# Final Statement of Reasons for Rulemaking

Including Summary of Comments and Agency Responses

PUBLIC HEARING TO CONSIDER ADOPTING THE REGULATION FOR

MOBILE CARGO HANDLING EQUIPMENT AT PORTS AND

INTERMODAL RAIL YARDS

Public Hearing Date: December 8, 2005

Agenda Item No.: 05-12-4i 

## T ABLE OF 

## C ONTENTS

Contents Page

I. General.........................................

................................................... ..................... 1

II. Modifications Made to the Original Proposal and Additional Documents Made Publicly Available............................

................................................... ......... 4

A. Exemptions, Subsection 2479 (c) ................. ............................................. 4 B. Definitions, Subsection 2479(d)................. ................................................ 4 C. Requirements, Subsection 2479(e) ................ ........................................... 5 D. Alternative Compliance Plan for Non-Yard Truck C argo Handling Equipment, Subsection 2479(h)...................... ........................................... 6 E. Reporting Requirements, Subsection 2479(j) ...... ...................................... 6 F. Additional Supporting Documentation............. ........................................... 6

III. Summary of Comments and Agency Responses to th e Original Proposal........... 7

A. Performance Standards and Operational Requiremen ts ......................... 11 B. Best Available Control Technology (BACT) and Alt ernative Fuels........... 14 C. Compliance Timeline ............................. .................................................. 1 7 D. Alternative Compliance Plan and Compliance Exten sions....................... 18 E. Expanding the Regulation to Cover Additional Equ ipment....................... 20

F. Procedures and Miscellaneous Issues............. ........................................ 22 G. Incentive Funding ...............................

................................................... .. 25 H. Recordkeeping and Reporting ..................... ............................................ 27

IV. Summary of Comments and Agency Responses – Noti ce of Modified Text....... 271 State of California

AIR RESOURCES BOARD

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



### PUBLIC HEARING TO CONSIDER ADOPTING THE REGULATION FOR

MOBILE CARGO HANDLING EQUIPMENT AT PORTS AND

INTERMODAL RAIL YARDS

Public Hearing Date: December 8, 2005

Agenda Item No.: 05-12-4

I. GENERAL

In this rulemaking, the Air Resources Board (ARB, B oard, or Agency) is adopting a new regulation to reduce emissions of diesel particulat e matter (PM) and oxides of nitrogen (NOx) from mobile, compression ignition, cargo hand ling equipment at ports and intermodal rail yards. The regulation will be cont ained in new section 2479, title 13, California Code of Regulations (CCR). This regulat ion will reduce the public’s exposure to diesel PM and NOx by establishing best available control technology (BACT), which includes emission standards and operational require ments, for cargo handling equipment that operate at ports and intermodal rail yards in California. The regulation supports the

“Risk Reduction Plan to Reduce Particulate Matter E missions from Diesel-Fueled Engines and Vehicles,” which was adopted by the Board on Se ptember 30, 2000, and the State Implementation Plan.

This rulemaking was initiated by the October 21, 20 05, publication of a notice for a public hearing on December 8, 2005. A “Staff Report: Init ial Statement of Reasons” (Staff Report) was also made available for public review a nd comment starting October 21, 2005. The Staff Report, which is incor porated by reference herein, described the rationale for the proposal. The text of the pr oposed regulation, which would add a new section 2479 to title 13, CCR, was included as Appendix A to the Staff Report. These documents were also posted on the ARB’s inter net site for the rulemaking at: http://www.arb.ca.gov/regact/cargo2005/cargo2005.ht m (“ARB’s internet site”).

On December 8, 2005, the Board conducted a public h earing to consider the staff’s proposal for adoption. Written and oral comments w ere received at the hearing, and several parties suggested changes to the proposed r egulation. The Board approved the staff’s proposal with proposed changes that include d modifying the Alternative Compliance Plan (ACP) provision of the regulation t o allow for public comment on any applications for the ACP, and addressing concerns r egarding Department of Defense equipment that is subject to the requirements of th e regulation. At the conclusion of the hearing on December 8, 2005, the Board adopted Reso lution 05-62, in which it2

approved the adoption of the originally proposed re gulation with suggested modifications discussed at the hearing. In accorda nce with section 11346.8 of the Government Code, the Board directed the Executive O fficer to incorporate the modifications into the proposed regulatory text and to make such modifications available for a supplemental comment period of at least 15 da ys. The Executive Officer was then directed either to adopt the regulation with such a dditional modifications as may be appropriate in light of the comments received, or t o present the regulation to the Board for further consideration if warranted in light of the comments.

The text of the modifications to the originally pro posed regulation and the incorporated documents were made available for a supplemental 15 -day comment period by issuance of a “Notice of Public Availability of Mod ified Text and Availability of Additional Documents” (“15-day Notice”). The 15-day Notice, a copy of Resolution 05-62, and the document entitled “Staff’s Suggested Modifications to the Original Proposal” were mailed on May 18, 2006, to all parties identified i n section 44(a), title 1, CCR, and to other persons generally interested in the ARB’s rul emaking concerning cargo handling equipment at ports and intermodal rail yards. Thes e documents were also published on May 18, 2006, on ARB’s Internet site. An email mes sage announcing and linking to this posting was transmitted to the more than 1,000 part ies that have subscribed to ARB’s “cargo” List Server. The 15-day Notice gave the na me, 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 modif ications to the original proposal, with all of the modifications clearly indicated.

Four written comments were received during the 15-d ay comment period. Three of the four comments did not specifically address the prop osed modifications in the 15-day notice. One comment specifically addressed the pro posed modifications, but staff determined additional modifications in response to that comment were unnecessary.

After considering the comment received during the s upplemental 15-day comment period, the Executive Officer issued Executive Orde r R-06-007, adopting new section 2479 in title 13, CCR, and adopting the inc orporated 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 w as issued. The FSOR also

summarizes written and oral comments the Board rece ived on the proposed regulatory text during the formal rulemaking process and the A RB’s responses to those comments.

Documents Incorporated by Reference. Four test procedures and guidance documents are incorporated by reference in title 13 , CCR, section 2479. Each instance of incorporation identifies the incorporated docume nt by title and date. The incorporated ARB test procedures and documents, the American Society for Testing and Materials (ASTM) standards and procedures and t he International Organization for Standardization (ISO) test methods, are readily ava ilable from the ARB upon request

and were made available in the context of this rule making in the manner specified in3

Government Code section 11346.5(b). Also, the refe renced ASTM test methods are published by ASTM, a well-established and prominent organization in the sampling and analysis field. Similarly, the ISO documents are p ublished by well-established and prominent organizations. Therefore, all of the inc orporated documents are reasonably available to the affected public from commonly know n sources.

The test procedures and guidance documents are inco rporated by reference because it would be cumbersome, unduly expensive, and otherwis e impractical to print them in the CCR. Existing ARB administrative practice has been to have the test procedures, guidelines, specifications, and similar documents i ncorporated by reference rather than printed in the CCR because these procedures, specif ications, and guidelines are highly technical and complex. They include the “nuts and bolts” engineering protocols, computer modeling, and laboratory practices require d for certification of diesel engines and for performing computerized risk assessments. In addition, they have a very limited audience. Because the ARB has never printed comple te test procedures and guidance documents in the CCR, the directly affected public is accustomed to the incorporation format utilized therein. The ARB’s test procedures and guidance documents as a whole are extensive, and it would be both cumbersome and expensive to print these lengthy, technically complex procedures for a limited audien ce in the CCR. Printing portions of the ARB’s test procedures that are incorporated by reference would be unnecessarily confusing to the affected public.

Fiscal Impacts. The Executive Officer has determined that this re gulatory action will not create costs or savings, as defined in Governme nt Code section 11346.5(a)(5) and 11346.5(a)(6), to any state agency or in federal fu nding to the State, or create costs or mandates to any local agency or school district, wh ether or not reimbursable by the state pursuant to part 7 (commencing with section 1 7500), division 4, title 2 of the Government Code, and does not impose a mandate that is required to be reimbursed pursuant to section 6 of article XIII B of the Cali fornia Constitution. It also does not include any other non-discretionary costs or saving s to local agencies.

The Board has determined that some costs to ARB wil l be incurred in order to implement and enforce this regulation; however, we believe these costs can be absorbed in our current budget. In future years, a dditional enforcement resources may be needed depending on the compliance options selec ted by the affected sources. No other State agencies are expected to incur costs du e to this regulation. Overall, while not specifically determined, the financial savings resulting from the health benefits of reduced exposures to diesel PM are expected to outw eigh the cost of implementing and enforcing the proposed regulation.

Consideration of Alternatives. The regulation proposed in this rulemaking was th e subject of discussions involving staff and the affe cted owners, operators, and sellers of cargo handling equipment at ports and intermodal ra il yards in California. A discussion of alternatives to the initial regulatory proposal is found in Chapter VII of the Staff Report. These include an option to rely on continu ed voluntary efforts and an option to regulate yard trucks only. For the reasons set for th in the Staff Report, staff’s4

comments and responses at the hearings, and this FS OR, the Board has determined that none of the alternatives considered by the age ncy would be more effective in carrying out the purpose for which the regulatory a ction was proposed or would be as effective and less burdensome to affected private p ersons than the action taken by the

Board.

II. MODIFICATIONS MADE TO THE ORIGINAL PROPOSAL AND ADDITIONAL

DOCUMENTS MADE PUBLICLY AVAILABLE

At the December 2005 hearing, the Board approved th e regulation and proposed modifications. Furthermore, the Board directed sta ff to work with stakeholders regarding modifications or clarifications to the ap proved regulation. The following is a description of the modifications and clarifications , by section number.

A. Exemptions, Subsection 2479(c)

Military Tactical Support Cargo Handling Equipment ((c)(4)): Staff added an exemption for military tactical support cargo handi ng equipment.

B. Definitions, Subsection 2479(d)

Alternative Diesel Fuel ((d)(1)): Staff modified this definition to include biodiesel to be

consistent with the treatment of certain biodiesel blends meeting the definition of California Air Resources Board (CARB) diesel fuel.

California Air Resources Board (CARB) Diesel Fuel ((d)(5)): Staff added this definition to support the existing fuel requirement s of the regulation.

Cargo Handling Equipment ((d)(7)): Staff modified this definition to clarify the inclusion of maintenance equipment that is used rou tinely or for predictable process

upsets.

Contiguous Properties ((d)(11)): Staff added this definition to support the revised definition for port.

Intermodal Rail Yard ((d)(27)): Staff modified the definition to clari fy that only transportation facilities – where the primary purpo se of the greater facility (as opposed to a subcomponent thereof) is the transportation of goods by rail – are intended to fall within the ambit of the rule. Hence, a rail facili ty, such as a rail spur, that is merely ancillary to a non-transportation related business or operation, would not be subject to the regulation.

Military Tactical Support Cargo Handling Equipment ((d)(31)): Staff added this definition as part of the new exemption for militar y tactical support cargo handling equipment (see above).5

Ocean-going Vessel ((d)(39)): Staff added this definition as part of the revised definition for port.

Port ((d)(44)): Staff revised this definition to clarify the inclus ion of military terminals and docks that are part of, or on contiguous proper ties with, non-military terminals and

docks.

Terminal ((d)(55)): Staff modified this definition to incl ude facilities owned and/or operated by the Department of Defense.

Top Handler or Top Pick ((d)(57)): Staff modified this definition to corr ect a clerical

error.

Verification Procedure ((d)(59)): Staff modified this definition to corr ect a clerical

error.

C. Requirements, Subsection 2479(e)

In-Use Performance Standards for Yard Trucks: Compl iance Schedules for In-Use

Yard Trucks. In (e)(2)(B), staff modified the date used to deter mine the percentage of yard trucks that must meet the requirements for eac h compliance deadline. The percentage will be determined based on the total po pulation of yard trucks for a specific model year or model year group that exist in the ow ner’s or operator’s fleet as of January 1 of the first compliance deadline year for that model year or model year group. This change allows for early compliance without pen alty and is consistent with staff’s original intent.

In-Use Performance Standards for Non-Yard Truck Mob ile Cargo Handling Equipment: Compliance Option for Basic Container Ha ndling Equipment, Bulk Cargo Handling Equipment, and Rubber-tired Gantry C ranes. In (e)(3)(B), staff modified the text for compliance option (c) for eac h equipment type to correct a clerical error, which had unintentionally omitted pre-Tier 1 engines.

In-Use Performance Standards for Non-Yard Truck Mob ile Cargo Handling Equipment: Compliance Schedule for Non-Yard Truck Mobile Cargo Handling Equipment. In (e)(3)(c), staff modified the date used to det ermine the percentage of equipment that must meet the requirements for each compliance deadline. The percentage will be determined based on the total po pulation of non-yard truck equipment for a specific model year or model year g roup that exist in the owner’s or operator’s fleet as of January 1 of the first compl iance deadline year for that model year or model year group. This change allows for early compliance without penalty and is consistent with staff’s original intent.6

D. Alternative Compliance Plan for Non-Yard Truck C argo Handling Equipment, Subsection 2479(h)

Requirements. Staff modified the alternative compliance plan (ACP ) language in (h)(1)(A) to be more concise and less redundant. I n (h)(1)(B), (h)(1)(F), and (h)(1)(H), staff modified the ACP language to make it clear th at qualifying equipment must be located at the same port or intermodal rail yard to which the ACP applies, and in (h)(1)(C), staff clarified that no equipment can be included in more than one ACP. Additionally, in (h)(1)(H), staff clarified that em ission reductions that are otherwise required by local rules, regulations, or statutes a re not allowed to be included in an

ACP.

Application Process. Numerous modifications were made to the ACP Applica tion Process in (h)(2), to address the Board’s directive to require the ACP to include provisions for public comment. Under the proposed modifications, all documents pertaining to ACP applications will be made availab le for public review. In addition, two separate public comment periods will be provided du ring the application process. The first will be provided after the Executive Officer has deemed the application to be “complete.” The second will be provided after the Executive Officer proposes to approve or disapprove the application. This commen t period will allow the public to comment on the proposed decision by the Executive O fficer before final action is taken, as well as a second opportunity to comment on the a pplication.

Revocation or Modification of Approved ACPs. In (h)(3), staff added a provision to enable the Executive Officer to revoke or modify an ACP if there have been violations to the ACP, or if the Executive Officer has reason to believe that the applicant no longer

meets the criteria for an ACP.

E. Reporting Requirements, Subsection 2479(j)

Demonstration of Compliance. Paragraph (j)(2) was revised to clarify that the Demonstration of Compliance pertains to each in-use cargo handling equipment engine or vehicle subject to the requirements of subsectio n (e).

Annual Reporting. In (j)(3)(D), staff added a clarification to requ ire annual reporting of the population (number) of equipment in each yard t ruck model year group and each non-yard truck model year group in order to determi ne compliance percentage requirements.

F. Additional Supporting Documentation

In accordance with Government Code section 11347.1, staff has added to the rulemaking record the following documents, which ar e incorporated by reference in the regulation:7

Diesel Particulate Matter Exposure Assessment Study for the Ports of Los Angeles and Long Beach

The document cited above is the final version of th e draft document included as Appendix C in the Staff Report.

In addition to the modifications detailed in this F SOR, staff made other minor modifications in the regulatory text to improve cla rity; to correct spelling, typographical errors, and grammar; and to make numbering adjustme nts.

III. SUMMARY OF COMMENTS AND AGENCY RESPONSES TO TH E ORIGINAL

PROPOSAL

The Board received numerous written and oral commen ts in the formal 45-day rulemaking comment period leading up to the Decembe r 2005 Board meeting, beginning with the notice publication on October 21 , 2005, and ending with the closing of the record on December 8, 2005. A list of comme nters is set forth below, identifying the date and form of all comments that were timely submitted. Following the list is a summary of each objection or recommendation made re garding the proposed action, together with an explanation of how the proposed ac tion has been changed to accommodate the objection or recommendation or the reasons for making no change. The comments have been grouped by topic whenever po ssible. Comments not involving objections or recommendations specificall y directed towards the rulemaking or to the procedures followed by the ARB in this rulem aking are not summarized below. Additionally, any other referenced documents are no t summarized below.

In addition to more than 1,200 supportive comment l etters from private citizens, government agencies, and legislators, we received c omments from the following that were generally supportive of the regulation or the rulemaking process:

American Lung Association of California (ALAC) Coalition for Clean Air (CCA) California Environmental Rights Alliance (CERA) National Resources Defense Council (NRDC) Alan Gordon for Senator Joe Simitian (GORDON) Long Beach Alliance for Children with Asthma (LBACA ) Manufacturers of Emission Controls Association (MEC A) Pacific Merchant Shipping Association (PMSA) Port of Long Beach (POLB) Sacramento Metropolitan Air Quality Management Dist rict (SMAQMD) Union of Concerned Scientists (UCS)8

Comments Received during the 45-day Comment Period

Abbreviation Reference

Number Commenter

ALAC ALAC Bonnie Holmes-Gen American Lung Association of California Oral testimony: December 8, 2005

CCA CCA Candice Kim

Coalition for Clean Air Oral testimony: December 8, 2005

CE CE 1 Mitchell W. Pratt Vice President, Public Affairs and Business Development Clean Energy Written testimony: December 6, 2005

CE 2 Todd Campbell

Clean Energy Oral testimony: December 8, 2005

CERA CERA Joe Lyou California Environmental Rights Alliance Oral testimony: December 8, 2005

CNGVC CNGVC 1 Michael L. Eaves

President

California Natural Gas Vehicles Coalition Written testimony: December 7, 2005

CNGVC 2 Michael L. Eaves

President

California Natural Gas Vehicles Coalition Oral testimony: December 8, 2005

DENNISON DENNISON Laura Dennison

Private Citizen Written testimony: December 7, 2005

DOD DOD 1 Rene Trevino

Executive Director Department of Defense, Department of the Navy Written testimony: December 8, 20059 DOD 2 Major Jeremy Jungreis

Department of Defense, Department of the Navy Oral testimony: December 8, 2005

DOWDLE DOWDLE Mr. M. Dowdle California State University Bakersfield Library Written testimony: December 3, 2005

EMA EMA Jed Mandel and Timothy French Engine Manufacturers Association Written testimony: December 5, 2005

ENVIR ENVIR Diane Bailey, et al

Scientist

Natural Resources Defense Council Written testimony: December 6, 2005

GNR GNR Erik Neandross Gladstein, Neandross & Associates, LLC Written testimony: December 7, 2005

GORDON GORDON Alan Gordon

Senator Joe Simitian Oral testimony: December 8, 2005

LBACA LBACA Elina Green Project Manager Long Beach Alliance for Children with Asthma Oral testimony: December 8, 2005

LOWENTHAL LOWENTHAL Bonnie Lowenthal

Councilmember City of Long Beach Written testimony: December 8, 2005

MECA MECA 1 Joe Kubsh

Executive Director

Manufacturers of Emission Controls Association Written testimony: December 6, 2005

MECA 2 Joe Kubsh

Executive Director

Manufacturers of Emission Controls Association Oral testimony: December 8, 200510

NRDC NRDC Diane Bailey

National Resources Defense Council Oral testimony: December 8, 2005

PASHA PASHA Kenneth Keane Director, Maritime Safety and Security Pasha Stevedoring and Terminals L.P. Written testimony: November 16, 2005

PMSA PMSA 1 John McLaurin

President Pacific Merchant Shipping Association Written testimony: December 7, 2005

PMSA 2 T.L. Garrett

Vice President Pacific Merchant Shipping Association Oral testimony: December 8, 2005

POLB POLB Thomas Jelenic Port of Long Beach Oral testimony: December 8, 2005

SCAQMD SCAQMD 1 Barry R. Wallerstein

Executive Officer South Coast Air Quality Management District Written testimony: December 7, 2005

SCAQMD 2 Barry R. Wallerstein

Executive Officer South Coast Air Quality Management District Oral testimony: December 8, 2005

SMAQMD SMAQMD Larry Greene

Air Pollution Control Officer Sacramento Metropolitan Air Quality Management District Written testimony: December 5, 2005

UCS UCS Don Anair Engineer

Union of Concerned Scientists Oral testimony: December 8, 200511

A. Performance Standards and Operational Requiremen ts

1. Comment: Requirements to replace or retire equipment shoul d be based upon engine hour usage and not model year. (PASHA)

2. Comment: Low-use vehicles and equipment should be exempt f rom the regulation. (DOD 1)

3. Comment: PMSA requests that staff work with the companies disproportionately impacted to establish a minimal use threshold. (PM SA 1)

4. Comment: PMSA would like to see some consideration for tho se who are disproportionately affected by the cost impacts bec ause their equipment is used only sporadically and for a very low number of hour s on an annual basis. (PMSA 2)

Agency Response: We disagree with these comments. Because there h ave been no previous regulations reducing emissions from in-use cargo handling equipment, older model year equipment that are run much fewer hours can actually have higher emissions than newer equipment running more hours. For instance, a 1999 off-road yard truck run 500 hours a year would emit more die sel PM and NOx than a 2006 offroad yard truck running twice as many annual hours. Moreover, enforcing an hourly limit would be problematic for this type of equipme nt and would require overly burdensome recordkeeping. During the rulemaking pr ocess, staff assisted companies in explaining the available compliance options, and staff will continue to remain available to offer assistance in understanding the requirements of the regulation.

5. Comment: The regulation will require all new cargo handlin g equipment to meet the final Tier 4 off-road engine standards as of Ja nuary 1, 2007. (EMA)

Agency Response: We disagree. The regulation is directed towards owners and operators as opposed to manufacturers and does not include any additional manufacturer requirements than existing U.S. EPA an d ARB rules. Interim Tier 4 offroad engine standards begin in 2011 for most cargo handling equipment, with final Tier 4 standards becoming effective in 2014 to 2015 . Meeting the final Tier 4 off-road engine standards is an option for owners and operat ors when those engines become available. However, until that time, cargo handlin g equipment that is newly purchased, leased, or rented as of January 1, 2007, must meet either the current model year onroad standards or off-road standards, as specified in subsection (e) of the regulation.

6. Comment: The proposed regulation threatens to undermine the regulatory

harmonization between the ARB and the United States Environmental Protection Agency (U.S. EPA) for controlling emissions from mo bile off-road vehicles and equipment by requiring engines to meet final Tier 4 standards before they’re required. (EMA)12

7. Comment: All in-use equipment will be required to meet fin al Tier 4 standards over a ten-year phase-in period between 2007 and 20 17. (EMA)

Agency Response: We disagree. The regulation will have no impact on the regulatory harmonization between the ARB and the U.S. EPA regu lations for off-road vehicles. While meeting the final Tier 4 off-road engine stan dards is an option when those engines become available, it is not a requirement f or all equipment types. In particular, non-yard truck equipment that have either met the 2 007 or later on-road engine certification standards or that have applied the hi ghest level verified diesel emission control strategy (VDECS) to meet their initial comp liance deadline as specified in subsection (e)(3)(C), are not required to meet the Tier 4 off-road engine requirements so long as the level of control is sufficient for t he category of equipment. This would

include all Level 3 VDECS and some Level 2 VDECS. Those equipment that are required to take the next step in meeting Tier 4 of f-road engine standards are not required to do so before the end of 2015 (Tier 4 en gine standards are effective by 2011 to 2012 for most equipment types).

8. Comment: The rule should have included idling limits that were proposed in earlier drafts. (ENVIR) (GORDON)

Agency Response: We disagree. Idling limits were considered by st aff early in the regulatory development process as part of our preli minary regulatory concepts. Staff subsequently determined that idling limits would be difficult to implement and could actually delay the implementation of the regulation for a number of reasons, including difficulty determining what constitutes necessary v ersus unnecessary idling. The limits were, accordingly, removed from staff’s proposal. However, staff will continue to look at idling restrictions for this type of equipment and others as part of potential future rulemakings.

9. Comment: Operators should be required to purchase yard tru cks with engines meeting the 0.2 g/bhp-hr NOx level. (SCAQMD 1) (SC AQMD 2) (NRDC) (CERA)

Agency Response: We disagree. The practical effect of the comment would be to require the use of alternative fuel (i.e., natural gas) engines, which staff determined are not cost-effective or even commercially available f or many types of cargo handling equipment (Staff Report, Appendix F). However, to the extent these engines are available and equipment operators choose to use the m, they remain a compliance option for meeting the requirements of the regulati on. Additionally, the proposed use of on-road engines will not have as significant a shor tfall in NOx reductions as the commenters infer. The on-road diesel engine standa rds as specified in title 13, CCR, section 1956.8 require 50 percent of new engines fo r model years 2007 through 2009 to meet a 0.2 g/bhp-hr NOx standard, while the other 5 0 percent could meet a 2.0 g/bhp-hr NOx standard. Engine manufacturers have stated tha t 2007 through 2009 model year engines will actually meet a 1.2 g/bhp-hr (or lower ) NOx level, significantly below the 2.0 g/bhp-hr standard.13

10. Comment: The rule should require non-yard truck equipment to have a Level 3 control installed or meet the Tier 4 standards by 2 011. (SCAQMD 1) (CERA)

Agency Response: We disagree. Currently, diesel particulate filte rs (DPFs) are the only technology capable of achieving Level 3 reduct ions in diesel PM. However, there are operational limitations to the use of DPFs in n on-yard truck cargo handling equipment applications (this is discussed in the St aff Report, pp. V-4 – V-5).

Because of this, a universal requirement that all n on-yard truck engines be equipped with DPFs is not technologically feasible at this t ime. Additionally, the non-yard truck equipment population is very diverse, has high capi tal replacement costs, and long useful lives, making rapid turnover impractical. H owever, by allowing a phased-in turnover, as provided in the regulation, to either a Level 3 VDECS or Tier 4 engine for most non-yard truck equipment by December 31, 2015, more equipment are expected to meet the lower NOx standards provided in the Fin al Tier 4 off-road engines, which become effective in 2014 and 2015 for most cargo ha ndling equipment. This will provide greater emission benefits relative to the c ommenters’ suggestion.

11. Comment: Rubber-tired gantry (RTG) cranes and equipment wi th a Level 2 control should also be required to meet the Tier 4 standards or install Level 3 retrofits. (SCAQMD 1) (CERA)

Agency Response: We disagree. As discussed in the Staff Report an d this FSOR, staff considered the feasibility of retrofit contro ls, availability of VDECS, potential for engine repowering, average engine and equipment use ful life, associated health risks, and economic feasibility of replacing equipment whe n establishing performance standards and operational requirements. Based on t his information, staff concluded that requiring all non-yard truck equipment with a Level 2 VDECS to either meet Tier 4 standards or install a Level 3 VDECS was not approp riate or feasible due to technological and economic constraints.

12. Comment: Highest level NOx retrofits should be required co ncurrently with highest level PM retrofits. (SCAQMD 1) (CERA)

Agency Response: We disagree. Few NOx retrofits exist for this eq uipment category. Only one NOx retrofit system, which is used in conj unction with a Level 2 diesel PM VDECS, has been verified by the ARB for this applic ation. As discussed in the Staff Report and this FSOR, staff considered the feasibil ity of retrofit controls, availability of VDECS, ability for engine repowering, average usefu l life, associated health risks, and economic feasibility of replacing equipment when de termining performance standards and operational requirements. Staff determined tha t requiring NOx retrofits concurrently with PM retrofits is not appropriate or feasible. However, staff will continue to evaluate the feasibility of this technology in a cargo handl ing equipment application and may consider future recommendations to the Board as app ropriate.14

B. Best Available Control Technology (BACT) and Alt ernative Fuels

1. Comment: The rule should require BACT and offer incentives for the use of alternative fuels. (ENVIR)

Agency Response: The regulation establishes and requires BACT for all equipment types. However, we disagree with the commenter tha t ARB should offer incentives for the use of alternative fuels. In this regulation, as with other mobile source regulations, BACT is a selection of compliance options, and alte rnative fuels may be used in meeting those requirements.

2. Comment: Non-yard truck equipment should be required to me et the most stringent compliance option available before being allowed to use a less stringent option. (ENVIR) (CNGVC 2)

3. Comment: For new non-yard truck equipment, electric powere d equipment should be the performance standard first, followed by alternative clean fuels such as natural gas. (SCAQMD 1) (CERA)

4. Comment: The regulation should require new purchases to co mply with a hierarchy BACT approach, which would maximize emiss ion reductions, be fuel neutral and emissions-driven, and support the Gover nor’s Action Plan and the Goods Movement Action Plan. The proposed regulatio n fails to require BACT for new and existing equipment and instead allows for t hree options for compliance in an attempt to provide regulatory flexibility. ( CE 1)

5. Comment: ARB should identify a hierarchy of compliance mea sures that if available and workable for an application, should b e used; if a BACT technology option is deemed infeasible, the next order of comp liance must be evaluated for applicability. (CNGVC 1)

Agency Response: We disagree. Staff considered a top-down BACT ap proach, but

determined that it was not cost-effective consideri ng the extremely high costs of replacing equipment, the long useful lives, the con tribution of emissions for this category of cargo handling equipment, and the additional red uctions that would be achieved from the Tier 4 off-road engines that will be available in future years. This regulation follows the direction of other mobile source regulations in establishing BACT as a selection of several compliance options that maximize both flexi bility and emission reductions.

6. Comment: Appendix F of the Staff Report regarding natural gas as a compliance option includes outdated information on demonstration projects and fuel pricing. (CNGVC 1)

Agency Response: We disagree. Staff utilized the most currently a vailable data and research at the time the Staff Report was released. Staff’s evaluation of this data included demonstration programs and an evaluation o f natural gas fuel prices. Staff15

additionally noted an upcoming demonstration progra m at the Port of Long Beach that is now underway but had not yet begun at the time of w riting (Staff Report, pp. F-5).

7. Comment: The ARB Staff Report fails to take into considera tion the current efforts at the Ports of Los Angeles and Long Beach to demonstrate up to 10 LNG yard tractors. (GNR)

Agency Response: We disagree. The demonstration programs noted by the commenter had not begun at the time of publication of the Staff Report. However, at the time of publication, staff was aware of the upc oming demonstration at the Port of Long Beach and mentioned it in Appendix F (Staff Re port, pp. F-5).

8. Comment: Natural gas vehicles are inherently cleaner than their diesel counterparts and are significantly cleaner than cur rent emission standards. (CE 1) (GNR)

Agency Response: While we agree that natural gas vehicles have low er PM emissions than diesel engines, they have higher tot al hydrocarbon (THC) emissions and can potentially have higher NOx emissions, dependin g on the duty cycle and condition.

9. Comment: ARB staff should recommend alternative fuel engin es to be considered BACT for the purposes of this regulation . (GNR) (GORDON)

Agency Response: As has been discussed in previous responses, we d isagree with exclusively specifying alternative fuel engines as BACT because of the issues regarding availability and cost-effectiveness (Staff Report, Appendix F). However, we believe it appropriate to allow alternative fuel engines to be one of the various options that can be used in meeting the BACT requirements for all equip ment types.

10. Comment: In regards to selecting BACT, in terms of applica tion and need, the urgency to reduce emissions, why are we picking win ners? Why don’t we let the market pick the winners? We need to be a little mo re fuel neutral and a little bit more emissions driven and support rules that make s ense. (CE 2)

Agency Response: The regulation remains fuel neutral and allows th e use of either diesel engines or alternative fuel engines to meet the requirements of the regulation.

11. Comment: The cleanest options are going to be alternative fuels certified to the optional low NOx standards of 0.2 g/bhp-hr in 2007, and we’re proposing that that technology should be employed where applicable . (CNGVC 2)

12. Comment: It is important for Central Valley air quality th at the small and large vehicles handling the cargo from ship to shore be r equired to use alternative fuels with the lowest emission levels possible. (D ENNISON)16

13. Comment: The final Tier 4 standards will require 0.3 g/bhp -hr NOx emissions and 0.01 g/bhp-hr PM emissions. Natural gas engine s in 2007 will be certified to 0.2 g/bhp-hr NOx and 0.01 g/bhp-hr PM. If Tier 4 e missions are cited as BACT, then certainly natural gas engines, for the purpose s of a 2007 regulation, should be considered BACT. (CNGVC 1)

Agency Response: We disagree. The possible higher cost of the alt ernative fuel and alternative fuel infrastructure, along with cleaner diesel engines, which have emissions near to those of alternative fuel engines, favors s election of alternative fuels on a caseby-case basis instead of a general mandate. Theref ore, we do not believe that it is appropriate to exclusively establish natural gas en gines as BACT in cargo handling equipment applications. The regulation is intended to be fuel neutral, and alternative fuel engines are among the various compliance optio ns that are considered BACT for meeting the requirements of the regulation.

14. Comment: We are concerned that the Tier 4 standards and th e 2007 on-road standards are seen as equivalent; but the Tier 4 st andards don’t come into effect until 2011 and are not fully compliant until 2014. We think that’s too long and too far away, especially when some of the alternative f uels will beat the Tier 4 standards in 2007. We should be fuel neutral. (CN GVC 2)

15. Comment: The rule gives the implication that Tier 4 non-ro ad engines will be available in 2007, but Tier 4 non-road standards do n’t go into effect until 2011, and the manufacturers don’t have to be fully compli ant with Tier 4 regulations until 2014. Given the reluctance shown by engine m anufacturers to introduce low emission technology before required, it is hard to see how the proposed rule implemented in 2007 can be considered BACT. (CNGVC 1)

Agency Response: The regulation does not suggest that Tier 4 engi nes will be available in 2007. The Staff Report discusses in d etail both the on-road and off-road standards, including Tier 4, and their effective da tes (Staff Report, pp. II-8 – II-10). Inuse yard trucks, which are responsible for approxim ately two-thirds of the cargo handling equipment emissions, are required to use e ither a certified on-road engine (2007 or later) or a final Tier 4 off-road engine o r equivalent. Until the final Tier 4 engines are available in 2014/2015, we expect most owners and operators to comply using certified on-road engines for the model year purchased. Non-yard truck equipment may also use either certified on-road or off-road engines. As discussed in previous responses, the regulation is fuel neutral, and we do not believe it is appropriate to exclusively establish natural gas engines as BAC T in cargo handling equipment applications. However, alternative fueled engines are among the various compliance options that are considered BACT and may be used in meeting the requirements.

16. Comment: The cost of operation for alternative fuel was no t considered in the cost-effectiveness analysis, and the operation cost s will more than offset the costs of the new technology. (CNGVC 2)17

Agency Response: We disagree. Staff studied the cost of alternati ve fuel operation, which included costs for fuel, infrastructure, and equipment relative to diesel. Costs, however, are only one consideration in establishing regulatory requirements. Alternative fuel use in cargo handling equipment ha s only been successful in limited equipment applications, and the use of 2007 on-road engines in yard trucks greatly narrows the emissions reduction advantage of altern ative fuels compared to diesel for this application.

17. Comment: Please mandate that equipment and transportation involved in cargo movement use the cleanest possible technology and f uels. (DOWDLE)

Agency Response: As has been discussed in response to previous com ments, the regulation requires BACT for all equipment types, w hich can include the use of alternative fuel engines.

18. Comment: I request that the Board require terminal owners and operators to purchase the cleanest and best available control eq uipment available on the market for cargo handling equipment. (LOWENTHAL)

Agency Response: The regulation requires BACT for all newly purcha sed, leased, or rented equipment.

C. Compliance Timeline

1. Comment: Because industry has been proactive in applying ret rofit controls before they were required, the compliance dates sho uld be extended. (PMSA 1) (PMSA 2)

Agency Response: We agree in the case of yard trucks where the maj ority of early retrofits have occurred, and the regulation does al low an additional year for compliance for equipment that have had a verified diesel emiss ion control strategy (VDECS) installed prior to December 31, 2006.

2. Comment: The regulation should take into account various inc entive programs that have legal contractual requirements that may e xtend beyond the compliance dates. (PMSA 1) (PMSA 2)

Agency Response: We agree in the case of yard trucks where the maj ority of incentive programs have been applied. The regulati on includes a compliance extension option for applicable equipment that extends three years beyond the installation date of the VDECS if the funding was provided by a public a gency, and if the program stipulated minimum use requirements that would expi re after the required compliance

date.

3. Comment: Compliance deadlines for equipment used at ports an d intermodal

facilities within the South Coast should be acceler ated. (SCAQMD 1) (CERA)18

Agency Response: We disagree. Staff worked with stakeholders, inc luding local air district and U.S. EPA staff, to craft a statewide r egulation that would affect the ports and intermodal rail yards throughout the state consiste ntly. Requiring separate compliance

dates for one area relative to another would be con tradictory, and could put some

terminals in one area of the state at a business ad vantage relative to terminals in other parts of the state.

4. Comment: The compliance timeline could be shorter and the fi nancial burden for compliance placed on the entities being control led. (GORDON)

Agency Response: We disagree. Staff believes that the regulation contains the most expeditious and stringent compliance schedule feasi ble, and that it maximizes emission

reductions in the most cost-effective manner.

D. Alternative Compliance Plan and Compliance Exten sions

1. Comment: The Alternative Compliance Plan (ACP) is a loophole that doesn’t include operational constraints or allow for public comment. (ENVIR) (CE 1) (GORDON) (CCA) (ENVIR) (UCS)

Agency Response: We disagree. The ACP provision does not provide a loophole in the regulation because safeguards are included to e nsure that the required emission reductions are achieved. Specifically, applicants must provide documentation, calculations, emissions test data, or other informa tion which demonstrates that the alternative emission control strategies under the p roposed ACP will result in equivalent or greater emission reductions than compliance with subsection (e)(3) of the regulation. Applicants must also maintain recordkeeping, report ing, monitoring, and testing procedures that will demonstrate continued complian ce with the ACP. At the Board’s direction, staff proposed modified regulatory langu age in the 15-Day Notice that establishes a process that is open to public scruti ny. Specifically, under the proposed modifications, all documents pertaining to ACP appl ications will be made available for public review, and two separate public comment peri ods will be provided during the application process.

2. Comment: The Long Beach Alliance for Children with Asthma ur ges the Board to strengthen this rule by changing the ACP provisi on to include public review and public comment, if possible. (LBACA 2)

3. Comment: I hope that the resolution will include a public co mment process for the ACP and a report back to the Board on the progr ess of those plans and to also strengthen and be more specific in the require ments of those plans. (NRDC)

Agency Response: At the Board’s direction, the staff proposed modi fications to the ACP process to provide for greater public participa tion and scrutiny. Specifically, under the proposed modifications, all documents pertainin g to ACP applications will be made19

available for public review, and two separate publi c comment periods will be provided during the application process. As stated in the r esponse to Comment number 1 above, safeguards are included in the ACP provision to ens ure that the required emission reductions are achieved. Specifically, applicants must provide documentation, calculations, emissions test data, or other informa tion which demonstrates that the alternative emission control strategies under the p roposed ACP will result in equivalent or greater emission reductions than compliance with subsection (e)(3) of the regulation. Applicants must also maintain recordkeeping, report ing, monitoring, and testing procedures that will demonstrate continued complian ce with the ACP. Additionally, staff will report back to the Board on the status of the development of the ACP guidance and periodically on the number of ACP applications that have been received and how those applications have been handled.

4. Comment: The compliance extensions and ACP options should be removed. (CNGVC 1) (CE 1)

Agency Response: We disagree. Removing compliance extensions and ACP options would unnecessarily limit the flexibility of the pr ogram and stifle innovation. Currently, there are promising control technologies under deve lopment that may be demonstrated to effectively control cargo handling equipment emi ssions, and allowing these demonstrations to go forward could increase the pot ential emission reductions from this

category.

5. Comment: The Coalition does not support compliance extension s. The menu of options ARB is proposing should be sufficient. At worst case, diesel options will include installation of Level 1 control devices, wh ich is no different than the diesel retrofit rule for solid waste collection vehicles, which had no compliance extensions. (CNGVC 1)

Agency Response: We disagree. Please see response to Comment numb er 4 above.

6. Comment: The ACP takes some of the opportunities for emissio n reductions off the table that we can’t afford to give away right n ow. (CNGVC 2)

Agency Response: We disagree. As discussed previously, safeguards are included in the ACP provision to ensure that each approved ACP will result in equivalent or greater emission reductions than compliance with the perfor mance requirements in subsection (e)(3) of the regulation. The ACP provi sion also encourages the application of innovative technologies that could lead to ARB v erification of additional diesel emission control technologies.

7. Comment: The ACP language doesn’t specify that each ACP can include only equipment at the same facility, so that should be a ddressed. (CERA)

Agency Response: We agree. The staff proposed modified regulatory language in the 15-Day Notice, which requires owners and operators to include only equipment under20

their direct control at the same port or intermodal rail yard and does not allow any equipment to be included in more than one ACP.

8. Comment: There should be a requirement for staff to provide a written response to public comments received for ACP applications. (CERA)

Agency Response: Staff proposed modified regulatory language in th e 15-Day Notice that provides for a public review process. During that process, the Executive Officer will consider and address all comments received during t he public comment periods and provide responses to each comment on the ACP Intern et site.

9. Comment: Whether an ACP is approved or denied, whoever has a n interest should be able to appeal that decision to the full Board. (CERA)

Agency Response: We disagree. Appealing to the full Board would d elay the ACP application process, which in turn could result in a loss of emission reduction benefits. Staff’s proposed modified regulatory language in th e 15-Day Notice provides interested parties an opportunity to submit comments regarding the Executive Officer’s proposed approval or disapproval of an ACP application.

10. Comment: The ACP provision would essentially allow one to pr opose an alternative compliance method to be substituted for the proposed regulation – when, in reality, all emission sources and solution s will be required. The ACP provisions will be detrimental to the public need t o address all sources. Compliance options that are currently outside the p roposed regulation will eventually have to be regulated by local if not ARB authority. (CNGVC 1)

Agency Response: We disagree. The ACP provision is intended to al low for flexibility in meeting the requirements of the regulation and f or innovation of additional emission control technologies and only applies to non-yard t ruck equipment subject to the rule. The ACP applicant must demonstrate that the ACP wil l achieve equivalent or greater

emission reductions. If the commenter was also ref erring to the inclusion of other sources of emissions besides cargo handling equipme nt, equipment and sources not subject to the regulation are not eligible to be in cluded in an ACP.

E. Expanding the Regulation to Cover Additional Equ ipment

1. Comment: The rule should have been applicable to cargo handl ing equipment at distribution centers and airports. (ENVIR) (CE 1) (GORDON)

2. Comment: The rule should be amended within one year to inclu de distribution centers and airports where significant cargo handli ng takes place. (CNGVC 1)

Agency Response: We disagree. Because of the community health ris ks associated with cargo handling equipment at ports and intermod al rail yards, it was important to address them quickly with this rule. While the ris ks with distribution centers and airports21

may also be significant, including them in this rul e would have delayed the regulatory process because it would have greatly increased the scope of the rule. A statewide inuse off-road equipment regulation is under developm ent and is scheduled to be considered by the Board in 2007. That rule will ad dress diesel off-road equipment not covered by this rule. Another rule, which addresse s the large, spark-ignition equipment statewide, was approved by the Board in May 2006.

3. Comment: I was disappointed that this rule only applies to p orts and intermodal rail yards when the Business, Transportation, and H ousing Agency (BTH) and California Environmental Protection Agency (CalEPA) process, the Goods Movement Emission Reduction Plan, is looking at eve rybody that’s impacted by the goods movement system, not just the people at t he ports and intermodal rail yards. (CE 2)

4. Comment: It is critical that the Board direct staff to come back to the Board within one year to include cargo handling equipment at airports and distribution centers. We don’t understand why staff decided to remove airports and distribution centers from the original rulemaking p rocess, as their omission contradicts the goals established by the Goods Move ment Action Plan. (CE 1)

Agency Response: We disagree. See response to Comments number 1 a nd 2 above.

5. Comment: The Board should consider adopting similar rules fo r heavy-duty onroad trucks that transport cargo from ports to inte rmodal rail yards. (CNGVC 1) (SCAQMD 1) (SCAQMD 2) (CE 1) (NRDC) (CERA)

Agency Response: We agree. Staff is currently developing a port-t ruck measure to specifically address emissions from on-road trucks at ports. This measure, which may be regulatory or non-regulatory, is expected to be considered by the Board in 2007. Additionally, a proposed regulation for on-road pri vate truck fleets is scheduled to be considered by the Board in the near future.

6. Comment: We ask that ARB staff work with the Port of Long Be ach to develop solutions to the emissions from on-road heavy-duty trucks. (POLB)

Agency Response: We agree. See response to Comment number 5 above

.

7. Comment: Switcher locomotives and line haul locomotives shou ld be included in the regulation within one year. (SCAQMD 1) (CE 1) (NRDC) (CERA)

8. Comment: ARB should develop an enhancement in the short term to this rule to cover locomotive switcher and line haul engines whe n they are at standby or under maintenance. (SCAQMD 2)

Agency Response: The California Legislature has granted ARB broad authority to regulate locomotive emissions, and has specifically directed the ARB to achieve the22

maximum degree of emission reductions by the earlie st practicable date from off-road equipment and vehicles, including locomotives. How ever, while this authority under State law is quite clear, preemption limitations at the federal level, which are supreme to State law, restrain the ability of ARB to engage in a regulatory approach targeting locomotive emission standards. Federal law signifi cantly restricts the ability of states and local jurisdictions to control locomotive emiss ions, or to enforce rules that affect national railroad transportation. These limitation s mean that voluntary agreements, as opposed to regulation, are preferable courses of ac tion to ensure timely and certain emission benefits from railroad operations.

9. Comment: I trust that you will also consider ways to reduce pollution from trains that travel the valley. (DENNISON)

Agency Response: ARB has developed a comprehensive program to redu ce emissions from railroad operations. The program in cludes negotiating memoranda of understanding with the two major railroads that acc elerate locomotive turnover by 2010, require the installation of automatic idling device s, establish a statewide smoke opacity inspection program, and perform yard-by-yard risk a ssessments and mitigation. Additionally ARB strongly supports the adoption of more stringent (Tier 3) national locomotive standards and accelerating the introduct ion of these locomotives into

California.

F. Procedures and Miscellaneous Issues

1. Comment: The Board should require an annual report back on t he implementation of the regulation and the ACP. (SMA QMD)

2. Comment: The Board should require staff to report back to th em within six months on updates to the regulation and on the feas ibility of addressing similar issues in future diesel regulations. (ENVIR)

Agency Response: Staff will report back to the Board regarding the development of the ACP guidance and semi-annually on the number of ACP applications that have been received and how they have been handled.

3. Comment: The Board should make sure that rules are adopted quickly to address this kind of equipment in other types of lo cations and making sure that we are getting the best possible technologies used in reducing emissions from these types of sources. (ALAC)

Agency Response: As discussed in response to previous comments, ad ditional statewide regulations to address other off-road die sel-fueled equipment not covered by this regulation are under development. Staff is al so committed to forming a technology working group, or working through one of the existi ng technical working groups, such as the Maritime Air Quality Technical Working Group, t o monitor the feasibility of retrofit23

emission controls and to share information on succe ssful applications of experimental emission control strategies (Staff Report, pp. ES-1 0 – ES-11).

4. Comment: We ask the Board to request staff to come back to t hem with recommendations regarding encouraging the use of al ternatives to dieselpowered equipment, accelerating the turnover of the equipment above and beyond what the regulation is requiring, reducing i dling emissions from this equipment, and addressing the lack of distribution centers and airports in this regulation. (UCS)

Agency Response: As discussed in response to previous comments, ad ditional regulations are under development to address off-ro ad equipment statewide, and staff is committed to monitoring the feasibility of retrofit emission controls and to share information on successful applications of experimen tal emission reduction strategies. Staff will continue to look at idling restrictions for this type of equipment and others as part of potential additional rulemakings.

5. Comment: We ask that staff report back in no later than six months on how to require the use of best available control technolog ies for all types of equipment considering age and other technological feasibility issues, how to appropriately offer incentives for the use of cleaner, more prote ctive alternative fuels, and how to reinstate idling limits. (CCA)

Agency Response: Please see response to Comment number 4 above. M ore stringent on-road and off-road diesel engine standa rds are lessening the benefits of selecting alternative fueled engines over diesel en gines, particularly in the case of yard trucks, which, in order to meet the requirements of this regulation, will be required to accelerate turnover to certified on-road engines or final Tier 4 off-road engines (or the equivalent). Within the first three years of imple mentation, by 2010, the emissions from on-road diesel engines and alternative fuel (LNG) e ngines will be virtually identical, making incentives for one over the other an impract ical option. Staff will continue to look at idling restrictions for this type of equipm ent and others as part of potential additional rulemakings.

6. Comment: Military tactical support equipment should be exemp t from the regulation. (DOD 1) (DOD 2)

Agency Response: We agree and have included the exemption as part of the changes in regulatory language in the 15-Day Notice

.

7. Comment: Because the 2007 certified engine standards are man ufacturer average standards, yard trucks could end up with en gines that emit 2.4 g/bhp-hr NOx. (SCAQMD 2) (NRDC)

Agency Response: We disagree. Under the certified on-road diesel engine standards (title 13, CCR, section 1956.8), at least 50 percen t of the engines manufactured for24

model years 2007 through 2009 must meet a 0.2 g/bhp -hr NOx standard, while the other 50 percent must meet a 2.0 g/bhp-hr standard. Manufacturers have consistently expressed to staff that they intend to have 100 per cent of their engines meet the average (1.1 to 1.2 g/bhp-hr NOx) for model years 2 007 through 2009. Because of this, we believe it is unlikely that 2007 through 2009 mo del year yard truck engines will exceed 1.2 g/bhp-hr NOx emissions. For model years 2010 and beyond, 100 percent must meet a 0.2 g/bhp-hr NOx standard.

8. Comment: Operators have begun the use of electrified rubber- tired gantry (RTG) cranes, and where that wasn’t feasible, there is alternative fueled equipment available. (SCAQMD 2) (NRDC)

Agency Response: As discussed in the Staff Report and this FSOR, t he use of alternative fueled equipment, particularly for non- yard truck vehicles, is limited. While BNSF Railway is proposing a new intermodal rail yar d at the Port of Los Angeles for which they are considering the use of electric RTG cranes, there are only two electric RTG cranes in operation in the world (both in Europ e), and none are currently in operation in the United States. BNSF Railway’s pro posal is currently conceptual and

has not been demonstrated to be feasible.

9. Comment: The resolution should acknowledge and encourage the development of effective local strategies, such as those being pursued in the Port of Los Angeles. (SCAQMD 2) (NRDC)

Agency Response: Acknowledgement for the ports’ air quality improv ement plans to reduce emissions from port-side diesel equipment wa s included in the Staff Report (Staff Report, pp. II-11). Staff has worked closel y with the ports in their development of their strategic plans and will continue to partner with them as they begin to implement the strategies specified in their plans.

10. Comment: ARB cannot enforce any aspect of the regulation u ntil the U.S. EPA has authorized the proposed rulemaking pursuant to the federal CAA section 209(e)(2). (EMA)

Agency Response: As discussed in the Staff Report, CAA section 209 (e) allows California to request and receive authority from th e U.S. EPA to establish requirements for off-road mobile engines (Staff Report, pp. ES-2 , I-2). ARB will make such a waiver request to the U.S. EPA as soon as this regulation becomes effective. A central part of ARB’s request to U.S. EPA will be authorization to require existing off-road yard trucks to repower using new 2007 heavy-duty vehicle on-roa d engines. California has already been granted a waiver by U.S. EPA to adopt and enfo rce emission standards for these engines. See California State Motor Vehicle Pollution Control St andards; Waiver of Federal Preemption, Decision of the Administrator ( Heavy-Duty Diesel Vehicles and Engines Standards for 2007 and Later Model Years) , 70 Fed.Reg. 50322 (8/26/05).25

11. Comment: MECA would like to work with ARB staff to define a streamlined verification extension process that would help deli ver more verified options to the off-road sector and expand the verified retrofit te chnology options available for cargo handling fleet operators to comply with the p roposed ARB PM reduction regulations. (MECA 1) (MECA 2)

Agency Response: Staff will be happy to work with MECA in the veri fication process.

12. Comment: MECA is happy to report that the development effo rt for the 2007 onroad diesel engines is on track; those engines will be in the marketplace come 2007. (MECA 2)

Agency Response: We appreciate MECA’s comment.

13. Comment: Our attorneys disagree with the statement in the Staff Report, “Districts are not authorized to adopt requirements for equipment subject to the proposed regulation.” We ask that this be struck f rom the Staff Report. If one looks at Vehicle Code Section 670, definition of a vehicle, it clearly says, “A device by which any person or property may be prope lled, moved or drawn upon highway.” There are clearly types of emission sour ces covered by this rule that we believe we have authority under other provisions of the Health and Safety Code. (SCAQMD 2) (NRDC)

14. Comment: I suggest that you strike the line regarding SCAQ MD’s authority as they requested, and let the lawyers fight it out an d get back to you with their decisions. (CCA)

Agency Response: Under the Health and Safety Code, ARB has exclusi ve authority to regulate vehicular sources, and air di stricts have the primary authority to regulate nonvehicular sources

. See Health and Safety Code section 39002, which provides in relevant part:

Local and regional authorities have the primary res ponsibility from

all sources other than vehicular sources. The cont rol of vehicular sources, except as otherwise provided in this divis ion, shall be the responsibility of the Air Resources Board.

California courts have broadly defined vehicular so urces to include any self-propelled vehicle that is capable of being drawn upon a highw ay, whether or not the object was designed to operate on a highway. Health and Safet y Code section 39060 defines

“vehicular sources” as “those sources or air contam inants emitted from motor vehicles.” The Health and Safety Code definitions of “motor ve hicle” and “vehicle” incorporate the

definitions in the Vehicle Code. Vehicle Code sect ion 670 defines “vehicle” as “a device by which any person or property may be propelled, m oved, or drawn upon a highway, excepting a device moved exclusively by human power or used exclusively upon26

stationary rails or tracks.” Vehicle Code section 415 defines “motor vehicle” as “a vehicle which is self-propelled.”

The courts have largely interpreted the definitions in the context of insurance claims, and have uniformly found the definitions to be broa d. California courts have found, among other vehicles, a bulldozer, 1 a self-propelled mobile crane, 2 a forklift, 3 and a four-wheel Le Tourneau scraper 4 all to be motor vehicles. There is no reported ca se in

which similar machines have been found not to be a motor vehicle.

G. Incentive Funding

1. Comment: The regulation will preclude equipment from accessi ng certain incentive funding programs which could possibly del ay early implementation of currently available and future technologies. (PMSA 1)

Agency Response: We disagree. Existing incentive funding programs , such as the Carl Moyer Program, remain an option for equipment that complies early or goes above and beyond the requirements of the regulation. Sta ff believes the commenter is referring to the Energy Policy Act of 2005, which a uthorizes $200 million each year, nationwide, for fiscal years 2007 through 2011 to p rovide grants or low-cost revolving

loans to achieve reductions in diesel emissions. T hese monies cannot be used to fund

emission reduction measures mandated under Federal, State, or local law. As discussed in the Staff Report, it is unknown when m onies will be appropriated and how much funding will be made available to California. While this regulation is clearly a State mandate, the ARB would support the use of the se monies by cargo handling equipment operators provided the funds are used to comply early or to achieve greater emissions benefits, similar to the manner in which Carl Moyer Program funds can be

used.

2. Comment: Federal funds are coming into play under the Energy Policy Act. We would like to see some consideration for allowing m ore of the incentive funds from both state and federal programs to be applied to this equipment in the hopes that we’ll turn over the equipment more aggre ssively and sooner than we might otherwise do if we solely rely upon the regul ation to turn over the equipments. (PMSA 2)

Agency Response: See response to Comment number 1 above.

1 Lambert v. Southern Counties Gas Company (1959) 52 C.2d 347.

2 Donahue Const. Co. v. Transport Indem. Co. (1970) 7 Cal.App.3d 291.

3 (Travelers Indem. Co. v. Colonial Ins. Co. (1966) 242 Cal.App.2d 227, 236-238 disapproved on appeal on other grounds),

4 People v. Pakchoian (1952) 114 Cal.App.2d Supp.27

H. Recordkeeping and Reporting Requirements

1. Comment: Individual labels on equipment are redundant and un necessarily burdensome. (PASHA) (PMSA 1) (PMSA 2)

Agency Response: In subsection (i)(2) (Records Kept in Mobile Carg o Handling Equipment), the regulation allows for either indivi dual labels or an alternative form approved by the Executive Officer or designee that is immediately accessible at the time of inspection by the enforcement agency. In other words, the commenter and others may use an alternative method which they believe is less burdensome in lieu of applying individual labels, so long as the Executiv e Officer has approved the alternative

method.

2. Comment: Records should be maintained for three to five year s or until the equipment is sold. Maintaining records longer than that becomes onerous and burdensome. (DOD 1)

Agency Response: In order to adequately enforce the requirements o f the regulation, staff believes it is necessary for owners and opera tors to maintain the appropriate records for their equipment as long as it operates at a port or intermodal rail yard in

California.

IV. SUMMARY OF PUBLIC COMMENTS AND AGENCY RESPONSES – NOTICE

OF MODIFIED TEXT

Four written comments were received during the 15-d ay comment period. One comment was made in support of the modifications, a nd two others did not specifically address the modifications. Only one comment was ma de regarding the specific regulatory actions proposed in the Notice of Modifi ed Text (dated May 18, 2006). Set forth below is a summary of the comment together wi th the Agency’s response.

Comment Received during the 15-day Comment Period

Abbreviation Reference

Number Commenter

PARKER PARKER Brad Parker

Private Citizen Written testimony: May 30, 2006

1. Comment: Staff should not have exempted the military, which makes up a huge part of the ports (Seal Beach). Their emissions al one will undermine the purpose

of reductions.

Agency Response: The military is not exempt from the requirements of the regulation. Since the intent of the regulation is to reduce emi ssions from commercial ports and28

intermodal rail yards because of the near source he alth risk to communities, the regulation applies to military operations that occu r as part of a port or on contiguous properties. However, staff modified the proposed r egulatory text to exempt military tactical support cargo handling equipment used in c ombat, combat support, combat service support, tactical or relief operations, or training for such operations. Staff believes the modification is appropriate and necess ary for reasons of national defense and security.