
[Federal Register Volume 77, Number 34 (Tuesday, February 21, 2012)]
[Notices]
[Pages 9916-9923]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3793]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9633-7]


California State Motor Vehicle and Nonroad Engine Pollution 
Control Standards; Mobile Cargo Handling Equipment Regulation at Ports 
and Intermodal Rail Yards; Notice of Decision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of decision granting an authorization and waiver of 
preemption for California's mobile cargo handling equipment regulation 
at ports and intermodal rail yards.

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SUMMARY: Pursuant to section 209(e) of the Clean Air Act (Act), 42 
U.S.C. 7543(e), EPA is granting California its request for 
authorization to enforce it emission standards and other requirements 
for its mobile cargo handling equipment regulation. To the extent that 
the mobile cargo handling equipment regulation pertains to the control 
of emissions from new motor vehicles or new motor vehicle engines

[[Page 9917]]

EPA is, pursuant to section 209(b) of the Act, 42 U.S.C. 7543(b), 
granting California its request for a waiver of preemption.

DATES: Under 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 
April 23, 2012. Under 307(b)(2) of the Act, judicial review of this 
final action may not be obtained in subsequent enforcement proceedings.

ADDRESSES: EPA has established a docket for this action under Docket ID 
EPA-HQ-OAR-2010-0862. All documents relied upon in making this 
decision, including those submitted to EPA by CARB, and public 
comments, are contained in the public docket. Publicly available docket 
materials are available either electronically through http://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 20460. The public reading 
room is open to the public on all federal government work days between 
8 a.m. and 4:30 p.m.; generally, it is open Monday through Friday, 
excluding holidays. The telephone number for the Reading Room (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-2010-0862 in 
the ``Enter Keyword or ID'' fill-in box to view documents in the record 
of CARB's mobile cargo handling equipment waiver and authorization 
request. 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 and Innovative Strategies Division, Office of Transportation 
and Air Quality, U.S. Environmental Protection Agency, 1200 
Pennsylvania Avenue (6405J) NW., Washington, DC 20460. Telephone: (202) 
343-9256. Fax: (202) 343-2800. Email: dickinson.david@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Chronology

    In a letter dated January 29, 2007, the California Air Resources 
Board (CARB) submitted to EPA its waiver and authorization request 
pursuant to section 209 of the Clean Air Act (CAA or Act), regarding 
its regulations for Mobile Cargo Handling Equipment at Ports and 
Intermodal Rail yards (Mobile Cargo Handling Equipment or CHE).\1\ 
CARB's CHE regulations were adopted at CARB's December 8, 2005 public 
hearing (by Resolution 05-62) and were subsequently modified after 
making the regulation available for supplemental public comment by 
CARB's Executive Officer through Executive Order R-06-007 on June 2, 
2006. The CHE regulations are codified at title 12, California Code of 
Regulations section 2479.\2\
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    \1\ See CARB's January 29, 2007 request at EPA-HQ-OAR-2010-0862-
0001 (CARB's Request). EPA's review of CARB's mobile source 
standards relating to the control of emissions for new motor 
vehicles and new motor vehicle engines conducted under section 
209(b) of the Act are treated as ``waiver'' requests from CARB. 
EPA's review of CARB's regulations relating to standards and other 
requirements relating to the control of emissions from nonroad 
vehicles and nonroad engines conducted under section 209(e) of the 
Act are treated as ``authorization'' requests from CARB.
    \2\ The CHE regulation is designed to use best available control 
technology (BACT) to reduce diesel PM and NOX emissions 
from mobile cargo handling equipment at ports and intermodal rail 
yards. Mobile cargo handling equipment is any engine-propelled 
vehicle used to handle cargo at ports and intermodal rail facilities 
and vehicles used to perform maintenance and repair activities and 
includes, but is not limited to, yard trucks, top handlers, rubber-
tired gantry (RTG) cranes, forklifts, dozers, and loaders.
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    EPA published a Federal Register notice for public hearing and 
comment on CARB's request on February 1, 2011.\3\ No hearing request 
was received and thus no hearing took place. EPA received a total of 
three written comments from BNSF Railway Company and Union Pacific 
Railway Company, SSAT Terminal Pier A (SSAT), and Ports America 
Equipment Services (Ports America).\4\ EPA also received supplemental 
comment from CARB.\5\
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    \3\ 76 FR 5586 (February 1, 2011).
    \4\ See EPA-HQ-OAR-2010-0862-0024.1, EPA-HQ-OAR-2010-0862-
0025.1, and EPA-HQ-OAR-2010-0862-0026.1, respectively.
    \5\ See EPA-HQ-OAR-2010-0862-0028, CARB's comments submitted on 
March 17, 2011; and EPA-HQ-OAR-0862-0029, CARB's comments submitted 
on May 2, 2011.
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    CARB has requested that EPA grant a waiver of preemption or grant a 
new authorization for certain portions of its CHE regulations. For 
other portions of its CHE regulation, CARB has requested that EPA find 
the requirements fall within the scope of a previously granted waiver 
or authorization, or in the alternative grant a new waiver of 
preemption or authorization. Finally, for one portion of its CHE 
regulation, CARB has requested that EPA find the requirements are not 
preempted by section 209 of the Clear Air Act, that if EPA finds they 
are preempted, the requirements fall within the scope of a previously 
granted waiver or, in the alternative, EPA grant a new waiver of 
preemption.\6\
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    \6\ CARB's initial waiver and authorization request submitted on 
January 29, 2007 (which full set forth the requisite information to 
support the granting of a full waiver and authorization), in 
combination with supplemental comments submitted by CARB on March 
17, 2011, make clear CARB's intent to receive a full waiver and 
authorization to the extent that EPA deems a within the scope 
determination is inappropriate. As explained below, EPA finds that 
due to the new application of CARB's standards a full waiver and 
authorization is necessary.
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B. CARB Mobile Cargo Handling Equipment Regulations

    CARB's CHE regulations set performance standards for engines 
equipped in newly purchased, leased, or rented (collectively known as 
``newly acquired''), as well as in-use, mobile cargo handling equipment 
used at ports or intermodal rail yards in California. The standards 
vary depending on the type of vehicle, whether the engine is used in 
off-road equipment or a vehicle registered as an on-road motor vehicle, 
and whether they are newly acquired or already in-use.\7\
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    \7\ CARB normally uses the term ``off-road'' while EPA uses the 
term ``nonroad.'' Similarly, CARB uses the term ``on-road'' while 
EPA uses the term ``on-highway'' or ``motor vehicles.''
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    Yard trucks and other mobile cargo handling equipment registered to 
operate on California highways acquired after January 1, 2007 must be 
equipped with engines that are certified to the on-road engine emission 
standards for the model year in which they are acquired.
    Any yard truck not registered for on-road operation (off-road yard 
trucks) acquired after January 1, 2007 must be equipped either with an 
engine certified to the on-road emission standards for the model year 
in which it is acquired or the final Tier-4 off-road emission

[[Page 9918]]

standard applicable to the engine's rated power.
    Engines in newly acquired CHE other than yard trucks that are not 
registered for on-road operation (non-yard trucks) must--if technically 
feasible and available for purchase, lease, or rental--meet one of two 
certification standards: (1) The on-road engine certification standards 
or (2) the off-road Tier 4 certification standards for the model year 
and rated power of the engine. Alternatively, if neither of the options 
is feasible or available, a newly acquired non-yard truck must be 
equipped with an engine that is certified to the most stringent off-
road engine emission standards for the type of vehicle and application 
for the model year in which it is acquired. In addition, under this 
alternative, within one year of acquiring the vehicle, the owner or 
operator must install the highest level verified diesel emission 
control strategy (VDECS) that is approved by CARB and available for 
that engine. If no VDECS is verified by CARB and available by the end 
of the one-year period, the owner or operator must install the highest 
level VDECS within six months after one becomes available.
    For in-use yard trucks, whether on-road or off-road, the 
regulations require they meet one of three compliance options: such 
vehicles must (1) be certified to the 2007 or later model year on-road 
engine standards; (2) be certified to Tier 4 off-road standards; or (3) 
apply VDECS that reduce emissions to levels that comply with diesel PM 
and NOx emissions of a certified final Tier 4 off-road diesel engine 
for the same power rating.
    The date by which each in-use yard truck in an owner or operator's 
fleet must be brought into compliance depends on the number of trucks 
in the fleet, the model year of the trucks, whether the trucks are 
equipped with on-road or off-road engines, and whether the engines were 
equipped with VDECS by December 31, 2006.
    For in-use non-yard trucks, the regulations identify and establish 
separate requirements for three categories or vehicles: Basic cargo 
handling equipment, bulk cargo handling equipment and rubber-tired 
gantry (RTG) cranes. Basic cargo handling equipment consists of top 
handlers, side handlers, reach stackers, forklifts, straddle carriers 
and any other type of equipment (other than RTG cranes) that handles 
cargo containers. Bulk cargo handling equipment consists of dozers, 
loaders, excavators, mobile cranes, sweepers, railcar movers, aerial 
lifts and any other type of equipment (except forklifts) that handles 
non-containerized or bulk cargo.
    For all three categories of in-use non-yard trucks, vehicles can be 
brought into compliance using any of three options. Option 1 is the 
same for all three categories: Use of an engine or power system--
including diesel, alternative fueled, or heavy-duty pilot ignition 
engine--certified to the 2007 or later model year on-road or Tier 4 
off-road engine standards for the rated power and model year of the 
engine.
    Option 2 two is identical for basic cargo handling equipment and 
bulk cargo handling equipment, but varies slightly for RTG cranes. 
Basic cargo handling equipment and bulk cargo handling equipment must 
comply by installing a pre-2007 model year certified on-road engine or 
a certified Tier 2 or Tier 3 off-road engine and applying the highest 
level VDECS that is certified for the specific engine family and model 
year. However, if no Level 2 or higher VDECS is available, the engine 
must be upgraded to either a certified Tier 4 off-road engine or a 
Level 3 VDECS must be installed by December 31, 2015.
    Under option 2, RTG cranes use a certified Tier 2 or Tier 3 off-
road engine and the highest VDECS available but, in contrast to basic 
and bulk cargo handling equipment, need not upgrade, regardless of 
whether or not the highest VDECS available was Level 2 or below.
    Option 3 is similar for both basic and bulk cargo handling 
equipment. Basic cargo handling equipment may comply using a pre-Tier 1 
or a Tier 1 off-road engine equipped with the highest level VDECS 
available. However, if the highest level VDECS available is not Level 3 
or higher, the engine must be upgraded to either a certified Tier 4 
off-road engine or a Level 3 VDECS by December 31, 2015. For bulk cargo 
handling equipment, the requirements of this option are the same except 
an upgrade is required if no Level 2 or higher VDECS is initially 
available. Lastly, under the option 3, RTG cranes may comply using a 
pre Tier 1 or certified Tier 1 off-road engine equipped with the 
highest level VDECS available. However, if no VDECS is available or the 
highest level VDECS is a Level 1 or 2, then the RTG crane engine must 
be replaced with a Tier 4 certified off-road engine or a Level 3 VDECS 
must be installed by the later of December 31, 2015 or December 31st of 
the model year of the initially compliant engine plus 12 years.
    The date by which each in-use non-yard truck in an owner or 
operator's fleet must be brought into compliance depends on the size 
and model-year composition of the in-use non-yard trucks in the fleet

C. Previously Granted Waivers and Authorizations

    By letter dated July 26, 2004, CARB requested that EPA grant 
California a waiver of federal preemption for its 2007 California Heavy 
Duty Diesel Engines Standards, which primarily align California's 
standards and test procedures with the federal standards and test 
procedures for 2007 and subsequent model year heavy-duty motor vehicles 
and motor vehicle engines.\8\ After offering an opportunity for hearing 
and public comment, on August 26, 2005 EPA granted California's request 
for waiver.\9\
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    \8\ 70 FR 50322 (August 26, 2006)
    \9\ Id.
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    On July 18, 2008, CARB notified EPA of additional regulations and 
amendments to its new nonroad compression ignition engine regulations. 
EPA determined that a portion of those regulations fell within the 
scope of the previously granted authorization and granted a new 
authorization for the remainder of the regulations.\10\
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    \10\ 75 FR 8056 (February 23, 2010). EPA previously granted an 
authorization for California's new heavy-duty off-road diesel-cycle 
engines greater than 130 kW at 60 FR 48981 (September 21, 1995) and 
subsequently confirmed that amendments to those standards were 
within the scope of the prior authorization at 69 FR 38958 (June 29, 
2004).
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D. Clean Air Act Waivers of Preemption and Authorizations

    Section 209(a) of the Clean Air Act preempts states and local 
governments from setting emission standards for new motor vehicles and 
engines. It provides:

    No State or any political subdivision thereof shall adopt or 
attempt to enforce any standard relating to the control of emissions 
from new motor vehicles or new motor vehicle engines subject to this 
part. No state shall require certification, inspection or any other 
approval relating to the control of emissions from any new motor 
vehicle or new motor vehicle engine as condition precedent to the 
initial retail sale, titling (if any), or registration of such motor 
vehicle, motor vehicle engine, or equipment.

Through operation of section 209(b) of the Act, California is able to 
seek and receive a waiver of section 209(a)'s preemption. Section 
209(b)(1) requires a waiver to be granted for any State that had 
adopted standards (other than crankcase emission standards) for the 
control of emissions from new motor vehicles or new motor vehicle 
engines prior to March 30, 1966,\11\ if the State

[[Page 9919]]

determines that its standards will be, in the aggregate, at least as 
protective of public health and welfare as applicable Federal standards 
(this is known as California's ``protectiveness determination''). 
However, no waiver is to be granted if EPA finds that: (A) California's 
``protectiveness determination'' is arbitrary and capricious \12\; (B) 
California does not need such State standards to meet compelling and 
extraordinary conditions \13\; or (C) California's standards and 
accompanying enforcement procedures are not consistent with section 
202(a) of the Act.\14\ Regarding consistency with section 202(a), EPA 
reviews California's standards for technological feasibility and 
evaluates testing and enforcement procedures to determine whether they 
would be inconsistent with federal test procedures (e.g., if 
manufacturers would be unable to meet both California and federal test 
requirements using the same test vehicle).\15\
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    \11\ Because California was the only state to have adopted 
standards prior to 1966, it is the only state that is qualified to 
seek and receive a waiver. See S.Rep. No. 90-403 at 632 (1967).
    \12\ CAA section 209(b)(1)(A).
    \13\ CAA section 209(b)(1)(B).
    \14\ CAA section 209(b)(1)(C).
    \15\ See, e.g., 74 FR at 32767 (July 8, 2009); see also Motor 
and Equip. Mfrs Assoc. v. EPA, 627 F.2d 1095 (D.C. Cir. 1979) 
(``MEMA I'').
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    If California amends regulations that were previously granted a 
waiver of preemption, EPA can confirm that the amended regulations are 
within the scope of the previously granted waiver if three conditions 
are met. These conditions for confirming a within-the-scope request are 
discussed below.
    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. Section 209(e)(2) of the 
Act requires the Administrator to grant California authorization to 
enforce its own standards for new nonroad engines or vehicles which are 
not listed under section 209(e)(1), subject to certain restrictions. On 
July 20, 1994, EPA promulgated a rule that sets forth, among other 
things, the criteria, as found in section 209(e)(2), which EPA must 
consider before granting any California authorization request for new 
nonroad engine or vehicle emission standards. On October 8, 2008, the 
regulations promulgated in that rule were moved to 40 CFR part 1074, 
and modified slightly. The applicable regulations, 40 CFR Sec.  
1074.105, provide:
    (a) The Administrator will grant the authorization if California 
determines that its standards will be, in the aggregate, at least as 
protective of public health and welfare as otherwise applicable 
federal standards.
    (b) The authorization will not be granted if the Administrator 
finds that any of the following are true:
    (1) California's determination is arbitrary and capricious.
    (2) California does not need such standards to meet compelling 
and extraordinary conditions.
    (3) The California standards and accompanying enforcement 
procedures are not consistent with section 209 of the Act.
    (c) In considering any request from California to authorize the 
state to adopt or enforce standards or other requirements relating 
to the control of emissions from new nonroad spark-ignition engines 
smaller than 50 horsepower, the Administrator will give appropriate 
consideration to safety factors (including the potential increased 
risk of burn or fire) associated with compliance with the California 
standard.

As stated in the preamble to the section 209(e) rule, EPA has 
historically interpreted the section 209(e)(2)(iii) ``consistency'' 
inquiry to require, at minimum, that California standards and 
enforcement procedures be consistent with section 209(a), section 
209(e)(1), and section 209(b)(1)(C) (as EPA has interpreted that 
subsection in the context of section 209(b) motor vehicle waivers).\16\
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    \16\ 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 under section 209(e)(1). 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. Pursuant to section 
209(b)(1)(C), 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 are 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.
    EPA can confirm that amended regulations are within the scope of a 
previously granted waiver of preemption or authorization if three 
conditions are met. First, the amended regulations must not undermine 
California's determination that its standards, in the aggregate, are at 
least as protective of public health and welfare as applicable federal 
standards. Second, the amended regulations must not undermine our 
previous determination with respect to consistency with section 202(a) 
of the Act. Third, the amended regulations must not raise any new 
issues affecting EPA's prior waiver determinations.

E. Burden of Proof

    In MEMA I, the U.S. Court of Appeals stated 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.\17\
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    \17\ MEMA I, 627 F.2d at 1122.v
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The court in MEMA I considered the standards of proof under section 209 
for the two findings related to granting a waiver for an ``accompanying 
enforcement procedure'' (as opposed to the standards themselves): (1) 
Protectiveness in the aggregate and (2) consistency with section 202(a) 
findings. The court instructed that ``the standard of proof must take 
account of the nature of the risk of error involved in any given 
decision, and it therefore varies with the finding involved. We need 
not decide how this standard operates in every waiver decision.'' \18\
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    \18\ Id.
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    The court upheld the Administrator's position that, to deny a 
waiver, there must be `clear and compelling evidence' to show that 
proposed procedures undermine the protectiveness of California's 
standards.\19\ 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.\20\
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    \19\ Id.
    \20\ 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

[[Page 9920]]

explicitly consider the standards of proof under section 209 concerning 
a waiver request for ``standards,'' as compared to 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.'' \21\
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    \21\ See, e.g., 40 FR 21102-103 (May 28, 1975).
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    Opponents of the waiver bear the burden of showing that the 
criteria for a denial of California's waiver request have been met. As 
found in MEMA I, this obligation rests firmly with opponents of the 
waiver in a section 209 proceeding:

[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.\22\
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    \22\ MEMA I, 627 F.2d 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.' '' \23\ Therefore, the 
Administrator's burden is to act ``reasonably.'' \24\
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    \23\ Id. at 1126.
    \24\ Id. at 1126.
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F. EPA's Consideration of CARB's Request

    EPA sought comment on a range of issues, including whether certain 
or all of CARBs CHE regulation should be evaluated under the within the 
scope criteria or under the criteria for a full authorization and 
waiver of preemption. EPA did not receive any comments contending that 
any portions of the CHE regulations should be subjected to full waiver 
or authorization analysis.
    CARB maintains that its requirements for newly acquired on-highway 
yard and non-yard trucks are covered by a waiver granted by EPA for 
2007 and later model year (MY) on-highway heavy-duty diesel engines, or 
conversely its requirements are within the scope of that waiver 
decision.\25\
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    \25\ 70 FR 50322 (August 26, 2005).
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    CARB also maintains that its requirements for newly acquired off-
road yard trucks should be analyzed under the within the scope criteria 
since the compliance options involve either the use of a 2007 and later 
MY on-highway heavy-duty diesel engine (and thus the same within the 
scope rationale noted above) or the use of an engine meeting the final 
Tier 4 off-road engine standards which EPA previously authorized.\26\ 
Similarly, for the requirements associated with newly acquired off-road 
non-yard trucks CARB also states that options 1 and 2 should be 
considered within the scope of the prior waiver and authorization noted 
above, and that option 3 (the VDECS option) should be granted a full 
authorization.
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    \26\ 75 FR 8056 (February 23, 2010).
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    In addition to the requirements associated with newly acquired 
mobile cargo handling equipment, the CHE regulations also set forth in-
use performance standards applicable to non-new yard and non-yard 
trucks. To the extent the in-use standards apply to yard and non-yard 
trucks registered on-road, CARB maintains such requirements are not 
preempted by section 209(a) of the Act and therefore do not require a 
waiver from EPA. To the extent the in-use standards apply to non-new 
off-road yard and non-yard trucks (those not registered for on-road 
operation) CARB requests a full authorization from EPA.
    Despite CARB's contentions, EPA has determined that California's 
CHE regulations to the extent they apply to nonroad engines require a 
full authorization and to the extent they apply to new motor vehicles 
or new motor vehicle engines require a full waiver of preemption. While 
CARB acknowledges their CHE requirements are standards relating to the 
control of emissions they nevertheless suggest that such standards have 
either been previously waived or authorized by EPA. However, the 
analysis does not end there. The United States Supreme Court's 
interpretation of ``standard relating to the control of emissions from 
new motor vehicles or new motor vehicle engines'' in Engine 
Manufacturers Association v. South Coast Air Quality Management 
District, 541 U.S. 246 (2004) supports the conclusion that 
``standards'' not merely be limited to a design or performance standard 
relating to the production of certain vehicles that meet particular 
emission characteristics but also that the means of enforcing the 
emission limits is pertinent. California's new engine requirements 
should be considered as standards relating to the control of emissions. 
As the Court noted, ``Manufacturers (or purchasers) can be made 
responsible for ensuring that vehicles comply with emission standards, 
but the standards themselves are separate from those enforcement 
techniques. While standards target vehicles or engines, standard-
enforcement efforts that are proscribed by Sec.  209 can be directed to 
manufacturers or purchasers.'' \27\ In this instance, while the 
underlying standards as applied toward the production of new heavy-duty 
diesel highway engines or new nonroad diesel engines have either 
previously been waived or authorized by EPA, CARB is newly applying the 
standards to operators at ports and rail yards and requiring them to 
acquire CHE with specific emission characteristics to the exclusion of 
other CHE.
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    \27\ Engine Manufacturers Association v. South Coast Air Quality 
Management District, 541 U.S. 246,253 (2004).
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    Therefore, with respect to newly acquired yard and non-yard trucks 
EPA will evaluate such requirements under the full waiver criteria. 
Similarly, for newly acquired off-road yard and non-yard trucks EPA 
will evaluate such requirements under the full authorization criteria.
    In addition to the extent the CHE in-use standards apply to yard 
and non-yard trucks registered on-road EPA agrees with CARB's 
assessment that such requirements are not preempted by section 209(a) 
of the Act (which only applies to ``new'' motor vehicles and ``new'' 
motor vehicle engines) and therefore do not require a waiver from EPA. 
Lastly, to the extent the in-use standards apply to non-new off-road 
yard and non-yard trucks (those not registered for on-road operation) 
EPA will evaluate such requirements under the full authorization 
criteria as requested by CARB.

II. Discussion

A. California's Protectiveness Determination

    Section 209(b)(1)(A) of the Act requires EPA to deny a waiver if 
the Administrator finds that California was

[[Page 9921]]

arbitrary and capricious in its determination that its State standards 
will be, in the aggregate, at least as protective of public health and 
welfare as applicable Federal standards. When evaluating California's 
protectiveness determination, EPA compares the stringency of the 
California and Federal standards at issue in a given waiver request. 
That comparison is undertaken within the broader context of the 
previously waived California program, which relies upon protectiveness 
determinations that EPA previously found were not arbitrary and 
capricious.
    Similarly, section 209(e)(2)(i) of the Act instructs that EPA 
cannot grant an authorization if the Administrator finds that CARB 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.
    EPA previously found that CARBs regulations establishing emission 
standards for 2007 and subsequent model year heavy duty on-road diesel 
engines are as protective of the public health and welfare as 
comparable federal standards.\28\ CARB has found that to the extent the 
CHE regulations permit newly acquired on-road yard trucks, newly 
acquired on-road non-yard trucks and in-use yard trucks to comply by 
using current model year certified on-road diesel engines, they do not 
undermine the board's previous determination that its emission 
standards, in the aggregate, are at least as protective of public 
health and welfare as comparable federal standards.\29\
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    \28\ 70 FR 50322 (August 26, 2005).
    \29\ See CARB Resolution 05-62.
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    EPA previously found that CARB's regulations for new nonroad Tier 4 
engines are at least as protective of the public health and welfare as 
comparable federal standards.\30\ CARB has found that to the extent the 
CHE regulations permit newly acquired off-road yard trucks, newly 
acquired off-road non-yard trucks and in-use yard trucks to comply by 
using Tier 4 off-road CI emission standards engines, they do not 
undermine the board's previous determination that its emission 
standards, in the aggregate, are at least as protective of public 
health and welfare as comparable federal standards.\31\
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    \30\ 75 FR 8056 (February 23, 2010).
    \31\ See CARB Resolution 05-62.
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    No commenter expressed an opinion or presented any evidence 
suggesting that CARB was arbitrary and capricious in making its above-
noted protectiveness findings. Therefore, based on the record, EPA 
cannot find that California was arbitrary and capricious in its 
findings that California's CHE requirements are, in the aggregate, at 
least as protective of public health and welfare as applicable Federal 
standards.

B. Compelling and Extraordinary Conditions

    Under section 209(b)(1)(B) of the Act, EPA cannot grant a waiver if 
California ``does not need such State standards to meet compelling and 
extraordinary conditions.'' To evaluate this criterion, EPA considers 
whether California needs a separate motor vehicle emissions program to 
meet compelling and extraordinary conditions.
    Similarly, section 209(e)(2)(ii) of the Act instructs that EPA 
cannot grant an authorization if the Administrator finds that 
California does not need such standards to meet compelling and 
extraordinary conditions. This criterion restricts EPA's inquiry to 
whether California needs its own mobile source pollution program to 
meet compelling and extraordinary conditions, and not whether any given 
standards are necessary to meet such conditions.\32\
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    \32\ See 74 FR 32744, 32761 (July 8, 2009); 49 FR 18887, 18889-
18890 (May 3, 1984).
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    Over the past forty years, CARB has repeatedly demonstrated the 
need for its motor vehicle emissions program to address compelling and 
extraordinary conditions in California.\33\ In Resolution 05-62, CARB 
affirmed its longstanding position that California continues to need 
its own motor vehicle and engine program to meet its serious air 
pollution problems. Likewise, EPA has consistently recognized that 
California continues to have the same ``geographical and climatic 
conditions that, when combined with the large numbers and high 
concentrations of automobiles, create serious pollution problems.'' 
\34\ Furthermore, no commenter has presented any argument or evidence 
to suggest that California no longer needs a separate motor vehicle 
emissions program to address compelling and extraordinary conditions in 
California. Therefore, EPA has determined that we cannot deny 
California a waiver or authorization for its CHE requirements under 
section 209(b)(1)(B) or section 209(e)(2)(ii), respectively.
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    \33\ See, e.g., Approval and Promulgation of State 
Implementation Plans; California--South Coast, 64 FR 1770, 1771 
(January 12, 1999). See also 69 FR 23858, 23881-90 (April 30, 2004) 
(designating 15 areas in California as nonattainment for the federal 
8-hour ozone national ambient air quality standard).
    \34\ 49 FR 18887, 18890 (May 3, 1984); see also 76 FR 34693 
(June 14, 2011), 74 FR 32744, 32763 (July 8, 2009), and 73 FR 52042 
(September 8, 2008).
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C. Consistency With Section 202(a) and 209 of the Clean Air Act

    Under section 209(b)(1)(C) of the Act, EPA must deny a California 
waiver request if the Agency finds that California standards and 
accompanying enforcement procedures are not consistent with section 
202(a) of the Act. The scope of EPA's review under this criterion is 
narrow. EPA has stated on many occasions that the determination is 
limited to whether those opposed to the waiver have met their burden of 
establishing that California's standards are technologically 
infeasible, or that California's test procedures impose requirements 
inconsistent with federal test procedures. Previous waivers of federal 
preemption have stated that California's standards are not consistent 
with section 202(a) 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 time. 
California's accompanying enforcement procedures would be inconsistent 
with section 202(a) if the federal and California test procedures 
conflict, i.e., if manufacturers would be unable to meet both the 
California and federal test requirements with the same test vehicle.
    Similarly, Section 209(e)(2)(iii) of the Act instructs that EPA 
cannot grant an authorization if California's standards and enforcement 
procedures are not consistent with section 209. As described above, EPA 
has historically evaluated this criterion for consistency with sections 
209(a), 209(e)(1), and 209(b)(1)(C).
1. Consistency With Section 209(a)
    As noted above, EPA considers CARB's nonroad authorization requests 
under certain criteria including whether CARB's requirements are 
consistent with section 209(a) of the Act (to be consistent with 
section 209(a) of the Clean Air Act, California's requirements must not 
apply to new motor vehicles or engines). However, in this instance 
California's CHE requirements affect both new motor vehicles and 
engines along with affecting nonroad vehicles and engines. To the 
extent the CHE requirements do affect motor vehicles and engines (CHE 
motor vehicle requirements) CARB explicitly requests a waiver of 
preemption under section 209(b) rather than an authorization under 
section 209(e)(2). EPA is evaluating the CHE motor vehicle requirements 
under section 209(b). The

[[Page 9922]]

purpose of section 209(b) is to waive the preemption otherwise created 
by section 209(a). To the extent the CHE requirements affect nonroad 
vehicles and engines (CHE nonroad requirements) CARB explicitly 
requests an authorization under section 209(e)(2). By logical extension 
and definition such CHE nonroad requirements only pertain to nonroad 
vehicles and engines and are thus not motor vehicles under section 
209(a).
    No commenter presented otherwise; therefore, EPA cannot deny 
California's authorization request on the basis that California's CHE 
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 CHE nonroad requirements must not affect new farming or 
construction vehicles or engines that are below 175 horsepower, or new 
locomotives or their engines. CARB presents that CHE equipment is not 
used in farm and construction equipment or vehicles or engines used in 
locomotives.\35\ No commenter presented otherwise; therefore, EPA 
cannot deny California's request on the basis that California's APS 
requirements are not consistent with section 209(e)(1).\36\
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    \35\ CARB's waiver and authorization request letter at p. 21, 
citing section 2479(e)(1)(B) of its regulations.
    \36\ BNSF Railway Company and Union Pacific Railroad Company 
note that they are currently complying with the CHE regulation in 
their efforts to work with the state and to reduce emissions from 
rail operations. Further, they state that ``Regardless of whether or 
not EPA issues a waiver for the retrofit component of the CHE rule, 
the Railroads are not waiving any aspect of preemption or setting 
any precedent as to preemption or voluntary compliance with other 
rules or agreements.'' EPA's decision granting a waiver and 
authorization for CARB's CHE regulations addresses only the specific 
criteria set forth in sections 209(b) and (e) of the Clean Air Act. 
It does not address ancillary issues related to harmonizing CAA 
authority with other federal preemptions, such as Interstate 
Commerce Commission Termination Act (ICCTA), that restrict the 
authority of local governments to regulate railroads.
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3. Consistency With Section 209(b)(1)(C) and Section 202(a)
    As noted above, EPA's evaluation of CARB nonroad authorization 
requests (e.g. the CHE nonroad requirements) includes consideration of 
whether their requirements are consistent with section 209(b)(1)(C) of 
the Act. In addition, EPA's evaluation of CARB waiver requests (e.g., 
the CHE motor vehicle requirements) includes consideration of whether 
their requirements are consistent with section 209(b)(1)(C). Under 
section 209(b)(1)(C) of the Act, EPA must deny a California request if 
the Agency finds that California standards and accompanying enforcement 
procedures are not consistent with section 202(a) of the Act. The scope 
of EPA's review under this criterion is narrow. EPA has stated on many 
occasions that the determination is limited to whether those opposed to 
the waiver have met their burden of establishing that California's 
standards are technologically infeasible, or that California's test 
procedures impose requirements inconsistent with federal test 
procedures. Previous waivers of federal preemption have stated that 
California's standards are not consistent with section 202(a) 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 time. California's accompanying 
enforcement procedures would be inconsistent with section 202(a) if the 
federal and California test procedures conflict, i.e., if manufacturers 
would be unable to meet both the California and federal test 
requirements with the same test vehicle.
    CARB states that the CHE regulations are consistent with section 
202(a). CARB states that the technological feasibility of the emission 
requirements related to yard trucks registered for operation on-road is 
not disputed since such vehicles need only meet the 2007 on-road 
engines standards previously waived by EPA. CARB's CHE regulations do 
not change the underlying test procedures for on-road engines. CARB 
notes that newly acquired non-yard trucks registered for operation on-
road are similar to yard trucks noted above in terms of applicable 
emission standards and test procedures.
    With respect to off-road yard and non-yard trucks CARB notes that 
the applicable emission standards (either the 2007 on-road standards 
previously waived by EPA or the Tier 4 nonroad standards previously 
authorized by EPA) are technologically feasible. CARB also notes that 
to the extent operators use option 3 (the use of a lower tier engine if 
option 1 and 2 are not available, and the subsequent installation of 
VDECS) it is feasible given the number of VDECS verified to date.
    EPA received comment from SSAT noting problems with ``post 07 yard 
truck issues'' and challenges associated with non-yard trucks and 
VDECs. With respect to the yard truck issue it appears that SSAT is 
concerned that it is only able to use a certain manufacturer's engine 
and such engine has exhaust gas leak issues that includes disabling the 
EGR system. SSAT contends that it is dealing with a 25% failure rate. 
CARB notes in response that the exact nature of the failure rate at the 
terminals is unclear and its conclusions seem to be based on opinion 
rather than any data in the record. CARB surmises the problem may be 
associated with maintenance or operational practices. SSAT provided no 
further explanation as to why the engine it identified is the only 
usable engine. Based on the limited information submitted by SSAT, and 
as CARB notes the fact that 38 other terminals have voluntarily 
acquired new yard trucks equipped with new on-road CI engines with none 
reporting EGR problems and none submitting comment to EPA, we find that 
opponents of the waiver have not met their burden of proof to 
demonstrate that the new yard truck emission standards are infeasible 
or otherwise inconsistent with section 202(a).
    With regard to non-yard trucks EPA received comment from SSAT and 
Ports America regarding the use of VDECS for compliance.\37\ The 
commenters' comments include: VDECS become plugged and do not operate 
properly; the compliance extension provisions are ambiguous, forcing 
fleet owners to undergo an arduous and expensive process; and the VDECS 
are expensive.
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    \37\ Similar to SSAT's comments on yard trucks it is unclear 
whether the commenters are raising concerns with newly acquired non-
yard trucks or in-use non-yard trucks. EPA notes that in-use 
requirements for on-road vehicles are not preempted by section 209 
of the Act.
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    CARB provides several responses to concerns of improper operating 
and plugging VDECS. CARB notes that nine Level 3 emission control 
devices have been verified for non-yard truck applications and that at 
least 77 VDECS have been installed on a wide-variety of vehicle 
applications. CARB understands that while excess soot may plug some 
VDECS there is strong evidence to suggest that fleet owners are not 
properly performing manual regeneration or that improper sizing of 
VDECS with engines may be occurring. This coupled with a lack of 
concrete information and data from the commenters causes CARB to 
suggest that a showing of infeasibility had not been shown.
    CARB also notes that to the extent the use of VDECS is not 
available its compliance extension provisions provide ample opportunity 
for fleet operators to comply with the CHE regulations. CARB responds 
to the commenters' suggestion that the compliance extension provisions 
are

[[Page 9923]]

ambiguous (extensions are granted by CARB if the VDECS are ``not 
available'' and ``not feasible'') by pointing to its initial request to 
EPA for a waiver and authorization where CARB discussed compliance 
flexibility and relief.\38\ CARB maintains that nothing in the comments 
contradicts CARB's reasons for the provisions or that the terms of the 
provisions are illusory. CARB notes that to date SSAT has never 
requested an extension and Ports America has requested and received an 
extension. CARB also provides an accounting of 88 compliance extension 
requests it has received with no indication of any problems. In 
addition, CARB provides a detailed explanation of its administrative 
process for handling such requests.
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    \38\ See CARB's January 29, 2007 request at pp. 11-12, and 34 
where CARB sets out 5 different types of extensions (e.g., a one 
year extension if an engine is within one year of retirement, a two-
year extension if no VDECS is available, etc.).
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    Based on the lack of concrete evidence from the commenters that it 
has incurred unreasonable delays or other difficulties making its 
compliance with the CHE regulations infeasible, EPA cannot deny CARB's 
request based on the infeasibility of CARB's compliance provisions.
    Finally, with regard to the costs associated with VDECS the 
commenters note ``The cost of [VDECS] typically cost 40k each dropped 
50% on `some' systems when the economy took a down turn. We are looking 
at spending millions of dollars to one or two vendors who charge 
whatever they feel they can get away with.'' CARB replies by noting 
that nowhere do the commenters assert that the costs make the CHE 
regulation infeasible. CARB notes that the nature or port terminals and 
intermodal railroads make them multimillion-dollar businesses with 
highly polluting equipment. Without hard evidence from the commenters 
as to why the costs render the regulations infeasible, CARB suggests 
that costs are a policy question for CARB to consider when adopting the 
regulation and that EPA should follow its historical practice of 
deference.
    EPA notes that it is required to closely examine costs when making 
a determination of whether there is evidence in the record to support a 
finding that CARB's regulations are technologically infeasible. In this 
instance there is insufficient evidence in the record to demonstrate 
why the costs of VDECS are inappropriately high when compared to the 
costs of the underlying vehicles or why the costs are otherwise 
inappropriately prohibitive. Therefore, based on the record, EPA cannot 
make a finding that CARB's CHE regulations are inconsistent with 
section 202(a) based on considerations of costs.
    As noted above, EPA's consideration of the consistency with section 
202(a) includes a review of whether California's test procedures impose 
requirements inconsistent with federal test procedures. Because CARB's 
test procedures are incorporated in previously waived and authorized 
regulations (e.g., the Tier 4 nonroad standards and the 2007 heavy-duty 
diesel engine regulations) and such regulations harmonize their test 
procedures with applicable federal test procedures CARB maintains there 
is no test procedure inconsistency. We have received no comments 
presented otherwise; therefore, based on the record before me I cannot 
deny CARB's request based on a lack of test procedure consistency.

III. Decision

    EPA's analysis finds that the criteria for granting a full 
authorization and a full waiver of preemption have been met for CARB's 
CHE regulations.
    The Administrator has delegated the authority to grant California a 
section 209(b) waiver to enforce its own emission standards for new 
motor vehicles and engines and to grant California a section 209(e) 
authorization to enforce its own emission standards for nonroad engines 
and equipment to the Assistant Administrator for the Office of Air and 
Radiation. Having given consideration to all the material submitted for 
this record, and other relevant information, I find that I cannot make 
the determinations required for a denial of a waiver request pursuant 
to section 209(b) of the Act nor can I make the determination required 
for a denial of an authorization pursuant to section 209(e) of the Act. 
Therefore I grant both a waiver of preemption and authorization to the 
State of California with respect to its CHE regulations as set for the 
above.
    My decision will affect not only persons in California but also 
manufacturers outside the State who must comply with California's 
requirements in order to produce engines for sale in California. 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 April 23, 2012. Judicial review of this final action may not 
be obtained in subsequent enforcement proceedings, pursuant to section 
307(b)(2) of the Act.
    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: November 28, 2011.
Gina McCarthy,
Assistant Administrator, Office of Air and Radiation.
[FR Doc. 2012-3793 Filed 2-17-12; 8:45 am]
BILLING CODE 6560-50-P


