United States Environmental Protection Agency, Region 9
Air Division

Technical Support Document
for

EPA’s Notice of Proposed Rulemaking
for the

California State Implementation Plan

South Coast Air Quality Management District

Rule 2202

, O n

- Road Motor Vehicle Mitigation Options

Prepared by: Idalia P é rez October 2015Page 2 of 8 Table of Contents

I. Description of SIP submittal

................................ ................................ ............................... 3
II. Rule Summary

................................ ................................ ................................ .................... 3
III. Effect on Emissions

................................ ................................ ................................ ............ 4
IV. Criteria for Evaluation

................................ ................................ ................................ ........ 4
V. Rule Evaluation

................................ ................................ ................................ ................... 7
VI. Rule Deficiency

................................ ................................ ................................ .................. 8
VII. Propo sed Action

................................ ................................ ................................ .................. 8Page 3 of 8 I. Description of SIP submittal

This Technical Support Document (TSD) addresses SCAQMD Rule 2202

, On

- Road Motor Vehicle Mitigation Options :

• A dopted : October 9

, 199 8

.

• Submitted for inclusion in the State Implementation Plan (SIP) : June 3

, 199 9

.

• Deemed complete by operation of law : December 3

, 1999

. There are no previous versions of Rule 2202 in the SIP, although the SCAQMD adopted earlier
version s of this rule on 12/08/95

, 03/08/96 and 11/08/96, and CARB submitted it to us on 11/26/96, 11/26/96 and 12/19/97, respectively. While we can act on only the most recently submitted version, we have r eviewed materials provided with previous submittals. In addition,
Rule 2202 has been amended three times ( 01/11/02; 02/06/04; 06/06/14 ) since the 1 0/09/9 8 version, but these amendments have not been submitted to EPA.

II. Rule Summary

Rule 2202 requires employers w ith 250 or more full or part

- time employees at a worksite to reduce mobile VOC, NO x and CO emissions generat ed from employee commutes. The r ule provides employers a menu of options to reduce emissions.

Section ( d ) of the rule includes definiti ons.

Section (e) of the rule requires employers to register with the District and includes the equation

use d to calculate the annual emission reduction target (ERT). The ERT depends on the number of employees, the year of the employer registration and the location of the worksite.

Section (f) of the rule lists the options available for generating emission redu ction credits that employers can use to meet their ERT. These option include:

- Mobile Source Emission Reduction Credits (MSERCs) from Regulation XVI;

- Emission Reduction Credits (ERC) from Stationary Sources in accordance with Regulation XIII;

- Air Quality Investment Program 1 fees;

- Other emission reduction strategies that the Executive Office approves as generating “real, quantifiable, enforceable, and surplus emission reductions.”

Section (f) of the rule also lists strategies that employers may elect to ge nerate Vehicle Trip Emission Credits (VTECs) which can be applie d towards their ERT. These strategies include:

- Employee commute reductions that occur during the peak window in accordance with Rule 2202 Implementation Guidelines;

- Employee commute reduction s that occur outside of the peak window or from non

commute vehicle usage;

- Alternate fuel vehicle usage;

1 Although not noted in Rule 2202, t he Air Quality Investment Program (AQIP) is a program regulated by SCAQMD Rule 2501, which was adopted on May 9, 1997. Rule 2501 creates a reserve of emission reductions that is intended to be used to provide a voluntary alternative compliance option to sources subject to specific Distric t rules.Page 4 of 8 - Vehicle Miles Traveled (VMT) Reduction Programs approved by the Executive Officer;

- Parking Cash

- Out programs

. Section (h) has additional provisions that apply to the emission credit strategies. They include the ability for employers to trade VTEC s

.

Section (i) describes program administration requirements including details of employer registrations, timing for employers to surrender emission credits and the process of AQIP monies
release.

Sections (j) and (k) of the rule allow for delegation of the program to local governments.

Section (l) stipulates the employers that are exempt from the rule.

Section (m) includes the emission factors used in calculations for this rule, and states that they
are based on EMFAC 2 and BURDEN 7F 3 , and are to be revi sed when CARB revises them.

III. E ffect on E missions

The 1999 submittal does not assign specific emission reductions to implementation of Rule 2202

. At this time, we have not credit ed emission reductions from this rule in an approved SIP. ( See

, for example

, Final Technical Support Document and Response to Comments, Final Rulemaking Action on the South Coast 2007 AQMP for PM2.5 and the South Coast Portions of the Revised 2007 State Strategy, US EPA Region 9, September 30, 2011, Appendix B , associated with 76 F R 69928, (November 9, 2011) ; and Technical Support Document for the Final Rulemaking Action
on the South Coast 2007 8

- Hour Ozone Plan and the South Coast Portions of the Revised 2007 State Strategy, U.S. EPA Region 9, December 2011, Appendix B , associated with 77 FR 123674 (March 1, 2012) .) Lastly, w e are not aware of a SCAQMD plan submitted to EPA that relies on emission reductions from this rule to fulfill a CAA requirement

.

IV. Criteria for Evaluation

EPA evaluation criteria that are generally applicable t o Rule 2202 include the following.

SIP Revisions

SIP rules must not interfere with applicable requirements concerning attainment and reasonable further progress or other CAA requirements (see CAA section 110(l)), and must not modify
certain SIP control re quirements in nonattainment areas without ensuring equivalent or greater emissions reductions (see CAA section 193).

2 The EMFAC emissions model is developed and used by ARB to assess emissions from on

- road vehicles including cars, trucks, and buses in California

3 The BURDEN model is used to calculate regional (area

- specific) emissions in tons/day using emissi on factors that have been corrected for ambient conditions and speeds combined with vehicle activity

. See “EMFAC2007 Calculating emission inventories for vehicles in California” available at http://www.arb.ca.gov/msei/onroad/downloads/docs/user_guide_emfac 2007.pdfPage 5 of 8 Rule Stringency

SIP rules must also require Reasonably Available Control Technology (RACT) for each category of sources covered by a Control Techniques Guidelines (CTG) document as well as each major
source of VOCs and NO x in ozone nonattainment areas classified as moderate or above (see CAA section 182(b)(2) and 182(f)). The SCAQMD regulates an ozone nonattainment area
classified as ex treme for the 2008 and 1997 8

- hour ozone standard s (40 CFR 51. 305 ). Rule
2202 does not concern emissions from stationary sources , thus it does not have to implement
RACT.

SIP rules must implement Reasonably Available Control Measures (RACM), including Reasonably Available Control Technology (RACT), in moderate PM 2.5 nonattainment areas (see CAA sections 172(c)(1) and 189(a)(1)(C)). The SCAQMD regulates a PM 2.5 nonattainment area
classified as moderate for the 24

- hour and annual PM 2.5 standard (40 CFR 51

. 305 ). A RACM evaluation is generally performed in context of a broader plan. In addition, SCAQMD has discretion to require employers “to implement programs to reduce work

- related vehicle trips and miles travelled by employees.” (see CAA section 182(d)( 1)(B))

Enforceability

CAA section 110(a)(2)(A) requires that regulations submitted to EPA for approval into a SIP must be clear and legally enforceable.

Voluntary and Economic Incentive Programs

T he following guidance documents provide EPA’s interpretation of the CAA requirements that apply to SIP submittals that rely on discretionary economic incentive programs (EIPs) and other nontraditional emission reduction programs for emission reduction credit

. T hese guidance
documents are non

- b inding and do not represent final agency action.

o “ Guidance on Incorporating Voluntary Mobile Source Emission Reduction Programs in State Implementation Plans (SIPs),” Richard D. Wilson, Acting Assistant Administrator for Air and Radiation, October 24, 1997 [ 1997 VMEP]

.
o “Improving Air Quality with Economic Incentive Programs” January 2001 (EPA

- 452/R

- 01

- 001) [ 2001 EIP Guidance]

.
o “Guidance on SIP Credits for Emission Reductions from Electric

- Sector Energy Efficiency
and Renewab l e Energy Measures,” Brian McLean, Office of Atmospheric Programs, and Steve Page, OAQPS, August 5, 2004 [ 2004 Electric

- Sector Guidance]

.
o “Incorporating Emerging and Voluntary M easure in a State Implementation Plan (SIP),” Stephen D. Page, OAQPS, October 4, 2004 [ 2004 Emerging and Voluntary Measures
Guidance ]

.
o “Guidance on Incorporating Bundled Measures in a State Implementation Plan

, ” Stephen D. Page, OAQPS , and Margo Oge, OTAQ, August 16, 2005 [ 2005 Bundled Measure s Guidance]

.Page 6 of 8 o “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal Implementation Plans

, ” July 2012 (EPA

- 456/D

- 12

- 001a) [ 2012 EE/RE Guidance]

.
o “Diesel Retrofits: Quantifying and Using Their Emission Benefits in SIPs and Conformity:
Guidance for State and Local Air and Transportation Agencies,” February 2014 (EPA

- 420

- B

- 14

- 007) [ 2014 Diesel Retrofit s Guidance]

. The CAA explicitly provides for the use of economic incentives as one tool for states to use to achieve attainment of the NAAQS. See, e.g., CAA s ection 110(a)(2)(A) (requiring that each SIP “include enforceable emission limitations and other control measures, means, or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance, as may be necessary or appropriate to meet the applicable requirements of [the Act]”); see also section 172(c)(6), 183(e)(4). EIPs
use market

- based strategies to encourage the reduction of emissions from stationary, area, an d/or mobile sources in an efficient manner. EPA has promulgated regulations for statutory EIPs required under section 182(g) of the Act and has issued guidance for discretionary EIPs. 4 See 59 FR 16690 (April 7, 1994) (codified at 40 CFR part 51, subpart U) and 2001 EIP Guidance

. Where a State relies upon a discretionary EIP in a SIP submission, EPA evaluates the programmatic elements of the EIP to determine whether the resulting emission red uctions are quantifiable, surplus, enforceable and permanent

. See 2001 EIP Guidance at Section 4.1. These four fundamental “integrity elements,” which apply to all EIPs and other incentive/voluntary measures relied on for SIP purposes, are designed to ensu re that such programs and measures satisfy the applicable requirements of the Act. See id

.

EPA has generally defined the four fundamental integrity elements for discretionary EIPs and other incentive/voluntary measures as follows:

1. Quantifiable: emissions and emission reductions are quantifiable if they can be measured in a manner that is reliable and replicable by different users.
2. Surplus: Emission reductions are surplus if they are not otherwise required by or assumed in
a SIP

- related program ( e.g., an at tainment or reasonable further progress plan or a transportation conformity demonstration), any other adopted State air quality program, a consent decree, or a federal rule designed to reduce emission of a criteria pollutant or its precursors ( e.g., a new source performance standard or federal mobile source requirement); Additionally, the emission reductions are “surplus” only for the remaining useful life of the vehicle, engine, or equipment being replaced.
3. Enforceable: emission reductions and other requ ired actions are enforceable if they are independently verifiable; program violations are defined; those liable can be identified; the State and EPA may apply penalties and secure appropriate corrective action where applicable; citizens have access to emis sions

- related information obtained from participating

sources; citizens may file suit against a responsible entity for violations; and the required reductions/actions are practicably enforceable consistent with EPA guidance on practical enforceability.

4 A “discretionary economic incentive program” is “any EIP submitted to the EPA as an implementation plan revision for purposes other than to comply with the statutory requirements of sections 182(g)(3), 182(g)(5), 187(d)(3), or 187(g) of the Act. ” 40 CFR § 51.491.Page 7 of 8 4. Per manent: emission reductions are permanent if the State and EPA can ensure that the reductions occur for as long as they are relied upon in the SIP ; the time period that the emission reductions are used in the SIP can be no longer than the remaining useful life of the retrofitted or replaced engine, vehicle, or equipment

.

See 2001 EIP Guidance at Section 4.1, 1997 VMEP at pp. 6

- 7, 2004 Emerging and Voluntary Measures Policy at pp. 3

- 4 and 2014 Diesel Retrofit s Guidance at p. 11

.

V. Rule Evaluation

Our evaluation below focusses on the enforceability criteria. Because we identify some significant enforceability deficiencies that are too significant to approve the rule, we have not attempted to ensure that we have identified all other approvability is sues. Also because of the magnitude of these enforceability deficiencies , we are not providing a detailed analysis of the other criteria (e.g., stringency) listed above.

Enforceability

EPA has laid out enforceability criteria in various guidance documents . (see “Review of State Implementation Plans and Revisions for Enforceability and Legal Sufficiency,” from J. Craig Potter, Thomas L. Adams Jr., Francis S. Blake, September 23, 1987 and “Guidance an Enforceability Requirements for Limiting Potential to Emi t through SIP and §112 Rules and General Permits” from Kathie A. Stein, January 25, 1995.) Some of the criteria essential in practically enforceable rules include clear statements of applicability, specificity of the standard that must be met, and inclusio n of record keeping requirements.

Rule 2202 has clear applicability (employers with more than 250 employees), specificity of the standard that must be met (ERT calculated based on equation in the rule), and includes some clear recordkeeping requirements ( a nnual registration requirements ). However, several of the emission reduction options available to comply with the ERT are not adequately enforceable

.

The rule has four options for on

- road vehicle mitigation (Section (f)). The first option relies on MSERCs generated through Regulation XVI, which is not currently SIP

- approved , and hence implementation of its requirements are not federally enforceable. Similarly, t he third option is AQIP, a program regulated by SCAQMD Rule 2501 which has not been appro ved into the SIP so it is also not federally enforceable

. The last option for on

- road vehicle mitigation is any other strategy approved by the Executive Officer. The rule states that “t he Executive Officer shall not approve an alternative emission reductio n program unless it is consistent with other District regulations and Governing Board policies, and shall consider guidelines established by the California Air Resources Board and the Environmental Protection Agency” (Section (f)(4)) but it does not requir e EPA approval of such alternate emission reductions strategies and it does not
include specific, objective and replicable criteria that identify how compliance with thisPage 8 of 8 requirement w ill be determined

. Thus, it is inconsistent with long

- standing national policy on
executive officer discretion. 5

The rule also allows employers to implement VMT r eduction p rograms to generate VTECs that can be applied towards their ERT

. (Section (g)(4)) These programs are approved by the
Executive Officer and the rule does not require EPA approval of such alternate emission reductions strategies. The employer is required to demonstrate that the emission reductions
achieved are real, quantifiable, enforceable, and surplus , but the rule does not include specific, objective and replicable criteria that identify how compliance with this requirement will be
determined

. Here too, the rule is inconsistent with national policy on executive officer discretion.

VI. Rule Deficiency

To summarize the discussion above, several significant SIP deficiencies in t he October 9, 1998
version of Rule 2202 are described below. We have not attempted to ensure that these are the only deficiencies:

- The rule relies on Regulation XVI, which is not currently in the SIP. (Section (f)(1))

- The rule relies on AQIP (Rule 2501), which is not currently in the SIP. (Section (f)(3))

- The rule relies on emission reduction strategies approved on a case

- by

- case basis by the Executive Officer. (Section (f)( 4 ))

- The rule relies on VMT reduction programs approved on a c ase

- by

- case basis by the Executive Officer. (Section (g)(4))

VII. Proposed Action

We recommend a full disapproval of SCAQMD Rule 2202.

This disapproval does not have any sanctions or FIP implications under CAA section 179(a)
because Rule 2202 emission reductions have not been credited in an SIP, and the rule was not submitted to address a requirement of part D, title I of the Act or in response to a finding of substantial inadequacy as described in CAA section 110(k)(5) ( i.e., a “SIP Call”).

5 See “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook) and “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).