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California State Nonroad Engine Pollution Control Standards; In-Use Diesel-Fueled Transport Refrigeration Units (TRUs) and TRU Generator Sets and Facilities Where TRUs Operate; Notice of Decision


American Government Trucking

California State Nonroad Engine Pollution Control Standards; In-Use Diesel-Fueled Transport Refrigeration Units (TRUs) and TRU Generator Sets and Facilities Where TRUs Operate; Notice of Decision

Gina McCarthy
Environmental Protection Agency
19 January 2017


[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Notices]
[Pages 6525-6532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01225]


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

ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2013-0024; FRL-9958-64-OAR]


California State Nonroad Engine Pollution Control Standards; In-
Use Diesel-Fueled Transport Refrigeration Units (TRUs) and TRU 
Generator Sets and Facilities Where TRUs Operate; Notice of Decision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of decision.

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

SUMMARY: The Environmental Protection Agency (``EPA'') is granting the 
California Air Resources Board (``CARB'') request for authorization of 
amendments to its Airborne Toxic Control Measure for In-Use Diesel-
Fueled Transport Refrigeration Units (``TRU'') and TRU Generator Sets 
and Facilities Where TRUs Operate (together ``2011 TRU Amendments''). 
EPA's decision also confirms that certain of the 2011 TRU amendments 
are within the scope of prior EPA authorizations. The 2011 TRU 
Amendments primarily provide owners of TRU engines with certain 
flexibilities; clarify recordkeeping requirements for certain types of 
TRU engines; establish requirements for businesses that arrange, hire, 
contract, or dispatch the transport of goods in TRU-equipped trucks, 
trailers, or containers; and address other issues that arose during the 
initial implementation of the regulation. This decision is issued under 
the authority of the Clean Air Act (``CAA'' or ``Act'').

DATES: Petitions for review must be filed by March 20, 2017.

ADDRESSES: EPA has established a docket for this Notice of Decision 
under Docket ID EPA-HQ-OAR-2015-0224. 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 from 8:30 a.m. to 4:30 
p.m.; Monday through Friday, excluding legal 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 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-2015-0224 in the ``Enter Keyword or ID'' fill-in box 
to view documents in the record. Although a part of the official 
docket, the public docket does not include Confidential Business 
Information (``CBI'') or other information whose disclosure is 
restricted by statute.
    EPA's Office of Transportation and Air Quality (``OTAQ'') maintains 
a Web page that contains general information on its review of 
California waiver and authorization requests. Included on that page are 
links to prior waiver 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, 
Transportation and Climate Division, Office of Transportation and Air 
Quality, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave. 
NW., (6405J), Washington, DC 20460. Telephone: (202) 343-9256. Fax: 
(202) 343-2804. Email: dickinson.david@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    EPA granted an authorization for California's initial set of TRU 
regulations on January 9, 2009.\1\ EPA also granted a within-the-scope 
authorization for amendments to the TRU regulations, adopted in 2010, 
on June 28, 2013.\2\ The TRU regulations establish in-use performance 
standards for diesel-fueled TRUs and TRU generator sets which operate 
in California, and facilities where TRUs operate. The TRU regulations 
are contained in an Airborne Toxic Control Measure (``ATCM'') adopted 
by CARB to reduce the general public's exposure to diesel particulate 
matter (``PM''), other toxic airborne contaminants and air pollutants 
generated by TRUs and reduce near source risk at facilities where TRUs 
congregate. TRUs are refrigeration systems powered by internal 
combustion engines which control the environment of temperature-
sensitive products that are transported in semi-trailer vans, truck 
vans, ``reefer'' railcars or shipping containers. The engines in TRUs 
do not propel the vehicle, but are used strictly to power the 
refrigeration system. These TRU engines are nonroad engines and vary in 
horsepower (``hp'') generally from 7 hp to 36 hp.
---------------------------------------------------------------------------

    \1\ 74 FR 3030 (January 16, 2009).
    \2\ 78 FR 38970 (June 28, 2013).
---------------------------------------------------------------------------

    By letter dated March 2, 2015, CARB submitted a request to EPA for 
authorization of amendments to its TRU regulations \3\ pursuant to 
section 209(e) of the CAA.\4\ The 2011 TRU Amendments were adopted by 
CARB on October 21, 2011, and became operative state law on October 15, 
2012.\5\ The 2011 TRU Amendments provide owners of 2001 through 2003 
model year (MY) TRU engines that complied with applicable Low-Emission 
TRU (``LETRU'') in-use performance standards by specified compliance 
deadlines a one- or two-year extension from the more stringent Ultra-
Low Emission (``ULETRU'') in-use performance standards. The amendments 
also clarify manual recordkeeping requirements for electric standby-
equipped TRUs and ultimately require automated electronic tracking 
system requirements for such TRUs and establish requirements for 
businesses that arrange, hire, contract, or dispatch the transport of 
goods in TRU-equipped trucks, trailers or containers. A more

[[Page 6526]]

detailed description of the 2011 Amendments is presented below in the 
context of which amendments CARB seeks within-the-scope confirmation 
and those amendments for which CARB seeks a full authorization.
---------------------------------------------------------------------------

    \3\ 13 California Code of Regulations (CCR), sections 2111, 
2112, Appendix A therein, 2139, 2147, 2440, 2441, 2442, 2443.1, 
2443.2, 2443.3, 2444.1, 2444.2, 2445.1, 2445.2, 2447, 2474 and 2448.
    \4\ ``Clean Air Act Sec.  209(e)(2) Authorization Support 
Document submitted by the California Air Resources Board, March 2, 
2015,'' at EPA-HQ-OAR-2015-0224-0002 (Authorization Support 
Document).
    \5\ Id., Attachment 13.
---------------------------------------------------------------------------

A. California's Authorization Request

    California requested EPA perform two types of review. First, CARB 
requested an EPA determination that certain provisions of the 2011 
amendments are within the scope of the prior authorizations, or in the 
alternative, merit full authorization (``Within-the-Scope 
Amendments''). The Within-the-Scope Amendments provide owners of 2003 
and older MY TRUs an extension of the ULETRU compliance date if the 
TRUs complied with the LETRU standard by specified dates. Such TRU 
engines that are 2001 MY and older are given an extension to December 
31, 2016 for the ULETRU deadline, 2002 MY TRUs are given a new deadline 
of December 31, 2017, and 2003 MY TRUs are given a new deadline of 
December 31, 2018. The Within-the-Scope Amendments also provide up to a 
one-year extension of the compliance dates if owners demonstrate that 
compliant technology is unavailable or is delayed due to financing, 
delivery, or installation and provides other flexibilities based upon 
certain requirements. In addition, the Within-the-Scope Amendments 
provide a host of new or clarified exemptions including: (1) 
Clarification that non-operational TRUs are generally exempt from 
compliance with the performance standards, but are still prohibited 
from being sold, rented or leased to a person that could reasonably be 
expected to operate such TRUs in California; (2) a limited exemption 
for TRU-equipped trucks and trailers used by mobile catering companies 
to feed emergency responders, such as firefighters (such engines are 
subject to registration and other requirements); (3) an exemption for 
non-compliant, non-operational TRUs on refrigerated railcars that 
travel through California based on CARB's Executive Officer approval 
under certain contingencies; and (4) an exemption for railway carriers 
from the owner/operator requirements for TRUs not owned by the railway 
carrier. Lastly, the Within-the-Scope Amendments clarify that the in-
use performance standards and associated compliance deadlines are to be 
based on the year the TRU unit itself was manufactured (including the 
potential for a prior model year TRU engine to be installed in limited 
circumstances), instead of basing the compliance deadline on the model 
year of the TRU engine.\6\
---------------------------------------------------------------------------

    \6\ See CARB's Authorization Support Document. CARB's Within-
the-Scope Amendments also include those provisions referenced at 
page 11 (allowance of California TRU dealers to acquire non-
compliant TRUs under certain conditions), pages 13-14 (clarification 
on the prohibition of selling non-compliant TRUs), page 15 
(allowance of the use of unique identification numbers instead of a 
CARB identification number), and page 16 (clarification of the 
registration requirements and consistency with current CARB 
Equipment Registration (``ARBER'') system screens).
---------------------------------------------------------------------------

    Second, CARB requested full authorization for amendments that 
revise standards or establish new requirements (``Full Authorization 
Amendments''). These provisions include amendments that require new 
replacement engines to meet more stringent requirements (based on the 
new replacement engine's model year or effective model year) than the 
original TRU engines. The Full Authorization Amendments also provide 
that to the extent TRUs now may be repowered with rebuilt engines such 
rebuilt engines must meet more stringent emission standards than the 
standards of the original engine, and provided the engines are rebuilt 
by engine rebuilders in compliance with federal and state engine 
rebuilding requirements for off-road compression ignition engines.\7\ 
CARB's TRU regulations allow TRU owners to utilize hybrid electric, 
hybrid cryogenic, and electric-standby (``E/S'') equipped TRUs as an 
``Alternative technology'' compliance option, which requires such TRUs 
to be operated in a manner that eliminates diesel engine operations at 
the facilities where the TRUs operate. The Full Authorization 
Amendments establish new recordkeeping requirements that will require 
the application of hardware to monitor the engine hour usage of the 
TRUs along with other automated monitoring, recordkeeping and reporting 
requirements. In addition, the TRU regulations now cover business 
entities that arrange, hire, contract for, or dispatch the transport of 
perishable goods in TRU-equipped trucks, trailers, shipping containers, 
or railcars. Lastly, the Full Authorization Amendments create new 
disclosure requirements for TRU original equipment manufacturers that 
are primarily designed to address engine emission labels on new 
replacement engines and new flexibility engines, as well as disclosure 
requirements for dealers and repair shops in order that the ARBER 
registration information is supplied to the end-user.
---------------------------------------------------------------------------

    \7\ 40 CFR 89.130 and 1068.120 and Cal. Code Regs. Tit. 13., 
section 2423(l), respectively.
---------------------------------------------------------------------------

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.\8\ For all other nonroad 
engines, states generally are preempted from adopting and enforcing 
standards and other requirements relating to the control of emissions. 
Section 209(e)(2), however, requires the Administrator, after notice 
and opportunity for public hearing, to authorize California to adopt 
and enforce standards and other requirements relating to the control of 
emissions from such vehicles or engines if California determines that 
California standards will be, in the aggregate, at least as protective 
of public health and welfare as applicable Federal standards. However, 
EPA shall not grant such authorization if it finds that (1) the 
determination of California is arbitrary and capricious; (2) California 
does not need such California standards to meet compelling and 
extraordinary conditions; or (3) California standards and accompanying 
enforcement procedures are not consistent with [CAA section 209].\9\
---------------------------------------------------------------------------

    \8\ 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. CAA Sec.  209(e)(1), 42 U.S.C. 
7543(e)(1)(A).
    \9\ 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. 
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. 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). See also 78 FR 58090, 58120 (September 20, 2013).
---------------------------------------------------------------------------

    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.\10\ EPA revised these

[[Page 6527]]

regulations in 1997.\11\ As stated in the preamble to the 1994 rule, 
EPA historically has interpreted the consistency inquiry under the 
third criterion, outlined above and set forth in section 
209(e)(2)(A)(iii), to require, at minimum, that California standards 
and enforcement procedures be consistent with section 209(a), section 
209(e)(1), and section 209(b)(1)(C) of the Act.\12\
---------------------------------------------------------------------------

    \10\ See ``Air Pollution Control; Preemption of State Regulation 
for Nonroad Engine and Vehicle Standards,'' 59 FR 36969 (July 20, 
1994).
    \11\ See ``Control of Air Pollution: Emission Standards for New 
Nonroad Compression-Ignition Engines at or Above 37 Kilowatts; 
Preemption of State Regulation for Nonroad Engine and Vehicle 
Standards; Amendments to Rules,'' 62 FR 67733 (December 30, 1997). 
The applicable regulations are now found in 40 CFR part 1074, 
subpart B, section 1074.105.
    \12\ 59 FR 36969 (July 20, 1994). EPA has interpreted 
209(b)(1)(C) in the context of section 209(b) motor vehicle waivers.
---------------------------------------------------------------------------

    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 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,\13\ or (2) the federal and state testing procedures impose 
inconsistent certification requirements.\14\
---------------------------------------------------------------------------

    \13\ H. Rep. No. 728, 90th Cong., 1st Sess. 21 (1967).
    \14\ S. Rep. No. 403, 90th Cong., 1st Sess. 32 (1967).
---------------------------------------------------------------------------

    In light of the similar language in sections 209(b) and 
209(e)(2)(A), EPA has reviewed California's requests for authorization 
of nonroad vehicle or engine standards under section 209(e)(2)(A) using 
the same principles that it has historically applied in reviewing 
requests for waivers of preemption for new motor vehicle or new motor 
vehicle engine standards under section 209(b).\15\ 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),\16\ and that EPA should 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:
---------------------------------------------------------------------------

    \15\ See Engine Manufacturers Association v. EPA, 88 F.3d 1075, 
1087 (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.''
    \16\ See EPA's Final 209(e) rulemaking at 59 FR 36969, 36983 
(July 20, 1994).

    The law makes it clear that the waiver requests cannot be denied 
unless the specific findings designated in the statute can properly 
be made. The issue of whether a proposed California requirement is 
likely to result in only marginal improvement in California 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, so long as the California requirement is 
consistent with section 202(a) and is more stringent than applicable 
Federal requirements in the sense that it may result in some further 
reduction in air pollution in California.\17\
---------------------------------------------------------------------------

    \17\ ``Waiver of Application of Clean Air Act to California 
State Standards,'' 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.\18\ 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).
---------------------------------------------------------------------------

    \18\ See, e.g., Motor and Equip. Mfrs Assoc. v. EPA, 627 F.2d 
1095 (D.C. Cir. 1979) (``MEMA I'').
---------------------------------------------------------------------------

C. Within-the-Scope Determinations

    If California amends regulations that have been previously 
authorized by EPA, California may ask EPA to determine that the 
amendments are within the scope of the earlier authorization. A within-
the-scope determination for such amendments is permissible without a 
full authorization review if three conditions are met. First, the 
amended regulations must not undermine California's previous 
determination that its standards, in the aggregate, are as protective 
of public health and welfare as applicable federal standards. Second, 
the amended regulations must not affect consistency with section 209 of 
the Act, following the same criteria discussed above in the context of 
full authorizations. Third, the amended regulations must not raise any 
new issues affecting EPA's prior waiver or authorization decisions.\19\
---------------------------------------------------------------------------

    \19\ See ``California State Motor Vehicle Pollution Control 
Standards; Amendments Within the Scope of Previous Waiver of Federal 
Preemption,'' 46 FR 36742 (July 15, 1981).
---------------------------------------------------------------------------

D. 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.\20\
---------------------------------------------------------------------------

    \20\ 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.\21\ This interpretation is supported by relevant 
discussion in the House Committee Report for the 1977 amendments to the 
Clean Air Act.\22\ Congress had the opportunity through the 1977 
amendments to restrict the preexisting waiver provision, but elected 
instead to

[[Page 6528]]

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.\23\
---------------------------------------------------------------------------

    \21\ Id. at 23104; 58 FR 4166 (January 13, 1993).
    \22\ MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 294, 95th 
Cong., 1st Sess. 301-302 (1977)).
    \23\ Id.
---------------------------------------------------------------------------

E. 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 California waiver request 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.\24\
---------------------------------------------------------------------------

    \24\ MEMA I, at 1121.

    The Administrator's burden, on the other hand, is to make a 
reasonable evaluation of the information in the record in coming to the 
waiver decision. As the court in MEMA I stated: ``here, too, if the 
Administrator ignores evidence demonstrating that the waiver should not 
be granted, or if he seeks to overcome that evidence with unsupported 
assumptions of his own, he runs the risk of having his waiver decision 
set aside as `arbitrary and capricious.''' \25\ Therefore, the 
Administrator's burden is to act ``reasonably.'' \26\
---------------------------------------------------------------------------

    \25\ Id. at 1126.
    \26\ Id. at 1126.
---------------------------------------------------------------------------

    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.\27\
---------------------------------------------------------------------------

    \27\ 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.'' \28\
---------------------------------------------------------------------------

    \28\ Id.
---------------------------------------------------------------------------

    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.\29\ 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.\30\
---------------------------------------------------------------------------

    \29\ Id.
    \30\ Id.
---------------------------------------------------------------------------

    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 what the standards of proof 
would be 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.'' \31\
---------------------------------------------------------------------------

    \31\ See, e.g., ``California State Motor Vehicle Pollution 
Control Standards; Waiver of Federal Preemption,'' 40 FR 23102 (May 
28, 1975), at 23103.
---------------------------------------------------------------------------

F. EPA's Administrative Process in Consideration of California's 
Request for Authorization of the 2011 TRU Amendments

    The CAA directs EPA to offer an opportunity for public hearing on 
authorization requests from California. On November 17, 2015, EPA 
published a Federal Register notice announcing an opportunity for 
written comment and offering a public hearing on California's request 
for authorization of the 2011 TRU Amendments.\32\ The request for 
comments specifically included, but was not limited to, the following 
issues.
---------------------------------------------------------------------------

    \32\ 80 FR 71791 (November 17, 2015).
---------------------------------------------------------------------------

    First, EPA requested comment on whether the 2011 amendments for 
which CARB requested a within-the-scope determination should be 
considered under a within-the-scope analysis. We specifically requested 
comment on whether the Within-the-Scope Amendments (1) undermine 
California's previous determination that its standards, in the 
aggregate, are at least as protective of public health and welfare as 
comparable federal standards, (2) affect the consistency of 
California's requirement with section 209 of the Act, or (3) raise any 
other new issue affecting EPA's previous authorization determinations.
    Second, EPA requested comment on whether the Within-the-Scope 
Amendments would satisfy the criteria for full authorization if they do 
not meet the criteria for within-the-scope analysis.
    Third, EPA sought comment on whether the Full Authorization 
Amendments, for which CARB requested full authorization, satisfy the 
full authorization criteria. We specifically requested comment on 
whether (1) California's protectiveness determination (i.e., 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.
    EPA received no request for a public hearing. Consequently, EPA did 
not hold a public hearing. EPA received one written comment and a 
response comment from CARB, discussed below.

II. Discussion

A. Within-The-Scope Analysis

    We initially evaluate California's Within-the-Scope Amendments by

[[Page 6529]]

application of our traditional within-the-scope analysis, as CARB 
requested. If we determine that CARB's request does not meet the 
requirements for a within-the-scope determination, we then evaluate the 
request based on a full authorization analysis. In determining whether 
amendments can be viewed as within the scope of previous waivers, EPA 
looks at whether CARB's revision has been limited to making minor 
technical amendments to previously waived regulations or modifying the 
regulations in order to provide manufacturers with additional 
compliance flexibilities without significantly reducing the overall 
stringency of the requirements. The Within-the-Scope Amendments at 
issue in this request provide for certain compliance extensions and 
certain exemptions from the TRU in-use performance standards. The 
Within-the Scope Amendments also clarify pre-existing requirements.
    EPA sought comment on a range of issues, including those applicable 
to a within-the-scope analysis as well as those applicable to a full 
authorization analysis. No party submitted a comment that California's 
Within-the-Scope Amendments require a full authorization analysis. 
Given the lack of comments on this issue, and EPA's assessment of the 
nature of the amendments, EPA will evaluate California's Within-the-
Scope Amendments by application of our traditional within-the-scope 
analysis, as CARB requested.
    EPA can confirm that amended regulations are within the scope of a 
previously granted waiver of preemption if three conditions are met. 
First, the amended regulations must not undermine California's 
determination that its standards, in the aggregate, are as protective 
of public health and welfare as applicable federal standards. Second, 
the amended regulations must not affect consistency with section 202(a) 
of the Act. Third, the amended regulations must not raise any ``new 
issues'' affecting EPA's prior authorizations.

B. Full Authorization Analysis

    As noted above, CARB's authorization request also included the Full 
Authorization Amendments. EPA must grant an authorization of the Full 
Authorization Amendments unless the Administrator finds: (1) 
California's determination that its 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 California standards to meet compelling and extraordinary 
conditions; or (3) California's standards and accompanying enforcement 
procedures are not consistent with this section.
    EPA's evaluation of the 2011 TRU Amendments, including the Within-
the-Scope Amendments and Full Authorization Amendments, is set forth 
below. Because of the similarity of the within-the-scope criteria and 
the full authorization criteria, a discussion of both sets of 
respective amendments take place within each authorization criterion. 
To the extent that the criteria are applied uniquely, or that 
additional criteria apply under either the within-the-scope analysis or 
the full authorization analysis, such application is also addressed 
below.
1. California's Protectiveness Determination
    In its March 2, 2015 letter requesting a within-the-scope 
determination, CARB stated that in approving the amendments to the TRU 
ATCM, the Board approved Resolution 11-35.\33\ The Board expressly 
declared ``. . . that the Board hereby determines that pursuant to 
Title II, section 209(e)(2) of the federal Clean Air Act, as amended in 
1990, that the emission standards and other requirements related to the 
control of emissions adopted as part of the amendments to the TRU ATCM 
are, in the aggregate, at least as protective of public health and 
welfare as applicable federal standards.'' \34\ CARB noted that EPA 
cannot find CARB's determination to be arbitrary and capricious for the 
reason that EPA does not have comparable federal emission standards 
that regulate in-use TRUs and TRU engines.
---------------------------------------------------------------------------

    \33\ See Authorization Support Document at 18-19. See also EPA-
HQ-OAR-2015-0224-0002, Attachment 6.
    \34\ Id.
---------------------------------------------------------------------------

    After evaluating the materials submitted by CARB, and since EPA has 
not adopted any standards or requirements for in-use TRU systems or 
engines, and based on no comments submitted to the record, I cannot 
find that California's TRU amendments undermine California's previous 
determination that its standards, in the aggregate, are at least as 
protective of public health and welfare as applicable federal 
standards. Thus I cannot deny CARB's within-the-scope request based on 
this criterion. Similarly, with regard to the Full Authorization 
Amendments I cannot make a finding that CARB's protectiveness 
determination is arbitrary and capricious and thus I cannot deny CARB's 
Full Authorization Amendments based on this criterion.
2. Whether the Standards Are Necessary 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.\35\
---------------------------------------------------------------------------

    \35\ See 74 FR 32744, 32761 (July 8, 2009); 49 FR 18887, 18889-
18890 (May 3, 1984).
---------------------------------------------------------------------------

    EPA does not examine the section 209(e)(2)(A)(ii) criterion in the 
context of within-the-scope requests since the original regulations 
(that received a previous authorization from EPA) have already been 
evaluated under this criterion. However, should CARB adopt amendments 
that require a full authorization assessment (e.g. the addition of more 
stringent emission standards, etc.) then EPA believes it is appropriate 
to reevaluate whether California continues to demonstrate the need for 
its own mobile source program. EPA's assessment of the Full 
Authorization Amendments under this criterion is set forth below.
    California has asserted its longstanding position that the State 
continues to need its own nonroad engine program to meet serious air 
pollution problems.\36\ The relevant inquiry under section 
209(e)(2)(A)(ii) is whether California needs its own emission control 
program to meet compelling and extraordinary conditions, not whether 
any given standard is necessary to meet such conditions.\37\
---------------------------------------------------------------------------

    \36\ See Authorization Support Document at 23, ``In adopting 
Resolution 11-35, the Board confirmed CARB's longstanding position 
that California continues to need its own nonroad engine program to 
meet serious air pollution problems.''
    \37\ Id.
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    There has been no evidence submitted to indicate that California's 
compelling and extraordinary conditions do not continue to exist. 
California, including the South Coast and the San Joaquin Valley air 
basins, continues to experience some of the worst air quality in the 
nation and continues to be in non-attainment with national ambient

[[Page 6530]]

air quality standards for fine particulate matter (PM2.5) 
and ozone.\38\
---------------------------------------------------------------------------

    \38\ 74 FR 32744, 32762-63 (July 8, 2009), 76 FR 77515, 77518 
(December 13, 2011), 81 FR 95982 (December 29, 2016). EPA 
continually evaluates the air quality conditions in the United 
States, including California. California continues to experience 
some of the worst air quality in the country and continues to be in 
nonattainment with National Ambient Air Quality Standards for fine 
particulate matter and ozone, see ``Notice of Availability of the 
Environmental Protection Agency's Preliminary Interstate Ozone 
Transport Modeling Data for the 2015 Ozone National Ambient Air 
Quality Standard (NAAQS)'' at EPA-HQ-OAR-2016-0751.
---------------------------------------------------------------------------

    We received no contrary evidence or comments contesting 
California's longstanding determination that its TRU ATCM program is 
needed to address the state's compelling and extraordinary conditions, 
nor did we receive any suggestion that CARB's nonroad program is not 
still necessary. In addition, EPA is not aware of any other information 
that would suggest that California no longer needs its nonroad emission 
program. Therefore, based on the record of this request and absence of 
comments or other information to the contrary, I cannot find that 
California does not continue to need such state standards, including 
the 2011 TRU Amendments, to address the ``compelling and extraordinary 
conditions'' underlying the state's air pollution problems.
3. 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.\39\ Thus, 
this can be viewed as a three-pronged test.
---------------------------------------------------------------------------

    \39\ See 59 FR 36969 (July 20, 1994).
---------------------------------------------------------------------------

a. Consistency With Section 209(a) and 209(e)(1)
    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.
    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 states that in granting an 
authorization for the initial TRU ATCM regulation, EPA found that the 
TRU ATCM was consistent with CAA sections 209(a) and 209(e)(1) because 
the ATCM did not apply to new motor vehicles and engines or to new 
engines under 175 hp used in farm and construction vehicles or 
equipment or to new locomotives or locomotive engines.\40\ CARB notes 
that the 2011 TRU Amendments likewise do not apply to the above 
categories of preempted mobile sources and thus EPA cannot find that 
such amendments are inconsistent with section 209(a) and 209(e)(1). No 
commenter argued the contrary or otherwise asserted that the 2011 TRU 
Amendments are not consistent with section 209(a) and 209(e)(1) and EPA 
is otherwise not aware of such evidence.
---------------------------------------------------------------------------

    \40\ See Authorization Support Document at page 19.
---------------------------------------------------------------------------

    Therefore, I cannot deny California's request on the basis that 
2011 TRU Amendments are not consistent with section 209(a) and section 
209(e)(1).
b. 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.\41\
---------------------------------------------------------------------------

    \41\ MEMA I, 627, F.2d at 1126.
---------------------------------------------------------------------------

    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.\42\ 
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.\43\
---------------------------------------------------------------------------

    \42\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess. 301 (1977).
    \43\ See, e.g., 49 FR 1887, 1895 (May 3, 1984); 43 FR 32182, 
32183 (July 25, 1978); 41 FR 44209, 44213 (October 7, 1976).
---------------------------------------------------------------------------

    With regard to the Within-the-Scope Amendments, CARB notes that the 
amendments are designed to provide owners with greater flexibility to 
comply with the existing TRU ATCM's in-use requirements. The amendments 
were not the result of non-existing technologies according to CARB, but 
rather that the Board determined that special considerations were 
necessary to accommodate TRU owners during implementation of the rule, 
including the availability of certain diesel emission control devices 
or the availability of cleaner Tier 4 standard engines in the later 
model years. With regard to the amendments that specify requirements 
for repowering TRUs with new replacement engines and the allowance for 
owners to repower TRUs with rebuilt engines, CARB notes that these 
amendments do not modify the pre-existing compliance dates that EPA 
previously authorized and EPA has previously addressed rebuilding

[[Page 6531]]

requirements.\44\ CARB also notes that several of its Full 
Authorization Amendments help ensure that the TRU ATCM is effectively 
implemented and enforced, and therefore constitute ``accompanying 
enforcement provisions'' (``AEPs'').\45\ CARB notes that the AEPs that 
pertain to new automated monitoring, recordkeeping and reporting 
requirements for E/S, hybrid-electric, and hybrid cryogenic TRUs 
present no issues regarding technical feasibility. CARB maintains that 
the technology needed to comply with the reporting requirements already 
exists and the GPS tracking systems are already being used and are 
capable of wirelessly transmitting reports and data.\46\
---------------------------------------------------------------------------

    \44\ See 74 FR 3030 (January 16, 2009), Authorization Support 
Document at 22.
    \45\ See Authorization Support Document at 25. Section 
209(e)(2)(A)(iii) requires that both standards and accompanying 
enforcement procedures be consistent with section 202(a). AEPs are 
not mentioned elsewhere in section 209(e). AEPs are general 
procedures or other requirements designed to ensure that the levels 
of emission reductions sought by the standards are achieved, see 
MEMA I at 1113.
    \46\ See Authorization Support Document at 27.
---------------------------------------------------------------------------

    EPA received comment acknowledging that the technology for data 
collection and record reporting currently exists, but that additional 
development will be necessary to ensure that the technology will 
provide the necessary information for reporting purposes while also 
providing the necessary security and safeguards to protect proprietary 
information of both the original equipment manufacturers (``OEMs'') and 
the equipment owner.\47\ This commenter also requested further 
definition of ``stationary location'' as well as seeking an increase in 
the 5 minute requirement to 15 minutes.\48\ CARB responds by noting 
that the commenter acknowledges that the technology needed to comply 
with the automated monitoring, recordkeeping and reporting requirements 
currently exists and that the commenter fails to specify and provide 
any evidence of the types of proprietary information that is at issue 
and how such potential information is included in what information must 
be reported to CARB. CARB also notes that the Alternative Technology 
TRUs are subject to reporting requirements that include the address of 
each stationary location where such a TRU was operated longer than five 
minutes. CARB states that ``Thermo King does not describe why or how 
the current 5-minute stationary requirement may be causing confusion 
and/or false stationary readings. Furthermore, Thermo King has 
presented no evidence to support its argument that the five-minute 
requirement will result in confusion or erroneous readings.'' \49\
---------------------------------------------------------------------------

    \47\ See comment submitted by Thermo King, EPA-HQ-OAR-2015-0224-
0003.
    \48\ Id. Thermo King also raises a series of questions regarding 
the electronic tracking system requirements that CARB has addressed 
in its supplemental comments at EPA-HQ-OAR-2015-0224-0004 (``CARB 
Supplemental Comments''). EPA agrees with CARB that questions about 
whether the definition and requirements of the electronic tracking 
system apply to OEMs and ``free access'' are questions that do not 
fall under EPA's review given the limited statutory criteria for 
authorization review.
    \49\ CARB Supplemental Comments at 7-8.
---------------------------------------------------------------------------

    As noted above, EPA's 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. I agree that the Within-the-Scope Amendments are designed 
to relax (i.e. extend the compliance deadlines in limited circumstances 
and provide additional exemptions) and clarify existing TRU ATCM 
requirements and therefore provide additional flexibility to regulated 
parties. EPA also did not receive any comments arguing that the Within-
the-Scope Amendments were technologically infeasible. With regard to 
the Full Authorization Amendments I find that CARB has presented 
sufficient information to demonstrate that the technology needed to 
meet the applicable requirements already exists. To the extent that 
comments were raised concerning Alternative Technology TRUs and 
associated reporting requirements, the commenter raising such concerns 
has failed to meet their burden of proof in demonstrating why such 
requirements are technologically infeasible. As such, the record does 
not support a finding that the 2011 TRU Amendments are inconsistent 
with Section 202(a).
4. New Issues
    EPA has stated in the past that if California promulgates 
amendments that raise new issues affecting previously granted waivers 
or authorizations, we would not confirm that those amendments are 
within the scope of previous authorizations.\50\ I do not believe that 
the Within-the-Scope Amendments that extend the compliance dates under 
certain circumstances, provide new or clarify existing exemptions from 
the TRU in-use performance standards, and provide clarifications to 
CARB's existing TRU ATCM raise any new issues with respect to our prior 
granting of the authorization. Moreover, EPA did not receive any 
comments that CARB's TRU Amendments raised new issues affecting the 
previously granted authorization. Therefore, I cannot find that CARB's 
Within-the-Scope Amendments raise new issues and consequently, cannot 
deny CARB's request based on this criterion.
---------------------------------------------------------------------------

    \50\ See, e.g., 78 FR 38970 (June 28, 2013), 75 FR 8056 
(February 23, 2010), and 70 FR 22034 (April 28, 2005).
---------------------------------------------------------------------------

III. Decision

    After evaluating CARB's 2011 TRU Amendments described above, EPA is 
taking the following actions. First, I am granting an authorization for 
the Full Authorization Amendments. Second, I confirm that the Within-
the-Scope Amendments are within the scope of the previous EPA 
authorizations.
    This decision will affect persons not only in California, but also 
manufacturers and/or owners/operators nationwide who must comply with 
California's requirements. In addition, because other states may adopt 
California's standards for which a section 209(e)(2)(A) authorization 
has been granted if certain criteria are met, this decision would also 
affect those states and those persons in such states. See CAA section 
209(e)(2)(B). For these reasons, EPA determines and finds that this is 
a final action of national applicability, and also a final action of 
nationwide scope or effect 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 March 20, 2017. Judicial review of this final action may not 
be obtained in subsequent enforcement proceedings, pursuant to section 
307(b)(2) of the Act.

IV. 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).


[[Page 6532]]


    Dated: January 11, 2017.
Gina McCarthy,
Administrator.
[FR Doc. 2017-01225 Filed 1-18-17; 8:45 am]
 BILLING CODE 6560-50-P

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