number of tugboats available to work in the SCAQMD. ARB does not believe 

costs of compliance in SCAQMD, home to California’s largest port (the combined ports 

of Los Angeles and Long Beach), which is also one of the nation’s busiest ports, will 

affect the number of tugboat and towboats available in the South Coast. In addition, 

see discussion in response to Comment H.13 about alternative options for larger 

engines in tugboats to comply with the in-use engine requirements. 

During the course of developing the regulation, ARB staff evaluated the fiscal impact on 

affected companies in both the SCAQMD and the rest of the State. As discussed in the 

Staff Report Technical Support Document (Chapter VIII), ARB staff analyzed the 

potential impacts of regulation compliance on affected tugboat and towboat businesses 

and estimated that the average impact on business’s return on equity (ROE) was a 

decrease of 3.6 percent and 0.5 percent, respectively. However, tugboat and towboat 
49 

businesses provide a needed service that is not easily replaced, and they will likely be 

able to pass on the costs to their customers in terms of higher service fees. To the 

extent that they are able to pass on these costs, the impact on their profitability would 

be less than estimated here. 

These businesses may also be able to reduce the impact of the regulation on their 

businesses by taking advantage of available public funding. Both Carl Moyer Program 

and Proposition 1B funds are available for early compliance with the regulation. The 

Board approved an allocation of $40 million of Proposition 1B funding specifically for 

reducing emissions associated with commercial harbor craft vessels involved in freight 

movement operations, including tugboats and towboats. See the response to 

Comment M.1 for more information regarding incentive funding. 

16. Comment: We recommend synchronizing the compliance time frames for the 

South Coast with the rest of the state. I believe the compliance time frame for 

the South Coast is eleven years. And that’s a really long time. And for the rest 

of the state, there’s even more time through 2022. And I think there is a lot of 

room to speed up that compliance and offer the earlier public health benefits to 

these impacted communities. I also want to note that there are significant 

safeguards already in place in the existing regulatory language that’s proposed 

here to make sure that we don’t run up against the problems of capacity in terms 

of getting enough vessels replaced or repowered in a year. And that if that did 

happen, compliance extensions would be possible. So I don’t think that that’s a 

significant issue. (NRDC) 

Response: We interpret this comment as suggesting that the State in-use engine 

compliance schedule be accelerated to match the SCAQMD schedule. See the 

response to Comment H.15 regarding the South Coast Air Basin’s non-attainment 

status and the necessity of the SCAQMD accelerated schedule. 

The statewide compliance timeline spans 14 years because it requires in-use Tier 1 

engines just recently purchased and installed to comply with more stringent standards. 

The statewide compliance schedule is based on allowing a minimum 15-year useful life 

for Tier 1 and Tier 0 diesel engines. Consequently, the engines complying in the latter 

timeframe are all engines meeting Tier 1 engine emission standards. All Tier 0 engines 

are brought into compliance by 2013 in the SCAQMD, and by 2016 in the rest of the 

State. The useful life of newer Tier 1 engines is shortened by five to seven years due to 

these requirements, depending on whether they have a homeport in the SCAQMD or 

elsewhere in the State. While useful life was shortened to 13 years in the SCAQMD, 

this was due to non-attainment issues, as discussed in the response to Comment H.15. 

Shortening their useful life further by compressing the compliance schedule without 

compelling reason would be unreasonable and burdensome. 

Accelerating the statewide schedule would also result in more engines being brought 

into compliance before Tier 3 standards become effective. Staff demonstrated to the 

Board at the November 2007 Hearing that replacing a Tier 0 engine with a Tier 2 engine 
50 

two years early results in a 20 to 25 percent loss of long-term benefits when compared 

with replacing the engine with a Tier 3 engine at the original compliance date. While it 

is important to obtain the short term benefits of early replacement in the South Coast, 

this is not true for the remainder of the State. 

Implementing the SCAQMD in-use engine compliance timeline for the entire State 

would overextend the statewide capacity of boat builders, boat repair facilities, and ship 

yards to complete the additional work associated with implementation of the regulation 

in a timely fashion. During the course of the rulemaking process, the ARB staff 

surveyed more than 60 California-based boat builders, boat repair facilities, and ship 

yards to ascertain the statewide cumulative annual vessel repair/maintenance carrying 

capacity. The results of that survey indicated that accelerating the compliance schedule 

would overburden the existing vessel repair/maintenance infrastructure. The Board 

agreed with the staff recommendation that the compliance schedule developed for the 

SCAQMD not be implemented statewide. In developing regulations, the ARB works to 

develop a balance that obtains the necessary emission reductions and protects public 

health while still allowing businesses to continue to operate within the State. 

Finally, accelerating the statewide compliance timeline reduces the opportunity for 

businesses to use incentive funds to comply early. This increases the burden on 

industry. 

17. Comment: The strongest argument that the staff has for not requiring an 

accelerated turnover for the rest of the state on the same time line as the South 

Coast is they’re concerned about the capacity of the industry to be able [to] 

change over the engines on time. Even the accelerated South Coast version is a 

long time line. You’re looking at a ten-year window of opportunity to either 

increase staff or expand a facility to enable additional engine turnover or 

replacement. The Board should feel empowered to require the whole state to go 

with the South Coast time line. Significant emission reductions justify the Board 

going with the South Coast time line that’s a two or three year acceleration to the 

overall program. (CCA) 

Response: We disagree for reasons provided in the response to Comment H.16. 

18. Comment: ARB should accelerate and compress the compliance schedule. At 

a minimum, ARB should duplicate the compliance schedule for the South Coast 

Air Quality Management District statewide. In keeping with a condensed 

compliance timeline, at a minimum we support the second alternative considered 

in the September 2007 CARB Staff Report. In this alternative, total DPM 

emissions reductions: “. . . would be significantly more than with the proposed 

schedule, 6.0 million pounds during the 14 years from 2009 to 2022 . . . The total 

NOx reduction of this same time would be 46,000 tons, nearly 20 percent more 

than with the proposed regulation. This alternative would produce earlier 

reductions than the current proposal, with a cost-effectiveness similar to the 

current proposal.” This alternative was rejected due to concerns about statewide 
51 

engine replacement capacity. However, possible alternatives exist to address 

these concerns including out-of-state engine replacement locations, financial 

inducements (such as the Carl Moyer Memorial Air Quality Standards Attainment 

Program), and subsidized increased capacity arrangements. These possible 

alternatives should be evaluated to accelerate and augment needed vessel 

emission reductions. (COALITION) (FOTE1) (FOTE2) 

Response: We disagree for reasons provided in the response to Comment H.16. 

While some vessel owners with larger vessels will send their vessels out of state for 

repower, ARB believes this will be a small minority of the repower population. Basing 

capacity on California facilities is reasonable. 

There are financial inducements in place for encouraging vessel owners to comply early 

with the in-use engine requirements. Adopting a condensed timeline for the entire State 

would reduce opportunities for incentive funding for early compliance. The Carl Moyer 

Program requires that funds be expended at least three years prior to the regulatory 

compliance date, and Proposition 1B funding guidelines require two years. The 

availability of these funding sources will allow proactive vessel owners to bring their 

engines into compliance years earlier than required by the compliance timeline. 

ARB does not have the funding authority to subsidize an increase in boat yard capacity. 

Nor can ARB advise boat builders, boat repair facilities, and ship yards as to what 

business model they should pursue, or mandate that these facilities increase their 

business capacity, either through increased staff or facility expansion, to meet the 

needs of the regulation. 

19. Comment: It appears in 2011 and 2012 and 2014 there’s some space to shift 

around the[se] numbers. I know the capacity number that was referenced is 

150 [engines per year]. And if possible, we can use any means at our disposal to 

move that around so that we can go forward on the statewide replication of that 

at the South Coast level. (FOTE2) 

Response: The compliance schedule in the regulation provides a more even 

distribution of engine repower than either of the two alternatives considered in the 

Technical Support Document. While the anticipated number of engines coming into 

compliance in 2011, 2012, and 2014 are lower than the estimated statewide capacity, 

requiring engines scheduled for compliance in 2015 and later to comply in those years 

would reduce their useful life to significantly less than 15 years. This would make the 

regulation more costly and also reduce the opportunity for using incentive funds for 

early compliance. 

20. Comment: The regulation sets unrealistic compliance dates. (AWO1) (AWO2) 

(SAUSE) (WESTAR1) (WESTAR2) 

Response: The compliance schedule is reasonable and takes into consideration 

economics, engine and dry dock availability, and emissions impacts. The regulation 
52 

includes extensions for cases in which there are no suitable engines available, 

installation difficulties exist, and when a fleet having sets of engines on multiple vessels 

are required to comply in the same year. There are also alternative compliance 

methods that can be used to meet the emission limit requirements, as discussed in the 

response to Comment H.13. 

21. Comment: The compliance timeline, as drafted, is extremely lengthy and should 

be shortened as much as practicable. No explanation has been provided for why 

the compliance deadline is 2022 despite the urgent need to reduce harbor craft 

emissions. (FOTE) (COALITION) 

Response: See the response to Comment H.16 regarding the length of the compliance 

timeline. 

I. Compliance Methods 

1. Comment: We recommend that Tier 4 repowers be considered for certain size 

vessels (e.g., over 800 hp) subject to a feasibility demonstration. If infeasible, 

Tier 3 engine repower requirements would then apply. (CAPCOA) 

Response: We do not believe it is appropriate to include a requirement for meeting 

Tier 4 standards for in-use vessels. During our public workshops, engine owners and 

manufacturers raised an issue about the proposed regulation’s originally proposed 

requirement to install Tier 4 engines on existing vessels. The U.S. EPA’s proposed 

Tier 4 marine engine emission standards will result in the necessity for exhaust aftertreatment (i.e., selective catalytic reduction and diesel particulate filters) on Tier 4 

engines. Owners and manufacturers stated that installing Tier 4 engines that utilize 

exhaust aftertreatment equipment on existing vessels would create space and weight 

difficulties, U.S. Coast Guard approval problems, and vessel stability issues. After 

consideration of these issues, staff modified the proposal so that engines meeting Tier 4 

standards are not required for engine repowers (i.e., on in-use vessels), unless the 

engine being replaced is a Tier 4 engine, but they would be required for new vessels. 

Additionally, see response to Comment F.10 regarding the feasibility of requiring Tier 4 

engines prior to the U.S. EPA effective date for these standards. 

J. Compliance Extensions 

1. Comment: We recommend that a three-year automatic extension be granted 

when there is no suitable engine replacement. Requesting annual extensions for 

engines that have not been developed is unnecessary and burdensome for a 

company. The industry already has to face the brunt of this regulation and it 

should not have to also face an undue administrative burden. (AWO1) (SAUSE) 

Response: The regulation allows a compliance extension when there is no suitable 

engine replacement available. The ARB Executive Officer (E.O.) may grant to an owner 
53 

or operator a one-year extension, which can be renewed annually, provided the owner 

or operator demonstrates to the E.O.’s written satisfaction that there is no suitable 

Tier 2-certified or Tier 3-certified replacement engine available that can be used in the 

specific vessel, and the owner cannot otherwise meet the requirements of subsection 

(e)(6) of the regulation. The annual extension application requirement provides 

accountability in the extension process. It is appropriate that the availability of a 

suitable engine for a vessel be evaluated annually due to the possibility of new offerings 

in the market place, and ARB does not believe this annual extension process is 

burdensome to the company. 

2. Comment: We recommend that an automatic extension be granted to the 

company as long as it submits documentation showing both that it has ordered 

the engine and the manufacturer’s expected delivery date. There is an economic 

incentive for the engine manufacturers to ensure that there are as few delays as 

possible in the delivery of a new engine. However, the burden should not fall on 

the operator to continually submit requests for six-month extensions when the 

manufacturer is delayed. In order to alleviate the administrative burden that this 

section imposes on the industry and expedite the extension process, 

documentation from the operator and manufacturer should be sufficient to 

warrant an extension to the compliance date that reflects the manufacturing 

delay. (AWO1) (SAUSE) 

Response: The extension application process requires only that the vessel operator 

provide the documentation cited in the comment and documentation showing that the 

engine was ordered no later than six months prior to the engine’s compliance date. 

This is not an onerous process, and ARB will make an objective determination of 

eligibility for the extension. The 6-month extension ensures that at least one full year is 

allowed for compliance from the date the engine is ordered. 

3. Comment: We recommend that this extension [an installation difficulty (six 

month extension)] should mirror the extension comments made previously in 

regards to manufacturer delays [be granted to the company as long as it submits 

documentation showing both that it has ordered the engine and the installer’s 

expected installation date.] Currently this regulation imposes the burden on the 

operators when the delays are out of their hands. (AWO1) (SAUSE) 

Response: As stated in the response to Comment J.2 above, the extension application 

process requires only that the vessel operator provide the documentation cited in the 

comment, documentation showing that the engine was ordered no later than six months 

prior to the engine’s compliance date, and documentation of the installation difficulties. 

This is not an onerous process, and ARB will make an objective determination of 

eligibility for the extension. 

4. Comment: We request automatic compliance for the extension dates on 

replacement engines due to the manufacturers, not a one year, six month. We 
54 

need automatic compliance or automatic extension for compliance. That would 

be in line with when we can get the engines. (AWO2) 

Response: We disagree for reasons provided in the response to Comment J.2. 

5. Comment: We request the exemption process through the Executive Officer for 

infeasibility be modified to allow for a longer period between submittals, the 

current writing calls for annual submissions of very complex and time consuming 

documents. (BAYLINK1) 

Response: We are interpreting this comment to be referring to the compliance 

extension for the case where no suitable engine is available, rather than an exemption. 

There are no repeated submittals for exemptions. See response to Comment J.1. As 

discussed in the response to Comment J.1, annual submittals are appropriate for 

accountability. If no new technology is available, then the submittal should not require 

further evaluation of the suitability of available technology. If new technology has 

become available, it is appropriate that the technology be evaluated for suitability. 

6. Comment: The regulation contains a burdensome application process. (AWO1) 

(AWO2) (SAUSE) 

Response: We disagree for reasons provided in the responses to Comments J.1, J.2, 

and J.3. 

7. Comment: We recommend that an extension [to an owner having multiple 

vessels whose engines need to comply during the same year] not be a one-time 

only extension. The impact on an operator with multiple vessels coming into 

compliance will only be compounded if this extension is limited to one use. 

(AWO1) (SAUSE) 

Response: We disagree with the comment except in the case when the compliance 

date is in one of the first two compliance years. Except when the compliance dates are 

in the first two compliance years, the vessel operator has sufficient time to plan for the 

engine compliance requirements and possibly comply early with incentive funding or 

apply for an alternative control of emissions plan. The one-year extension allows an 

operator to phase the dry dock times for their multiple vessels over a two-year period 

rather than just over one year. 

For those cases where compliance is required for sets of engines on multiple vessels in 

one of the first two compliance years, a change was made in the regulation as part of 

the 15-day Notice. The original proposal provided a one-year compliance extension for 

vessel owners or operators with multiple vessels requiring engine compliance in a single 

year. However, there are at least two fleets with a large number of vessels with engines 

older than 1975 model year that would need to bring all of the effected engines on these 

vessels into compliance in the first two compliance years, 2009 and 2010. The original 

proposed compliance extension would only have extended their compliance deadline for 
55 

either of these dates by one year. Based on Board direction at the November 2007 

Hearing, staff made changes in the 15-day Notice to provide an extension to allow a 

phased compliance schedule for owners and operators with sets of engines on multiple 

vessels requiring compliance in either 2009 or 2010. The phased compliance schedule 

would require that a portion of the fleet be brought into compliance each year and that 

all engines be brought into compliance by the end of 2013. This would allow up to 

four years for the engines to be brought into compliance but would not jeopardize the 

early reductions necessary in the South Coast or the rest of California. 

8. Comment: We renew our objection to compliance extensions offered to owners 

or operators possessing multiple vessels in the same fleet. While some 

extensions are reasonably provided for – such as those pertaining to the 

absence of suitable replacement engines – assisting owners and operators who 

own multiple vessels is neither essential nor arguably equitable. (FOTE1) 

Response: The extension the commenter is referring to is a one-year extension for 

cases when there are sets of engines on more than one vessel in a fleet with 

compliance required in the same year. If compliance for these sets of engines is 

required in one of the first two compliance years (2009 or 2010), a longer extension is 

provided, as discussed in the response to Comment J.7. This extension requires more 

than simply for owners or operators to own multiple vessels, as implied in the comment. 

This extension was provided because compliance with the regulation is expected to 

require a nontrivial period of time, during which the vessel must be in dry dock. The 

extension will allow the vessel owner to phase that out-of-service time for vessels over 

two or more years rather than one. This extension also allows more time for financing 

of any modifications required. When sets of engines on multiple vessels in a fleet are 

required to comply within one of the first two years, additional time beyond a one-year 

extension is allowed because there is little time for the owners to plan for the expense 

and out-of-service time. Requiring compliance within one of the first two years also 

does not allow for early compliance with the use of incentive funding. 

9. Comment: Write into the regulation or give the Executive Director and staff 

more discretion to allow appropriate time to companies that can demonstrate 

undue economic burden in any given year of the program . . . i.e., to extend 

implementation dates if a company has more than two vessels to be re-powered 

in any given year (estimated implementation cost of over $250,000). 

(HORNBLOWER1) 

Response: We disagree with this recommendation. The determination of undue 

economic burden is very subjective in nature, which makes equitable evaluation difficult. 

As explained in the response to Comment J.7, more flexibility has been added to the 

regulation for vessel owners with sets of engines on multiple vessels that are required to 

comply in one of the first two years. For cases where compliance is required in later 

years, there is sufficient time for the vessel owner to plan for compliance, including 

considering various compliance options, as discussed in the response to 
56 

Comment H.13, and the use of incentive funding, as discussed in the responses to 

Comments H.15 and M.1. 

10. Comment: We request that the extension for same fleet vessels that share 

compliance dates be broadened. Due to our extensive re-engining under the 

Carl Moyer program, Westar currently has seven vessels that have a compliance 

date of 2015 and seven vessels with a date of 2017. We would have to reengine 14 vessels over a four year period. Based on our extensive experience 

with re-engining, we do not believe that we could manage that many re-enginings 

with in that time period. A single one-year extension is just not adequate. We 

request that this extension not be limited to one use. (WESTAR1) (WESTAR2) 

Response: For cases where compliance is required in later years, there is sufficient 

time for the vessel owner to plan for compliance, including considering various 

compliance options, as discussed in the response to Comment H.13, and the use of 

incentive funding, as discussed in the responses to Comments H.15 and M.1. See 

responses to Comments L.1 and L.3 for additional discussion on the impacts on 

businesses. 

11. Comment: I’d also like to comment briefly on engine availability and second 

what you’re hearing that it takes a year or so to get the engines. We’re going to 

schedule six months for our ferries to be re-powered. And we’re going to have to 

take it to a shipyard in Washington. . . . we are actually having to modify the hull 

of the vessel in order to accommodate the added weight of the engine. And 

that’s going to involve significant shipyard time. (BAYLINK2) 

Response: Every commercial harbor craft repair/maintenance/repower project is 

different and, as such, the regulation includes a compliance extension for manufacturer 

delays or installation difficulties. In addition, ARB staff plans to work closely with 

owners that are fulfilling the intent of the regulation when dealing with these types of 

issues. There are other options besides engine replacement that can be considered for 

compliance. See response to Comment H.13 for a discussion of these options. 

12. Comment: There’s much more to this exchange of engines than I think what I’ve 

heard talked about today. There’s no way you can complete this task within a 

three week period. It’s been a minimum of three months per vessel. 

(CATALINA) 

Response: ARB staff surveyed more than 60 California-based boat builders, boat 

repair facilities, and ship yards to determine an estimate of the time it takes to repower a 

commercial harbor craft. The time estimates ranged from three to four weeks up to 

three months, with the vast majority indicating the former. Also, see response to 

Comment J.11. 
57 

K. Alternative Control of Emissions 

1. Comment: We reiterate our opposition . . . to elements of the Alternative Control 

of Emissions (ACE) program. We remain concerned that Fleet Averaging may 

create disproportionate impacts. Further, we believe that several of the 

provisions allowable in an ACE should be required, as opposed to optional. 

These provisions include engine modifications, exhaust treatment control, engine 

repower, use of alternative fuels or fuel additives and shore-side power, 

especially shore-side power for tugboats. ARB should evaluate whether ACE 

methods can be made mandatory elements of this rule. (FOTE1) 

Response: ARB believes the ACE provision is important for providing flexibility in 

achieving equivalent emission reductions compared to direct compliance with the 

regulation. The regulation will require ACE applications be made available for public 

review and comment before Executive Officer action. Fleet reductions that are part of 

an ACE plan cannot be used to compensate for emissions in another air district or 

locale, as provided for in the definition of “fleet”. This will avoid any disproportionate 

impacts from occurring due to the ACE plan. Until Executive Officer approval is 

granted, the owner or operator would be required to meet the performance 

requirements in the regulation. 

The multiple strategies possible in an ACE plan and the costs and risks associated with 

those strategies make them more appropriate to consider on a case-by-case basis as 

opposed to a general mandate. To make these strategies mandatory would impose a 

prescriptive standard for the in-use engines affected. In contrast, the regulation 

imposes a performance standard for these engines which allows vessel owners to 

choose how they will meet these standards. 

As discussed in the response to Comment G.8, staff is considering including shore 

power requirements for at-berth commercial harbor craft as part of a future rulemaking 

effort. 

L. Economic Burden and Impact on California’s Economy 

1. Comment: We oppose the draft harbor craft regulation. It places unnecessary 

and overly burdensome regulations on the tugboat, towboat and barge industry 

that have the potential to put many operators out of business, thereby striking a 

severe blow to California’s economy, as well as the nation’s. (AWO1) (SAUSE) 

Response: We do not believe this regulation will significantly affect California’s or the 

nation’s economy. As discussed in the Technical Support Document (Chapter VIII), 

ARB staff analyzed the potential impacts of regulation compliance on affected tugboat 

and towboat businesses and estimated that the average impact on business’s return on 

equity (ROE) was a decrease of 3.6 percent and 0.5 percent, respectively. Tugboats 

and towboats are a significant source of commercial harbor craft emissions, resulting in 

reduced air quality and contributing to significant public health risks. However, these 
58 

businesses provide a needed service that is not easily replaced, and they will likely be 

able to pass on the costs to their customers in terms of higher service fees. To the 

extent that they are able to pass on these costs, the impact on their profitability would 

be less than estimated here. The State’s and the nation’s economies are not expected 

to be impacted by the passing on of these costs. The ultimate customer base to which 

the costs will be passed is the mass of consumers of imported goods. The distribution 

of these costs among a customer base that is many orders of magnitude larger than the 

source will greatly mitigate the increase in costs such that it becomes negligible. 

These businesses may also be able to reduce the impact of the regulation on their 

businesses by taking advantage of available public funding. Both Carl Moyer Program 

and Proposition 1B funds are available for early compliance with the regulation. The 

Board approved an allocation of $40 million specifically for reducing emissions 

associated with commercial harbor craft vessels involved in freight movement 

operations, including tugboats and towboats. See the response to Comment M.1 for 

more information regarding incentive funding. 

2. Comment: The proposed regulation will have a significant effect on our 

operations and our ability to stay in business. (WESTAR1) (WESTAR2) 

Response: See response to Comment L.1. 

3. Comment: The ramifications of this regulation have not been adequately 

addressed by CARB staff in the economic impact statement. For example, 

imposing a short life cycle on marine engines will be so costly that it will push 

smaller vessel operators out of business, which will decimate the ship assist 

business in California waters and cause employees to lose family-wage jobs, and 

also possibly severely limit the number of vessels that operate in California from 

outside of the state and weaken the state’s economy. 

Ocean-going tugs operating as ships and only making port calls, ship assist 

vessels and marine construction companies will all be severely impacted. 

(AWO1) (SAUSE) (AWO2) 

Response: We disagree with these comments. See response to Comment L.1 for a 

discussion of economic impact on affected businesses and the State’s and nation’s 

economies. The analysis that staff conducted took into account the lost economic value 

due to engines being replaced before the end of the engine’s useful life. This cost was 

included in the estimated reduction in ROE discussed in the response to Comment L.1. 

The economic analysis assumed that vessel operators would comply with the regulation 

by replacing their engines. This is the most costly option for regulation compliance. 

There may be other, less costly options available to many fleet owners for complying, 

including rebuilding engines with engine upgrade kits that reduce emissions (as 

discussed in the response to Comment H.13), employing emission control technologies, 

which could include aftertreatment devices and fuel strategies, or applying for approval 

for an ACE plan. An ACE plan must obtain emission reductions equivalent to or greater 
59 

than direct compliance with the regulation. ACE plans may include the use of engine 

rebuild kits, exhaust treatment, use of alternative fuels or additives, shore side power, or 

other methods which reduce emissions for their fleet but allow more flexibility. 

Consequently the regulation will not cause the ship assist industry to be decimated or 

result in lost jobs. 

There are provisions in the regulation to extend the compliance time for vessel 

owners/operators for manufacturer delays, installation difficulties, and for engines on 

multiple vessels that have the same compliance date. ARB staff plan to work closely 

with owners/operators when dealing with these types of issues. If an extension is 

warranted, the owner or operator is required to apply for this extension at least 

six months prior to the engine regulatory compliance date. The approval process for 

some extensions includes a public review period. 

Operators who bring out-of-state vessels into California for operation may need to 

assign their cleanest harbor craft to California operation and, as maintenance schedules 

permit, clean up other vessel engines to allow more flexibility in vessel use. 

4. Comment: One example of a similar situation in the past is in the 1990’s when 

California imposed an eight percent sales tax on bunker fuel. Ships simply chose 

to buy fuel elsewhere. This increase obliterated the bunkering business and, in 

turn, approximately 75 percent of the market left California. The impact of the 

harbor craft regulation on the tug and barge industry will have a greater negative 

impact than the bunker tax and, unlike the bunker tax, the harbor craft regulation 

will impact multiple business sectors. (AWO1) 

Response: See responses to Comments L.1 and L.3 for a discussion on the economic 

impacts on affected businesses. The example of the bunker fuel sales tax is not 

applicable to this situation. As discussed in the response to Comment H.15, the 

combined ports of Los Angeles and Long Beach are one of the nation’s busiest ports 

due to the large amount of imported goods that flow through this port and the size of the 

metropolitan area that the port and other local transportation industries service. The 

businesses that commercial harbor craft are engaged in (primarily import/export) will not 

relocate to outside of California due to the cost of this regulation. The customer base 

that the harbor craft industries service is sufficiently large to bear the cost of the 

regulation. 

5. Comment: However, legitimate concerns of the tug boat industry presented 

during development of the regulation have mostly not been addressed. Of 

particular note are the unrealistic compliance dates and the gross 

underestimation of total costs involved. Many vessels are going to have to be reengined. 

And there’s going to be disruptions in commerce when tug boats are unavailable 

due to time out of service, engine delivery delays, and limited shipyard 

resources. This is going to cost California consumer much more than is 
60 

estimated in this proposed rulemaking. And many smaller tugboat companies 

with limited financial resources will sell their boats outside of California and go 

out of business. (WESTAR1) (WESTAR2) 

Response: ARB believes it has addressed the concerns of the tugboat industry, as 

described more specifically in other responses to comments within this document, even 

though not all changes that companies requested in the regulation have been made. 

See response to Comment H.20 for a discussion regarding unrealistic compliance dates 

and extensions for delays due to engine delivery and installation difficulties (including 

delays due to limited shipyard resources). As discussed in Chapter VIII of the Technical 

Support Document and the responses to Comments L.1 and L.3, staff conducted an 

economic analysis and calculated that the average impact on tugboat business ROE 

was a decrease of 3.6 percent. Tugboat and towboat businesses provide a needed 

service that is not easily replaced, and they will likely be able to pass on the costs to 

their customers in terms of higher service fees. To the extent that they are able to pass 

on these costs, the impact on their profitability would be less than estimated here. 

Assuming these costs are passed on to and spread amongst millions of consumers, the 

cost to each individual consumer will be insignificant. Alternative methods of meeting 

the emission limits are discussed in the response to Comment H.13. 

6. Comment: Typically the main engines on tugs will last many rebuild cycles. 

Most of the EMD engine blocks have pre 1980 original build dates. To re-power 

with like engines can cost 2.5-3.5 million dollars per tug, sometimes exceeding 

the total value of the tug. The current compliance schedules will decimate the 

ocean tugs and ship assist business in California waters and cause employees to 

lose family-wage jobs, and also possibly severely limit the number of vessels that 

operate in California from outside of the state and weaken the state’s economy. 

(SAUSE) (AWO2) 

Response: We disagree with the commenter’s conclusion. See responses to 

Comments H.13 and L.3 regarding less costly alternative compliance options available. 

See Comment L.1 regarding the economic impact on businesses. It is not expected 

that the regulation will result in job losses or have a significant impact on tugboat 

businesses because they provide a necessary service that will continue to be in high 

demand. See the response to Comment L.3 regarding the possibility of the regulation 

limiting the number of vessels that operate in California from outside of the State and 

the impact on the State’s economy. 
61 

7. Comment: . . . our company cannot survive the proposed Commercial Harbor 

Craft Regulation as drafted. 

 

 The impact of the legislation will bankrupt our company: 

 14 of 35 Vessels would require re-power in the first two years (2010-11). 

Regulation does not recognize the impact it will create on a large fleet of 

vessels. 

 All of these vessels combined have fewer emissions than the average 

commuter ferry due to hours of operation and fuel consumption rate. 

 Recent rebuild and re-power write-offs would exceed $500,000 

 Historic Register(s) registration concept as drafted is not compatible with 

USCG Inspected Vessels. Many vessels were built around the engines and 

will require substantial demolition to replace. Our fleet has at least 5 such 

vessels that would be permanently removed from service as a result.

 Collateral damage in re-power situations is substantial, including reduction in 

capacity, additional capital expenditures, and route/service reduction. 

 Private Lender support will dry up with regulations that increase ownership 

cost 

(HORNBLOWER1) 

Response: As discussed in the responses to Comments H.13, L.1, and L.3, 

owners/operators have other options for regulation compliance besides engine 

replacement that are substantially less expensive. Larger fleets, such as described in 

the comment are particularly suited to using the ACE option. Additionally, a change has 

been made to the regulation through the 15-day Notice and public comment that 

includes a compliance extension specific to fleets with sets of engines on multiple 

vessels that are required to comply within the first two years. The extension allows 

phasing compliance through multiple years, as long as all affected vessel engines are 

brought into compliance by the end of 2013, as discussed in the response to 

Comment J.7. 

See the response to Comment H.14 regarding the comparison of emissions from older 

excursion vessels to those from newer ferries. 

Capital expenses will be incurred; however, as discussed above and in the responses to 

Comments L.1 and L.3, these costs are not expected to be devastating to affected 

businesses. In Appendix H, included as Attachment 4 in the 15-day Notice, staff 

estimated an increase in ticket price required to cover the expense of regulation 

compliance for three businesses for which staff was able to obtain Dun & Bradstreet 

credit and business report information. These businesses represent a range of 

business sizes, including a large, medium, and small ferry/excursion company. 

Estimated new equipment costs were based on the fleet description provided in the 

survey responses for these companies. An average annual new equipment cost was 

estimated for the years over which compliance would be required. The average new 

equipment costs ranged from between three to five percent of the average annual sales 
62 

for these three companies. As a worst case hypothetical example generated to confirm 

this estimated range of ticket price increase, ARB staff estimated the costs to a small 

excursion company with a single older vessel. The analysis estimated that if the 

annualized cost, amortized over 10 years at an interest rate of 5 percent, was passed 

on to the passengers through a ticket price increase, the resulting increase in ticket 

price would be 10.5 percent. These estimated increases in the ticket prices should not 

significantly reduce the number of passengers nor cause bankruptcy. 

See response to Comment D.1 to address the applicability of the National Historic 

Registry to U.S. Coast Guard inspected vessels. The response to Comment D.1 

discusses two fireboats that are listed in the National Historic Register: one which is 

currently part of the Los Angeles Fire Department’s fleet and the other which previously 

operated in Oakland. Since these types of vessels are registered by the U.S. Coast 

Guard, we assume that there is no conflict between U.S. Coast Guard registration and 

registration with the National Historic Registry. 

The commenter claims that compliance with the regulation will reduce capacity and 

routes and services. Whether or not such reductions occur will be dependent on how 

the operator chooses to comply with the regulatory requirements. If they choose to 

reduce engine operating hours to below the low-use limit, these reductions may occur. 

Otherwise, compliance with the regulation should not reduce vessel capacity, routes, or 

services. 

With higher costs, businesses may find it more difficult to qualify for loans from private 

lenders. A private lender will want to see a return on investment and proof that the 

borrower can pay back the loan. As discussed in Chapter VIII of the Technical Support 

Document, the reduction in return on equity due to regulatory compliance that was 

estimated for ferry/excursion companies ranged from 3 to 5 percent. This is not 

considered an economic hardship and is not expected to impact the ability of 

businesses to qualify for loans. 

We acknowledge that some vessel owners may be forced to change their business 

model and increase their debt to comply with the commercial harbor craft regulation. 

Many vessel owners may have to change how they allocate capital resources, and they 

may need to borrow money to purchase retrofits or repowers. The amount of debt 

acquired will depend on the compliance path chosen by the vessel owner. Also, for 

vessel owners with engines with later compliance dates, taking early actions with the 

use of incentive funding is another way to spread out the costs of the regulation without 

accruing large amounts of debt in the beginning years where the compliance costs can 

be the highest. 

8. Comment: The regulation does not accurately address the economic impact of 

us and unfairly requires ocean tugs to comply. (AWO2) 
63 

Response: We are confident in the economic impact analyses conducted for this 

regulation and believe it is appropriate to include ocean-going tugboats in the 

regulation. See responses to Comments B.1, L.1, and L.3. 

9. Comment: To get a better understanding of how flawed the financial impact 

statement is, this section will detail how a real California tug company will comply 

with this regulation. The company has a total of 10 tugs and operates a ship 

assist business. The numbers contained within this example will be in today’s 

dollar; any future impacts would need to have an escalator of at least 10 percent 

annually due to inflation. 

The engines in the tug company are model years 1996 and 1997 and operate 

more than 1,500 hours annually. Based on the proposed regulation, the 

compliance date for these tugs would be 2015, which means that this company 

would have to replace its entire fleet’s engines during the same year. Each tug 

would be out of service for approximately 30 days, during which time the tug will 

have to be ripped open and have the engines removed with a crane. Also, 

during this time the company would have to pay a charter tug to cover the 

company’s existing contracts. 

After taking into account lost revenues, engine costs, service costs, service 

equipment costs and the expense to charter a vessel, the company will have to 

invest $2.2 million per tug. This means that within a two-year period, if the onetime extension for multiple vessels is utilized, the small business in question will 

have to spend $22 million. 

This is one tug company of many that will probably not be able to afford 

compliance with the harbor craft regulation as it is currently written. Companies 

will also have to examine the various ports to determine if the enormous 

additional expense of complying with the regulation is worth continuing to stay in 

operation in California. 

However, if AWO’s suggestions are incorporated, the tug company in the 

previous example will be able to spread the $22 million expense over a period of 

five to 10 years. This time will allow the company to continue to use part of its 

fleet to generate revenue so that it can pay the costs imposed by the regulation 

and not be forced out of business. (AWO1) (SAUSE) 

Response: We do not agree with the dire picture that the comment has drawn. With a 

compliance date in 2015, the business has six years to plan for the required 

compliance. Incentive funds, as discussed in the response to Comment M.1, are 

available for tugboat projects if they choose to comply early with the regulation 

requirements. Additionally, other options besides engine replacement are anticipated to 

be available for compliance, as discussed in the response to Comment H.13. 
64 

10. Comment: Example of how the proposed policy will impact one “classic Vessel” 

in our fleet – 

Built in 1942 and owned by John Wayne, she currently carries 150 Passengers 

maximum, 80 average, 100 days per year. We have spent $200,000 over the 

last 2 years to maintain her classic condition. The vessel has large slow speed 

EMD engines with average operation of 800 hours annually. 

Under the present proposal, Hornblower will need to re-power by 2010. We do 

not think that a re-power is possible and the vessel will be rendered unusable at 

a great loss to the public, who enjoy the vessel and her history. 

a. Large heavy engines are part of the vessel ballast system (USCG Issue) 

b. Vessel would require partial destruction to remove engines (USCG Issue) 

c. Estimated cost of new engines & generators $200,000. Estimated 

additional cost of re-power (if even possible) $500,000. Estimated fair 

value of vessel $2,000,000. 

d. Vessel contributes over 40% of our gross revenue in Newport Beach, and 

employs over 50 local residents. 

(HORNBLOWER1) (HORNBLOWER2) 

Response: We do not agree with this comment. There are options for regulation 

compliance other than repowering. See responses to Comments H.13 and L.1 

regarding alternative ways for owners/operators to comply with the regulation. See 

responses to Comments D.3 and H.14 regarding the emissions from “classic vessels.” 

11. Comment: Implementing a hastily-constructed regulation would cripple an 

industry and harm the overall economic health of the state. (AWO1) (SAUSE) 

Response: As discussed in the Staff Report (pages 25-26) and Technical Support 

Document (Chapter II, pages II-7 to II-9), ARB has worked extensively with the various 

stakeholders since 2004. ARB staff has held 12 public workshops during the 

development process. In addition to the public workshops, staff participated in 

numerous industry and government agency meetings over this timeframe regarding the 

development of the regulation. See responses to Comments L.1 and L.3 regarding the 

impact of the regulation on tugboat industry and the State’s economy. 

12. Comment: There is not an appreciation by the state of the severity of the 

regulation’s impact on the entire maritime community. (AWO1) (SAUSE) 

Response: See responses to Comments L.1 and L.3 regarding the economic impact 

on the tugboat and towboat industry and the State’s economy. The regulation was 

crafted to include sufficient flexibility, as discussed in responses to Comment H.13, 

regarding alternative methods for compliance, Comment H.20, regarding available 

extensions, and Comment J.7, regarding fleets with sets of engines on multiple vessels 
65 

required to comply in the same year (to mitigate the regulation’s impact on the maritime 

community). 

13. Comment: We don’t believe that the staff has done an adequate analysis to 

determine the ROE on our company. In fact, we think it could jeopardize our 

viability as a company to serve the public of California. (HORNBLOWER2) 

Response: As discussed in Chapter VIII of the Technical Support Document, staff 

used the available Dunn and Bradstreet financial data to analyze the economic impact 

of the regulation on the ROE of impacted businesses. Staff was able to obtain 

representative data for each of the three vessel types. However, it was not possible to 

conduct an ROE analysis for every individual company impacted. ARB is confident that 

its financial impact projections are sound and that the regulation has sufficient 

compliance options and flexibility to accommodate the specific needs of individual 

businesses 

14. Comment: AWO’s concerns with previous drafts of the harbor craft regulation 

have, in large part, gone unaddressed, and we are now presented with a draft 

regulation that will have an enormously negative economic impact on the tug and 

barge industry. (AWO1) (SAUSE) 

Response: ARB believes it has addressed the concerns of the tugboat and towboat 

industry by including a number of compliance options and flexibility into the regulations, 

as discussed more specifically in other responses. In particular, see the responses to 

Comments L.1 and L.3 regarding the economic impact on the tugboat and towboat 

industries. 

M. Incentives 

1. Comment: We suggest CARB authorize tax incentives and grants to tug 

companies to invest in cleaner burning, more efficient engines. It is uncertain 

whether or not Carl Moyer funding will be available after the adoption of the 

harbor craft regulation, since the funding is not available to meet regulatory 

compliance. This would allow small businesses and companies heavily invested 

in equipment the opportunity to find capital to make the necessary modifications 

to their engines to meet the compliance standards. (AWO1) (SAUSE) 

Response: ARB has no authority to initiate tax incentives. The State Legislature and 

U.S. Congress have exclusive authority to amend State and federal tax law, 

respectively. 

Grants for early compliance are available. The Carl Moyer Memorial Air Quality 

Standards Attainment Program, now in its tenth year, provides incentive grants to public 

and private entities. Carl Moyer Program funding subsidizes the incremental cost of 

installing cleaner-than-required engines and rebuilding older, dirty engines to a cleaner 

standard. The objective is to encourage operators to exceed emission reductions 
66 

required by regulation. During its first seven years, the Carl Moyer Program provided 

$170 million to clean up approximately 7,500 engines throughout California. 

As of the 2003-2004 fiscal year, about 400 propulsion engines and 50 auxiliary engines 

had been replaced in approximately 300 harbor craft through the Carl Moyer Program. 

Specifically, $6.3 million was granted to tugboat operators to rebuild and replace 

68 engines, and $3.7 million was granted to ferry/excursion operators to rebuild and 

replace 30 engines. 

The Carl Moyer Program is available to commercial harbor craft operators who 

undertake projects to reduce emissions early or beyond what is required by regulations. 

Grants are available as long as replacing engines with new cleaner engines is 

completed at least three years prior to regulation compliance dates. Project completion 

deadlines are summarized in Table VIII-16 and Table VIII-17 Chapter VIII of the 

Technical Support Document. 

In addition, Proposition 1B funding is available to reduce tugboat and towboat 

emissions; $40 million has been allocated for reducing emissions from commercial 

harbor craft. These funds are available in the specified goods movement corridors and 

may also be used for projects to reduce emissions from work, pilot, crew, and supply 

boats as well as high-use commercial fishing vessels. Engine replacements for 

tugboats and towboats must be completed at least two years prior to regulation 

compliance dates. 

At the local port level, grants are available to support air quality improvements from port 

operations. For example, grant funds are available from the Port of Los Angeles for air 

emission reductions that go beyond current regulatory requirements. The Port of 

Los Angeles Air Quality Mitigation Incentive Program (PAQMIP) has granted millions of 

dollars since 2003 for air quality mitigation projects. 

2. Comment: We request that incentives be crafted to assist economically 

challenged companies or industries, this in order to attain CARB goals in a faster 

time frame. (BAYLINK1) 

Response: Incentive money to fund early reductions is available as discussed in the 

response to Comment M.1. However, public funding is specifically meant for obtaining 

emission reductions surplus to regulation compliance, such as early compliance, and 

are not awarded based on need. Additionally, the determination of economic need is 

very subjective in nature which makes equitable evaluation difficult. 

3. Comment: We’ve never seen funding available that will do the complete job. 

When you replace this engine, you don’t just replace the engine . . . You redo 

the engine beds. You have to replace drive lines. And you may end up replacing 

water jets and everything else. They just don’t come out the same. They either 

run at a different RPM that changes torque levels. (CATALINA) 
67 

Response: Incentive money to fund early or excess reductions is available as 

discussed in the response to Comment M.1. However, the vessel operator is expected 

to share in these costs. Alternative methods to replacing an engine in order to meet the 

emission limits are discussed in the response to Comment H.13. 

4. Comment: There’s just one point I wanted to clarify as far as duty cycles of a 

dinner cruise boat. Historically, that has not allowed us to get Carl Moyer 

funding. In fact, on the occasions we’ve applied, we did not get it. From the 

criteria I hear today from this future bond funding, I don’t think we’ll get it either. 

(HORNBLOWER3)

Response: As discussed in ARB’s response to Comment M.1, the Carl Moyer Program 

has provided several millions of dollars to install new engines in commercial harbor 

craft. Over the past several years, 12 excursion vessel engines have been repowered 

under the Carl Moyer Program and other local incentive programs. The Carl Moyer 

Program is typically over-subscribed, and the air districts typically award funding to the 

most cost-effective projects. To be competitive for these funds, excursion vessel 

operators may choose to make their proposals more cost effective in order to be 

awarded funds. One way to increase cost effectiveness is to share a more significant 

portion of the cost. 
68 

IV. SUMMARY OF PUBLIC COMMENTS AND AGENCY RESPONSES – NOTICE 

OF MODIFIED TEXT 

Ten written comments were received on changes made in the regulation at the time of 

the 15-day Notice dated June 18, 2008. Two of the written comments received were 

not responsive to the modifications in the 15-day Notice as they did not address the 

specific changes in the regulation. Additionally, several commenters included nonresponsive comments along with responsive ones in their written correspondence. For 

example, both Red and White Fleet and San Francisco Bay Area Water Emergency 

Transportation Authority made comments regarding subsections that were rearranged 

or otherwise modified to make them easier to read but did not include substantive 

changes. Comments that were not responsive to the modifications are not addressed in 

this FSOR. Eight commenters suggested changes to the proposed modified 

regulations. These eight commenters are listed in Table II. Set forth below is a 

summary of the comments together with the Agency’s response. 

Table II

Comments Received During the 15-day Comment 

(excluding comments that were not specific to modification made)

Abbreviation 

Reference 

Number Commenter 

AWO AWO Jason A. Lewis 

The American Waterways Operators 

Written testimony: July 3, 2008 

FOTE FOTE John Kaltenstein 

Friends of the Earth 

Written testimony: July 3, 2008 

HORNBLOWER HORNBLOWER Terry A. MacRae 

Hornblower Cruises and Events 

Written testimony: July 3, 2008 

PPS PPS Brett Greene 

Peterson Power 

Written testimony: July 3, 2008 

PVA PVA Edmund B. Welsh 

Passenger Vessel Association 

Written testimony: July 3, 2008 

RED AND WHITE RED AND WHITE Joe Burgard 

Red and White Fleet 

Written testimony: July 3, 2008 
69 

WETA WETA Mary Culnane 

San Francisco Bay Area Water Emergency 

Transportation Authority 

Written testimony: June 27, 2008 

BLUE AND GOLD BLUE AND GOLD Carolyn Horgan 

Blue and Gold Fleet 

Written testimony: July 3, 2008 

Summary of 15-Day Comments and Responses 

A. Engine’s “Model Year + 5” Method of Determining Effective Model 

Year 

1. Comment: The “engine model year plus five years” methodology is an important 

option in the proposed regulation. It is to be regretted that this methodology will 

not be allowed for vessels in the South Coast. Retention of this concept for 

vessels in the South Coast would not impede that region’s efforts to achieve its 

air quality goals, but it would demonstrate CARB’s sensitivity to the fact that the 

affected passenger vessel operators in the South Coast area are all private small 

businesses with limited financial resources. (PVA)

Response: The “engine model year + 5” method was removed for use in the South 

Coast Air Quality Management District (SCAQMD) because there was concern that this 

option would delay the emission reductions necessary in the South Coast to bring the 

region into attainment with federal standards. The South Coast is in non-attainment 

with the federal annual PM2.5 and PM10 ambient air quality standards and 8-hour 

ozone standard. Early emissions reductions are necessary in order to meet the PM2.5 

standards in 2014. The attainment date is 2015, but the U.S. EPA requires that all 

necessary emission reductions be achieved one calendar year sooner – by 2014 – in 

recognition of the annual average form of the standard. NOx emission reductions are 

needed because NOx leads to formation in the atmosphere of both ozone and PM2.5. 

Diesel PM emission reductions are needed because diesel PM contributes to the 

ambient concentrations of PM2.5. 

The impact of compliance costs on ticket price was estimated for typical small, medium, 

and large ferry/excursion businesses and the analysis documented in Appendix H, 

included as Attachment 4 in the 15-day Notice. The ticket price increase was estimated 

to range from 5 to 10 percent and with little differential across the range of business 

sizes. This cost will impact all excursion businesses within California and so will not 

generate a competitive advantage or disadvantage. 

2. Comment: Some of [the South Coast] operators have already demonstrated 

their financial commitment to clean air by obtaining Carl Moyer funds and 
70 

combining them with their own private resources to repower their vessels with 

lower-emissions engines in recent years before they had any legal obligation to 

do so . . . PVA urges CARB to reconsider this proposed modification and restore 

the “engine model year plus five years” option statewide. An alternative would be 

to restore this “engine model year plus five years” option for any engine in the 

South Coast area that was obtained with the assistance of Carl Moyer grant 

funding. (PVA15) 

Response: While we applaud those owners and operators who have replaced older 

engines with Tier 1 engines, reducing engine replacement timelines is a mechanism 

that ARB has employed for many industries to reduce emissions. Engines funded 

through the Carl Moyer Program are required to meet a specified project life to ensure 

that these public funds are spent in a cost-effective manner and gain near-term 

emission reductions that go above and beyond, or in advance of, a regulation’s 

requirements. The Carl Moyer Program guidelines establish a maximum project life of 

five years for marine projects. The in-use engine compliance schedule allows a 15-year 

useful life for all Tier 1 engines outside the SCAQMD and 13 years within the SCAQMD. 

The compliance date for an engine rebuilt to Tier 1 standards prior to January 1, 2008, 

is based on an effective model year which is the same as the rebuild date. 

Consequently, all Tier 1 engines, and engines rebuilt to Tier 1 standards, will have 

fulfilled their Carl Moyer Program project lives (5 years maximum) prior to required 

compliance to the regulation. 

Also, see response to Comment A.1 regarding the necessity of achieving early emission 

reductions in the South Coast. 

3. Comment: The proposed amendments to the original draft regulation only make 

it more onerous to conduct business in Southern California and do little to help 

mitigate the negative impact of the regulation’s compliance schedule. (AWO) 

Response: The amendments proposed in the 15-day Notice that specifically impact 

vessel operators in the South Coast include disallowing the use of the Model Year + 5 

method for determining model year in the South Coast, adding a compliance extension 

for operators with sets of engines on multiple vessels required to comply with the in-use 

engine requirements in one of the first two years of the compliance schedule, and 

modifying the date for reporting compliance plans. Only the amendment to exclude the 

use of the Model Year + 5 method in the South Coast could be construed as having a 

negative impact on businesses. This modification prevents any delay in engine 

replacement emission reductions in the SCAQMD. See response to Comment A.1 

regarding the necessity of early reductions in the South Coast. 

4. Comment: FOE does not believe the “Engine Model Year +5” method to 

determine engine model year is desirable, despite its application being restricted 

to vessels with home ports outside the SCAQMD. FOE references below its 

previously stated reasons for opposition to the provision: 
71 

With respect to the regulation’s provision for Compliance 

Schedules and Determination of Engine Model year and its 

“Engine’s Model Year +5” method, we have reservations 

concerning the limited amount of pollution control that could trigger 

a compliance extension, thus potentially vitiating overall emission 

reductions. For example, an owner can achieve a 25 percent 

reduction in diesel particulate matter and a 9 percent increase in 

oxides of nitrogen for a net emissions reduction of 14 percent and 

thus have a legitimate emissions control strategy, entitling him or 

her to use the “Engine’s Model Year +5” method. In some 

instances, the election of this method can postpone compliance 

requirements two years. The overall benefits of this alternative 

compliance strategy seem questionable, and the strategy 

furthermore offers another way in which an owner or operator can 

extend his or her compliance timeline – timelines, which as 

referenced previously, have already been pushed back and 

prolonged considerably. We suggest that this alterative 

compliance option be altered to mandate emission reductions 

equivalent to those realizable from replacing existing engines with 

Tier 2 and 3 engines.“ (FOTE) 

Response: The “Engine Model Year + 5” method was included to encourage the 

development and use of diesel emission control strategies (DECS) for marine 

applications. While control technologies have been proven to reduce emissions of PM 

and NOx from land-based diesel-fueled engines, there is limited experience applying 

controls to marine engines. To date there are no ARB verified diesel emission control 

strategies (VDECS) for marine applications. Therefore, commercial harbor craft 

operators who employ this method do not have the assurances that accompany a 

verified strategy. However, this optional method provides an opportunity for DECS 

manufacturers to verify their systems. 

The minimum 25 percent emission reduction level was chosen to be consistent with a 

Level 1 VDECS. The requirement that there be no more than a 10 percent increase in 

NOx or PM is also consistent with the Level 1 VDECS requirements. The emission 

control alternatives available to a harbor craft owner or operator range from 

aftertreatment controls to engine modifications. These DECS and possible future 

VDECS could be used to help reduce emissions from other commercial harbor craft 

vessel types which are not subject to the in-use engine requirements, and could result 

in larger overall commercial harbor craft emission reductions. 

The commenter suggests that the method require emission reductions equivalent to 

replacing with a Tier 2 or Tier 3 engine. This modification would change this method 

into a compliance option, which is not the purpose of the method. Compliance Methods 

C2 and C3 already provide compliance options that allow the use of DECS. 
72 

B. Acceleration of Compliance Schedule for 1996-1999 Model Year Ferry 

Engines 

1. Comment: WETA suggests that CARB reconsider issuing restrictive timeframes 

and advancing timeframes for ferries for compliance when CARB doesn’t retain 

any responsibility for liability for CARB’s actions. The financial burden could 

have disastrous results especially when there is a state-wide call to increase the 

number of ferries for emergency response. CARB’s actions could potentially put 

ferry companies out of business. (WETA) 

Response: We are interpreting this comment to be in reference to the acceleration of 

the compliance schedule for 1996-1999 model year ferry Tier 0 engines such that all 

unregulated ferry engines are brought into compliance by the end of 2014. This 

acceleration only impacts ferries with homeports outside the SCAQMD. As documented 

in Appendix I, included as Attachment 5 of the 15-day Notice, staff completed a phone 

survey of known ferry operators in California and found only 4 out of 24 ferries operating 

outside the SCAQMD that would be impacted by this change. Based on this result, staff 

estimated that less than 10 ferries throughout the State would be impacted. ARB does 

not believe that the magnitude of this impact is consistent with the commenter’s 

conclusion that the financial burden would have disastrous results for the ferry industry. 

C. Vessel Owners or Operators with Multiple Vessels Requiring In-Use 

Engine Compliance in Either 2009 or 2010 

1. Comment: For an extension to be invoked there must be a “set” (2 or more) of 

engines on two or more vessels. Many vessels will have engines of varying ages 

and may not have a set of engines that needs to be addressed at the same time. 

Moreover, to take a vessel into dry dock to replace only one set of engines is 

cost prohibitive and will lead to a more expensive project in the long run. The 

Board should eliminate the requirement that there must be a set of engines on a 

vessel and allow extensions when an owner has to address two or more engines. 

Proposed draft only offers flexibility for vessels required to comply in 2009 and 

2010. However, the way in which the time tables are structured there will be 

other years where multiple vessels in a fleet will need to comply with the 

proposed regulations. In the Hornblower fleet, we have several years (2009, 

2010, 2011, 2012, 2013, and 2014) where multiple vessels/engines will need to 

comply with the propose regulations. Permit time extensions in any year where a 

vessel owner has to address two or more engines (regardless of vessel). 

(HORNBLOWER) 

Response: If this extension were provided to vessel owners required to bring two or 

more engines into compliance in the same year, regardless of whether they were on two 

or more vessels, it would apply in cases where there are multiple engines on a single 

vessel that were required to comply in the same year. Having multiple engines 

repowered on a vessel at the same time is more economical then staggering the 

repowers. While it involves a larger, single capital investment, only one dry dock time 
73 

period and one out-of-service time period is required rather than multiple events. This is 

a significantly different case than having to pull two different vessels out of service and 

put into dry dock in the same year. Additionally, there are a large number of vessels 

with twin propulsion engines of the same model year, and every one of these vessels 

would then be eligible for the extension. This would greatly increase the number of 

engines to which the extension would apply. See response to Comment C.2 below for 

additional discussion on multiple vessels with compliance dates in 2011 and beyond. 

2. Comment: The proposed modification allows more flexibility for a covered 

owner with multiple engines or two or more vessels with a compliance date of 

2011 or later. Under these circumstances the regulations would allow Blue & 

Gold a one-time extension of one year, upon the approval by the CARB 

Executive Officer. We request that CARB reconsider this part of the proposed 

modification and restructure it to be equivalent to the potential relief offered 

owners with a compliance date of 2009-2010 

In 2017 and 2018 Blue & Gold will need to replace five engines in each year. We 

are asking that the rule be modified to allow the CARB Executive Officer the 

latitude to approve a compliance extension plan that allows three to four years 

beyond the original compliance date. (BLUE AND GOLD) 

Response: Vessel fleet operators with engines having compliance dates of 2011 and 

beyond will have sufficient time to plan and execute regulatory compliance, compared to 

vessels which need to comply in the first two years of the compliance schedule. A 

vessel owner who needs to bring engines into compliance with the regulation in 2011 

will have up to three years to prepare and execute regulatory compliance. While this 

timeframe is short, it does allow the use of incentive funding if the operator is willing to 

bring the engine into compliance early. 

With compliance dates of 2017 and 2018, the commenter has sufficient time to 

formulate a compliance plan for these engines. There are multiple options for 

compliance, including rebuilding or retrofitting engines to meet Tier 2 standards prior to 

the Tier 3 effective date, submitting an ACE compliance plan that utilizes alternative 

emission reduction strategies which obtain equivalent or more emission benefits, and 

applying for incentive funding for early compliance. 

The extension was necessary for the first two years of the compliance schedule for a 

couple of reasons. For one, the first two years cover a wide range of engine model 

years (>1975 model year) compared to later compliance dates with engine model year 

ranges up to 10 years. A small number of fleets have a large number of 1975 and older 

engines on their vessels. These fleets will be heavily impacted in the first two years of 

the compliance schedule. Secondly, the timeframe does not allow for the use of 

incentive funding for early compliance, whereas compliance dates in later years do 

allow time for this. 
74 

3. Comment: Section 6(E)4b offers some operational and financial relief, we 

believe the E.O. should be granted greater flexibility when considering the length 

of an extension for those vessels having to comply after 2011, similar to that 

provided in section 6(E)4a. (RED AND WHITE) 

Response: We disagree with this comment for reasons provided in the response to 

Comment B.2. 

4. Comment: The proposed modification provides somewhat more flexibility for a 

covered owner with multiple engines on two or more vessels with a compliance 

date of 2011 or later. Such an owner can seek a one-time extension of one year, 

upon approval by the CARB Executive officer. PVA proposes that CARB 

reconsider this part of the proposed modification and restructure it to be 

equivalent to the potential relief afforded to covered owners with compliance 

dates of 2009-2010. PVA believes that there are a small number of vessel 

operators with multiple vessels and engines to be replaced in given years in 2011 

and beyond; PVA has asked those owners to identify themselves and 

characterize their fleets in their submissions pursuant to this 15-day review and 

comment. The capital and financial challenges facing them will be the same as 

those facing owners with compliance years of 2009-2010. The proposed rule 

should be modified to allow the CARB Executive Officer to approve a compliance 

extension plan that embraces as much as four years (not a single year) beyond 

the original compliance date . . . [a compliance extension plan] gives the owner 

with multiple vessels and multiple vessels with a compliance year of 2011 or 

beyond the chance to propose an acceptable method of “spreading out” the 

heavy capital costs. (PVA) 

Response: We disagree with this comment for reasons provided in the response to 

Comment B.2. 

5. Comment: FOE believes that providing a three- to four-year compliance 

extension for owners of multiple vessels who need to comply by 2009 or 2010 is 

not warranted . . . we again urge that ARB remain vigilant to ensure that the 

cumulative emissions impacts from compliance extensions are not significant and 

do not forestall expected public health benefits . . . If ARB finds that compliance 

extensions and exemptions are hindering regulatory objectives, the agency 

should scale back or eliminate those provisions, as needed. (FOTE) 

Response: The original proposal provides a one-year compliance extension for vessel 

owners or operators with sets of engines on multiple vessels requiring engine 

compliance in a single year. However, these initial compliance dates occur within two 

years of the final adoption of the regulation, leaving vessel owners or operators minimal 

time to plan for these expenses and no time to comply early with the help of incentive 

funding. There are at least two fleets with a large number of vessels with engines older 

than 1975 model year that would need to bring all of the engines on these vessels into 

compliance in the first two compliance years, 2009 and 2010. The modified compliance 
75 

extension approved by the Board for these vessels allows a phased compliance 

schedule, wherein the portion of the fleet required to comply in 2009 and 2010 would be 

brought into compliance over a period of up to four years, as long as all engines are 

brought into compliance by 2013. Because all engines would be in compliance by 

2013, this does not jeopardize the early reductions necessary in the South Coast to 

meet federal standards and has minimal impact on the expected health benefits. 

D. Reporting Requirements 

1. Comment: Covered owners of in-use harborcraft vessels must submit a report 

as to how they intend to comply. The proposed modification sets the due date 

for this report as February 28 of the year compliance is required. CARB needs to 

further clarify this reporting requirement for owners of multiple vessels with 

different compliance years. Is such an owner to submit a single report 

addressing the compliance plan for the entire fleet as of February 28 of the year 

of compliance for the first vessel? Or does that report cover only the vessel or 

vessels with a compliance date of that year, with subsequent reports required in 

later years when additional vessels must comply? (PVA) 

Response: We disagree that clarification is required in the regulatory text. The 

requirement is clear in the text. Vessel owners and operators may report a compliance 

plan for their entire fleet by February 28 of the year of the first compliance date, or they 

may choose to report for each engine in the year of its compliance date. Any revisions 

to the compliance plan will need to be reported by February 28 of the compliance year 

for the affected engine. ARB staff will work with operators during implementation to 

ensure they understand their reporting obligations. 

E. Appendix H: Estimated Ticket Price Increase for Ferry/Excursion 

Businesses 

1. Comment: The estimated ticket price increase calculation [for ferry/excursion 

businesses] is an interesting method to demonstrate the cost to the consumer for 

a non-funded state mandate. By way of an actual example, WETA will 

demonstrate that CARB’s estimate errors on the low side. It is important to note 

that WETA ferries, constructed to a 85% better than EPA Tier II (2007) standard 

are a method to reduce congestion and improve air quality; but, the increase in 

ticket prices tend to deter ridership; consequently, the air quality improvement 

benefits may be lost. State assistance to meet CARB’s emission reduction goals 

is required in order for the concept to be successful. Unfunded state mandates 

are not productive and do not set up the ferry operators for success. (WETA) 

Response: The estimated ticket price increase presented in the new Appendix H, 

included as Attachment 4 in the 15-day Notice, dealt with the costs to bring engines into 

compliance with the in-use engine regulation requirements. The commenter is 

addressing the cost to include BACT on new ferry propulsion engines. This was not the 

purpose of the analysis. The ticket price increase was estimated to range from 5 to 
76 

10 percent. This magnitude of increase will not deter ridership, so the air quality 

benefits will not be lost. This estimated increase does not include the added benefit of 

the possible use of public incentive funds if engines are brought into compliance earlier 

than required. These funding sources are discussed in Chapters VI and VIII of the 

Technical Support Document. 

WETA is building a new ferry that is 85 percent cleaner than Tier 2 standards, 

independent of the ARB requirements. The ARB requirements do not become effective 

until January 1, 2009. Since WETA is already required to provide additional emission 

controls for the new ferry propulsion engines, it is not appropriate to assign the 

additional cost for these controls to the ARB regulation. 

2. Comment: One must consider emission reduction equipment (SCR) catalyst 

replacement cycles, maintenance of the additional system, etc., and CARB’s 

estimate of 5-10% just doesn’t compute. . . WETA suggests that CARB reevaluate their financial estimates. (WETA) 

Response: The commenter is referring to the cost of applying BACT for new ferry 

engines. The estimated ticket price increase presented in Appendix H dealt with the 

costs to bring in-use engines into compliance with the regulation requirements, not the 

cost of applying BACT for new ferry propulsion engines. As discussed in the response 

to Comment E.2, WETA is already required to provide additional emission controls to 

the ferry propulsion engines, independent of the ARB regulation. 

3. Comment: The proposed amortization of costs does not account for the down 

time needed to make required modifications to the vessels. (HORNBLOWER) 

Response: This is true. As stated in Chapter VIII of the Technical Support Document, 

“Staff has not assigned an out-of-service cost for the regulation. We assumed that 

engine replacement for excursion vessels would occur during their low-use season and 

not have an impact on revenue. For transit ferries, tugboats, and towboats, we 

assumed that most companies have sufficient excess capacity to schedule engine 

replacements so as to maintain the current level of service and minimize the “out-ofservice” cost. An additional factor we considered is that companies currently, as a 

normal business practice, take the vessels out of service every five years for an engine 

overhaul. We believe that the out-of-service time for a repower would replace the outof-service time for an overhaul.” Consistent with the previous economic analysis, down 

time, or out-of-service time, was not included in the economic analysis. 

4. Comment: The owner will experience several other costs associated with the 

down time including laying off vessel staff during the period (approximately 6-8 

staff members per vessel); indirect effects on suppliers and vendors who depend 

on the activity of the vessel to generate demand for their products; lost income to 

the landlords (many of which are public enterprise agencies such as Port 

authorities) as many excursion vessels are on a percentage lease provision (if 
77 

the vessel does not operate then it does not generate income to share with the 

underlying landlord). (HORNBLOWER) 

Response: See response to Comment E.3 regarding out-of-service costs. As 

discussed in the response to Comment E.3, there is routine maintenance that also 

requires out-of-service time. These out-of-service times could be planned for a low-use 

season or to occur at the same time as a planned out-of-service time. It would be 

expected that operators will plan this out-of-service time for the low-use season. 

5. Comment: Staff (cost) assumptions are based on 2004 costs. Obviously costs 

have changed since 2004. As mentioned in the November hearing, as more and 

more vessels are pressed into the shipyards for work, prices will rise in the 

shipyards due to availability of time slots and schedules of workers. It was also 

pointed out by the engine manufacturers that as demand increases for available 

engines, supplies will contract leading to inevitable price increases for available 

products. (HORNBLOWER) 

Response: As stated in Chapter VIII of the Technical Support Document, costs are 

presented in 2006 dollars. Use of 2006 dollars would not impact the percentage 

increase in ticket price that was calculated. The commenter suggests that costs will 

increase due to increased demand for parts and services. However, ARB has 

organized compliance dates so as not to overtax the statewide capacity for this type of 

work, and would not expect this to occur. 

6. Comment: Amortization is not an accurate means of looking at the ability of 

owners to implement equipment improvements. The underlying premise of the 

analysis is the owner can somehow finance the improvements over time. Ticket 

revenue from excursion operations is seasonal and driven by the economy. 

During poor weather months the number of clients may drop as much as 50% 

which will affect total revenue. Similarly when the economy is in a recession, or 

gas prices spike limiting discretionary travel, the number of clients will drop 

accordingly. (HORNBLOWER) 

Response: We disagree with this comment. Staff assumed a typical interest rate and 

period of time to amortize the costs assuming normal business practice. ARB does not 

believe that increasing ticket prices by five to ten percent will significantly reduce ticket 

sales of this recreation. The ticket sales assumptions in the analysis were an overall 

yearly average, not a seasonal maximum. 

7. Comment: Staff assumes the owner can simply raise ticket prices and gain 

additional revenue. This assumption does not reflect market reality. Increased 

ticket prices will force the customer to look for more economical ways of access 

the water, driving business away from excursion vessels to less expensive 

resources. Staff analysis makes a static revenue assumption that does not 

reflect the reality of revenue flows in small businesses. (HORNBLOWER) 
78 

Response: Given the history of excursion vessel activity in California, the Board does 

not believe that a five- to ten-percent increase in ticket price would deter the public from 

utilizing this service. See also response to Comment D.6. 

8. Comment: Staff should re-evaluate the economic impact of the proposed 

regulations on vessel owners, and develop measures to mitigate the potential 

devastation to many small business owners throughout the State. Possible 

measures could include: 

a. Revise the eligibility guidelines of various incentive grants (i.e., Carl Moyer, 

Prob. 1B, etc.) of the Board to provide a necessary stream of revenue to 

achieve the air quality goals. 

b. Provide low or no interest loans to vessel owners so that amortization can 

actually take place with ticket revenues. 

c. Allow adjustment in implementation dates for financial hardship. 

(HORNBLOWER) 

Response: Staff has already conducted the economic impact analysis using the best 

available data. As discussed in the Staff Report Technical Support Document 

(Chapter VIII), ARB staff analyzed the potential impacts of regulation compliance on 

affected tugboat and towboat businesses and estimated that the average impact on 

businesses’ return on equity (ROE) was a decrease of 3.6 percent and 0.5 percent, 

respectively. 

The regulation has not developed further measures to mitigate the cost to small 

business owners because we believe there are sufficient incentive funding opportunities 

to help mitigate costs for those with compliance dates after the first two years. 

Compliance dates within the first two years do not allow sufficient time to obtain 

incentive funding for early compliance. 

For those cases where compliance is required for sets of engines on multiple vessels in 

one of the first two compliance years, a 15-day change has been made to the original 

regulation. The original proposal provided a one-year compliance extension for vessel 

owners or operators with multiple vessels requiring engine compliance in a single year. 

Based on Board direction at the November Hearing, staff made changes in the 15-day 

Notice to provide an extension to allow a phased compliance schedule for owners and 

operators with sets of engines on multiple vessels requiring compliance in either 2009 

or 2010. The phased compliance schedule would require that a portion of the fleet be 

brought into compliance each year and that all engines be brought into compliance by 

the end of 2013. This would allow up to four years for the engines to be brought into 

compliance but would not jeopardize the early reductions necessary in the South Coast 

or the rest of California. 

Finally, a revision in the eligibility guidelines of the various incentive programs is outside 

the scope of this rulemaking and would affect many other control programs. These 

guidelines were decided by the Board in a separate proceeding. 
79 

The legislature has not authorized funding for low or no interest loans for vessel owners. 

The legislature would need to authorized these funds and direct them to ARB for 

administration. 

There are no provisions for adjusting compliance dates for financial hardship because 

the determination of economic need is very subjective in nature, which makes equitable 

evaluation difficult. 

F. Appendix G: Assumptions for Estimating Greenhouse Gas 

Emissions from Commercial Harbor Craft Operating in California 

1. Comment: To use private ferry vessel characteristics as a generic model for all 

vessels in California inherently over estimates the amounts of CO2 emission 

projected. Private ferry operations are: 

Scheduled services from one point to another point on New York Harbor, 

Vessels run every 15 to 20 minutes with little or no down time, 

Operations that produce a large number of annual hours. 

This is inconsistent with typical excursion, tug and tow operations in California 

which have low vessel annual hours, not scheduled on a daily time schedule, 

and have large amounts of down time between operations. Staff should adjust 

CO2 calculations for vessels that do not have ferry operational characteristics, 

such as crew, tug and excursion vessels. (HORNBLOWER) 

Response: The emission factor used was based on the only available source for 

commercial harbor craft CO2 emissions, the New York private ferry fleet emission 

study. However, this emission factor is also consistent with the ARB OFFROAD Model 

factor used to estimate emissions from off-road equipment. The agreement between 

the factor from the ferry fleet and the general factor for off-road equipment in the offroad model indicates that the factor can be used for a more broad range of applications, 

such as the commercial harbor craft fleet. 

G. Miscellaneous 

1. Comment: To achieve more certainty in the legislation, in various places in the 

text, the word “may” needs to be changed to “shall”. (HORNBLOWER) (2) 

Response: We disagree with the comment. In cases where there are specified 

conditions that must be met, once the conditions have been met, the verb “may” 

indicates a non-discretionary result and the indicated action will be taken. For example, 

the E.O. may grant a one-year extension for No Suitable Engine Replacement for 

Harbor Craft, “only if the person demonstrates to the E.O.’s written satisfaction that 

there is no suitable Tier 2-certified or Tier 3-certified replacement engine available 

anywhere that can be used in the person’s specific vessel, and the person cannot 

otherwise meet the requirements . . .” (subsection (e)(6)(E)(2)) In this example, once 

the specified conditions have been met, “may” indicates a non-discretionary result, and 

the compliance extension will be granted. 
80 

2. Comment: 93118.5.e.6.C.3.b. (Method C3) Mentions that DECS can be 

implemented for meeting tier 3 standards but appears to not mention that simply 

meeting tier 2 might be appropriate for some engines prior to EPA tier 3 being 

available. (PPS) 

Response: We disagree with the comment. The referenced text is specifically dealing 

with compliance requirements after Tier 4 engine emission standards have come into 

effect. In (e)(6)(C)(2), Compliance Method C2 explains that compliance can be met by 

meeting Tier 2 engine emission standards prior to the date when Tier 3 marine engine 

emission standards come into effect. 

3. Comment: There is a verb omitted at the bottom of page A-41 where the current 

text reads, “Upon written request, the E.O. grant to the person . . .” (PVA) 

4. Comment: There is a typo – on page A41, the text should read “The E.O. MAY

grant . . .” (HORNBLOWER) 

Response: We agree with these comments. To fix this typographical error, ARB 

added the word “may” so the text reads “the E.O. may grant”.