Document ID: EPA-HQ-OAR-2008-0691-0321
Agency: epa
Document Type: Notice
Title: California State Nonroad Engine Pollution Control Standards: Off-road Compression Ignition Engines-In-Use Fleets
Posted Date: 2013-09-20T04:00Z

[Federal Register Volume 78, Number 183 (Friday, September 20, 2013)]
[Notices]
[Pages 58089-58121]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22930]

[[Page 58089]]

Vol. 78

Friday,

No. 183

September 20, 2013

Part IV

Environmental Protection Agency

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California State Nonroad Engine Pollution Control Standards; Off-Road 
Compression Ignition Engines--In-Use Fleets; Notice of Decision; Notice

  Federal Register / Vol. 78 , No. 183 / Friday, September 20, 2013 / 
Notices  

[[Page 58090]]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2008-0691; FRL-9901-18-OAR]

California State Nonroad Engine Pollution Control Standards; Off-
Road Compression Ignition Engines--In-Use Fleets; Notice of Decision

AGENCY: Environmental Protection Agency (EPA).

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 regulations applicable to in-use fleets that operate off-
road (nonroad or NR), diesel-fueled (compression-ignition or CI) 
vehicles with engines 25 horsepower and greater. The regulations 
require such fleets to meet fleet average emissions standards for 
oxides of nitrogen (NOX) and particulate matter (PM), or, 
alternatively, to comply with best available control technology (BACT) 
requirements for the vehicles in those fleets. This decision is issued 
under the authority of the Clean Air Act (CAA or Act).

DATES: Petitions for review must be filed by November 19, 2013.

ADDRESSES: EPA has established a docket for this action under Docket ID 
EPA-HQ-OAR-2008-0691. 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 
either electronically through www.regulations.gov or in hard copy at 
the Air and Radiation Docket in the EPA Headquarters Library, EPA West 
Building, Room 3334, located at 1301 Constitution Avenue NW., 
Washington, DC. The Public Reading Room is open to the public on all 
federal government working days from 8:30 a.m. to 4:30 p.m.; generally, 
it is open Monday through Friday, excluding holidays. The telephone 
number for the Reading Room is (202) 566-1744. The Air and Radiation 
Docket and Information Center's Web site is http://www.epa.gov/oar/docket.html. The electronic mail (email) address for the Air and 
Radiation Docket is: a-and-r-Docket@epa.gov, the telephone number is 
(202) 566-1742, and the fax number is (202) 566-9744. An electronic 
version of the public docket is available through the federal 
government's electronic public docket and comment system. You may 
access EPA dockets at http://www.regulations.gov. After opening the 
www.regulations.gov Web site, enter EPA-HQ-OAR-2008-0691 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 requests. Included on that page are links to prior waiver 
Federal Register notices, some of which are cited in today's notice; 
the page can be accessed at http://www.epa.gov/otaq/cafr.htm.

FOR FURTHER INFORMATION CONTACT: David Dickinson, Attorney-Advisor, 
Compliance Division, Office of Transportation and Air Quality, U.S. 
Environmental Protection Agency, 1200 Pennsylvania Avenue (6405J) NW., 
Washington, DC 20460. Telephone: (202) 343-9256. Email: 
Dickinson.David@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
    A. California's Nonroad CI In-Use Fleet Requirements
    B. Clean Air Act Nonroad Engine and Vehicle Authorizations
    C. Deference to California
    D. Burden and Standard of Proof
    E. EPA's Administrative Process in Consideration of California's 
Nonroad CI In-Use Fleet Requirements
III. Discussion
    A. California Protectiveness Determination
    1. Based on EPA's Traditional Analysis, is California's 
Protectiveness Determination Arbitrary and Capricious?
    2. Is CARB's Protectiveness Determination Arbitrary and 
Capricious Based on Other Effects of California's Fleet 
Requirements?
    3. Section 209 (e)(2)(A)(i) Conclusion
    B. Does California Need its Standards to Meet Compelling and 
Extraordinary Conditions?
    1. Should EPA Review This Criterion Based on the Need for 
California's Nonroad Program or the Need for the Fleet Requirements?
    a. Comment from Pacific Legal Foundation
    b. EPA Response
    2. Does California Need its Nonroad Program to Meet Compelling 
and Extraordinary Conditions?
    3. In the Alternative, does California Need its Nonroad Fleet 
Requirements to Meet Compelling and Extraordinary Conditions?
    a. California Air Quality Today and Moving Forward
    b. PM Health Effects
    c. Additional PM Comments
    4. Section 209(e)(2)(A)(ii) Conclusion
    C. Consistency with Section 209 of the Clean Air Act
    1. Consistency with Section 209(a)
    2. Consistency with Section 209(e)(1)
    3. Consistency with Section 209(b)(1)(C)
    a. Technological Feasibility
    b. Consistency of Certification Procedures
    D. Additional Issues Raised in Comment
    1. Request for a Public Hearing In California
    2. Request for EPA to Reopen the Comment Period
    3. Claims Outside the Scope of the Clean Air Act
    4. Constitutional Claims
    E. Authorization Determination for California's Fleet 
Requirements
IV. Decision
V. Statutory and Executive Order Review

I. Executive Summary

    Today, the Environmental Protection Agency (EPA) is granting a 
California Air Resources Board (CARB) request for authorization of 
regulations designed to reduce PM and NOX emissions from in-
use nonroad diesel engines. The California In-Use Off-Road Diesel-
Fueled Fleets Regulation (Fleet Requirements) applies to fleets with NR 
CI vehicles or equipment greater than 25 horsepower. The regulation 
takes effect beginning as early as 2014, depending on fleet size. It 
requires fleet operators to meet a progressively more stringent 
combined PM and NOX standard, or to reduce emissions through 
technology upgrades such as retrofit or replacement. Today's decision 
pertains to CARB's request of March 1, 2012, for authorization of the 
Fleet Requirements as amended in 2010.
    The legal framework for this decision stems from the provisions 
first adopted by Congress in 1967, and later modified in 1977, with 
respect to state emission requirements for motor vehicles and motor 
vehicle engines; and from similar language adopted by Congress in 1990 
with respect to preemption of state emission requirements for certain 
nonroad vehicles and equipment. Section 209(e)(2) of the Act, 42 U.S.C. 
7543(e)(2), specifies that EPA must authorize California to adopt and 
enforce covered nonroad standards if California determines that its 
standards are, in the aggregate, at least as protective of the public 
health and welfare as applicable Federal standards, unless EPA makes 
one of three findings specified under the Clean Air Act: (1) That 
California's protectiveness finding is arbitrary and capricious; (2) 
that California does not need such California standards to meet 
compelling and extraordinary conditions; or (3) that California 
standards and accompanying enforcement procedures are not consistent 
with this section. As explained below, EPA interprets the

[[Page 58091]]

statutory language ``consistent with this section'' to mean consistent 
with section 209 (e.g. section 209(a), section 209(e)(1), and section 
209(b)(1)(C)) of the Act. EPA's role upon receiving an authorization 
request is to determine whether it is appropriate to make any of these 
three specified findings. Opponents of authorization bear the burden of 
proving that at least one of the three bases for denial of 
authorization has been satisfied. If the Agency cannot make at least 
one of the three findings, then it must grant the requested 
authorization. EPA has evaluated CARB's request with regard to each of 
these three authorization criteria, in light of the evidence in the 
public record, and is granting CARB its authorization request as 
required under the Clean Air Act.
    This Notice of Decision provides a full discussion of EPA's 
evaluation of each of the three criteria, including EPA's evaluation of 
the record and its determination that those opposing the authorization 
have not met their burden of proof with regard to any of the three 
criteria in section 209(e)(2)(A).

II. Background

A. California's Nonroad CI In-Use Fleet Requirements

    CARB initially approved the Fleet Requirements on July 26, 2007. 
CARB subsequently amended the regulation after the Board conducted 
hearings in December 2008, January 2009, July 2009, and most recently 
in December 2010. As explained below, the December 2010 amendments 
significantly modified the regulation's compliance dates and in-use 
performance requirements.
    The Fleet Requirements establish statewide in-use performance 
standards applicable to any person, business, or government agency that 
owns and operates in-use nonroad diesel vehicles in California with a 
maximum power of 25 horsepower (hp) or greater. The regulation applies 
to engines that are used to provide motive power, and in some cases 
auxiliary power, to nonroad vehicles, which are defined as vehicles 
that (1) cannot be registered and driven safely on-road, and (2) are 
not implements of husbandry or recreational off-highway vehicles.
    The Fleet Requirements phase in according to fleet size as defined 
by total fleet horsepower. Requirements begin for large fleets (greater 
than 5,000 hp) in 2014; for medium fleets (2,500-5,000 hp) in 2017; and 
for small fleets, 2,500 hp or less, in 2019. The regulation establishes 
two general compliance pathways. Fleets may either (1) meet fleet 
average emission targets (based on the combined horsepower of the 
vehicles in the fleet) that become increasingly stringent over a ten-
year period, or (2) satisfy best available control technology (BACT) 
requirements within a given compliance year. The BACT pathway requires 
fleets to retire, repower, designate for low use, and/or retrofit a 
certain percentage of the fleet's total horsepower each year. Fleets 
demonstrate compliance for a given year by taking a sufficient number 
of such actions in the prior year or by utilizing previously earned 
BACT credits associated with these actions. For large fleets, the 
annual BACT rates (demonstrated either through utilization of credits 
or through action taken during the previous calendar year) start out at 
4.8 percent of the fleet's total horsepower in 2014 and increase to 8 
percent for each year from 2015 through 2017, and to 10 percent for 
each year from 2018 through 2023. For medium fleets, the annual BACT 
rate is 8 percent in 2017, increasing to 10 percent for each year from 
2018 through 2023. Small fleets have an annual BACT rate of 10 percent 
for each year from 2019 through 2028. After the final compliance year, 
all fleets must continue to either (1) meet the fleet average emission 
target rate for the final target year, or (2) satisfy the applicable 
final annual BACT compliance rate (e.g. 10 percent) each year until the 
fleet comes into compliance with the fleet average emission target. The 
Fleet Requirements also restrict fleets from adding older dirtier 
vehicles to their vehicle inventories.
    The regulation EPA is authorizing in this decision reflects 
amendments that CARB adopted in 2010. Compared to the original Fleet 
Requirements, the 2010 amendments delay the original compliance 
schedule by four years. The 2010 amendments also simplified the annual 
requirements so that in each compliance year a fleet must only meet a 
single emissions target--a combined NOX plus PM standard--
rather than separate targets for each of these two pollutants. The 
amendments reduced the annual BACT requirements from a 28 percent 
turnover and retrofit requirement in the prior version of the 
regulation, to a combined 4.8 percent to 10 percent requirement (as 
outlined above). Finally, the amendments removed mandatory retrofitting 
requirements so that retrofit is now a compliance option under the BACT 
pathway rather than a mandate. Additional information about the 
original and amended Fleet Requirements is provided below in the 
section discussing the consistency of the Fleet Requirements with 
section 202(a) of the Act.

B. Clean Air Act Nonroad Engine and Vehicle Authorizations

    Section 209(e)(1) of the Act permanently preempts any state, or 
political subdivision thereof, from adopting or attempting to enforce 
any standard or other requirement relating to the control of emissions 
for certain new nonroad engines or vehicles.\1\ For all other nonroad 
engines (including ``non-new'' engines), states generally are preempted 
from adopting and enforcing standards and other requirements relating 
to the control of emissions, except that section 209(e)(2)(A) of the 
Act requires EPA, after notice and opportunity for public hearing, to 
authorize California to adopt and enforce such regulations unless EPA 
makes one of three enumerated findings. Specifically, EPA must deny 
authorization if the Administrator finds that (1) California's 
protectiveness determination (that California standards will be, in the 
aggregate, as protective of public health and welfare as applicable 
federal standards) is arbitrary and capricious, (2) California does not 
need such standards to meet compelling and extraordinary conditions, or 
(3) the California standards and accompanying enforcement procedures 
are not consistent with section 209 of the Act. Other states with state 
air quality implementation plans may also adopt and enforce such 
regulations if the standards are identical to California's standards.
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    \1\ States are expressly preempted from adopting or attempting 
to enforce any standard or other requirement relating to the control 
of emissions from new nonroad engines which are used in construction 
equipment or vehicles or used in farm equipment or vehicles and 
which are smaller than 175 horsepower. Such express preemption under 
section 209(e)(1) of the Act also applies to new locomotives or new 
engines used in locomotives.
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    On July 20, 1994, EPA promulgated a rule interpreting the three 
criteria set forth in section 209(e)(2)(A) that EPA must consider 
before granting any California authorization request for nonroad engine 
or vehicle emission standards.\2\ EPA revised these regulations in 
1997.\3\ As stated in the preamble to the 1994 rule, EPA historically 
has interpreted the consistency inquiry under the third criterion 
outlined above (set forth in section 209(e)(2)(A)(iii)) to require, at 
minimum, that California standards and enforcement procedures be 
consistent

[[Page 58092]]

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) of the Act.\4\
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    \2\ 59 FR 36969 (July 20, 1994).
    \3\ See 62 FR 67733 (December 30, 1997). The applicable 
regulations are now found in 40 CFR part 1074, subpart B, Sec.  
1074.105.
    \4\ See 59 FR 36969 (July 20, 1994).
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    In order to be consistent with 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 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 section 
209(b)(1)(C), EPA typically reviews nonroad authorization requests 
under the same ``consistency'' criteria that are applied to motor 
vehicle waiver requests under section 209(b)(1)(C). That provision 
provides that the Administrator shall not grant California a motor 
vehicle waiver if she finds that California ``standards and 
accompanying enforcement procedures are not consistent with section 
202(a)'' of the Act. Previous decisions granting waivers and 
authorizations have noted that state standards and enforcement 
procedures will be found to be inconsistent with 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.
    In light of the similar language of sections 209(b) and 
209(e)(2)(A), EPA has analyzed requests for California authorization of 
standards for nonroad vehicles or engines under section 209(e)(2)(A) 
using the same principles that it has historically applied in analyzing 
requests for waivers of preemption for new motor vehicle or new motor 
vehicle engine standards under section 209(b).\5\ These principles 
include, among other things, that EPA should limit its inquiry to the 
three specific authorization criteria identified in section 
209(e)(2)(A),\6\ and that EPA will give substantial deference to the 
policy judgments California has made in adopting its regulations. In 
previous waiver decisions, EPA has stated that Congress intended EPA's 
review of California's decision-making be narrow. EPA has rejected 
arguments that are not specified in the statute as grounds for denying 
a waiver:
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    \5\ See Engine Manufacturers Association v. EPA, 88 F.3d 1075 
(D.C. Cir. 1996). ``. . . EPA was within the bounds of permissible 
construction in analogizing Sec.  209(e) on nonroad sources to Sec.  
209(a) on motor vehicles.''
    \6\ See EPA's Final 209(e) rulemaking at 59 FR 36969, 36983 
(July 20, 1994).

    The law makes 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 costs or is otherwise an arguably unwise 
exercise of regulatory power is not legally pertinent to my decision 
under section 209, as 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.\7\
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    \7\ 36 FR 17458 (Aug. 31, 1971). Note that the more stringent 
standard expressed here, in 1971, was superseded by the 1977 
amendments to 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. In the 1990 amendments to section 209, Congress 
established section 209(e) and similar language in section 
209(e)(1)(i) pertaining to California's nonroad emission standards 
which California must determine to be, in the aggregate, at least as 
protective of public health and welfare as applicable Federal 
standards.

    This principle of narrow EPA review has been upheld by the U.S. 
Court of Appeals for the District of Columbia Circuit.\8\ Thus, EPA's 
consideration of all the evidence submitted concerning an authorization 
decision is circumscribed by its relevance to those questions that may 
be considered under section 209(e)(2)(A).
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    \8\ See, e.g., Motor and Equip. Mfrs Assoc. v. EPA, 627 F.2d 
1095 (D.C. Cir. 1979) (``MEMA I'').
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C. Deference to California

    In previous waiver decisions, EPA has recognized that the intent of 
Congress in creating a limited review based on the section 209(b)(1) 
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. The 
whole approach of the Clean Air Act is to force the development of 
new types of emission control technology where that is needed by 
compelling the industry to ``catch up'' to some degree with newly 
promulgated standards. Such an approach * * * may be attended with 
costs, in the shape of reduced product offering, or price or fuel 
economy penalties, and by risks that a wider number of vehicle 
classes may not be able to complete their development work in time. 
Since a balancing of these 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.\9\
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    \9\ 40 FR 23102, 23103-23104 (May 28, 1975).

    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.\10\ This interpretation is supported by relevant 
discussion in the House Committee Report for the 1977 amendments to the 
Clean Air Act.\11\ 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.\12\
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    \10\ Id. at 23104; 58 FR 4166 (January 13, 1993).
    \11\ MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 294, 95th 
Cong., 1st Sess. 301-302 (1977)).
    \12\ Id.
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D. Burden and Standard of Proof

    As the U.S. Court of Appeals for the D.C. Circuit has made clear in 
MEMA I, opponents of a waiver request by California bear the burden of 
showing that the statutory criteria for a denial of the request have 
been met:

    [T]he language of the statute and its legislative history 
indicate that California's regulations, and California's 
determinations that they must 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.\13\
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    \13\ Id.

    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 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

[[Page 58093]]

capricious.''' \14\ Therefore, the Administrator's burden is to act 
``reasonably.'' \15\
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    \14\ Id. at 1126.
    \15\ Id. at 1126.
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    With regard to the standard of proof, the court in MEMA I explained 
that the Administrator's role in a 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.\16\
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    \16\ Id. at 1122.

    In that decision, the court considered the standards of proof under 
section 209 for the two findings related to granting a waiver for an 
``accompanying enforcement procedure.'' Those findings involve: (1) 
Whether the enforcement procedures impact California's prior 
protectiveness determination for the associated standards, and (2) 
whether the procedures are consistent with section 202(a). The 
principles set forth by the court, however, are similarly applicable to 
an EPA review of a request for a waiver of preemption for a standard. 
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.'' \17\
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    \17\ Id.
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    With regard to the protectiveness finding, the court upheld the 
Administrator's position that, to deny a waiver, there must be ``clear 
and compelling evidence'' to show that proposed enforcement procedures 
undermine the protectiveness of California's standards.\18\ 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.\19\
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    \18\ Id.
    \19\ Id.
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    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. 
Although MEMA I did not explicitly consider the standards of proof 
under section 209 concerning a waiver request for ``standards,'' as 
compared to a waiver request for accompanying enforcement procedures, 
there is nothing in the opinion to 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.'' 
\20\
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    \20\ See, e.g., 40 FR 21102-22103 (May 28, 1975).
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E. EPA's Administrative Process in Consideration of California's 
Nonroad CI In-Use Fleet Requirements

    EPA has conducted three separate public notice and comment periods 
associated with three successive versions of CARB's NR CI in-use Fleet 
Requirements.
    On August 8, 2008, CARB requested that EPA authorize California to 
enforce its original In-Use Off-Road Diesel-Fueled Fleets regulation 
adopted at its July 26, 2007 public hearing.\21\ CARB's original 
regulations required fleets that operate nonroad, diesel fueled 
equipment with engines 25 hp and greater to meet separate fleet average 
emission standards for NOX and PM, respectively. 
Alternatively, the regulations required the vehicles in those fleets to 
comply with BACT requirements. Based on this request, EPA noticed and 
conducted a public hearing on October 27, 2008, and provided an 
opportunity to submit written comment through December 19, 2008.\22\ 
CARB amended the regulations between December 2008 and mid-2009. On 
February 11, 2010 CARB requested that EPA grant California 
authorization to enforce its In-Use Off- Road Diesel-Fueled Fleets 
regulation as amended.\23\ Based on CARB's February 11, 2010 request, 
EPA noticed and conducted a public hearing on April 14, 2010, and 
provided an opportunity to submit written comment through May 18, 
2010.\24\
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    \21\ See CARB Resolution 07-19) and subsequently modified after 
supplemental public comment by CARB's Executive Officer by the In-
Use Regulation in Executive Order R-08-002 on April 4, 2008 (these 
regulations are codified at Title 13, California Code of Regulations 
sections 2449 through 2449.3).
    \22\ See 73 FR 58585 (October 7, 2008) and 73 FR 67509 (November 
14, 2008).
    \23\ CARB's amendments included those of December 2008 (and 
formally adopted in California on October 19, 2009); January 2009 
(and formally adopted in California on December 31, 2009); and, a 
certain subset of amendments adopted by the Board in July 2009 in 
response to California Assembly Bill 8 2X (and formally adopted on 
December 3, 2009). In CARB's February 11, 2010 request letter to EPA 
it also noted additional amendments adopted in July 2009 and not yet 
formally adopted by California's Office of Administrative Law. Once 
this last subset of amendments was formally adopted CARB planned to 
submit them to EPA for subsequent consideration.
    \24\ See 75 FR 11880 (March 12, 2010).
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    CARB again amended its regulations in December 2010 and these 
amendments were formally adopted in California on December 14, 2011--
resulting in the current version of the Fleet Requirements which are 
the subject of this authorization decision. On March 1, 2012, CARB 
submitted a request that EPA grant California authorization to enforce 
its Fleet Requirements as most recently amended (Authorization 
Request).\25\ Based on CARB's Authorization Request, on August 21, 2012 
EPA invited comment on whether (a) CARB's determination that its 
standards, in the aggregate, are at least as protective of public 
health and welfare as applicable federal standards is arbitrary and 
capricious, (b) California needs separate standards to meet compelling 
and extraordinary conditions, and (c) California's standards and 
accompanying enforcement procedures are consistent with section 209 of 
the Act.\26\ The Federal Register notice stated that EPA would only 
consider testimony and comment submitted in response to the current 
request for comment because the CARB regulations were substantially 
amended in December 2010.\27\ EPA conducted a hearing on the 
Authorization Request on September 20, 2012, in Washington, DC.\28\ The 
written

[[Page 58094]]

comment period closed on October 22, 2012.\29\ In addition, to provide 
further opportunity to submit direct verbal comment for affected 
parties who could not participate in the public hearing, EPA conducted 
an informal teleconference on October 19, 2012.\30\
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    \25\ See EPA-HQ-OAR-2008-0691-0270.
    \26\ 77 FR 50500 (August 21, 2012).
    \27\ ``Therefore, EPA will not be considering oral testimony or 
written comments based on the prior Federal Register notices, since 
CARB's December 2010 amendments are likely to affect many of these 
prior comments. To the extent any entity believes that its prior 
comments remain pertinent then EPA is requiring such comments be 
resubmitted or incorporated into new comments.'' Id. at 50502. EPA 
did not receive any adverse comment or suggestions that it is 
inappropriate to exclude comments submitted prior to the August 12, 
2012 Federal Register notice. As noted by AGC, ``While the Clean Air 
Act has not changed, and the questions that EPA must address are one 
and the same, the rule that CARB now seeks the authority to enforce 
is very different from the rule that CARB originally submitted to 
EPA.'' See EPA's Hearing transcript at 84 (EPA-HQ-OAR-2008-0691-
0298). CARB reincorporated by reference all of its prior submissions 
regarding the Fleet Requirements.
    \28\ The written transcript of this hearing is at EPA-HQ-OAR-
2008-0691-0298 (Hearing Transcript). EPA received testimony from 
CARB, the Pacific Legal Foundation (PLF), the American Road and 
Transportation Builders Association (ARTBA), the Manufacturers of 
Emission Controls Association (MECA), the Associated General 
Contractors of America (AGC), the Construction Industry Air Quality 
Association (CIAQC), and the California Construction Trucking 
Association (CCTA).
    \29\ EPA received written comment from: Airlines for America 
(A4A)--EPA-HQ-OAR-2008-0691-0297; Manufacturers of Emission Controls 
Association (MECA) (Copy of oral testimony)--EPA-HQ-OAR-2008-0691-
0300; Steve Milloy (Copy of oral testimony)--EPA-HQ-OAR-2008-0691-
0301; Pacific Legal Foundation (PLF) (copy of oral testimony)--EPA-
HQ-OAR-2008-0691-0302; Associated General Contractors of America 
(AGC) (Copy of oral testimony)--EPA-HQ-OAR-2008-0691-0303; PLF--EPA-
HQ-OAR-2008-0691-0304; Altfillisch Contractors (ACI)--EPA-HQ-OAR-
2008-0691-0305; Savala Equipment Company--EPA-HQ-OAR-2008-0691-0306; 
Dr. Matthew Malkan--EPA-HQ-OAR-2008-0691-0307; Dr. James Enstrom--
EPA-HQ-OAR-2008-0691-0308; Dr. Phalen--EPA-HQ-OAR-2008-0691-0313; 
California Construction Trucking Association (CCTA)--EPA-HQ-OAR-
2008-0691-0309; American Road & Transportation Builders Association 
(ARTBA)--EPA-HQ-OAR-2008-0691-0310; Bay Cities Paving and Grading 
(Bay Cities)--EPA-HQ-OAR-2008-0691-0311; Nick Silicz--EPA-HQ-OAR-
2008-0691-0313; Granite Rock--EPA-HQ-OAR-2008-0691-0314; Delta 
Construction--EPA-HQ-OAR-2008-0691-0315; United Contractors--EPA-HQ-
OAR-2008-0691-0316; Construction Industry Air Quality Coalition 
(CIAQC)--EPA-HQ-OAR-2008-0691-0317; California Air Resources Board--
EPA-HQ-OAR-2008-0691-0318 (CARB Written Comments) and EPA-HQ-OAR-
2008-0691-0319 (CARB Supplemental Comments); PLF Request to Reopen 
Comment Period, etc--EPA-HQ-OAR-2008-0691-0320.
    \30\ EPA-HQ-OAR-2008-0691-0321. As discussed below, EPA believes 
that interested parties have adequate opportunity to present their 
views through both the public hearing and by submitting written 
comment.
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III. Discussion

A. California's Protectiveness Determination

    Section 209(e)(2)(A)(i) of the Act sets forth the first of the 
three criteria governing a request for authorization of relevant 
standards--providing that EPA cannot grant the request if the agency 
finds that California was arbitrary and capricious in its determination 
that California standards will be, in the aggregate, at least as 
protective of public health and welfare as applicable federal 
standards.\31\
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    \31\ As explained above, EPA's authorization analysis is guided 
by precedent related to both section 209(e)(2) and to section 
209(b), which contains similar, and in some cases identical, 
language. See Engine Manufacturers Ass'n v. EPA (EMA), 88 F.3d 1075, 
1085-87 (D.C. Cir. 1996).
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    EPA maintains that the phrase ``California standards'' means 
California's entire group of standards (i.e. the overall program) that 
is applicable to nonroad engine emissions. As explained below, while 
evaluating California's protectiveness determination, EPA compares 
California's standards to applicable federal standards. That comparison 
is undertaken within the broader context of the California program 
applicable to nonroad vehicles and engines, for which EPA previously 
has granted authorization and which relies upon protectiveness 
determinations that EPA in its authorization decisions found not to be 
arbitrary and capricious.\32\
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    \32\ In situations where there are no Federal standards directly 
comparable to the specific California standards under review, the 
analysis then occurs against the backdrop of previous waivers which 
determined that the California program was at least as protective of 
the federal program. In a prior EPA waiver pertaining to 
California's zero-emission vehicle program (ZEV) for which there are 
no comparable Federal standards, EPA also took into consideration 
California's existing low-emission vehicle program (LEV II) and 
greenhouse gas emission standards (GHG) applicable to light-duty 
vehicles. ((LEV II + ZEV) + GHG). See 71 FR 78190 (December 28, 
2006), Decision Document for Waiver of Federal Preemption for 
California Zero Emission Vehicle (ZEV) Standards (December 21, 
2006).
---------------------------------------------------------------------------

    As noted above, EPA is guided in its interpretation of the section 
209(e)(2) authorization criteria by the similar language in section 
209(b) pertaining to waivers of preemption for new motor vehicle 
standards. Therefore, the evaluation of the protectiveness of CARB's 
nonroad standards under section 209(e)(2)(A)(i) follows the instruction 
of section 209(b)(2), which states: ``If each State standard is at 
least as stringent as the comparable applicable Federal standard, such 
State standard shall be deemed to be at least as protective of health 
and welfare as such Federal standards for purposes of [209(b)(1)].'' 
EPA evaluates the stringency of California's standards relative to 
comparable EPA emission standards. To review California's 
protectiveness determination under section 209(e)(2)(A)(i), EPA 
conducts its own analysis comparing the newly adopted California 
standards to comparable applicable Federal standards. EPA traditionally 
makes a quantitative comparison of relevant numeric emission standards 
to determine whether the California standards are more or less 
protective than the Federal standards.\33\
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    \33\ In situations where there are no Federal standards directly 
comparable to the specific California standards under review, the 
analysis then occurs against the backdrop of previous waivers which 
determined that the California program was at least as protective of 
the federal program ((LEV II + ZEV) + GHG). See 71 FR 78190 
(December 28, 2006), Decision Document for Waiver of Federal 
Preemption for California Zero Emission Vehicle (ZEV) Standards 
(December 21, 2006).
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    As explained above in the section on burden and standard of proof, 
any finding that California's determination was arbitrary and 
capricious under section 209(b)(1)(A) must be based upon '''clear and 
compelling evidence' to show that proposed [standards] undermine the 
protectiveness of California's standards.'' \34\ Accordingly, even if 
EPA's own analysis of comparable protectiveness, or one submitted by a 
commenter, might diverge from California's analysis, that alone would 
not provide a sufficient basis for EPA to make a section 209(b)(1)(A) 
finding that California's protectiveness finding is arbitrary and 
capricious.
---------------------------------------------------------------------------

    \34\ MEMA I, 627 F.2d at 1122.
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1. Based on EPA's Traditional Analysis, is California's Protectiveness 
Determination Arbitrary and Capricious?
    In adopting the initial version of the Fleet Requirements, CARB 
approved Resolution 07-19, in which it declared:

    Be it further resolved that the Board hereby determines, in 
accordance with CAA section 209(e)(2), that to the extent the 
regulations approved herein affect nonroad vehicles or nonroad 
engines as defined in CAA section 216(10) and (11), the emission 
standards and other requirements related to the control of emissions 
in the regulations approved herein are, in the aggregate, at least 
as protective of public health and welfare as applicable federal 
standards, California needs its nonroad emission standards to meet 
compelling and extraordinary conditions, and the standards and 
accompanying enforcement procedures approved herein are consistent 
with CAA section 209.\35\
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    \35\ CARB Authorization Request at 17.

    With the most recent Fleet Requirements amendments in 2010, the 
Board reaffirmed its protectiveness finding in Resolution 10-47.\36\ 
CARB maintains that there is no basis for EPA to find the Board's 
determination (which applies solely to standards for in-use nonroad 
engines) is arbitrary and capricious since EPA's authority, under the 
CAA, is limited to new engines, vehicles, and equipment. As a result, 
EPA has not adopted any federal standards or requirements for in-use 
nonroad engines. CARB notes that there is no question that its Fleet 
Requirements are at least as protective of public health and welfare as

[[Page 58095]]

applicable federal standards, given the lack of any comparable EPA 
standards.\37\
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    \36\ ``BE IT FURTHER RESOLVED that the Board hereby determines, 
in accordance with CAA section 209(e)(2), that the proposed 
amendments as they affect nonroad vehicles or nonroad engines as 
defined in CAA section 216 (10) and (11), do not undermine the 
Board's previous determination that the regulation's emission 
standards, other emissions related requirements, and associated 
enforcement procedures are, in the aggregate, at least as protective 
of public health and welfare as applicable federal standards, are 
necessary as part of ARB's off-road emission program to meet 
compelling and extraordinary conditions existing in the state, and 
are consistent with CAA section 209.'' CARB Resolution 10-47EPA-HQ-
OAR-2008-0691-0283.
    \37\ Authorization Request at 18, citing Engine Manufacturers 
Association v. EPA, (D.C. Cir. 1996) 88 F.3d at 1075, 1089-1090.
---------------------------------------------------------------------------

    As described above, EPA's traditional analysis has been to evaluate 
California's protectiveness determination by comparing the newly 
adopted California standards to applicable EPA emission standards for 
the same pollutants from the industry sector. CARB is correct that 
EPA's authority to adopt emission standards and other requirements 
related to the control of nonroad emissions is limited to new engines, 
vehicles, and equipment,\38\ and that as a result EPA has not adopted 
any standards or requirements for in-use nonroad engines.
---------------------------------------------------------------------------

    \38\ See 42 U.S.C. 7547 (Section 213 of Clean Air Act).
---------------------------------------------------------------------------

    EPA already has determined that California was not arbitrary and 
capricious in its determination that California standards applicable to 
new nonroad CI engines are at least as protective as comparable Federal 
standards.\39\ The in-use Fleet Requirements will achieve emission 
reductions in addition to those achieved by the previously authorized 
new nonroad engine standards, for which CARB made a protectiveness 
finding that EPA found not to be arbitrary and capricious. According to 
CARB, the Fleet Requirements are expected to result in a reduction of 
0.5 tons/day of NOX in the South Coast and 0.3 tons/days in 
San Joaquin Valley in 2014, along with 3.2 tons/day and 1.9 tons/day in 
these respective areas in 2023.\40\ As such, the Fleet Requirements 
achieve additional emission reductions beyond those attained under CARB 
emission standards applicable to new nonroad CI engines, which EPA has 
already determined to be as protective, in the aggregate, as applicable 
federal standards. Accordingly, there is no basis for determining that 
CARB's protectiveness finding with regard to the in-use Fleet 
Requirements is arbitrary and capricious.
---------------------------------------------------------------------------

    \39\ 75 FR 8056 (February 23, 2010).
    \40\ CARB Written Comments at 10.
---------------------------------------------------------------------------

    Further, as noted above, EPA is guided in its interpretation of 
209(e)(2)(A)(i) by section 209(b)(2). Section 209(b)(2) states: ``If 
each State standard is at least as stringent as the comparable 
applicable Federal standard, such State standard shall be deemed to be 
at least as protective of public health and welfare as such Federal 
standards for purposes of paragraph (1).'' In this instance there is no 
comparable applicable Federal standard for in-use nonroad CI engines 
and thus there is no basis for determining the CARB's protectiveness 
finding is arbitrary and capricious through the application of section 
209(b)(2).
    Finally, EPA received no comments or evidence suggesting that 
CARB's protectiveness determination, under EPA's traditional analysis, 
is arbitrary and capricious. In particular, no commenter disputes that 
California standards, whether looking at the particular California 
standards being authorized in this proceeding or the entire suite of 
California standards for nonroad engines, are at least as stringent, in 
the aggregate, as applicable federal standards.
    In light of the foregoing, EPA finds that CARB's Fleet Requirements 
achieve additional emission reductions beyond CARB's requirements 
applicable to new nonroad CI engines, and further finds that the 
opponents of authorization have not presented evidence to show that 
CARB's protectiveness determination is arbitrary and capricious. 
Accordingly, applying the traditional comparative analysis, we cannot 
find that CARB's protectiveness determination is arbitrary and 
capricious.
2. Is CARB's Protectiveness Determination Arbitrary and Capricious 
Based on Other Effects of California's Fleet Requirements?
    Having addressed the protectiveness inquiry under EPA's traditional 
analysis, we turn now to the question whether we should use a different 
analytical approach and, if so, whether a different approach would 
yield a different outcome. EPA received one comment suggesting that 
EPA's analysis under section 209(e)(2)(A)(i) should be based on a 
broader inquiry into the effects of CARB's Fleet Requirements.\41\ 
Relatedly, EPA received one other comment specifically questioning 
whether CARB's Fleet Requirements are as protective of applicable 
Federal requirements in light of the Fleet Requirements' alleged 
adverse impacts on needed transportation and infrastructure development 
across the country as well as in California.\42\ The latter commenter 
suggested, for example, that CARB's rule ``could'' severely impact 
efforts at improving the nation's infrastructure because transportation 
projects by necessity involve moving construction equipment across 
state lines. The commenter stated that equipment associated with such 
national projects would necessarily have to meet CARB's Fleet 
Requirements, increasing costs, unless fleet operators were able to 
differentiate such equipment that would only be used for California 
projects.\43\ The commenter argues that increased costs as a result of 
the Fleet Requirements could in turn prevent or delay needed 
construction of infrastructure such as roads, schools, housing and 
levees, and that such delay or prevention could adversely affect public 
health and safety impacts in California and in other states.\44\ EPA 
received further comment suggesting that CARB is prioritizing one 
public health issue (air quality) over another (safe roads and 
infrastructure improvements) and thus California's protectiveness 
determination is ``arbitrary and capricious.'' \45\
---------------------------------------------------------------------------

    \41\ See Delta Construction.
    \42\ See Hearing Transcript and written comment (ARTBA).
    \43\ Id.
    \44\ Id.
    \45\ Id.
---------------------------------------------------------------------------

    EPA also received a series of comments from general contracting 
companies and others that highlighted what they believe to be the 
adverse economic impacts of the Fleet Requirements. For example, 
several commenters stated that the regulation would have some 
combination of the following impacts: Significant layoffs, increased 
unemployment, and disadvantage to family-owned and other small 
businesses. Such impacts, the commenters argue, would have negative 
rather than the intended positive effects on public health.\46\ One 
commenter asserted that the correlation between poor health and poverty 
or lack of employment is much stronger than the correlation between 
poor health and air pollution. The commenter claims that because of 
such economic and social impacts, regulations such as the Fleet 
Requirements will be harmful to California's citizens and that the 
health benefits from CARB's regulation are dubious if not 
counterproductive.\47\ These comments, by and large, do not refer 
specifically to CARB's protectiveness determination or section 
209(e)(2)(A)(i) and it is not clear whether commenters are referring to 
EPA's analysis under that section.
---------------------------------------------------------------------------

    \46\ Id, see also CCTA, Savala Equipment Rentals, Delta 
Construction.
    \47\ See Delta Construction. This comment is also addressed 
below under the second authorization criterion of whether California 
needs its standards to meet compelling and extraordinary conditions.
---------------------------------------------------------------------------

    Finally, EPA received comment that does refer to CARB's 
protectiveness determination, suggesting it was arbitrary and 
capricious, but basing this claim on a variety of concerns that do not 
directly relate to CARB's actual protectiveness determination (e.g.

[[Page 58096]]

alleged flaws in CARB's emission modeling--including CARB's estimates 
of economic recovery scenarios--as well as concerns with the alleged 
impact of the Fleet Requirements on fleet operator assets leading to 
more unemployment and associated poor health, and concerns related to 
the health effects of PM2.5).\48\
---------------------------------------------------------------------------

    \48\ See CCTA.
---------------------------------------------------------------------------

    CARB's written comments note that the Board has repeatedly 
determined that its in-use off-road regulations are, in the aggregate, 
at least as protective of public health and welfare as applicable 
federal standards. In addition to the fact that EPA only has authority 
to adopt standards related to the control of emissions for new nonroad 
engines, CARB notes that EPA has previously stated that the phrase 
``state standards'' as used in the protectiveness determination means 
the entire California set of standards (i.e. program) applicable to the 
relevant category of vehicles or engines. Further, CARB asserts that 
EPA has previously granted authorization to California's emission 
standards for new nonroad engines, and the in-use Fleet Requirements 
will yield emission reductions in addition to the new nonroad engine 
standards that were the subject of prior protectiveness findings, thus 
ensuring that the Fleet Requirements are of necessity more stringent 
than those covered by federal new engine emission standards alone.\49\
---------------------------------------------------------------------------

    \49\ See CARB's Written Comments.
---------------------------------------------------------------------------

    CARB responds to criticisms that it prioritized air quality health 
benefits and did not consider dis-benefits (e.g. increased costs for, 
and possible delay of, needed highway safety projects and improvements 
or other infrastructure) by stating that the latter set of concerns 
falls outside the scope of a section 209 protectiveness determination. 
CARB maintains that the plain language and intent of section 
209(e)(2)(A)(i) is that review of California's protectiveness 
determination should be based exclusively on whether its ``standards 
will be, in the aggregate, at least as protective of public health and 
welfare as applicable Federal standards.'' Since this language is 
almost identical to the protectiveness criterion language in section 
209(b)(1), CARB maintains that EPA should thus follow the directive of 
Congress in section 209(b)(2) that:

    If each State standard is at least as stringent as the 
comparable applicable Federal standard, such State standard shall be 
deemed to be at least as protective of health and welfare as such 
Federal standards for purpose of paragraph (1).

    CARB points to EPA's 2009 waiver of California's light-duty 
greenhouse gas standards (EPA's 2009 GHG Waiver) where EPA concluded 
that, in considering whether California's protectiveness determination 
is arbitrary and capricious under section 209(b)(1)(A), the agency 
``has always interpreted `applicable Federal Standards' as limiting 
EPA's inquiry to motor vehicle emission standards established by EPA 
under the Clean Air Act that apply to the same cars and the same air 
pollutants or group of pollutants as considered by California's 
aggregate protectiveness finding.'' \50\ CARB argues that same analysis 
should apply to nonroad authorizations. CARB maintains that if EPA were 
to require the Board to consider factors other than aggregate emission 
standards in making the Board's protectiveness determination, this 
would undermine the broad discretion that Congress intended to provide 
California in making policy decisions on how best to address 
California's severe air pollution.\51\
---------------------------------------------------------------------------

    \50\ See EPA's greenhouse gas waiver decision issued in 2009 
(2009 GHG Waiver Decision) at 74 FR 32743 (July 8, 2009).
    \51\ Id. at 4-5 (citing MEMA I, 627 F.2d at 1122 
[``(C)ongressional intent to provide California with the broadest 
discretion in setting regulations it finds protective of the public 
health and welfare.'']); see also 40 FR 23102, 23104 (May 28, 1975).
---------------------------------------------------------------------------

    CARB also disagrees with opponents' arguments that the Fleet 
Requirements will delay highway safety improvements. CARB notes that, 
even before the 2010 amendments, the regulations' expected maximum 
costs were projected to be so small (less than one percent) compared to 
overall construction spending, that they would not be expected to 
decrease or delay constructions projects. With the 2010 amendments, 
CARB expects compliance costs to be significantly lower and even less 
likely to delay construction projects, including highway safety 
projects.\52\
---------------------------------------------------------------------------

    \52\ Id.
---------------------------------------------------------------------------

    EPA agrees that the phrase ``California standards'' means the 
entire California nonroad emissions program (i.e. the set of all 
nonroad standards), or at the very least all of California's standards 
for nonroad CI engines, which is the category of engines being 
regulated by California in the Fleet Requirements. Therefore, as 
explained above, when evaluating California's protectiveness 
determination, EPA compares the California requirements to federal 
standards applicable to the relevant category of engines. Again, that 
comparison is undertaken within the broader context of the previously 
authorized California standards for the relevant category of engines, 
which rely upon protectiveness determinations that EPA previously has 
found were not arbitrary and capricious. Finally, as discussed above, 
no commenter disputes that California standards, whether looking at the 
particular standards being authorized in this proceeding or the entire 
suite of standards for nonroad engines, are more stringent than federal 
standards.
    The only issue in dispute is whether other information provided by 
commenters, outlined at the beginning of this section, provides clear 
and compelling evidence that California was arbitrary and capricious in 
finding its standards are in the aggregate at least as protective of 
public health and welfare as applicable federal standards.
    EPA previously has considered whether its traditional analysis is 
sufficient to properly review CARB's protectiveness determination with 
regard to the ``in-use effects'' of CARB's regulations. Analysis of 
such in-use effects remained focused on the actual emission reductions/
benefits expected from CARB's regulation.\53\ In EPA's 2009 GHG Waiver 
Decision granting a waiver of preemption for CARB's greenhouse gas 
(GHG) standards for light duty vehicles, we noted that, given the 
legislative history and text of section 209(b)(2), EPA would need a 
concrete factual basis to examine the in-use effect of California's GHG 
standards on its broader LEV II program as compared to the Federal Tier 
II program. EPA did not take a position as to the validity of the 
suggestion that the type of analysis discussed in EPA's traditional 
protectiveness analysis is insufficient. Rather, EPA reached the 
conclusion that commenters who opposed the GHG waiver did not meet 
their burden of proof in presenting clear and compelling factual 
evidence (in the context of the regulatory effect on real-world in-use 
emissions) that CARB's protectiveness determination was arbitrary and 
capricious.
---------------------------------------------------------------------------

    \53\ See (2009 GHG Waiver Decision) at 74 FR 32743, 32758.
---------------------------------------------------------------------------

    We recount this history to contrast it with the comments received 
opposing the Fleet Requirements authorization on the basis of various 
safety, economic, and health arguments. In the instant proceeding, EPA 
received no comments indicating why EPA's review of CARB's 
protectiveness determination with regard to the Fleet Requirements 
should be broader than past reviews, and/or should be based on anything 
other than an examination of the stringency of comparable applicable 
federal standards.

[[Page 58097]]

    Further, the opponents of the Authorization Request provide no 
analysis of the statutory language or history of section 
209(e)(2)(A)(i) to support their view that the review of the 
``protectiveness'' finding should be broader than EPA's traditional 
review. Nor do they provide any significant analysis or calculus as to 
how EPA should or would weigh these competing interests (i.e. those 
that go beyond the comparative stringency of applicable state and 
federal emission standards) in making its determination. While EPA 
recognizes that commenters have expressed significant concerns 
regarding the potential business impacts of the Fleet Requirements on 
individual contractors and on employment, a review of CARB's 
protectiveness determination based upon such factors would be 
inconsistent with the broad discretion that Congress intended to 
provide California in making policy decisions on how best to address 
California's severe air pollution.\54\ As EPA has previously concluded:
---------------------------------------------------------------------------

    \54\ See MEMA I, 627 F.2d at 1122 [``(C)ongressional intent to 
provide California with the broadest possible discretion in setting 
regulations it finds protective of the public health and 
welfare.'']; see also 40 FR 23102, 23104 (May 28, 1975).

    [Congressional] sponsors of the (waiver) language eventually 
adopted referred repeatedly to their intent to make sure that no 
``Federal bureaucrat'' would be able to tell the people of 
California what auto emission standards were good for them as long 
as they were stricter than the Federal standards.\55\
---------------------------------------------------------------------------

    \55\ 40 FR 23101, 23102 (May 28, 1975).

    In our view, the statutory language of section 209(e)(2)(A)(i)--
both on its face and as read together with 209(b)(2)--reflects 
Congress's intention that EPA evaluate only the comparative stringency 
of the relevant California and EPA emission standards. As discussed 
above, the text, structure, and history of the California waiver 
provision clearly indicate a congressional intent that EPA leave the 
decision on ``ambiguous and controversial matters of public policy'' to 
California's judgment. That has been EPA's consistent practice under 
section 209. As the court stated in MEMA I, Congress's intent in 
amending the protectiveness determination language in 1977 was to 
afford California the broadest possible discretion in selecting the 
best means to protect the health of its citizens. EPA therefore 
considers it inappropriate, in the context of reviewing CARB's 
protectiveness determination, to second-guess CARB's policy choices or 
to weigh competing health and welfare interests that are best left to 
California.
    As explained below under the third authorization criterion--
consistency with section 209 (including consistency with 202(a))--EPA 
interprets the ``cost of compliance'' in section 202(a) to refer to the 
direct economic costs of CARB's standards and the timing of a 
particular emission control regulation rather than to its social 
implications.\56\ Similarly, EPA believes it appropriate to limit our 
examination for purposes of the protectiveness comparison to the 
specific effects the California and EPA emission standards have on 
emissions rather than performing an analysis of social impacts or other 
secondary implications. Policy decisions with regard to how various 
potential non-emissions impacts of an emission regulation can or should 
be weighed against one another is inherently and properly within the 
sphere of the state regulatory authority promulgating the regulation. 
Such decisions should not be made or reviewed by EPA, which Congress 
has given the limited role of reviewing the regulations based on the 
three specified and relatively narrow statutory criteria, consistent 
with Congress's intent to uphold California's broad regulatory 
discretion in this sphere.
---------------------------------------------------------------------------

    \56\ 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.
---------------------------------------------------------------------------

    For all these reasons, EPA declines to depart from its traditional 
analysis of the protectiveness criterion under section 209(e)(2)(A)(i), 
as discussed above. Even if there were a valid basis for considering 
the types of non-air quality impacts alleged by the opponents of the 
Authorization Request, the opponents did not meet their burden to 
provide clear and convincing evidence that CARB's analysis of the 
effects of the Fleet Requirements is unreasonable. For EPA to make a 
section 209(e)(2)(A)(i) finding that California's protectiveness 
determination is arbitrary and capricious, it is not enough for 
authorization opponents to provide competing analysis or alternative 
policy considerations and arguments. To support a denial of 
authorization under this criterion, commenters must show that 
California's analysis, or the assumptions on which California relied to 
support its protectiveness determination, were arbitrary and 
capricious. In this instance, the opponents of the authorization have 
suggested that CARB's Fleet Requirements could make construction 
projects more expensive and this could lead to delays. But they have 
not introduced any actual evidence that such projects will be suspended 
due to the costs associated with the Fleet Requirements, and certainly 
not that the projected increase in costs, as estimated by CARB after 
the 2010 amendments, will be significant enough to delay or prevent 
such projects. Similarly, the opponents of the waiver have not 
introduced substantial evidence that the Fleet Requirements 
themselves--as opposed to a host of other factors, including the 
economic downturn, that have affected the economy over the last several 
years--will result in a loss in the number of employees or actual 
business. In the absence of any such evidence, EPA could not find 
California's protectiveness determination to be arbitrary and 
capricious even if these alleged impacts were an appropriate subject 
for analysis under section 209(e)(2)(A)(i).
    Regarding the comment that CARB's regulation could adversely affect 
health and welfare in other states, EPA does not find the comment to be 
a basis for judging California's protectiveness determination to be 
arbitrary and capricious for two reasons. First, a change in emissions 
outside of California would not lead to a different conclusion 
regarding the relative protectiveness of the Fleet Requirements to 
federal requirements within California. Second, the commenters do not 
provide any substantive or factual evidence to show significant 
emissions impacts in other states. We would also note that other states 
may decide independently to adopt California's regulations.
    In response to the comment that California's regulations are 
arbitrary and capricious, we note that EPA's sole review under section 
209(e)(2)(A)(i) is whether California's protectiveness determination 
was arbitrary and capricious. Congress did not give EPA wide-ranging 
authority to examine the overall reasonableness of California's 
regulations. As discussed above, the policy decisions made by CARB in 
enacting its regulations are not reviewed generally by EPA, and, as 
Congress intended, EPA leaves such policy decisions to California.
3. Section 209(e)(2)(A)(i) Conclusion
    In light of the foregoing, based on the record before us, EPA finds 
that opponents of the authorization have not shown that California was 
arbitrary and capricious in its determination that its standards are, 
in the aggregate, at least as protective of public health and welfare 
as applicable federal standards.

[[Page 58098]]

B. Does California need its standards to meet compelling and 
extraordinary conditions?

    Section 209(e)(2)(A)(ii) instructs that EPA cannot grant an 
authorization if the Agency finds that California ``does not need such 
California standards to meet compelling and extraordinary conditions . 
. ..'' EPA's inquiry under this second criterion (found both in 
paragraphs 209(b)(1)(B) and 209(e)(2)(A)(ii)) has been to determine 
whether California needs its own mobile source pollution program (i.e. 
set of standards) for the relevant class or category of vehicles or 
engines to meet compelling and extraordinary conditions, and not 
whether the specific standards that are the subject of the 
authorization or waiver request are necessary to meet such 
conditions.\57\ In a 2009 waiver action, for example, EPA examined the 
language of section 209(b)(1)(B) and reiterated its longstanding 
traditional interpretation that the better approach for analyzing the 
need for ``such State standards'' to meet ``compelling and 
extraordinary conditions'' is to review California's need for its 
program (i.e. set of standards) as a whole, for the class or category 
of vehicles being regulated, as opposed to its need for the individual 
standards that are the subject of a waiver or authorization 
request.\58\
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    \57\ See 74 FR 32744, 32761 (July 8, 2009); 49 FR 18887, 18889-
18890 (May 3, 1984).
    \58\ See EPA's 2009 GHG Waiver Decision wherein EPA rejected the 
suggested interpretation of section 209(b)(1)(B) as requiring a 
review of the specific need for California's new motor vehicle 
greenhouse gas emission standards as opposed to the traditional 
interpretation (need for the program as a whole) applied to local or 
regional air pollution problems.
---------------------------------------------------------------------------

    As noted above, CARB first adopted its Fleet Requirements in 2007. 
CARB designed the 2007 regulation to address its determination that 
legacy fleets--and particularly nonroad CI vehicles--were responsible 
for significant PM and NOX emissions. CARB's Initial 
Statement of Reasons (ISOR) states, in part:

    Off-road vehicles are a significant source of diesel particulate 
matter, as well as NOX emissions that lead to ozone and 
ambient PM. Statewide, they are responsible for nearly a quarter of 
the total PM emissions from mobile diesel sources and nearly a fifth 
of the total NOX emissions from mobile diesel sources. 
Although increasingly stringent new engine standards are reducing 
emissions from off-road diesel vehicles over time, because of their 
durability, most vehicles operate for several decades before being 
retired. Thus, in-use off-road diesel vehicles would continue to 
pose significant health risk for many years if this proposed 
regulation is not adopted. . . . without reductions from this large 
source category, the South Coast and San Joaquin Valley would be 
unable to attain the federal ambient air quality standards.
    . . . [E]missions would trend naturally down as the fleet 
gradually turned over to newer, cleaner engines. However, these 
reductions are not sufficient for many areas of the state to meet 
clean air standards. Because of this, the proposed regulation 
accelerates this anticipated reduction in emissions.\59\

    \59\ See STAFF REPORT: INITIAL STATEMENT OF REASONS FOR PROPOSED 
RULEMAKING (ISOR) at EPA-HQ-OAR-2008-0691-0002, attachment A at 7-
10. EPA notes that while CARB has incorporated by reference its 
earlier submissions to EPA docket EPA-HQ-OAR-2008-0691 we recognize 
that CARB has modified its emission inventory modeling. 
Nevertheless, the NR CI legacy fleet in California continues to 
present California with serious air quality issues according to 
CARB.
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    The 2010 amendments affirmed CARB's longstanding position that 
California continues to need its own nonroad engine and vehicle program 
to address serious air pollution problems the state still 
confronts.\60\ CARB's Authorization Request notes that 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 
(NAAQS) for fine particulate matter (PM2.5) and ozone.\61\ 
``The unique geographical and climatic conditions, and the tremendous 
growth in California's on- and off-road vehicle population, which moved 
Congress to authorize the State to establish on-road motor vehicle 
standards in 1970 and off-road engine standards in 1990, still exist 
today. . . . Nothing in these conditions has changed to warrant a 
change in this determination. Accordingly, there can be no doubt of the 
continuing existence of compelling and extraordinary conditions 
justifying California's need for its own mobile source emissions 
control program.'' \62\
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    \60\ See CARB Resolution 10-47 at EPA-HQ-OAR-2008-0691-0283. 
Specifically, the Board stated, in part:
    WHEREAS, in-use off-road diesel vehicles operating in the state, 
as a class, continue to be a significant source of air pollution 
emissions in California that contribute to continuing violations of 
the national ambient air quality standards (NAAQS) for both 
particulate matter (PM) less than 2.5 microns (PM2.5) and 
ozone, and to continuing localized health risk, including premature 
death, associated with exposure to PM2.5;
    WHEREAS, Staff Report 2007 further discussed the results of ARB 
staff's evaluations of the non-cancer health effects of exposure to 
primary and secondary PM emissions from the vehicles subject to the 
initially proposed Off-Road regulation, and these evaluations 
indicated that exposure to these emissions can be associated with 
premature deaths and other non-cancer health impacts;
    WHEREAS, the United States Environmental Protection Agency (U.S. 
EPA) in a recently published review of the PM-related health science 
literature, which is the first part of an ongoing review of the 
national ambient air quality standards for PM, concluded that long-
term exposure to PM2.5 is causally associated with 
premature mortality, and that premature deaths caused by 
PM2.5 occur at levels as low as 5.8 micrograms per cubic 
meter, which is considerably lower than the current national 
standard of 15 micrograms per cubic meter;
    WHEREAS, the U.S. EPA risk assessment methodology is the basis 
for ARB's estimate that 9,200 (7,300 to 11,000, 95 percent 
confidence interval) premature deaths occur annually in California 
and that reducing emissions to meet the Federal standard would 
result in 2,700 fewer premature deaths annually;
    WHEREAS, the Board further finds based on its independent 
judgment and analysis of the entire record before it that:
    In-use off-road diesel vehicles and engines that operate in the 
State--whether based in California or not--continue to be 
significant contributors of diesel PM and NOX emissions, 
which California must reduce to attain the ozone and 
PM2.5 NAAQS and to reduce the health risks associated 
with such pollutants;
    Even with the amendments and economic relief proposed, the 
proposed amended regulation would significantly reduce diesel PM and 
NOX emissions and associated cancer, premature mortality, 
and other adverse health effects statewide, such that emission 
reductions from the proposed amended regulation are expected to 
prevent 470 premature deaths from 2014 to 2029.
    \61\ CARB Authorization Request at 18, citing 7 FR 4052, 4054 
(July 11, 2011).
    \62\ CARB Authorization Request at 18, citing 74 FR 32744, 32762 
(July 8, 2009); 76 FR 77515, 77518 (December 13, 2011).
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    CARB's Authorization Request also notes the continuing importance 
and need to address the NAAQS for pollutants considered to be harmful 
to public health, including PM2.5 and ozone.\63\ For areas 
in California that exceed the NAAQS, CARB is responsible under CAA 
section 110 for developing a State Implementation Plan (SIP) that 
describes how the state will attain the standards by certain deadlines. 
The South Coast Air Basin and the San Joaquin Valley Air Basin are in 
nonattainment for both PM2.5 and the 8-hour ozone standard. 
Significant reductions in NOX emissions are needed to attain 
the standards because NOX leads to formation in the 
atmosphere of both ozone and PM2.5. Diesel PM emissions 
reductions are also needed because diesel PM contributes to ambient 
concentrations of PM2.5. The South Coast and San Joaquin 
Valley air basins are both required to be in attainment with the 
PM2.5 standard by 2014. The San Joaquin Valley and South 
Coast air basins are required to be in

[[Page 58099]]

attainment of the 8-hour ozone standard by 2023.\64\
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    \63\ CARB notes: Ambient PM2.5 is associated with 
premature mortality, aggravation of respiratory and cardiovascular 
disease, asthma exacerbation, chronic and acute bronchitis and 
reductions in lung function. Ozone is a powerful oxidant. Exposure 
to ozone can result in reduced lung function, increased respiratory 
symptoms, increased airway hyper-reactivity, and increased airway 
inflammation. Exposure to ozone is also associated with premature 
death, hospitalization for cardiopulmonary causes, and emergency 
room visits for asthma.
    \64\ CARB Authorization Request at 3-4.
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    The SIP for the South Coast and San Joaquin air basins demonstrates 
attainment of the PM2.5 standard by 2014, but only based on 
projected achievement of PM2.5 emission reductions of nearly 
15 percent in the South Coast Air Basin and 25 percent in the San 
Joaquin Valley Air Basin. CARB's Authorization Request states that 
NOX emissions must be reduced by approximately 50 percent to 
meet the PM2.5 standard in the South Coast and the San 
Joaquin Valley air basins. Even greater NOX reductions, on 
the order of 75 to 88 percent, will be needed to achieve the 8-hour 
ozone standard by 2023. California's 2007 SIP included the initial 
version of the Fleet Requirements as a control measure. CARB's legal 
commitment to achieve the emission reductions specified in the SIP 
relies upon the emission reductions from the Fleet Requirements 
regulation in the South Coast and the San Joaquin Valley.\65\ In its 
ISOR, CARB notes ``Despite the major economic recession and revisions 
to the off-road regulation inventory, the in-use off-road diesel 
vehicle category remains an important source of emissions. In 2010, 
staff estimates the off-road vehicles subject to the off-road 
regulation are the fourth largest source of diesel PM in California (7 
percent of total) and the sixth largest source of NOX from 
all sources (4 percent of total).'' \66\
---------------------------------------------------------------------------

    \65\ Id.
    \66\ EPA-HQ-OAR-2008-0691-0002 Attachment A, at 13.
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1. Should EPA Review this Criterion Based on the Need for California's 
Nonroad Program or the Need for the Fleet Requirements?
    In addressing whether California needs ``such State standards to 
meet compelling and extraordinary conditions,'' we must first address 
the question whether it is appropriate for EPA to evaluate this 
criterion based on California's need for its nonroad emission program 
as a whole, or whether we instead should evaluate only the particular 
standards being addressed in this authorization proceeding.
    As noted above, CARB maintains that the relevant inquiry is whether 
California needs its own emission control program as opposed to the 
need for any given standard as necessary to meet compelling and 
extraordinary conditions. CARB notes that in prior decisions the 
Administrator has determined that:

    ``[C]ompelling and extraordinary conditions'' does 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.\67\
---------------------------------------------------------------------------

    \67\ CARB Authorization Request at 18.

    EPA has also consistently held that the phrase ``the need for 
California emission standards'' refers to the need for California's 
program (i.e. set of standards) applicable to the relevant category of 
vehicles or engines, and not the need for the particular standards that 
are the subject of an authorization request. In the instant proceeding, 
EPA received comments disputing this approach, which we discuss below.
a. Comment From Pacific Legal Foundation
    EPA received comment from the Pacific Legal Foundation (PLF) 
challenging both California's and EPA's interpretation of the 
``compelling and extraordinary conditions'' criterion in section 
209(e)(2)(A)(ii). PLF asserts that based on both the plain language of 
the provision and its legislative history, the word ``standards'' 
should be read to refer only to particular standards, and not to the 
entire California program for the relevant category of engines or 
vehicles.\68\
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    \68\ As explained below, EPA believes it important to examine 
the language of section 209(e)(2)(A)(ii) precisely as Congress set 
it forth. Therefore, to be clear, the phrase ``the need for 
California emission standards'' does not appear in this section. 
Rather, the language is ``No such authorization shall be granted if 
the Administrator determines that--(ii) California does not need 
such California standards to meet compelling and extraordinary 
conditions.'' EPA's interpretation of this section includes an 
examination of the significance of the word ``such'' before 
``California standards.''
---------------------------------------------------------------------------

    PLF contends that California must apply for a waiver or 
authorization on a case-by-case basis \69\ and that the Clean Air Act 
requires EPA not grant California any waiver or authorization unless 
California makes a showing that it has ``compelling and extraordinary 
conditions'' necessitating the particular standards for which a waiver 
or authorization is sought. PLF argues that CARB has put little 
evidence in the record about the need for the Fleet Requirements. 
Further, PLF asserts that ``Congress intended the word `standard' in 
section 209 to mean quantitative level of emissions'' \70\ and that 
there is no indication in the text or legislative history that by using 
the term ``standard'' Congress really meant ``program'' or anything 
other than ``standard.'' PLF states that Congress could have used the 
term ``program'' rather than the term ``standards'' in the statute and 
delegated to EPA the responsibility to make case by case decisions on 
whether a particular standard was required or needed.
---------------------------------------------------------------------------

    \69\ PLF at 1.
    \70\ PLF cites MEMA I at 1112-1113.
---------------------------------------------------------------------------

    In addition, PLF cites the legislative history of section 209 to 
support its position that standards need to be justified on an 
individual basis. Specifically, PLF cites the Senate Committee report 
for the 1967 legislation, which in discussing section 208 (the 
predecessor to what is now section 209) refers to California's 
``compelling and extraordinary circumstances'' that are ``sufficiently 
different from the nation as a whole to justify standards . . . [that] 
may, from time to time, need to be more stringent than national 
standards.'' \71\ PLF argues that this language indicates that Congress 
intended California to justify specific standards ``from time to 
time,'' and that it intended EPA to deny a waiver if California does 
not require or need particular standards. PLF claims that if Congress 
wanted to apply a need tests based on California's need for a program 
as a whole then it could have stated so.
---------------------------------------------------------------------------

    \71\ S Rep No 90-403 at 33 (1967) (emphasis added).
---------------------------------------------------------------------------

    PLF further contends that in 1977, when Congress amended section 
209(b)--Congress continued to focus on ``standards'' but with two 
important additions. First, Congress amended the language relating to 
the protectiveness determination to clarify that California's standards 
need only be at least as protective as federal standards ``in the 
aggregate''--making clear that California did not need to determine 
that each individual standard would be more protective or stringent 
than applicable federal standards. PLF asserts that this clarification, 
however, applied only to the protectiveness determination. Second, 
Congress tightened section 209(b)(1)(B) to provide that ``no such 
waiver shall be granted if EPA finds that California . . . does not 
need such standards to meet compelling and extraordinary conditions . . 
..'' (emphasis added). PLF asserts that the preexisting 1967 language 
had provided that EPA ``shall'' grant a waiver unless it finds 
California did ``not require'' the underlying standards, whereas the 
1977 amendments expressly prohibited EPA from granting a waiver where 
California did not ``need'' a particular emissions standard. Based on 
the foregoing, PLF argues that the 1977 amendments created two separate 
tests for ``standards.'' The ``protectiveness'' test (under the first 
waiver criterion), which

[[Page 58100]]

applies to the protectiveness of California's aggregate set of 
standards, and the ``needs'' test (under the second waiver criterion), 
which is based on a need for the particular standards for which a 
waiver is sought and focuses on whether there are compelling conditions 
in the state necessitating that particular standard.
    PLF also maintains that EPA's traditional interpretation is 
contrary to plain meaning of the CAA. PLF asserts that the term 
``program'' is not used in section 209 and that the phrase ``such 
California standards'' in 209(e)(2)(A)(ii) does not refer to the entire 
California mobile source emissions program. PLF states that the phrase 
``in the aggregate'' appears only once in section 209 and only under 
the first waiver prong added in the 1977 amendments. ``In the 
aggregate'' is set off by commas, PLF argues, providing evidence that 
it pertains only to protectiveness under the first waiver criterion, 
and does not apply to the ``needs'' inquiry under the second waiver 
criterion. PLF maintains that the outcome of the protectiveness test 
depends on California making a determination, whereas the outcome of 
the needs tests depends on EPA making a finding. Further, PLF argues 
that the protectiveness test affirmatively mandates that EPA approve 
the waiver application if California makes the protectiveness 
determination, while the ``needs test'' expressly prohibits EPA from 
granting a waiver if EPA makes the requisite finding. Thus, PLF argues, 
the first prong is written to broaden the likelihood of issuing a 
waiver, whereas the second prong is written to narrow it.
    PLF maintains that the two waiver prongs were intended to address 
entirely different issues. Congress gave EPA greater authority to 
approve waivers under the first prong, PLF asserts, but lesser 
authority to approve waivers under the independent needs test. PLF 
highlights that the sentence regarding ``protectiveness'' applies to 
both ``standards and other requirements,'' whereas the sentence 
establishing the needs test refers only to standards. This makes sense, 
according to PLF, because Congress intended EPA to look holistically at 
protectiveness and not at whether an individual standard was as 
protective. To ensure CARB did not abuse the privilege, PLF argues, 
Congress provided under the ``needs'' criterion that California could 
not adopt any standard that it did not need or that was not 
specifically designed to address California's ``peculiar'' conditions.
    Finally, PLF maintains that EPA's traditional interpretation leads 
to absurd results. PLF states that EPA itself has acknowledged that 
conditions in California may improve, thereby eliminating the need for 
the authority to waive preemption of California standards.\72\ Under 
EPA's traditional interpretation, PLF argues, EPA would be forced to 
deny a waiver request based on a finding that there is no longer a need 
for the California program. PLF argues that such a finding would put in 
jeopardy past waivers, as the positive (program-wide) ``needs'' finding 
underpinning those past waivers would no longer be valid. PLF further 
comments that a broad negative finding with regard to ``needs'' would 
eliminate CARB's ability to maintain its own mobile source emission 
standards program, separate from the federal program. In such 
circumstances, PLF argues, EPA would be substituting its policy 
judgment for that of Congress. If one interpretation leads to absurd 
results and another does not, PLF argues, then the former must be 
rejected.
---------------------------------------------------------------------------

    \72\ See 74 FR 32744, 32762 (July 8, 2009).
---------------------------------------------------------------------------

b. EPA Response
    EPA examined these same issues at length in the Agency's 2009 
decision granting California's request for a waiver of preemption of 
its GHG standards for light duty vehicles.\73\ Consistent with that 
examination, EPA continues to believe that the traditional approach to 
the compelling and extraordinary conditions criterion is appropriate. 
That is, EPA believes it is proper to review California's need for its 
emission program (i.e. set of standards) applicable to the relevant 
category of vehicles or engines as a whole, rather than to follow an 
interpretation that applies this criterion to specific standards that 
are the subject of an authorization request.
---------------------------------------------------------------------------

    \73\ 74 FR 32744, 32759-32762 (July 8, 2009).
---------------------------------------------------------------------------

    EPA's traditional interpretation is the most straightforward 
reading of the text and legislative history of section 209(b) and 
section 209(e). First, EPA disagrees with PLF's assertions regarding 
the original language of the preemption provision promulgated in 1967. 
The critical language in section 208(b) of the 1967 legislation 
required that EPA`s predecessor department grant California a waiver of 
section 208(a) preemption unless it found that California ``does not 
require standards more stringent than applicable Federal standards to 
meet compelling and extraordinary conditions . . ..'' This language did 
not suggest a searching review of every California standard. Rather, it 
required a waiver of preemption unless the agency determined that 
California did not require more stringent ``standards''--a term that is 
both general and plural--to meet compelling and extraordinary 
conditions. This language is fully consistent with a review of 
California's general need for more stringent standards and thus for its 
own program (i.e. its own set of standards).
    PLF's emphasis on the word ``standards,'' as opposed to ``program'' 
in this section is inapposite. EPA's use of the word ``program'' in 
this context is simply meant to describe the group of standards 
applicable to the engines and vehicles in question under California's 
regulatory program, compared to those under the federal program. The 
``program'' in this context is merely the standards being considered 
together. It is fully consistent with the language of the statute to 
review the need for the program (i.e. the set of relevant standards) as 
a whole, rather than the need for individual standards. PLF's reference 
to legislative history is consistent with EPA's view that the relevant 
issue in determining whether a waiver is justified is California's 
``circumstances'' being ``sufficiently different'', rather than the 
specific need for any particular standard.\74\
---------------------------------------------------------------------------

    \74\ PLF at 4.
---------------------------------------------------------------------------

    Beginning prior to the 1977 amendments, EPA has consistently 
interpreted the ``compelling and extraordinary conditions'' criterion 
to apply to the full California program (i.e. set of standards).\75\ 
When Congress re-evaluated this provision in 1977, it could have 
revised the criterion to make clear that California must show each 
standard is necessary. Instead, as discussed below, Congress went out 
of its way to indicate that California is to be given even more 
flexibility in designing its own motor vehicle program.\76\
---------------------------------------------------------------------------

    \75\ See 38 FR 30136 (November 1, 1973).
    \76\ MEMA I, 627 F.2d at 1110.
---------------------------------------------------------------------------

    PLF, moreover, does not take proper account of the critical 
statutory change Congress made in 1977, which allowed California to 
promulgate individual standards that are not as stringent as comparable 
federal standards, as long as the standards are ``in the aggregate, at 
least as protective of public health and welfare as applicable federal 
standards.'' This decision by Congress requires EPA to waive preemption 
of individual California standards that, in and of themselves, might 
not be considered needed to meet compelling and extraordinary 
circumstances, but are part of California's overall approach to 
reducing vehicle emissions to address air pollution problems.
    Although PLF is correct that the 1977 amendments formally separated 
the ``protectiveness'' criterion from the ``need'' criterion, the 
latter continues to

[[Page 58101]]

refer back to the language regarding protectiveness, by using the term 
``such state standards.'' In addition, contrary to PLF's comments, the 
creation of the ``in the aggregate'' test for protectiveness is 
supportive of the argument that EPA is not to look at the need for each 
individual standard. If EPA were required to look independently at the 
need for each individual standard, any individual standard that was 
less stringent than a federal standard might be considered unnecessary. 
This would obviate the rationale for looking at the protectiveness of 
California's standards ``in the aggregate'' under the first criterion--
effectively requiring EPA to give back in the second criterion what 
Congress explicitly gave California in its revision to the first 
criterion. Finally, it bears emphasis that the 1977 amendments 
continued to require that EPA grant a waiver of preemption unless it 
makes one of the findings in section 209(b)(1), thus continuing to put 
the burden of proof on those opposing the waiver.\77\
---------------------------------------------------------------------------

    \77\ Id.
---------------------------------------------------------------------------

    Congress, in 1990, added language in section 209(e)(2)(A) creating 
criteria for EPA authorization of California nonroad engine standards 
that are essentially identical to the criteria for EPA waiver of 
preemption of California's standards for new motor vehicles in section 
209(b). In particular, Congress provided California with the discretion 
to create a broad emissions program (i.e. ``California standards'') 
that needs only to be as stringent as applicable EPA standards, in the 
aggregate. Further, section 209(e)(2)(A)(ii) refers to whether ``such 
California standards'' are needed to meet compelling and extraordinary 
conditions, referring back to the general and plural term ``California 
standards'' in the protectiveness finding.
    The language of section 209(e)(2)(A) regarding the 
``protectiveness'' determination by California refers only to 
``California standards,'' not to each California standard individually. 
Moreover, the use of the term ``in the aggregate'' makes clear that the 
set of standards to be reviewed is the aggregate set of standards 
applicable to the engines and vehicles being regulated. EPA is to 
determine whether California's determination is arbitrary and 
capricious under section 209(e)(2)(A)(i), and is to determine whether 
California does not need ``such California standards'' to meet 
compelling and extraordinary conditions. The natural reading of these 
provisions leads EPA, in addressing the ``needs'' criterion, to 
consider the same group of standards that California considered in 
making its protectiveness determination. While the words ``in the 
aggregate'' are not specifically applicable to section 
209(e)(2)(A)(ii), this criterion does refer to the need for ``such 
California standards,'' rather than ``each California standard'' or 
otherwise indicate a standard-by-standard analysis. The text thus 
indicates that the proper analysis is to review the aggregate set of 
standards (i.e. the program) applicable to the regulated vehicles and 
engines.\78\
---------------------------------------------------------------------------

    \78\ To the extent the provision is ambiguous, EPA's 
interpretation is, at minimum, one that is reasonable and entitled 
to deference under Chevron U.S.A. Inc. v. Natural Resources Defense 
Council, Inc., 467 U.S. 837 (1984). It certainly is not 
``unambiguously precluded'' by the language of the statute. See 
Entergy Corp. v. Riverkeeper, Inc., 129 S.Ct. 1498 (2009) (``That 
view governs if it is a reasonable interpretation of the statute--
not necessarily the only possible interpretation, nor even the 
interpretation deemed most reasonable by the courts. Chevron U.S.A. 
Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843-
844 (1984).'') (``It seems to us, therefore, that the phrase ``best 
available,'' even with the added specification ``for minimizing 
adverse environmental impact,'' does not unambiguously preclude 
cost-benefit analysis.''). Carrow v. Merit Systems Protection Board, 
564 F.3d 1359 (Fed. Cir. 2009) (``[W]e are obligated to give 
controlling effect to [agency's] interpretation if it is reasonable 
and is not contrary to the unambiguously expressed intent of 
Congress'', citing Entergy Corp.).
---------------------------------------------------------------------------

    PLF's discussion of case law interpreting the term ``standard'' is 
inapposite. For example, although PLF points to both MEMA I and EMA, 
those decisions address an entirely different issue relevant to section 
209--i.e., whether the regulation set by California is, in fact, a 
``standard,'' as opposed to another type of provision, like an 
enforcement provision. These cases do not illuminate the issue of 
whether EPA reviews each standard individually under sections 
209(b)(1)(B) and 209(e)(2)(A)(ii), or whether it reviews California's 
standards as a group (i.e. California's program for such engines) under 
those provisions.
    EPA's 2009 decision waiving preemption of California's GHG 
standards for light duty vehicles considered the plain language and 
legislative history of section 209(b)(1)(B) and determined that for all 
pollutants, it was appropriate to review section 209(b)(1)(B) by 
reviewing the need for California's motor vehicle program, rather than 
individual standards. We incorporate that discussion into this decision 
by reference because, as explained above, the language of section 
209(e)(2)(A)(ii) is substantively the same as that in section 
209(b)(1)(B) on this issue.
    The 2009 GHG waiver decision included the following discussion, 
which in particular addressed a 1984 decision waiving preemption for 
earlier California PM standards:

    [I]n the legislative history of section 209, the phrase 
``compelling and extraordinary circumstances'' refers to ``certain 
general circumstances, unique to California, primarily responsible 
for causing its air pollution problem,'' like the numerous thermal 
inversions caused by its local geography and wind patterns. The 
Administrator also noted that Congress recognized ``the presence and 
growth of California's vehicle population, whose emissions were 
thought to be responsible for ninety percent of the air pollution in 
certain parts of California.'' EPA reasoned that the term compelling 
and extraordinary conditions ``do not refer to the levels of 
pollution directly.'' Instead, the term refers primarily to the 
factors that tend to produce higher levels of pollution--
``geographical and climatic conditions (like thermal inversions) 
that, when combined with large numbers and high concentrations of 
automobiles, create serious air pollution problems.''
    The Administrator summarized that under this interpretation the 
question to be addressed in the second criterion is whether these 
``fundamental conditions'' (i.e. the geographical and climate 
conditions and large motor vehicle population) that cause air 
pollution continued to exist, not whether the air pollution levels 
for PM were compelling and extraordinary, or the extent to which 
these specific PM standards will address the PM air pollution 
problem.\79\

    \79\ 74 FR 32744, 32759 (July 8, 2009) (citations omitted).

    The structure of section 209, as adopted in 1967 and as amended in 
1977 and 1990, is notable in its focus on limiting the ability of EPA 
to deny a waiver or authorization. This limitation preserves discretion 
for California to construct its motor vehicle and nonroad programs as 
it deems appropriate to protect the health and welfare of its citizens. 
The legislative history indicates Congress quite intentionally 
restricted and limited EPA's review of California's standards, and that 
its express legislative intent was to ``provide the broadest possible 
discretion [to California] in selecting the best means to protect the 
health of its citizens and the public welfare.'' \80\ The D.C. Circuit 
recognized that ``[t]he history of the congressional consideration of 
the California waiver provision, from its original enactment up through 
1977, indicates that Congress intended the State to continue and expand 
its pioneering efforts at adopting and enforcing motor vehicle emission 
standards different from and in large measure more advanced than the 
corresponding federal program. In short to act as a kind of laboratory 
for innovation. * * * For a court [to limit

[[Page 58102]]

California's authority] despite the absence of such an indication would 
only frustrate the congressional intent.'' \81\
---------------------------------------------------------------------------

    \80\ 105 H.R. Rep. No. 294, 95th Cong., 1st Sess. 301-302 
(1977). See MEMA, 627 F.2d at 1110-11.
    \81\ MEMA, 627 F. 2d at 1111.
---------------------------------------------------------------------------

    In this context, it is fully consistent with the expressed 
intention of Congress to interpret section 209(e)(2)(A)(ii) in a manner 
that allows California the policy discretion to set its emission 
program as it sees fit, subject to the limitation that its standards 
remain, in the aggregate, as protective of public health and welfare as 
applicable federal standards and that California continue to experience 
compelling and extraordinary conditions. Congress intended to provide 
California the broadest possible discretion to develop its nonroad 
emissions program. Neither the text nor the legislative history of 
section 209(b) or 209(e) indicates that Congress intended to limit this 
broad discretion by requiring EPA to determine, on a case-by-case 
basis, whether each specific standard is necessary or appropriate for 
California. EPA's longstanding interpretation, accordingly, is directly 
in line with the purpose of Congress.
    This approach does not make section 209(b)(1)(B) or section 
209(e)(2)(A)(ii) a nullity. EPA must still determine whether opponents 
of authorization have met their burden to establish that California 
does not need its nonroad program to meet the compelling and 
extraordinary conditions. As discussed below, EPA does not believe that 
burden has been met in this instance. We acknowledge, however, that 
conditions in California may one day improve such that it no longer has 
the need for a separate nonroad program to address certain air quality 
problems. The statute contemplates that such improvement is possible. 
PLF is incorrect in concluding that EPA's approach would lead to an 
absurd outcome. EPA would not deny an authorization request under 
section 209(e)(2)(A)(ii) unless it determined that the regulatory 
program was not needed because compelling and extraordinary conditions 
no longer exist in California. Furthermore, the basis for previously 
waived or authorized standards would remain valid unless EPA determined 
that the compelling and extraordinary conditions would not exist even 
without those standards in place. This is consistent with the intent of 
Congress to permit California to maintain separate emission standards 
when compelling and extraordinary conditions exist. Thus, there would 
be no absurd results regarding such standards.
    Congress has directed EPA to exercise its technical judgment with 
regard to all three authorization criteria, but has not authorized EPA 
to substitute its policy judgment for California's judgment with regard 
to which of its specific standards are or are not needed to meet its 
compelling and extraordinary conditions. Those who oppose California 
regulations for reasons other than the three criteria that Congress 
specified in the statute have the ability to raise their legal, policy, 
and other concerns in the state administrative process, or through 
judicial review of the regulations themselves.
    For these reasons, EPA believes that the better approach for 
analyzing the need for ``such State standards'' to meet ``compelling 
and extraordinary conditions'' is to review California's need for its 
program, as a whole, for the class or category of vehicles being 
regulated, as opposed to its need for the individual standards that are 
the subject of an authorization request.
2. Does California Need its Nonroad Program to Meet Compelling and 
Extraordinary Conditions?
    Applying the traditional approach to application of the compelling 
and extraordinary circumstances criterion under section 
209(e)(2)(A)(ii), EPA cannot deny the authorization of the Fleet 
Requirements on this basis.
    CARB has repeatedly demonstrated the need for its nonroad program 
to address compelling and extraordinary conditions in California. As 
noted above, in its Authorization Request, CARB stated that the unique 
geographical and climatic conditions and the tremendous growth in 
California's onroad and nonroad vehicle population, giving rise to 
serious air quality problems and NAAQS nonattainment in California, 
still exist today and that nothing in these conditions has changed to 
warrant a change in this determination. As such CARB notes that there 
can be no doubt of the continuing existence of compelling and 
extraordinary conditions justifying California's need for its own 
mobile source emissions control program.
    EPA received some comment from those that otherwise oppose the 
authorization but implicitly recognize the underlying compelling and 
extraordinary conditions in California. For example, the American Road 
and Transportation Builders Association (ARTBA) notes that it is ``very 
supportive of both EPA and ARB's goal of reducing PM and NOX 
emissions,'' but ``does not believe ARB has considered fully some of 
the air quality improvements already occurring in California and the 
nation. These improvements in air quality undercut the need for a 
measure as severe as the ARB proposal.'' \82\ ARTBA notes that the air 
quality is significantly improving without the Fleet Requirements.\83\ 
However, EPA received no evidence to suggest that California's air 
quality is improving to the point that it will attain the NAAQS for PM 
and ozone without the Fleet Requirements or that California continues 
to experience serious air quality concerns based on continuing 
compelling and extraordinary conditions, as EPA and CARB have outlined 
in this and previous actions. Based on the record, EPA is unable to 
identify any change in circumstances or any evidence to suggest that 
the conditions that Congress identified as giving rise to serious air 
quality problems in California no longer exist. As noted by CARB, there 
continue to be underlying compelling conditions in California giving 
rise to a significant number of California air basins that continue to 
be in nonattainment with NAAQS for PM2.5 and ozone.
---------------------------------------------------------------------------

    \82\ ARTBA at 2.
    \83\ Id.
---------------------------------------------------------------------------

    To the degree that commenters question the stringency of the Fleet 
Requirements or whether the emission reductions projected from this 
rule are needed, EPA received no comment that addressed the fundamental 
question of whether California continues to experience compelling and 
extraordinary conditions giving rise to the need of a nonroad emissions 
program. The design, or stringency of such an emission program, is 
irrelevant to EPA's review of section 209(e)(2)(A)(ii). Such review 
would be inconsistent with the express indication from Congress to 
provide California with the ``broadest possible discretion'' in 
selecting the best means to protect the health of its citizens and the 
public welfare. Accordingly, applying the traditional approach of 
reviewing the need for a separate California nonroad program to meet 
compelling and extraordinary conditions, EPA cannot deny the 
authorization based on this criterion.
3. In the alternative, does California need its nonroad Fleet 
Requirements to meet compelling and extraordinary conditions?
    As discussed above, EPA is maintaining its interpretation of 
section 209(e)(2)(A)(ii) as requiring a review of whether compelling 
and extraordinary conditions give rise to a need for a California 
nonroad emission program. Nevertheless, because EPA received

[[Page 58103]]

comment urging an alternative interpretation (based on a review of 
whether the Fleet Requirements are per se needed to meet compelling and 
extraordinary conditions) and because we received other comments 
concerning the specific need for or benefits of the Fleet Requirements, 
EPA has also evaluated this criterion in the alternative by reviewing 
the Fleet Requirements separately.
    Although EPA received a wide variety of comments questioning the 
``need'' for CARB's Fleet Requirements, we did not receive any comments 
or explanation as to how an evaluation of ``need'' should be performed 
by EPA. As discussed below, in light of the lack of criteria by which 
to judge such need (including how to weigh or balance evidence and 
provide CARB with the requisite policy deference described above), the 
lack of any explanation of the relevant facts that EPA must or could 
consider, and the failure of commenters to satisfy their burden of 
proof to overcome CARB's stated need for its Fleet Requirements, even 
if EPA were to apply the alternative interpretation proposed by 
commenters, the agency would be unable to make an affirmative finding 
under section 209(e)(2)(A)(ii). Therefore, EPA is unable to deny CARB's 
request on this basis.
a. California's Air Quality Today and Moving Forward
    The Agency received a number of comments suggesting that 
California's air quality is improving on its own. ARTBA notes that 
levels of PM2.5 and NOX have declined 
significantly since 1980 and since 2001, while numerous economic 
indicators have increased. The Associated General Contractors of 
America (AGC) note the significant decline in emissions from off-road 
diesel equipment due to a decline in activity and other factors. The 
Construction Industry Air Quality Coalition (CIAQC) claims that 
emissions from the existing fleet are naturally declining and that 
additional regulation is not needed to reach the emission levels CARB 
attributes to implementation of the Fleet Requirements. The California 
Construction Trucking Association (CCTA) and CIAQC state that CARB's 
emission modeling was overstated and continues to be inaccurate because 
it presumes too optimistic a scenario of economic recovery and 
therefore more activity and emissions from nonroad fleets than there 
actually has been. We also received comments that the cost of CARB's 
regulation compared to the benefits supports a finding that such 
standards are not needed, and that the health benefits are either 
overstated or non-existent. In related comments, commenters stated that 
the Fleet Requirements are likely to do harm to the public health of 
Californians and that the economic impacts of the regulation are likely 
to lead to significant adverse health effects.\84\ We also received 
comment from Altfillisch Contractors (ACI) suggesting that the 
California Environmental Quality Act (CEQA) renders the Fleet 
Requirements unnecessary.
---------------------------------------------------------------------------

    \84\ These comments are addressed in the ``protectiveness'' or 
section 209(e)(2)(i) discussion above. As discussed in that section, 
the Agency believes it appropriate to limit our examination to the 
specific effects the California and EPA emission standards have on 
emissions rather than performing an analysis of social impacts or 
other secondary implications. The determination of how numerous 
possible impacts of emission regulation can or should be weighed in 
determining public policy is one inherently directed to the 
regulatory authority promulgating the regulation, not to an 
authority whose limited role is to review the regulations based on 
three narrow criteria and who has been directed by Congress to 
provide broad discretion in its review.
---------------------------------------------------------------------------

    CARB explains in its comments that for areas that exceed the NAAQS, 
California is responsible under the CAA section 110 for developing a 
state implementation plan (SIP) that describes how the state will 
attain the standards by certain deadlines.
    CARB notes that its Fleet Requirements are part of an integral 
strategy to attain the NAAQS in both the San Joaquin Valley Air Basin 
and South Coast Air Basin. CARB notes there is no question that areas 
of California continue to be in nonattainment for PM2.5, as 
well as for ozone, and that the Fleet Requirements and other 
regulations and incentives are needed to achieve attainment.\85\ 
Additionally, CARB states that despite the economic recession and 
downward revisions to the in-use off-road emissions inventory, off-road 
diesel vehicles remain a significant source of emissions.\86\ Thus, 
CARB states, there continues to be a strong need for further regulation 
of all emission source categories, including off-road vehicles. ``As 
EPA has long-confirmed, questions of what sources to regulate and how 
to regulate them are policy questions that Congress has determined is 
best left to the State.'' \87\
---------------------------------------------------------------------------

    \85\ CARB notes in its Authorization Request that two air basins 
in California--South Coast Air Basin and San Joaquin Valley Air 
Basin--are in nonattainment for both PM2.5 and the 8-hour 
ozone standard. This nonattainment is based on the 2006 NAAQS for PM 
(71 FR 61144, October 17, 2006) and which EPA has subsequently made 
more stringent in 2012 (78 FR 3086, January 15, 2013). The 
nonattainment for ozone is based on EPA's 2008 NAAQS 8-hour ozone 
standard (73 FR 16436, March 27, 2008). CARB notes that significant 
emission reductions of NOX are needed because it leads to 
formation in the atmosphere of ozone and PM2.5, and that 
diesel PM emission reductions are also needed because diesel PM 
contributes to ambient concentrations of PM2.5.
    California submitted a revision to its SIP (State Strategy) in 
2007 for the South Coast and San Joaquin Valley Air Basins that 
demonstrates attainment of the PM2.5 standard by 2014 
(needed by 2015), but only after achieving significant reductions of 
PM2.5 (and NOX). In addition, additional 
reductions of NOX emissions are needed to achieve the 8-
hour ozone standard by 2023. EPA approved the Stated Strategy for 
both PM2.5 and NOX for the South Coast and San 
Joaquin Air Basins on November 9, 2011 and March 1, 2012, 
respectively. CARB projects that the Fleet Regulations will achieve 
a 17 percent reduction in NOX emissions and a 21 percent 
reduction in PM2.5 emissions in 2023 that would not occur 
without the regulation and that Fleet Requirements are an integral 
part of the SIP and are laid out in EPA's proposed rulemaking to 
approve the State Strategy and that no ``margin of safety'' 
otherwise exists.
    \86\ CARB notes in its Written Comments at 10-11 that the Fleet 
Requirements are part of the approved SIP for the South Coast and 
San Joaquin valley, both extreme nonattainment areas for ozone and 
nonattainment for PM2.5 and that specific emission 
benefits from the Fleet Requirements are laid out in EPA's proposed 
rulemaking to approve the State Strategy.
    \87\ CARB Written Comments at 12-13.
---------------------------------------------------------------------------

    CARB also notes, and the EPA agrees, that the CEQA does not render 
the Fleet Requirements unnecessary. The purposes of the CEQA and the 
Fleet Requirements are different. The CEQA, which is applied in only a 
few air districts, is essentially designed to identify when projects 
will result in significant harm and to mitigate that harm (to make sure 
air quality does not worsen), whereas the Fleet Requirements are 
proactive measures applicable statewide as part of coordinated strategy 
designed to improve air quality throughout the state.
    EPA believes that CARB's initial filings and additional submissions 
to the record, responding to arguments that the Fleet Requirements are 
not needed because of the economic downturn and because of CARB's 
overestimation of inventory and emissions, are reasonable. Mere 
assertions by commenters that CARB's most recent emission modeling is 
inaccurate do not meet the burden of proof to demonstrate otherwise. As 
noted above, CARB has submitted updated estimates of projected emission 
reductions expected from the Fleet Requirements, and there is no 
evidence in the record to demonstrate that CARB's projections are 
unreasonable. EPA further finds that the opponents have not met their 
burden of demonstrating that such considerations would render the Fleet 
Requirements unnecessary. In adopting the 2010 amendments, CARB 
acknowledged that past and future emissions from in-use nonroad CI 
vehicles were significantly lower than originally projected, and CARB 
states that the amendments for

[[Page 58104]]

which authorization is requested provide economic relief to fleets 
while still achieving the emission reductions necessary to attain 
federal ambient air quality standards (NAAQS). CARB indicates that 
despite the smaller inventory contribution from in-use nonroad CI 
engines than CARB projected in the initial rulemaking, emissions from 
these engines still represent a significant portion of the overall 
emissions inventory. The opponents provide no evidence to refute CARB's 
assertion that despite the economic recession and revised inventory, 
the in-use nonroad CI fleet remains a significant source of emissions.
    Moreover, as CARB notes, there continues to be a strong need for 
emission reductions from all emission categories, including the in-use 
nonroad CI fleet, to meet the PM2.5 and ozone NAAQS. As CARB 
notes, it is not for EPA to decide which types of sources to regulate 
and in what manner to do so.\88\ Congress intended to leave such policy 
questions in the hands of the state. As discussed below, EPA finds that 
CARB has promulgated the Fleet Requirements, in part, to satisfy its 
PM2.5 and 8-hour ozone NAAQS requirements and no evidence 
exists in the record to explicitly demonstrate why the emission 
reductions projected by CARB are not needed in order to meet 
California's NAAQS obligations.
---------------------------------------------------------------------------

    \88\ Consistent with MEMA I, the Agency has evaluated costs in 
this authorization in the evaluation of the technological 
feasibility below. The Agency looks at the actual cost of compliance 
in the time provided by the regulation, not the regulation's cost-
effectiveness. The appropriate cost-effectiveness for a regulation 
is a policy decision of California that is considered and made when 
California adopts the regulations, and EPA, historically, has 
deferred to these policy decisions. EPA has stated in this regard, 
``the law makes it clear that the waiver request cannot be denied 
unless the specific findings designated in the statute can 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. Therefore, EPA declines to review CARB's Fleet 
Requirements for their cost-effectiveness or the cost-benefits of 
the regulation in the context of any of the authorization criteria 
set forth in section 209(e)(2).
---------------------------------------------------------------------------

    Lastly, CARB restates its legal obligation to achieve PM emission 
reductions and the expected benefits associated with the Fleet 
Requirements:

    ARB adopted the Off-Road regulation, in part, to meet 
California's legal obligations under federal law to achieve 
attainment with the NAAQS for PM2.5 by 2014. The emission 
reductions in the regulation are critical to attaining federally 
mandated air quality standards. Primary diesel PM emissions are a 
significant contributor to overall PM2.5. In 2008, 20,600 
tons of diesel PM were emitted in California. The present amendments 
to the Off-Road regulation have been adopted to accommodate the 
economic hardship of affected businesses while still meeting the 
legal requirements and protecting the public health of all 
Californians.\89\
---------------------------------------------------------------------------

    \89\ Id.

    In order to properly evaluate whether California has a need for its 
Fleet Requirements under the alternative approach to section 
209(e)(2)(A)(ii) described above, EPA believes it would be necessary 
only to examine whether the identified ``compelling and extraordinary 
conditions'' in California are giving rise to an air quality problem 
that CARB seeks to address with the Fleet Requirements. EPA has 
received no comment suggesting that EPA's historically recognized 
``conditions'' in California (e.g. geographic and climatic conditions, 
number of vehicles operating in California, etc.) do not continue to 
give rise to elevated concentrations of particulate matter and 
NOX. In addition, EPA has received no comment rebutting 
CARB's statement that it is legally required to demonstrate compliance 
with the CAA's NAAQS requirements (for PM2.5 and 8-hour 
ozone) and that CARB is currently committed to achieve such compliance 
in part through the promulgation of emission standards such as its 
Fleet Requirements. As noted by CARB, the Fleet Requirements were 
initially set in response to the NAAQS requirements for 
PM2.5 and the 8-hour ozone set in 2006 and 2008, 
respectively. The state of California has a greater level of 
nonattainment under those NAAQS than other states. Since that time, EPA 
in 2012 has completed review of the PM NAAQS and has strengthened the 
primary annual standard for PM2.5, and California continues 
to set regulations in response to such requirements.\90\ EPA believes 
that to the extent that a review of the need for the Fleet Requirements 
(as opposed to CARB's nonroad program) is required, that CARB has 
reasonably demonstrated such need due to its obligation to comply with 
federal law (including section 110 of the CAA); CARB needs its Fleet 
Requirements and a host of other regulatory measures in order to 
adequately meet its SIP obligations. Because EPA has received 
additional comment suggesting that the PM conditions in California are 
not a serious air quality issue the Agency addresses those comments 
below.
---------------------------------------------------------------------------

    \90\ 78 FR 3086 (January 15, 2013).
---------------------------------------------------------------------------

b. PM Health Effects
    EPA received several comments that question the public health 
benefits associated with the Fleet Requirements. EPA received comment 
stating that PM2.5, and specifically PM2.5 from 
diesel combustion, does not present a public health risk in 
general,\91\ and that there is no measurable or detectable relationship 
between PM2.5 and mortality.\92\ Separately EPA also 
received comment that PM2.5 from diesel combustion located 
in California does not present a public health risk.
---------------------------------------------------------------------------

    \91\ EPA received only one comment suggesting that 
NOX and ozone do not pose a public health issue. This 
comment did not include any data or other evidence to support this 
assertion. See Milloy written testimony.
    \92\ See Milloy. EPA notes that Mr. Milloy, who submitted 
comment on behalf of the California Construction Trucking 
Association, separately brought litigation against EPA in which he 
signed a sworn declaration comparing exposure of human test subjects 
being voluntarily exposed to forms of particulate matter to Nazi 
death camp experimentation. Declaration of Steven J Milloy in Case 
1:12-cv-01066-AJT-TCB pp. 2-3; see also the complaint in the same 
matter which states that such studies ``ris[k] the lives and health 
of human study subjects'' and that ``Mr. Milloy is appalled by this 
inhumanity''(complaint para. 15). These sworn statements are 
diametrically at odds with Mr. Milloy's presentation and testimony 
here that exposure to particulate matter does not pose a public 
health concern. Needless to say, when a commenter publically 
espouses positions that are at a 180 degree remove from each other, 
the credibility of the assertions is greatly diminished. This 
lawsuit was dismissed as lacking any legal basis. Dr. Enstrom states 
in his comment ``There is now overwhelming epidemiologic evidence 
that PM2.5 and diesel PM are not related to total 
mortality in California. This evidence has most recently been 
summarized in my thirteen-page September 28, 2012 paper, 
``Particulate Matter is Not Killing Californians. This paper was 
presented on August 1, 2012 at the American Statistical Association 
Joint Statistical Meeting in San Diego. It is currently posted 
online and will be published later this year in the 2012 JMS 
Proceedings (http://www.scientificintegrityinstitute.org/ASAS092812.pdf).''
---------------------------------------------------------------------------

    With regard to the suggestion that PM2.5 from diesel 
combustion does not present a public health risk, EPA received comment 
stating that ``the claimed toxic effects of diesel particulate matter 
are hundreds of times smaller than, for example, the increased risk of 
lung cancer caused by cigarette smoking. This commenter asserts that 
these possible effects are smaller than any previously discovered in 
medical history, the actual exposure levels are so difficult to 
estimate, and there are so many confounding health factors (smoking and 
lifestyle) that are impossible to control, that the entire scientific 
basis of the regulatory policy needs to be broadly re-assessed before 
allowing CARB any kind of waiver in PM2.5 enforcement.'' 
\93\
---------------------------------------------------------------------------

    \93\ See Dr. Malken.
---------------------------------------------------------------------------

    EPA also received comment questioning whether PM2.5 from 
diesel exhaust is causing cancer, premature death, or other health 
effects in

[[Page 58105]]

California. For example, one commenter stated that ``we don't know 
yet'' and we ``can't rule out'' that exposure to diesel PM might 
statistically be related to zero premature deaths.\94\ This commenter 
suggests that the toxic effects of diesel particulate matter are so 
small that the scientific basis for concerns about PM2.5 
impacts on health needs to be re-assessed before EPA authorizes 
California's regulation. This commenter maintains that science does not 
know yet if fine particulate matter is causing cancer and the premature 
death of a measurable number of Californians, and that other factors 
like smoking and lifestyle may confound any effects.\95\ EPA also 
received comment suggesting that the scientific evidence on the health 
effects of particulate air pollution (specifically PM2.5) in 
California does not support its further control or regulation at this 
time. This commenter maintains that ``[o]ur PM2.5 is 
different in composition and is less toxic than that in many Eastern 
regions of the U.S.'' \96\ In addition, two commenters stated that 
strong epidemiologic evidence shows ambient PM2.5 and diesel 
PM is not related to total mortality in California.\97\ The commenters 
also note studies published in 2005 and 2011 for support.\98\ One 
commenter notes the 2011 study for California-specific evidence 
regarding PM2.5 and diesel PM and mortality and claims it 
demonstrates no current relationship between PM2.5 and 
mortality in California and may show no scientific or public health 
justification for this regulation.\99\
---------------------------------------------------------------------------

    \94\ See Dr. Malken. This commenter also suggests that the 
PM2.5 from diesel exhaust in California might be 
inherently different than the PM studied in the eastern half of the 
United States.
    \95\ Id. at 2.
    \96\ See Dr. Phalen.
    \97\ See Delta and Dr. Enstrom. Delta also comments that the 
least healthy county in California has low diesel PM air 
concentrations, but high poverty and unemployment levels. Delta 
states that California is the fourth healthiest state as measured by 
premature death rates. EPA notes that Delta makes no attempt to 
connect these general views on health with the specific issue of 
whether emissions of PM2.5 have any effect on health.
    \98\ See Dr. Enstrom and Dr. Malken. Dr. Malken claims that the 
CARB-funded Jerrett et al. (2011) study of the LA subset of ACS data 
was the only one which utilized data from particle monitors and 
``they found no significant correlation between PM2.5 and 
`premature deaths.' '' This commenter also states that weighing all 
of the studies that CARB has considered is more a matter of 
subjective taste than a scientific process and that CARB has 
``cherry-picked'' the few results that have supported their 
position.
    \99\ Dr. Enstrom. This commenter maintains that EPA's June 2012 
``Regulatory Impact Analysis related to the Proposed Revisions to 
the National Ambient Air Quality Standards for Particulate Matter'' 
erroneously concluded that ``most of the cohort studies conducted in 
California report central effect estimates similar to the (nation-
wide) all-cause mortality risk estimate'' but EPA's Table 5 B-10 was 
inaccurate or misleading, including the hazard ratio used from his 
2005 paper. EPA notes that the proper place to contest the 
methodology and findings of the Agency in its NAAQS review process 
is in that federal context. This commenter also claims that ``[a] 
glaring omission was the detailed evidence from the October 28, 2011 
CARB-funded Report, ``Spatiotemporal Analysis of Air Pollution and 
Mortality in California Based on the American Cancer Society Cohort: 
Final Report,'' by Drs. Michael Jerrett, Richard T. Burnett, C. 
Arden Pope III, Daniel Krewski, Michael Thun, and nine others http://www.scientificintegrityinstitute.org/JerrettCriticism102811.pdf).'' 
This commenter also claims that his September 28, 2012 paper 
summarizes the epidemiologic evidence that PM2.5 and 
diesel PM are not related to total mortality in California.
---------------------------------------------------------------------------

    Separately, the commenter also takes issue with EPA's Regulatory 
Impact Analysis for its proposed PM NAAQS rule (which has since been 
finalized), claiming the Regulatory Impact Analysis is misleading and 
contains omissions.\100\
---------------------------------------------------------------------------

    \100\ Id.
---------------------------------------------------------------------------

    Lastly, we received comment from CCTA that references a paper 
titled ``Mortality Among Members of a Truck Driver Trade Association'' 
(Truck Driver study) suggesting that any research on exposure to diesel 
exhaust should necessarily include truck drivers. CCTA maintains that 
the study results indicate that those in closest proximity and duration 
of high levels of exposure to diesel exhaust don't seem to share the 
same deleterious effects to exposure claimed in other studies.
    In response to claims that the Fleet Requirements are not needed 
because there is no causal connection existing between PM2.5 
exposure and premature mortality and other health effects, CARB states:

    Staff carefully reviewed all peer-reviewed studies that have 
been performed in the United States on the relationship between 
long-term PM2.5 exposure and mortality, as has the U.S. 
EPA in its recent review of the National Ambient Air Quality 
Standard for particulate matter. U.S. EPA's 2009 science assessment 
states ``Collectively, the evidence is sufficient to conclude that 
the relationship between long-term PM2.5 exposures and 
mortality is causal.'' U.S. EPA and ARB have critically evaluated 
the methods used in each study so that we can place the most weight 
on the studies that have used the strongest methodologies . . .. 
ARB's conclusions about the relationship between long-term exposure 
to PM2.5 and mortality are aligned with the findings of 
the U.S. EPA, the World Health Organization, Health Canada, and the 
British government. Those findings have been publicly peer reviewed 
by multiple independent bodies worldwide.\101\
---------------------------------------------------------------------------

    \101\ See CARB Written Comments.

    With respect to the questions about the health effects associated 
---------------------------------------------------------------------------
with exposure to diesel exhaust PM, CARB notes:

    Staff agrees that ambient PM2.5 arises from many 
different sources, including diesel exhaust, and there are no 
established methods for routinely measuring the concentration of 
PM2.5 in ambient air from any specific source. Diesel PM 
is primarily less than 2.5 microns in diameter, and consequently 
falls into the PM2.5 size category. As discussed above, 
exposure to PM in this size fraction is strongly associated with 
premature death. Also, the results of animal exposure studies 
suggest that diesel PM is at least as toxic as other species within 
this size range.\102\
---------------------------------------------------------------------------

    \102\ Id.

    Further, with respect to questions about the specific health 
effects of diesel exhaust PM in California, CARB cites, in its 
responsive comments during the waiver proceeding, the large body of 
peer-reviewed scientific studies evaluated by CARB and EPA that have 
identified a broad range of health effects associated with 
PM2.5 exposures.\103\ CARB states that ``[t]he national 
studies reviewed by the U.S. EPA for the NAAQS assessment apply to 
California. In fact, as part of the federal standards review process, 
U.S. EPA estimated the premature deaths associated with 
PM2.5 in two California cities--Los Angeles and 
Fresno.''\104\ CARB also cites EPA's Quantitative Health Risk 
Assessment, which estimates that, based on 2005 ambient mean levels of 
PM2.5, approximately 63,000 to 80,000 premature deaths each 
year are related to PM2.5 exposures in the United States. 
CARB also conducted its own California-focused study, which estimated 
that in California, exposure to PM2.5 results in 
approximately 9,200 deaths each year.\105\ In further comments, CARB 
states that the pre-2010 studies cited by Drs. Enstrom and Malkan in 
their comments were reviewed by CARB, as well as by the EPA in the 
development of the PM Integrated Science Assessment (ISA).
---------------------------------------------------------------------------

    \103\ Id. at 12, citing attachments 1-3.
    \104\ Id.
    \105\ CARB Written Comments at 12, citing attachments 1 and 2 of 
its October 19, 2012 submissions to EPA, including the ``Estimate of 
Premature Deaths Associated with Fine Particle Pollution 
(PM2.5) in California Using a U.S. Environmental 
Protection Agency Methodology,'' August 31, 2010.
---------------------------------------------------------------------------

    Separately, CARB also reviewed the 2011 Jerrett et al. study, 
referenced by commenters.106 107 CARB notes that the

[[Page 58106]]

study found that ``[c]ardiovascular disease (CVD) deaths, particularly 
those from ischemic heart disease (IHD), are consistently and robustly 
associated with fine particulate and traffic-related air pollution. The 
effects on CVD and IHD in California are virtually identical to those 
of the national . . . study.'' The study also found that ``[a]ll-cause 
mortality is significantly associated with PM2.5 exposure, 
but the results are sensitive to statistical model specification and to 
the exposure model used to generate the estimates.'' \108\
---------------------------------------------------------------------------

    \106\ CARB Supplemental Comments.
    \107\ The Jerrett et al., 2011 report was not included in EPA's 
PM ISA because it was completed after the ISA was published. It was 
also not included in the Provisional Science Assessment because it 
was not a peer-reviewed publication at the time. However, the work 
conducted by Jerrett et al. was recently published and can now be 
found in the peer-reviewed literature [http://www.atsjournals.org/doi/pdf/10.1164/rccm.201303-0609OC]. EPA will consider this study in 
the next round of NAAQS reviews that include PM. We note, however, 
that the inclusion or exclusion of one report such as Jerrett would 
not materially change the large body of scientific evidence 
indicating an effect of PM2.5 exposure on human health.
    \108\ CARB Supplemental Comments at 13, citing ``Spatiotemporal 
Analysis of Air Pollution and Mortality in California Based on the 
American Cancer Society Cohort: Final Report,'' Michael Jerrett, 
Ph.D., 2011, at 6-7.
---------------------------------------------------------------------------

    CARB also included a copy of the 2011 Jerrett et al. study in its 
comments and indicated the study reached the following conclusion:

    Taken together, the results from this investigation indicate 
consistent and robust effects of PM2.5--and other 
pollutants commonly found in the combustion-source mixture with 
PM2.5--on deaths from CVD and IHD. We also found 
significant associations between PM2.5 and all causes of 
death, although these findings were sensitive to model 
specification. In Los Angeles, where the monitoring network is 
capable of detecting intra urban variations in PM2.5, we 
observed large effects on death from all causes, CVD, IHD, and 
respiratory disease. These results were consistent with past ACS 
[American Cancer Society cohort] analyses and with findings from 
other national or international studies reviewed in this report. Our 
strongest results were from a land use regression estimate of 
NO2, which is generally thought to represent traffic 
sources, where significant elevated effects were found on deaths 
from all causes, CVD, IHD, and lung cancer. We therefore concluded 
that combustion-source air pollution as significantly associated 
with premature death in this large cohort of Californians.\109\
---------------------------------------------------------------------------

    \109\ Id.

    EPA will address in turn: (1) Suggestions that PM2.5 
does not present a public health risk in general; (2) suggestions that 
PM2.5 from diesel combustion does not present a public 
health risk; and (3) suggestions that PM2.5 from diesel 
combustion located in California does not present a public health risk.
    EPA disagrees with the commenters regarding the evidence associated 
with PM exposure in the context of all three suggestions noted above.
    Regarding the claim that there is no link between health effects, 
including mortality, and exposure to PM2.5, EPA disagrees 
with this comment and notes the large body of scientific literature 
that was thoroughly evaluated during the NAAQS review process is 
discussed in detail in EPA's Integrated Science Assessment (ISA) for 
Particulate Matter.\110\ The ISA characterizes the weight of evidence 
for different health effects and makes causal determinations for both 
short-term (i.e., hours to days) and long-term (i.e., months to years) 
exposures to PM2.5, PM10-2.5, and ultrafine 
particles. Specifically in the ISA, the EPA carefully evaluated and 
integrated the scientific evidence from across epidemiological, 
toxicological and controlled human exposure studies to make inferences 
about causality. The PM ISA considered and assessed an extensive body 
of scientific information, all of which had undergone peer-review prior 
to being published.\111\
---------------------------------------------------------------------------

    \110\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F. Docket entry EPA-HQ-OAR-
2008-0691-0318-attachments 2.1 through 2.5
    \111\ Id. at 1-22. See http://www.epa.gov/ttn/naaqs/standards/pm/data/20121214rtc.pdf at II-9 to II-12 for discussion of EPA's 
application of its framework for causal determinations and 
recognition of the distinction between evaluating the relative 
scientific quality of individual study results and the evaluation of 
the pattern of results within the broader body of scientific 
evidence. This discussion also addresses allegations of cherry-
picking studies and ignoring studies that reported no association 
with PM2.5.
---------------------------------------------------------------------------

    Overall, the PM ISA provides a concise evaluation and integration 
of the policy-relevant science. This includes key science judgments 
upon which EPA based its Quantitative Health Risk Assessment for 
Particulate Matter (PM RA, U.S. EPA, 2010), and the Policy Assessment 
for the Review of Particulate Matter National Ambient Air Quality 
Standards (PM PA, U.S. EPA, 2011).\112\ These documents informed EPA's 
2012 rule completing review of the PM NAAQS.\113\
---------------------------------------------------------------------------

    \112\ See EPA-HQ-OAR-2008-0691-0318-attachment 3 and http://yosemite.epa.gov/sab/sabproduct.nsf/368203f97a15308a852574ba005bbd01/8bee96ad3228eabe8525760400702786!OpenDocument.
    \113\ EPA incorporates by reference our 2012 PM NAAQS review and 
associated rulemaking documents. EPA also notes that the reasoning 
and conclusions reached in the PM NAAQS review are not being 
revisited in the context of this authorization decision but are 
cited for the purposes of demonstrating the vast body of peer 
reviewed evidence and findings that is not contravened by the few 
studies submitted by commenters to the authorization docket. EPA 
also states that to the extent the comments take issue with the 
determinations made in the context of the PM NAAQS rulemaking, the 
proper place to bring challenges to those decisions would be in the 
context of that rule.
---------------------------------------------------------------------------

    After a thorough evaluation and integration of the evidence across 
scientific disciplines, the PM ISA made causal determinations for the 
health effects associated with both short- and long-term exposures to 
PM2.5.\114\ For short-term exposures, the PM ISA concludes 
that cardiovascular effects (e.g., emergency department (ED) visits and 
hospital admissions for ischemic heart disease (IHD) and congestive 
heart failure (CHF), changes in cardiovascular function, and myocardial 
ischemia), and premature mortality are causally associated with short-
term exposure to PM2.5. It also concludes that respiratory 
effects (e.g., ED visits and hospital admissions for chronic 
obstructive pulmonary disease (COPD), respiratory infections, and 
asthma; and exacerbation of respiratory symptoms in asthmatic children) 
are likely to be causally associated with short-term exposure to 
PM2.5. For long-term exposures, the PM ISA concludes that 
there are causal associations between long-term exposure to 
PM2.5 and cardiovascular effects, such as the development/
progression of cardiovascular disease (CVD), and premature mortality, 
particularly from cardiovascular causes. It also concludes that long-
term exposure to PM2.5 is likely to be causally associated 
with respiratory effects, such as reduced lung function growth, 
increased respiratory symptoms, and asthma development. The ISA 
characterizes the evidence as suggestive of a causal relationship for 
associations between long-term PM2.5 exposure and 
reproductive and developmental outcomes, such as low birth weight and 
infant mortality. It also characterizes the evidence as suggestive of a 
causal relationship between PM2.5 and cancer incidence, 
mutagenicity, and genotoxicity.\115\ EPA's evaluation of the

[[Page 58107]]

studies presented in the ISA, as well as the causal framework and 
determinations upon which the Assessment is based, have undergone 
extensive critical review by the EPA, CASAC, and the public during its 
development. The rigor of the review makes the ISA the most reliable 
source of scientific information on the subject of PM and health and 
welfare effects.
---------------------------------------------------------------------------

    \114\ Id. EPA also noted in this Response to Significant 
Comments document that ``The EPA's evaluation of the scientific 
evidence and its application of the causal framework used in the 
current PM NAAQS review was the subject of exhaustive and detailed 
review by CASAC and the public. Prior to finalizing the ISA, two 
drafts were released for CASAC and public review to evaluate the 
scientific integrity of the documents. Evidence related to the 
substantive issues raised by CASAC and public commenters with regard 
to the content of the first and second draft ISAs were discussed at 
length during these public CASAC meetings and considered in 
developing the final ISA. CASAC supported the development of the 
EPA's causality framework and its use in the current PM NAAQS review 
and concluded: The five-level classification of strength of evidence 
for causal inference has been systematically applied; this approach 
has provided transparency and a clear statement of the level of 
confidence with regard to causation, and we recommend its continued 
use in future Integrated Science Assessments (Samet 2009f, p. 1).'' 
(At II-9).
    \115\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report) (ISA). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-08/139F. Section 2.3.5 
and Table 2-6. EPA also notes that the ISA assessed the body of 
scientific evidence regarding particles available through mid-2009, 
which included over two thousand new studies. The ISA received two 
rigorous rounds of peer review by the independent Clean Air 
Scientific Advisory Committee (CASAC) and two draft PM ISAs were 
made available for public review and comment.
---------------------------------------------------------------------------

    Additionally, new health studies published since the completion of 
the ISA were discussed in EPA's Provisional Science Assessment (U.S. 
EPA, 2012), which was used to ensure-the Administrator was fully aware 
of the ``new'' science that developed since 2009 before making final 
decisions on whether to retain or revise the ambient PM standards. 
Overall, the new health studies were found not to materially change the 
conclusions of the 2009 ISA. As in prior NAAQS reviews, the EPA based 
its final decisions on the studies and related information included in 
the ISA, RA, and PA which had undergone CASAC and public review. To the 
extent that the commenters attempt to introduce new arguments or new 
studies that have not been peer-reviewed, including the 2011 Jerrett 
study, EPA believes the new science published after the ISA does not 
materially change the conclusions found within the ISA.\116\ As noted 
above, EPA has recently concluded its PM NAAQS review. No comments 
submitted in the context of this authorization proceeding lead the 
Agency to reassess (for purposes of this authorization) the findings 
related to PM exposure and health effects. EPA notes that the study 
referenced by Mr. Milloy in his comments was never provided to EPA nor 
has EPA found it in the peer-reviewed literature. Therefore EPA has no 
basis to review the technical methods used or the summary results.\117\
---------------------------------------------------------------------------

    \116\ Id. EPA is only reviewing the comments submitted to the 
EPA-HQ-OAR-008-0691 public docket for CARB's authorization request 
and EPA the responses to such comments are not intended to imply 
that EPA is engaged in a reexamination of the issues thoroughly 
examined in the recent PM NAAQS review.
    \117\ EPA is only reviewing the comments submitted to the EPA-
HQ-OAR-2008-0691 public docket for CARB's authorization request and 
EPA's responses to such comments are not intended to imply that EPA 
is engaged in a reexamination of the issues thoroughly examined in 
the recent PM NAAQS review.
---------------------------------------------------------------------------

    With regard to suggestions that PM2.5 from diesel 
combustion does not present a public health risk or assertions that 
PM2.5 composition is determinative to risk, EPA believes 
that the available scientific evidence linking mortality and morbidity 
effects with long-and short-term exposures to fine particles continue 
to be largely indexed by PM2.5 mass. In the PM NAAQS review 
completed in 2012, EPA concluded that it was appropriate to retain 
PM2.5 as the indicator for fine particles due to the 
inability to differentiate those components or sources that are more 
closely related to specific health outcomes nor to exclude any 
component or group of components from the mix of fine particles 
included in the PM2.5 indicator. As EPA previously stated in 
the ISA ``overall, the results indicate that many constituents of PM 
can be linked with differing health effects and the evidence is not yet 
sufficient to allow differentiation of those constituents or sources 
that are more closely related to specific health outcomes.'' \118\
---------------------------------------------------------------------------

    \118\ See ISA at 2-26.
---------------------------------------------------------------------------

    With regard to suggestions that EPA did not properly consider prior 
reports (including the 2005 Dr. Enstrom study), EPA notes the Enstrom 
study was included in summary figures depicting the totality of the 
evidence for long-term PM2.5 exposure and mortality.\119\ It 
is important to note that Dr. Enstrom based his comments solely on 
statistical significance. Another commenter also asserts that studies 
looking at associations between PM and premature mortality do not have 
statistically significant results.\120\ EPA responded in the NAAQS 
rulemaking to the issue of relying on statistical significance and why 
it is not appropriate to only focus on it when evaluating a body of 
evidence.\121\ Specifically, EPA stated:
---------------------------------------------------------------------------

    \119\ EPA noted that an association was reported for long-term 
PM2.5 exposure with all-cause deaths from 1973-1982. 
However, no significant associations were reported with deaths in 
later time periods when PM2.5 levels had decreased in the 
most polluted counties (1983-2002). The PM2.5 data were 
obtained from the EPA's Inhalation Particle Network (collected 1979-
1983), and the locations represented a subset of data used in the 
50-city ACS study (Pope et al., 1995, 045159). However, the use of 
average values for California counties as exposure surrogates likely 
leads to significant exposure error, as many California counties are 
large and quite topographically variable. ISA, at 7-85.
    \120\ See Dr.Malkan.
    \121\ See ``Responses to Significant Comments on the 2012 
Proposed Rule on the National Ambient Air Quality Standards for 
Particulate Matter (June 29, 2012; 77 FR 38890). http://www.epa.gov/ttn/naaqs/standards/pm/data/20121214rtc.pdf at II-9 to II-12 for 
discussion of EPA's application of its framework for causal 
determinations and recognition of the distinction between evaluating 
the relative scientific quality of individual study results and the 
evaluation of the pattern of results within the broader body of 
scientific evidence.

    Statistical significance is an indicator of the precision of a 
study's results, which is influenced by a variety of factors 
including, but not limited to, the size of the study, exposure and 
measurement error, and statistical model specifications. Statistical 
significance is just one of the means of evaluating the validity of 
the relationships determined with epidemiological studies. The EPA 
can reasonably look to other indicia of reliability such as the 
consistency and coherence of a body of studies as well as other 
confirming data to justify reliance on the results of a body of 
epidemiological studies, even if individual studies may lack 
statistical significance. American Trucking Association v. EPA, 283 
F. 3d 355, 371 (D.C. Cir. 2002). As a result, in developing an 
integrated assessment of the health effects evidence for PM, the EPA 
has emphasized the importance of examining the pattern of results 
across various studies and their coherence and consistency, and has 
not focused solely on statistical significance as a criterion of 
study reliability.
    It has been clearly articulated throughout the epidemiological 
and causal inference literature that it is important not to focus on 
results of statistical tests to the exclusion of other information. 
For example, Rothman (1998) stated: ``Many data analysts appear to 
remain oblivious to the qualitative nature of significance testing 
[and that] . . . statistical significance is itself only a 
dichotomous indicator. As it has only two values, significant or not 
significant.'' As a result, Rothman recommended that P-values be 
omitted as long as point and interval estimates are available.
    The concepts underlying the EPA's approach to evaluating 
statistical associations reported for the health effects on 
PM2.5 have been discussed in numerous publications, 
including a report by the U.S. Surgeon General on the health 
consequences of smoking (Centers for Disease Control and Prevention, 
2004). This report cautions against overreliance on statistical 
significance in evaluating the overall evidence for an exposure-
response relationship: Hill made a point of commenting on the value, 
or lack thereof, of statistical testing in the determination of 
cause: ``No formal tests of significance can answer those [causal] 
questions. Such tests can, and should, remind us of the effects the 
play of chance can create, and they will instruct us in the likely 
magnitude of those effects. Beyond that, they contribute nothing to 
the `proof' of our hypothesis'' (Hill 1965, p. 299). Hill's warning 
was in some ways prescient, as the reliance on statistically 
significant testing as a substitute for judgment in a causal 
inference remains today (Savitz et al., 1994; Holman et al., 2001; 
Poole 2001). To understand the basis for this warning, it is 
critical to recognize the difference between inductive inferences 
about the truth of underlying hypotheses, and deductive statistical 
calculations that are relevant to those inferences, but that are not 
inductive statements themselves. The latter include p values, 
confidence intervals, and hypothesis tests (Greenland 1998; Goodman 
1999). The dominant approach to statistical inference today, which 
employs those

[[Page 58108]]

statistical measures, obscures this important distinction between 
deductive and inductive inferences (Royall 1997), and has produced 
the mistaken view that inferences flow directly and inevitably from 
data. There is no mathematical formula that can transform data into 
a probabilistic statement about the truth of an association without 
introducing some formal quantification of external knowledge, such 
as in Bayesian approaches to inference (Goodman 1993; Howson and 
Urbach, 1993). Significance testing and the complementary estimation 
of confidence intervals remain useful for characterizing the role of 
chance in producing the association in hand (CDC, 2003, pp. 23 to 
24).
    Accordingly, the statistical significance of findings from an 
individual study has played an important role in the EPA's 
evaluation of the study's results and overall the EPA has placed 
greater emphasis on studies reporting statistically significant 
results in making determinations as to the elements of the standard. 
In particular, as noted in section III.E.4.b.i of the preamble to 
the final rule, the EPA identified long- and short-term exposure 
studies considered ``key'' multi-city studies for consideration for 
informing the decisions on the appropriate standard levels and 
included those studies observing effects for which the evidence 
supported a causal or likely causal association. Figure 4 in the 
preamble to the final rule (also Figure 4 in the proposal, 77 FR 
38933) represents the subset of multi-city studies included in 
Figures 1 through 3 of the preamble to the final rule (also Figures 
1 through 3 in the proposal, 77 FR 38929 to 38931) that provided 
evidence of positive and generally statistically significant effects 
associated in whole, or in part, with more recent air quality data, 
generally representing health effects associated with lower 
PM2.5 concentrations than had previously been considered 
in the last review.
    The EPA notes that many of these studies evaluated multiple 
health endpoints, and not all of the effects evaluated provided 
evidence of positive and statistically significant effects. For 
purposes of informing the Administrator's decision on the 
appropriate standard levels, the Agency considers the full body of 
scientific evidence and focuses on those aspects of the key studies 
that provided evidence of positive and generally statistically 
significant effects. However, in the broader evaluation of the 
evidence from many epidemiological studies, and subsequently during 
the process of forming causality determinations, the EPA has 
emphasized the pattern of results across epidemiological studies for 
drawing conclusions on the relationship between PM2.5 and 
health outcomes, and whether the effects observed are coherent 
across the scientific disciplines. Thus, in making causality 
determinations, the EPA did not limit its focus or consideration to 
just studies that reported positive associations or where the 
results were statistically significant.\122\
---------------------------------------------------------------------------

    \122\ Id.

    In addition, EPA has previously addressed the issue of what one 
commenter calls ``confounding health factors.'' In the case of short-
term exposure studies, a confounder would need to vary on a day-to-day 
basis with both air pollution and with the specific health outcome 
being evaluated (e.g., mortality or hospital admissions or emergency 
department visits). The confounders that fit these criteria for short-
term exposure studies are related to weather (e.g., temperature, dew 
point, relative humidity). The short-term exposure studies, 
specifically time-series studies, evaluated in the ISA all included 
weather covariates in their models to account for their potential 
---------------------------------------------------------------------------
confounding effects (U.S. EPA, 2009a, Chapter 6).

    With regard to long-term exposure studies, a number of 
multilevel cohort studies (Naess et al. 2007; Jerrett et al. 2003; 
Jerrett et al. 2005) have evaluated individual-level and contextual, 
or ecologic-level variables as potential confounders. As reported in 
Jerrett et al. (2005), ``Contextual effects occur when individual 
differences in health outcomes are associated with the grouped 
variables that represent the social, economic, and environmental 
settings where the individuals live, work, or spend time (e.g., 
poverty or crime rate in a neighborhood). These contextual effects 
often operate independently from (or interactively with) the 
individual-level variables such as smoking.'' These studies found 
that the inclusion of contextual variables tended to attenuate the 
risk estimates for the association between long-term exposure to 
PM2.5 and mortality, but that an independent effect of 
PM2.5 on mortality remains. For example, Jerrett et al. 
(2005) found that for PM2.5 (controlling for age, sex, 
and race), the relative risk was 1.24 (95% CI 1.11, 1.37) for a 10 
[micro]g/m3 exposure contrast. In a parsimonious model that 
controlled for 44 different individual covariates and ecological 
confounder variables that both reduced the pollution coefficient and 
had associations with mortality, the relative risk was 1.11 (95% CI 
0.99, 1.25) for the same exposure contrast. The EPA believes that 
the results of these studies provide confidence that more recent 
reports with updated datasets are showing independent effects of 
PM2.5.\123\
---------------------------------------------------------------------------

    \123\ Id.

    One commenter's assertion that the risk from PM is hundreds of 
times smaller than the increased risk of lung cancer caused by 
cigarette smoking, and difficult to estimate, has been previously 
addressed during the PM NAAQS review. The ``Responses to Significant 
Comments on the 2012 Proposed Rule on the National Ambient Air Quality 
---------------------------------------------------------------------------
Standards for Particulate Matter'' stated:

    The comparison of smoking and ambient PM-related effect 
estimates was not considered relevant for the PM NAAQS review, and 
thus, was not considered in the ISA. This issue was not raised 
during the CASAC and public review of the drafts of the ISA. In 
order to address the comments submitted, the EPA conducted a 
provisional review of the ``new'' literature published since the 
close of the ISA including studies cited by commenters, and 
identified several relevant studies that compared and evaluated 
effect estimates determined for relationships between specific 
health outcomes and ambient particulate matter and active smoking 
(Pope et al. 2009; Pope et al. 2011). These authors analyzed data 
from the American Cancer Society cohort in order to evaluate the 
shape of the exposure-response relationship for PM2.5 and 
both lung cancer mortality (Pope et al. 2011) and cardiovascular 
disease (CVD) mortality (Pope et al. 2009; Pope et al. 2011). In 
these studies, the authors evaluated three sources of exposure to 
PM2.5: active smoking, passive smoking, and ambient air 
pollution.
    For lung cancer mortality, the authors observed ``a monotonic, 
nearly linear exposure response relationship with fairly constant 
marginal increases in RR [relative risk] with increasing exposure'' 
across the full range of observed exposures (Pope et al. 2011). When 
the authors evaluated CVD mortality, they observed ``an exposure-
response relationship that is substantially non-linear, that is, 
much steeper at the very low levels of exposure compared with higher 
levels of exposure'' (Pope et al. 2011). In fact, the study authors 
noted that ``For lung cancer mortality, the RRs steadily increase to 
nearly 40 at the highest increment of cigarette smoking (>42 
cigarettes per day), whereas for CVD mortality, the RRs level off at 
approximately 2.0-2.5.''
    Because of the much steeper exposure-response relationship for 
long-term exposure to PM2.5 and CVD mortality at low 
PM2.5 concentrations, which flattens out at higher 
PM2.5 concentrations (i.e., those associated with passive 
and active cigarette smoking), it is biologically plausible that the 
risk estimates for CVD mortality due to exposure to ambient 
concentrations of PM2.5 would be similar to risk 
estimates for CVD mortality due to active cigarette smoking. These 
results are consistent with the results observed in epidemiological 
studies of long-term exposure to PM2.5 and mortality, and 
with the conclusions drawn in the ISA. For example, Dockery et al. 
(1993) found essentially the same risk estimates for CVD mortality 
associated with both ambient PM2.5 concentrations and 
active cigarette smoking in an area with relatively high levels of 
ambient PM2.5concentration.
    Additionally, there could be non-traditional confounders have 
not been accounted for in epidemiological studies of short- and 
long-term exposure to air pollution. These confounders include 
physical and psychological population stress factors. The EPA 
disagrees with these commenters because: (1) There is very limited 
evidence of stress affecting the air pollution-health effect 
relationship upon which to base the commenters assertion; (2) in 
order for stress to be a true confounder it would need to vary 
temporally (for short-term exposure studies) and spatially (for 
long-term exposure studies) with both air pollution concentrations 
and the health effect of interest, which has not been demonstrated;

[[Page 58109]]

and (3) rather than stress acting as a true confounder, more than 
likely stress is on the causal pathway to the health effects that 
have been observed to be associated with air pollution. The EPA 
acknowledges that stress may contribute bias to epidemiological 
studies; however, stress more than likely would influence the 
magnitude of individual effect estimates in a single-city or multi-
city study and not the trends of positive associations observed 
across studies conducted in multiple locations.'' \124\
---------------------------------------------------------------------------

    \124\ EPA's Response to Comments: http://www.epa.gov/ttn/naaqs/standards/pm/data/20121214rtc.pdf at II 23-25.

    With regard to the third set of PM2.5 health effect 
comments noted above (suggestions that PM2.5 from diesel 
combustion located in California does not present a public health 
risk), we note that the isolated studies noted by the commenters are 
either consistent with past peer-reviewed studies supportive of 
PM2.5-related health effects, or have been considered 
previously by EPA and were considered as part of the weight of evidence 
used to make conclusions in the ISA.
    Some of the commenters asserted that the composition of PM in 
California is less toxic than the PM in other areas of the country. One 
commenter asserted that ``[t]he scientific evidence on the health 
effect of particulate matter air pollution in CA does not support its 
further control or regulation at this time. Our PM2.5 is 
different in composition and is less toxic than that in many Eastern 
regions of the U.S.'' \125\ Another commenter states that ``[t]he 
composition of what CARB defines as PM2.5 has changed over 
time, and is not the same as what has been studied in the Eastern half 
of the United States.'' \126\ EPA responded to questions about 
heterogeneity in risk estimates in the PM NAAQS Review and that 
response is included here. EPA finds that no new evidence has been 
submitted in the context of the authorization proceeding to change this 
conclusion.
---------------------------------------------------------------------------

    \125\ See Dr. Phalen comment.
    \126\ See Dr. Malkan comment.
---------------------------------------------------------------------------

    EPA responded in the PM NAAQS review that with respect to 
understanding the nature and magnitude of PM2.5-related 
risks:

    [T]he EPA agrees that epidemiological studies evaluating health 
effects associated with long- and short-term PM2.5 
exposures have reported heterogeneity in responses between cities 
and effect estimates across geographic regions of the U.S. (U.S. 
EPA, 2009a, sections 6.2.12.1, 6.3.8.1, 6.5.2, and 7.6.1; U.S. EPA, 
2011a, p. 2-25). For example, when focusing on short-term 
PM2.5 exposure, the ISA found that multi-city studies 
that examined associations with mortality and cardiovascular and 
respiratory hospital admissions and emergency department visits 
demonstrated greater cardiovascular effects in the eastern versus 
the western U.S. (Dominici, et al., 2006a; Bell et al., 2008; 
Franklin et al. (2007, 2008)). However, the rationale that 
heterogeneity in risk estimates presents a potential bias as posed 
by the commenters is simplistic and does not account for a number of 
factors that have been shown to influence city-specific risk 
estimates in epidemiologic studies. As discussed in the ISA, the EPA 
recognizes that there are compositional differences in 
PM2.5 across the country and that the county-level air 
quality data used in epidemiological studies may result in exposure 
error, which could in part account for variability in city-specific 
risk estimates (U.S. EPA, 2009a, section 2.3.2).
    There are a limited number of studies that evaluated regional 
heterogeneity in the association between long-term exposure to 
PM2.5 and mortality. Krewski et al. (2009a) conducted 
subset analyses of the ACS cohort in Los Angeles, CA and New York 
City, NY, and observed a relative risk in Los Angeles that was 
greater in magnitude than what was observed in the full ACS cohort, 
while the relative risk in New York City was less than what was 
observed in the full ACS cohort. These observations are likely due 
to the greater spatial heterogeneity in PM2.5 
concentrations observed in Los Angeles, and the overall spatial 
homogeneity of PM2.5 concentrations in New York City.
    In another retrospective cohort, Zeger et al. (2008) observed 
associations between long term exposure to PM2.5 and 
mortality for the eastern and central ZIP codes that were similar to 
those reported in the ACS and Harvard Six Cities studies, though no 
association was observed in the western region. The lack of the 
association in the western region is ``largely because the Los 
Angeles basin counties (California) have higher PM levels than other 
West Coast urban centers, but not higher adjusted mortality rates'' 
(Zeger et al. 2008). The ISA also evaluated studies that provided 
some evidence for seasonal differences in PM2.5 risk 
estimates, specifically in the northeast. The ISA found evidence 
indicating that individuals may be at greater risk of dying from 
higher exposures to PM2.5 in the warmer months, and at 
greater risk of PM2.5 associated hospitalization for 
cardiovascular and respiratory diseases during colder months of the 
year. The limited influence of seasonality on PM risk estimates in 
other regions of the U.S. may be due to a number of factors 
including varying PM composition by season, exposure 
misclassification due to regional tendencies to spend more or less 
time outdoors and air conditioning usage, and the prevalence of 
infectious diseases during the winter months (U.S. EPA, 2009a, p. 3-
182).
    Overall, the EPA recognizes that uncertainties still remain 
regarding various factors that contribute to heterogeneity observed 
in epidemiological studies (77 FR 38909/3). Nonetheless, the EPA 
recognizes that this heterogeneity could be attributed, at least in 
part, to differences in PM2.5 composition across the 
U.S., as well as to exposure differences that vary regionally such 
as personal activity patterns, microenvironmental characteristics, 
and the spatial variability of PM2.5 concentrations in 
urban areas (U.S. EPA, 2009a, section 2.3.2; 77 FR 38910).
    As recognized in the PA, the current epidemiological evidence 
and the limited amount of city-specific speciated PM2.5 
data does not allow conclusions to be drawn that specifically 
differentiate effects of PM in different locations (U.S. EPA, 2011a, 
p. 2-25). Furthermore, as discussed in section III.E.1 of the 
preamble to the final rule, the ISA concluded, ``that many 
constituents of PM2.5 can be linked with multiple health 
effects, and the evidence is not yet sufficient to allow 
differentiation of those constituents or sources that are more 
closely related to specific health outcomes'' (U.S. EPA, 2009a, p. 
2-17). CASAC thoroughly reviewed the EPA's presentation of the 
scientific evidence indicating heterogeneity in PM2.5 
effect estimates in epidemiological studies and concurred with the 
overall conclusions presented in the ISA (Pages 6-179-180, Figure 6-
25, Figure 6-26).\127\
---------------------------------------------------------------------------

    \127\ See ``Responses to Significant Comments on the 2012 
Proposed Rule on the National Ambient Air Quality Standards for 
Particulate Matter (June 29, 2012; 77 FR 38890). http://www.epa.gov/ttn/naaqs/standards/pm/data/20121214rtc.pdf at II-37-II-38.

---------------------------------------------------------------------------
In the PM ISA EPA has also stated:

    Additionally it is important to point out that there are a few 
CA-specific time-series studies conducted by Ostro et al. that did 
find associations with PM2.5. These are discussed in the 
ISA PM2.5-Mortality Associations on a Regional Scale: 
California. Ostro et al. (2006, 087991) examined associations 
between PM2.5 and daily mortality in nine heavily 
populated California counties (Contra Costa, Fresno, Kern, Los 
Angeles, Orange, Riverside, Sacramento, San Diego, and Santa Clara) 
using data from 1999 through 2002. The authors used a two-stage 
model to examine all-cause, respiratory, cardiovascular, ischemic 
heart disease, and diabetes mortality individually and by potential 
effect modifier (i.e., age, gender, race, ethnicity, and education 
level). The a priori exposure periods examined included the average 
of 0- and 1-day lags (lag 0-1) and the 2-day lag (lag 2). The 
authors selected these non-overlapping lags (i.e., rather than 
selecting lag 1 as the single-day lag) because previous studies have 
reported stronger associations at lags of 1 or 2 days or with 
cumulative exposure over three days. It is unclear why the 
investigators chose these non-overlapping lags (i.e., single-day lag 
of 2 instead of 1) even though they state they based the selection 
of their lag days on results presented in previous studies, which 
found the strongest association for PM lagged 1 or 2 days. Using the 
average of 0- and 1-day lags Ostro et al. (2006, 087991) reported 
combined estimates of: 0.6% (95% CI: 0.2-1.0), 0.6% (95% CI: 0.0-
1.1), 0.3% (95% CI: -0.5 to 1.0), 2.2% (95% CI: 0.6-3.9), and 2.4% 
(95% CI: 0.6-4.2) for all-cause, cardiovascular, ischemic heart 
disease, respiratory, and diabetes deaths, respectively, per 10 
[micro]g/m\3\.

[[Page 58110]]

    . . . Five of the nine counties examined in the Ostro et al. 
(2006, 087991) analysis contain cities that are among the 2 cities 
examined in the Franklin et al. (2007, 091257) analysis for the same 
period, 1999-2002. While the lags used were different between these 
two studies, both presented PM2.5 risk estimates in 
individual cities or counties (graphically in the Franklin et al. 
study (2007, 091257); in a table in the Ostro et al. study (2006, 
087991)), which allowed for a cursory evaluation of consistency 
between the two analyses. In Franklin et al. (2007, 091257), 
PM2.5 risk estimates at lag 1 day for the cities Los 
Angeles and Riverside were slightly negative, whereas Fresno, 
Sacramento, and San Diego showed positive values above 1% per 10 
[micro]g/m3 increase in PM2.5. The 2-day lag result 
presented in Ostro et al. (2006, 087991) is qualitatively 
consistent, with Los Angeles and Riverside, both of which show 
slightly negative estimates, while the other 3 locations all show 
positive, but somewhat smaller estimates, than those reported by 
Franklin et al. (2007, 091257). The estimates for the average of 0- 
and 1-day lags for these five counties in Ostro et al. (2006, 
087991), which contain cities examined in Franklin et al. (2007, 
091257), were all positive. Thus, these two PM2.5 studies 
showed some consistencies in risk estimates even though they used 
different lag periods and a different definition for the study areas 
of interest (i.e., counties vs. cities).\128\
---------------------------------------------------------------------------

    \128\ See EPA-HQ-OAR-2008-0691-0318-attachment 3 and http://yosemite.epa.gov/sab/sabproduct.nsf/368203f97a15308a852574ba005bbd01/8bee96ad3228eabe8525760400702786!OpenDocument at 6-179.

    Thus, as noted in EPA's PM NAAQS review and the Response to 
Comments document referenced above, EPA has stated it agrees that 
epidemiological studies evaluating health effects associated with long- 
and short-term PM2.5 exposures have reported heterogeneity 
in responses between cities and effect estimates across geographic 
regions of the United States. However, EPA believes it critical to 
understand the issue in context and EPA's overall approach in 
concluding as it did in the ISA, ``that many constituents of 
PM2.5 can be linked with multiple health effects, and the 
evidence is not yet sufficient to allow differentiation of those 
constituents or sources that are more closely related to specific 
health outcomes.'' EPA finds that no new evidence has been submitted in 
the context of the authorization proceeding to change this conclusion.
    With regard to the claims made by Dr. Phalen in comments on this 
authorization proceeding, Dr. Phalen does not provide any evidence or 
studies to support the proposition that PM2.5 is not only 
different in composition in California but as a result is less toxic, 
or present evidence as to the level of reduced toxicity. With regard to 
Dr. Enstrom's comments regarding differences in PM health risk in 
California compared to other locations, as discussed above, EPA has 
previously reviewed Dr. Enstrom's studies and has responded to his 
comments, as well as others, on this issue. As explained above, EPA has 
examined the issue of whether PM2.5 composition is 
determinative and found that the scientific evidence is not yet 
sufficient to allow differentiation of those components or sources that 
are more closely related to specific health outcomes nor to exclude any 
component or group of components from the mix of fine particles 
included in the PM2.5 indicator. EPA similarly concluded 
that current evidence does not allow conclusions to be drawn that 
differentiate effects of PM in different locations.
    With regard to the claims of omissions in EPA's Regulatory Impact 
Analysis (RIA) for its proposed PM air quality standards, it is 
necessary to understand that only the peer-reviewed studies cited in 
the PM ISA (2009) or PM Provisional Science Assessment (2012) were 
listed in the RIA table. Furthermore, the inclusion or exclusion of a 
study published after the Provisional Science Assessment would not 
materially change the large body of scientific evidence indicating an 
effect of PM2.5 exposure on human health.
    With regard to the claims based on the Trucker Study noted above, 
the study does not attempt to examine air pollution-related health 
effects or provide any measure of air pollution exposure in the cohort 
examined. The study looked only at mortality rates for certain deaths 
within the population studied. EPA notes that the Truck Driver study 
contains a research abstract that plainly states ``[t]he absence of 
disease mortality deserves careful interpretation, and may be due to 
both a strong healthy worker effect and a short monitoring period.'' 
\129\ We note that this study did not include an actual close study of 
air quality and PM exposure levels and otherwise is not of scientific 
significance. This type of study as well as the other few studies 
submitted in isolation does not overcome the significant evidence and 
scientific evidence that has been peer reviewed and found PM to be 
associated with health effects.
---------------------------------------------------------------------------

    \129\ CCTA; ``Mortality Among Members of a Truck Driver Trade 
Associations'' AAOHN Journal Vol. 58. No. 11, 2010 at 473.
---------------------------------------------------------------------------

    The comments provided do not provide sufficient evidence to meet 
the authorization opponents' burden of showing that PM emissions in 
California do not create any risk to public health, particularly given 
the substantial body of evidence suggesting such a risk. Therefore, 
even if EPA were to apply the alternative interpretation of section 
209(e)(2)((A)(ii) and examine whether CARB has a specific need for its 
Fleet Requirements, the opponents of the authorization have not met 
their burden of proof to demonstrate that California no longer 
continues to have serious air quality issues related to PM and 
NOX, that are created by California's underlying compelling 
and extraordinary conditions. The evidence submitted to the record, in 
addition to EPA's own PM NAAQS review and the multitude of studies 
reviewed therein and conclusions of EPA that were peer reviewed by 
CASAC, continue to demonstrate requisite health effects due to PM 
exposure and therefore the authorization cannot be denied on this 
basis.
    Finally, EPA notes that CARB's Fleet Requirements are designed not 
only to reduce PM emissions and public health consequences, as 
discussed above, but also to address the harmful effects of ozone by 
reducing emissions of NOX, as an ozone precursor, from the 
in-use fleet.\130\ There is no evidence in the record to suggest that 
ozone pollution is not harmful to public health or that CARB's Fleet 
Requirements are not needed in that context.
---------------------------------------------------------------------------

    \130\ See CARB Authorization Request at 4 (``Even as amended to 
provide immediate short-term relief to fleets adversely impacted by 
the recession, the In-Use Off-Road Regulation is expected to achieve 
a 17 percent reduction in NOX emissions and a 21 percent 
reduction in PM2.5 emissions in 2023 from forecasted 
emissions that would exist without a regulation in place.'').
---------------------------------------------------------------------------

    In conclusion, even if EPA were to use the alternative approach 
outlined above--that of reviewing the need for the Fleet Requirements 
per se to meet compelling and extraordinary conditions in California--
EPA finds that the opponents of the authorization have not met their 
burden of proof. Therefore, even if EPA were to use this alternative 
approach, we could not deny the authorization on this basis.
c. Additional PM Comments
    EPA also received comment from the PLF focused on the recent 
decision issued by the United States Court of Appeals for the District 
of Columbia Circuit in Natural Resources Defense Counsel v. EPA, No 08-
1250, January 4, 2013, (NRDC v. EPA) concerning implementation 
regulations applicable to the 1997 PM2.5 NAAQS. PLF 
characterizes the court's decision as requiring EPA itself to adopt 
stringent

[[Page 58111]]

federal implementation standards for PM2.5 throughout the 
nation, including California. Because California asserted that it 
``needs'' nonroad diesel PM standards that are more stringent than 
federal nonroad PM standards, and because (in PLF's view) EPA is now 
required to use the ``stringent, action-forcing provisions'' of section 
188-188(b) of the Clean Air Act as a result of the Decision, PLF 
maintains that it is appropriate to complete EPA's administrative 
proceedings on remand (from the decision) for implementation 
regulations before EPA is able to determine the extent to which there 
is a ``need'' for California to have its own PM2.5 nonroad 
diesel standard for engines and vehicles based on ``compelling and 
extraordinary conditions'' in California. In addition, PLF highlights 
EPA's most recent revision of the primary annual NAAQS for 
PM2.5, which lowered the prior standard from 15.0 micrograms 
per cubic meter to 12.0 micrograms per cubic meter, and the concomitant 
revision to the Air Quality Index for PM2.5. PLF asserts 
that these events provide additional reasons to question California's 
``need'' for its own PM2.5 nonroad diesel standard.
    PLF's reliance on NRDC v. EPA is misplaced. That decision pertains 
only to EPA's regulations governing how states should address the 
statutory requirements for attainment plans. It does not require EPA 
``to move ahead in implementing strict federal PM2.5 
controls,'' through its own regulations as opposed to state regulation 
of PM2.5 and PM2.5 precursors. The Clean Air Act 
generally requires states to have state implementation plans (SIPs) 
that provide for attainment and maintenance of the NAAQS, and nothing 
in the Court's opinion obviates or supplants that statutory 
requirement. Further, the NRDC v. EPA decision will not result in EPA 
itself issuing new regulatory controls that impose any specific 
emission reductions requirements on mobile sources. To the extent that 
PLF is suggesting that EPA itself is now required to regulate any 
particular sources more stringently, through national standards, such 
suggestion is incorrect.
    To the extent EPA imposes the ``more stringent'' NAAQS 
implementation requirements of sections 188 through 190 of the Act on 
the state (rather than the ``less stringent'' implementation 
requirements of sections 171 through 179B of the Act), then the state 
will still be required to adopt its own regulations (e.g. Fleet 
Requirements) to get necessary emission reductions to attain and 
maintain the applicable NAAQS. While this may create somewhat lesser 
flexibility for states in developing attainment plan measures in the 
future, it by no means negates their SIP obligations today. The 
emission reductions from the Fleet Requirements take effect at the 
beginning of 2014, and California has shown that it needs these 
reductions as part of the suite of control measures that are necessary 
for purposes of attaining and maintaining the PM2.5 and 
ozone NAAQS expeditiously. Moreover, states still have a great deal of 
flexibility in designing their emission control program to achieve 
needed emission reductions, and nothing in the court's opinion in NRDC 
v. EPA indicates any attempt by the court to preclude California from 
using the specific flexibility provided by section 209(e)(2)(A) to 
reduce emissions through regulation of nonroad engines. Such emission 
reductions have been instrumental in California's strategy to meet its 
NAAQS requirements.
    With respect to the revisions to the primary annual 
PM2.5 NAAQS issued in December of 2012, the revisions have 
increased the stringency of the standard. Thus, if anything, the new 
PM2.5 standard will increase California's need to find 
reductions in emissions of PM2.5 and PM2.5 
precursors from regulated sources, which should only increase the need 
for such regulations such as the Fleet Requirements.
    For the reasons set forth above, EPA believes that under the 
alternative interpretation of the compelling need criterion discussed 
above, opponents of authorization have not meet their burden of 
demonstrating that California's Fleet Requirements do not have a 
rational relationship to contributing to amelioration of serious air 
quality problems in California, including its PM2.5 and 
ozone. Accordingly, commenters' assertions to the contrary provide no 
basis for denying authorization.
4. Section 209(e)(2)(A)(ii) Conclusion
    With respect to the need for California's standards to meet 
compelling and extraordinary conditions, after an examination of the 
text of section 209 and the legislative history, EPA again concludes 
that the best way to interpret this provision is to apply the 
traditional interpretation. Under this interpretation, EPA can deny 
authorization under section 209(e)(2)(A)(ii) only if it finds that 
opponents of authorization have demonstrated that California does not 
need a separate nonroad program to address compelling and extraordinary 
conditions. Under this traditional interpretation, EPA cannot find that 
opponents of the authorization have demonstrated that California does 
not need its state standards to meet compelling and extraordinary 
conditions. The opponents of the waiver have not adequately 
demonstrated that California no longer has a need for its nonroad 
emissions program.
    Even if EPA were to apply the alternative interpretation advocated 
by commenters--that EPA is required to review, on a case by case basis, 
whether the specific standard submitted by CARB is needed to meet 
compelling and extraordinary conditions--EPA cannot find that the 
opponents of the waiver have demonstrated that California does not need 
its Fleet Requirements to meet compelling and extraordinary conditions.
    Accordingly, EPA has determined that it cannot deny the 
authorization request under section 209(e)(2)(A)(ii).

C. Consistency with Section 209 of the Clean Air Act

    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.'' As described 
above, EPA's section 209(e) rule states that the Administrator shall 
not grant authorization to California if she finds (among other tests) 
that the ``California standards and accompanying enforcement procedures 
are not consistent with section 209.'' EPA has interpreted the 
requirement to mean that California standards and accompanying 
enforcement procedures must be consistent with at least section 209(a), 
section 209(e)(1), and section 209(b)(1)(C), as EPA has interpreted 
this last subsection in the context of motor vehicle waivers.\131\ 
Thus, this can be viewed as a three-pronged test.
1. Consistency with Section 209(a)
---------------------------------------------------------------------------

    \131\ See 59 FR 36969 (July 20, 1994).
---------------------------------------------------------------------------

    Section 209(a) of the Clean Air Act prohibits states or any 
political subdivisions of states from setting emission standards for 
new motor vehicles or new motor vehicle engines. Section 209(a) is 
modified in turn by section 209(b) which allows California to set such 
standards if other statutory requirements are met. To find a standard 
to be inconsistent with section 209(a) for purposes of section 
209(e)(2)(A)(iii), EPA must find that the standard in question actually 
regulates new motor vehicles or new motor vehicle engines.
    In its authorization request, CARB stated that by definition, the 
section

[[Page 58112]]

209(a) preemption does not apply to vehicles covered by the Fleet 
Requirements because the regulation only applies to non-new, in-use 
vehicles and engines and not to new motor vehicles and engines. CARB 
also stated that with a few limited exceptions--workover rigs, two-
engine cranes, and certain other two-engine vehicles--vehicles covered 
under the Fleets Requirements are not motor vehicles under the Clean 
Air Act definition of motor vehicles.\132\ No commenter argued the 
contrary or otherwise asserted that the Fleet Requirements are not 
consistent with section 209(a).
---------------------------------------------------------------------------

    \132\ CARB Authorization Request. CARB noted that these limited 
exceptions are provided to afford fleet operators of such vehicles 
additional flexibility to address both the in-use on-highway 
requirements associated with the engines designed to propel the 
equipment and the nonroad engines on the vehicles designed to 
perform other functions. Since the regulation of such non-new (in 
use) on-highway vehicles (and the engines designed to propel such 
vehicles) is not preempted under section 209(a) CARB did not seek a 
waiver under section 209(b) and instead only sought an authorization 
under section 209(e) for the in use nonroad engines associated with 
such on-highway vehicles.
---------------------------------------------------------------------------

    Therefore, EPA cannot deny California's request on the basis that 
California's Fleet Requirements are not consistent with section 209(a).
2. Consistency with Section 209(e)(1)
    To be consistent with section 209(e)(1) of the Clean Air Act, 
California's standards or other requirements relating to the control of 
emissions must not relate to new engines which are used in farm or 
construction equipment or vehicles and which are smaller than 175 
horsepower (hp), and new locomotives or new engines used in 
locomotives.
    In its Authorization Request, CARB stated that the Fleet 
Requirements specifically ``do not apply to locomotives and do not 
apply to new farm and construction vehicles and equipment less than 175 
hp.'' \133\ CARB notes that ``implements of husbandry, regardless of 
engine size, are expressly excluded from coverage.'' While CARB 
acknowledged that nonroad construction vehicles and engines used in 
such vehicles are covered by the Fleets Requirements, CARB stated that 
the regulation does not apply to new construction vehicles or engines.
---------------------------------------------------------------------------

    \133\ Id at 20.
---------------------------------------------------------------------------

    CARB stated that the Fleet Requirements do not attempt to regulate 
new construction sources covered by the section 209(e)(1) preemption. 
New, as it applies to nonroad engines and equipment other than 
locomotives and engine used in locomotives, means engines and equipment 
whose legal title has not been transferred to an ultimate purchaser, or 
in certain cases, to engines or vehicles that have been placed into 
service.\134\ The Fleet Requirements do not regulate engines and 
vehicles immediately after their titles are transferred or they enter 
service; instead, the regulation exempts any vehicle that is less than 
ten years old from the BACT requirements. CARB states that while a 
fleet owner may elect to comply with the fleet average or BACT 
requirements by purchasing or repowering a vehicle primarily used in 
construction with a new nonroad engine under 175 hp, that outcome also 
does not run afoul of the 209(e)(1) preemption. CARB notes that this 
new engine is only required to be certified to the existing federal 
nonroad emission standards.\135\ Therefore, the Fleet Requirements do 
not establish standards for such new engines.
---------------------------------------------------------------------------

    \134\ See 40 CFR Sec.  1074.5.
    \135\ CARB's regulations establishing new emission standards for 
engines less than 175 hp specifically do not cover engines that are 
primarily used in farm and construction vehicles and equipment.
---------------------------------------------------------------------------

    EPA received comment from ARTBA suggesting that CARB's regulations 
run afoul of section 209(e)(1)'s preemption for ``new engines which are 
used in construction equipment or vehicles or farm equipment or 
vehicles and which are smaller than 175 horsepower.'' ARTBA argues that 
section 209(e)(1)'s limitation on state standards or emission-related 
requirements for these engine/equipment categories lasts throughout the 
useful life of the equipment.\136\ ARTBA stated in comment that under 
this interpretation, California's authorization request should be 
denied because the Fleet Requirements apply to all in-use off-road 
diesel construction equipment greater than 25 HP, including equipment 
in the permanently preempted power range. ARTBA did not provide any 
further explanation in its written comments or at the public hearing as 
to why this permanent preemption of certain types of ``new'' vehicles 
should be interpreted as extending throughout the useful life of the 
vehicles.
---------------------------------------------------------------------------

    \136\ See Hearing Transcript at 51-52, and ARTBA at 2.
---------------------------------------------------------------------------

    CARB, in response to comments made by ARTBA at EPA's public 
hearing, noted that the contention that the preemption under section 
209(e)(1) extends throughout the useful life of the new engine is 
simply wrong. CARB noted that EPA considered and rejected this extended 
definition of ``new'' in section 209(e)(1) during the 209(e) rulemaking 
process.\137\ CARB also noted in its Authorization Request that the 
Court of Appeals in Engine Manufacturers Association v. EPA (EMA), 
affirmed EPA's definition of ``new'' as it is applied to off-road 
sources other than locomotives.\138\ In EMA, the court discussed the 
issue of whether EPA's definition of new nonroad engines would 
effectively undermine the section 209(e)(1) preemption that states are 
prohibited from adopting emission standards for new farm and 
construction vehicles with less than 175 hp. CARB noted that the court 
concluded that EPA's definition of new did not undermine the preemption 
in 209(e)(1).\139\
---------------------------------------------------------------------------

    \137\ 59 FR 31306, 31328-31 (June 17, 1994).
    \138\ EMA 88 F3d 1075, 1082-1086 (D.C. Cir. 1996).
    \139\ A more recent opinion in the Court of Appeals for the 
Ninth Circuit agreed with the D.C. Circuit's decision on this issue. 
National Association of Home Builders v. San Joaquin UAPCD, 627 F. 
3d 730 (9th Cir. 2010).
---------------------------------------------------------------------------

    CARB also notes the more recent history on this issue. In a 2002 
petition to EPA, ARTBA requested that EPA revise its regulations such 
that nonroad engines in the categories covered under section 209(e)(1) 
are preempted for their useful lives. EPA denied ARTBA's request,\140\ 
and subsequently the United States Court of Appeals for the District of 
Columbia dismissed ARTBA's petition for review of that denial.\141\
---------------------------------------------------------------------------

    \140\ 73 FR 59034, 59130 (October 8, 2008).
    \141\ ARTBA v. EPA, 558 F.3d 1109 (D.C. Cir. 2009), certiorari 
denied 131 S.Ct. 338, 178 L.Ed.2d 38. A more recent opinion from the 
Court of Appeals for the D.C. Circuit came to the same conclusion. 
ARTBA v. EPA, 705 F.3d 453 (D.C. Cir. 2013)
---------------------------------------------------------------------------

    At the outset, we note that no commenter disputes CARB's assertion 
that its regulations do not violate section 209(e)(1) as EPA's current 
regulations implement that provision. Rather, ARTBA's comments appear 
to go to the validity of EPA's longstanding regulations, as opposed to 
the validity of California standards currently being reviewed under 
those regulations. As such, EPA believes ARTBA's comments are 
peripheral to this proceeding. EPA is not reviewing its authorization 
regulations in this proceeding, but is instead reviewing the validity 
of California's Fleet Requirements under those regulations.
    In any event, EPA fully considered the scope of preemption issue 
(the definition of ``new'') during its 1994 rulemaking which 
implemented the provisions of section 209(e). The rationale contained 
in that rulemaking was affirmed by the Court of Appeals in EMA.\142\ As 
CARB notes, EPA fully reviewed its rationale regarding the definition 
of ``new'' in the context of ARTBA's earlier petition to reconsider its 
regulations and EPA denied the petition. No information or argument

[[Page 58113]]

has been submitted to the record of this proceeding to rebut EPA's 
interpretation. ARTBA provides no new information or argument in the 
record of this proceeding to suggest that EPA should change its 
longstanding interpretation of ``new'' in section 209(e), \143\ and as 
stated above, EPA is not in any case reviewing its regulations in the 
context of this proceeding. Moreover, ARTBA does not make any factual 
argument regarding the consistency with section 209(e)(1) of the 
particular regulations for which CARB is requesting authorization, even 
under ARTBA's own definition.
---------------------------------------------------------------------------

    \142\ EMA, 88 F3d 1075, (D.C. Cir. 1996).
    \143\ ARTBA had previously, though not in this proceeding, 
provided a fuller explanation of its view regarding the 
interpretation of 209(e)(1) and we have previously responded that 
ARTBA's arguments were not persuasive. See 73 FR 59034, 59130 
(October 8, 2008). The U.S. Court of Appeals for the District of 
Columbia subsequently dismissed ARTBA's petition for review of EPA's 
response. ARTBA v. EPA (2009 D.C. Cir. (588 F.3d 1109, rehearing en 
banc denied (March 5, 2010), certiorari denied 131 S.Ct. 388, 178 
L.Ed2d 38. ARTBA has not made similar or other arguments in this 
proceeding beyond an unsupported statement regarding how it 
interprets the length of the preemption, and we do not address that 
issue in depth here, except to say that ARTBA makes no attempt to 
support its assertion.
---------------------------------------------------------------------------

    In light of the lack of information in the record, and giving due 
consideration to the burden of proof being on the opponents of the 
waiver, EPA cannot make a finding that CARB's Fleet Requirements are 
inconsistent with section 209(e)(1)(i). Therefore, EPA cannot deny 
CARB's authorization request on this basis.
3. Consistency With Section 209(b)(1)(C)
    The requirement that California's standards be consistent with 
section 209(b)(1)(C) of the Clean Air Act effectively requires 
consistency with section 202(a) of the Act. To determine this 
consistency, EPA has applied to California nonroad standards the same 
test it has used previously for California motor vehicle standards; 
namely, state standards are inconsistent with section 202(a) of the Act 
if there is inadequate lead-time to permit the development of 
technology necessary to meet those requirements, giving appropriate 
consideration to the cost of compliance within that timeframe. 
California's accompanying enforcement procedures would also be 
inconsistent with section 202(a) if federal and California test 
procedures conflicted. The scope of EPA's review of whether 
California's action is consistent with section 202(a) is narrow. The 
determination is limited to whether those opposed to the authorization 
or waiver 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.\144\
---------------------------------------------------------------------------

    \144\ MEMA I, 627 F.2d at 1126.
---------------------------------------------------------------------------

    EPA does not believe that there is any reason to review these 
criteria any differently for EPA's evaluation of California's Fleet 
Requirements. There is nothing inherently different about how the Fleet 
Requirement control technologies should be reviewed when making a 
determination about technological feasibility or consistency of text 
procedures.
a. Technological Feasibility
    The legislative history of section 209 (including the ``consistency 
with section 202(a) requirement in 209(b)((1)(C)) indicates that this 
provision is intended to relate to technological feasibility.\145\ 
Section 202(a)(2) states, in relevant 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. Previous EPA waivers are in accord with 
this position.\146\ For example, EPA in a 1976 waiver decision 
considered California's standards and enforcement procedures to be 
consistent with section 202(a) because adequate technology existed as 
well as adequate lead-time to implement that technology.\147\ The 
legislative history of the 1977 amendments to the Clean Air Act 
indicates Congress' view that, generally, EPA's construction of the 
waiver provision had been consistent with congressional intent.\148\
---------------------------------------------------------------------------

    \145\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess. 301 (1977).
    \146\ See, e.g., 49 FR 1887, 1895 (May 3, 1984); 43 FR 32182, 
32183 (July 25, 1978); 41 FR 44209, 44213 (October 7, 1976).
    \147\ 41 FR 44209 (October 7, 1976).
    \148\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess. 301 (1977).
---------------------------------------------------------------------------

    EPA also evaluates CARB's request in light of congressional intent 
regarding the waiver program generally. This is consistent with the 
motivation behind section 209(b)--to foster California's role as a 
laboratory for motor vehicle emission control, in order ``to continue 
the national benefits that might flow from allowing California to 
continue to act as a pioneer in this field.'' \149\ For these reasons, 
EPA believes that California must be given substantial deference to 
adopt not only new motor vehicle emission standards, but to adopt new 
and in-use nonroad emission standards which may require new and/or 
improved technology. This deference was discussed in an early waiver 
decision when EPA approved the waiver request for California's 1977 
model year standards:
---------------------------------------------------------------------------

    \149\ 40 FR 23102, 23103 (waiver decision citing views of 
Congressman Moss and Senator Murphy) (May 28, 1975).

    Even on this issue of technological feasibility I would feel 
constrained to approve a California approach to the problem which I 
might feel unable to adopt at the Federal level in my own capacity 
as a regulator. The whole approach to the Clean Air Act is to force 
the development of new types of emission control technology where 
that is needed by compelling the industry to `catch up' to some 
degree with newly promulgated standards. Such an approach to 
automotive emission control might be attended with costs, in the 
shape of reduced product offering, or price and fuel economy 
penalties, and by risks that a wider number of vehicle classes may 
not be able to complete their development work in time. Since a 
balancing of these 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 judgment on that score.\150\
---------------------------------------------------------------------------

    \150\ Id. at 23103.

    In MEMA I, the court addressed the cost of compliance relative to 
technological feasibility issue at some length in reviewing a waiver 
---------------------------------------------------------------------------
decision. According to the court:

    Section 202's cost of compliance concern, juxtaposed as it is 
with the requirement that the Administrator provide the requisite 
lead time to allow technological developments, refers to the 
economic costs of motor vehicle emission standards and accompanying 
enforcement procedures. See S. Rep. No. 192, 89th Cong., 1st Sass. 
5-8 (1965); H.R. Rep. No. 728 90th Cong., 1st Sass. 23 (1967), 
reprinted in U.S. Code Cong. & Admin. News 1967, p. 1938. It relates 
to the timing of a particular emission control regulation rather 
than to its social implications. Congress wanted to avoid undue 
economic disruption in the automotive manufacturing industry and 
also sought to avoid doubling or tripling the cost of motor vehicles 
to purchasers. It, therefore, requires that the emission control 
regulations be technologically feasible within economic parameters. 
Therein lies the intent of the cost of compliance requirement 
(emphasis added).\151\
---------------------------------------------------------------------------

    \151\ MEMA I at 1118 (emphasis added). See also id. at 1114 n. 
40 ([T])he `cost of compliance' criterion relates to the timing of 
standards and procedures.

[[Page 58114]]

---------------------------------------------------------------------------

    Previous waiver decisions are fully consistent with MEMA I, which 
indicates that the cost of compliance must reach a very high level 
before the EPA can deny a waiver. Therefore, past decisions indicate 
that the costs must be excessive to find that California's standards 
are inconsistent with section 202(a).\152\ It should be noted that, as 
with other issues related to the determination of consistency with 
section 202(a), the burden of proof regarding the cost issue falls upon 
the opponents of the grant of the waiver.
---------------------------------------------------------------------------

    \152\ See, e.g. 47FR 7306, 7309 (Feb. 18, 1982), 43 FR 25735 
(June 14, 1978), and 78 FR 2112, 2134 (Jan. 9, 2013).
---------------------------------------------------------------------------

    Consistent with MEMA I, the Agency has evaluated costs in the 
waiver and authorization context by looking at the actual cost of 
compliance in the time provided by the regulation, not the regulation's 
cost-effectiveness. The appropriate level of cost-effectiveness for any 
given California regulation is a policy decision that state regulators 
must consider in adopting the regulation. EPA, historically, has 
deferred to these policy decisions. EPA has stated in this regard, 
``the law makes it clear that the waiver request cannot be denied 
unless the specific findings designated in the statute can 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 * * *.'' \153\ 
Thus, although EPA may evaluate whether compliance costs to 
manufacturers (or in this case, fleet operators) are so excessive as to 
implicate the regulation's technological feasibility, EPA does not look 
at cost-effectiveness when making a waiver decision.
---------------------------------------------------------------------------

    \153\ 36 FR 17158 (August 31, 1971). See also 40 FR 23102, 
23104; 58 FR 4166 (January 7, 1993), LEV Waiver Decision Document at 
20.
---------------------------------------------------------------------------

    In evaluating the Fleet Requirements' consistency with section 
202(a), EPA finds that CARB provided a series of flexibilities in order 
to address concerns expressed by some about cost and cost-
effectiveness. CARB, in its Authorization Request, notes that section 
2449.1 of its 2010 amendments, requires all fleets to comply with 
annual fleet average emission targets or, alternatively, meet the 
annual BACT requirements for specified percentages of the fleet. The 
fleet average targets, CARB states, have been set to progressively 
become more stringent over the years to ensure that fleets modernize to 
achieve the necessary emission reductions for California to meet the 
federal NAAQS for NOX and PM2.5 and to meet its 
2020 goal set forth in CARB's 2000 Diesel Risk Reduction Plan.\154\
---------------------------------------------------------------------------

    \154\ CARB Authorization Request at 21. CARB notes that meeting 
the 2020 target would reduce diesel PM from all diesel sources by 85 
percent from the 2000 baseline and would prevent thousands of 
premature deaths and medical infirmities.
---------------------------------------------------------------------------

    CARB notes that to meet the fleet average targets or the 
alternative BACT requirements, a large or medium fleet may comply by 
using a variety of different strategies, including: replacing the 
engines in existing vehicles with cleaner engines, purchasing newer 
vehicles with cleaner engines to replace older, higher emitting 
vehicles, retiring vehicles from service, designating vehicles as 
permanent low use, or retrofitting engines with verified diesel 
emission control strategies (VDECS). Compliance with the amended 
regulation will require most large and medium fleets to phase-out use 
of Tier 0 and Tier 1 engines through replacement or repowering of 
vehicles, but CARB also notes that fleets will be able to meet the 
fleet average targets by replacing such vehicles and engines with a 
combination of higher-tiered engines. Therefore, it is not until 2018 
that the regulation actually requires large and medium fleets to 
replace vehicles and engines with only Tier 3 and 4 engines.
    CARB states that by 2018, Tier 3 engines will have been available 
for at least ten years, Interim Tier 4 engines for at least seven 
years, and Tier 4 engines for at least three years. In addition, CARB 
notes that the Fleet Requirements provide relief to fleets if there is 
a delay in the availability of vehicles that would be required to use 
Tier 3, Tier 4 interim, or final Tier 4 emission standards. Therefore, 
CARB notes, it is anticipated that large and medium fleet owners with 
high natural turnover of vehicles will be able to meet the fleet 
average targets through normal replacement and repowering of vehicles. 
Fleets may also choose to meet the BACT fleet average requirements by 
either installing retrofits, or by modernizing the fleet by turning 
over older, dirtier engines and vehicles to newer (not necessarily new) 
and cleaner models; by retiring older vehicles or designating them as 
low use; or by using the other exemptions, compliance extensions, and 
credit provisions. Additionally, CARB explains that the 2010 amendments 
provide even further flexibility and relief for the smaller fleets, 
including, but not limited to, an additional five year delay in the 
implementation date (2019) of the fleet average targets beyond that 
applicable to large fleets, a variety of exemptions from the BACT 
requirements including an exemption if the vehicle is less than ten 
years old, or if the vehicle has already been retrofitted with a level 
2 or 3 VDECS that was the highest level PM VDECS at the time of 
installation, etc. The 2010 amendments also included a new compliance 
path for small fleets whereby such fleets could comply by phasing out 
their Tier 0 and Tier 1 vehicles between 2019 and 2029--and if they 
meet such compliance targets for a specific year then no other 
compliance requirements would apply.
    EPA received multiple comments regarding the cost of the CARB Fleet 
Requirements. The comments address both the cost to fleet operators and 
cost-effectiveness of the regulations. Almost all of the comments argue 
that authorization should be denied because of the high compliance 
costs for fleet operators. The comments claim that these costs are 
excessive for an industry characterized by small, independent 
companies, and they claim that many will be forced out of business by 
the cost of compliance with the Fleet Requirements. EPA also received 
comments on other aspects of technological feasibility including 
technology availability and safety issues. A detailed discussion of 
these comments is presented below.
    EPA received comment from a variety of contractors and associations 
claiming that while the nation and California continue to experience a 
sluggish economic recovery, employment in the construction sector has 
continued to decline. As a result, these commenters argue, the market 
is less prepared to handle the Fleet Requirements than even before the 
2010 amendments.
    EPA also received a variety of comments stating that the Fleet 
Requirements require the use of new equipment that might not be 
available for purchase until 2014 or later. In this context, one 
commenter noted that, where technology is available, a sudden increase 
in demand could cause supplies to be exhausted and that contractors may 
be barred from their work if they are not able to make necessary 
purchases. As such, the commenter argues that CARB must allow 
technology to catch up to the point that compliant equipment is broadly 
available. The comment states that without a period for technology to 
catch up, contractors will be unable to meet the Fleet Requirements, 
triggering negative impacts on California's infrastructure rebuilding 
efforts, the health of the state's construction industry, and its 
overall economy.

[[Page 58115]]

    Similarly, EPA received comment that the eventual elimination of 
Tier 0 and Tier 1 equipment has significantly diminished the resale 
value of such equipment and, combined with the recession in California, 
has forced the sale of this older equipment to out-of-state 
contractors. The commenter claims that this has caused a reduction in 
the size of the fleet and has probably eliminated up to 15,000 jobs in 
California and has also diminished the bonding capacity of contractors 
(equipment is used as collateral) and severely limited the size and 
number of construction projects which a contractor could undertake.
    EPA also received a number of comments suggesting that the larger 
fleet companies may fare better than the smaller companies in terms of 
compliance with the Fleet Requirements. One commenter noted that larger 
companies have already begun the process of repowering or retrofitting 
their equipment: however the smaller companies (less than 10 employees) 
will be severely hampered by the costs of repowering or retrofitting 
equipment that, in some cases, is the sole asset of their family-owned 
businesses. Commenters asserted that many of these smaller companies do 
not have the resources or access to capital to repower or retrofit 
their engines and may be forced to park the equipment. Due to the 
annual emission reduction targets required by the Fleet Requirements, 
these commenters argue, many contractors will be required to first 
repower or retrofit an engine, only to have to turn around a few years 
later and replace the entire piece of equipment when the technology to 
do the job right finally hits the marketplace.
    Another commenter maintains that the ongoing economic recession in 
conjunction with CARB's ``draconian set of diesel regulations that 
denies normal industry replacement cycles'' has placed many businesses 
in a ``catch-22'' situation.\155\ Many businesses face having to 
replace and/or modify both on-road and off-road diesel powered 
equipment, yet the net effect of CARB's regulations has been to devalue 
their current equipment to the point they have lost equity necessary to 
secure financing. To the extent they may secure financing, the comment 
states, many could not secure enough work to satisfy a mortgage 
obligation.
---------------------------------------------------------------------------

    \155\ California Construction Trucking Association (CCTA).
---------------------------------------------------------------------------

    EPA also received comment stating that regardless of whether EPA 
reconsiders its ``case-by-case'' implementation of section 209 waivers 
by revisiting what it means for California to need this regulation to 
meet its air quality goals,\156\ the Fleet Requirements still suffer 
from gross inefficiencies, amortized over a smaller-than-expected 
market, for smaller-than-expected gains which should defeat the 
authorization as inconsistent with section 202(a), including 
technological feasibility, the cost of compliance, safety, and lead 
time.
---------------------------------------------------------------------------

    \156\ To the extent that the ``need'' for the Fleet Requirements 
to meet California's air quality goals is relevant to EPA's 
consideration of CARB's authorization request we examine this under 
the second authorization criterion of section 209(e)(2)(ii) above.
---------------------------------------------------------------------------

    EPA received a variety of comments concerning the reliability and 
safety of diesel retrofits. One commenter noted that the California 
Occupational Health and Safety Board has established safety standards 
for installation and operation of the retrofits.\157\ Another commenter 
noted that attempts to meet emission levels by using filtering 
equipment have failed--to the extent that the 2010 amendments 
eliminated the retrofit requirement altogether and made diesel 
particulate filters (DPFs) voluntary only, due to limitations in 
safety, reliability, and functionality.\158\
---------------------------------------------------------------------------

    \157\ ARTBA and Allfishch Contractors.
    \158\ United Contractors.
---------------------------------------------------------------------------

    In addition to the concerns about retrofits noted above, EPA also 
received comment questioning whether EPA's regulation for replacement 
engines has eliminated fleets' ability to choose engine replacement or 
repower compliance strategies, which the commenter claimed to be the 
only cost effective means to achieve the fleet average emission 
standards. This commenter noted that one compliance option is to 
replace equipment with the newest equipment available but that this is 
impractical for most contractors due to the cost of new equipment. For 
example, a new scraper or bulldozer can cost over $1,000,000. The 
second option is to repower an older machine with a new engine 
(replacing a Tier 0 engine with a Tier 3 engine with a cost of $150,000 
or more). The commenter suggested this second option is far more 
practical as the equipment is designed to last for 30 years or more. 
The commenter contends that EPA's replacement engine regulation at 40 
CFR 1068.240 prohibits the repowering of a machine unless the engine 
has ``prematurely failed.'' This roadblock makes compliance impossible 
according to the commenter.\159\
---------------------------------------------------------------------------

    \159\ See CIACQ.
---------------------------------------------------------------------------

    EPA also received comment stating that attempts to repower or 
replace existing older engines with newer, cleaner technology have 
encountered the practical issue of compatibility. ``The new engines 
either don't fit the old chassis, or require additional alterations or 
replacement of other systems (such as cooling units) in the old unit. 
Thus, cost-effectiveness of modifying such older units becomes 
problematical.'' \160\ This commenter does not note the availability of 
retrofit, but instead noted that the alternative to repower is 
retirement and replacement.
---------------------------------------------------------------------------

    \160\ See United Contractors.
---------------------------------------------------------------------------

    Finally, EPA received a number of comments suggesting that the 
Fleet Requirements are generally not cost-effective, given the makeup 
of the current fleet.
    EPA received comment in favor of CARB's Authorization Request from 
the Manufacturers of Emission Control Association (MECA), which 
supported CARB's original 2007 rule, and continues to support the 
current rule while requesting that EPA grant this authorization. MECA 
contends that a number of advanced emission control technologies 
already exist with the capability to significantly reduce PM and 
NOX emissions from the engines subject to CARB's regulation, 
and that over 250,000 systems (retrofits) have been installed on off-
road engines worldwide. MECA also disputes safety concerns surrounding 
these systems, citing statistics that 35,000 diesel particulate filters 
have been installed in California, with fewer than 15 safety-related 
issues, all of which ``were shown to be attributed to poor engine or 
device maintenance, misapplication of devices, or the ignoring of 
warning alarms by the operator.'' MECA does not support the 
implementation delays built into the CARB's 2010 amendments, but 
nonetheless asks EPA to grant the request.
    In response to comments from opponents of the authorization, CARB 
states that the opponents have not met their burden of showing that the 
regulation is inconsistent with section 209(b)(1)(C). CARB continues to 
rely upon the information presented in its Authorization Request and 
earlier submissions and maintains that California has amply 
demonstrated that the performance standards of the regulation are 
technologically feasible in the lead time provided, giving appropriate 
consideration to costs. CARB states that its position that the 
feasibility of the performance standards of the regulation are amply 
demonstrated is consistent with past EPA authorizations for in-use 
vehicles

[[Page 58116]]

and equipment, in which EPA has stated:

    [S]ection 202(a) consistency calls for a limited review of 
technological feasibility, including analysis of the cost of new 
technology, if technology does not currently exist. Section 202(a) 
does not allow EPA to conduct a more searching review of whether the 
costs are outweighed by the overall benefits of the California 
regulations.

    CARB notes that the costs of the regulation, which was amended for 
the express purpose of providing fleets with significant economic 
relief during the recovery from the nation's economic downturn, cannot 
be characterized as so prohibitive as to render the regulation 
infeasible. In fact, CARB notes the 2010 amendments have significantly 
reduced the costs of compliance for all fleets by reducing the number 
of specific compliance actions that a fleet must undertake:

    By delaying initial implementation of the regulation, revising 
target and BACT compliance rates downward, and by providing fleets 
with greater compliance flexibility (vehicle exemptions, compliance 
extensions, and special credits), between 2010 and 2015, the costs 
for large fleets will be reduced by approximately 97 percent, from 
over $1 billion to approximately $33 million (2010 dollars). Total 
costs over the life of the off-road regulation would be reduced by 
approximately 72 percent, which represents a cost savings of over 
$1.5 billion (2010 dollars). Peak year costs would be postponed from 
2013 to 2019 and reduced almost 73 percent, from $542 million to 
$146 million (2010 dollars).

    With the amendments, CARB maintains fleets are in a better position 
today to effectively pass on the reduced amortized costs of the 
regulation to their customers.
    CARB references the testimony of AGC at EPA's public hearing which 
characterized the regulation's cost as reasonable.\161\
---------------------------------------------------------------------------

    \161\ CARB Written Comments at 15, citing to the Hearing 
Transcript at p. 87. AGC noted that California's construction 
contractors invested enormous sums in the equipment in the 
reasonable expectation that they could lawfully operate and use it 
for the duration of its useful life. AGC also noted, anecdotally, 
that contractor defaults in 2012 will be higher than in any of the 
previous three years and thus EPA's review of CARB's most recent 
amendments is of interest and concern to AGC's members. AGC had 
requested EPA to delay prior proceedings on California's Fleet 
Requirements given ongoing announced plans by CARB to revisit at 
least portions of CARB's rule. AGC had been deeply concerned about 
the costs and other estimates CARB had made, about the technology 
that contractors would require to comply, and the lead time 
provided. AGC noted at EPA's authorization hearing that ``reasonable 
people may disagree about whether the rule merits federal approval, 
but AGC is not prepared to dispute a resolution that goes either 
way.'' ``At the time [of the 2010 amendments], from our members in 
California [AGC members], . . ., the costs of the amended rule were 
considered reasonable. We would not have agreed to that package of 
amendments . . . if they were not considered to be reasonable.''
---------------------------------------------------------------------------

    CARB also notes, that to the extent that some companies may be more 
adversely impacted than others, CARB had previously stated in its 
authorization request:

    The costs to fleets for compliance varies dramatically, 
depending upon the size of the fleet, the type of vehicles and 
equipment used by the fleet, the age of the vehicles in the fleet, 
the fleet's normal fleet replacement practices, and the compliance 
pathway chosen. Regarding the last variable, fleets have wide 
discretion on how they choose to comply; which vehicles should be 
controlled first, should a [verified diesel emission control 
strategy] VDECS be installed, or should the vehicle or engine be 
turned over. If turnover is selected, does the fleet choose to 
rebuild a vehicle's existing engine, report the engine with a newer, 
cleaner engine, replace the older vehicle with a newer vehicle with 
a cleaner engine, etc; does the fleet elect to designate a vehicle 
as low use. Each of these decisions will determine the actual 
compliance costs for the fleet.

    In the context of responding to fleet contractors who may have the 
financial inability to meet the compliance costs, CARB states that EPA 
has previously addressed this general issue in a separate proceeding:

    Regarding small businesses, the Owner-Operator Independent 
Drivers Association (OOIDA) commented that the transport 
refrigeration units (TRU) air toxic control measure (ATCM) places a 
``particularly onerous financial burden on small business truckers'' 
with small fleets (20 or fewer trucks) making up 95% of the industry 
. . .. EPA believes that the CARB regulations are feasible with 
respect to cost objectively; i.e., all fleet operators face the same 
cost per unit to comply. While this cost may have different impacts 
on fleets of varying sizes, EPA recognizes that it is up to CARB to 
choose who it will regulate under its standards. Because these TRU 
engines do emit significant amount of pollution and the cost of 
compliance are not so large as to render the compliance options 
objectively out-of-reach, the fact that some operators may have 
difficulties with the cost of the program does not make the Program 
infeasible.

    CARB notes that EPA's previous statements regarding feasibility 
with regard to analyzing cost objectively and CARB's discretion to 
choose who and how it may regulate under its standards also holds true 
for its Fleet Requirements. CARB notes that in the context of the Fleet 
Requirements the technology itself is feasible and has not been 
questioned; and that the objective costs of the regulation--as conceded 
by some members of industry--are reasonable.
    With regard to ARTBA and other commenters' contention that small 
companies will be severely affected by the Fleet Requirements because 
of the costs of repowering and retrofitting vehicles and that these 
companies do not have the resources to comply, CARB states that this 
overlooks the fact that the amended regulations have significantly 
reduced the costs of compliance and have extended the date of 
compliance along with a variety of compliance options. CARB notes that 
the total costs of compliance of the regulation have been reduced by 
approximately 72 percent. In addition, the compliance costs for smaller 
fleets are lower than the costs for larger fleets in that small fleets 
are exempted from having to turnover vehicles to meet the regulation's 
BACT requirements.\162\
---------------------------------------------------------------------------

    \162\ Title 13, CCR, section 2449.1(b)(3)(C).
---------------------------------------------------------------------------

    CARB also addressed the issue of whether its new engine replacement 
provisions are inconsistent with EPA's regulations and therefore not a 
feasible compliance path for fleet operators in California. As CARB 
notes, and CIAQC's comments maintain, repowering under CARB's existing 
regulatory authority pertaining to new nonroad CI engine regulations 
is, in many instances, technologically feasible at a significantly 
lower cost than replacing an older vehicle with a new one. CARB 
acknowledges that repowering is not possible in all circumstances but 
nevertheless is often a cost-effective option for older equipment and 
vehicles. CARB references comment from Altfillisch, as one example, 
that it has been able to repower at least 71 nonroad vehicles and 
equipment between 2001 and 2005, years before the Fleet Requirements 
went into effect.
    With respect to whether EPA's replacement engine regulations are 
inconsistent with CARB's replacement engine regulations, CARB notes 
that EPA has previously authorized the CARB nonroad CI emission 
standards applicable to new engines and equipment which included CARB's 
replacement engine regulations.\163\ Therefore California fleet 
operators are subject to CARB's replacement engine regulations which 
substitute for EPA's replacement engine provisions in California.\164\
---------------------------------------------------------------------------

    \163\ See 75 FR 8056, 8060 (February 23, 2010).
    \164\ See CARB Mail Out  MSC 13-07 (March 11, 2013), 
see also CARB Supplemental Comments.
---------------------------------------------------------------------------

    In response to concerns that the Fleet Requirements are not 
technically feasible due to the unavailability of Tier 4 engines, CARB 
references its March 1, 2012 Authorization Request wherein it states:

[[Page 58117]]

    It is not until 2018 that the regulation requires large and 
medium fleets to replace vehicles and engines with only Tier 3 and 
Tier 4 engines. By 2018, Tier 3 engines will have been available for 
at least ten years, Interim Tier 4 engines for at least 7 years, and 
Tier 4 engines for at least 3 years. Additionally, the regulation 
provides relief to fleets if there is a delay in availability of 
vehicles that would be required to use Tier 3 or Tier 4 interim of 
final Tier 4 emission standards.

    CARB noted that there is no basis to ARTBA's conjecture regarding 
Tier 4 engine unavailability during the applicable time frame.\165\
---------------------------------------------------------------------------

    \165\ CARB Written Comments at 17.
---------------------------------------------------------------------------

    Finally, with respect to the compliance option of VDECS or 
retrofits, CARB's supplemental comments clarify that the regulation 
never required unsafe retrofits to be installed, and retrofit safety is 
even less of a concern since the regulation, as amended, removes all 
mandatory installation of VDECS. CARB explains that the regulation, as 
initially adopted, only required retrofit of a specified percentage of 
vehicles if the fleet operator could not meet the PM fleet average 
targets. The amendments have since removed this requirement and, in 
addition, the California Occupational Health Standards Safety Board 
(OSHSB) has adopted amendments to its construction safety orders (after 
working with CARB) to ensure that any retrofit will not affect the 
capacity, structural integrity, or safe performance of the vehicle in 
which it is installed nor create a risk of fire or operator contact 
with the exhaust system or impair the vision of the operator. CARB's 
2010 amendments to the Fleet Requirements continue to provide that no 
VDECS are required to be installed if in violation of the amended OSHSB 
safety order and, as noted above, there is no longer a mandate that a 
specified percentage of vehicles be retrofitted if the fleet average is 
not met.\166\
---------------------------------------------------------------------------

    \166\ Id. at 17-18.
---------------------------------------------------------------------------

    As explained below, EPA agrees with CARB's presentation of how 
technological feasibility should be evaluated, for purposes of 
authorization review by EPA, and that CARB has provided ample evidence 
of the feasibility of the Fleet Requirements overall, and the 
feasibility with respect to individual compliance options. CARB has 
presented appropriate evidence of the feasibility and availability of 
new nonroad CI engines along with appropriate replacement engines and 
retrofits.
    CARB has also properly set forth the role of EPA in reviewing 
California in-use performance standards which require legacy fleets to 
achieve challenging emission reductions. EPA is not setting its own 
standards under section 202(a) of the Clean Air Act, rather EPA's role 
within its authorization review is more limited and takes place in the 
context of deference that Congress envisioned for California. This 
deference was discussed in an early waiver decision when EPA approved 
the waiver request for California's 1977 model year standards:

    Even on this issue of technological feasibility 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. The whole approach to the Clean Air Act is 
to force the development of new types of emission control technology 
where that is needed by compelling the industry to `catch up' to 
some degree with newly promulgated standards. Such an approach to 
automotive emission control might be attended with costs, in the 
shape of a reduced product offering, or price or fuel economy 
penalties, and by risks that a wider number of vehicle classes may 
not be able to complete their development work in time. Since a 
balancing of these 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 judgement on that score.\167\
---------------------------------------------------------------------------

    \167\ 40 FR 23102, 23103 (May 28, 1975); see also 78 FR 2112 
(January 9, 2013).

    CARB has set forth a series of compliance options to address 
emissions from its legacy fleet of NR CI engines. Fleet operators may 
choose from these compliance options. As explained below, EPA does not 
believe those opposing these regulations have met their burden of 
showing that the regulations are not technologically feasible.
    Further, while EPA acknowledges the comments it has received that 
claim that the Fleet Requirements may have significant adverse economic 
affect on individual fleet operators, the Agency finds no factual basis 
for determining that the Fleet Requirements are objectively cost 
prohibitive. To the extent that a balancing of risks attendant with 
adverse effect on some fleet operators against the benefits of 
addressing the emission inventory associated with the legacy fleet in 
California, EPA gives that the same substantial deference (as with past 
waivers) to California's judgment regarding the balancing of the risks 
and costs of regulation against the potential benefits from reduced 
emissions. CARB has gone through several significant rounds of 
amendments to address in part the economic cost associated with the 
Fleet Requirements and has afforded the fleet operators a significant 
number of compliance options and delays in initial compliance in order 
to objectively address the risks associated with costs.
    At the outset, EPA believes it important to note that we agree with 
CARB's assessment that the Fleet Requirements will be feasible given 
the technology available today along with the technologies that CARB 
projects to be available in the lead time provided.
    First, several commenters noted their concern that one of the more 
cost effective compliance options, the replacement of engines or 
repowering, is precluded as it conflicts with EPA's engine replacement 
policy at 40 CFR 1068.240. EPA has previously authorized CARB's 
emission standards applicable to new NR CI engines and the regulations 
in that authorization included CARB's replacement engine provisions. 
Therefore, CARB's replacement engine provisions, not EPA's provisions, 
are the applicable provisions for the purposes of these Fleet 
Requirements. In addition, EPA has recently published a direct final 
rule and accompanying notice of proposed rulemaking that adopts 
modifications to the Agency's replacement engine provisions to allow, 
on a limited basis, the practice of replacing engines with engines that 
are cleaner, but not certified to the most stringent standards, even 
where the original engines have not failed prematurely.\168\ Therefore, 
EPA's replacement engine provisions do not prevent use of repowering as 
a method of complying with CARB's regulations.
---------------------------------------------------------------------------

    \168\ See http://www.epa.gov/otaq/climate/documents/420f13001.pdf, and http://www.gpo.gov/fdsys/pkg/FR-2013-06-17/pdf/2013-11980.pdf. The EPA received adverse comment on a portion of the 
Direct Final Rule, but no commenter objected to the provision 
allowing repowering using engines that are not certified to the most 
stringent standards.
---------------------------------------------------------------------------

    Second, with respect to fleet operators choosing to replace their 
equipment with new cleaner vehicles and commenters questioning the 
availability of such vehicles (e.g., Tier 3, interim Tier 4, and Tier 
4), EPA notes that these standards have already been reviewed by EPA in 
the context of its own rulemakings, and EPA has found these standards 
to be feasible in a timeframe allowing even less lead time than that 
provided by California. EPA annually certifies new NR CI engines and 
the certification data to date strongly suggest that engine 
manufacturers are certifying to meet the newest applicable standards, 
and that these standards are

[[Page 58118]]

feasible.\169\ EPA believes CARB is reasonable in its depiction of 
currently available emission control technology and with its projection 
of sufficient lead time being available to ensure that a sufficient 
supply of newer emission control technologies (meeting newer Tier 3, 
and interim and final Tier 4 emission standards) is in place to meet 
the demands of fleet operators. As CARB notes, the comments contending 
otherwise have not provided any evidence that in 2018 large and medium-
sized fleet operators will not be able to replace vehicles and engines 
with Tier 3 and Tier 4 engines. In addition, to the extent a fleet 
operator replaces such vehicles and engines, CARB's Fleet Requirements 
also provide relief to fleets if there is a delay in availability of 
vehicles that would be required to use Tier 3 or Tier 4 interim or 
final Tier 4 emission standards. Finally, there is no evidence in the 
record indicating a shortage of certified engines during the time frame 
for which they will be needed for this rule, given the flexibilities 
provided by the amendments. The opponents of the waiver have not met 
their burden of proof to demonstrate the lack of commercial 
availability of appropriate engines to the extent that the regulations 
would be infeasible.
---------------------------------------------------------------------------

    \169\ http://www.epa.gov/otaq/certdata.htm#nrci.
---------------------------------------------------------------------------

    Third, with respect to the technical feasibility of exhaust 
retrofits (VDECS) and the safety-related and compatibility concerns 
expressed by commenters, EPA believes that CARB's 2010 amendments add 
both the needed flexibility, with respect to not mandating retrofits, 
and sufficiently clarify when a NR CI vehicle is exempted due to 
expressed safety concerns. The Fleet Requirements never required unsafe 
retrofits be installed, and retrofit safety is even less of a concern 
now that the regulation has been amended to remove all mandatory 
installation of VDECS, even if fleet average targets are not met.\170\ 
EPA believes that CARB has also appropriately addressed expressed 
concerns regarding retrofit safety, including referencing the 
amendments adopted by OSHSB. These amendments, adopted in March 2012, 
state that a safety order will be provided in order to ensure that a 
retrofitted VDECS shall not affect the capacity, structural integrity, 
and safe performance of the vehicle in which it is installed nor create 
a fire or safety risk or impair the operators' vision.\171\ EPA also 
notes that the CARB staff reviewed retrofit field experience since 
2002. Of the 35,000 diesel particulate filters (DPFs) deployed in the 
state, less than 15 safety-related issues were identified and all of 
these were shown to be attributed to poor engine or device maintenance, 
misapplication of devices, or the ignoring of warning alarms by the 
operator.\172\ With regard to the availability of VDECS in general, 
there is no evidence in the record to refute CARB's view that the Fleet 
Requirements are likely to continue to increase the demand for 
retrofits and that CARB's anticipation that an increase in supply will 
occur as compliance deadlines approach is reasonable. CARB has 
identified a number of verified Level 3 VDECS and the commenters have 
not shown that this option does not provide a feasible alternative in 
many cases to meeting the Fleet Requirements.\173\
---------------------------------------------------------------------------

    \170\ CARB Supplemental Comments at 17-18.
    \171\ Id.
    \172\ MECA at 4. ``Regarding the safe installation of retrofit 
devices, retrofit manufacturers have shown that off-road retrofits 
can be installed to comply with the Cal/OSHA retrofit visibility/
safety requirements finalized last year. Retrofit manufacturers are 
using the best engineering judgment and installation practices to 
ensure the safe installation of devices. In general, retrofit 
installations in California have had an excellent safety record.
    \173\ Authorization Request at 24. See also EPA's list of 
currently verified technologies at: http://www.epa.gov/cleandiesel/verification/verif-list.htm, and generally: http://www.epa.gov/cleandiesel/technologies/.
---------------------------------------------------------------------------

    EPA also believes it important to note that CARB's fleet average 
targets have been set so that they progressively become more stringent 
over the years in order that CARB's emission reductions goals are met 
while affording fleet operators with necessary flexibility and 
compliance options. In addition, CARB's four-year delay in compliance 
(from 2010 to 2014) helps ensure the feasibility of the regulation 
along with built-in provisions that ensure against noncompliance with 
the Fleet Requirements due to the unavailability of the highest tiered 
engines or VDECS. In addition, CARB's BACT credits compliance path 
includes a number of accommodations (e.g. accrual of credits earned 
prior to March 1, 2010 may in certain circumstances be applied toward a 
large fleets' January 1, 2014 compliance deadline; double credits for 
early installation of VDECS; credit for reduced horsepower of the 
fleet, etc). There are also a number of exemptions under the BACT 
requirements applicable to large and medium fleets, and separately for 
small fleets. For example, vehicles in any size fleet are exempt from 
the BACT credit requirement calculation if on any given annual 
compliance date the vehicle is less than ten years old from the date of 
manufacture, and specialty vehicles are exempt if the fleet has applied 
BACT to all other vehicles in the fleet and no engine is available to 
repower the specialty vehicle and instead has the highest level VDECS 
available installed. In addition, for large and medium fleets, a 
vehicle is exempt if it had a Level 2 or 3 p.m. VDECS installed within 
the last six years and for small fleets the vehicle is exempt if has 
already been retrofitted with a Level 2 or 3 VDECS that was the highest 
level PM VDECS available at the time of installation. Regarding the 
claim that the regulations require an initial repower or retrofit and 
then a replacement of an entire piece of equipment shortly thereafter, 
CARB's 2010 amendments also provide an exemption for vehicles that have 
had a level 2 or 3 p.m. VDECS installed within the last six years and 
an exemption for original equipment manufacturer diesel PM equipped 
vehicles and, with certain limitations, to vehicles that installed 
highest level VDECS prior to 2013. These further accommodations help 
assure the feasibility of the Fleet Requirements.
    Although certain fleet operators contend that their business will 
either be severely or irreparably harmed (as reviewed further below), 
the commenters opposing the authorization have not provided any factual 
evidence in the record to demonstrate that a mix of available 
compliance options and flexibilities is not feasible.
    EPA believes that CARB has afforded a variety of compliance options 
(and initial delays of the phase-in periods for compliance) that 
individual fleet operators can employ in a variety of ways depending on 
the nature of their business and the composition of their fleets. 
Accordingly, with regard to the consideration of cost of the Fleet 
Requirements (including comments that the regulation will diminish the 
net value of certain fleet operators which will further impair their 
ability to finance the upgrades necessary to comply with the regulation 
or to obtain construction bonds), we note at the outset that many 
factors affect the ability of certain fleet operators to meet the Fleet 
Requirements. While it is possible that some diminishment in value of 
certain fleet operator equipment will occur as a result of the Fleet 
Requirements (while recognizing that CARB has significantly delayed the 
requirement that such engines be replaced), there is no evidence or 
data in the record to demonstrate that the loss in value to the fleet 
operator is the proximate cause of such operations going out of 
business or that such

[[Page 58119]]

economic results render the Fleet Requirements infeasible for the 
broader regulated community. EPA believes that CARB has reasonably 
responded to concerns expressed about the costs of the Fleet 
Requirements, including the availability of engine replacements and 
retrofits. EPA notes that even some commenters otherwise opposed to the 
authorization have recognized the feasibility of early engine 
replacement. In addition, there is no evidence in the record to reflect 
a widespread or significant economic disruption to regulated fleet 
operators that is proximately caused by the Fleet Requirements.\174\
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    \174\ Regarding comments that these regulations would stop 
valuable work to be performed by this industry in California, there 
is no evidence that this rule has led to the widespread cancelation 
of projects.
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    More importantly, EPA believes that the CARB regulations are 
feasible with respect to cost objectively; i.e., although fleets are 
likely to be comprised differently, all fleet operators are 
nevertheless facing the same cost per unit to comply. While this cost 
may have different impacts on fleets of varying sizes, EPA recognizes 
that it is up to CARB to choose who it will regulate under its 
standards.\175\ The fact that some operators may have difficulties with 
the cost of the program does not make the program infeasible.\176\
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    \175\ CARB notes that the increased costs, due to the Fleet 
Requirements, to small fleet operators is on the magnitude of 
$38,000 for the youngest fleets to $173,000 for the oldest fleets 
(cite) and such costs have not been countered by opponents of the 
authorization.
    \176\ EPA has previously stated that it is up to CARB to choose 
who it will regulate under its standards, even though such costs may 
have differing impacts for different fleets. See 74 FR 3030 (January 
16, 2009), TRU Decision Document at 63.
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    In addition, under the guidelines of MEMA I, EPA believes that it 
should evaluate costs in authorization requests by looking at the 
actual costs of compliance in terms of the lead time provided by the 
regulations, and not at the regulation's cost-effectiveness. It is 
CARB's responsibility to determine the best way to reduce emissions in 
its state, and EPA does not reevaluate California's policy decisions in 
deciding whether to grant authorization, as long as, pursuant to 
section 209(e), the regulations can be met without making the costs 
prohibitive. The comments received regarding cost-effectiveness do not 
show that the costs for fleet operators generally will be prohibitive. 
California's estimates of the costs of the regulation are reasonable 
and CARB has rebutted the argument that small fleet operators in 
general will not be able to meet the requirements.\177\ EPA also agrees 
with CARB's statement that EPA has long deferred to California's policy 
judgments associated with cost-effectiveness ``EPA will not look into 
the question of cost-effectiveness--that is, whether the overall 
benefits of the regulation are outweighed by the regulation's costs of 
compliance.'' \178\ Consequently, based on the record, EPA is unable to 
make the finding that the Fleet Requirements are not technologically 
feasible with the available lead time giving consideration to the cost 
of compliance.
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    \177\ CARB's Authorization Request at 25. CARB notes that small 
fleets are expected to be able to fully comply with the regulation 
if it routinely turns over its vehicles and equipment and meet the 
emission target rates and have little or no compliance costs 
associated with the regulation. To the extent normal turnover is 
insufficient, CARB notes small fleets are expected to comply through 
installation of VDECS (If a small fleet cannot be retrofitted with a 
VDECS that vehicle is exempt from the BACT requirements, including 
turnover), by exercising the special option for fleets with less 
than 500 total horsepower, designating vehicles as low-use, and by 
exercising the small fleet vehicle exemptions along various other 
exemptions, credits, etc.
    \178\ Id., citing 58 FR 4166 (January 7, 1993), Decision 
Document at 20 [``Since a balancing of these . . . costs against the 
potential benefits from reduced emissions is a central policy 
decision [of CARB is adopting the regulation] I believe I am 
required to give very substantial deference to California's 
judgments on this score.''].
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b. Consistency of Certification Procedures
    California's standards and accompanying enforcement procedures 
would also be inconsistent with section 202(a) if the California test 
procedures were to impose certification requirements inconsistent with 
the federal certification requirements. Such inconsistency would mean 
that manufacturers would be unable to meet both the California and 
federal testing requirements using the same test vehicle or 
engine.\179\ CARB presents that the Fleet Requirements raise no issue 
regarding incompatibility of California and federal test procedures. 
``There is no requirement on engine manufacturers or fleet owners to 
certify engines beyond existing federal and state certification testing 
for new engines. Additionally, there are no conflicts between federal 
and California test procedures for verification testing for diesel 
emission control strategies in that there is no comparable mandatory 
federal program.'' \180\ EPA received no comments suggesting that 
CARB's Fleet Requirements pose any test procedure consistency problem. 
Therefore, based on the record, EPA cannot find that CARB's testing 
procedures are inconsistent with section 202(a) and cannot deny CARB's 
request based on this criterion.
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    \179\ See, e.g., 43 FR 32182 (July 25, 1978).
    \180\ CARB Authorization Request at 28.
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D. Additional Issues Raised in Comment

    EPA received a series of comments on grounds other than those 
specified in section 209(e)(2)(A) of the Act. These comments include 
several administrative concerns including the lack of a public hearing 
in California and a request to reopen the public comment period (and to 
stay the issuance of a final EPA decision). We also received a number 
of comments objecting to the authorization based on other federal law 
or constitutional claims. As set forth below, EPA has complied with all 
relevant administrative process requirements for this proceeding and 
none of the comments described above provide any basis for denying 
CARB's Authorization Request.
1. Request for a Public Hearing in California
    EPA received comment during the course of the public comment period 
associated with EPA's August 12, 2012 Federal Register notice 
requesting that EPA conduct a public hearing or hearings in California 
in order for those affected by CARB's regulation, the fleet operators, 
to be directly heard and for those unable to travel to Washington, DC 
be afforded the opportunity to express their concerns to EPA.
    Section 209(e)(2)(A) states in part that ``. . . the Administrator 
shall, after notice and opportunity for public hearing, authorize 
California to adopt and enforce standards and other requirements 
relating to the control of emissions from such nonroad vehicles or 
engines . . . .'' EPA's process for providing an opportunity for public 
comment on the CARB Fleet Requirements was consistent with the normal 
process EPA applies in response to this language. EPA has consistently 
announced in the Federal Register the opportunity for a public hearing 
for any authorization request received from CARB. As a general matter 
EPA has also offered an opportunity for written comment which has 
opened on the date of the Federal Register notice and closed on a date 
after the public hearing. As part of EPA's public hearings, the 
presiding officer has consistently stated that the hearing was being 
conducted in accordance with section 209(e) of the Clean Air Act and 
that any interested parties have the opportunity to present both oral 
testimony and written comments. While EPA occasionally has held 
hearings in California, the vast

[[Page 58120]]

majority of hearings on section 209 proceedings have occurred in 
Washington, DC. EPA has been conducting its section 209(b) waiver 
proceedings and section 209(e) authorization proceedings in this manner 
for decades, and although Congress has amended provisions in section 
209 on two separate occasions, Congress has not chosen to alter EPA's 
administrative requirements.
    EPA is guided by the principles of fair public notice and 
opportunity for comment. In this instance, EPA published notice of 
CARB's authorization request in the Federal Register, including the 
Clean Air Act prescribed authorization criteria EPA would review in 
consideration of CARB's request, and provided more than 30 days of 
notice before conducting a public hearing. EPA conducted a properly 
noticed public hearing in Washington, DC which was attended by several 
trade associations representing numerous members and fleet operators 
within California.\181\ EPA has placed the transcript of the public 
hearing into the public docket. After the public hearing EPA provided 
an additional 30 days for interested parties to submit written comment 
addressing all relevant issues pertaining to California's authorization 
request. The affected parties have had in their possession the 
necessary information to adequately comment on whether the Fleet 
Requirements are technologically feasible as well as CARB's 
protectiveness determination. Opponents have had access to the 
necessary information to formulate comments in regard to the second 
waiver criterion at section 209(e)(2)(A)(ii). All written comments have 
been placed in the public docket. EPA was responsive to the desire 
expressed by some commenters to speak directly with representatives to 
EPA, including the desire to explain the economic impacts the Fleet 
Requirements may have on their businesses. In response, EPA conducted 
and made available an informal teleconference phone call for interested 
parties in California with representatives from EPA.\182\ This Federal 
Register notice provides EPA's reasoned response to all oral testimony, 
written comment, and viewpoints expressed to EPA. All commenters, 
including opponents of the waiver, have had ample opportunity to 
comment and meet their applicable burdens of proof. Opponents of CARB's 
Fleet Requirements and of its authorization request have had ample 
opportunity to present their viewpoints during the course of CARB's 
rulemaking and EPA's authorization proceeding. Lastly, as noted above, 
CARB has engaged in several proceedings and has adopted a series of 
amendments in response to concerns raised by the regulated parties, 
including fleet operators.
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    \181\ As explained in EPA's July 2009 GHG waiver decision, EPA 
is guided by the language in the Clean Air Act and not the hearing 
requirements set forth in the Administrative Procedure Act. EPA 
incorporates that reasoning into today's decision. See 74 FR 32744, 
32780-32782 (July 8, 2009).
    \182\ EPA-HQ-OAR-2008-0691-0321.
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2. Request for EPA To Reopen the Comment Period
    EPA received comment from PLF characterized as a ``Notice of New 
Development and Supplemental Comment'' requesting that EPA reopen the 
comment period associated with the Fleet Requirements authorization 
request and to hold in abeyance any decision regarding California's 
authorization request. PLF points to the recent decision issued by the 
United States Court of Appeals for the District of Columbia Circuit in 
Natural Resources Defense Counsel v. EPA, No. 08-1250, January 4, 2013, 
(Decision) for the proposition that the court's decision and CARB's 
authorization application are inextricably linked. PLF characterizes 
the Decision as requiring EPA itself to adopt stringent federal 
implementation standards for PM2.5 throughout the nation, 
including California. Because California asserted that it ``needs'' 
PM2.5 nonroad diesel standards that are more stringent than 
federal PM2.5 standards, and because EPA is now required to 
use the ``stringent, action-forcing provisions'' of section 188-188(b) 
of the Clean Air Act as a result of the Decision, PLF maintains that it 
is appropriate to complete EPA's administrative proceedings on remand 
(from the Decision) before EPA is able to determine the extent to which 
there is a ``need'' for California to have its own PM2.5 
standard based on ``compelling and extraordinary conditions'' in 
California. In addition, PLF asserts that EPA's most recent revision of 
the NAAQS PM2.5 primary standard, which lowers the existing 
level to 12.0 micrograms per cubic meter, and the concomitant revision 
to the Air Quality Index for PM2.5, provides additional 
reason to question California's ``need'' for its own PM2.5 
nonroad diesel standard.\183\ EPA responds to the substance of PLF's 
comments above in our discussion of the second criterion for 
authorization.
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    \183\ Although PLF expresses the NAAQS PM2.5 primary 
standard in ``micrometers,'' the correct unit of measure is 
micrograms.
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    As discussed above, EPA does not agree that the recent decision of 
the Court of Appeals has any significant effect on the second criterion 
for granting authorization. Moreover, PLF has had a full opportunity to 
make its argument with regard to this new decision and its potential 
effect on this authorization determination, and EPA has responded in 
full to PLF's comments. We therefore believe there is no need for a 
further reopening of the comment period for this proceeding; nor is 
there any cause for any delay in issuing our decision with regard to 
the authorization. Therefore, we deny PLF's request to reopen the 
authorization comment period and to delay issuing an authorization 
decision for the Fleet Requirements.
3. Claims Outside the Scope of the Clean Air Act
    Airlines for America (``A4A'') has provided comment opposing EPA 
authorization of California's Fleets Regulation. A4A claims that the 
Fleet Requirements, as they affect airport ground equipment, are 
preempted by the Federal Aviation Act and the Airline Deregulation Act. 
These comments are outside the scope of EPA's scope of review of 
California authorization requests under section 209(e)(2). As EPA has 
stated on numerous occasions, EPA's review of California regulations 
under section 209 is not a broad review of the reasonableness of the 
regulations or its compatibility with all other laws. Sections 209(b) 
and 209(e) of the Clean Air Act limit EPA's authority to deny 
California requests for waivers and authorizations to the three 
criteria listed therein. As a result, EPA has consistently refrained 
from denying California's requests for waivers and authorizations based 
on any other criteria.\184\ In instances where the U.S. Court of 
Appeals has reviewed EPA decisions declining to deny waiver requests 
based on criteria not found in section 209(b), the Court has upheld and 
agreed with EPA's determination.\185\ A4A's comment raises issues of 
federal preemption that are not included within the criteria listed 
under sections 209(e).\186\ Therefore, in considering

[[Page 58121]]

whether to grant authorization for California's Fleet Requirements 
under section 209(e), EPA cannot deny California's request for 
authorization based on the issues raised by A4A.
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    \184\ See, e.g., 74 FR 32744, 32783 (July 8, 2009).
    \185\ See Motor and Equipment Manufacturers Ass'n v. Nichols, 
142 F.3d 449, 462-63, 466-67 (D.C. Cir.1998), Motor and Equipment 
Manufacturers Ass'n v. EPA, 627 F.2d 1095, 1111, 1114-20 (D.C. Cir. 
1979).
    \186\ A4A may raise these issues in a direct challenge to 
California's regulations in other forums, but these issues are not 
relevant to EPA's limited review under section 209.
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    EPA also received comment suggesting that EPA and California must 
certify CARB's Fleet Requirements as ``not having a significant 
economic impact on a substantial number of small entities'' under the 
Regulatory Flexibility Act (5 U.S.C. 601).\187\ EPA notes that CARB's 
authorization request and EPA's subsequent action do not constitute a 
rule as defined in the Regulatory Flexibility Act, 5 U.S.C. 601(2), and 
therefore are not covered by the certification requirement in that 
statute. EPA's authorization proceedings and actions under section 
209(e)(2)(A) are informal adjudications. In an authorization 
proceeding, EPA receives a request from one entity (CARB) that is 
presenting an existing regulation established as a matter of California 
law. The request is for an EPA authorization for that party, so it may 
adopt and enforce the specific regulations. In deciding this request, 
EPA interprets and applies the three authorization criteria established 
by the Act, and under this provision is required to grant the 
authorization unless EPA makes one of the three specified findings. EPA 
applies the pre-existing law, section 209(e)(2)(A), and EPA's 
regulation promulgated therein, to a specific request covering a 
specific regulation, and applies the three statutory criteria to the 
facts of the specific request.
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    \187\ Delta Construction, May 12, 2010 comment at 3 (Citing 42 
U.S.C. 7410(k) and 40 CFR 52.02(a)).
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    The decision to grant or deny the authorization request directly 
affects the legal rights of the party before EPA, California. If EPA 
grants the authorization, then CARB may enforce its state regulations. 
Other parties, for example, the fleet operators, may be indirectly 
affected because state regulation is no longer preempted. While there 
may be indirect consequences for various parties, the only decision 
taken by EPA in the authorization proceeding is the decision that 
permits the State of California to adopt and enforce its state 
regulations. As noted above, sections 209(b) and 209(e) of the Clean 
Air Act limit EPA's authority to deny California requests for waivers 
and authorizations to the three criteria listed therein. As a result, 
EPA has consistently refrained from denying California's requests for 
waivers and authorizations based on any other criteria.\188\ Review of 
California regulations under the Regulatory Flexibility Act is not 
included within the criteria listed under sections 209(e). Indeed, 
Congress intended EPA to provide California with substantial deference 
in making its own decisions regarding the effects of its regulations. 
Therefore, in considering whether to grant authorization for 
California's Fleet Requirements under section 209(e), EPA is not 
required to undertake a review under the Regulatory Flexibility Act and 
could not deny California's request for authorization based on any such 
review.
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    \188\ See, e.g. 74 FR 32744, 32783 (July 8, 2009).
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4. Constitutional Claims
    EPA received a number of comments suggesting that EPA should deny 
authorization of the Fleet Requirements because of their potential to 
impose negative economic impacts on fleets. These comments stated that 
the regulations would cause emissions control equipment that fleet 
operators purchased before CARB's regulations took effect to lose its 
asset value, even though the equipment still has a long useful life. 
The comments suggest that CARB's regulation amounts to a ``taking'' as 
defined under the Fifth Amendment to the U.S. Constitution and 
``appropriate sections of California Constitution and Law.'' EPA's 
response to these comments is guided first by the language in section 
209(e)(2)(A) that clearly sets forth the limited criteria or basis by 
which we may deny an authorization request from CARB. EPA's limited 
ability to deny an authorization request to the criteria found in 
section 209(e)(2)(A) of the Act is consistent with case law.\189\ 
Therefore, in considering whether to grant authorization for 
California's Fleet Requirements under section 209(e), EPA cannot deny 
California's request for authorization based on constitutional 
arguments outside the scope of the Clean Air Act. Moreover, such 
arguments are best directed against California directly in a court of 
law, not to a separate government agency with only a limited authority 
to review California's regulations.
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    \189\ MEMA I.
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E. Authorization Determination for California's Fleet Requirements

    After a review of the information submitted by CARB and other 
commenters, EPA finds that those opposing California's request have not 
met the burden of demonstrating that authorization for California's 
Fleet Requirements should be denied based on any of the statutory 
criteria of section 209(e)(2)(A). For this reason, EPA finds that an 
authorization for California's Fleet Requirements should be granted.

IV. Decision

    The Administrator has delegated the authority to grant California 
section 209(e) authorizations to the Assistant Administrator for Air 
and Radiation. After evaluating California's Fleet Requirements, CARB's 
submissions, and the public comments received, EPA is granting an 
authorization to California for its Fleet Requirements.
    My decision will indirectly affect not only persons in California, 
but also entities outside the state who must comply with California's 
requirements. For this reason, I determine and find that this is a 
final action of national applicability for purposes of section 
307(b)(1) of the Act. Pursuant to section 307(b)(1) of the Act, 
judicial review of this final action may be sought only in the United 
States Court of Appeals for the District of Columbia Circuit. Petitions 
for review must be filed by November 19, 2013. Judicial review of this 
final action may not be obtained in subsequent enforcement proceedings, 
pursuant to section 307(b)(2) of the Act.

V. 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).

    Dated: September 13, 2013.
Janet G. McCabe,
Acting Assistant Administrator, Office of Air and Radiation.
[FR Doc. 2013-22930 Filed 9-19-13; 8:45 am]
BILLING CODE 6560-50-P