Document ID: EPA-HQ-OAR-2021-0327-0006
Agency: epa
Document Type: Notice
Title: Decision: California State Nonroad Engine Pollution Control Standards; Large Spark-Ignition Engines
Posted Date: 2023-04-20T04:00Z

[Federal Register Volume 88, Number 76 (Thursday, April 20, 2023)]
[Notices]
[Pages 24411-24416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08296]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2021-0327; FRL-8869-02-OAR]

California State Nonroad Engine Pollution Control Standards; 
Large Spark-Ignition (LSI) Engines; Notice of Decision

AGENCY: Environmental Protection Agency.

ACTION: Notice of decision.

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SUMMARY: The Environmental Protection Agency (``EPA'') is granting the 
California Air Resources Board's (``CARB's'') request for authorization 
of California's 2016 Large Spark Ignition (``LSI'') Fleet Amendments to 
its large spark-ignition engines fleets regulation (``2016 LSI Fleet 
Amendments''). This decision is granted under the authority of the 
Clean Air Act (``CAA'').

DATES: Petitions for review must be filed by June 20, 2023.

ADDRESSES: EPA has established a docket for this action under Docket ID 
EPA-HQ-OAR-2021-0327. All documents relied upon in making this 
decision, including those submitted to EPA by CARB, are contained in 
the public docket. Publicly available docket materials are available 
electronically through www.regulations.gov. After opening the website, 
enter ``EPA-HQ-OAR-2021-0327'' in the ``Enter Keyword or ID'' fill-in 
box to view documents in the record. Although a part of the official 
docket, the public docket does not include Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. EPA's Office of Transportation and Air Quality (OTAQ) 
maintains a web page that contains general information on its review of 
California waiver and authorization requests. Included on that page are 
links to prior waiver and authorization Federal Register notices, some 
of which are cited in this notice; the page can be accessed at: https://www.epa.gov/state-and-local-transportation/vehicle-emissions-california-waivers-and-authorizations.

FOR FURTHER INFORMATION CONTACT: Julian M. Davis, Office of 
Transportation and Air Quality, U.S. Environmental Protection Agency, 
2565 Plymouth Rd., Ann Arbor, MI 48105, Telephone: (734) 214-4029. 
Email: [email protected]; or Kayla Steinberg, Office of 
Transportation and Air Quality, U.S. Environmental Protection Agency, 
1200 Pennsylvania Ave. NW. Telephone: (202) 564-7658. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The California Air Resources Board (CARB) promulgated its first 
Large Spark-Ignition (LSI) regulations, applicable to new LSI engines, 
in 1999 and they remained unchanged until CARB's 2008 Amendments.\1\ 
EPA authorized these first LSI regulations on May 15, 2006.\2\ CARB 
adopted the initial LSI Fleet Requirements (LSI Fleet Requirements), 
applicable to fleet operators on March 2, 2007. EPA granted California 
an authorization for the initial LSI Fleet Requirements in 2012.\3\ The 
LSI Fleet Requirements were designed to address hydrocarbon (HC) and 
nitrogen oxide (NOX) emissions from existing LSI engines 
operating in California and required fleets to meet certain fleet 
average emission level (FAEL) standards. CARB adopted its 2008 LSI 
Amendments on November 21, 2008. The 2008 LSI Amendments created two 
new engine categories below one-liter displacement, with new, more 
stringent exhaust and evaporative emission standards applicable to new 
engines. These amendments also provided clarification as to when CARB's 
off-road sport or utility regulations apply to certain LSI engines.\4\ 
CARB adopted its 2010 LSI Amendments on December 17, 2010. EPA issued 
an authorization decision for the 2008 and 2010 amendments in 2015.\5\ 
The 2010 LSI Amendments expanded the ``Limited Hours of Use Provision'' 
to encompass equipment operated not more than 200 hours per year 
subsequent to January 1, 2011, and extended the preexisting compliance 
extension period if CARB has not verified a retrofit emission control 
system, or if one is not commercially available, from one year to two 
years.\6\ At its July 21, 2016, public hearing, the CARB Board approved 
for adoption the 2016 LSI Fleet Amendments. By letter dated March 15, 
2021, CARB submitted a request to EPA for an authorization to enforce 
the 2016 LSI Fleet Amendments and asked that EPA consider its 
amendments as accompanying enforcement procedures for standards already 
authorized in EPA's 2015 decision.\7\ The 2016 LSI Fleet Amendments 
include reporting requirements (e.g., initial and annual reports, 
equipment transfer and sales reports, and an extension of existing 
reporting requirements for fleet operators subject to FAEL). The 2016 
LSI Fleet Amendments also include new labeling requirements wherein, 
based on operator provided information, CARB will issue the operators a 
unique Equipment Identification Number (EIN) for each item of equipment 
reported, and the EIN will become the basis for a manufacturer's 
equipment labels with a number of associated requirements.\8\
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    \1\ Title 13, California Code of Regulations (Cal. Code Regs.), 
sections 2430 through 2439.
    \2\ 71 FR 29621, 29623 (May 15, 2006).
    \3\ EPA granted an authorization for these regulations at 77 FR 
20388 (April 4, 2012).
    \4\ Clean Air Act section 209(e)(2) Authorization Support 
Document (Authorization Support Document), EPA-HQ-OAR-2021-0327-
0003, at 1. Note, ``off-road'' is the term California uses in the 
Health and Safety Code and in Title 13, California Code of 
Regulations, and is intended to be synonymous and interchangeable 
with the term ``nonroad'' as used in the CAA and Federal 
regulations.'' Id. at 1, note 1. In the rest of this decision, the 
term ``nonroad'' will be used.
    \5\ EPA granted a full authorization for the 2008 LSI Amendments 
and a within-the-scope confirmation for the 2010 LSI Amendments at 
80 FR 76468 (Dec. 9, 2015).
    \6\ See Authorization Support Document, at 2-3.
    \7\ See Authorization Support Document, at 1. See also 80 FR 
76468 for the full authorization of CARB 2008 LSI Amendments and 
within the scope of CARB's 2010 LSI Amendments.
    \8\ See Title 13, Cal. Code Regs., section 2775, for all large 
spark-ignition engine fleet requirements.
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    On August 16, 2021, EPA issued a notice seeking comment on CARB's 
2016 LSI Fleet Amendments as accompanying enforcement procedures.\9\
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    \9\ 86 FR 45724 (Aug. 16, 2021).
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II. Principles Governing This Review

A. Clean Air Act Nonroad Engine and Vehicle Authorizations

    CAA section 209(e)(1) prohibits states and local governments from 
adopting or attempting to enforce any standard or requirement relating 
to the control of emissions from certain new nonroad

[[Page 24412]]

vehicles or engines.\10\ The CAA also preempts states from adopting and 
enforcing standards and other requirements related to the control of 
emissions from all other nonroad engines or vehicles.\11\ CAA section 
209(e)(2)(A), however, requires the Administrator, after notice and 
opportunity for public hearing, to authorize California to adopt and 
enforce standards and other requirements relating to the control of 
emissions from such vehicles or engines not preempted by CAA section 
209(e)(1) if California determines that California standards will be, 
in the aggregate, at least as protective of public health and welfare 
as applicable Federal standards. However, EPA shall not grant such 
authorization if it finds that: (1) The protectiveness determination of 
California is arbitrary and capricious; (2) California does not need 
such standards to meet compelling and extraordinary conditions; or (3) 
California standards and accompanying enforcement procedures are not 
consistent with CAA section 209.\12\ On July 20, 1994, EPA promulgated 
a rule (``the 1994 rule'') that sets forth, among other things, 
regulations providing the criteria, as found in CAA section 209(e)(2), 
which EPA must consider before granting any California authorization 
request for new nonroad engine or vehicle emission standards.\13\ EPA 
revised these regulations in 1997.\14\
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    \10\ CAA section 209(e)(1) prohibits states or any political 
subdivision from adopting or enforcing any standard or other 
requirement relating to the control of emissions from new engines 
which are used in construction equipment or vehicles or used in farm 
equipment or vehicles, and which are smaller than 175 horsepower, or 
new locomotives or new engines used in locomotives. See 40 CFR 
1074.10(a).
    \11\ See CAA section 209(e)(2), 42 U.S.C. 7543(e). See 40 CFR 
1074.10 (b). Therefore, States and localities are categorically 
prohibited from regulating the control of emissions from new nonroad 
vehicles and engines set forth in section 209(e)(1) of the CAA, but 
for ``all other'' nonroad vehicles and engines (including non-new 
engines and vehicles otherwise noted in 209(e)(1) and all other new 
and non-new nonroad engines and vehicles) are only preempted.
    \12\ See 40 CFR 1074.105.
    \13\ 59 FR 36969 (July 20, 1994).
    \14\ 40 CFR 1074.105:
    (a) The Administrator will grant the authorization if California 
determines that its standards will be, in the aggregate, at least as 
protective of public health and welfare as otherwise applicable 
federal standards.
    (b) The authorization will not be granted if the Administrator 
finds that any of the following are true:
    (1) California's determination is arbitrary and capricious.
    (2) California does not need such standards to meet compelling 
and extraordinary conditions.
    (3) The California standards and accompanying enforcement 
procedures are not consistent with section 209 of the Act (42 U.S.C. 
7543).
    (c) In considering any request to authorize California to adopt 
or enforce standards or other requirements relating to the control 
of emissions from new nonroad spark-ignition engines smaller than 50 
horsepower, the Administrator will give appropriate consideration to 
safety factors (including the potential increased risk of burn or 
fire) associated with compliance with the California standard.
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    As stated in the preamble to the 1994 rule, EPA has historically 
interpreted CAA section 209(e)(2)(iii) ``consistency'' inquiry to 
require that California standards and enforcement procedures be 
consistent with CAA sections 209(a), 209(e)(1), and 209(b)(1)(C) (as 
EPA has interpreted that subsection in the context of CAA section 
209(b) motor vehicle waivers).\15\ In order to be consistent with CAA 
section 209(a), California's nonroad standards and enforcement 
procedures must not apply to new motor vehicles or new motor vehicle 
engines. To be consistent with CAA section 209(e)(1), California's 
nonroad standards and enforcement procedures must not attempt to 
regulate engine categories that are permanently preempted from state 
regulation. To determine consistency with CAA section 209(b)(1)(C), EPA 
typically reviews nonroad authorization requests under the same 
``consistency'' criteria that are applied to motor vehicle waiver 
requests. Pursuant to CAA section 209(b)(1)(C), the Administrator shall 
not grant California a motor vehicle waiver if he finds that California 
``standards and accompanying enforcement procedures are not consistent 
with section 202(a)'' of the CAA. Previous decisions granting waivers 
and authorizations have noted that state standards and enforcement 
procedures are inconsistent with CAA section 202(a) if: (1) There is 
inadequate lead time to permit the development of the necessary 
technology giving appropriate consideration to the cost of compliance 
within that time, or (2) the Federal and state testing procedures 
impose inconsistent certification requirements.\16\ When considering 
whether to grant authorizations for accompanying enforcement procedures 
tied to standards (such as record keeping and labeling requirements) 
for which an authorization has already been granted, EPA has evaluated: 
(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 Federal and California enforcement 
procedures are consistent.\17\
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    \15\ 59 FR at 36982-83.
    \16\ Id. See also 78 FR 58090, 58092 (Sept. 20, 2013).
    \17\ See Motor & Equipment Manufacturers Association v. 
Environmental Protection Agency (MEMA I), 627 F.2d 1095, 1112 (D.C. 
Cir. 1979). California certification test procedures need not be 
identical to the Federal test procedures to be ``consistent.'' 
California procedures would be inconsistent, however, if 
manufacturers would be unable to meet both the state and Federal 
test requirements with the same test vehicle in the course of the 
same test. See, e.g., 43 FR 32182, (July 25, 1978).
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B. Burden of Proof

    In MEMA the Court stated that the Administrator's role in a CAA 
section 209 proceeding is to ``consider all evidence that passes the 
threshold test of materiality and . . . thereafter assess such material 
evidence against a standard of proof to determine whether the parties 
favoring a denial of the waiver have shown that the factual 
circumstances exist in which Congress intended a denial of the 
waiver.'' \18\ The court in MEMA I considered the standard of proof 
under CAA section 209 for the two findings related to granting a waiver 
for an ``accompanying enforcement procedure'' (as opposed to the 
standards themselves): (1) Protectiveness in the aggregate and (2) 
consistency with section 202(a) findings. The Court instructed that 
``the standard of proof must take account of the nature of the risk of 
error involved in any given decision, and it therefore varies with the 
finding involved. We need not decide how this standard operates in 
every waiver decision.'' \19\ The Court upheld the Administrator's 
position that, to deny a waiver, there must be `clear and compelling 
evidence' to show that proposed procedures undermine the protectiveness 
of California's standards.\20\ The Court noted that this standard of 
proof also accords with the Congressional intent to provide California 
with the broadest possible discretion in setting regulations it finds 
protective of the public health and welfare.\21\ With respect to the 
consistency finding, the Court did not articulate a standard of proof 
applicable to all proceedings but found that the opponents of the 
waiver were unable to meet their burden of proof even if the standard 
were a mere preponderance of the evidence.
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    \18\ MEMA I, 627 F.2d at 1122.
    \19\ Id.
    \20\ Id.
    \21\ Id.
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    Although MEMA I did not explicitly consider the standard of proof 
under CAA section 209 concerning a waiver request for ``standards,'' as 
compared to accompanying enforcement procedures, there is nothing in 
the opinion to

[[Page 24413]]

suggest that the Court's analysis would not apply with equal force to 
such determinations. EPA's past waiver decisions have consistently made 
clear that: ``[E]ven in the two areas concededly reserved for Federal 
judgment by this legislation--the existence of `compelling and 
extraordinary' conditions and whether the standards are technologically 
feasible--Congress intended that the standards of EPA review of the 
State decision to be a narrow one.'' \22\ Opponents of the waiver or 
authorization bear the burden of showing that the criteria for a denial 
of California's waiver or authorization request have been met. As found 
in MEMA I, this obligation rests firmly with opponents of the waiver or 
authorization in a CAA section 209 proceeding:
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    \22\ 80 FR 76468, 76471 (December 9, 2015).

    The language of the statute and its legislative history indicate 
that California's regulations, and California's determinations that 
they comply with the statute, when presented to the Administrator 
are presumed to satisfy the waiver requirements and that the burden 
of proving otherwise is on whoever attacks them. California must 
present its regulations and findings at the hearing and thereafter 
the parties opposing the waiver request bear the burden of 
persuading the Administrator that the waiver request should be 
denied.\23\
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    \23\ Id. at 1121.

    The Administrator's burden, on the other hand, is to make a 
reasonable evaluation of the information in the record in coming to the 
waiver or authorization decision. As the Court in MEMA I stated: 
``here, too, if the Administrator ignores evidence demonstrating that 
the waiver should not be granted, or if he seeks to overcome that 
evidence with unsupported assumptions of his own, he runs the risk of 
having his waiver decision set aside as `arbitrary and capricious.' '' 
\24\ Therefore, the Administrator's burden is to act ``reasonably.'' 
\25\
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    \24\ Id. at 1126.
    \25\ Id.
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C. Deference to California

    In previous waiver and authorization decisions, EPA has recognized 
that the intent of Congress in creating a limited review based on 
specifically listed criteria was to ensure that the Federal government 
did not second-guess state policy choices. As the Agency explained in 
one prior waiver decision: ``It is worth noting . . . I would feel 
constrained to approve a California approach to the problem which I 
might also feel unable to adopt at the federal level in my own capacity 
as a regulator . . . Since a balancing of risks and costs against the 
potential benefits from reduced emissions is a central policy decision 
for any regulatory agency under the statutory scheme outlined above, I 
believe I am required to give very substantial deference to 
California's judgments on this score.'' \26\ Similarly, EPA has stated 
that the text, structure, and history of the California waiver 
provision clearly indicate both a Congressional intent and appropriate 
EPA practice of leaving the decision on ``ambiguous and controversial 
matters of public policy'' to California's judgment.\27\ This 
interpretation is supported by relevant discussion in the House 
Committee Report for the 1977 Amendments to the CAA. Congress had the 
opportunity through the 1977 Amendments to restrict the preexisting 
waiver provision but elected instead to expand California's flexibility 
to adopt a complete program of motor vehicle emission controls. The 
report explains that the amendment is intended to ratify and strengthen 
the preexisting California waiver provision and to affirm the 
underlying intent of that provision, that is, to afford California the 
broadest possible discretion in selecting the best means to protect the 
health of its citizens and the public welfare.\28\
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    \26\ See, ``California State Motor Vehicle Pollution Control 
Standards; Waiver of Federal Preemption,'' 40 FR 23102, 23103 (May 
28, 1975).
    \27\ Id. at 23103-04.
    \28\ MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 294, 95th 
Cong., 1st Sess. 301-02 (1977)).
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D. EPA's Administrative Process in Consideration of California's 
Request

    On August 16, 2021, EPA issued a notice for comment regarding 
CARB's 2016 LSI Fleet Amendments. The notice requested the public 
provide EPA with comment on issues relevant to EPA's consideration of 
the accompanying enforcement procedures established within the 2016 LSI 
Fleet Amendments, specifically whether California's 2016 LSI Fleet 
Amendments: (a) undermine California's previous determination that its 
standards, in the aggregate, are at least as protective of public 
health and welfare as comparable Federal standards; (b) affect the 
consistency of California's requirements with CAA section 209; or (c) 
raise any other new issues relating to the three authorization criteria 
affecting EPA's previous waiver or authorization determinations.\29\
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    \29\ 86 FR 45724 (Aug. 16, 2021).
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    EPA did not receive a request for a public hearing. As a 
consequence, EPA did not hold a public hearing on this matter. EPA did 
receive one comment, from the Outdoor Power Equipment Institute (OPEI), 
which asked EPA to deny California's authorization request and to 
revise the Agency's 1994 rule implementing CAA section 209(e) to 
prevent California from both adopting and enforcing its state 
regulations until after EPA has waived preemption under CAA section 
209. The commenter requested that EPA deny California's request because 
it believes the State is enforcing its nonroad emissions regulations 
prior to an EPA authorization. OPEI states that California's position 
is inconsistent with the due process protections intended under CAA 
section 209, including safeguards for the public such as California's 
requiring a waiver or authorization to be granted in order to enforce 
the state's emission standards. In addition to denying California this 
authorization, OPEI requested EPA: (1) Revisit its 1994 rule and change 
its interpretation to bar California from adopting and enforcing its 
regulations prior to EPA issuing a waiver or authorization; (2) clarify 
adoption dates, implementation dates and lead times, and enforcement 
terms; and (3) establish that the effective dates and lead times for 
CARB rules requiring an EPA waiver or authorization must consider the 
timing of the waiver submission and approval process.

III. Discussion

    Our analysis of the 2008 LSI Amendments in the context of the full 
authorization criteria is set forth below.

A. California's Protectiveness Determination

    CAA section 209(e)(2)(A)(i) of the CAA instructs that EPA cannot 
grant an authorization if the Agency finds that California was 
arbitrary and capricious in its determination that its amendments are, 
in the aggregate, at least as protective of public health and welfare 
as applicable Federal standards. In adopting the 2016 LSI Fleet 
Amendments, CARB's Board approved Resolution 16-10, in which it 
expressly declared, `` `the Board hereby determines, in accordance with 
the CAA, section 209(e)(2), that the amendments adopted herein do not 
undermine the Board's previous determination that the regulation's 
emission standards, other emission related requirements, and associated 
enforcement procedures are, in the aggregate, at least as protective of 
the public health and welfare as applicable

[[Page 24414]]

federal standards.' '' \30\ CARB further stated that the 2016 LSI Fleet 
Amendments ``do not reduce the stringency of the FAEL standards 
established by the initial LSI Fleet Requirements but will instead 
enable CARB to more effectively enforce the LSI Fleet Requirements.'' 
\31\ CARB also pointed out that there are no Federal standards to 
regulate engines that have been placed into service, such as 
regulations applicable to fleet operators, under the CAA and, 
therefore, there is no question that California's standards are at 
least as protective as Federal standards.
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    \30\ CARB, Resolution 16-10 (quoted in Authorization Support 
Document, at 7-8).
    \31\ Id. at 8.
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    EPA requested but did not receive any comment on whether the 2016 
LSI Fleet Amendment undermine California's previous protectiveness 
determination. We cannot find that California's 2016 LSI Fleet 
Amendments undermine California's previous determination that its 
standards and accompanying enforcement procedures, in the aggregate, 
are at least as protective of public health and welfare as applicable 
Federal standards. Thus, we cannot deny CARB's request for 
authorization of its amendments based on this criterion.

B. Consistency With CAA Section 209

    Section 209(e)(2)(A)(iii) of the Act instructs that EPA cannot 
grant an authorization if California's standards and enforcement 
procedures are not consistent with ``this section.'' The 1994 rule sets 
forth, among other things, regulations providing the criteria, as found 
in section 209(e)(2), which EPA must consider before granting any 
California authorization request for new nonroad engine or vehicle 
emission standards. EPA has historically interpreted the section 
209(e)(2)(iii) ``consistency'' inquiry to require, at minimum, that 
California standards and enforcement procedures be consistent with 
section 209(a), section 209(e)(1), and section 209(b)(1)(C) (as EPA has 
interpreted that subsection in the context of section 209(b) motor 
vehicle waivers).\32\ EPA has interpreted this last subsection in the 
context of motor vehicle waivers. Thus, this can be viewed as a three-
pronged test as evaluated below.
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    \32\ 59 FR at 36982-83.
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1. Consistency With CAA Section 209(a)
    To be consistent with CAA section 209(a), California's 2016 LSI 
Amendments must not apply to new motor vehicles or new motor vehicle 
engines. California's 2016 LSI Fleet Amendments expressly apply only to 
nonroad engines and do not apply to engines used in motor vehicles as 
defined by CAA section 216(2). We did not receive any comments on 
California's consistency with CAA section 209(a). Therefore, EPA cannot 
deny California's request on the basis that California's 2016 LSI Fleet 
Amendments are not consistent with CAA section 209(a).
2. Consistency With CAA Section 209(e)(1)
    To be consistent with CAA section 209(e)(1), California's 2016 LSI 
Fleet Amendments must not affect new farm or construction equipment or 
vehicles that are below 175 horsepower, or new locomotives or new 
engines used in locomotives. CARB notes that its 2016 LSI Fleet 
Amendments do not affect such permanently preempted vehicles or 
engines. EPA did not receive any comments regarding California's 
consistency with section 209(e)(1). Therefore, EPA cannot deny 
California's request on the basis that California's 2016 LSI Fleet 
Amendments are not consistent with section 209(e)(1).
3. Consistency With CAA Section 209(b)(1)(C)
    The requirement that California's standards be consistent with CAA 
section 209(b)(1)(C) effectively requires consistency with section 
202(a). EPA has interpreted consistency with section 202(a) using a 
two-pronged test: (1) Whether there is sufficient lead time to permit 
the development of technology necessary to meet the standards and other 
requirements, giving appropriate consideration to the cost of 
compliance in the time frame provided, and (2) whether 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.\33\ The scope of EPA's review of whether 
California's action is consistent with CAA section 202(a) is narrow. 
The determination is limited to whether those opposed to the 
authorization have met their burden of establishing that California's 
standards are technologically infeasible, or that California's test 
procedures impose requirements inconsistent with the Federal test 
procedures.\34\
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    \33\ See 61 FR 53371, 53372 (Oct. 11, 1996).
    \34\ MEMA I, 627, F.2d at 1126.
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a. Technological Feasibility
    Congress has stated that the consistency requirement of section 
202(a) relates to technological feasibility.\35\ CAA section 202(a)(2) 
states, in part, that any regulation promulgated under its authority 
``shall take effect after such period as the Administrator finds 
necessary to permit the development and application of the requisite 
technology, giving appropriate consideration to the cost of compliance 
within such period.'' Section 202(a) thus requires the Administrator to 
first determine whether adequate technology already exists; or if it 
does not, whether there is adequate time to develop and apply the 
technology before the standards go into effect. The latter scenario 
also requires the Administrator to decide whether the cost of 
developing and applying the technology within that time is feasible.
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    \35\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess. 301 (1977).
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    The 2016 LSI Fleet Amendments include reporting requirements (e.g., 
initial and annual reports, equipment transfer and sales reports, and 
an extension of existing reporting requirements for fleet operators 
subject to fleet average emission limits). The 2016 LSI Fleet 
Amendments also include new labeling requirements wherein, based on 
operator provided information, CARB will issue the operators a unique 
EIN for each item of equipment reported and become the basis of a 
manufacturer's equipment labels with a number of associated 
requirements. EPA did not receive any comments suggesting that CARB's 
accompanying enforcement procedures are technologically infeasible. 
Consequently, based on the record, EPA cannot deny California 
authorization of its 2016 LSI Fleet Amendments based on technological 
infeasibility.
b. Consistency With Federal Test Procedures
    California's 2016 LSI Amendments do not alter the testing required 
under the previously granted LSI Fleet authorization. California states 
in its authorization support document, ``[t]he 2016 LSI Fleet 
Amendments also do not raise any issue regarding incompatibility 
between California and Federal test procedures because EPA has no 
comparable requirements.\36\ We did not receive any comment regarding 
inconsistency with Federal test procedures that would provide EPA a 
basis to deny this authorization. Consequently, based on the record, 
EPA cannot deny California an authorization on the basis of 
inconsistency with Federal test procedures.
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    \36\ Authorization Support Document, at 9.

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[[Page 24415]]

C. Other Issues Affecting EPA's Evaluation of CAA Section 209(e) 
Criteria

    EPA has received comment outside the scope of the three 
authorization criteria in section 209(e)(1) of the CAA. A summary of 
OPEI's comment is set forth above. EPA does not believe OPEI has 
provided comments directly related to the applicable criteria EPA may 
consider when reviewing a request from California for a waiver or 
authorization. OPEI has not met its burden of proof to demonstrate that 
the basis for denying an authorization under section 209(e)(1) has been 
met.
    In previous decisions on waivers and authorizations, EPA has stated 
that Congress intended EPA's review of California's decision-making to 
be narrow. This has led EPA to reject arguments that are not specified 
in the statute as grounds for denying a waiver:

    The law makes it clear that the waiver requests cannot be denied 
unless the specific findings designated in the statute can properly 
be made. The issue of whether a proposed California requirement is 
likely to result in only marginal improvement in air quality not 
commensurate with its cost or is otherwise an arguably unwise 
exercise of regulatory power is not legally pertinent to my decision 
under section 209, so long as the California requirement is 
consistent with section 202(a) and is more stringent than applicable 
Federal requirements in the sense that it may result in some further 
reduction in air pollution in California.\37\
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    \37\ 78 FR 2111, 2115 (Jan. 9, 2013). See also 36 FR 17458 (Aug. 
31, 1971). Note that the more stringent standard expressed here, in 
1971, was superseded by the 1977 Amendments to CAA section 209, 
which established that California must determine that its standards 
are, in the aggregate, at least as protective of public health and 
welfare as applicable Federal standards.

EPA has noted that the statute lists three specific grounds for 
rejecting an authorization request.\38\ This has led EPA to reject 
arguments that are outside the scope of the three statutory criteria 
when considering whether to grant or deny a waiver request.\39\
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    \38\ Id.
    \39\ 87 FR 14342 (March 14, 2022).
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    EPA believes OPEI's challenge to California's exercise of 
California's enforcement procedures is misplaced in this request for an 
authorization. Consideration of a request for authorization is limited 
to the criteria outlined in CAA section 209(e)(2)(A), i.e., whether: 
(1) California's determination is arbitrary and capricious, (2) 
California does not need such standards to meet compelling and 
extraordinary conditions,\40\ or (3) California standards and 
accompanying enforcement procedures are not consistent with section 209 
of the CAA. OPEI does not argue that the 2016 LSI Fleet Amendments and 
its accompanying enforcement procedures affect EPA's prior 
authorization decision or alters California's previous grant of an EPA 
authorization. An evaluation of the issues related to whether 
California is improperly enforcing its regulations before a waiver or 
authorization is issued by EPA is not among the criteria listed under 
CAA section 209(e)(1). EPA may only deny an authorization based on the 
criteria in CAA section 209(e)(1) and any issues raised regarding the 
improper enforcement by California of its regulations prior to 
receiving a waiver or authorization is not one of those criteria. 
Therefore, given OPEI does not raise new issues affecting EPA's 
evaluation of CAA section 209(e)(1) criteria, and the issues raised by 
OPEI in its comments may not be used as a basis of denying California 
this authorization.
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    \40\ As noted above, EPA's review of waiver requests for 
accompanying enforcement procedures does not include a review of the 
second waiver prong. In any event, no adverse comment was submitted 
to suggest CARB's regulations did not meet this criterion and EPA 
cannot deny the waiver request on this basis.
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    Similarly, OPEI's comments seeking revision of EPA's authorization 
regulations are misplaced. EPA did not reopen those regulations in this 
proceeding, and therefore those comments are beyond the scope of this 
action.
    EPA notes, without reopening our regulations, that the regulations 
implementing CAA section 209(e)(2) are at 40 CFR part 1074, subpart 
B.\41\ We also note that the ``lead time'' associated with the 
evaluation of California's regulations under CAA section 
209(e)(2)(A)(iii) is measured from when California adopts its 
regulations.\42\ Once EPA authorizes CARB's authorization request, 
which includes an assessment of CAA section 209(e)(2)(A)(iii), then 
CARB is no longer subject to the preemption in CAA section 209 and may 
enforce its regulations under its state law authorities.
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    \41\ 40 CFR 1074.101(a) provides that California must request 
authorization from the Administrator of EPA to enforce its adopted 
standards. See also 95 FR 3699 (July 20, 1994).
    \42\ 59 FR 3969, 36981-36983 (July 20, 1994).
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IV. Decision

    After evaluating California's 2016 LSI Fleet Amendments, CARB's 
submissions, and the lack of any relevant adverse comment, EPA is 
granting an authorization to California for its 2016 LSI Fleet 
Amendments.

V. Judicial Review

    Section 307(b)(1) of the CAA governs judicial review of final 
actions by the EPA. This section provides, in part, that petitions for 
review must be filed in the United States Court of Appeals for the 
District of Columbia Circuit: (i) when the agency action consists of 
``nationally applicable regulations promulgated, or final actions 
taken, by the Administrator,'' or (ii) when such action is locally or 
regionally applicable, but ``such action is based on a determination of 
nationwide scope or effect and if in taking such action the 
Administrator finds and publishes that such action is based on such a 
determination.'' For locally or regionally applicable final actions, 
the CAA reserves to the EPA complete discretion whether to invoke the 
exception in (ii).
    To the extent a court finds this final action to be locally or 
regionally applicable, the Administrator is exercising the complete 
discretion afforded to him under the CAA to make and publish a finding 
that this action is based on a determination of ``nationwide scope or 
effect'' within the meaning of CAA section 307(b)(1) for several 
reasons.\43\ This final action grants an authorization for amendments 
to California's LSI Fleet regulations that were previously authorized 
by EPA. As such, this final action will affect fleet operators located 
within and outside California that are subject to the reporting and 
labeling requirements in those regulations while operating their 
equipment within California.
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    \43\ In deciding whether to invoke the exception by making and 
publishing a finding that this final action is based on a 
determination of nationwide scope or effect, the Administrator has 
also taken into account a number of policy considerations, including 
his judgment balancing the benefit of obtaining the D.C. Circuit's 
authoritative centralized review versus allowing development of the 
issue in other contexts and the best use of Agency resources.
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    Furthermore, the LSI Fleet regulations, and the amendments to those 
regulations that are the subject of today's action, the 2016 LSI Fleet 
Amendments, are part of California's nonroad emissions program that, 
together with its on-highway emissions program, are regulatory programs 
that EPA may waive under CAA section 209. As required by statute, in 
evaluating the authorization criteria in this action, EPA considers not 
only the 2016 LSI Fleet Amendments in isolation, but in the context of 
the entire California program. See CAA section 209(e)(2)(A) (requiring 
that the protectiveness finding be made for California's standards ``in 
the aggregate''). Moreover, EPA generally applies a consistent 
statutory interpretation and analytical framework

[[Page 24416]]

in evaluating and deciding various authorization and waiver requests 
under CAA section 209. EPA also relies on the extensive body of D.C. 
Circuit case law developed by that court since 1979 as it has reviewed 
and decided judicial challenges to these actions. As such, judicial 
review of any challenge to this action in the D.C. Circuit will 
centralize review of national issues in that court and advance other 
Congressional principles underlying this CAA provision of avoiding 
piecemeal litigation, furthering judicial economy, and eliminating the 
risk of inconsistent judgments.
    For these reasons, the Administrator is exercising the complete 
discretion afforded to him by the CAA and hereby finds that this final 
action is based on a determination of nationwide scope or effect for 
purposes of CAA section 307(b)(1) and is hereby publishing that finding 
in the Federal Register. 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 District of Columbia Circuit by June 20, 2023.

VI. Statutory and Executive Order Reviews

    As with past authorization and waiver decisions, this action is not 
a rule as defined by Executive Order 12866. Therefore, it is exempt 
from review by the Office of Management and Budget as required for 
rules and regulations by Executive Order 12866. In addition, this 
action is not a rule as defined in the Regulatory Flexibility Act, 5 
U.S.C. 601(2). Therefore, EPA has not prepared a supporting regulatory 
flexibility analysis addressing the impact of this action on small 
business entities. Further, the Congressional Review Act, 5 U.S.C. 801, 
et seq., as added by the Small Business Regulatory Enforcement Fairness 
Act of 1996, does not apply because this action is not a rule for 
purposes of 5 U.S.C. 804(3).

Michael S. Regan,
Administrator.
[FR Doc. 2023-08296 Filed 4-19-23; 8:45 am]
BILLING CODE 6560-50-P