Document ID: EPA-HQ-OAR-2014-0036-0003
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2014-05-28T04:00Z

CLEAN AIR ACT § 209(e)(2) AUTHORIZATION SUPPORT DOCUMENT

 SUBMITTED BY THE

 CALIFORNIA AIR RESOURCES BOARD

          

 2008 AMENDMENTS TO CALIFORNIA’S 

 Small Off-Road Engines REGULATION  

December 2, 2013 

l. INTRODUCTION AND SUMMARY OF REQUEST

The California Air Resources Board (CARB or Board) requests, pursuant to
Clean Air Act (CAA) section 209(e)(2), that the Administrator of the
U.S. Environmental Protection Agency (EPA) confirm that CARB’s 2008
amendments to its spark-ignited (SI) Small Off-Road Engines regulation
(2008 Amendments) are within the scope of the authorization previously
granted for CARB’s SORE regulations, or alternatively, grant a new
authorization.  Section II of this document describes the 2008
Amendments in detail, and Section III describes the basis for
California’s request.

Small off-road engines and equipment  are rated at or below 19 kilowatts
(kW) (25 horsepower (hp)).  The vast majority of engines covered by the
SORE SI regulation are gasoline-fueled SI engines that are used to power
a broad range of equipment, including lawn mowers, leaf blowers,
generators, and small industrial equipment.  Exhaust and evaporative
emissions from small off-road engines are a significant source of
hydrocarbon (HC) and oxides of nitrogen (NOx) emissions, which
contribute to California’s continuing ozone problem.  The SORE SI
regulation also includes provisions for electric equipment.

A.  Background and History of Previously Adopted and Authorized Small
Off-Road Emission Standards and Test Procedures  

1.  Initial SORE Regulation and 1994, 1995, and 1996 Amendments

CARB first adopted standards and test procedures applicable to utility
and lawn and garden engines (ULGE Rule, subsequently renamed in a later
rulemaking as the “Small Off-Road Engine (SORE) Regulation”) on
March 20, 1992, which California’s Office of Administrative Law (OAL)
approved on May 1, 1992.  In April 1993, in response to a petition from
industry, CARB amended these regulations to delay initial implementation
until January 1, 1995.  CARB requested that EPA grant authorization for
the SORE regulation as required by section 209(e)(2) of the federal
CAA.  The Administrator granted authorization to CARB on July 5, 1995. 
The authorized SORE regulation established two tiers of exhaust emission
standards for new SI and compression ignition (CI) engines.  Tier I
standards applied to 1995 through 1998 model-year engines, while the
Tier II standards applied to 1999 and newer engines.  EPA adopted
similar regulations in 1995, using the term “Phase” instead of
“Tier” to describe the exhaust emission standards categories.

CARB amended the initially adopted and authorized SORE regulation in
1994, 1995, and 1996 to clarify certification and implementation
procedures, exempt military tactical equipment, and relax emissions
standards for certain engines.  CARB requested and received EPA’s
confirmation that these amendments fell within the scope of the
initially granted SORE authorization on November 9, 2000. 

2.  1998 SORE Amendments

In 1998, CARB amended the initially adopted SORE regulation to apply to
all engines rated less than 25 hp used in off-road applications,
revised the regulation to be based on engine displacement instead of
whether the engine is used in a handheld or non-handheld application,
and delayed implementation of the 1999 Tier 2 standards.  For CI
engines, the Board extended application of the authorized Tier 1
emission standards one year and adopted new emission standards for new
engines under 19 kW, consistent with the “Compression-Ignition Engine
Statement of Principles” jointly entered into by CARB, EPA, and engine
manufacturers in August 1996.  The adopted emission standards were
phased in, beginning with the 2000 model year.  Finally, CARB adopted
new durability requirements that were also phased in for new engines
starting in the 2000 model year.

The 1998 SORE Amendments established an averaging, banking, and trading
(ABT) provision that provided manufacturers flexibility in complying
with applicable 

hydrocarbons and oxides of nitrogen (HC+NOx) standard for 2000 and
subsequent model year engine families.  For each engine family, a
manufacturer would determine a Family Emission Limit (FEL); the FEL
would serve as the "emissions standard" for compliance purposes. 
Individual FELs could be set above the standard, provided that the
average of all a manufacturer’s FEL (as weighted by power, load
factor, sales and durability period) met the standard.  Averaging was
carried out by Emission Credits.  The emission credit program was
similar to that proposed by the EPA for small nonroad engines and was
designed to provide industry the flexibility to deal efficiently with
issues such as low sales volume engines that can be particularly costly
to control.  The averaging provision also allowed manufacturers to focus
their efforts on their higher sales volume families first.

The 1998 SORE Amendments also created a provision allowing manufacturers
to generate Production Emission Reduction Credits.  A manufacturer would
generate Production Emission Reduction Credits if  the final HC+NOx
sample mean (from production line testing) of an engine family was 
below the FEL.  This provision was intended to allow manufacturers to
receive consideration for the "headroom" or compliance margin they
designed into their engines.  The production emission reduction credits,
based on actual production engines, could be used for certification and
as a remedy for noncompliance of another engine family if needed.  This
introduced another degree of flexibility that did not previously exist
in the program.  EPA considered, but never adopted, a similar Production
Emission Reduction Credits program.

EPA subsequently determined that, except for the above-mentioned
durability requirements, California’s 1998 amendments to the SORE
regulation were within the scope of the previously granted 1995
authorization.  EPA issued CARB a new authorization for the durability
requirements on November 21, 2003.

	3.  2000 and 2004 Off-Road CI Amendments

In 2000, CARB amended the SORE regulation by recodifying the
requirements applicable to new CI engines less than 19 kW from the SORE
regulation (CCR title 13, division 3, chapter 9, article 1 section 2400
et seq.) to a different regulatory article  (CCR title 13 division 3,
chapter 9, article 4 section 2420 et seq.).  With this change, all
off-road CI engine categories are contained in the same regulatory
article, which conforms to the federal regulatory program.    

In 2004, CARB amended its off-road CI regulations to harmonize CARB’s
standards and test procedures with the federal standards and test
procedures specified in its Tier 4 rulemaking and the subsequent Omnibus
Technical Amendments, while still maintaining the emission benefits of
the current California program.  

EPA confirmed that the 2000 amendments to the off-road CI engine
regulation were within the scope of the previously granted SORE
authorization and granted a new authorization for the 2004 amendments to
the standards and test procedures for nonroad CI engines rated less than
19 kW.

4.  2004 SORE SI Amendments

In 2004, CARB amended the exhaust emission standards and associated test
procedures and adopted evaporative emission standards and associated
test procedures for SI small off-road engines rated at or below 19 kW
and equipment utilizing such engines.  EPA issued CARB a new
authorization for the 2004 SORE SI amendments on December 15, 2006.

	B.  Overview of 2008 Amendments to California’s SORE SI Regulation

At its November 21, 2008 public hearing, the Board approved the 2008
Amendments by Resolution 08-41 (Enclosure 4).  After making
modifications to the proposed amendments available for supplemental
public comment, CARB filed the Final Rulemaking Package with the Office
of Administrative Law (OAL) on September 8, 2009.  OAL approved the
rulemaking and filed it with the California Secretary of State on April
5, 2010.  The 2008 Amendments became effective on May 5, 2010.

The 2008 SORE SI Amendments primarily addressed issues arising from the
excessive accumulation of credits generated under the existing emission
credits program in the SI SORE regulation, and included other amendments
to streamline the regulation and enhance harmonization of requirements
with the federal nonroad engine regulations.

As detailed in Section ll below, CARB requests confirmation that the
following elements of the 2008 Amendments are within the scope of the
authorized SORE regulation: 

Modification of Certification Emission Credits 

Modification of Production Emission Credits

Ethanol Blend Certification Fuel Option

ll. Summary of 2008 Amendments that are Within the scope of Previously
GRANTED AUTHORIZATIONS

A summary of the 2008 Amendments that fall within the scope of the
authorized SORE regulation follows.  A more detailed description of
these provisions is provided in the Staff Report (Enclosure 2) and
15-Day Notice of Modified Text (Enclosure 3). 

Modification of Certification Emission Credits

CARB initially established the certification emission credits program in
1998 to provide manufacturers additional flexibility in certifying their
engines.  In concept, qualifying manufacturers would earn certification
emission credits by introducing some engine families with cleaner
technologies (e.g., catalysts) earlier than necessary, which they could
then use to provide more time to certify more challenging engine
families.  CARB expected that the ABT provisions would provide
manufacturers with another tool to manage compliance, while also
encouraging the early introduction of cleaner engines.

While the certification emission credits program did provide
manufacturers flexibility, it has also produced mixed results regarding
the use of advanced technologies.  Instead of using catalysts and other
advanced technologies on the more challenging engine families, a small
number of manufacturers have often been able to use banked credits to
certify “dirtier” engines and delay implementation of cleaner
technology.  Furthermore, manufacturers have been able to accumulate a
large amount of certification emission credits, which indicates that the
emissions standards were not as stringent as they needed to be, in that
many more credits were generated than were needed to manage compliance. 
To exacerbate the situation further, the certification emission credits
were available for use indefinitely.  Allowing the credits to be banked
for an indefinite period of time led to large credit banks that slowed
progress towards cleaner engines.  

To address these issues, as discussed below and in the Staff Report,
pages 8-11 (Enclosure 2), CARB adopted the following amendments. 

Emission Credits Limited to Five Years

The 2008 Amendments limit the lifetime of certification emission credits
to five years, which coincides with the useful lifetime of SORE
equipment and/or the time the equipment remains in emissions compliance.
 One of the issues arising from the unlimited life of the certification
emission credits was that such credits continued in existence even after
the engines that had generated the emission credits had been taken out
of service.  Limiting the credit life to five years strikes an
appropriate balance between not allowing credits at all and preventing
credits from accumulating indefinitely.  

In limiting the lifetime of certification emission credits, CARB neither
modified the Tier 3 hydrocarbon plus oxides of nitrogen (HC+NOx)
emission standards for engines less than 50 cubic centimeters (cc) (that
went into effect with the 2005 model year) nor the catalyst-based
standards for engines above 80 cc.  

This limitation has not posed a challenge to manufacturers, as
technology has been available (e.g., catalysts) that is both a
technically feasible and cost effective means of complying with the Tier
3 standards.  A number of manufacturers currently produce CARB certified
engines without the use of banked emission credits.  Currently there are
68 CARB manufacturers that produce CARB certified SORE engines.  Only
five manufacturers use banked emission credits to certify for exhaust
emissions and only one relies on buying emission credits.  

See section 2408 (Enclosure 6) and the Staff Report, pages 8-10
(Enclosure 2).

Emission Credits Generation for Advanced Technology  

The existing regulation did not allow electric equipment to participate
in the emission credits program.  Advances in electric-powered SORE
equipment and advances in battery development led CARB to amend the SORE
regulation to encourage the development of professional grade
zero-emission equipment (ZEE).    

CARB modified the program to allow advanced technology ZEE to generate
emission credits provided they are able to meet the following
requirements:

The equipment must be able to perform at a level equivalent to that of
currently available, professional level SORE equipment.

The equipment must not be equipped with an electric cord.  Corded
equipment already exists and is generally not conducive to professional
usage, and so awarding emission credits for it would not advance
technology.

Each recharge or refueling must allow the equipment to perform at a
professional performance level for the same duration as typical
professional equipment of the same type.  The time to repower (e.g.,
time to replace battery pack) the ZEE should be equivalent to the time
of refueling typical spark-ignition equipment.

The equipment must be as durable as the equivalent professional SORE
equipment.  It should be capable of operation over the appropriate SORE
test cycle repeatedly for the maximum durability period for that
equipment.

To obtain certification, a manufacturer needs to provide a description
of the equipment, performance data showing that it meets the ZEE
criteria, a description of the power source, an energy density or
specific energy test, and all other applicable certification
requirements.  The manufacturer will receive credits upon certifying an
advanced technology ZEE.  

 

ZEE credits can be averaged, banked, and traded as normal certification
emission credits, and are subject to the same five-year credit life. 
However, because ZEE emission credits can be generated by manufacturers
not currently in the SORE category (e.g., those who produce electric
equipment, but not engines), CARB established additional limitations to
ensure that any potential influx of emission credits does not result in
the delay of improvements to engine-powered equipment.  To this end,
manufacturers cannot use ZEE credits to certify engines that exceed the
standard by more than 40 percent.  Rather, to certify an engine family
with emissions that exceed 40 percent above the standard manufacturers
need to use other types of certification credits to cover the
difference.  CARB believes that the addition of ZEE credits will promote
advanced technology and allow manufacturers additional flexibility.  See
sections 2401, 2404, 2405, 2408(g), and 2408.1 (Enclosure 6).  These
modifications are discussed in the Staff Report, pages 12-13 (Enclosure
2).  

Modification of Production Emission Credits

The emission credits program originally adopted by CARB also included
both the generation and accrual of production emission credits. 
Production emission credits were initially adopted to provide
manufacturers with additional flexibility in meeting emission standards
on production engines.  Manufacturers design their engines such that
during production line testing the engines will perform
“comfortably” below the emission standard.  In general, any
emissions margin observed during production testing is used by
manufacturers as an emissions “cushion” to ensure compliance.  CARB
intended that the production emission credits provisions would be used
by manufacturers to certify engine families as well as to offset
production line testing exceedances of another engine family.  The
adoption of production emission credits was unique, in that no other
existing mobile source category was allowed to generate and use
production line credits for compliance purposes.  At the time the 1998
proposal was drafted, EPA was considering the use of production emission
credits and staff’s proposal was intended to harmonize with the
anticipated, future EPA rulemaking.  Ultimately, EPA decided against
offering production emission credits as an option for these engines and
equipment in its final rule.  Termination of production emission credits
enhances harmonization with the federal program.

Production emission credits were generated when a manufacturer produced
an engine whose production line test result was below the applicable
engine family emission limit.  Manufacturers were also allowed to
convert production emission credits to certification emission credits at
a rate of 1.1 production emission credits to 1.0 certification emission
credit, and some manufacturers that accumulated large amounts of
production emission credit  then converted those production emission
credits  to certification emission credits, which allowed them to
continue producing and certifying engines that did not comply with the
otherwise applicable emission standards.  With the 2008 Amendments, CARB
eliminated further generation of production emission credits starting in
2009, but allowed manufacturers an additional year to use or convert
production emission credits to certification emission credits.   

As previously stated, CARB originally envisioned that manufacturers
would use these generated/banked credits to offset compliance problems,
but as of 2008, no manufacturer needed to use production emission
credits for that purpose, and manufacturers, in certain cases, generated
large amounts of production emission credit balances. 

Production emission credits effectively provided manufacturers with a
double benefit for having low compliance margins.  First, they
benefitted because the compliance margin ensured that their production
engines did not exceed the emission standards and were not out of
compliance with the regulation.  The credits provided manufacturers with
a second benefit by rewarding them, even though the production
compliance margin was essentially part of their design strategy to meet
the emissions standards, not an additional effort to go beyond the
requirements by using cleaner technologies.  

The fact that production emission credits could be converted to
certification emission credits raised a second concern.  As production
emission credits were converted to certification emission credits, the
emission credit banks grew even larger.  By the end of the 2007 model
year, over 85 percent of the production emission credits had been
converted to certification emission credits, which indicated that
manufacturers did not actually need production credits to comply with
the production line requirements.  Instead, manufacturers could use the
converted credits simply to further delay compliance with the Tier 3
standards for certain engine families, even though cost-effective
technology was available to comply.  To date, this change has not raised
any compliance issues. 

See section 2409 (Enclosure 6).  These modifications are discussed in
the Staff Report, pages 4-5, and 10-11 (Enclosure 2).  

 Ethanol Blend Certification Fuel Option

The 2008 Amendments provide manufacturers the option to use a
certification fuel with up to ten percent ethanol content, if they use
the same fuel for certification with EPA.  This option enhances the
harmonization of California’s SORE certification procedures with
EPA’s nonroad engine certification procedures, and could reduce
testing costs for some manufacturers.  See California Exhaust Emission
Standards and Test Procedures for 2005 and Later Small Off-Road Engines,
as amended February 24, 2010, Subpart D, Section 90.308 (Enclosure 10) 
and the Staff Report at page 13 (Enclosure 2).

III. AUTHORIZATION ANALYSIS 

Criteria for Granting New Authorizations Under CAA Section 209(e) or
Confirming that Amendments are Within the Scope of Previous
Authorizations

Section 209(e)(2) of the CAA sets forth the protocol that the
Administrator must follow in granting California an authorization to
adopt and enforce standards and other requirements relating to
controlling emissions from new and in-use nonroad engines that are not
otherwise specifically preempted by section 209(e)(1) – new engines
less than 175 hp used in farm and construction equipment and vehicles
and new engines used in new locomotives and locomotive engines.  Section
209(e)(2) directs the Administrator to grant California an authorization
for standards and requirements for all other nonroad engines if
California determines that the state’s standards will be, in the
aggregate, at least as protective of public health and welfare as
applicable federal standards, unless she finds that:  (1) the
protectiveness finding of the state is arbitrary and capricious;
(2) California does not need separate state standards to meet
compelling and extraordinary conditions; or (3) the state standards and
accompanying enforcement procedures are not consistent with CAA section
209.

In its 209(e) Final Rule, EPA interpreted “not consistent with section
209” to mean that those challenging a California authorization request
must show that the State’s standards and accompanying enforcement
provisions are not consistent with sections 209(a), 209(b)(1)(C) –
that the standards are not consistent with CAA section 202(a) – and
209(e)(1).

In considering whether to grant waivers (authorizations) for
accompanying enforcement procedures tied to standards for which a waiver
has already been granted, Administrators have long held that they will
only address questions as to (1) whether the enforcement procedures are
so lax that they threaten the validity of California’s determination
that its standards are as protective of public health and welfare as
applicable federal standards and, (2) whether the enforcement procedures
are consistent with section 202(a).  

The Administrator has applied a similar analysis in confirming that
amendments to a CARB standard or regulation are within the scope of a
previously granted authorization.

EPA can make such a confirmation if certain conditions are present. 
Specifically, if California acts to amend a previously authorized
standard or accompanying enforcement procedure, the amendments may be
considered within the scope of a previously granted authorization if
such amendments:

Do not undermine California's determination that its standards in the
aggregate are as protective of public health and welfare as applicable
Federal standards, 

Do not affect  consistency with section 209 of the Act, and

Raise no new issues affecting EPA's previous authorization
determination.

It is also well established that EPA may only consider the
aforementioned criteria set forth in section 209(e)(2), that EPA shall
give substantial deference to California's policy judgments, and that
the burden is on those who oppose the granting of the authorization to
show why it should not be granted.

The 2008 Amendments Fall Within the Scope of the Previously Granted 
Authorization

The following 2008 Amendments (detailed in Section ll above) fall within
the scope of the previously granted authorization for the Small Off-Road
Engine Regulation:  

Modification of Certification Emission Credits 

Modification of Production Emission Credits

Ethanol Blend Certification Fuel Option

  

Protectiveness Determination

In adopting the 2008 Amendments, the Board approved Resolution 08-41
(Enclosure 4), in which it declared:

BE IT FURTHER RESOLVED that the Board hereby determines that the
regulations adopted herein will not cause California small off-road
engine emission standards, in the aggregate, to be less protective of
public health and welfare than applicable federal standards.

BE IT FURTHER RESOLVED that the Board hereby finds that separate
California emission standards and test procedures are necessary to meet
compelling and extraordinary conditions.

BE IT FURTHER RESOLVED that the Board finds that the California emission
standards and test procedures as adopted herein will not cause the
California requirements to be inconsistent with section 202(a) of the
Clean Air Act and raise no new issues affecting previous waiver
determinations of the Administrator of the Environmental Protection
Agency pursuant to section 209(b) of the Clean Air Act.

These findings were reaffirmed by CARB’s Executive Officer.

The Administrator has no basis to find that the Board’s protectiveness
determination is arbitrary or capricious.  The Administrator has
previously determined that CARB’s SORE emissions standards and related
test procedures are at least as protective of public health and welfare
as the federal nonroad emissions standards and test procedures, and the
2008 Amendments do not affect that previous determination, as they do
not modify the applicable emissions standards.

In 1999, EPA adopted regulations for small spark-ignition engines used
in nonhandheld equipment that included enduring (i.e., non-expiring)
credit provisions.  In 2008, EPA adopted additional transitional credit
provisions (i.e., expiring) as part of its Phase 3 emissions standards
in 2008.  By capping its certification emission credit provisions at
five years and eliminating the future accrual of production emission
credits, CARB’s SORE regulations continue to be, in the aggregate, at
least as protective of public health and welfare as applicable federal
standards.  The addition of the ZEE credits provision does not undermine
this determination in that such credits will encourage development and
production of cleaner, advanced technologies.  

2.  Consistency with Section 209 of the CAA  

a.  Consistent with CAA sections 209(a) and 209(e)(1)

In granting California the authorization for the 2004 Amendments to the
SORE regulation, EPA found that those amendments were not inconsistent
with CAA section 209(a), because they did not regulate emissions from
new motor vehicles or new motor vehicle engines.  EPA also found that
the amendments were not inconsistent with CAA section 209(e)(1) because
they did not apply to new nonroad engines less than 175 hp used in farm
and construction equipment and vehicles, new locomotives, or engines
used in new locomotives.  The 2008 Amendments similarly do not apply to
the above-mentioned preempted categories of mobile sources, and
consequently, EPA cannot find that the amendments are inconsistent with
CAA sections 209(a) or 209(e)(1).

     b.  Consistent with CAA section 209(b)(1)(C) and 202(a)

EPA determines if California standards are consistent with section
202(a) of the CAA by considering if they provide sufficient lead time to
permit the development of technology needed to meet the standards and
other requirements, giving appropriate consideration to the cost of
compliance in the time frame provided, and if the California and federal
test procedures are sufficiently compatible to permit manufacturers to
meet both the state and federal test requirements with one test vehicle
or engine. The reference to “cost of compliance” in CAA section
202(a) refers to the economic costs of emission standards and
accompanying enforcement procedures and the timing of a particular
emission control regulation rather than to its social implications.  

As demonstrated below, each of the compliance options associated with
the amendments described in Section II of this document are technically
feasible within the

lead time provided for compliance and presents no issue of
incompatibility between

California and federal test procedures.

		i.  Technological Feasibility and Lead Time 

The 2008 Amendments do not raise any issue that disturbs EPA’s prior
finding that the SORE emission standards are technologically feasible
within the lead time provided for compliance or that inconsistent test
procedures do not exist.  None of these issues were raised in the
comments on the amendments.  See comments and CARB responses in the
Final Statement of Reasons for Rulemaking, (Enclosure 7).

The limitation on emission credits did not pose a challenge for
manufacturers, as technology was available (catalysts) that was both a
technically feasible and cost effective means of complying).  As stated,
most manufacturers have been able to comply fully with the standards
without relying on the use of credits.

Production emission credits were originally intended for a manufacturer
to use to offset compliance problems, but no manufacturer has needed to
use production emission credits for that purpose since the adoption of
the 2008 Amendments.  Therefore, the elimination of these credits does
not affect the EPA’s prior finding of feasibility.

The amendment allowing manufacturers to generate advanced technology ZEE
emission credits is clearly feasible as it only provides manufacturers
additional flexibility to comply with previously waived standards.  See
Staff Report, pages 8-11 (Enclosure 2).  

The amendments allowing the use of an alternate certification test fuel
likewise present no issue regarding technical feasibility.  

        ii.  Test Procedure Consistency

The amendments present no issue of incompatibility between California
and federal test procedures.  Instead, the amendment allowing the use of
federal certification fuel containing up to ten percent ethanol content
only serves to enhance the consistency between California and federal
test procedures.

3.  No New Issues Exist

The 2008 SORE Amendments do not change any emissions requirements,
design or performance standards, impose new means of enforcing emission
limits nor do they expand the scope of what engines are included in the
previously authorized regulations.  The changes made to the emissions
and production credit programs do not fundamentally alter the standards
that previously received authorization, Therefore the Amendments do no
impose new standards for which new authorization must be sought.

CARB is not aware of any new issues affecting the previously granted
authorization determination for the SORE regulation.  The amendments do
not force any change in technology to warrant revisiting conclusions
reached in granting the existing authorizations.  It is therefore
entirely appropriate for EPA to approve the within the scope request.

 

Alternatively, a New Authorization Must Be Granted for the 2008
Amendments 

Should the Administrator determine that a within the scope determination
cannot be granted for any of the above-identified 2008 Amendments, she
must grant CARB a new authorization for those amendments based on the
same record CARB has provided.  As discussed above, no issue regarding
protectiveness or consistency with CAA sections 209(a), 209(e)(1), or
209(b)(1)(C) exists, and as demonstrated below, California satisfies the
compelling and extraordinary criterion.

 Compelling and Extraordinary Circumstances 

In adopting Resolution 08-41 (Enclosure 4), the Board confirmed CARB’s
longstanding position that California continues to need its own nonroad
engine program to meet serious air pollution problems.  The relevant
inquiry under section 209(e)(2)(A)(ii) is whether California needs its
own emission control program to meet compelling and extraordinary
conditions, not whether any given standard is necessary to meet such
conditions. 

“[C]ompelling and extraordinary conditions” [do] not refer to levels
of pollution directly, but primarily to the factors that tend to produce
them:  geographical and climatic conditions that, when combined with
large numbers and high concentrations of automobiles, create serious air
pollution problems.

California, and particularly the South Coast and San Joaquin Valley Air
Basins, continue to experience some of the worst air quality in the
nation and continue to be in non-attainment with national ambient air
quality standards for PM 2.5 and ozone.  The unique geographical and
climatic conditions, and the tremendous growth in on and off-road
vehicle population and use that moved Congress to authorize California
to establish separate on-road motor vehicle standards in 1967 and
off-road engine standards in 1990, still exist today.

In the California Clean Air Act of 1988, the California Legislature
found that: 

[D]espite the significant reductions in vehicle emissions which have
been achieved in recent years, continued growth in population and
vehicle miles traveled throughout California have the potential not only
to prevent attainment of the state standards, but in some cases, to
result in worsening of air quality.

The Importance of Regulating Off-Road Engines

By adding federal and state authority to regulate off-road engines,
Congress and California’s Legislature, respectively, acknowledged the
increasing importance of reducing emissions from all mobile sources,
including new and in-use off-road   engines.  The Administrator has
repeatedly agreed with CARB that California’s continuing extraordinary
conditions justify California’s mobile source emission programs. 
Nothing in these conditions has changed to warrant a change in this
determination.  Accordingly, for all the aforementioned reasons, there
can be no doubt of the continuing existence of compelling and
extraordinary conditions justifying California’s need for its own
mobile source emissions program.

IV. CONCLUSION

Based on the foregoing, CARB respectfully requests that the
Administrator grant California’s request for the authorization action
as described in this document pursuant to CAA section 209(e).  To assist
you in reviewing the requests, CARB is enclosing a CD-ROM, containing
the following referenced documents to be included in the record of this
proceeding.

Reference Materials from the 2008 Amendments to its Small Off-Road
Engines and Equipment Regulations (as titled on the enclosed CD)

1.	Public Hearing Notice dated November 20, 2008 (Enclosure 1 Notice of
Public Hearing).

2.	CARB Staff Report: Initial Statement of Reasons for Proposed
Rulemaking, dated October 3, 2008 (Enclosure 2 Staff Report)

3.	15 Day Notice of Modified Text dated February 4, 2010 (Enclosure 3 15
Day Notice), Attachment 1 (Enclosure 3 (A) Attachment to 15 Day Notice) 

4. 	Resolution 08-41 (Enclosure 4 CARB Resolution 08-41) 

5.	Executive Order R-10-004 dated February 24, 2010 (Enclosure 5
Executive Order R-10-004)

6.	Final Regulation Order as approved by OAL (Enclosure 6 Final
Regulation)

	

7.        Final Statement of Reasons for Rulemaking (Enclosure 7 FSOR)

	

8.	Addendum to the Final Statement of Reasons (Enclosure 8 Addendum
FSOR)

9.	Transcript of September 23, 2008, public hearing in the rulemaking
(Enclosure 9 Transcript 09-23-08)

10.	California Exhaust Emission Standards and Test Procedures for 2005
and Later Small Off-Road Engines, as amended February 24, 2010, Subpart
D, Section 90.308 (Enclosure 10 Test Procedures) 

11.	Fully endorsed STD 400 face sheet and Final Regulation Order as
approved by OAL and filed with the Secretary of State April 5, 2010
(Enclosure 11 STD 400)

12.      Office of Administrative Law Approval Notice, April 5, 2010
(Enclosure 12 OAL Notice)

CARB Contacts

Technical questions or requests for additional technical information on
this item should be directed to Ron Haste, Emission Research and
Regulation Development Branch, Off-Road Control Section, at (626)
575-6676 or rhaste@arb.ca.gov.  Legal questions should be directed to
Lisa Brown, Senior Attorney, at (916) 324-2132 or lbrown@arb.ca.gov.

 The specific regulatory text enacted by the 2008 Amendments  is set
forth in California Code of Regulations (CCR), title 13, sections 2401,
2403, 2404, 2405, 2406, 2408, 2408.1 and 2409 (Enclosure 6).  Unless
otherwise noted, all section references are to title 13, CCR.  

 In this request, the federal term “nonroad” and the California term
“off-road” are used interchangeably.

 As further detailed below, CARB’s regulation for small off-road SI
engines, which includes electric engines and equipment, and off-road
compression ignition (CI) engines at or below 19 kW are now located in
separate articles of CCR title 13.  The 2008 Amendments are to the SORE
SI regulation and affect SI and electric engines and equipment only.  

 The 2008 Staff Report: Initial Statement of Reasons (Staff Report), at
pages 4-7 (Enclosure 2) provides a summary of the key requirements of
the previously authorized SORE regulations.

 For purposes of clarity and consistency, the ULGE Rule is referred to
as the SORE regulation. 

 Section 209(e) provides in pertinent part:

No state or any political subdivision thereof shall adopt or attempt to
enforce any standard or other requirement relating to the control of
emissions from either of the following new nonroad engines or nonroad
vehicles subject to regulation under this Act–

  New engines that are used in construction equipment or vehicles or
used in farm equipment or vehicles and which are smaller than 175 hp.  

  New locomotives or new engines used in locomotives

* * * * *

(2) (A)  In the case of any nonroad vehicles or engines other than those
referred to in subparagraph [(e)(1)], the Administrator shall, after
notice and public hearing, authorize California to adopt and enforce
standards and other requirements relating to the control of emissions
from such vehicles and engines if [certain specified conditions are
met].  See infra.  

 60 Fed.Reg. 37440 (July 20, 1995).

 60 Fed. Reg. 34582 (July 3, 1995)

 65 Fed.Reg. 69763 (November 20, 2000).	

 These emission standards aligned with emission standards adopted by EPA
in its final rule for “Control of Emissions of Air Pollution from
Nonroad Diesel Engines,” 62 Fed.Reg.  200 (January 2, 1997).

 EPA adopted Phase 2 regulations for small spark-ignition engines used
in nonhandheld equipment in 1999 that also included provisions for a
certification ABT program.  64 Fed. Reg. 15208 (March 30, 1999).  The
certification credits generated under EPA’s ABT program had unlimited
credit life, which this document will refer to as “enduring
credits,” as opposed to the “expiring credits” discussed later. 

 1988 and later model year engine families were eligible to participate
in this provision.  

 65 Fed.Reg. 69767 (November 20, 2000).

 68 Fed.Reg. 65702 (November 21, 2003).

 Hereafter, section 2400 et seq. is known as the SORE SI regulation. 

 69 Fed.Reg. 38958 (June 29, 2004)

 70 Fed.Reg. 40240 (July 13, 2005)

 75 Fed.Reg. 8056 (February 23, 2010).  The new authorization extended
to all engine power categories of off-road CI engines affected by the
regulation.

 71 Fed.Reg. 75536 (December 15, 2006).

 Current emission credits exceed 5 billion.

 In addition to providing reductions in criteria pollutants, increased
use of ZEE will provide greenhouse gas reductions.  

 EPA’s decision was influenced by the fact that manufacturers of small
engines were able to comply with federal phase 2 emission standards
without the use of production emission credits.  64 Fed.Reg. 15208
(March 30, 1999) and 73 Fed.Reg. 59034 (October 8, 2008).  Despite not
adopting the credit provision as part of the federal regulations, EPA
continued to find that California’s new off-road engine program to be
more protective of public health and welfare than applicable federal
standards.  75 Fed.Reg. 8056 (February 23, 2010).

 59 Fed.Reg. 36969, 36983 (July 20, 1994). 

 Motor and Equipment Manufacturers Association v. EPA (MEMA) (D.C. Cir.
1979) 627 F.2d 1095, 1111, 1113.  EPA applies this standard in CAA
section 209 requests on both on road waivers (209 (b)) and off road
authorization (209 (e)), see 77  Fed.Reg. 72851, 72853 (Dec. 6, 2012). 

 65 Fed.Reg. 69767, 69768-769 (November 20, 2000); 71 Fed.Reg. 44027 at
44028 (August 3, 2006).

 MEMA, supra, 627 F.2d 1095, 1121; 40 Fed.Reg.  23102, 23103-23104
(January 7, 1993).

 Executive Order R-10-004 (Enclosure 5).  

60 Fed.Reg. 37440 (July 20, 1995); 71 Fed.Reg. 75536 (December 15,
2006); 75 Fed.Reg. 8056 (February 23, 2010).  

 64 Fed.Reg. 15208 (March 30, 1999).

 73 Fed.Reg. 59034 (October 8, 2008).  

 71 Fed.Reg. 75,536, 75, 537 (Dec. 15, 2006)

 Ibid.

 See 61 Fed.Reg.  53371, 53372 (October 11, 1996); Decision Document at
p.2 (OBD II Waiver Decision).

 Id., referencing See S. Rep. No. 192, 89th Cong., 1st Sess. 5-8 (1965);
H.R. Rep. No. 728, 90th Cong., 1st Sess. 23 (1967), U.S. Code Cong. &
Admin.News 1967, p. 1938; see also 74 Fed.Reg. 3030 (January 16, 2009),
Decision Document at p. 49.   

 71 Fed.Reg. 75,536, 75, 537 (Dec. 15, 2006)

 77 Fed.Reg. 9916, at 9920 (Feb. 21, 2012)

 Final 209(e) Rule, 59 Fed.Reg. at 36982.  The Administrator has
recognized that even if such a standard by standard test were applied to
California, it "would not be applicable to its fullest stringency due to
the degree of discretion given to California in dealing with its mobile
source pollution problems.”  (41 Fed.Reg. 44209, 44213, (October 7,
1976); 49 Fed.Reg. 18887, 18892 (May 3, 1984).)

 49 Fed.Reg. 18887, 18892 (May 3, 1984).

 76 Fed.Reg. 40652, 40654 (July 11, 2011).

 See 74 Fed.Reg. 32744, 32762-32763 (July 8, 2009); 76 Fed.Reg.  77515,
77518 (December 13, 2011).

 California Health and Safety Code section 43000.5.

 60 Fed.Reg 37440 (July 2, 1995) utility engine authorization Decision
Document, at p. 33; 76 Fed.Reg. 77515, 77518 (December 13, 2011).

 76 Fed.Reg. 77515, 77518 (December 13, 2011); 76 Fed.Reg. 77521, 77525
(December 13, 2011). 

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