State ofCalifornia AIR RESOURCES BOARD Report on Reductions Achieved from Incentive-Based Emissions Reduction Measures in the San Joaquin Valley Resolution 14-36 October24, 2014 Agenda Item No.: 14-8-10

WHEREAS, the Legislature in Health and Safety Code section 39602 has designated the State Air Resources Board (ARB or Board) as the air pollution control agencyfor all purposes setforth in federal law; WHEREAS, sections 39600 and 39601 ofthe Health and Safety Code authorize ARB to adopt standards, rules, and regulations and to do such acts as may be necessaryforthe proper execution ofthe powers and duties granted to and imposed upon the Board by law; WHEREAS, ARB is responsible forthe preparation ofthe State Implementation Plan (SIP) for attaining and maintaining the national ambient air quality standards (NAAQS) as required by the federal Clean AirAct(Act) (42 U.S.C. section 7401 etseq.), and to this end is directed by Health and Safety Code section 39602 to coordinatethe activities ofaU local and regional air pollution control and air quality management districts (districts) necessaryto comply with the Act; WHEREAS, section 39602 ofthe Health and Safety Code also provides thatthe SIP shall include only those provisions necessary to meetthe requirements oftheAct; WHEREAS, sections 39515 and 39516 ofthe Health and Safety Code providethat any power, duty, purpose, function, orjurisdiction ofthe Board may be delegated to the Board's Executive Officer as the Board deems appropriate; WHEREAS, ARB has primary responsibility for the control ofair pollution from vehicular sources, including motorvehicle fuels, as specified in sections 39002, 39500, and part 5 (commencing with section 43000) ofthe Health and Safety Code, and for ensuring that the districts meettheir responsibilities underthe Act pursuantto sections 39002, 39500, 39602, 40469, and 41650 ofthe Health and Safety Code; WHEREAS, the districts have primary responsibility forthe control ofair pollution from non-vehicular sources and for adopting control measures, rules, andregulations to attain the NAAQS within their boundaries pursuantto sections 39002, 40000, 40001, 40701,40702, and 41650 ofthe Health and Safety Code;Resolution 14-36 

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WHEREAS, the San Joaquin ValleyAir Pollution Control District (District) was established, pursuantto sections 40000 and 40100 ofthe Health and Safety Code, as the air pollution control district responsible for carrying outthese responsibilities in the San Joaquin Valley Air Basin; WHEREAS, the San Joaquin Valley Air Basin includes Fresno, Kings, Madera, Merced, San Joaquin, Stanislaus, Tulare, and western Kern Counties; WHEREAS, in July 1997, United States Environmental Protection Agency (U.S. EPA) promulgated an annual and 24-hour NAAQSforfine particulate matter (PM2.5) of 15 1Jg/m3 and 65 1Jglm3 respectively; WHEREAS, on April 5, 2005, U.S. EPA designated the San JoaquinValleyAir Basin (SJV) as nonattainmentfor the 15 1Jglm3 annual and 65 1Jg/m324-hour PM2.5 standards (PM2.5 standards); WHEREAS, in 2008, the District and ARB adopted the SJV 2008 PM2.5 Plan (SJV PM2.5 Plan) to fulfill the planning requirements ofthe Act forthe PM2.5 standards forthe SJV PM2.5 nonattainment area and transmitted it to U.S. EPA as

# aSIP revision; WHEREAS, the SJV PM2.5 Plan relies on emission reductions from already adopted control measures and reductions from new control measures so SJVcan reach attainment in 2014; WHEREAS, the reductions from newcontrol measures in the SJV PM2.5 Plan consist oftwo components: a commitmentto propose new control measures by specific dates, and an aggregate emission reduction commitment in 2014; WHEREAS, the SJV PM2.5 Plan specifies the commitment to achieve the aggregate emission reductions could be met by new regulations or alternative emission reductions measures including emission reductions from incentive programs; WHEREAS, on April 28, 2011, the Board adopted revisions tothe SJV PM2.5 Plan to reflect the benefits of recently adopted SIP measures; WHEREAS, on November 9, 2011, U.S. EPA approved the amended SJV PM2.5 Plan, including the ARB State Strategy commitment; WHEREAS, incentives programs achieve emission reductions beyond those required by regulations by providing grants to private and public entitiesfor the introduction of cleanertechnologies earlierthan what is required by regulations alone; WHEREAS, in orderfor emission reductions from incentive programs to be credited toward fulfilling the ARB aggregate emissions SIP commitment, U.S. EPA guidelines specifythatthe emission reductions must be enforceable, quantifiable, surplus, and permanent;Resolution 14-36 

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WHEREAS, since 1999, the Carl Moyer Memorial Air Quality Standards Attainment Program (Moyer Program) has provided over $900 million to replace over 41 ,000 high polluting engines throughout the State cumulatively reducing about 150,000tons of ozone precursor and 6300 tons of particulate matter emissions;

.WHEREAS, since2008, Proposition 1B: Goods Movement Emission Reduction

Program (Prop 1B) has awarded over $718 million to air districts and seaports to reduce air pollution emissions and health riskfrom freight movement along California trade corridors; WHEREAS, the Moyer Program and Prop 1 Bfunding guidelines are developed through a public process that include workshops and Board action that allowfor stakeholder input; WHEREAS, ARB prepared the Report on Reductions Achieved from Incentive-Based Emission Reduction Measures in the San Joaquin Valley (Report) to demonstrate that emission reductions from the Moyer Program and Prop 1 B are SIP creditable; WHEREAS, the Report documentsthatthe incentive-based emission reduction measuresfrom the Moyer Program and Prop 1B satisfythe U.S. EPA requirementthat the reductions be enforceable by ensuring that actions required ofproject grantees are independently verifiable, program violations are defined, those liable can be identified, and penalties or corrective action may occur; WHEREAS, the Report documents thatthe incentive-based emission reduction measuresfrom Moyer Program and Prop 1 Bsatisfy the U.S. EPA requirement thatthe reductions be quantifiable by providing publicly available emission factors, calculation methods and project activity data so that project emission reductions can be replicated in a reliable manner; WHEREAS, the Report documentsthatthe incentive-based emission reduction measures from the Moyer Program and Prop 1 B and satisfy the U.S. EPA requirement thatthe reductions be surplus by showing that the emission reductions are not required by orassumed in a SIP-related program, any State/local rule, consent decree, orfederal rule designed to reduce criteria pollutant or precursoremissions or relied upon for SJV PM2.5 Plan contingency; WHEREAS, the Report documents thatthe incentive-based emission reduction measures from the Moyer Program and Prop 1 B satisfy the U.S. EPA requirement that the reductions be permanent by showing that the project grantee is required to operate and maintain the project, contract provisions allowthe publicto evaluate the duration of emission to ensure that duration adequately covers the period forwhichthe reductions are relied upon in the SIP and forvehicle or engine replacement projects, the replaced vehicle orequipment is destroyed;Resolution 14-3.6 4
WHEREAS, section 110(1) ofthe Act and title 40 Code of Federal Regulations (CFR) section 51.102 requires that one or more public hearings, preceded by at least 30-day notice and opportunityfor public review, must be conducted priorto the adoption and submittal to U.S. EPA of any SIP revision; WHEREAS, the Report was made available on September 22, 2014 for public review at least 30 days priorto the hearing date; WHEREAS, the Report: 1. Quantifies incentive-based emission reductions from 832 Moyer Program off-road equipment repower, replacement, and retrofit projects according to 2005, 2008, 2011 Carl Moyer program guidelines, and 1454 Prop 1B on-road vehicle replacement projects under2008 and 2010 Prop 1B program guidelines that provide emission reductions throughout the 2014 attainmentyear in the SJV; 2. Demonstrates thatthe reductions from the programs meet U.S. EPA requirements for credit toward fulfilling the State Strategy aggregate emission reductions commitment in the SJV PM2.5 Plan; and 3. Documents that ARB and the District have implemented incentive-based emission reduction measures that will provide reductions (7.8 tpd NOx and 0.2 tpd PM2.5) towards the SJV PM2.5 Plan 2014 aggregate emission reduction commitment; WHEREAS, in consideration ofthe Report, the Board finds that: 1. The incentive-based emission reduction measures provide 2014 emission reductions of7.8 tpd NOx and 0.2 tpd PM2.5that are enforceable, quantifiable, surplus and permanent as these terms are used in applicable U.S. EPA guidance; · 2. The Report provides the necessary documentation for U.S. EPAto approve it as an amendmentto the California SIP; and 3. The Report meets the applicable requirements established by theAct and U.S. EPAregulations. NOW, THEREFORE, BE IT RESOLVED that the Board hereby approves the Report on Incentive-based Emission Reduction Measures in the San Joaquin Valley as a revision to the California SIP, and directs the Executive Officerto submitthe Report and other appropriate supporting documentation to U.S. EPAfor inclusion in SIP as the mechanism to allow California to receive SIP credit for reduction achieved through incentive-based emission reduction measures.Resolution 14-36 

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BE IT FURTHER RESOLVED that the Board directs the Executive Officerto work with U

.S

. EPA and take appropriate action to resolve any completeness orapprovability issuesthat may arise regarding the SIP submission

. BE IT FURTHER RESOLVED that the Board authorizes the Executive Officerto include in the SIP submittal anytechnical corrections, clarifications,oradditionsthat may be necessaryto secure U

.S. EPAapproval. BE IT FURTHER RESOLVED thatthe Board hereby certifies pursuantto 40 CFR, section 51.102,thatthe Report was approved after notice and public hearing as required by40 CFR,section 51.102. I hereby certifythatthe above is a true and correct copy of Resolution 14-36 as adopted by theAir Resources Board.