Document ID: EPA-R09-OAR-2013-0534-0013
Agency: epa
Document Type: Rule
Title: Air Quality State Implementation Plans; Approvals and Promulgations: California; San Joaquin Valley; Contingency Measures for the 1997 PM2.5 Standards
Posted Date: 2014-05-22T04:00Z

[Federal Register Volume 79, Number 99 (Thursday, May 22, 2014)]
[Rules and Regulations]
[Pages 29327-29351]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11681]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2013-0534; FRL-9911-07-Region 9]

Approval and Promulgation of Implementation Plans; California; 
San Joaquin Valley; Contingency Measures for the 1997 PM2.5 
Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving a State 
implementation plan (SIP) revision submitted by California that 
corrects deficiencies in the Clean Air Act (CAA) contingency measures 
for the 1997 annual and 24-hour national ambient air quality standards 
(NAAQS) for fine particulate matter (PM2.5) in the San 
Joaquin Valley (SJV). Approval of this SIP revision lifts the CAA 
section 179(b)(2) offset sanctions and terminates the CAA section 
179(b)(1) highway funding sanction clock triggered by the EPA's partial 
disapproval of the SJV SIP for attainment of the 1997 PM2.5 
NAAQS on November 9, 2011.

DATES: This rule is effective on June 23, 2014.

ADDRESSES: You may inspect the supporting information for this action, 
identified by docket number EPA-R09-OAR-2013-0534, by one of the 
following methods: Federal eRulemaking portal, http://www.regulations.gov, please follow the online instructions; or, Visit 
our regional office at, U.S. Environmental Protection Agency Region 9, 
75 Hawthorne Street, San Francisco, CA 94105-3901.
    Docket: The index to the docket (docket number EPA-R09-OAR-2013-
0534) for this action is available electronically at http://www.regulations.gov and in hard copy at EPA Region 9, 75 Hawthorne 
Street, San Francisco, California. While documents in the docket are 
listed in the index, some information may be publicly available only at 
the hard copy location (e.g., voluminous records, large maps, 
copyrighted material), and some may not be publicly available in either 
location (e.g., Confidential Business Information). To inspect the hard 
copy materials, please schedule an appointment during normal business 
hours with the contact listed directly below.

FOR FURTHER INFORMATION CONTACT: Frances Wicher, EPA Region 9, (415) 
972-3957, wicher.frances@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and 
``our'' refer to the EPA.

Table of Contents

I. Background Information
II. Public Comments and the EPA's Responses
    A. Comments Regarding Necessary Types and Quantities of 
Contingency Measure Emission Reductions
    B. Comments Regarding Emission Reductions From Waiver Measures 
and Incentive Grant Programs
    C. General Comments
III. Final Actions
IV. Statutory and Executive Order Reviews

I. Background Information

    On November 9, 2011, the EPA partially approved and partially 
disapproved the San Joaquin Valley PM2.5 State 
Implementation Plan (``SJV PM2.5 SIP'') (76 FR 69896). The 
SJV PM2.5 SIP is California's plan for attaining the 1997 
PM2.5 NAAQS in the San Joaquin Valley.\1\ Our partial 
disapproval of the SJV PM2.5 SIP was based on our 
determination that its contingency measure provisions failed to meet 
the requirements of Clean Air Act (``CAA'' or ``the Act'') section 
172(c)(9), which require that the SIP for each PM2.5 
nonattainment area contain contingency measures to be implemented if 
the area fails to make reasonable further progress (RFP) or to attain 
the NAAQS by the applicable attainment date. See 76 FR 41338, 41357 to 
41359 (July 13, 2011) (proposed partial approval and partial 
disapproval of SJV PM2.5 SIP) and 76 FR 69896, 69918 to 
69919 and 69924 (final partial approval and partial disapproval of SJV 
PM2.5 SIP). The disapproval became effective on January 9, 
2012, starting a sanctions clock for imposition of new source review 
offset sanctions 18 months after January 9, 2012, and highway sanctions 
6 months after the imposition of offset sanctions, pursuant to CAA 
section 179 and our regulations at 40 CFR 52.31.
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    \1\ For a more detailed description of the SJV PM2.5 
SIP, see 76 FR 41338, 41339 to 41359 (July 13, 2011).
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    On July 3, 2013, CARB submitted the Contingency Measure SIP as a 
revision to the California State Implementation Plan. The Contingency 
Measure SIP addresses the SIP deficiencies identified in the EPA's 2011 
partial disapproval of the SJV PM2.5 SIP by (1) confirming 
that

[[Page 29328]]

the SJV area had met its 2012 RFP milestones and (2) expanding upon the 
attainment contingency measures in the SJV PM2.5 SIP to 
establish a contingency plan that achieves SIP-creditable emission 
reductions equivalent to approximately one year's worth of RFP in 2015. 
See generally Contingency Measure SIP. Among these SIP-creditable 
emission reductions are reductions from a contingency provision in the 
District's residential woodburning rule, Rule 4901, and reductions from 
the District's implementation of two incentive grant programs: The Carl 
Moyer Memorial Air Quality Standards Attainment Program (``Carl Moyer 
Program'') and the Proposition 1B: Goods Movement Emission Reduction 
Program (``Prop 1B''). Id. at 4 and 6. A detailed description of the 
Contingency Measure SIP can be found at 78 FR 53113, 53115 (August 28, 
2013).
    On August 28, 2013, we proposed to approve the Contingency Measure 
SIP as correcting the deficiency in the SJV PM2.5 SIP 
related to the attainment contingency measure requirement (78 FR 
53113). At the same time, we also proposed to find, based on 
documentation in the Contingency Measure SIP, that the RFP contingency 
measure requirement in CAA section 172(c)(9) for the 2012 milestone 
year was moot because the SJV has achieved the emission reduction 
benchmarks for the 2012 RFP year. Our full evaluation of the 
Contingency Measure SIP and our rationale for finding that this SIP 
corrects the deficiencies in the SJV PM2.5 SIP can be found 
in the August 28, 2013 proposed rule. Based on our proposed approval of 
the Contingency Measure SIP, we also issued on August 28, 2013, an 
interim final determination that stayed the imposition of the offset 
sanctions that became effective in the SJV on July 9, 2013 and tolled 
the sanctions clock for the imposition of the highway sanctions (78 FR 
53038).

II. Public Comments and the EPA's Responses

    The EPA provided a 30-day period for the public to comment on our 
proposed rule. During this comment period, which ended on September 28, 
2013, we received four public comments. A copy of these comment letters 
can be found in the docket. We provide our responses to these comments 
below.

A. Comments Regarding Necessary Types and Quantities of Contingency 
Measure Emission Reductions

    Comment 1: Earthjustice cites the D.C. Circuit Court of Appeals' 
decision in Natural Resources Defense Council v. EPA, 706 F.3d 428 
(D.C. Cir. 2013) (hereafter ``NRDC'') to support its claim that the 
Contingency Measure SIP cannot be approved under the CAA. Specifically, 
Earthjustice argues that the EPA's approval of the SJV PM2.5 
SIP was built upon the EPA's 2007 implementation rule for the 1997 
PM2.5 NAAQS (hereafter ``2007 PM2.5 
Implementation Rule''),\2\ which the NRDC court has since remanded for 
failure to comply with the requirements of subpart 4 of title I, part D 
of the CAA; that the SJV PM2.5 SIP and the reasonable 
further progress (RFP) projections therein likewise fail to satisfy the 
applicable requirements of subpart 4; and that because the contingency 
measure obligation is based upon the RFP projections in the SJV 
PM2.5 SIP, the Contingency Measure SIP is also flawed.
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    \2\ See ``Clean Air Fine Particle Implementation Rule,'' 72 FR 
20586 (April 25, 2007), codified at 40 CFR part 51, subpart Z.
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    Earthjustice argues that the most significant defect in the SJV 
PM2.5 SIP is that it assumes the maximum available 
attainment deadline without implementing best available control 
measures (BACM) under CAA section 189(b)(1)(B), and that because of 
this erroneous attainment date the RFP trajectory in the SJV 
PM2.5 SIP provides for a 9-year attainment ``glide path'' 
that fails to comply with the CAA. Under subpart 4, Earthjustice 
argues, nonattainment areas relying on reasonably available control 
measures have four years to attain and thus have a contingency measure 
obligation of 25 percent of the total reductions required for 
attainment, rather than the one-ninth of total reductions provided in 
the Contingency Measure SIP. Alternatively, Earthjustice argues that 
had the SJV qualified for an extended attainment deadline under CAA 
section 188(b)(1), the District would have had to implement BACM, which 
would have provided for steeper emission reductions than currently 
provided in the SJV PM2.5 SIP which is based on the 
implementation of reasonably available controls.
    Earthjustice further contends that because the SJV area has failed 
to attain the PM2.5 standard by the ``moderate'' area 
deadline in subpart 4, a new plan with new controls and an attainment 
horizon that is less than 9 years is required. Earthjustice states that 
this new plan must include new RFP targets and contingency measures, 
and that the calculation of these targets will require more than one-
ninth of the total reductions required, because the interval between 
the baseline for the serious area plan and the attainment deadline will 
be less than nine years. Thus, according to Earthjustice, ``no matter 
how the SJV chooses to comply with subpart 4, there is no scenario in 
which the RFP trajectory and therefore the quantity of emission 
reductions required for contingency measures will match those 
calculated in the [SJV PM2.5 SIP].''
    Response 1: As a threshold matter, to the extent the commenter is 
challenging our November 2011 final action on the SJV PM2.5 
SIP based on the D.C. Circuit's January 2013 decision in NRDC, such a 
challenge may only be brought in the appropriate circuit court within 
specified timeframes under CAA section 307(b). Section 307(b)(1) 
provides, inter alia, that any petition for review of an EPA action in 
``approving or promulgating any implementation plan under [CAA section 
110] * * * which is locally or regionally applicable may be filed only 
in the United States Court of Appeals for the appropriate circuit'' and 
must be filed ``within sixty days from the date notice of such 
promulgation, approval, or action appears in the Federal Register, 
except that if such petition is based solely on grounds arising after 
such sixtieth day, then any petition for review under this subsection 
shall be filed within sixty days after such grounds arise.'' Our action 
today on the Contingency Measure SIP is not the appropriate forum for a 
challenge to our November 2011 final action on the SJV PM2.5 
SIP.
    We nonetheless respond below to the substance of Earthjustice's 
claims. In NRDC, the U.S. Court of Appeals for the D.C. Circuit 
remanded the EPA's 2007 PM2.5 Implementation Rule,\3\ 
holding that the EPA erred in implementing the 1997 PM2.5 
standards solely pursuant to the general implementation provisions of 
subpart 1 of part D, title I of the CAA, without also considering the 
particulate matter-specific provisions of subpart 4. The court directed 
the EPA to re-promulgate the rule pursuant to subpart 4 of part D, 
title I of the Clean Air Act but declined to impose a deadline by which 
the Agency must do so. See 706 F.3d 428, 437 and n. 10. This decision 
has no bearing on our action on the Contingency Measure SIP.
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    \3\ The NRDC decision remanded both the 2007 PM2.5 
Implementation Rule and a separate rulemaking to implement the New 
Source Review permitting requirements for the 1997 PM2.5 
NAAQS. This latter rule is not at issue in this action.
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    Earthjustice's arguments rest on the premise that the NRDC decision 
necessarily invalidates our November 2011 final action on the SJV 
PM2.5 SIP (76 FR 69896, November 9, 2011) and therefore 
renders flawed any assessment of contingency measure obligations

[[Page 29329]]

derived from that plan. Nothing in NRDC, however, indicates the court 
intended to automatically invalidate other EPA rulemakings that were 
based in whole or in part on the 2007 PM2.5 Implementation 
Rule. Indeed, the D.C. Circuit remanded but did not vacate the 2007 
PM2.5 Implementation Rule,\4\ citing in its opinion (at 706 
F.3d at 437 n. 10) a prior decision in which it held that ``it is 
appropriate to remand without vacatur in particular occasions where 
vacatur `would at least temporarily defeat . . . the enhanced 
protection of the environmental values covered by [the EPA rule at 
issue].' '' North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 
2008). Our November 2011 final action on the SJV PM2.5 SIP 
included approval of District commitments to adopt and implement 
specific control measures on a fixed schedule and State and District 
commitments to achieve specific amounts of NOX, 
SOX and direct PM2.5 emission reductions by fixed 
dates. See 76 FR 69896, 69924 (November 9, 2011), codified at 40 CFR 
52.220(c)(392) and (c)(395). Absent an EPA rulemaking to withdraw or 
revise this final rule, which NRDC does not compel, our final action on 
the SJV PM2.5 SIP remains effective and these State and 
District commitments remain federally-enforceable requirements of the 
California SIP.\5\ We therefore disagree with the commenter's assertion 
that the RFP projections in the SJV PM2.5 SIP render the 
Contingency Measure SIP flawed.
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    \4\ The 2007 PM2.5 Implementation Rule therefore 
remains ``on the books'' while the EPA effects the required changes 
through one or more national rulemakings consistent with the NRDC 
decision.
    \5\ To remove these commitments from the applicable SIP before 
the EPA has re-promulgated an implementation rule pursuant to 
subpart 4 consistent with the NRDC opinion would be to temporarily 
defeat the enhanced environmental protections provided by these 
federally-enforceable control obligations.
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    Additionally, we do not believe that the NRDC court's January 4, 
2013 decision should be interpreted so as to retroactively impose 
subpart 4 requirements on the state in the context of our action on 
this corrective SIP, as the timing and nature of the court's decision 
compound the consequences of disapproval based on such retroactive 
application here.\6\ California submitted the various components of the 
SJV PM2.5 SIP (and revisions thereto) between June 2008 and 
July 2011. On July 13, 2011, we proposed to approve all elements of the 
SJV PM2.5 SIP except for its contingency measure provisions 
and described the specific deficiencies in the contingency measures 
that California would need to address in a corrective SIP submission in 
order to avoid mandatory sanctions (76 FR 41338, 41358 to 41359, 41361, 
July 13, 2011). We finalized this partial approval and partial 
disapproval action on November 9, 2011, effective January 9, 2012, 
starting a sanctions clock for imposition of offset sanctions 18 months 
after January 9, 2012 and highway sanctions 6 months later, pursuant to 
CAA section 179(b) and the EPA's regulations at 40 CFR 52.31 (76 FR 
69896, 69924, November 9, 2011) (final rule partially approving and 
partially disapproving SJV PM2.5 SIP).\7\ We stated in the 
final rule that ``[n]either sanction [would] be imposed under the CAA 
if California submits and we approve prior to the implementation of the 
sanctions, SIP revisions that correct the deficiencies identified in 
our proposed action.'' Id. California reasonably relied upon this 
statement to develop a SIP submission addressing the deficiencies 
identified in the July 2011 proposed action--i.e., a SIP submission 
containing contingency measures that achieve emission reductions 
equivalent to one year's worth of RFP, on a pollutant-specific basis, 
which are in excess of the emission reductions relied on for RFP and 
attainment in the SJV PM2.5 SIP (76 FR 41338, 41358 to 
41359, 41361, July 13, 2011).
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    \6\ In rulemakings on individual areas subsequent to the NRDC 
decision, the EPA has explained in detail its view that the court's 
recently announced interpretation should not be applied 
retroactively. See, e.g., 78 FR 20856 (April 8, 2013) (proposed 
redesignation of Indianapolis to attainment for 1997 annual 
PM2.5 standard) and 78 FR 41698 (July 11, 2013) (final 
redesignation of Indianapolis to attainment for 1997 annual 
PM2.5 standard). The U.S. District Court for the District 
of Colorado recently agreed with the EPA's position that NRDC does 
not require retroactive application of Subpart 4 requirements. See 
Wildearth Guardians v. Gina McCarthy, Case No. 13-CV-1275-WJM-KMT 
(D. Colo., March 11, 2014) (dismissing plaintiff's claim that the 
EPA missed a non-discretionary deadline based on retroactive 
application of Subpart 4).
    \7\ The disapproval also triggered an obligation on the EPA 
under CAA section 110(c)(1) to promulgate a federal implementation 
plan to address the deficiency unless the State submits and the EPA 
approves a plan revision correcting the deficiency within two years 
(76 FR 69896, 69924, November 9, 2011).
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    Over a year later, on January 4, 2013, the D.C. Circuit issued its 
decision remanding the EPA's 2007 PM2.5 Implementation Rule. 
By this time, just six months remained before mandatory offset 
sanctions would apply in the SJV under CAA section 179(b) unless the 
State submitted and we approved a SIP revision correcting the 
deficiencies that prompted the EPA's disapproval. On June 20, 2013, the 
District adopted the Contingency Measure SIP, which it had developed to 
address the deficiencies identified in the 2011 action on the SJV 
PM2.5 SIP, and CARB submitted this corrective SIP on July 3, 
2013.\8\ We proposed to approve the Contingency Measure SIP on August 
28, 2013 (78 FR 53113). Concurrently, we issued an interim final 
determination to stay offset sanctions and defer highway sanctions in 
the SJV area, based on our ``proposal to approve the State's SIP 
revision as correcting the deficiency that initiated these sanctions'' 
(78 FR 53038, August 28, 2013).\9\ To disapprove this corrective SIP 
submission now, based on a retroactive application of subpart 4 
requirements to the SJV PM2.5 SIP, would immediately subject 
the SJV area to offset sanctions and highway sanctions under the EPA's 
sanction application sequencing rule in 40 CFR 52.31(d)(2)(ii).\10\ We 
believe it would be unreasonable to now disapprove this SIP submission, 
which corrects the deficiencies we had identified, and subject the SJV 
area to mandatory sanctions solely because the State did not address 
subpart 4 requirements of which it had no notice.\11\
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    \8\ Letter dated July 3, 2013, from Richard W. Corey, Executive 
Officer, California Air Resources Board, to Jared Blumenfeld, 
Regional Administrator, U.S. EPA Region 9, transmitting the San 
Joaquin Valley Air Pollution Control District's ``Quantification of 
Contingency Reductions for the 2008 PM2.5 Plan'' (adopted 
June 20, 2013), with enclosures.
    \9\ Under 40 CFR 52.31(d)(2)(ii), during the period between 18 
and 24 months following the EPA's disapproval of a plan submission, 
offset sanctions are stayed and highway sanctions deferred if the 
EPA proposes to approve a revised plan submitted by the State and 
issues an interim final determination that the revised plan 
``corrects the deficiency prompting the [disapproval].''
    \10\ The offset sanction initially applied in the SJV area on 
July 9, 2013 (78 FR 53038, August 28, 2013). Thus, under 40 CFR 
52.31(d)(2)(ii), the offset sanction would reapply on the date the 
EPA issued a proposed or final disapproval and the highway sanction 
would apply immediately because more than 6 months have passed since 
initial application of the offset sanction.
    \11\ As the U.S. District Court for the District of Colorado 
recently stated, ``retroactive application of Subpart 4 to impose 
deadlines of which the States were not previously aware would be 
unfair and contrary to the state/federal balance outlined in the 
CAA.'' See Wildearth Guardians v. Gina McCarthy, Case No. 13-CV-
1275-WJM-KMT (D. Colo., March 11, 2014) at 12.
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    Moreover, it is not clear what RFP projections would result from 
the new subpart 4 plan that Earthjustice calls for and, consequently, 
it is impossible for the State to quantify a contingency measure 
obligation based on such a new plan before it is developed.\12\ It 
would

[[Page 29330]]

be even more unreasonable to disapprove this corrective SIP submission 
on the basis of RFP trajectories that cannot currently be ascertained, 
particularly given the lengthy rulemakings that would be necessary for 
the State to develop a new plan under subpart 4 with new RFP targets 
and a new attainment deadline, and the likely economic hardship that 
would result from continued application of mandatory offset and highway 
sanctions during this time. The D.C. Circuit recognized the inequity of 
this type of retroactive impact in Sierra Club v. Whitman, 285 F.3d 63 
(D.C. Cir. 2002), where it upheld the district court's ruling refusing 
to make retroactive the EPA's determination that the St. Louis area did 
not meet its attainment deadline. In that case, petitioners urged the 
court to make the EPA's nonattainment determination effective as of the 
date that the statute required, rather than the later date on which the 
EPA actually made the determination. The court rejected this view, 
stating that applying it ``would likely impose large costs on the 
States, which would face fines and suits for not implementing air 
pollution prevention plans * * * even though they were not on notice at 
the time.'' Id. at 68. Similarly, it would be unreasonable to penalize 
California by rejecting this corrective SIP on the basis of subpart 4 
requirements of which the State was unaware when we partially 
disapproved the SJV PM2.5 SIP, particularly when relief from 
mandatory sanctions would not be available until after the State 
completes a lengthy rulemaking process to adopt an entirely new plan 
under subpart 4.
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    \12\ As the EPA explained in the preamble to the 2007 
PM2.5 Implementation Rule, contingency measures should 
provide for emission reductions equivalent to about one year of 
reductions needed for RFP, based on the overall level of reductions 
needed to demonstrate attainment divided by the number of years from 
the ``base year'' to the attainment year (72 FR 20586, 20643, April 
25, 2007). Thus, without first establishing the relevant base year, 
the attainment year, and the overall level of reductions needed to 
demonstrate attainment, and then considering whether available 
controls (whether RACM or BACM) might expedite the attainment date, 
it is impossible to determine the rate of emission reductions that 
would demonstrate RFP and the corresponding amount of emission 
reductions that would be equivalent to about one year of RFP.
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    In separate rulemakings, the EPA has taken steps to respond to the 
NRDC decision by addressing the applicable requirements of subpart 4 
for areas designated nonattainment for the 1997 PM2.5 NAAQS 
and/or the 2006 PM2.5 NAAQS. For example, the EPA recently 
completed a rulemaking to classify all PM2.5 nonattainment 
areas nationwide, including the San Joaquin Valley, as ``moderate'' 
nonattainment under subpart 4 and to establish a December 31, 2014 
deadline for the states to submit any additional SIP revisions that may 
be necessary to satisfy the requirements applicable to moderate 
nonattainment areas under CAA section 189(a). See 78 FR 69806 (November 
21, 2013) (proposed rule) and ``Identification of Nonattainment 
Classification and Deadlines for Submission of State Implementation 
Plan (SIP) Provisions for the 1997 Fine Particle (PM2.5) 
National Ambient Air Quality Standard (NAAQS) and 2006 PM2.5 
NAAQS,'' signed April 25, 2014 (final rule, pre-publication copy). As 
explained in that rulemaking, the EPA recognizes that prior to the D.C. 
Circuit's decision in NRDC, states have worked towards meeting the air 
quality goals of both the 1997 PM2.5 standards and the 2006 
PM2.5 standards in accordance with EPA regulations and 
guidance derived from subpart 1, including the requirements of the 2007 
PM2.5 Implementation Rule (78 FR 69806, 69809). Taking this 
history into account, the EPA concluded that a December 31, 2014 
deadline would provide states a relatively brief but reasonable amount 
of time to ascertain whether and to what extent any additional SIP 
submissions would be needed to satisfy the applicable requirements of 
subpart 4 in a particular nonattainment area and to develop, adopt and 
submit any such SIPs. See id. The EPA explicitly stated that this 
rulemaking ``does not affect any action that the EPA has previously 
taken under section 110(k) of the Act on a SIP for a PM2.5 
nonattainment area.'' Id. at 69810.
    Accordingly, California is obligated to consider whether and to 
what extent any additional SIP submissions may be required to satisfy 
the applicable requirements of subpart 4 for the 1997 and/or 2006 
PM2.5 NAAQS in the SJV and to develop, adopt and submit any 
such SIPs, following reasonable notice and public hearings, no later 
than December 31, 2014. In the meantime, our November 2011 final action 
remains in effect and continues to provide the appropriate basis for 
calculating the required quantity of emission reductions in this 
corrective SIP. We believe it is appropriate to address the NRDC 
decision on a prospective rather than retrospective basis by 
maintaining the environmental benefits of air quality plans that the 
EPA has previously approved while working with state and local agencies 
to supplement these prior submissions as necessary going forward. Our 
approval of the Contingency Measure SIP today does not obviate the 
State's obligation to submit these additional SIP revisions, consistent 
with the requirements of subpart 4, including additional contingency 
measures as necessary.
    Comment 2: Earthjustice argues that the EPA cannot claim that the 
Contingency Measure SIP and the SJV PM2.5 SIP are consistent 
with the implementation rule remanded by the D.C. Circuit pending 
adoption of a new implementation rule. According to Earthjustice, 
subpart 4 is self-effectuating and directly-enforceable and does not 
require EPA regulations in order for states to know their planning 
obligations. Additionally, Earthjustice states that the EPA has already 
adopted guidance interpreting subpart 4 in ``State Implementation 
Plans; General Preamble for the Implementation of Title I of the Clean 
Air Act Amendments of 1990'' (57 FR 13498, April 16, 1992) (hereafter 
``General Preamble'') and in ``State Implementation Plans for Serious 
PM-10 Nonattainment Areas, and Attainment Date Waivers for PM-10 
Nonattainment Areas Generally; Addendum to the General Preamble for the 
Implementation of Title I of the Clean Air Act Amendments of 1990'' (59 
FR 41998, August 16, 1994) (hereafter ``Addendum''). According to 
Earthjustice, the requirements of subpart 4 are plain on their face and 
well understood, and the NRDC holding means that these requirements 
have always applied to PM2.5 nonattainment plans 
notwithstanding the EPA's efforts to avoid them.
    Response 2: It appears Earthjustice is arguing that NRDC compels us 
to disapprove the Contingency Measure SIP based on a retroactive 
application of subpart 4 requirements to the underlying SJV 
PM2.5 SIP. We disagree with this assertion. As explained 
above, we do not believe it would be reasonable to disapprove this 
corrective SIP based on a finding that the underlying attainment and 
RFP demonstrations in the SJV PM2.5 SIP, which we fully 
approved in 2011, now fail to satisfy subpart 4 requirements of which 
the State had no notice. As discussed in our proposal (78 FR 53113, 
53123), the Contingency Measure SIP corrects the deficiencies that 
prompted the partial disapproval of the SJV PM2.5 SIP in 
2011. We believe our approval of this corrective SIP submission today 
is appropriate in light of the State's reasonable reliance on the 2011 
final action, the significant consequences of a disapproval based on 
retroactive application of subpart 4 requirements in this context, and 
the EPA's separate rulemaking to establish reasonable timeframes for 
states to submit additional SIPs that may be required to satisfy the 
requirements of under subpart 4. See Response 1.
    The commenter does not appear to challenge our position that the 
general contingency measure requirement in subpart 1 (CAA section 
172(c)(9)) continues to govern our evaluation of

[[Page 29331]]

and action on the Contingency Measure SIP.\13\ Under the EPA's long-
standing policy, which pre-dates the 2007 PM2.5 
Implementation Rule by more than a decade, contingency measures in a 
SIP should consist of available control measures beyond those required 
in the control strategy to attain the standards or demonstrate RFP, 
provide SIP-creditable emission reductions equal to approximately one 
year of the emission reductions needed for RFP, and be implemented 
without further action by the State. See General Preamble at 13543 to 
13544 (discussing contingency measures for moderate PM10 
nonattainment areas); see also Addendum at 42014 to 42015 (discussing 
contingency measures for serious PM10 nonattainment areas). 
We are approving the Contingency Measure SIP because it meets these 
criteria as applied to the SJV PM2.5 SIP and because it 
corrects the deficiencies that prompted the 2011 partial disapproval of 
that plan (78 FR 53113, 53123).
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    \13\ As explained in our proposed rule, subpart 4 of part D, 
title I of the Act contains no specific provision governing 
contingency measures for PM10 or PM2.5 
nonattainment areas that supersedes the general contingency measure 
requirement for all nonattainment areas in CAA section 172(c)(9). 
Thus, even if we apply the subpart 4 requirements to our evaluation 
of the Contingency Measure SIP and disregard the provisions of the 
2007 PM2.5 Implementation Rule remanded by the NRDC 
court, the general requirement for contingency measures in CAA 
section 172(c)(9) continues to apply (78 FR 53113, 53115 n. 8).
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    Our approval of the Contingency Measure SIP today does not rest on 
a conclusion that compliance with the 2007 PM2.5 
Implementation Rule remanded by the court suffices to satisfy CAA 
requirements pending adoption of a new implementation rule, nor does 
the EPA believe an implementation rule is necessary for states to know 
their planning obligations under subpart 4. Indeed, although the EPA 
has not yet issued a new or revised implementation rule consistent with 
the court's directive in NRDC, the EPA has established a December 31, 
2014 deadline for all states with PM2.5 nonattainment areas 
to submit any additional SIPs that may be required under subpart 4, 
following consultation as appropriate with EPA regional offices. See 
``Identification of Nonattainment Classification and Deadlines for 
Submission of State Implementation Plan (SIP) Provisions for the 1997 
Fine Particle (PM2.5) National Ambient Air Quality Standard 
(NAAQS) and 2006 PM2.5 NAAQS,'' signed April 25, 2014 (final 
rule, pre-publication copy). To the extent any revisions to the SJV 
PM2.5 SIP are necessary to ensure compliance with the 
requirements of subpart 4, California is required to adopt and submit 
such SIP revisions by December 31, 2014, including additional 
contingency measures as appropriate.
    Comment 3: Earthjustice comments that the EPA cannot claim as a 
basis for approval that the Contingency Measure SIP satisfies the 
obligations identified in the EPA's 2011 final action on the SJV 
PM2.5 SIP because that plan does not comply with the Act. 
Earthjustice contends that the approval of the Contingency Measure SIP 
would ``compound the legal defects of the [SJV PM2.5 SIP]'' 
and that we should act immediately to ``call'' the SJV PM2.5 
SIP under CAA section 110(k)(5) because we now know that the plan fails 
to comply with the requirements of the Act. In the meantime, 
Earthjustice asserts that we cannot add to the legal defects by 
approving contingency measures that are based on a defective plan. In 
support of these arguments, Earthjustice cites Association of Irritated 
Residents v. EPA, 632 F.3d 584 (9th Cir. 2011), reprinted as amended on 
January 27, 2012, 686 F.3d 668, further amended February 13, 2012 
(``AIR'').
    Response 3: We disagree with these arguments. First, as discussed 
above, nothing in NRDC compels us to retroactively apply subpart 4 
requirements to the SJV PM2.5 SIP and to disapprove the 
Contingency Measure SIP on that basis. Absent an EPA rulemaking to 
withdraw or revise our November 2011 final action on the SJV 
PM2.5 SIP (76 FR 69896, November 9, 2011), that final action 
remains effective and provides an appropriate basis for our evaluation 
of the State's corrective SIP submission in accordance with the EPA's 
long-standing policies on contingency measures. See Response 1.
    Second, the EPA's discretionary ``SIP call'' authority in CAA 
section 110(k)(5) is not relevant to this action as we have not made 
any of the findings that would obligate us to ``call'' the SJV 
PM2.5 SIP. Section 110(k)(5) provides, in relevant part, 
that ``[w]henever the Administrator finds that the applicable 
implementation plan for any area is substantially inadequate to attain 
or maintain the relevant [NAAQS] . . . or to otherwise comply with any 
requirement of [the CAA],'' the EPA ``shall require the State to revise 
the plan as necessary to correct such inadequacies'' and may establish 
reasonable deadlines, not to exceed 18 months after providing notice to 
the State, for the submission of such plan revisions. CAA section 
110(k)(5), 42 U.S.C. 7410(k)(5). Should we find that the SJV 
PM2.5 SIP is ``substantially inadequate to attain or 
maintain'' the 1997 PM2.5 NAAQS or to otherwise comply with 
any requirement of the Act, we would be obligated to require that 
California revise the plan as necessary to correct such inadequacies 
(i.e., to issue a ``SIP call'') and would be authorized to establish 
reasonable deadlines for the State to submit such plan revisions, not 
to exceed 18 months after the EPA notifies the State of the 
inadequacies. To date, however, we have not made any such finding under 
section 110(k)(5) with respect to the SJV PM2.5 SIP. The EPA 
believes that its recent rulemaking to classify all PM2.5 
nonattainment areas as ``moderate'' nonattainment and to set a December 
31, 2014 deadline for subpart 4 SIP submissions provides a reasonable 
timeframe for California to develop, adopt and submit any additional 
SIP submissions that are necessary to comply with the requirements of 
subpart 4 in the San Joaquin Valley. See ``Identification of 
Nonattainment Classification and Deadlines for Submission of State 
Implementation Plan (SIP) Provisions for the 1997 Fine Particle 
(PM2.5) National Ambient Air Quality Standard (NAAQS) and 
2006 PM2.5 NAAQS,'' signed April 25, 2014 (final rule, pre-
publication copy). Under CAA section 110(k)(5), the EPA retains the 
discretion to determine after this deadline for SIP submissions whether 
the PM2.5 SIP for the SJV is substantially inadequate to 
comply with CAA requirements.
    Finally, the Ninth Circuit Court of Appeal's decision in AIR is 
inapposite. AIR involved our action on proposed revisions to the SIP 
for the one-hour ozone standard for the Los Angeles-South Coast air 
basin (686 F.3d 668 at 671). An approved SIP for the area was in place, 
but after conducting new modeling for the one-hour ozone standard, 
California submitted proposed SIP revisions, including a revised 
attainment demonstration that relied on additional control measures. 
Id. at 672-73. California later withdrew certain of the proposed 
additional control measures and the State specifically represented that 
the currently approved plan was not sufficient to provide for 
attainment. Id. We approved the control measures that had not been 
withdrawn. Id. at 673. However, we disapproved the revised attainment 
demonstration because California had substantially based it upon 
emission reductions resulting from the withdrawn control measures. Id. 
This disapproval left in place the existing attainment demonstration, 
which the State had specifically characterized as deficient. Id. The 
Ninth Circuit held that our action was arbitrary and capricious,

[[Page 29332]]

because we had a duty under CAA section 110(l) to evaluate whether the 
SIP, as a whole, would provide for attainment of the NAAQS when the EPA 
approved a revision to the already approved SIP. Id. at 673-74.
    The circumstances here are significantly different from those in 
AIR. First, nothing in the record indicates that California considers 
any element of the currently approved SJV PM2.5 SIP 
insufficient to provide for attainment of the 1997 PM2.5 
standards. Second, the Contingency Measure SIP neither revises nor 
replaces the attainment demonstration in the currently approved plan, 
nor does it alter any existing emission limitation or other control 
requirement in the applicable SIP. Finally, California has not 
withdrawn any control measures that provide emission reductions 
necessary for attainment of the 1997 PM2.5 standards; to the 
contrary, the Contingency Measure SIP expands upon the contingency 
measure portion of the SJV PM2.5 SIP by providing additional 
NOX, SOX, and direct PM2.5 emission 
reductions beyond those relied upon for RFP and attainment in the SJV 
PM2.5 SIP, thereby correcting the deficiency that we had 
identified in 2011 (78 FR 5311, 53123). In sum, nothing in the 
Contingency Measure SIP revises the currently approved attainment 
demonstration in the SJV PM2.5 SIP, nor does any information 
in the State's submissions raise a question about the plan's 
sufficiency to provide for timely attainment of the 1997 
PM2.5 standards. The AIR decision therefore is not pertinent 
to our action.
    For these reasons, we disagree with the commenter's claim that our 
approval of the Contingency Measure SIP would ``compound'' or ``add 
to'' existing legal defects in the SJV PM2.5 SIP. Because 
our approval of the Contingency Measure SIP strengthens the SIP and 
does not interfere with the on-going process for ensuring that 
requirements for RFP and attainment of the 1997 PM2.5 NAAQS 
are met, we find that it complies with CAA section 110(l). To the 
extent California is obligated to submit additional SIP revisions 
consistent with subpart 4 requirements by December 31, 2014, these 
outstanding obligations do not preclude approval today of the 
Contingency Measure SIP as adequate to correct prior SIP deficiencies 
that triggered sanctions clocks. See Response 1.
    Comment 4: Earthjustice comments that the SJV PM2.5 SIP 
fails to properly address PM2.5 precursor emissions and that 
the EPA approved the plan based on the ``illegal presumption'' in the 
2007 PM2.5 Implementation Rule that VOC and ammonia need not 
be controlled. Earthjustice argues that because the NRDC court has 
rejected this presumption, without a showing that sources of these 
precursor emissions do not contribute significantly to PM2.5 
levels, they are subject to controls and therefore subject to separate 
contingency measure targets. Earthjustice further argues that the San 
Joaquin Valley APCD has made no such demonstration and that ``the 
record currently before EPA suggests that these emissions do contribute 
significantly to ambient levels even though the District believes that 
a strategy focusing on oxides of nitrogen is better policy.'' In 
support of these arguments, Earthjustice references our responses to 
comments regarding VOCs in our final action on the SJV PM2.5 
SIP (76 FR 69896, 69902).
    Response 4: To the extent the commenter is challenging the November 
2011 final action on the SJV PM2.5 SIP based on the D.C. 
Circuit's January 2013 decision in NRDC, such a challenge may only be 
brought in the U.S. Court of Appeals for the appropriate circuit within 
specified timeframes under CAA section 307(b). We are today acting on a 
SIP revision submitted by the State to correct SIP deficiencies that 
prompted sanctions, and comments concerning the analyses underlying the 
November 2011 action on the SJV PM2.5 SIP are not germane to 
this action. See Response 1.
    As discussed above, the November 2011 final action on the SJV 
PM2.5 SIP remains in effect and we believe that it would be 
unreasonable to retroactively apply the requirements of subpart 4 to 
our prior evaluation of the PM2.5 precursor assessment in 
the SJV PM2.5 SIP. Although the EPA has taken steps in a 
separate rulemaking to respond to the NRDC decision regarding subpart 4 
and is requiring all states with PM2.5 nonattainment areas, 
including California, to submit SIP revisions as necessary to address 
subpart 4 requirements no later than December 31, 2014, that rulemaking 
specifically notes that it does not affect any action that the EPA has 
previously taken under CAA section 110(k) on a SIP for a 
PM2.5 nonattainment area. See 78 FR 69806, 69810 (November 
21, 2013) and ``Identification of Nonattainment Classification and 
Deadlines for Submission of State Implementation Plan (SIP) Provisions 
for the 1997 Fine Particle (PM2.5) National Ambient Air 
Quality Standard (NAAQS) and 2006 PM2.5 NAAQS,'' signed 
April 25, 2014 (final rule, pre-publication copy). Accordingly, the RFP 
demonstration in the SJV PM2.5 SIP remains the appropriate 
basis for our evaluation of the specific types and amounts of emission 
reductions provided by the Contingency Measure SIP at this time. See 
Response 1.
    Even if the EPA takes the view that NRDC compels us to 
retroactively apply the requirements of subpart 4 to our prior 
evaluation of the PM2.5 precursor assessment in the SJV 
PM2.5 SIP, it is not clear at this time how such a 
reevaluation would affect the assessment of required contingency 
measures. The D.C. Circuit remanded the EPA's 2007 PM2.5 
Implementation Rule, including the presumptions concerning VOC and 
ammonia in 40 CFR 51.1002.\14\ While expressly declining to decide the 
specific challenge to these presumptions (see 706 F.3d at 437, n. 10 
(D.C. Cir. 2013)), the court cited CAA section 189(e) \15\ to support 
its observation that ``[a]mmonia is a precursor to fine particulate 
matter, making it a precursor to both PM2.5 and 
PM10'' and that ``[f]or a PM10 nonattainment area 
governed by subpart 4, a precursor is presumptively regulated.'' 706 
F.3d at 436, n. 7 (citing CAA section 189(e), 42 U.S.C. 7513a(e)). The 
NRDC court did not, however, address whether and how it was 
substantively necessary to regulate any specific precursor in a 
particular PM2.5 nonattainment area. Moreover, even assuming 
both VOC and ammonia must be regulated for purposes of attaining the 
1997 PM2.5 standards in the SJV, it is not clear what 
collection of control measures for which specific precursors would 
ultimately be necessary to satisfy the requirements in subpart 4 
concerning reasonably available control measures (CAA section 
189(a)(1)(C)), best available control measures (CAA section 
189(b)(1)(B)), or quantitative milestones demonstrating RFP (CAA 
section 189(c)). See, e.g., General Preamble at 13540 to 13541 
(discussing technological feasibility, cost of control, and ``de 
minimis'' emission levels among factors to be considered in

[[Page 29333]]

determining RACM and RACT for a particular PM10 
nonattainment area); see also Addendum at 42011 to 42014 
(distinguishing BACM from RACM standard and discussing factors to be 
considered in determining BACM and BACT for a particular 
PM10 nonattainment area, including technological and 
economic feasibility). Given that it is thus currently impossible to 
identify the precise collection of control measures that would be 
necessary in a new subpart 4 plan, let alone to quantify the emission 
reductions that these measures would collectively achieve and then 
calculate the reductions that would be required for associated 
contingency measure purposes,\16\ we do not believe it would be 
reasonable to penalize the State at this time for failure to carry out 
these tasks in the past. The State and District must first address 
these issues as appropriate through adoption of a SIP revision 
satisfying the requirements of subpart 4, which is due December 31, 
2014.
---------------------------------------------------------------------------

    \14\ The 2007 PM2.5 Implementation Rule contained 
rebuttable presumptions concerning certain PM2.5 
precursors applicable to attainment plans and control measures 
related to those plans. Specifically, in 40 CFR 51.1002(c), the EPA 
provided, among other things, that a state was ``not required to 
address VOC [and ammonia] as . . . PM2.5 attainment plan 
precursor[s] and to evaluate sources of VOC [and ammonia] emissions 
in the State for control measures,'' unless the State or the EPA 
provided an appropriate technical demonstration showing that 
emissions from sources of these pollutants ``significantly 
contribute'' to PM2.5 concentrations in the nonattainment 
area (40 CFR 51.1002(c)(3), (4)).
    \15\ CAA section 189(e) provides that control requirements for 
major stationary sources of direct PM10 shall also apply 
to PM10 precursors from those sources, except where the 
EPA determines that major stationary sources of such precursors ``do 
not contribute significantly to PM10 levels which exceed 
the standard in the area.''
    \16\ See n. 12, supra.
---------------------------------------------------------------------------

    Under the commenter's read of NRDC, relief from mandatory sanctions 
for SIP deficiencies identified prior to the NRDC decision would be 
unavailable to California until it completes lengthy State and local 
rulemaking processes to develop and adopt an entirely new attainment 
plan that satisfies the requirements of subpart 4, requirements that 
are not yet due and that we have not, to date, identified as bases for 
plan disapproval. We decline to read the court's decision in a way that 
would lead to such an inequitable and retroactive result.
    Comment 5: Earthjustice claims that the alleged legal defects of 
the SJV PM2.5 SIP preclude the EPA from determining that the 
proposed contingency measures are ``beyond or in addition to'' the core 
control requirements of the CAA. Earthjustice argues that this problem 
is most apparent in the EPA's treatment of the contingency provision in 
the District's residential woodburning rule, Rule 4901. Citing our 
November 2011 responses to comments on the SJV PM2.5 SIP (76 
FR 69896, 69904), Earthjustice states that we did not require 
implementation of this measure as a basic control measure on the basis 
that it would not ``advance attainment'' by at least a year and argues 
that this justification ``is no longer sufficient if the area is 
subject to the [BACM] requirement, as it must be given that it has 
failed to attain within four years of its designation as nonattainment 
for PM2.5.'' Earthjustice asserts that BACM are more 
stringent than reasonably available controls and cannot be rejected 
based on whether or not they advance attainment, and that credit for 
the Rule 4901 contingency measure is therefore inappropriate. 
Furthermore, Earthjustice asserts that our 2009 approval of Rule 4901 
as BACM for PM10 is ``not sufficient for concluding that 
improvements such as those included in the proposed contingency measure 
are beyond [BACM]'' as the necessary demonstration has not been made 
and ``there is no reason to believe that the lower trigger included in 
the proposed contingency measure is not technically feasible or cost-
effective.'' Noting that the problems associated with PM2.5 
in the Valley are different than those associated with PM10, 
Earthjustice cites the preamble to the EPA's 2007 PM2.5 
Implementation Rule (72 FR 20617) to support its conclusion that ``past 
determinations on the adequacy of control measures cannot substitute 
for a new demonstration for a new state implementation plan.''
    Response 5: As noted above, it appears the commenter is challenging 
the November 2011 final action on the SJV PM2.5 SIP based on 
the D.C. Circuit's January 2013 decision in NRDC. Such a challenge, 
however, may only be brought in the U.S. Court of Appeals for the 
appropriate circuit within specified timeframes under CAA section 
307(b). We are today acting on a SIP revision submitted by the State to 
correct SIP deficiencies that prompted sanctions, and comments 
concerning the analyses underlying the EPA's November 2011 action on 
the SJV PM2.5 SIP are not germane to this action. See 
Response 1.
    We nonetheless respond below to the substance of the commenter's 
claims. To the extent the commenter is arguing that our action today on 
the Contingency Measure SIP constitutes a determination that the 
contingency provision in Rule 4901 is ``beyond BACM,'' this is 
incorrect. We have not yet made any determination concerning BACM for 
PM2.5 in the SJV and make no such determination today, as 
the area has not been classified as a ``Serious Area'' area under 
subpart 4 and the State therefore has not submitted a Serious Area plan 
for SJV for any PM2.5 standard. See CAA section 189(b)(1)(B) 
(requiring that ``each State in which all or part of a Serious Area is 
located'' submit a plan for such area that includes BACM for the 
control of PM10) and section 189(b)(2) (requiring submission 
of BACM provisions ``no later than 18 months after reclassification of 
the area as a Serious Area''). Although Earthjustice suggests that we 
are relying on the Agency's prior (2009) approval of Rule 4901 as BACM 
for the control of PM10 as a basis for today's action, this 
suggestion is also incorrect. As part of the 2011 action on the SJV 
PM2.5 SIP, we concluded that the contingency provision in 
Rule 4901 was not a required RACM under CAA section 172(c)(1) \17\ and 
that it qualified for consideration as a contingency measure because it 
provided emission reductions beyond those relied upon for RFP or 
attainment in that plan. See 76 FR 41338, 41358 (July 13, 2011) and 76 
FR 69896, 69904 and 69906 (November 9, 2011). We disagree with the 
commenter's claim that we must now also conclude that the contingency 
provision in Rule 4901 is not a required BACM under CAA section 
189(b)(1)(B).
---------------------------------------------------------------------------

    \17\ In response to comments on the SJV PM2.5 SIP, we 
discussed the 2009 approval of Rule 4901 for PM10 BACM 
purposes as relevant context, but the Agency's approval of the RACM 
demonstration in the SJV PM2.5 SIP did not rely on this 
prior action (76 FR 69896, 69904 and 69906, November 9, 2011).
---------------------------------------------------------------------------

    Likewise, we disagree with the commenter's contention that our 
November 2011 rationale for not requiring implementation of this 
measure as a basic control measure (i.e., on the basis that it would 
not ``advance attainment'' by at least a year) is no longer sufficient 
because the area has failed to attain within four years of its 
designation as nonattainment for PM2.5 and is, therefore, 
now subject to the BACM requirement. Under the CAA, BACM is required 
only for nonattainment areas classified as serious (CAA section 
189(b)(1)(B)). The SJV area is currently classified as moderate 
nonattainment. See ``Identification of Nonattainment Classification and 
Deadlines for Submission of State Implementation Plan (SIP) Provisions 
for the 1997 Fine Particle (PM2.5) National Ambient Air 
Quality Standard (NAAQS) and 2006 PM2.5 NAAQS,'' signed 
April 25, 2014 (final rule, pre-publication copy). Whether or not the 
SJV area has attained the 1997 PM2.5 standards to date, in 
the absence of an EPA rulemaking to reclassify the area as a Serious 
Area under subpart 4, the requirement to submit a Serious Area plan 
that assures implementation of BACM does not apply (CAA sections 
189(b)(1)(B) and 189(b)(2)).
    We note also that the commenter's reference to CAA section 
188(c)(1) to support its contention that ``[u]nder subpart 4, 
nonattainment areas relying on reasonably available controls have four 
years to attain'' is not accurate. Section 188(c)(1) states that 
``[f]or a Moderate Area, the attainment date shall be as expeditiously 
as practicable but no later than the end of the sixth

[[Page 29334]]

calendar year after the area's designation as nonattainment, except 
that, for areas designated nonattainment for PM10 under 
section [107(d)(4) of the Act], the attainment date shall not extend 
beyond December 31, 1994'' (CAA section 188(c)(1), 42 U.S.C. 
7513(c)(1)). It appears that the commenter is interpreting the 
exception specified in the last clause of this provision to mean that 
the SJV PM2.5 nonattainment area must attain the 1997 
PM2.5 NAAQS within four years of its designation as 
nonattainment for these standards. By its terms, however, this 
provision establishes an attainment date that has long passed (December 
31, 1994) and applies only to those areas that were designated by 
operation of law under CAA section 107(d)(4) as nonattainment for the 
PM10 NAAQS, pursuant to the CAA Amendments of 1990. See CAA 
section 107(d)(4)(B), 42 U.S.C. 7407(d)(4)(B) (establishing 
nonattainment designations by operation of law for certain areas 
identified by the EPA as ``Group I'' areas prior to November 15, 1990 
and areas where air quality monitoring data showed a violation of the 
PM-10 NAAQS before January 1, 1989). This provision and the December 
31, 1994 attainment date specified therein do not apply for purposes of 
establishing the applicable attainment date for an area designated 
nonattainment for the 1997 PM2.5 NAAQS in 2005, such as the 
San Joaquin Valley.
    If and when the EPA reclassifies the SJV area from ``moderate'' to 
``serious'' nonattainment for a PM2.5 standard under subpart 
4,\18\ California will be obligated to submit, no later than 18 months 
after such reclassification, SIP provisions to assure that BACM for 
PM2.5 shall be implemented no later than 4 years after the 
date the area is reclassified, among other things (CAA sections 
189(b)(1)(B) and 189(b)(2)). Contingency measures for any new or 
revised plan submitted to address subpart 4 requirements would have to 
provide emission reductions beyond those relied upon in the control 
strategy for that plan (i.e., for a ``Serious Area,'' measures that are 
``beyond BACM'').
---------------------------------------------------------------------------

    \18\ Under CAA sections 188(b)(2) and 179(c), the EPA must 
determine no later than 6 months following the applicable attainment 
date for the 1997 PM2.5 standards in the SJV (April 5, 
2015), based on air quality data, whether the area attained the 
standards by that date. Should we determine that the SJV area has 
failed to attain by April 5, 2015, the area will be reclassified by 
operation of law as a Serious Area and the State will be required to 
submit plan provisions consistent with the requirements of subpart 4 
within 18 months. See CAA sections 188(b)(2) and 189(b)(2).
---------------------------------------------------------------------------

    We note that the possibility that a measure may be required as RACM 
or BACM in the future does not preclude its use as a contingency 
measure now. Likewise, an approval of a measure as a contingency 
measure now does not preclude a future determination that it is a 
required RACM or BACM under subpart 4. As the EPA explained in the 
Addendum, ``if all or part of the moderate area plan contingency 
measures become part of the required serious area control measures 
(i.e., BACM), then additional contingency measures must be submitted 
whether or not the previously submitted contingency measures had 
already been implemented.'' Addendum at 42015.
    Comment 6: Earthjustice comments that because the RFP demonstration 
will change under a plan that complies with subpart 4, the assessment 
of the controls required for demonstrating RFP will also change. 
Earthjustice argues that without a new RFP demonstration, the EPA 
cannot determine whether the contingency measures are surplus to 
measures that are otherwise required by the Act.
    Response 6: As explained above, we do not believe it would be 
reasonable to disapprove this corrective SIP based on a finding that 
the underlying attainment and RFP demonstrations in the SJV 
PM2.5 SIP, demonstrations that we fully approved in 2011, 
now fail to satisfy subpart 4 requirements of which the State had no 
notice. As discussed in our proposal (78 FR 53113, 53123), the 
Contingency Measure SIP corrects the deficiencies that prompted the 
partial disapproval of the SJV PM2.5 SIP in 2011. We believe 
our approval of this corrective SIP submission today is appropriate in 
light of the State's reasonable reliance on our 2011 final action, the 
significant consequences of a disapproval based on retroactive 
application of subpart 4 requirements in this context, and the EPA's 
separate rulemaking to establish reasonable timeframes for states to 
submit additional SIPs that may be required under subpart 4 consistent 
with the NRDC decision. See Response 1.

B. Comments Regarding Emission Reductions From Waiver Measures and 
Incentive Grant Programs

    Comment 7: Earthjustice comments that ``Congress was not willing to 
let states merely `promise' to protect air quality'' and that CAA 
section 110(a) requires states to formulate plans for meeting and 
maintaining compliance with the NAAQS which ``include enforceable 
emission limitations and other control measures, means or techniques 
(including economic incentives such as fees, marketable permits, and 
auctions of emissions rights) . . . as may be necessary or appropriate 
to meet the applicable requirements of this chapter. . . .'' 
Earthjustice states that even those nontraditional techniques for 
reducing pollution (economic incentives, marketable permits, and 
auctions of emissions rights) authorized by section 110(a)(2)(A) must 
be ``enforceable,'' meaning that the EPA and citizens must have the 
ability to bring enforcement actions to assure compliance. Earthjustice 
further asserts that ``[a] state cannot claim SIP credit from control 
measures that shield pollution sources from independent enforcement 
actions.'' In support of these statements, Earthjustice references the 
EPA's statements in ``State Implementation Plans; General Preamble for 
the Implementation of Title I of the Clean Air Act Amendments of 1990'' 
(57 FR 13498, April 16, 1992) (hereafter ``General Preamble''); 
``Improving Air Quality with Economic Incentive Programs,'' U.S. EPA, 
Office of Air and Radiation, January 2001 (EPA-452/R-01-001) (hereafter 
``2001 EIP Guidance''); and the February 4, 2013 docket memorandum for 
a rulemaking entitled ``State Implementation Plans: Response to 
Petition for Rulemaking; Findings of Substantial Inadequacy; and SIP 
Calls to Amend Provisions Applying to Excess Emissions During Periods 
of Startup, Shutdown, and Malfunction'' (EPA-HQ-OAR-2012-0322) 
(hereafter ``2013 SSM Memo'').
    Response 7: We agree generally with the statement that the CAA 
requires states to submit implementation plans including measures that 
the EPA and citizens can enforce. As the commenter notes, the EPA has 
long interpreted CAA section 110(a) to mean that control measures and 
other means of achieving emission reductions in a SIP, including 
``nontraditional techniques for reducing pollution [such as] economic 
incentives, marketable permits, and auctions of emissions rights,'' 
must be ``enforceable'' (General Preamble at 13556). We disagree, 
however, with Earthjustice's suggestion that the emission reductions 
identified in the Contingency Measure SIP are not enforceable because 
they are based on ``measures that shield pollution sources from 
independent enforcement actions.'' As explained below in Response 8 
through Response 15, all of the measures relied upon in the Contingency 
Measure SIP are directly enforceable by the State and/or District 
against pollution sources, and the District's commitments concerning 
the incentive-based emission reductions are also enforceable by the EPA 
and citizens

[[Page 29335]]

under the CAA. Nothing in the Contingency Measure SIP ``shields'' 
pollution sources from enforcement actions brought by the State or 
District. See Response 8 through Response 15.
    Comment 8: Earthjustice highlights both the EPA's enforcement 
authority in CAA section 113 and the citizen suit provision in CAA 
section 304 as indication that ``Congress was not willing to rely on 
states alone to guarantee that the claimed emission reductions would 
occur or be enforced.'' Citing Pennsylvania v. Del. Valley Citizens' 
Council for Clean Air, 478 U.S. 546, 560 (1986), Earthjustice states 
that ``[t]he Supreme Court has found that `Congress enacted 304 
specifically to encourage citizen participation in the enforcement of 
standards and regulations established under this Act, and intended the 
section to afford citizens very broad opportunities to participate in 
the effort to prevent and abate air pollution.' '' Additionally, 
Earthjustice states that ``[t]his notion that SIPs must be built upon 
emission reductions that are capable of being enforced by EPA and 
citizens pervades a number of EPA policies regarding SIP 
approvability.'' For example, Earthjustice states that the ``EPA will 
not approve control measures that include `director discretion' to 
define or redefine compliance requirements'' and that the EPA also will 
``not allow SIPs to include state affirmative defenses that would 
foreclose EPA or other enforcement.'' In support of these statements, 
Earthjustice references EPA statements in the 2013 SSM Memo and in a 
memorandum dated September 20, 1999, from Steven A. Herman, Assistant 
Administrator for Enforcement and Compliance, to Regional 
Administrators, entitled ``State Implementation Plans (SIPs): Policy 
Regarding Excess Emissions During Malfunctions, Startup, and Shutdown'' 
(hereafter ``1999 SSM Guidance''). Earthjustice asserts that the two 
main contingency measures relied upon by the District--excess emission 
reductions from State mobile source measures and emission reductions 
achieved through incentive programs--fail to meet these criteria for 
enforceability.
    Response 8: We agree generally with the commenter's statement that 
SIPs must be built upon emission reductions that the EPA and citizens 
can enforce under CAA sections 113 and 304, respectively. We disagree, 
however, with the commenter's assertion that the contingency measures 
relied upon by the District contain any impermissible ``director 
discretion'' or ``affirmative defense'' provisions that may bar EPA or 
citizen enforcement of these measures or otherwise fail to meet the 
Act's requirements for enforceability.
    As Earthjustice correctly states, the EPA has stated in long-
standing policy that it would not approve into a SIP any ``director 
discretion'' or ``affirmative defense'' provision that would bar the 
EPA or citizens from enforcing applicable SIP requirements, as such 
provisions would be inconsistent with the regulatory scheme established 
in title I of the Act. See 2013 SSM Memo at 11-13 (quoting 1999 SSM 
Guidance at 3). Although some degree of state/local agency discretion 
in a SIP rule may be permissible if explicit and replicable procedures 
within the rule tightly define how the discretion will be exercised to 
assure equivalent emission reductions, the EPA has long stated that SIP 
provisions that include unbounded discretion for state personnel 
unilaterally to change or to grant variances from applicable SIP 
provisions are problematic and inconsistent with the requirements of 
the CAA. See ``Guidance Document for Correcting Common VOC and Other 
Rule Deficiencies (a.k.a. The Little Bluebook),'' U.S. EPA Region IX, 
originally issued April 1991, revised August 21, 2001; see also 78 FR 
12460, 12485 to 12486 (February 22, 2013) (proposed findings of 
substantial inadequacy and SIP calls to amend provisions applying to 
excess emissions during periods of startup, shutdown, and malfunction) 
and 2013 SSM Memo at 13. With respect to ``affirmative defenses,'' \19\ 
the EPA has stated in long-standing policy that a state may include in 
a SIP certain narrowly drawn affirmative defense provisions, which 
qualifying sources may utilize in enforcement proceedings under 
specified circumstances, but that a SIP may not contain any defense to 
injunctive relief or any provision that would enable a state to bar EPA 
or citizen enforcement of applicable requirements. See 2013 SSM Memo at 
11-13; see also 1999 SSM Guidance at 2.
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    \19\ The term ``affirmative defense'' means, in the context of 
an enforcement proceeding, a response or defense put forward by a 
defendant, regarding which the defendant has the burden of proof, 
and the merits of which are independently and objectively evaluated 
in a judicial or administrative proceeding. See 1999 SSM Memo, 
Attachment at 2, n. 4.
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    Nothing in the Contingency Measure SIP authorizes either CARB or 
the District to modify the requirements of the SIP. As explained below 
in Response 13, the District has submitted enforceable commitments to 
account for specified amounts of NOX and PM2.5 
emission reductions to be achieved in 2015 through incentive programs 
and to adopt and submit substitute measures on a fixed schedule if the 
identified programs fail to achieve these emission reductions in 2015. 
Since the EPA is approving these commitments into the SIP, they are 
federally enforceable requirements of an applicable implementation 
plan, which cannot be modified except through a SIP revision adopted by 
the State after reasonable notice and public hearing and approved by 
the EPA through notice-and-comment rulemaking. See CAA sections 110(l) 
and 302(q), 5 U.S.C. section 553, and 40 CFR 51.105. Additionally, 
nothing in the Contingency Measure SIP creates grounds for an 
affirmative defense that could be used in proceedings to enforce the 
District's SIP commitments, nor does the Contingency Measure SIP 
contain any provision that could bar EPA or citizen enforcement of 
these SIP commitments. We therefore disagree with the commenter's 
suggestion that the Contingency Measure SIP contains any ``director 
discretion'' or ``affirmative defense'' provision that would undermine 
the enforceability of these emission reductions. We explain more fully 
below how the District's SIP commitments can be enforced by the EPA and 
citizens. See Response 10 through Response 15.
    In addition, the EPA disagrees with the commenter's assertion that 
the CARB mobile source control measures relied upon in the Contingency 
Measure SIP are not creditable as contingency measures. As explained in 
Response 9 below, the EPA has historically allowed emission reduction 
credit for California motor vehicle emissions standards that have 
received waivers of federal preemption pursuant to the waiver approval 
process of CAA section 209 (``waiver measures''), without requiring 
California to submit the standards themselves to the EPA for approval 
as part of the California SIP. See, e.g., 76 FR 69896 (November 9, 
2011) (final rule partially approving and partially disapproving SJV 
PM2.5 SIP) and 77 FR 12652 (March 1, 2012) (final rule 
approving SJV 8-hour Ozone SIP). Waiver measures are substituted for 
federal mobile source control measures in California, and they become 
enforceable by the State once the EPA issues a waiver or authorization. 
Based on considerations of permanence, enforceability, and 
quantifiability, the EPA continues to believe that it is appropriate 
and consistent with the CAA to allow California to rely on emission 
reductions resulting from

[[Page 29336]]

waiver measures in SIPs. See Response 9.
    Comment 9: Earthjustice states that most of the CARB mobile source 
control measures relied upon to provide excess emission reductions are 
not approved into the SIP and, therefore, are not enforceable by the 
EPA or through independent citizen enforcement. Earthjustice states 
that the EPA is aware of this issue from previous comments on the 2008 
PM2.5 Plan and incorporates those comments by reference.\20\ 
Earthjustice contends that because ``the State is free to amend or 
rescind these measures altogether without EPA oversight,'' these 
emission reductions are not creditable as contingency measures.
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    \20\ Specifically, the commenter states: ``As EPA is well aware 
from previous comments on the 2008 PM2.5 Plan 
(incorporated by reference here), most of the CARB mobile source 
control measures relied upon here to provide excess emission 
reductions are not actually approved into the state implementation 
plan. As a result, they are not enforceable by EPA or through 
independent citizen enforcement. . . .'' See letter dated September 
27, 2013, from Paul Cort, at 7. Given the context of this comment 
and the broad range of issues raised by commenters during the EPA's 
previous rulemaking on the 2008 PM2.5 Plan (referred to 
herein as the ``SJV PM2.5 SIP''), we assume Earthjustice 
intended here to incorporate by reference only those of its own 
comments addressing the EPA's treatment of CARB mobile source 
control measures in the SIP (see letter dated August 12, 2011, from 
Paul Cort, Staff Attorney, and Sarah Jackson, Research Associate, 
Earthjustice, ``Comments on EPA's Partial Approval/Disapproval of 
the San Joaquin Valley's State Implementation Plan for Fine 
Particulate Matter, Docket  EPA-R09-OAR-2010-0516'').
---------------------------------------------------------------------------

    Response 9: We disagree with the commenter's argument that emission 
reductions from CARB mobile source control measures may not be credited 
as contingency measures. The EPA believes that credit for emission 
reductions from implementation of California mobile source rules that 
are subject to CAA section 209 waivers (``waiver measures'') is 
appropriate notwithstanding the fact that such rules are not approved 
as part of the California SIP. In our July 13, 2011 proposed action on 
the SJV PM2.5 SIP and the technical support document for 
that proposal, we explained why we believe such credit is appropriate. 
See 76 FR 41338, 41345 (July 13, 2011) and ``Technical Support Document 
and Responses to Comments, Final Rule on the San Joaquin Valley 2008 
PM2.5 State Implementation Plan,'' U.S. EPA Region 9, 
September 30, 2011 (hereafter ``2011 Final TSD'') at 101-105. 
Historically, the EPA has granted credit for the waiver measures 
because of special Congressional recognition, in establishing the 
waiver process in the first place, of the pioneering California motor 
vehicle control program and because amendments to the CAA (in 1977) 
expanded the flexibility granted to California in order ``to afford 
California the broadest possible discretion in selecting the best means 
to protect the health of its citizens and the public welfare,'' (H.R. 
Rep. No. 294, 95th Congr., 1st Sess. 301-2 (1977)). In allowing 
California to take credit for the waiver measures notwithstanding the 
fact that the underlying rules are not part of the California SIP, the 
EPA treated the waiver measures similarly to the Federal motor vehicle 
control requirements, which the EPA has always allowed States to credit 
in their SIPs without submitting the program as a SIP revision. As we 
explained in the 2011 Final TSD (p. 87), credit for Federal measures, 
including those that establish on-road and nonroad standards, 
notwithstanding their absence in the SIP, is justified by reference to 
CAA section 110(a)(2)(A), which establishes the following content 
requirements for SIPs: ``. . . enforceable emission limitations and 
other control measures, means, or techniques (including economic 
incentives such as fees, marketable permits, and auctions of emissions 
rights), . . . , as may be necessary or appropriate to meet the 
applicable requirements of this chapter.'' (emphasis added.) Federal 
measures are permanent, independently enforceable (by the EPA and 
citizens), and quantifiable without regard to whether they are approved 
into a SIP, and thus the EPA has never found such measures to be 
``necessary or appropriate'' for inclusion in SIPs to meet the 
applicable requirements of the Act. CAA section 209 establishes a 
process under which the EPA allows California's waiver measures to 
substitute for Federal measures, and like the Federal measures for 
which they substitute, the EPA has historically found, and continues to 
find, based on considerations of permanence, enforceability, and 
quantifiability, that such measures are not ``necessary or 
appropriate'' for California to include in its SIP to meet the 
applicable requirements of the Act.
    First, with respect to permanence, we note that, to maintain a 
waiver, CARB's on-road waiver measures can be relaxed only to a level 
of aggregate equivalence to the Federal Motor Vehicle Control Program 
(FMVCP) (CAA section 209(b)(1)). In this respect, the FMVCP acts as a 
partial backstop to California's on-road waiver measures (i.e., absent 
a waiver, the FMVCP would apply in California). Likewise, Federal 
nonroad vehicle and engine standards act as a partial backstop for 
corresponding California nonroad waiver measures. The constraints of 
the waiver process thus serve to limit the extent to which CARB can 
relax the waiver measures for which there are corresponding the EPA 
standards, and thereby serve an anti-backsliding function similar in 
substance to those established for SIP revisions in CAA sections 110(l) 
and 193. Meanwhile, the growing convergence between California and EPA 
mobile source standards diminishes the difference in the emission 
reductions reasonably attributed to the two programs and strengthens 
the role of the Federal program in serving as an effective backstop to 
the State program. In other words, with the harmonization of EPA mobile 
source standards with the corresponding State standards, the Federal 
program is becoming essentially a full backstop to most parts of the 
California program.
    Second, as to enforceability, we note that the waiver process 
itself bestows enforceability onto California to enforce the on-road or 
nonroad standards for which the EPA has issued the waiver. CARB has as 
long a history of enforcement of vehicle/engine emissions standards as 
the EPA, and CARB's enforcement program is equally as rigorous as the 
corresponding EPA program. The history and rigor of CARB's enforcement 
program lends assurance to California SIP revisions that rely on the 
emission reductions from CARB's rules in the same manner as the EPA's 
mobile source enforcement program lends assurance to other state's SIPs 
in their reliance on emission reductions from the FMVCP. While it is 
true that citizens and the EPA are not authorized to enforce California 
waiver measures under the Clean Air Act (i.e., because they are not in 
the SIP), citizens and the EPA are authorized to enforce EPA standards 
in the event that vehicles operate in California without either 
California or EPA certification.
    As to quantifiability, the EPA's historical practice has been to 
give SIP credit for motor-vehicle-related waiver measures by allowing 
California to include motor vehicle emissions estimates made by using 
California's EMFAC (and its predecessors) motor vehicle emissions 
factor model in SIP inventories. The EPA verifies the emission 
reductions from motor-vehicle-related waiver measures through review 
and approval of EMFAC, which is updated from time to time by California 
to reflect updated methods and data, as well as newly-established 
emissions standards. (Emission reductions from the EPA's motor vehicle

[[Page 29337]]

standards are reflected in an analogous model known as MOVES.) The 
EMFAC model is based on the motor vehicle emissions standards for which 
California has received waivers from the EPA but accounts for vehicle 
deterioration and many other factors. The motor vehicle emissions 
estimates themselves combine EMFAC results with vehicle activity 
estimates, among other considerations. See the 1982 Bay Area Air 
Quality Plan, and the related the EPA rulemakings approving the plan 
(see 48 FR 5074 (February 3, 1983) for the proposed rule and 48 FR 
57130 (December 28, 1983) for the final rule) as an example of how the 
waiver measures have been treated historically by the EPA in California 
SIP actions.\21\ The SJV PM2.5 SIP was developed using a 
version of the EMFAC model referred to as EMFAC2007, which the EPA has 
approved for use in SIP development in California. (73 FR 3464, January 
18, 2008). Thus, the emission reductions that are from the California 
on-road ``waiver measures'' and that are estimated through use of EMFAC 
are as verifiable as are the emission reductions relied upon by states 
other than California in developing their SIPs based on estimates of 
motor vehicle emissions made through the use of the MOVES model.
---------------------------------------------------------------------------

    \21\ The EPA's historical practice in allowing California credit 
for waiver measures notwithstanding the absence of the underlying 
rules in the SIP is further documented by reference to the EPA's 
review and approval of a May 1979 revision to the California SIP 
entitled, ``Chapter 4, California Air Quality Control Strategies.'' 
In our proposed approval of the 1979 revision (44 FR 60758, October 
22, 1979), we describe the SIP revision as outlining California's 
overall control strategy, which the State had divided into vehicular 
sources and non-vehicular (stationary source) controls. As to the 
former, the SIP revision discusses vehicular control measures as 
including technical control measures and transportation control 
measures. The former refers to the types of measures we refer to 
herein as waiver measures, as well as fuel content limitations, and 
a vehicle inspection and maintenance program. The 1979 SIP revision 
included several appendices, including appendix 4-E, which refers to 
``ARB vehicle emission controls included in title 13, California 
Administrative Code, chapter 3 . . . ,'' including the types of 
vehicle emission standards we refer to herein as waiver measures; 
however, California did not submit the related portions of the 
California Administrative Code (CAC) to the EPA as part of the 1979 
SIP revision submittal. With respect to the CAC, the 1979 SIP 
revision states: ``The following appendices are portions of the 
California Administrative Code. Persons interested in these 
appendices should refer directly to the code.'' Thus, the State was 
clearly signaling its intention to rely on the California motor 
vehicle control program but not to submit the underlying rules to 
the EPA as part of the SIP. In 1980, we finalized our approval as 
proposed (45 FR 63843, September 28, 1980).
---------------------------------------------------------------------------

    Moreover, the EPA's waiver review and approval process is analogous 
to the SIP approval process. First, CARB adopts its emissions standards 
following notice and comment procedures at the state level, and then 
submits the rules to the EPA as part of its waiver request. When the 
EPA receives new waiver requests from CARB, the EPA publishes a notice 
of opportunity for public hearing and comment and then publishes a 
decision in the Federal Register following the public comment period. 
Once again, in substance, the process is similar to that for SIP 
approval and supports the argument that one hurdle (the waiver process) 
is all Congress intended for California standards, not two (waiver 
process plus SIP approval process). Second, just as SIP revisions are 
not effective until approved by the EPA, changes to CARB's rules (for 
which a waiver has been granted) are not effective until the EPA grants 
a new waiver, unless the changes are ``within the scope'' of a prior 
waiver and no new waiver is needed. Third, both types of final actions 
by the EPA--i.e., final actions on California requests for waivers and 
final actions on state submittals of SIPs and SIP revisions--may be 
challenged under section 307(b)(1) of the CAA in the appropriate United 
States Court of Appeals.
    In the 2011 Final TSD (pp. 102-103), we indicated that we believe 
that section 193 of the CAA, the general savings clause added by 
Congress in 1990, effectively ratified our long-standing practice of 
granting credit for the California waiver rules because Congress did 
not insert any language into the statute rendering the EPA's treatment 
of California's motor vehicle standards inconsistent with the Act. 
Rather, Congress extended the California waiver provisions to most 
types of nonroad vehicles and engines, once again reflecting 
Congressional intent to provide California with the broadest possible 
discretion in selecting the best means to protect the health of its 
citizens and the public welfare. Requiring the waiver measures to 
undergo SIP review in addition to the statutory waiver process is not 
consistent with providing California with the broadest possible 
discretion as to on-road and nonroad vehicle and engine standards, but 
rather, would add to the regulatory burden California faces in 
establishing and modifying such standards, and thus would not be 
consistent with Congressional intent. In short, we believe that 
Congress intended California's mobile source rules to undergo only one 
the EPA review process (i.e., the waiver process), not two.
    In summary, the EPA has historically given SIP credit for waiver 
measures in our approval of attainment demonstrations and other 
planning requirements such as reasonable further progress and 
contingency measures submitted by California. We continue to believe 
that section 193 ratifies our long-standing practice of allowing credit 
for California's waiver measures notwithstanding the fact they are not 
approved into the SIP, and correctly reflects Congressional intent to 
provide California with the broadest possible discretion in the 
development and promulgation of on-road and nonroad vehicle and engine 
standards. Further, even without considering section 193, the Act's 
structure, evolution, and provision for the waiver of federal 
preemption for California mobile source emissions standards all support 
the EPA's long-standing interpretation of the CAA to allow California 
to rely on emission reductions resulting from waiver measures when 
developing SIP emission inventories, related attainment demonstrations, 
and contingency measures, even though the waiver measures are not in 
the SIP itself.
    Comment 10: Referencing the District's commitments to monitor, 
assess, and report on program implementation and to remedy emission 
reduction shortfalls, Earthjustice characterizes the ``contingency 
measure'' as an ``enforceable commitment to adopt measures as needed'' 
and asserts that such ``committal SIPs'' have repeatedly been rejected 
by the courts. More fundamentally, Earthjustice argues, ``this 
commitment does not create enforceable emission limits or control 
measures as required by section 110(a)(2)(A)'' but rather ``creates an 
enforceable duty to adopt such emission limits or control measures as 
contingency measures'' (emphases in original). Earthjustice contends 
that this is a plain violation of section 110(a)(2)(A). Moreover, 
Earthjustice contends, ``this duty already exists under section 
172(c)(9), so this proposed contingency measure adds nothing beyond 
what is already required by law.''
    Response 10: We disagree with the commenter's characterization of 
the District's commitments in the Contingency Measure SIP as a 
``committal SIP.'' Courts have rejected the EPA's use of the 
``conditional approval'' procedure in CAA section 110(k)(4) to permit 
states to postpone statutory SIP deadlines by submitting ``committal 
SIPs'' that contain no specific remedial measures but instead merely 
promise to adopt such measures in the future. See, e.g., Natural 
Resources Defense Council, Inc. v. EPA, et al, 22 F.3d 1125 (D.C. Cir. 
1994) and

[[Page 29338]]

Sierra Club v. EPA, 356 F.3d 296 (D.C. Cir. 2004). The District's 
commitments in the Contingency Measure SIP, however, are not promises 
to adopt measures in the future. Instead, these SIP commitments 
identify on-going emission reductions and current obligations that the 
District must satisfy on an ongoing basis.\22\ Specifically, the 
District's SIP commitments obligate the District to track its ongoing 
implementation of the Prop 1B and Carl Moyer Program requirements for 
specific projects relied upon for SIP credit and to submit reports to 
the EPA, on an annual basis, that include detailed information 
regarding the type, location, and duration of each such project. See 
Response 13 (referencing SJVUAPCD Board Resolution No. 13-6-18 at pg. 3 
and Rule 9610 at Section 4.5). As explained in supporting materials 
submitted by the District, all of the projects relied upon for SIP 
credit in the Contingency Measure SIP are subject to ``already-
executed, legally binding contracts'' which ensure that the District's 
claimed emission reductions are currently being achieved. See SJVUAPCD, 
``Quantification of Contingency Reductions for the 2008 
PM2.5 Plan'' (June 20, 2013) at 7, 8. Although the 
District's SIP commitments include an enforceable requirement to submit 
substitute measures in the event of a shortfall in expected emission 
reductions for 2015, this secondary obligation does nothing to 
undermine the District's current obligation to monitor, assess, and 
report on its implementation of the Prop 1B and Carl Moyer Program for 
the identified projects and the actual emission reductions achieved 
through these projects, consistent with the applicable requirements of 
Rule 9610. To the contrary, the secondary commitment to adopt and 
submit substitute measures is provided as an additional safeguard to 
ensure that, if the projects relied upon for SIP credit fail to achieve 
the expected emission reductions by the applicable implementation 
deadline (i.e., by December 5, 2015), the District will be required to 
implement a timely remedy, i.e., to adopt and submit substitute 
measures that achieve equivalent amounts of emission reductions by the 
same implementation deadline.\23\ In sum, the District's SIP 
commitments establish current obligations as part of an enforceable 
sequence of actions leading to compliance with a December 5, 2015 
emission reduction obligation, which the EPA or citizens may enforce 
under the CAA. See Response 13.
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    \22\ As we explained in our proposed rule (78 FR 53113, 53115), 
contingency measures may include Federal, state and local measures 
already scheduled for implementation that provide emission 
reductions in excess of those needed to provide for RFP or 
expeditious attainment. Nothing in the statute precludes a state 
from implementing such measures before they are triggered. See, 
e.g., LEAN v. EPA, 382 F.3d 575 (5th Cir. 2004) (upholding 
contingency measures that were previously required and implemented 
where they were in excess of the attainment demonstration and RFP 
SIP). The EPA believes that its interpretation of the contingency 
measure requirement in section 172(c)(9) of the Act is reasonable 
because reductions from these contingency measures are continuing in 
nature.
    \23\ See n. 46, infra (discussing December 5, 2015 deadline for 
implementation of substitute measures under District's SIP 
commitment).
---------------------------------------------------------------------------

    We also disagree with the commenter's characterization of the 
District's SIP commitments as a ``duty to adopt'' emission limits or 
control measures that violates the requirements of CAA section 
110(a)(2)(A). CAA section 110(a)(2)(A) requires that each SIP ``include 
enforceable emission limitations and other control measures, means, or 
techniques (including economic incentives such as fees, marketable 
permits, and auctions of emissions rights), . . . as may be necessary 
or appropriate to meet the applicable requirements of [the Act].'' CAA 
section 110(a)(2)(A); see also CAA section 172(c)(6) (establishing 
substantively identical requirements for nonattainment areas). Thus, in 
addition to ``emission limitations'' and ``control measures,'' the Act 
allows for SIPs to be built upon other ``means or techniques'' as may 
be necessary or appropriate to provide for timely attainment of the 
NAAQS. See BCCA Appeal Group v. EPA, 355 F.3d 817 (5th Cir. 2003), 
reh'g denied, 2004 U.S. App. LEXIS 215 (5th Cir., January 8, 2004) 
(noting expansion of the EPA's authority under section 110(a)(2)(A) 
following Congress' addition of the ``means'' and ``techniques'' and 
``as appropriate'' language as part of the 1990 CAA Amendments). 
Moreover, as explained in the EPA's proposed rule, both CAA section 
110(a)(2)(A) and section 172(c)(6) explicitly provide for the use of 
economic incentives as one tool for states to use to achieve attainment 
of the NAAQS. See 78 FR 53113, 53118 (quoting reference in CAA section 
110(a)(2)(A) to ``economic incentives such as fees, marketable permits, 
and auctions of emissions rights''). Nothing in the Act prohibits the 
District's use of economic incentives as part of a contingency measure 
plan that ensures an appropriate level of emission reduction progress 
if attainment is not achieved and additional planning by the State is 
needed.
    The incentive programs relied upon in the Contingency Measure SIP 
provide emission reductions in excess of those relied on for RFP or for 
expeditious attainment in the SJV PM2.5 SIP (78 FR 53113, 
53123). These incentive programs do not alter any existing control 
requirement in the applicable SIP and do not interfere with any 
applicable requirement concerning attainment and RFP or any other 
applicable requirement of the Act. Id. The District has submitted a SIP 
commitment to comply with detailed requirements of the Prop 1B program 
and Carl Moyer Program guidelines through a sequence of actions leading 
to compliance with a December 2015 emission reduction obligation, which 
the EPA or citizens may enforce under CAA sections 113 and 304, 
respectively. See Response 13. For all of these reasons, we conclude 
that the District's SIP commitments are both enforceable ``emission 
standards or limitations'' as defined in CAA section 304(f) \24\ and 
appropriate ``means or techniques'' for achieving NOX and 
PM2.5 emission reductions under CAA sections 110(a)(2)(A) 
and 172(c)(6), and that these enforceable commitments are permissible 
components of a plan submitted to satisfy the attainment contingency 
measure requirement in CAA section 172(c)(9).
---------------------------------------------------------------------------

    \24\ See n. 31, infra.
---------------------------------------------------------------------------

    Comment 11: Earthjustice asserts that the EPA's reliance on the 
``enforceable commitment'' to adopt control measures as an enforceable 
contingency measure is also a plain violation of section 172(c)(9), 
which requires that contingency measures ``take effect . . . without 
further action by the State or the Administrator.'' Citing the EPA's 
interpretive statements in the Addendum (59 FR 41998, August 16, 1994), 
Earthjustice contends that ``[t]he commitment to adopt new rules and 
measures is a blatant attempt to allow the District to defer adoption 
of enforceable contingency measures until after the attainment failure 
occurs'' and that ``[t]his undermines the entire purpose of the 
contingency measure requirement.'' Earthjustice concludes that the 
incentive program contingency measure therefore cannot be approved.
    Response 11: We disagree. As explained in Response 10 above, the 
District's SIP commitments contain both a current obligation for the 
District to monitor, assess, and report on its ongoing implementation 
of the Prop 1B and Carl Moyer Program requirements with respect to 
specified projects and a secondary obligation for the District to 
implement a timely remedy, should the

[[Page 29339]]

identified projects fail to achieve the expected emission reductions. 
These SIP obligations take effect without further action by the State 
or the Administrator, in accordance with CAA section 172(c)(9).
    Additionally, consistent with the EPA's longstanding interpretation 
of the contingency measure requirement in CAA section 172(c)(9) as 
requiring that all actions needed to effect full implementation of 
contingency measures occur within 60 days after the EPA notifies the 
State of a failure to attain the NAAQS by the applicable attainment 
date,\25\ the District's SIP commitments ensure that all actions needed 
to effect full implementation of the incentive-based emission 
reductions will occur no later than December 5, 2015. Should the EPA 
find based on the 2014 annual demonstration report that the required 
amounts of NOX and PM2.5 emission reductions may 
not continue through 2015 as projected, the EPA will promptly notify 
the District of its potential obligation to implement substitute 
measures consistent with its Board commitment no later than December 5, 
2015, so that the District has ample time for any rulemakings that may 
be necessary to meet this implementation deadline. Subsequently, should 
the EPA determine that the SJV area has failed to attain the 1997 
PM2.5 NAAQS by the applicable attainment date of April 5, 
2015,\26\ the District will be obligated under its SIP commitment 
either to confirm that the Prop 1B and Carl Moyer Program projects 
identified in the 2014 and 2015 annual demonstration reports will 
continue to achieve the required amounts of NOX and 
PM2.5 emission reductions in December 2015 as projected, or 
to adopt and submit substitute measures achieving equivalent amounts of 
emission reductions (4.15 tpd of NOX reductions and 0.10 tpd 
of direct PM2.5 reductions) no later than December 5, 
2015.\27\ See SJVUAPCD Board Resolution No. 13-6-18 at p. 3.
---------------------------------------------------------------------------

    \25\ See General Preamble at 13512, 13543-13544 and the Addendum 
at 42014-42015 (``EPA generally expects all actions needed to effect 
full implementation of the [contingency] measures to occur within 60 
days after EPA notifies the State of the area's failure [to 
attain]'').
    \26\ Under CAA section 179(c), the EPA must determine whether 
the SJV area has attained the 1997 PM2.5 NAAQS ``as 
expeditiously as practicable'' and no later than 6 months after the 
applicable attainment date, based on the area's air quality as of 
the attainment date. Because the applicable attainment date for the 
1997 PM2.5 NAAQS in the SJV area is April 5, 2015, the 
EPA must make this determination regarding attainment for the SJV no 
later than October 5, 2015.
    \27\ See n. 46, infra (discussing December 5, 2015 deadline for 
implementation of substitute measures under District's SIP 
commitment). In our proposed rule, we erroneously stated that 
following an EPA finding that the SJV area has failed to attain the 
1997 PM2.5 NAAQS, the District would be obligated to 
verify through the 2016 annual demonstration report whether the 
required amounts of NOX and direct PM2.5 
reductions had occurred or to adopt and submit substitute rules 
consistent with its Board commitment (78 FR 53113, 53122). We hereby 
clarify that the 2014 annual demonstration report (not the 2016 
report) is the vehicle through which the District must either 
demonstrate that the required amounts of emission reductions will 
continue through 2015 or identify substitute measures to be 
implemented by December 5, 2015. See Rule 9610, Section 4.4 
(requiring that each annual demonstration report ``identify and 
quantify SIP commitment shortfalls, if any, and remedies for 
addressing said shortfalls''). We note, however, that under Rule 
9610 the District remains subject to an ongoing obligation to 
retrospectively assess the performance of its incentive programs for 
potential future enhancements and that the 2016 annual demonstration 
report should, therefore, contain information adequate to verify 
whether the required amounts of NOX and direct 
PM2.5 reductions occurred in 2015. See Rule 9610, Section 
4.7.
---------------------------------------------------------------------------

    Earthjustice suggests that only those ``substitute'' measures that 
the District would be obligated to implement in the event of an 
emission reduction shortfall constitute enforceable contingency 
measures, and that the EPA's approval of this SIP commitment therefore 
impermissibly allows the District to delay adoption of required 
measures. As discussed above, however, the enforceable contingency 
measure here is the District's SIP commitment in its entirety, which 
includes a current obligation to monitor, assess, and report on the 
District's ongoing implementation of the Prop 1B and Carl Moyer Program 
requirements with respect to specified projects which collectively are 
expected to achieve 4.15 tpd of NOX reductions and 0.10 tpd 
of direct PM2.5 reductions in 2015. This current obligation 
constitutes an enforceable measure in itself, and should the District 
fail to fully account for the required amounts of NOX and 
direct PM2.5 emission reductions in annual demonstration 
reports submitted in 2014 and 2015 that satisfy the applicable 
requirements of Rule 9610, the EPA may make a finding of failure to 
implement the SIP under CAA section 179(a) and either the EPA or 
citizens may take enforcement action under CAA section 113 or 304, 
respectively. See Response 12 and Response 13. The secondary obligation 
to adopt and submit ``substitute'' measures is an additional safeguard 
to be effectuated only if the District fails to satisfy its current 
obligation to monitor, assess, and report on its ongoing emission 
reduction responsibilities. We therefore disagree with the commenter's 
assertion that the District's SIP commitment allows it to ``defer 
adoption of enforceable contingency measures until after the attainment 
failure occurs.''
    In sum, the District's SIP commitments establish current 
obligations on the District to take action well before the applicable 
attainment date to achieve the required emission reductions by December 
5, 2015, whether through annual demonstration reports submitted in 2014 
and 2015 or through adoption and submission of substitute measures to 
be implemented by December 5, 2015. Given the District's long history 
of successful implementation and enforcement of Prop 1B and Carl Moyer 
Program grants and the detailed requirements in the associated 
incentive program guidelines, as discussed in our technical support 
document for the proposed rule (see U.S. EPA Region 9, ``Technical 
Support Document, Proposed Approval of Clean Air Act Section 172(c)(9) 
Contingency Measures, San Joaquin Valley State Implementation Plan for 
Attainment of the 1997 PM2.5 Standards,'' August 15, 2013 
(hereafter ``Proposal TSD'')) and further in these responses to 
comments, we expect that the District's implementation of these program 
requirements for the identified projects will achieve the District's 
claimed 4.15 tpd of NOX reductions and 0.10 tpd of direct 
PM2.5 reductions in 2015. However, should the EPA find based 
on documentation submitted by the District in 2014 that the required 
emission reductions may not occur in 2015 as projected, the District 
will be obligated under its SIP commitment to adopt and submit 
substitute measures achieving the required emission reductions by 
December 5, 2015. We find these SIP commitments adequate to ensure that 
an appropriate level of emission reduction progress will continue to be 
made should the SJV area fail to attain the 1997 PM2.5 NAAQS 
by the applicable attainment date of April 5, 2015.
    Comment 12: Earthjustice asserts that the incentive-based emission 
reductions are unenforceable by the EPA or citizens and that the EPA 
itself has described such emission reductions as ``not enforceable 
against individual sources,'' ``voluntary,'' and subject to a cap on 
SIP credit.
    Response 12: We disagree with the commenter's assertion that these 
emission reductions are unacceptable because they are unenforceable by 
the EPA or citizens. As the commenter notes, the EPA has described 
``voluntary'' measures as those that are not directly enforceable 
against individual sources and has recommended presumptive limits 
(sometimes referred to as ``caps'') on the

[[Page 29340]]

credit that may be allowed in a SIP for such measures. Such voluntary 
measures may be credited for SIP purposes only where the State submits 
other enforceable mechanisms to ensure that the required emission 
reductions are achieved, subject to EPA and citizen enforcement under 
the CAA. As discussed further below, the incentive-based emission 
reductions relied upon in the Contingency Measure SIP fall within the 
EPA's presumptive limits on credit for voluntary measures and are 
consistent with the EPA's recommendations for voluntary mobile source 
emission reduction programs. Additionally, these incentive-based 
emission reductions are consistent with the EPA's recommendations for 
discretionary economic incentive programs. We discuss below EPA's 
guidance on both voluntary measures and economic incentive programs 
(EIPs) and our rationale for concluding that the Contingency Measure 
SIP adequately addresses the applicable requirements of the Act, as 
described in these guidance documents.
    The EPA believes that it is appropriate and consistent with the Act 
to allow a limited percentage of the total emission reductions needed 
to satisfy any statutory requirement to come from ``voluntary'' or 
``emerging'' measures or other nontraditional measures and programs, 
where the State commits to certain safeguards and satisfies the 
statutory criteria for SIP approval. See, e.g., ``Guidance on 
Incorporating Voluntary Mobile Source Emission Reduction Programs in 
State Implementation Plans (SIPs),'' October 24, 1997 (hereafter ``1997 
VMEP'') at 4-7; ``Incorporating Emerging and Voluntary Measures in a 
State Implementation Plan,'' September 2004 (hereafter ``2004 Emerging 
and Voluntary Measures Policy'') at 8-12; and ``Guidance on 
Incorporating Bundled Measures in a State Implementation Plan,'' August 
16, 2005 (hereafter ``2005 Bundled Measures Guidance'') at 7-12. The 
EPA has described ``voluntary measures'' as measures or strategies that 
are not directly enforceable against individual sources, and ``emerging 
measures'' as those that are more difficult to accurately quantify than 
traditional SIP emission reduction measures.\28\ See 1997 VMEP at 4; 
2004 Emerging and Voluntary Measures Policy at 13, 19; and 2005 Bundled 
Measures Guidance at 2. ``Voluntary'' measures for stationary and area 
sources may include consumer-oriented programs to reduce the use of 
high-emitting paints or other consumer products during the ozone 
season; mechanisms to encourage pollution prevention or process changes 
at unregulated emission points; and voluntary wood stove changeout 
programs. See 2004 Emerging and Voluntary Measures Policy at 19, 20. 
``Voluntary'' mobile source emission reduction programs (VMEPs) \29\ 
may include employer-based transportation management programs to manage 
employee commute and travel behavior; area-wide rideshare incentives to 
encourage commuters to use alternatives to single-occupant vehicles; 
and auto restricted zones, no-drive days, or other limitations on 
vehicle use in a given geographic area. See 1997 VMEP at Attachment 1. 
``Emerging'' measures include activities that indirectly reduce 
emissions by promoting more efficient energy use or that promote 
renewable resources (e.g., use of solar power, wind power, or biomass) 
and activities that improve air quality by means other than emission 
reductions (e.g., heat island measures that reduce criteria pollutant 
concentrations by lowering ambient temperatures). See 2004 Emerging and 
Voluntary Measures Policy at 14-15. Where a State submits a VMEP or 
other voluntary or emerging measure for SIP approval, the EPA evaluates 
it for consistency with four fundamental ``integrity elements'' and 
with SIP attainment and reasonable further progress (RFP) requirements, 
and to ensure that it does not interfere with other requirements of the 
Act. See 1997 VMEP at 6; see also 78 FR 53113, 53118 and Proposal TSD 
at 22-24.
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    \28\ A measure can be both emerging and voluntary. See 2004 
Emerging and Voluntary Measures Policy at 1.
    \29\ A voluntary mobile source emission reduction program (VMEP) 
is a mechanism that supplements traditional emission reduction 
strategies through voluntary, nonregulatory changes in local 
transportation sector activity levels or changes in in-use vehicle 
and engine fleet composition, among other things. See 1997 VMEP at 
3.
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    In light of the increasing incremental cost associated with further 
stationary and mobile source emission reductions and the difficulty of 
identifying such additional sources of emission reductions, the EPA 
encourages innovative approaches to generating emission reductions 
through voluntary and emerging measures and other nontraditional 
measures and programs. See 1997 VMEP at 4-5; 2004 Emerging and 
Voluntary Measures Policy at 9; and 2005 Bundled Measures Guidance at 
7. The EPA also recognizes, however, that these nontraditional measures 
raise novel issues related to enforceability and quantification of the 
associated emission reductions. Accordingly, the EPA's policies 
addressing nontraditional measures provide for some flexibility in 
meeting established SIP requirements for enforceability and 
quantification, provided the State takes clear responsibility for 
ensuring that the emission reductions necessary to meet applicable CAA 
requirements are achieved. See 1997 VMEP at 5-7; 2004 Emerging and 
Voluntary Measures Policy at 9; 2005 Bundled Measures Guidance at 7; 
and ``Roadmap for Incorporating Energy Efficiency/Renewable Energy 
Policies and Programs into State and Tribal Implementation Plans,'' 
July 2012 (hereafter ``2012 Roadmap for EE/RE Programs'') at 37-38. 
Importantly, the EPA has consistently stated that any voluntary or 
other nontraditional measure submitted for SIP credit must be 
accompanied by an appropriate enforceable ``backstop'' commitment from 
the State to monitor emission reductions achieved and to rectify any 
shortfall in a timely manner. See, e.g., 1997 VMEP at 4-5; 2004 
Emerging and Voluntary Measures Policy at 8-12; 2005 Bundled Measures 
Guidance at 7-12; and ``Guidance on SIP Credits for Emission Reductions 
from Electric-Sector Energy Efficiency and Renewable Energy Measures,'' 
August 5, 2004 (hereafter ``2004 Electric-Sector EE/RE Guidance'') at 
6-7. Thus, although the State is not necessarily responsible for 
implementing a program dependent on voluntary actions, the State is 
obligated to monitor, assess and report on the implementation of any 
such program and the associated emission reductions, and to remedy 
emission reduction shortfalls in a timely manner should the voluntary 
measure not achieve the projected emission reductions. See 1997 VMEP at 
6-7. The EPA believes that voluntary measures, in conjunction with the 
enforceable commitment to monitor emission reductions achieved and 
rectify any shortfall, meet the SIP control measure requirements of the 
Act. See 1997 VMEP at 5 and 2004 Emerging and Voluntary Measures Policy 
at 8-9.
    Given the innovative nature of these nontraditional measures, the 
EPA has recommended ``presumptive'' limits on the amounts of emission 
reductions from such measures that may be credited in a SIP. 
Specifically, for VMEPs, the EPA has identified a presumptive limit of 
three percent (3%) of the total projected future year emission 
reductions required to attain the appropriate NAAQS, and for any 
particular SIP submittal to demonstrate attainment or maintenance of 
the NAAQS or progress toward attainment (RFP), 3% of the specific 
statutory

[[Page 29341]]

requirement. See 1997 VMEP at 5. As explained in the 2001 EIP Guidance, 
the EPA recommended this 3% cap (per pollutant) on the credit allowed 
for VMEPs because states are ``not required to play a direct role in 
implementing these programs, the programs are not directly enforceable 
against participating parties, and there may [be] less experience in 
quantifying the emission benefits from these programs.'' 2001 EIP 
Guidance at 158. For voluntary stationary and area source measures, the 
EPA has identified a presumptive limit of 6% of the total amount of 
emission reductions required for RFP, attainment, or maintenance 
demonstration purposes. See 2004 Emerging and Voluntary Measures Policy 
at 9 and 2005 Bundled Measures Guidance at 8. These limits are 
presumptive in that the EPA may approve emission reductions from 
voluntary or other nontraditional measures in excess of the presumptive 
limits where the State provides a clear and convincing justification 
for such higher amounts, which the EPA would review on a case-by-case 
basis. See id.
    The incentive-based emission reductions in the Contingency Measure 
SIP are consistent with the EPA's recommendations in the 1997 VMEP. 
First, the Contingency Measure SIP and related support documents 
contain the State's and District's demonstrations that the claimed 
incentive-based emission reductions are quantifiable, surplus, 
enforceable and permanent consistent with EPA policy. See Proposal TSD 
at 29-42. Second, the SIP submission contains enforceable commitments 
by the District to monitor, assess and report on its implementation of 
specified portions of the Carl Moyer and Prop 1B programs and the 
associated emission reductions, and to remedy emission reduction 
shortfalls in a timely manner should these programs fail to achieve the 
projected amounts (i.e., 4.15 tpd of NOX reductions and 0.10 
tpd of direct PM2.5 reductions) in 2015. See 78 FR 53113, 
53121-53122 and Proposal TSD at 42-44. These commitments become 
federally enforceable by the EPA under CAA section 113 \30\ and by 
citizens under CAA section 304 \31\ upon the EPA's approval of the 
commitments into the SIP. Thus, although neither the EPA nor citizens 
can enforce these emission reductions directly against sources, as a 
result of today's action the EPA and citizens may enforce these 
emission reductions against the District,\32\ pursuant to the 
District's SIP-approved commitments. See Proposal TSD at 42-44; see 
also Response 13 below (discussing EPA and citizen enforcement of SIP 
commitments under the CAA). Third, the incentive-based emission 
reductions relied upon in the Contingency Measure SIP amount to less 
than two percent of the total projected NOX reductions and 
less than one percent of the total projected PM2.5 
reductions needed to attain the 1997 PM2.5 NAAQS in the San 
Joaquin Valley by April 5, 2015 (78 FR 53113, 53121, n. 29). These 
amounts of emission reductions fall within the EPA's recommended 3% cap 
(per pollutant) on the credit allowed for VMEPs. Finally, the 
incentive-based emission reductions do not interfere with requirements 
of the CAA and are consistent with the attainment and RFP requirements 
in the approved SJV PM2.5 SIP (78 FR 53113, 53123 
(discussing the EPA's evaluation of the Contingency Measure SIP in 
accordance with CAA section 110(l)).
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    \30\ Section 113 of the CAA authorizes the EPA to issue notices 
and compliance orders, assess administrative penalties, and bring 
civil actions against any ``person,'' including a State, who ``has 
violated or is in violation of any requirement or prohibition of an 
applicable implementation plan. . . .'' CAA section 113(a)(1)-(2), 
42 U.S.C. 7413(a)(1)-(2); CAA section 302(e), 42 U.S.C. 7602(e) 
(defining ``person'' to include a State or political subdivision 
thereof). ``Applicable implementation plan'' is defined in CAA 
section 302(q), in relevant part, as ``the portion (or portions) of 
the implementation plan, or most recent revision thereof, which has 
been approved under section 110 of [title I of the Act] . . . and 
which implements the relevant requirements of [the Act].'' 42 U.S.C. 
7602(q).
    \31\ CAA section 304(a)(1) authorizes any person to bring a 
civil action against any ``person,'' including a State, ``who is 
alleged to have violated or to be in violation of . . . an emission 
standard or limitation. . . .'' 42 U.S.C. 7604(a)(1); CAA section 
302(e), 42 U.S.C. 7602(e) (defining ``person'' to include a State or 
political subdivision thereof). An ``emission standard or 
limitation'' is defined in section 304(f), in relevant part, to mean 
``a schedule or timetable of compliance'' which is in effect under 
the Act ``or under an applicable implementation plan.'' 42 U.S.C. 
7604(f)(1). ``Schedule and timetable of compliance'' is broadly 
defined in section 302(p) to mean ``a schedule of required measures 
including an enforceable sequence of actions or operations leading 
to compliance with an emission limitation, other limitation, 
prohibition, or standard.'' 42 U.S.C. 7602(p).
    \32\ The District Governing Board's commitments are also 
enforceable against the State through CARB's adoption of the 
Contingency Measure SIP. See State of California, Air Resources 
Board, ``San Joaquin Valley PM2.5 Contingency Measures 
Update,'' Resolution 13-30 (June 27, 2013) (``the Board hereby 
adopts the PM2.5 Contingency Measures Update as a 
revision to the California SIP and directs the Executive Officer to 
transmit it to the U.S. EPA'' as a SIP revision). Throughout this 
document, references to enforcement against the District include 
enforcement against the State, which has responsibility for ensuring 
adequate implementation of the SIP consistent with CAA section 
110(a)(2)(E).
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    Additionally, as explained in our proposed rule, the EPA evaluated 
the incentive-based emission reductions in the Contingency Measure SIP 
in accordance with the Agency's guidance on discretionary economic 
incentive programs (EIPs),\33\ specifically ``financial mechanism 
EIPs'' (78 FR 53113, 53118, August 28, 2013). The EPA's approach to 
discretionary EIPs differs in several respects from its approach to 
``voluntary'' and ``emerging'' measures. A discretionary EIP uses 
market-based strategies to encourage the reduction of emissions from 
stationary, area, and/or mobile sources in an efficient manner. See 
2001 EIP Guidance at 3. To qualify for approval as a discretionary EIP, 
emission reductions or actions leading to reductions must be 
enforceable either by the State or by the EPA, and the State must be 
directly responsible for ensuring that program elements are 
implemented. See id. at 157-158 (states may use the 2001 EIP Guidance 
where ``[a]ctions and/or emission reductions by identifiable sources 
are enforceable by [the State] and/or by the EPA''). Additionally, the 
emission reductions resulting from an EIP must be quantifiable with a 
higher degree of certainty than the reductions resulting from an 
emerging measure. See 2004 Emerging and Voluntary Measures Policy at 5. 
Given these more rigorous approval criteria, the EPA's presumptive 
limits on SIP credit for voluntary and emerging measures do not apply 
to discretionary EIPs. See 2001 EIP Guidance at 158 (``[states] may use 
the EIP guidance to implement programs which will generate emission 
reductions beyond the 3 percent limit''); see also 2004 Emerging and 
Voluntary Measures Policy at 6 (``EIP measures are not subject to a 
percentage limitation that applies to voluntary measures'').
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    \33\ The EPA has promulgated regulations for ``statutory EIPs'' 
required under CAA sections 182(g), 187(d)(3), or 187(g) and has 
issued guidance for ``discretionary EIPs.'' See generally 40 CFR 
part 51, subpart U; 59 FR 16690 (April 7, 1994); and 2001 EIP 
Guidance. A ``discretionary EIP'' is any EIP submitted to the EPA as 
an implementation plan revision for purposes other than to comply 
with the statutory requirements of CAA sections 182(g)(3), 
182(g)(5), 187(d)(3), or 187(g) (40 CFR 51.491). In today's action, 
we address only the requirements that apply to discretionary EIPs as 
the Contingency Measure SIP does not contain any statutory EIP.
---------------------------------------------------------------------------

    A ``financial mechanism EIP'' is an EIP that indirectly reduces 
emissions by increasing costs for high emitting activities--e.g., 
through subsidies targeted at promoting pollution-reducing activities 
or products. See 2001 EIP Guidance at 119-122 (Chapter 8.0). The EPA 
has identified several attributes that may make subsidy financial 
mechanism EIPs successful, including: (1) The relevant governmental 
body possesses legal

[[Page 29342]]

authority to provide subsidies; (2) the subsidies address activities 
reasonably related to actual emissions or potential emissions; (3) 
where projected emission reductions are based on changes in behavior, 
methods for verifying that such reductions have taken place to the 
degree projected are generally accepted as unbiased and trustworthy; 
and (4) if needed, adequate penalty provisions are in place to ensure 
that the subsidy is used as expected. See 2001 EIP Guidance at 27 
(``Attributes That Make Subsidy Financial Mechanism EIPs Successful'').
    As explained further below, the incentive-based emission reductions 
in the Contingency Measure SIP are consistent with the EPA's 
recommendations for ``financial mechanism EIPs'' in the 2001 EIP 
Guidance. First, CARB and the District are directly responsible for 
ensuring that the Prop 1B program and Carl Moyer Program are 
implemented in accordance with State law. See 2010 Prop 1B guidelines 
at 1-4 (``Overview'') and 2011 Carl Moyer Program Guidelines at Chapter 
1 (``Program Overview''). Second, these incentive funds address 
activities reasonably related to actual or potential air pollutant 
emissions by requiring grant recipients to purchase and operate newer, 
cleaner vehicles or equipment in place of older, more-polluting 
vehicles or equipment, subject to detailed contract requirements. See 
Response 13. Third, the 2008 and 2010 Prop 1B guidelines and the 2011 
Carl Moyer Program Guidelines establish a number of methods for 
verifying that projected emission reductions have taken place through 
compliance with the terms and conditions of each funding contract. See 
Response 13 and Response 14. Finally, under the applicable guidelines, 
actions by grantees that lead to emission reductions are directly 
enforceable by the State and/or the District--e.g., CARB and/or the 
District may assess fiscal penalties and take certain corrective 
actions where contract violations are identified \34\--and EPA and 
citizens may, in turn, enforce the annual reporting and emission 
reduction obligations against the District. See Response 13 and 
Response 14. Consistent with the EPA's recommendations for ``financial 
mechanisms EIPs,'' these provisions in the 2008 and 2010 Prop 1B 
guidelines and the 2011 Carl Moyer Program Guidelines are adequate to 
ensure that program funds are used as expected--i.e., to reduce 
emissions from higher-polluting vehicles and equipment by replacing 
them with newer, lower-polluting equipment and vehicles.
---------------------------------------------------------------------------

    \34\ These State and District enforcement authorities 
distinguish both the Prop 1B program and the Carl Moyer Program from 
an entirely ``voluntary'' measure, which depends on actions by 
individual sources that cannot be enforced. See, e.g., 2001 EIP 
Guidance at 157-58 (describing VMEPs as ``innovative mobile source 
air quality programs that are voluntary or that are operated by a 
non-governmental entity'' and distinguishing these from EIPs, for 
which the State is ``directly responsible for ensuring that program 
elements are implemented'').
---------------------------------------------------------------------------

    In sum, although the incentive-based emission reductions in the 
Contingency Measure SIP are not directly enforceable against individual 
sources by the EPA or citizens, the District may enforce specific 
emissions-reducing actions against individual sources, and the EPA and 
citizens may, in turn, enforce the emission reduction obligations 
against the District, pursuant to the District's SIP-approved 
commitments. Thus, whether the incentive-based emission reductions are 
characterized as dependent upon ``voluntary'' measures (i.e., a VMEP) 
or resulting from a discretionary ``financial mechanism EIP,'' we find 
the District's SIP commitments in the Contingency Measure SIP adequate 
to ensure that the EPA and citizens may enforce these emission 
reductions under the Act. The Contingency Measure SIP and related 
support documents also adequately address all other applicable 
requirements of the CAA and the EPA's recommendations as set forth in 
the 1997 VMEP and 2001 EIP Guidance (78 FR 53113, 53118-53122, August 
28, 2013). Given all of these considerations, we find that the 
incentive-based emission reductions in the Contingency Measure SIP 
satisfy the statutory criteria for SIP approval.
    Comment 13: Citing both the 2001 EIP Guidance and the 2004 Emerging 
and Voluntary Measures Policy, Earthjustice highlights seven criteria 
for enforceability and asserts that the emission reductions identified 
in the Contingency Measure SIP do not meet these criteria.
    Response 13: As an initial matter, we note that both the 2001 EIP 
Guidance and the 2004 Emerging and Voluntary Measures Policy set forth 
the EPA's recommendations for EIPs or voluntary measures submitted for 
SIP purposes and do not establish binding legal requirements. See 2001 
EIP Guidance at 12 and 19 (stating that the EPA would determine through 
notice-and-comment rulemaking whether a particular EIP submission meets 
the applicable CAA requirements) and 2004 Emerging and Voluntary 
Measures Policy at 2. Moreover, the 2004 Emerging and Voluntary 
Measures Policy does not apply to mobile emission sources such as on-
road and non-road vehicles.\35\ See 2004 Emerging and Voluntary 
Measures Policy at 5. We have, however, evaluated the incentive-based 
emission reductions in the Contingency Measure SIP for consistency with 
the fundamental ``integrity elements'' outlined in the 2001 EIP 
Guidance, the 2004 Emerging and Voluntary Measures Policy, and other 
guidance on innovative measures as part of our evaluation of the SIP 
submission in accordance with CAA requirements.
---------------------------------------------------------------------------

    \35\ The Contingency Measure SIP relies on emission reductions 
from incentive programs that apply only to mobile emission sources--
specifically, ``on-road vehicle replacement'' projects funded 
through the Prop 1B program and ``off-road vehicle replacement'' 
projects funded through the Carl Moyer Program (78 FR 53113, 53120).
---------------------------------------------------------------------------

    Based on this evaluation, we disagree with the commenter's 
assertion that the incentive-based emission reductions in the 
Contingency Measure SIP fail to adequately address the enforceability 
recommendations provided in EPA policy. As the commenter notes, the 
2001 EIP Guidance identifies enforceability considerations that are 
substantively identical to the recommendations in the 2004 Emerging and 
Voluntary Measures Policy. According to the 2001 EIP Guidance, emission 
reductions use, generation, and other required actions are enforceable 
if: (1) They are independently verifiable; (2) program violations are 
defined; (3) those liable for violations can be identified; (4) the 
State and the EPA maintain the ability to apply penalties and secure 
appropriate corrective actions where applicable; (5) citizens have 
access to all the emissions-related information obtained from the 
source; (6) citizens can file suits against sources for violations; and 
(7) they are practicably enforceable in accordance with other EPA 
guidance on practicable enforceability. See 2001 EIP Guidance at 35-36.
    The actions required of grantees under the applicable portions of 
the Prop 1B and Carl Moyer Program guidelines, as discussed in our 
proposed rule, the Proposal TSD, and further below, adequately address 
these enforceability recommendations. First, the required actions are 
independently verifiable through (1) pre-project and post-project on-
site inspections (with photographic documentation) that the District 
and/or CARB must carry out pursuant to the applicable guidelines, and 
(2) documents that each grantee is required to maintain and/or submit 
to the District in accordance with detailed contract provisions. See 
generally 2008 Prop 1B guidelines at Section III.D

[[Page 29343]]

(``Local Agency Project Implementation Requirements''), Section IV 
(``General Equipment Project Requirements''), and Appendix A, Section C 
(``Recordkeeping Requirements'') and Section D (``Annual Reporting 
Requirements''); 2010 Prop 1B guidelines at Section IV.A (``Project 
Implementation Requirements''), Section VI (``General Equipment Project 
Requirements''), and Appendix A, Section F (``Recordkeeping 
Requirements'') and Section G (``Annual Reporting Requirements''); and 
2011 Carl Moyer Program Guidelines, Part I, Chapter 3 (``Program 
Administration'').
    For example, the 2008 and 2010 Prop 1B guidelines require, among 
other things, that (1) all project applications \36\ include 
documentation of current equipment and activity information (e.g. 
engine make, model, horsepower and fuel type, annual vehicle miles of 
travel (VMT) in California, and estimated percentage of annual VMT in 
trade corridors); (2) that the District conduct a ``pre-inspection'' of 
each application deemed eligible for funding, to verify information 
regarding the baseline engine, vehicle, or equipment; (3) that the 
District conduct a ``post-inspection'' of each funded project to 
record, among other things, identifiers and specifications for the new 
engine/equipment (e.g., VIN numbers for new trucks, serial numbers for 
new engines), verification that the new engine/equipment is operational 
and consistent with the equipment described in the project application, 
and verification of the destruction of the old/replaced equipment, 
where applicable; and (4) that the District's pre-inspection and post-
inspection project files include photographic documentation of each 
piece of equipment being inspected, including an engine serial number, 
visible distinguishing identification (e.g., a license plate), and a 
full view of the equipment. See Proposal TSD at 30-35; see also 2008 
Prop 1B guidelines at Section III.D.8 (``Equipment project pre-
inspections'), Section III.D.14 (``Equipment project post-inspections), 
Section IV.D (``Equipment Project Application Requirements'') and 
Appendix A, Section F (``Application Information''); and 2010 Prop 1B 
guidelines at Section IV.A.10 (``Equipment project pre-inspections'), 
Section IV.A.16 (``Equipment project post-inspections), Section VI.D 
(``Equipment Project Application Requirements'') and Appendix A, 
Section F (``Application Information'').
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    \36\ Each project application must be incorporated by reference 
into the equipment project contract, which the equipment owner must 
maintain for at least two years after equipment project ends or 
three years after final payment, whichever is later. See 2008 Prop 
1B guidelines at Section III.D.10 (``Equipment project contracts'') 
and 2010 Prop 1B guidelines at Section IV.A.11 (``Equipment project 
contracts'').
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    Similarly, the 2011 Carl Moyer Program Guidelines require, among 
other things, that (1) all project applications \37\ include 
documentation of existing engine usage in previous years (e.g. miles 
traveled, hours operated, or fuel consumed per year); (2) that the 
District conduct a ``pre-inspection'' of each application deemed 
eligible for funding, to verify information regarding the baseline 
engine, vehicle, or equipment; (3) that the District conduct a ``post-
inspection'' of each funded project to record, among other things, 
information regarding the new engines, vehicles/equipment, and retrofit 
devices as needed to provide a basis for emission calculations and to 
ensure contract enforceability; and (4) that the District's pre-
inspection and post-inspection project files include photographic 
documentation of the engine, vehicle, or equipment information, 
including a legible serial number and/or other identifying markings. 
See Proposal TSD at 37-42; see also 2011 Carl Moyer Program Guidelines, 
Part I, Chapter 3, at Section W (``Minimum Project Application 
Requirements''), Section AA (``Project Pre-Inspection''), and Section 
BB (``Project Post-Inspection'').
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    \37\ A project application that is ``accurate and complete'' may 
be included as an attachment to the contract to satisfy the 
``project specification'' requirements of the 2011 Carl Moyer 
Program Guidelines. See 2011 Carl Moyer Program Guidelines at 
Section Z.6 (stating that ``[a]ll contracts must include detailed 
information on the baseline and new vehicles, equipment, and/or 
engines that were used in the project cost-effectiveness 
calculation''). Each contract must be retained by the grantee for at 
least two years after contract expiration or three years after final 
project payment, whichever is later. See id. at Z.10 (``On-Site 
Inspections and Audits'').
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    Second, the applicable portions of the 2008 and 2010 Prop 1B 
guidelines and the 2011 Carl Moyer Program guidelines specifically 
define the required elements of each contract and the types of actions 
that constitute violations of such contracts. For example, under the 
2008 and 2010 Prop 1B guidelines, each equipment project contract must 
include: (1) A unique ``tracking number''; (2) the equipment owner's 
contact information; (3) the original application submitted by the 
equipment owner; (4) requirements for the equipment owner to submit 
reports to the local agency annually or biennially \38\; (5) the 
equipment owner's agreement to allow ongoing evaluations and audits of 
equipment and documentation by the District, CARB, or their designated 
representative(s); and (6) requirements for the equipment owner to 
retain all records pertaining to the program (i.e., invoices, 
contracts, and correspondence) for at least two years after equipment 
project ends or three years after final payment, whichever is later. 
See 2008 Prop 1B guidelines at Section III.D.10 (``Equipment project 
contracts'') and 2010 Prop 1B guidelines at Section IV.A.11 
(``Equipment project contracts''); see also Proposal TSD at 30-32. 
Additionally, under the same guidelines, the following actions (among 
others) are specifically identified as contract violations: (1) Failure 
to meet the terms and conditions of an executed equipment project 
contract, including equipment operating conditions and geographic 
restrictions; (2) failure to allow for an electronic monitoring device 
or tampering with an installed device or data; (3) insufficient, 
incomplete, or faulty equipment project documentation; and (4) failure 
to provide required documentation or reports in a timely manner. See 
2008 Prop 1B guidelines at Section IV.G (``Equipment Project Non-
Performance'') and 2010 Prop 1B guidelines at VI.I (``Equipment Project 
Non-Performance''); see also Proposal TSD at 30-32.
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    \38\ Under the 2008 Prop 1B guidelines, all grant recipients are 
required to submit reports to the District annually. See 2008 Prop 
1B guidelines at Appendix A (``Trucks Serving Ports and Intermodal 
Rail Yards''), Section D (``Annual Reporting Requirements''). The 
2010 Prop 1B guidelines also require annual reports except that 
certain owners of equipment with PM retrofits with a 2-year contract 
may report at the end of the 2-year project life. See 2010 Prop 1B 
guidelines, Appendix A (``Heavy Duty Diesel Trucks''), Section G 
(``Annual Reporting Requirements'').
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    Similarly, under the 2011 Carl Moyer Program Guidelines, each 
equipment project contract must include: (1) The name and contact 
information of the grantee; (2) specified timeframes for ``project 
completion'' (the date the project post-inspection confirms that the 
project has become operational) and ``project implementation'' (the 
project life used in the project cost-effectiveness calculation); (3) 
detailed information on both baseline and new vehicles, equipment, and/
or engines, including documentation adequate to establish historical 
annual usage; (4) requirements for the grantee to maintain the vehicle, 
equipment and/or engine according to the manufacturer's specifications 
for the life of the project; (5) annual reporting requirements; (6) a 
provision authorizing the District, CARB, and their designees to 
conduct fiscal audits and to inspect the project engine, vehicle, and/
or equipment and

[[Page 29344]]

associated records during the contract term, and (7) requirements to 
maintain and retain project records for at least two years after 
contract expiration or three years after final project payment, 
whichever is later. See 2011 Carl Moyer Program Guidelines, Part I, 
Chapter 3 at Section Z (``Minimum Contract Requirements''); see also 
Proposal TSD at 37-38 (describing requirements for Off-Road Compression 
Ignition engine replacement projects in 2011 Carl Moyer Program 
Guidelines, Part I, Chapter 9 at Section C (``Project Criteria'')). 
Additionally, the 2011 Carl Moyer Program Guidelines explicitly require 
that each contract ``specify that by executing the contract, the 
grantee understands and agrees to operate the vehicle, equipment, and/
or engine according to the terms of the contract'' and describe the 
potential repercussions to the grantee for non-compliance with contract 
requirements. See 2011 Carl Moyer Program Guidelines, Part I, Chapter 3 
at Section Z.11 (``Repercussions for Non-Performance'') and Section FF 
(``Nonperforming Projects'').\39\ The 2011 Carl Moyer Program 
Guidelines also specifically identify types of actions on the part of 
the District that CARB may treat as violations of program 
requirements--e.g., misuse of Carl Moyer Program funds and 
insufficient, incomplete, or inaccurate project documentation. See 2011 
Carl Moyer Program Guidelines at Section U (``Program Non-
Performance'').
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    \39\ The 2011 Carl Moyer Program Guidelines authorize the 
District to grant a ``waiver'' to a grantee who demonstrates to the 
District's satisfaction that certain conditions justify contract 
noncompliance for a defined period. See 2011 Carl Moyer Program 
Guidelines, Part I, Chapter 3 at Section FF.4(D). We note that, for 
any project that the District has relied upon for SIP credit, 
Section 4.3 of Rule 9610 requires the District to annually adjust 
its calculation of SIP-creditable emission reductions to reflect 
periods of noncompliance under any such waiver.
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    Third, grantees that are liable for violations of these contract 
provisions can be identified by the State and/or District and, through 
the annual demonstration reports submitted to the EPA, by the EPA and 
citizens as well. Specifically, as discussed above, under the 2008 Prop 
1B guidelines, the 2010 Prop 1B guidelines, and the 2011 Carl Moyer 
Program guidelines, each contract executed by the District must require 
the grantee to maintain project records for at least two years after 
contract expiration or three years after final project payment, 
whichever is later, and to submit annual or biennial reports to the 
District. See 2008 Prop 1B guidelines at Section III.D.10 (``Equipment 
project contracts''), 2010 Prop 1B guidelines at Section IV.A.11 
(``Equipment project contracts''),\40\ and 2011 Carl Moyer Program 
Guidelines, Part I, Chapter 3 at Section Z (``Minimum Contract 
Requirements''); see also Proposal TSD at 30-32 and 37-40. 
Additionally, the 2008 and 2010 Prop 1B guidelines require that each 
contract contain a provision stating the equipment owner's agreement to 
allow ongoing evaluations and audits of equipment and documentation by 
the District, CARB, or their designated representative(s), and the 2011 
Carl Moyer Program Guidelines similarly require that all contracts 
authorize the District, CARB, or their designees to conduct fiscal 
audits of the project and/or to inspect the project engine, vehicle, 
and/or equipment and associated records during the contract term. See 
id. These provisions in the Prop 1B and Carl Moyer Program guidelines 
enable both the State and District to identify grantees that violate 
their contract provisions.
---------------------------------------------------------------------------

    \40\ See also n. 38, supra.
---------------------------------------------------------------------------

    The EPA and citizens, in turn, can identify violators through the 
annual demonstration reports that the District is obligated under its 
SIP commitment to make publicly available (on the District's Web site) 
and to submit to the EPA by August 31 of each year. See SJVUAPCD Board 
Resolution No. 13-6-19 (June 20, 2013) at 3 and Rule 9610, Section 5.0. 
Specifically, Section 6.1 of Rule 9610 (as adopted June 2013) \41\ 
states that ``[a]ll documents created and/or used in implementing the 
requirements of Section 4.0 shall be kept and maintained as required by 
the applicable incentive program guidelines . . . [and] shall be made 
available for public review'' consistent with the California Public 
Records Act and other related requirements. Section 6.1 also states 
that ``[i]nformation regarding the process for the public review of 
such records shall be included in the annual demonstration report.'' 
Rule 9610, Section 6.1. Consistent with these requirements, the 2013 
Annual Demonstration Report submitted by the District states that the 
public may request documents created and/or used in implementing the 
requirements of Section 4.0 (of Rule 9610) through the District's 
Public Records Release Request form, which is available on the District 
Web site. See SJVUAPCD, ``2013 Annual Demonstration Report'' (January 
31, 2014) at 8. The District has confirmed that both the EPA and 
citizens may use this form to request copies of the required records 
for any Prop 1B or Carl Moyer Program project that the District has 
relied upon for SIP credit, which will be identified in the District's 
annual demonstration reports going forward. See email dated December 
18, 2013, from Jeannine Tackett, SJVUAPCD, to Idalia Perez, U.S. EPA 
Region 9, ``RE: question needed for response to comments on contingency 
measure SIP.'' \42\
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    \41\ All references to Rule 9610 herein are to the rule as 
adopted by the District on June 20, 2013.
    \42\ In its December 18, 2013 email, the District confirmed that 
it ``will include information in future annual demonstration reports 
as necessary to ensure the ongoing tracking of projects claimed in 
prior annual demonstration reports, including adjustments necessary 
under Section 4.3 [of Rule 9610].'' We note that beginning with the 
2014 annual demonstration report, the District must identify the 
specific projects (by unique project identification number) that the 
District has relied upon for emission reduction credit in the 
Contingency Measure SIP, including adjustments made as required by 
Section 4.3 of Rule 9610, to ensure that the EPA and citizens can 
track the District's progress in satisfying its SIP commitments. See 
Rule 9610, Section 4.5; see also Proposal TSD at 27, n. 17. The 
District may satisfy this requirement by including, in its annual 
demonstration report, the list of specific projects in the 
attachments to the EPA's Proposal TSD (as adjusted consistent with 
Rule 9610, Section 4.3), which the EPA developed because the 2013 
Annual Demonstration Report does not specifically identify the 
projects relied upon for credit in the Contingency Measure SIP. See 
Proposal TSD at Attachment A (``Prop 1B: On-Road Vehicle Replacement 
projects achieving emission reductions through 2015'') and 
Attachment B (``Carl Moyer Program: Off-Road Vehicle Replacement 
projects achieving emission reductions through 2015'').
---------------------------------------------------------------------------

    Fourth, the State maintains the ability to apply penalties and 
secure appropriate corrective actions where contract terms are 
violated, and the EPA maintains the ability to require appropriate 
corrective actions of the District where projected emission reductions 
are not achieved. For example, under the 2008 and 2010 Prop 1B 
guidelines, where the District finds that a grantee has violated a 
contract term, the District is authorized to recover all or a portion 
of program funds, assess fiscal penalties on equipment owners based on 
the severity of the non-performance, and prohibit the equipment owner 
from participating in future State incentive programs, among other 
things. See 2008 Prop 1B guidelines at Section IV.G (``Equipment 
Project Non-Performance'') and 2010 Prop 1B guidelines at Section VI.I 
(``Equipment Project Non-Performance''). Under the 2011 Carl Moyer 
Program Guidelines, both CARB and the District are authorized to ``seek 
any remedies available under the law for noncompliance with Carl Moyer 
Program requirements and nonperformance with the contract,'' including 
withholding of program funds, and should CARB determine that the 
District's oversight and enforcement

[[Page 29345]]

of the program is insufficient, CARB may recapture funds granted to the 
District that have not yet been awarded to approved projects. See 2011 
Carl Moyer Program Guidelines, Chapter 3 at Section U (``Program Non-
Performance''). Additionally, as explained further below, the EPA 
maintains the ability to enforce the District's SIP commitments--i.e., 
to require the District to submit annual demonstration reports 
consistent with the requirements of Rule 9610 and/or to adopt and 
submit substitute measures on a fixed timeframe, where projected 
emission reductions are not achieved.
    Fifth, citizens have access to all of the emissions-related 
information obtained from the source. As explained in our proposed 
rule, the Board commitments submitted with the Contingency Measure SIP 
obligate the District to ``account for'' its claimed NOX and 
PM2.5 emission reductions ``in annual demonstration reports 
pursuant to the requirements of Rule 9610.'' See SJVUAPCD Board 
Resolution No. 13-6-18 at 3. Rule 9610 requires the District to submit 
to the EPA, no later than August 31 of each year, an ``annual 
demonstration report'' that includes detailed information about each 
specific project that the District has relied upon to achieve SIP-
creditable emission reductions (e.g., unique project identification 
numbers, project implementation dates, applicable incentive program 
guideline(s), and quantified emission reductions per year and 
aggregated over the project life, by pollutant). See 78 FR 53113, 53121 
(citing Rule 9610, sections 4.1-4.6 and 5.0) (emphases added). 
Additionally, Rule 9610 requires that ``[a]ll documents created and/or 
used in implementing the requirements of Section 4.0 shall be kept and 
maintained as required by the applicable incentive program guidelines'' 
and that ``such records shall be made available for public review.'' 
Rule 9610, Section 6.1. Under the 2008 and 2010 Prop 1B guidelines, all 
grant recipients must, among other things, retain ``all documents, 
invoices, and correspondence associated with the application, award, 
contract, monitoring, enforcement, and reporting requirements'' for at 
least two years after the equipment project contract term or three 
years after final payment, whichever is later''; must make records 
readily available and accessible to the District, CARB, or their 
designees upon request; and must submit regular reports to the District 
that include information about annual miles traveled, certification and 
documentation of travel within California's trade corridors, and 
certification that the project was operated in accordance with the 
signed contract. See 2008 Prop 1B guidelines, Appendix A (``Trucks 
Serving Ports and Intermodal Rail Yards''), Section C (``Recordkeeping 
Requirements'') and Section D (``Annual Reporting Requirements'') at A-
4 and 2010 Prop 1B guidelines, Appendix A (``Heavy Duty Diesel 
Trucks''), Section F (``Recordkeeping Requirements'') and Section G 
(``Annual Reporting Requirements'') at A-19. The 2011 Carl Moyer 
Program Guidelines contain substantially similar recordkeeping and 
reporting requirements for grantees in Chapter 3, Section Z.9 
(``Reporting''), Section Z.10 (``On-Site Inspections and Audits''), and 
Section DD (``Grantee Annual Reporting''). Pursuant to section 6.1 of 
Rule 9610, all of these documents must be made available for public 
review upon request.\43\ See Rule 9610, Section 6.1.
---------------------------------------------------------------------------

    \43\ The 2008 Prop 1B guidelines require the District to retain 
all ``program records'' (e.g., invoices, contracts, and 
correspondence) for at least two years after the project ends or 
three years after final payment, whichever is later. See 2008 Prop 
1B guidelines, Chapter II, Section D.10.b (``General Program 
provisions''). The 2010 Prop 1B guidelines require the District to 
retain ``program records'' for 35 years after the bond issuance date 
providing the funds for the grant, or to send all records to ARB by 
the end date of the grant agreement. See 2010 Prop 1B guidelines, 
Chapter II, Section E.10.b (``General Program provisions''). Under 
the Carl Moyer Program Guidelines, the District must keep each 
``project file'' for a minimum of two years after the end of the 
contract term or a minimum of three years after final payment, 
whichever is later. See 2011 Carl Moyer Program Guidelines, Chapter 
3, Section V (``ARB Audit of Air Districts'') at 3-25. A ``project 
file'' generally includes a copy of the application, a completed 
pre- and post-inspection form, and the annual reports submitted by 
the grantee. See id. at Section X.6, Section AA.4, Section BB.1.(G), 
and Section DD.3.
---------------------------------------------------------------------------

    Sixth, although citizens cannot file suits against sources for 
violations, both the EPA and citizens may file suits against the 
District for violations of its commitments to ensure that the projected 
emission reductions are achieved in 2015. Specifically, the SJVUAPCD 
Governing Board has submitted a commitment to quantify SIP-creditable 
emission reductions in the amount of 4.15 tpd of NOX 
reductions and 0.10 tpd of PM2.5 reductions using the 
incentive program guidelines and related documents identified in Rule 
9610 and to ``account for these NOX and PM2.5 
emission reductions in annual demonstration reports pursuant to the 
requirements of Rule 9610'' for purposes of satisfying the 
PM2.5 contingency measure requirement for 2015. SJVUAPCD 
Board Resolution No. 13-6-18 at p. 3. Additionally, the Board's 
commitment states that ``[if] there is a shortfall in expected emission 
reductions for 2015, the District will adopt and submit to EPA 
substitute rules and measures that will achieve equivalent emission 
reductions as expeditiously as practicable and no later than any 
applicable implementation deadline in the CAA or EPA's implementing 
regulations, by no later than December 31, 2016.'' Id. As explained in 
our proposed rule (78 FR 53113, 53121), the EPA interprets these 
District commitments as applying to emission reductions to be achieved 
in 2015 through specific types of Prop 1B and Carl Moyer Program 
projects,\44\ and the EPA expects that the 2014 annual demonstration 
report will then specify the individual projects relied upon to achieve 
these emission reductions, consistent with the requirements of Rule 
9610, Section 4.5. See Proposal TSD at 25-27, n. 13 and n. 17 
(referencing Proposal TSD at Attachment A and Attachment B). These 
Board commitments, which become federally enforceable by the EPA and by 
citizens upon approval into the SIP,\45\ impose clear and specific 
requirements on the District to account for specific amounts of 
NOX and PM2.5 emission reductions through annual 
demonstration reports that satisfy the requirements of Rule 9610 and, 
if the identified projects fail to achieve the projected emission 
reductions in 2015, to adopt and submit to the EPA substitute measures 
that will achieve equivalent amounts of emission reductions as 
expeditiously as practicable and no later than December 5, 2015.\46\ 
Should the EPA determine

[[Page 29346]]

that the SJV area has failed to attain the 1997 PM2.5 
standards by the applicable attainment date (April 5, 2015), the EPA 
and citizens may enforce both components of the District's SIP 
commitment under sections 113 and 304 of the CAA, respectively, as 
follows: (1) If the Board fails to annually account for its claimed 
NOX and PM2.5 emission reductions consistent with 
the requirements of Rule 9610, the EPA or citizens may enforce the 
District's obligation to submit the required reports; and (2) if the 
District's 2014 annual demonstration report indicates that the specific 
projects identified therein will not achieve the District's claimed 
amounts of NOX and PM2.5 emission reductions 
(4.15 tpd of NOX reductions and 0.10 tpd of PM2.5 
reductions) in 2015 as projected, the EPA or citizens may enforce the 
District's obligation to adopt and submit substitute measures that will 
achieve equivalent amounts of emission reductions by December 5, 2015. 
See Proposal TSD at 42-44. We find these provisions adequate to ensure 
that the EPA and citizens may secure appropriate corrective actions 
where projected emission reductions are not achieved.
---------------------------------------------------------------------------

    \44\ This interpretation is consistent with information in the 
District's 2013 Annual Demonstration Report, which identifies 
``agricultural off-road vehicle replacement projects funded through 
the Carl Moyer Program'' and ``on-road vehicle replacement projects 
funded through the Prop 1B program'' as the projects relied upon for 
contingency measure purposes. See 2013 Annual Demonstration Report 
at 26 (Table 5).
    \45\ See notes 30 and 31, supra.
    \46\ Consistent with the EPA's longstanding interpretation of 
CAA section 172(c)(9) as requiring that all actions needed to effect 
full implementation of contingency measures occur within 60 days 
after the EPA notifies the State of a failure to attain the NAAQS by 
the applicable attainment date (78 FR 53113, 53115), we interpret 
the phrase ``applicable implementation deadline'' in the District's 
SIP commitment to mean 60 days after October 5, 2015, which is the 
latest date by which the EPA must determine whether the SJV area has 
attained the 1997 PM2.5 NAAQS pursuant to CAA section 
179(c). In our proposed rule, we stated that the District's 
commitment obligated it to adopt and submit any substitute measures 
necessary to correct a shortfall in emission reductions ``no later 
than December 31, 2016'' (78 FR 53113, 53121, 53122). In this final 
action, however, we are clarifying our interpretation of the SIP 
commitment to mean that any substitute measures necessary to correct 
a shortfall in 2015 emission reductions must be adopted and 
submitted to the EPA no later than the applicable implementation 
deadline for these contingency measures under CAA section 172(c)(9), 
which is December 5, 2015. This interpretation is consistent with 
the text of the District's SIP commitment, which states that in the 
event of a shortfall, the District will ``adopt and submit to EPA 
substitute rules and measures that will achieve equivalent emission 
reductions as expeditiously as practicable and no later than any 
applicable implementation deadline in the CAA or EPA's implementing 
regulations, by no later than December 31, 2016.'' See SJVUAPCD 
Board Resolution No. 13-6-18 at p. 3 (emphases added). As a 
practical matter, because a December 2015 deadline for 
implementation of the remedy requires the District to begin 
developing any necessary substitute measures well before that date, 
the EPA intends to determine by late 2014 (based on the District's 
2014 annual demonstration report and other available documentation) 
whether there will be any shortfall in projected emission reductions 
that triggers the District's obligation to adopt and submit 
substitute measures.
---------------------------------------------------------------------------

    Finally, the emission reductions to be achieved through the 
identified Prop 1B and Carl Moyer Program projects are practicably 
enforceable consistent with EPA policy on enforceability requirements. 
The EPA generally considers a requirement to be ``practically 
enforceable'' if it contains a clear statement as to applicability; 
specifies the standard that must be met; states compliance timeframes 
sufficient to meet the standard; specifies sufficient methods to 
determine compliance, including appropriate monitoring, record keeping 
and reporting provisions; and recognizes relevant enforcement 
consequences. See ``Review of State Implementation Plans and Revisions 
for Enforceability and Legal Sufficiency,'' September 3, 1987 (``1987 
Potter Memo'') and ``Guidance on Enforceability Requirements for 
Limiting Potential to Emit through SIP and Section 112 Rules and 
General Permits,'' January 25, 1995 (``1995 PTE Policy'') at 5, 6. The 
actions associated with the incentive-based emission reductions in the 
Contingency Measure SIP are practicably enforceable on two levels. 
First, as explained above, the actions required of grantees under the 
2008 and 2010 Prop 1B guidelines and the 2011 Carl Moyer Program 
Guidelines are practicably enforceable by the State and District. 
Specifically, under the applicable portions of the Prop 1B and Carl 
Moyer Program guidelines (see Proposal TSD at 29-42), each grant of 
incentive funds must be subject to contract provisions that clearly 
identify the funded equipment or vehicle; specify the actions required 
of the grantee; identify relevant compliance timeframes (e.g., a 
``project life''); specify sufficient methods to determine the 
grantee's compliance with contract provisions, including detailed 
monitoring, recordkeeping and reporting requirements; and identify 
potential enforcement consequences in cases of contract non-compliance. 
Taken together, these provisions of the 2008 and 2010 Prop 1B 
guidelines and the 2011 Carl Moyer Program Guidelines ensure that the 
actions required of grantees are practically enforceable consistent 
with EPA policy.
    Second, the actions required of the District under its SIP 
commitment are practicably enforceable by the EPA and citizens. As 
discussed above, the District has submitted an enforceable commitment 
to account for specified amounts of NOX and direct 
PM2.5 emission reductions through annual demonstration 
reports meeting the requirements of Rule 9610 and, should the projects 
identified in those reports \47\ fail to achieve the specified 
reductions in 2015, to adopt and submit substitute measures achieving 
equivalent amounts of reductions on a fixed schedule. This commitment 
clearly identifies the District as the responsible entity; specifies 
the requirement that must be met and the compliance timeframes (i.e., 
to account for specific amounts of incentive-based NOX and 
PM2.5 emission reductions or to adopt and submit substitute 
measures by fixed dates); and, through reference to the requirements of 
Rule 9610, specifies sufficient methods to determine compliance (i.e., 
the requirements under Section 4.0 of Rule 9610 that each annual 
demonstration report must satisfy). Should the District fail to submit 
annual demonstration reports meeting the requirements of Rule 9610 that 
confirm that its claimed NOX and PM2.5 emission 
reductions occurred in 2015 as projected, the EPA may make a finding of 
failure to implement the SIP under CAA section 179(a), which starts an 
18-month period for the State/District to correct the non-
implementation before mandatory sanctions are imposed. Additionally, 
the EPA or citizens may enforce the District's obligation to adopt and 
submit substitute measures that will achieve equivalent emission 
reductions no later than December 5, 2015.
---------------------------------------------------------------------------

    \47\ See n. 42, supra.
---------------------------------------------------------------------------

    Taking into account all of these provisions of the applicable 
incentive program guidelines and the District's SIP commitments, we 
find the incentive-based emission reductions relied upon in the 
Contingency Measure SIP to be practically enforceable consistent with 
EPA policy.
    Comment 14: Earthjustice asserts that the incentive-based emission 
reductions are not independently verifiable because the EPA and 
citizens can only rely on data submitted to or collected by the 
District. Additionally, Earthjustice contends that the EPA has no 
authority to inspect sources for compliance with the contracts between 
the District and the source, and that the EPA also lacks the ability to 
apply penalties or secure corrective actions against the sources. 
Finally, Earthjustice asserts that because the emission reductions are 
secured through contracts between the source and the District, 
compliance with those agreements cannot be enforced by the public or 
the EPA, and that the District ``has discretion to modify these 
contracts and redefine violations without any EPA or public 
oversight.''
    Response 14: First, we disagree with the commenter's claim that the 
incentive-based emission reductions are not independently verifiable. 
Although enforcement of these emission reductions by the EPA or 
citizens generally depends upon project-related information maintained 
by the District, this does not preclude independent verification of the 
emission reductions if sufficient safeguards are in place to ensure 
that the District will obtain and maintain adequate compliance-related 
records and make these records available to the EPA and the public. As 
discussed above, the applicable incentive program guidelines (the 2008 
and 2010 Prop 1B guidelines and the 2011 Carl Moyer Program Guidelines) 
require that the District maintain specific documentation of pre-
project and post-project inspections for each

[[Page 29347]]

funded project and that all grantees submit detailed compliance-related 
documentation to the District on an annual or biennial basis. The 
District, in turn, is obligated under its SIP commitment to make these 
project records available to the EPA and to the public upon request. 
See Response 13. Furthermore, as a result of the EPA's approval of the 
District's commitments into the SIP, the EPA may require under CAA 
section 114(a) that the District provide information necessary for the 
purpose of determining whether the District is in violation of these 
SIP commitments--including all compliance-related documentation that 
the District maintains in accordance with the applicable incentive 
program guidelines. See CAA section 114(a) (authorizing the EPA to 
require submission of information from ``any person'' who may have 
information necessary for the purpose of determining whether a SIP 
requirement has been violated) and section 302(e) (defining ``person'' 
to include a State or political subdivision thereof). We find the 
monitoring, recordkeeping and reporting requirements of the applicable 
incentive program guidelines, together with the District's enforceable 
SIP commitments, adequate to ensure that the incentive-based emission 
reductions can be independently verified.
    Second, although the commenter correctly states that the EPA is not 
authorized to inspect sources for compliance with their funding 
contracts or to apply penalties or secure corrective actions against 
individual sources, we do not believe such authorities are necessary in 
order to enforce these emission reductions under the CAA. As discussed 
in Response 13 above, both the District and CARB are authorized to 
inspect sources for compliance with their funding contracts and to 
apply penalties or secure corrective actions against sources that 
violate their contracts. Rule 9610 requires the District to maintain 
records of all such inspections and enforcement actions (see Rule 9610, 
Section 6.1), and under section 114(a) of the CAA, the EPA may require 
the District to provide these project-related records for purposes of 
determining whether the District is in violation of its SIP commitment. 
Both the EPA and citizens may also obtain these records from the 
District through submission of a ``Public Records Release Request.'' 
See Response 13. Based on these project-related records, the EPA and 
citizens may verify whether the District has adequately accounted for 
4.15 tpd of NOX reductions and 0.10 tpd of PM2.5 
reductions in 2015, consistent with its SIP commitments. Additionally, 
where the documentation evidences a shortfall in the required emission 
reductions, the District would be obligated--subject to the EPA and 
citizen enforcement under the CAA--to adopt and submit substitute 
measures that achieve equivalent emission reductions no later than 
December 5, 2015. We find these provisions adequate to ensure that the 
incentive-based emission reductions in the Contingency Measure SIP may 
be enforced under the CAA.
    Finally, although we agree with the commenter's claim that neither 
the EPA nor citizens can enforce compliance with the contracts between 
sources and the District, we disagree with the claim that the District 
has discretion to ``redefine violations without any EPA or public 
oversight.'' As explained above, upon approval into the SIP the 
District's commitments become federally enforceable by the EPA and by 
citizens under sections 113 and 304 of the Act, respectively. See 
Response 13. These SIP-approved commitments cannot be modified, nor can 
the District ``redefine violations'' thereof, except through a SIP 
revision adopted by the State after reasonable notice and public 
hearing and approved by the EPA through notice-and-comment rulemaking. 
See CAA section 110(l); 5 U.S.C. section 553; 40 CFR 51.105; see also 
Response 8.
    Comment 15: Earthjustice cites the EPA's 2001 EIP Guidance to 
support its assertion that to be enforceable, a ``financial mechanism 
EIP'' must meet the general programmatic and source-specific 
definitions of enforceable. Earthjustice asserts that the EPA's 
analysis does not include any review of the programmatic requirements 
outlined in EPA policy and that the Valley's incentive program 
``violates several of these criteria.'' Additionally, as to the 
``source-specific'' definition of enforceable in EPA policy, 
Earthjustice asserts that the EPA lacks the ability to independently 
verify compliance because the EPA is reliant upon information collected 
by the State and District and cannot collect its own information, 
conduct inspections, demand additional reporting, or enforce the 
failure to submit required reports. Earthjustice further contends that 
the limited reporting required under the Carl Moyer program does not 
allow the EPA to independently verify compliance given ``EPA must rely 
on the limited documentation submitted by the owner and will not even 
see reports on usage of the new equipment unless that data happens to 
be collected by the State or District and shared with EPA.'' 
Earthjustice concludes that the incentive program contingency measure 
thus fails to be ``enforceable'' either at the programmatic level or 
the source-specific level.
    Response 15: We disagree with Earthjustice's characterization of 
the EPA's recommendations in the 2001 EIP Guidance. The EPA stated in 
the 2001 EIP Guidance that ``[t[he emission reductions associated with 
a financial mechanism EIP are enforceable if they meet the general 
programmatic and source-specific definitions of enforceable.'' 2001 EIP 
Guidance at 120. Additionally, the EPA stated that although a program 
containing these elements would assure that the program would meet the 
applicable CAA provisions, the EPA would also evaluate programs 
submitted by states that do not contain all of these elements and would 
determine, through notice-and-comment rulemaking, whether such programs 
satisfied the applicable CAA requirements. See 2001 EIP Guidance at 
119; see also 2001 EIP Guidance at 12 and 19. Because the 
enforceability considerations highlighted in the 2001 EIP Guidance are 
non-binding recommendations, the EPA does not apply them as regulatory 
criteria in its evaluation of an EIP submission.
    We have, however, evaluated the incentive-based emission reductions 
in the Contingency Measure SIP for consistency with the EPA's 
recommendations in the 2001 EIP Guidance and find them generally 
consistent with the general programmatic and source-specific 
definitions of ``enforceable'' in this document. As Earthjustice notes, 
the ``programmatic'' definition of enforceable highlights seven key 
factors that should be considered in determining whether an EIP is 
enforceable. See 2001 EIP Guidance at 35-36. We addressed each of these 
seven factors in Response 13 above. The ``source-specific'' definition 
of enforceable highlights three key factors that should be considered 
in determining whether an EIP is enforceable: (1) The source is liable 
for any violations; (2) the liable party is identifiable; and (3) the 
State, the public, and the EPA can independently verify a source's 
compliance. See 2001 EIP Guidance at 40. With respect to the first two 
factors (the source's liability for violations and the ability to 
identify the liable party), see Response 13 above. With respect to the 
third factor (the ability of the State, the public, and the EPA to 
independently verify a source's compliance), see Response 14 above.
    We also disagree with Earthjustice's assertion that the EPA cannot 
collect the

[[Page 29348]]

information necessary to independently verify compliance and that the 
reporting required under the Carl Moyer program does not allow the EPA 
to independently verify compliance. As discussed above, the applicable 
incentive program guidelines (the 2008 and 2010 Prop 1B guidelines and 
the 2011 Carl Moyer Program Guidelines) require that the District 
maintain specific documentation of pre-project and post-project 
inspections for each funded project and that all grantees submit 
detailed compliance-related documentation to the District on an annual 
or biennial basis. The District, in turn, is obligated under its SIP 
commitment to maintain these project records and make them available to 
the EPA and to the public upon request. See Response 13; see also n. 43 
supra. Furthermore, as a result of the EPA's approval of the District's 
commitments into the SIP, the EPA may require under CAA section 114(a) 
that the District provide information necessary for the purpose of 
determining whether the District is in violation of its SIP 
commitments--including all compliance-related documentation that the 
District maintains in accordance with the applicable incentive program 
guidelines. See id. and Response 14. We find these provisions adequate 
to ensure that the EPA can collect the information necessary to 
independently verify the District's compliance with its SIP 
commitments.
    All SIP measures have some level of uncertainty, whether it comes 
from the uncertainty associated with the emissions factors for certain 
sources, the level of compliance with existing SIP measures, or the 
modeling for an attainment demonstration. The issue is how best to 
apply assumptions and tools to reduce the uncertainty to a manageable 
factor. See 2004 Electric-Sector EE/RE Guidance at 11. As explained in 
our Proposal TSD and further in these responses to comments, the 
incentive programs relied upon in the Contingency Measure SIP are 
subject to detailed monitoring, recordkeeping, reporting, and emissions 
quantification requirements under State law, all of which are designed 
to ensure that program grants are used to reduce air pollution through 
the replacement of older, higher-polluting vehicles and equipment with 
newer, cleaner vehicles and equipment and to ensure that the resulting 
emission reductions are calculated consistent with established 
quantification protocols. See Proposal TSD at 29-42; see also Response 
13. We find these requirements of the Prop 1B program and Carl Moyer 
Program adequate to reduce the uncertainties in calculating associated 
emission reductions to a manageable factor and to provide a reasonable 
basis for approval of the incentive-based emission reductions in the 
Contingency Measure SIP.
    Comment 16: The District notes that the EPA did not review emission 
reductions achieved through the National Resources Conservation Service 
Environmental Quality Incentives Program (NRCS EQIP) for the 
replacement of agricultural equipment (as included in Rule 9610 and 
documented through the District's 2013 Annual Demonstration Report). It 
describes efforts that have been taken toward developing procedures for 
crediting these emission reductions for SIP purposes including the 
statement of principles agreed upon by the District, NRCS, EPA, and 
CARB in December 2010 \48\ and the document signed by the EPA and NRCS 
in July 2012.\49\ The District states that the agencies that signed 
these statements agreed to work collaboratively to develop a mechanism 
to provide SIP credit for emission reductions from federal, state, and 
local incentive programs that meet the EPA integrity principles of 
being surplus, quantifiable, enforceable, and permanent. The District 
comments that it appreciates the EPA's efforts over the last several 
years in reviewing the NRCS EQIP Program in the context of these 
agreements and Rule 9610 and looks forward to the EPA's approval of 
this program as SIP-creditable in the near future.
---------------------------------------------------------------------------

    \48\ SJVAPCD, EPA, US Department of Agriculture NRCS, and CARB; 
Statement of Principles Regarding the Approach to State 
Implementation Plan Creditability of Agricultural Equipment 
Replacement Incentive Programs Implemented by the USDA Natural 
Resources Conservation Service and the San Joaquin Valley Air 
Pollution Control District, December 2010.
    \49\ USDA and EPA, Implementation Principles for Addressing 
Agricultural Equipment under the Clean Air Act, July 26, 2012.
---------------------------------------------------------------------------

    Response 16: We did not evaluate the EQIP as part of our action on 
the Contingency Measure SIP because the District did not specifically 
identify any emission reductions from the EQIP as part of its 
contingency measure plan and because emission reductions from the Carl 
Moyer and Prop 1B projects identified in our proposed rule and the 
Proposal TSD provide sufficient emission reductions to meet the CAA 
contingency measure requirement for the 1997 PM2.5 NAAQS in 
the SJV. See Contingency Measure SIP at 7-9 and 2013 Annual 
Demonstration Report at Table 5; see also Proposal TSD at 25-27, n. 13 
and n. 17. Comments regarding the EQIP program are therefore outside 
the scope of this action.
    Comment 17: Citing the EPA's discussion of voluntary and 
discretionary economic incentive programs in the proposed rule, the 
District states that the EPA has generally limited the amount of 
emission reduction credit allowed in a SIP for discretionary incentive 
programs to three percent of the total projected future year emission 
reductions required to attain the relevant NAAQS. The District states 
that ``[t]his three percent cap does not affect this contingency 
measure demonstration and should be removed from the proposed rule, 
since EPA notes the amount of incentive-based emission reductions used 
in this contingency demonstration is less than two percent of the total 
projected emission reductions needed to attain the 1997 
PM2.5 NAAQS in the Valley.'' It further asserts that ``the 
District should not be limited to a three percent limit for incentive-
based reductions achieved through SIP-creditable processes, such as 
Rule 9610.'' In support of these assertions, the District quotes from 
the EPA's stated rationale in the 2001 EIP Guidance (at pg. 139) for 
the recommended 3 percent cap on SIP credit for voluntary programs and 
the EPA's statement that states ``may use the EIP guidance to implement 
programs which will generate emission reductions beyond the 3 percent 
limit, or when [the state has] already reached the 3 percent limit 
under the voluntary measures guidance.'' Finally, the District notes 
that the 2001 EIP Guidance sets forth only non-binding policy and does 
not represent final EPA action on the requirements for EIPs.
    Response 17: With respect to voluntary mobile source emission 
reduction programs (VMEPs), the EPA has generally limited the amount of 
emission reductions allowed in a SIP to three percent (3%) of the total 
projected future year emission reductions required to attain the 
relevant NAAQS, and for any particular SIP submittal to demonstrate 
attainment or maintenance of the NAAQS or progress toward attainment 
(RFP), 3% of the specific statutory requirement. See 1997 VMEP at 5. 
Similarly, with respect to voluntary and emerging measures for 
stationary sources, the EPA has generally limited the amount of 
emission reductions allowed in a SIP to 6% of the total amount of 
emission reductions required for RFP, attainment, or maintenance 
demonstration purposes. See 2004 Emerging and Voluntary Measures Policy 
at 9 and 2005 Bundled Measures Guidance at 8. These limits are

[[Page 29349]]

``presumptive'' in that the EPA may approve emission reductions from 
voluntary or other nontraditional measures in excess of the presumptive 
limits where the State provides a clear and convincing justification 
for such higher amounts, which the EPA would review on a case-by-case 
basis. See id.; see also Response 12.
    It appears the District may have misunderstood the EPA's intent in 
discussing this presumptive 3% limit on the emission reduction credit 
allowed in a SIP for VMEPs. In the proposed rule (78 FR 53113, 53118), 
we discussed the presumptive 3% limit both to provide context on the 
applicable EPA guidance to date and to indicate that the incentive-
based emission reductions in the Contingency Measure SIP adequately 
address the EPA's recommendations in the 1997 VMEP, as applicable (78 
FR 53113, 53118 and 53121). Our proposed rule made clear, however, that 
we were evaluating the Contingency Measure SIP in accordance with the 
fundamental integrity elements identified in several EPA guidance 
documents, as applied not only to VMEPs but also to discretionary 
``financial mechanism EIPs.'' See id. at 53118 (citing both 2001 EIP 
Guidance and 1997 VMEP). Although we observed in the proposed rule that 
the NOX and direct PM2.5 emission reductions 
attributed to Carl Moyer Program and Prop 1B projects in the 
Contingency Measure SIP each amounted to less than 2 percent of the 
total projected emission reductions needed to attain the 1997 
PM2.5 NAAQS in the SJV (78 FR 53113, 53121), this factual 
observation was intended to provide additional support for our proposal 
and was not a necessary basis for our action. See Response 12. Our 
discussion of the presumptive 3% limit provides relevant context on the 
EPA's guidance on voluntary and incentive programs to date, and we 
disagree with the District's statement that this discussion should be 
excluded from the analyses supporting our rulemaking action.
    We agree, however, with the District's suggestion that it is not 
necessarily limited to a 3% cap on the amount of SIP emission reduction 
credit allowed for incentive programs. As the District correctly notes, 
the 2001 EIP Guidance sets forth only non-binding policy and does not 
represent final EPA action on the requirements for EIPs. See 2001 EIP 
Guidance at 12. Likewise, the presumptive 3% limit on the SIP credit 
allowed for a VMEP under the 1997 VMEP policy is also a non-binding 
policy recommendation. In addition, the 2001 EIP Guidance explicitly 
provides that states may use it to implement programs which will 
generate emission reductions beyond the 3 percent limit, provided the 
state is directly responsible for ensuring that program elements are 
implemented. See 2001 EIP Guidance at 139. The EPA will review each SIP 
submitted by California that relies on emission reductions from 
incentive programs on a case-by-case basis in accordance with the 
applicable CAA requirements and, for any SIP that relies on incentive 
programs for emission reductions exceeding the EPA's presumptive caps, 
the EPA will determine through notice-and-comment rulemaking whether 
the State has provided adequate justification for such higher amounts 
and whether the submission, as a whole, satisfies the requirements of 
the Act. Because the incentive-based emission reductions in the 
Contingency Measure SIP fall below the EPA's recommended 3% limit, we 
do not need to decide in today's action whether the State has provided 
adequate justification for higher amounts of emission reduction credit.
    Comment 18: The District disagrees in part with the EPA's 
description of the effect of a ``case-by-case determination'' under the 
Carl Moyer Program and with the EPA's statement that such 
determinations give the State broad discretion without EPA oversight or 
public process. First, the District states that case-by-case 
determinations are defined under Rule 9610 as ``alternative procedures 
approved by ARB for specific projects, as authorized under the Carl 
Moyer Program Guidelines'' and that these are not limited to 
``determinations that provide for a longer project life.'' Second, the 
District states that ``all case-by-case determinations submitted for 
review to ARB are made available to the public via public Web posting 
at ARB's Carl Moyer Program Web site, and [that] the District is 
required by the Carl Moyer Program Guidelines to keep a copy of the 
determination in the project file.'' Third, the District states that 
under Section 3.2.2 of Rule 9610, no case-by-case determination may be 
used to quantify emission reductions under the rule unless each 
determination is reviewed through a public process and submitted to the 
EPA in accordance with Section 7.0. Finally, the District confirms the 
EPA's understanding that emission reductions from projects subject to 
case-by-case determinations are not included in the 2013 Annual 
Demonstration Report but disagrees with the EPA's statement in the 
proposed rule that such projects ``are not eligible for SIP credit,'' 
noting that the reason these are not included in the 2013 Annual 
Demonstration Report is that they are ``extremely rare and make up less 
than one percent of District administered incentive programs.'' In 
conclusion, the District maintains that case-by-case determinations 
made in accordance with Rule 9610 should be eligible for SIP credit.
    Response 18: We do not dispute the District's statement that 
``case-by-case determinations'' under the Carl Moyer Program are not 
limited to determinations that allow for a longer project life and note 
the broad definition of the term ``case-by-case determination'' in 
Section 2.4 of Rule 9610. We discussed case-by-case determinations in 
the proposed rule only to note that, although the portions of the three 
incentive program guidelines that we reviewed generally establish 
criteria consistent with the requirements of the Act, the provisions 
regarding case-by-case determinations in these portions of the 
guidelines do not adequately address the Act's requirements for SIP 
emission reduction credit (78 FR 53113, 53120). We referenced, as an 
example, a provision in the 2011 Carl Moyer Program guideline entitled 
``Project Life'' and noted that emission reductions from any project 
subject to a case-by-case determination under such a provision would 
not be eligible for SIP credit ``unless the District submits the 
individual determination for EPA review and approval through the SIP 
process'' (78 FR 53113, 53120 (referencing 2011 Carl Moyer Program 
guideline at Chapter 9, Section C.1(c)(5)). The purpose of this 
discussion was to make clear that the EPA is not, through this 
rulemaking, authorizing the District to rely on any project subject to 
a case-by-case determination under the referenced incentive program 
guidelines, nor is the EPA approving any such case-by-case 
determination.
    As the District correctly notes, Rule 9610 specifically prohibits 
the District from using a case-by-case determination to quantify 
emission reductions under the rule ``unless such determination is 
reviewed through a public process and submitted to EPA in accordance 
with Section 7.0.'' Rule 9610, Section 3.2.2. Section 7.0 of the rule 
states, in relevant part, that ``[e]ach SIP submission in which the 
District relies on [projections of SIP-creditable emission reductions] 
shall contain a demonstration that the applicable incentive program 
guideline(s) continues to provide for SIP-creditable emission 
reductions. . . .'' Read together, these provisions require the 
District to submit any case-by-case determination that it

[[Page 29350]]

intends to rely on for SIP credit to the EPA in a formal SIP 
submission, together with a demonstration that the determination and 
the project(s) subject to it provide for emission reductions that are 
surplus, quantifiable, enforceable, and permanent. See Rule 9610, 
Section 7.0 (establishing requirements for SIP submissions) and Section 
2.25 (defining ``SIP-Creditable Emission Reduction''). Upon the EPA's 
approval of such a SIP consistent with CAA requirements, projects 
subject to the identified case-by-case determination would be eligible 
for SIP credit.
    In sum, case-by-case determinations under the Carl Moyer Program 
are not currently eligible for SIP credit but may become eligible for 
credit through the EPA's approval of SIP submissions going forward. 
Should the District intend to rely on emission reductions from a 
project subject to a case-by-case determination to satisfy a SIP 
requirement, it may do so only following its submission of the 
determination to the EPA as part of a SIP that meets the requirements 
of Rule 9610, Section 7.0 and the EPA's approval of such SIP consistent 
with the requirements of the CAA.
    The EPA appreciates the District's statement confirming that 
projects subject to case-by-case determinations are not included in the 
2013 Annual Demonstration Report and is approving the incentive-based 
emission reductions in the Contingency Measure SIP based on our 
understanding that it does not rely on any case-by-case determination.

C. General Comments

    Comment 19: Earthjustice urges the EPA not to approve the San 
Joaquin Valley contingency measures for the San Joaquin Valley's 
PM2.5 SIP. Earthjustice argues that the Contingency Measure 
SIP ``does not comply with the Clean Air Act and would leave Valley 
residents without meaningful air quality protections if and when the 
Valley fails to attain the 1997 PM2.5 standards.''
    Response 19: For the reasons discussed in our proposed rule and 
further explained in our responses to comments above, we have 
determined that the Contingency Measure SIP corrects the deficiency 
that prompted our partial disapproval of the SJV PM2.5 SIP 
and strengthens the SIP and are, therefore, approving it into the 
California SIP.
    We disagree with the claim that the approval of this Contingency 
Measure SIP would leave SJV residents ``without meaningful air quality 
protections'' should the SJV fail to meet the 1997 PM2.5 
standards by the applicable attainment date of April 5, 2015. The 
Contingency Measure SIP demonstrates that California has adopted 
measures that will achieve substantial emission reductions in and after 
2015 that will provide significant on-going air quality benefits to SJV 
residents. Specifically, the Contingency Measure SIP shows that in 
calendar year 2015, adopted and implemented federal and State mobile 
source control measures will reduce NOX emissions by 21 tpd; 
State and local incentive grant funds will reduce NOX 
emissions by an additional 4.15 tpd; and the SIP-approved contingency 
provision in the District's residential woodburning rule, Rule 4901, 
will provide 3.1 tpd of direct PM2.5 reductions should we 
determine that the SJV has failed to attain the 1997 PM2.5 
standards by the applicable attainment date of April 5, 2015 (78 FR 
53113, 53123). Compared to projected 2014 levels of NOX and 
direct PM2.5 emissions in the SJV, these contingency 
measures will provide an additional 9 percent reduction in 
NOX emissions and an additional 5 percent reduction in 
direct PM2.5 emissions in 2015.\50\
---------------------------------------------------------------------------

    \50\ Total NOX and direct PM2.5 emissions 
in the SJV are projected to be 291 tpd and 63.3 tpd, respectively, 
in 2014. See 2011 Progress Report, Appendix C, Table C-1.
---------------------------------------------------------------------------

    Comment 20: Earthjustice objects to the EPA's statement that 
contingency measures must be implemented ``quickly without significant 
additional action by the state,'' stating that the addition of 
``significant'' in 40 CFR 51.1012 was the result of a scrivener's error 
and is not consistent with the plain statutory language of CAA section 
172(c)(9). Quoting from the preamble to the EPA's 2007 PM2.5 
Implementation Rule, Earthjustice notes that the EPA acknowledged this 
error in its adoption of the rule.
    Response 20: We agree that the inclusion of ``significant'' in 40 
CFR 51.1012 was in error and note the correction.
    Comment 21: Mr. Unger comments that the SJV area has not met the 
PM2.5 standards and that air quality has not improved much 
in the past few years. He also states that both the SJV's citizens and 
the District are reluctant to do more to improve air quality. For these 
reasons, he urges the EPA to not approve the SIP for the 1997 annual 
and 24-hour PM2.5 standards. He disagrees with our statement 
that ``the State has most likely done all it can to correct the 
deficiency'' given the continuing nonattainment in the San Joaquin 
Valley. He states that if the EPA were to impose sanctions on the SJV, 
it would encourage California to adopt controls sufficient to attain 
the standards. He includes a list of suggested measures in his 
comments.
    Response 21: In 2011, we approved all but one element of 
California's SIP to attain the 1997 annual and 24-hour PM2.5 
standards in the SJV (76 FR 69896, November 9, 2011). Our action here 
is to approve the last outstanding element of that SIP, the contingency 
measures for failure to make RFP or attain. Our approval is based on 
our determination that the Contingency Measure SIP corrects the 
deficiency that prompted our 2011 disapproval of the contingency 
measure provisions in the SJV PM2.5 SIP. Although the 
commenter asserts generally that SJV citizens and the District are 
``reluctant'' to do more to improve air quality, that the SJV area has 
not complied with the NAAQS for many years, and that the threat of 
sanctions might encourage further regulatory action, the commenter 
fails to identify any specific basis under the CAA for disapproving the 
Contingency Measure SIP.
    The purpose of contingency measures is to continue progress in 
reducing emissions while the SIP is being revised to meet a missed RFP 
milestone or correct continuing nonattainment. Should the EPA determine 
that the SJV has failed to attain the 1997 standards by the applicable 
attainment date (April 5, 2015), the State and District will be 
required to implement these contingency measures and to revise the SIP 
to assure expeditious attainment consistent with applicable CAA 
requirements.
    We appreciate the list of control measures and will forward it to 
the District for its consideration during development of the next 
PM2.5 SIP for the Valley.

III. Final Actions

    The EPA is approving the Contingency Measure SIP (adopted June 20, 
2013 and submitted July 3, 2013) based on the Agency's conclusion that 
this SIP submission corrects the deficiency in the CAA section 
172(c)(9) attainment contingency measures that was one of two bases for 
the EPA's partial disapproval of the SJV PM2.5 SIP on 
November 9, 2011 (76 FR 69896).
    The EPA also finds that the CAA section 172(c)(9) RFP contingency 
measure requirement for the 2012 RFP milestone year is moot as applied 
to the SJV nonattainment area because the area has achieved its SIP-
approved emission reduction benchmarks for the 2012 RFP milestone year. 
This finding corrects the deficiency in the CAA section 172(c)(9) RFP 
contingency measures that was the second of two bases for the EPA's 
partial

[[Page 29351]]

disapproval of the SJV PM2.5 SIP on November 9, 2011 (76 FR 
69896).
    Finally, the EPA is approving enforceable commitments by the 
District to monitor, assess, and report on actual NOX and 
direct PM2.5 emission reductions achieved through its 
implementation of specific Prop 1B and Carl Moyer Program grants and to 
remedy any identified emission reduction shortfall in a timely manner 
as found on page 3 of the SJVUPACD Governing Board Resolution No. 13-6-
18, dated June 20, 2013.
    Today's final actions lift the CAA section 179(b)(2) offset 
sanctions and terminate the CAA section 179(b)(1) highway funding 
sanction clock triggered by the 2011 partial disapproval of the SJV 
PM2.5 SIP. These actions also terminate the EPA's obligation 
under CAA section 110(c) to promulgate a corrective Federal 
implementation plan within two years of the partial disapproval.

IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, the EPA's role is to approve State choices, 
provided that they meet the criteria of the Clean Air Act. Accordingly, 
this action merely approves State law as meeting Federal requirements 
and does not impose additional requirements beyond those imposed by 
State law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     does not provide the EPA with the discretionary authority 
to address, as appropriate, disproportionate human health or 
environmental effects, using practicable and legally permissible 
methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because it does not apply in Indian country located in the State, and 
the EPA notes that it will not impose substantial direct costs on 
tribal governments or preempt tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. The EPA will submit a report containing this action and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by July 21, 2014. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. This action may not be challenged later in proceedings to 
enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Incorporation by reference, Nitrogen dioxide, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur oxides.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: April 28, 2014.
Jared Blumenfeld,
Regional Administrator, Region IX.

    40 CFR part 52 is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS.

0
1. The authority citation for Part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

Subpart F--California

0
2. Section 52.220 is amended by adding paragraph (c)(438) to read as 
follows:

Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (438) The following plan was submitted on July 3, 2013, by the 
Governor's Designee.
    (i) [Reserved]
    (ii) Additional materials.
    (A) San Joaquin Valley Unified Air Pollution Control District.
    (1) ``Quantifying Contingency Reductions for the 2008 
PM2.5 Plan'' (dated June 20, 2013), adopted October 7, 2011.
    (2) SJVUAPCD Governing Board Resolution No. 13-6-18, dated June 20, 
2013, ``In the Matter of: Authorizing Submittal of the `Quantification 
of Contingency Reductions for the 2008 PM2.5 Plan' to EPA.''
    (3) Electronic mail, dated July 24, 2013, from Samir Sheikh, 
SJVUAPCD, to Kerry Drake, EPA Region 9, ``RE: Per our conversation 
earlier.''
    (B) State of California Air Resources Board.
    (1) CARB Executive Order 13-30, dated June 27, 2013, ``San Joaquin 
Valley PM2.5 Contingency Measures Update.''

[FR Doc. 2014-11681 Filed 5-21-14; 8:45 am]
BILLING CODE 6560-50-P