State of California

AIR RESOURCES BOARD

Addendum to the Final Statement of Reasons for Rule making

PUBLIC HEARING TO CONSIDER THE AMENDMENTS TO THE CU RRENT

SMALL OFF-ROAD ENGINES REGULATIONS

Public Hearing Date: November 21, 2008

Agenda Item No.: 08-10-03 Addendum Prepared: February 24, 2010

I. BACKGROUND

On September 8, 2009, the California Air Resources Board (ARB) staff submitted the Final Statement of Reasons (FSOR), a Final Regu lation Order containing proposed amendments to the Small Off-Road Engine (S ORE) regulations, and the incorporated SORE test procedures to the Office of Administrative Law (OAL) for review and approval.

On October 20, 2009, OAL disapproved the proposed a mended regulations because the modifications to the regulations did no t comply with the California Administrative Procedures Act (APA) required standa rds for clarity and consistency, and ARB did not comply with the APA pr ocedural requirements for FSOR content. Although staff did not agree with al l of OAL’s determinations,

staff has addressed these concerns in this addendum

.

A. Failure to comply with the clarity standard.

In its disapproval, OAL noted that during the publi c comment period and at the hearing, manufacturer representatives indicated tha t the zero emission equipment (ZEE) credit provisions proposed in secti on 2508(f)(7) were unclear and in need of revision. Staff acknowledged the la ck of specificity and necessity for further clarifications at the hearing and in th e FSOR. The clarity standard specified in California Government Code Section 113 49(c) requires that regulations be written so that they will be underst ood by those directly affected by them. Accordingly, OAL did not approve the unclear and unfinished ZEE credit program regulations for codification into the Calif ornia Code of Regulations (CCR).

B. Failure to comply with the consistency standard

.

OAL also noted that the amendment proposed in secti on 2403(i) did not comply with the consistency standard specified in Governme nt Code section 11340.5(a). Specifically, proposed section 2403(i) granted the Executive Officer the discretion to make technical changes to the incorporated test procedures in order to2

enhance alignment with similar federal regulations promulgated after October 3, 2008. Because of this limited authorization, OAL d id not approve this

amendment.

C. Failure to follow procedural requirements of AP A.

Lastly, OAL noted that ARB’s FSOR contained inadequ ate summaries and responses to some of the comments as required under Government Code section 11346.9(a)(3). OAL determined that the FSO R did not adequately summarize or respond to the following comments.

1. The Outdoor Power Equipment Institute (OPEI) c ommented that: “under ARB’s credit life proposal, ARB’s ABT [Avera ge Banking and Trading] credit program will not be consistent with the federal program (which does not impose a credit life on Phase 3 credits). Conseque ntly, manufacturers would have to develop and implement unique ARB vs. EPA AB T-compliance strategies. This could require separate product lines for the C alifornia market. In turn, this will add cost-inefficiencies and higher prices for California consumers with no

environmental benefits.”

2. The Engine Manufacturers Association (EMA) com mented as follows: “Agency concerns regarding delayed implementation o f product meeting the latest standard level due to credits banked from pr ior standard levels should be segregated from concerns regarding credits generate d from products that emit at lower levels than the current standard requirements . EMA has proposed that ARB pursue an approach similar to EPA to segregate credits generated by manufacturers when building products to meet prior standard requirements from credit potential for products meeting the current s tringent ARB standard levels.”

In addition, OAL noted that there were comments to which the responses did not address the substance of the comments on the ground s of timeliness of the

comments’ submission. This Addendum to the FSOR fo r the 2008 Amendments to the SORE Regulations lists, describes, and provi des reasoning for the changes that ARB made to the FSOR, and the Final Re gulation Order. Many of these changes were made in response to concerns rai sed by OAL, as well as typographical errors and oversights subsequently di scovered. ARB is submitting

this addendum to the FSOR for insertion in OAL File Number 2009-0908-03S.

II. ADDITIONAL MODIFICATIONS

To address OAL’s concerns, staff made clarifying re visions, developed collaboratively with manufacturers, to the ZEE cred it program regulations, removed adopted language for allowing Executive Off icer discretion in making technical amendments to the test procedures, and re vised responses to comments received in the 45-day public comment peri od.3

In order to develop more refined ZEE credit program provisions, staff held several conference calls with OPEI, EMA and equipme nt manufacturer Stihl. On November 17, 2009, staff held a workshop to present its proposal for amending the ZEE credit program regulations. One month afte r the workshop, staff posted a draft of the proposed ZEE credit program modifica tions to the SORE regulations. After addressing additional concerns from manufacturers, staff published the “Notice of Public Availability of Mod ified Text” on February 4, 2010.

Listserve notices were also sent out on ARB’s MSPRO G and ORSPARK electronic mailing lists, and Board hearing comment ers were individually provided with the Notice, as well. The comment per iod ended on February 19, 2010.

The Notice of Public Availability of Modified Text included the following modifications, and the Final Statement of Reasons w as amended as follows:

A. Modifications to Regulatory Text of California C ode of Regulations, Title 13, Chapter 9, Article 1, sections 2401, 2403, 2404 , 2405, 2406, 2408, and the

addition of section 2408.1.

1. Section 2401 was modified by adding definitions of “eight-hour workday” in order to establish a basis of compariso n of ZEE operation with that of conventional equipment; “professional level” to est ablish a basis of equipment performance comparisons; “standard battery package” to establish a basis for quantifying battery capacity delivered in a one-hou r period; “zero-emission equipment credits” to identify emission reductions achievable by ZEE; and, “zeroemission equipment engine family” to identify speci fic ZEE that generate credits.

2. Section 2403(b)(3) was modified by adding “subsecti on 2403(b)” to clarify the existing citation for subsection (2)(B) , adding “.1” to the existing citation for section 2408 to correctly indicate the new sect ion, and deleting “above” to eliminate redundancy.

3. Section 2403(i) was removed per OAL’s concern t hat it did not comply with the Government Code’s consistency stand ard and, in effect, would allow the Executive Officer regulatory authority ou tside of the APA process.

4. Sections 2404(m)(1) and (2) were added to pro vide manufacturers the option of adding labels to ZEE that meet profe ssional-level ZEE requirements. The labels may encourage and facilit ate environmentally conscious commercial consumers to purchase ZEE over conventional equipment. Staff made this label optional because some of the small-sized equipment lack available space due to the other lab eling requirements.

5. Section 2405(h)(1) was added to ensure that w arranties for ZEE, including batteries and battery chargers, would be warranted against defects for4

at least two years. Although the ZEE credit progr am is optional, staff believes that the equipment needs to remain usable for the s ame amount of time as conventional equipment. The consumer purchasing th e product also needs protection from defective products.

6. Section 2405(h)(2) was added to explicitly ind icate the allowance for equipment manufacturers to make contractual agr eements with battery manufacturers to provide warranty coverage for the batteries. However, the equipment manufacturer is ultimately responsible fo r covering all of the consumer’s warranty needs. This section was added at the specific request of the manufacturers, even though manufacturers could have done this on their

own.

7. Section 2406(b)(2) was modified by changing “ call” to “calls” to make the sentence grammatically correct.

8. Section 2408(f)(7) was deleted. Staff introduc ed provisions for a more defined ZEE credit program in section 2408.1.

9. Section 2408(i)(3) was modified by correcting the mailing address for the end-of-year and final reports.

10. Section 2408.1(a) was added as part of the col laborative revisions developed with manufacturers to the ZEE credit prog ram. As with the certification emission credit program, the credit p rogram for ZEE is a voluntary program. Staff is proposing that ZEE may begin to generate ZEE credits with the 2010 model year, and ZEE credits may be used to off set negative credits from any SORE family beginning with the 2011 model year. However, any equipment that receives funding by any emission reduction pro gram funded by ARB (e.g., Assembly Bill 118 funding), or a manufacturer parti cipating in the Blue Sky program, may not generate ZEE credits. Accordingly , staff is adding language to address the applicability issue.

11. Section 2408.1(b)(1)was added to set a startin g point for the ZEE credit program. Basically, ZEE credits may be used to offset exhaust emissions for “carryover engine families” or engine families that meet the current tier 3

emission standards.

12. Section 2408.1(b)(2) was added so that only ZEE sol d and used in California would generate ZEE credits.

13. Section 2408.1(b)(3) was added to allow manufacture rs that find it difficult to separate out exact sales of an engine family in California, to use their entire production of that engine family when calcul ating the usage of ZEE credits. This option is only allowed for the usage of credit s, and not for the generation of

credits.5

14. Section 2408.1(b)(4) was added as a requirem ent that manufacturers that wish to generate ZEE credits mus t certify the ZEE and the ZEE engine family would obtain a Family Emission Li mit (FEL) of zero grams per

kilowatt-hour.

15. Section 2408.1(b)(4)(A) was added to clarify t hat ZEE credits may be used for averaging, banking or trading, or a com bination of these three

actions.

16. Section 2408.1(b)(4)(B) was added to set the durability requirement at the maximum durability period to ensure that onl y higher durability professional-level equipment can generate ZEE credi ts. This is meant to encourage new technology that may not yet be in pro duction. The durability periods would be different for each engine displace ment category. The displacement designation would correspond to the di splacement of the engine in the conventional equipment.

17. Section 2408.1(b)(4)(C) was added to allow a r educed ZEE durability requirement with a corresponding reducti on in credit generation. A ZEE certified at the lower durability level may gen erate only seventy-five percent of the ZEE credits that the engine family would hav e generated at the normal durability period. To generate reduced ZEE credits , the engine family must meet a minimum durability period of 225 hours for engine s with a displacement under or equal to 80cc or 375 hours for engines with disp lacement greater than 80 cubic centimeters (cc) and less than 225cc. This p rovision would be allowed through the 2012 model year. This section was adde d in response to comments made at the board hearing requesting “some interim period of time for equipment that may not entirely meet the proposed performance standards.”

18. Section 2408.1(b)(4)(D) was added to state the minimum professional-level requirements. Conventional prof essional-level lawn and garden equipment are generally expected to provide one hour of continuous use before refueling is required. A similar one-hour o perating period expectation will apply to professional-level ZEE. However, because current battery technology does not enable a single battery to power equipment constantly for one hour, staff is allowing up to four batteries to be used. If multiple batteries are necessary to meet this requirement, they must be pr ovided with the equipment. Minimum specifications are stated in Table 1 of thi s section. Additional requirements are also included for durability testi ng and minimum battery durability.

19. Section 2408.1(b)(4)(E) was added to clarify the re quirement that enough batteries be provided to the ultimate purcha ser to allow for one hour of continuous operation.6

20. Section 2408.1(b)(4)(F) was added to require manufa cturers to demonstrate as part of the certification process, t hat a commercial operator could use the equipment through a typical “8-hour” workda y without difficulty. The manufacturer must show that this is possible with t he limitations of the battery charging and recharging times.

21. Section 2408.1(b)(4)(G) was added to clarify t hat manufacturers must demonstrate compliance with the use of ZEE cre dits within 270 days after the end of the model year.

22. Section 2408.1(b)(4)(H) was added to state requirem ents for the manufacturer to track batteries originally sold wit h ZEE for credit generation. This requirement would be useful for both consumers and manufacturers to identify which batteries are covered under warranty . This section also clarifies that replacement batteries cannot generate ZEE cred its.

23. Section 2408.1(c)(1) was added to establish ZE E credit use requirements. Specifically, only up to fifty perce nt of the negative emission credits from a particular engine family can be offs et by ZEE credits. The remaining credit balance must be offset by positive certification credits. Requiring the use of certification emission credits , in addition to ZEE credits, encourages manufacturers to use other advanced emis sion control technologies in addition to the zero emission technology.

24. Section 2408.1(c)(2) was added to require that ZEE credits be banked before they can be used to offset emissions from other equipment. Requiring that ZEE credits be banked ensures that a ny ZEE credits being used are legitimate.

25. Sections 2408.1(c)(3) and (4) were added to ke ep ZEE credits separated by displacement categories. This require ment, which was requested by manufacturers, is beneficial because of the diff erential in the emission standards for each displacement category. In addit ion, ZEE is expected to replace equivalently performing conventional equipm ent, so the credits should be used only within the respective displacement catego ry. Accordingly, language that specifies this requirement has been included.

26. Sections 2408.1(d)(1) and (2) were added to pr ovide the provisions for banking ZEE credits. Specifically, while actua l generation of these credits may begin with the 2010 model year, these credits c an be banked only at the end of the model year.

27. Section 2408.1(d)(3) was added to indicate tha t ZEE credits can be banked for a maximum of five years. This is consis tent with the same limits for

certification emission credits.7

28. Section 2408.1(d)(4) was added to clarify that after five years, ZEE credits would expire and would no longer be usable for offsetting negative

certification emission credits.

29. Section 2408.1(e) was added to provide the pro visions for trading ZEE credits. Specifically, ZEE credits that are av ailable for trading are credits that were banked in previous model years, and these credits can be used for averaging and banking purposes for up to five years from the time they were generated.

30. Section 2408.1(f) was added to provide clarifying l anguage for the

calculation of ZEE credits.

31. Section 2408.1(g) was added to provide the cer tification requirements for equipment that generate ZEE credit s. These requirements mirror the requirements for certification emission credits.

32. Section 2408.1(h) was added to explain the mai ntenance of records requirements for ZEE credits. These requirements a lso mirror the requirements

for certification emission credits. The records fo r ZEE credits must include maintaining records for the batteries, as well.

33. Section 2408.1(i) was added to provide the req uirements for the end-of-year and final reports for ZEE credits. The se requirements are also similar to the reports required for certification e mission credits.

In developing the ZEE credit program provisions, on e aspect that concerned staff involves the possibility that commercial operators of ZEE may use portable generators or parked motor vehicle motive power sou rces for recharging ZEE batteries, instead of recharging through the electr ic power grid itself. However, staff currently believes that this kind of rechargi ng activity will not be wide spread

because of the additional costs and effort associat ed with owning, handling, and transporting the generators, or the fuel costs asso ciated with motor vehicle engine idling. In the future, staff may consider m onitoring and determining the emissions benefits associated with any battery rech arging activities performed by operators of ZEE during a typical eight-hour workda y, that rely either partially or completely on non-electric power grid sources.

B. Modifications to the Final Statement of Reason s for Rulemaking.

1. Inadvertently omitted written comments.

On page 3, Final Statement of Reasons, Section II, SUMMARY OF COMMENTS AND AGENCY RESPONSE, the following comment s and Agency Responses are hereby added in their entirety , which includes8 inadvertently omitted written comments received dur ing the initial 45-day public comment period.

15. Comment : Under ARB’s credit life proposal, ARB’s ABT [Average Banking and Trading] credit program will n ot be consistent with the federal program (which does not impose a credit life on Phase 3 credits). Consequently, manufactur ers would have to develop and implement unique ARB vs. EPA ABT-com pliance strategies. This could require separate product li nes for the California market. In turn, this will add cost-ine fficiencies and higher prices for California consumers with no envi ronmental benefits. (OPEI)

Agency Response : Previous to the changes made in these proposed amendments to the SORE regulation, ARB’s e vaporative

and exhaust emission standards, as well as its emis sion credit programs, had already differed from the United Stat es Environmental Protection Agency’s (U.S. EPA) corres ponding rules. Consequently, manufacturers had already dev eloped and implemented unique California compliance strategies

. Manufacturers have not provided any new or addition al information to indicate that there would be any significant cos ts beyond those that already exist. In addition, although ARB pref ers to align with U.S. EPA when possible, in this case, staff believe s that the proposed changes will improve California’s emission credit program. Accordingly, no changes were made to the regulations in response to the comment.

16. Comment : Agency concerns regarding delayed implementation of product meeting the latest standa rd level due to credits banked from prior standard levels should be segregated from concerns regarding credits generated from prod ucts that emit at lower levels than the current standard requireme nts. EMA has proposed that ARB pursue an approach similar to EPA to segregate credits generated by manufacturers when b uilding products to meet prior standard requirements from c redit potential for products meeting the current stringent ARB stan dard levels. (EMA)

Agency Response : Although staff agrees that giving more weight to credits generated under the more stringent stand ards than credits generated under previous less stringent sta ndards would be ideal, in practice, this would not be feasible. AR B exhaust emission standard changes took place in model years 2005, 20 07, and 2008 for SORE with engine displacements less than 80cc, 80cc to 225cc, and over 225cc, respectively. Staff would not expe ct9 manufacturers to determine which of their remaining credits were generated before the changes in the emission standa rds because of the impracticality involved in retroactively est ablishing the proper accounting of emission credits to specific emission standards. Staff

will, however, remember this comment when consideri ng any modifications to the SORE regulations in the future

.

2. Comments that were responded to incompletely.

On page 3, Final Statement of Reasons, Section II, SUMMARY OF COMMENTS AND AGENCY RESPONSE, the following respons es to comments are hereby modified as indicated below.

10. Comment : Here are several examples of needed amendments that ARB should adopt to harmonize with the new EPA Phase 3 regulations: 1) EPA’s new engine test procedure (Part 1065) ne eds to be an option for certification ASAP (by 2013 at the latest when EPA mandates it for new families). 2) New 40 CFR §1054.670. ARB should add this lan guage as an option to their current test procedure. 3) ARB should add language for the time to stabil ize and the measurement period (for emissions) that is indicate d in new section 1054.505(a)(1). EPA requires a 5-minute warm up at each mode (minimum) and a 1-minute measurement period. 4) EPA describes (in detail) the measurement spee d of rated WOT (wide open throttle) and Idle. ARB shoul d accept these test points as an alternate to the current specifie d test speeds in the ARB regulation. 5) Pursuant to (and with the same effective dates as) new 40 CFR §1054.135(c), ARB should revise its label la nguage in section 2759(c)(4)(A) and 2404(C)(4)(A) to read “EM ISSION CONTROL INFORMATION” (instead of the current “IMPOR TANT EMISSION INFORMATION”) in order to harmonize with E PA. ARB should avoid pulling ahead any labeling changes bef ore it is required by EPA – typically in the 2011 and 2012 Mo del Year. (OPEI)

Original Agency Response : Some of these examples of “needed amendments” can probably be changed using the adopt ed provision for Executive Officer discretion. Howeve r, a determination of that applicability would require a more complete

discussion with all manufacturers and stakeholders (see Response to Comment No. 9.). Guidance for such minor change s could also

be distributed via MAC’s or other documents.10 The Board agrees with OPEI that allowing for Execut ive Officer discretion in making minor changes to the amendment s would be a more efficient way of handling such issues. This i s something that

both staff and stakeholders desire. Staff was not able to include the changes suggested because these comments were n ot presented during the workshop process, but were sub mitted just prior to the Board hearing. With an allowance for the Executive Officer discretion, this matter could be handled wi thout the need to go through the full Board Hearing process.

Further Agency Response : As indicated in the Hearing Notice for this regulatory action, the scope of the proposal w as limited to amending the emission credit provisions for SORE, a long with some other minor regulatory changes. The changes t o the SORE test procedures recommended by the comments are bey ond the scope of the proposal. Accordingly, no changes wer e made to the regulations in response to the comments. Neverthel ess, staff recognizes the merit of these comments and will con sider them for future incorporation into the regulation.

12. Comment : OPEI supports the addition of the EPA Phase 3 approach allowing exhaust certification with fuels up to 10 percent

ethanol. We understand ARB staff’s intent is to li nk the selected certification fuel with any confirmatory testing. OPEI requests ARB to add language that clarifies that any confirmatio n or auditing tests that ARB conducts or requires be conducted will use the same, selected certification fuel. (OPEI)

Original Agency Response : The Board appreciates OPEI’s support of this portion of the amendments. The Board appro ved an allowance for the optional use of this fuel for cer tification testing.

However, staff was not able to include a similar fu el allowance for confirmatory testing because the suggestion was rec eived after the notice period had ended. This is another example o f a minor technical change that ARB could possibly make to th e test procedures, without returning to the Board, by usin g the Executive Officer discretion provision, as described in the R esponse to

Comment Number 9.

Further Agency Response : Staff did not modify the existing language in the test procedures because the inheren t requirement to perform testing using good engineering practice means that certification confirmatory exhaust emission testing must be

conducted with the same fuel that is used for the i nitial certification exhaust emission testing. In addition, section 240 7(a)(7), CCR, title 13, indicates that an engine selected for exh aust emission11 compliance testing must be emission tested accordin g to the applicable test procedures (i.e., the same test pro cedures used for certification of the engine). Further, section 240 7(d)(1), CCR, title 13, indicates that the test procedures to be used f or engines selected for exhaust emission quality-audit product ion line testing are specified in conjunction with the “Emission Sta ndards and Test Procedures,” or in other words, the same test proce dures used for certification of the engine. Consequently, since t he adopted provision for allowing up to a 10 percent (by volum e) ethanol fuel is explicitly specific to certification testing, that same test fuel allowance must also pertain to compliance and quali ty-audit production line testing. Accordingly, no changes t o the test procedures were necessary in order for either certi fication confirmatory testing or compliance and quality-audi t production line testing to be conducted with the same test fuel that was used to emission certify an engine.

3. Comments that were received during the 15-day public comment period.

The following includes comments that were received during the 15-day public comment period, and staff’s responses to the se comments.

17. Comment : [EMA/OPEI recommends that] ZEE credit generating product labeling specified by §2404(m) b e mandatory rather than optional as proposed. ARB has traditio nally required all products certified by the Air Resources Board to be labeled such that their compliance status can be identified. Be cause certified ZEE will be generating emission credits utilized to demonstrate compliance with ARB emission standards it is import ant that these equipment be identifiable for warranty requirements as specified in §2405(h) and to avoid such equipment from being uti lized for emission reduction programs as specified in §2408.1 (a). Failure to change the labeling requirements from optional to m andatory will result in substantial risk that ARB will provide cr edits to equipment that either fails to meet warranty requirements or is additionally utilized to generate emission reduction program cre dits. (EMA, OPEI)

Comment : EMA recommends that the proposed 15-day changes identified in the February 1, 2010 notice of public ly available modified text be adopted as proposed; provided, how ever, EMA contends that the product labeling specified by §24 04(m) should be mandatory rather than voluntary. (EMA)12 Agency Response : Staff understands and shares EMA’s and OPEI’s concerns about the compliance of equipment w hich will generate ZEE emission credits. However, it should be noted that the intent of the proposed optional ZEE label provi sions, specified in section 2404(m), is to facilitate the identifica tion of Californiacertified ZEE by the ultimate purchasers, and there by encourage the use of ZEE. The ZEE label was made optional in recognition of the lack of available space on some smaller-sized e quipment and of the compliance burden associated with the existi ng label requirements, as well as the additional cost burden of the newer battery technology itself. If a manufacturer choos es to use a label, it should be noted that only California-certified Z EE can display a label that contains the statement, as specified in section 2404(m)(A), to be “professional-level California-ce rtified zeroemission” equipment. Further, the proposed optiona l ZEE label is in addition to the existing label requirements cont ained in section 2404. These existing label requirements already se rve to readily identify the compliance status of SORE, specificall y through the unique engine family names that must be displayed o n labels. Thus, the compliance status of California-certified ZEE can be identified by their unique ZEE-engine family names, the definition of which is also included in the proposal. Accordingl y, staff did not make any changes to the proposed regulations in res ponse to

these comments.

18. Comment : [EMA/OPEI recommends that] ARB Staff carefully review all applications for certification of ZEE credits generating families to ensure that (i) the equipmen t is in fact “professional level” meeting the proposed definitio n in §2401 (a); (ii) the ZEE warranty meets the requirements specified i n §2405 (h); and (iii) the credits being generated comply with a ll of the requirements specified in §2408.1. (EMA, OPEI)

Agency Response : Staff agrees that adherence with these requirements is critical to the success of the ZEE credit program. By virtue of its considerable experience with succe ssfully developing, implementing, and administering mobile source emission control programs, staff is confident that all of the ZEEengine family applications submitted for certificat ion will undergo the same careful review process that is used with a ll mobile source categories in order to ensure complete compliance w ith the regulations. Accordingly, staff did not make any c hanges to the proposed regulations in response to these comments13 19. Comment : [EMA/OPEI recommends that] ARB Staff carefully review any small off-road engine certific ation application utilizing ZEE credits to demonstrate compliance wit h ARB regulatory requirements including: (i) §2408.1 (c) (1) which requires that not more than 50% of an engine manufacturers n egative credits can be offset by ZEE credits; (ii) all of t he provisions specified in §2408.1(g) associated with the use of ZEE credits; and (iii) §2408 (g)(1)(E), which sets the maximum ZEE c redit usage for an engine family 40% above the applicable standard. (EMA,OPEI)

Agency Response : Again, as in the previous response, staff has already dealt with certification emission credit pr ovisions, and will continue to review the ZEE credit program requireme nts with the same level of attention. Accordingly, staff did no t make any changes to the proposed regulations in response to these

comments.

20. Comment : [EMA/OPEI recommends that if] at a future date it is determined that additional produc ts are capable of generating ZEE credits, a formal rulemaking process would be required before such products could generate ZEE cr edits. Such a rulemaking process will facilitate the required pub lic participation process required to ensure that ZEE credits are onl y being generated by viable products. (EMA, OPEI)

Agency Response : Staff agrees with this comment. A formal rulemaking process is the proper method for allowin g any ZEE not currently identified in the proposed amendments. H owever, no changes the regulations were required in response t o these

comments.

21. Comment : OPEI recommends adding to §2408.1(c)(1) a clarification statement such as “subject to the lim itations in §2408(g)(1)(E).” (OPEI)

Agency Response : The provisions requiring a manufacturer to indicate credit sources and recipients when using c ertification credits, as specified in §2408(g)(1)(E), pertain on ly to certification credits, and are not applicable when using ZEE cred its. For ZEE credit use, §2408.1(g)(1)(E) requires that only rec ipients of ZEE credits (i.e., ZEE would not generate negative cred its) be specified. The averaging requirements specified in §2408.1(c)( 1) are to be allowed, “...under the provisions of section 2408.1.” Thus, the requirements specified in §2408.1(g)(1)(E) are appl icable to §2408.1(c)(1). Accordingly, staff did not make any changes to the proposed regulations in response to this comment.14 22. Comment : To assure that “professional Level” (sic) performance is not only demonstrated for certificat ion but also provided as part of the actual product sold, §2408. 1(b)(4)(E) should be clarified that the 1 hr battery capacity must be supplied with the product. (OPEI)

Agency Response : As specified in §2408.1(b)(4)(E), a manufacturer is required to provide a “standard bat tery package,” which is defined in §2401 to be sufficient battery capacity to allow equipment to perform one hour of continuous operati on. Staff believes that these proposed provisions adequately indicate the requirement that a one-hour battery capacity must b e provided with the product. Accordingly, staff did not make any c hanges to the proposed regulations in response to this comment.

23. Comment : In addition to a unique part number for the manufacturers original battery pack as stated in §2408.1 (b)(4)(H)(1), original batteries should als o be labeled “Not for Retail Sale”, to prevent ZEE products from bein g sold without the intended battery capacity or the original batte ry capacity from being retailed separately. (OPEI)

Agency Response : As discussed in the Agency Response to Comment No. 22, a manufacturer must provide the ult imate purchasers with a standard battery package. Thus, it is the manufacturer’s responsibility to ensure that the pr oper number of batteries is sold with the ZEE product. In the int erest of providing flexibility in manufacturers marketing concerns, AR B will not dictate how a manufacturer satisfies this requirement. Nev ertheless, if ARB discovers that ZEE products are being sold with out the standard battery package, then the manufacturer wil l not generate ZEE credits from the sale of their ZEE product. In addition, staff will not prevent manufacturers from labeling their produ ct with a “Not for Retail Sale” warning in order to protect themse lves from the possibility of its original batteries being sold se parately from its ZEE product. Accordingly, staff did not make any chang es to the proposed regulations in response to this comment.

24. Comment : In §2408.1 (b), Battery Capacity – Add the following clarification – “See minimum supplied bat tery capacity requirements in §2408.1, Table 1. Additional capacity above minimum may be supplied at the manufacturer’s discr etion.” (OPEI)15 Agency Response : Staff does not believe that the clarification is necessary. Also, the proposed regulations do not p revent a manufacturer from providing additional battery capa city that is beyond the minimum amount required. Accordingly, s taff did not make any changes to the proposed regulations in res ponse to this

comment.

25. Comment : In §2408.1, Table 1, for handheld and back pack blowers, the performance criteria references ANSI B 175.2. The standard is currently under revision and the perfor mance criteria relied upon within Table 1 has not yet been publish ed in the ANSI B175.2 standard. Current publish date estimated fo r the new

revision of ANSI B175.2 is late 2010. To address t his lapse between the ANSI B175.2 standard and the ZEE perfor mance criteria reliance upon the ANSI B175.2 in Table 1, OPEI recommends two possible options:

a. Inclusion of the performance criteria in §2408. 1, or

b. A temporary guidance document that would expire upon the publish date of ANSI B175.2. (OPEI)

Agency Response : Staff relied on manufacturers’ recommendation of the ANSI B 175.2 standard in designating the per formance

criteria. The fact that the revisions to the ANSI B175.2 standard will not be published until late 2010 means that manufac turers of handheld and backpack blowers that wish to ZEE cert ify their product would either choose to use the performance criteria from

the current version of the ANSI 175.2 standard or c hoose to wait until the revised standard is published. No change s to the regulations were made in response to the comment.

III. CONCLUSIONS

Staff believes that the regulatory text is sufficie ntly clarified to be consistent with APA’s standards for regulatory consistency and clar ity, and with APA’s procedural requirements for regulatory actions so t hat meaningful public opportunity for comment is provided before the regu lations become effective. The proposed 2008 amendments to the SORE regulation s are necessary, costeffective, and technologically feasible. The final modifications were adopted by ARB through Executive Order [to be determined], dat ed [to be determined].