
[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Notices]
[Pages 6500-6506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01261]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2014-0534; FRL-9958-62-OAR]


California State Nonroad Engine Pollution Control Standards; 
Commercial Harbor Craft Regulations; Notice of Decision

AGENCY: Environmental Protection Agency.

ACTION: Notice of decision.

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SUMMARY: The Environmental Protection Agency (``EPA'') is granting the 
California Air Resources Board (``CARB'') its request for an 
authorization of its amendments to its Commercial Harbor Craft 
regulations (``CHC Amendments''). EPA is also confirming that certain 
CHC amendments are within the scope of a prior EPA authorization. 
CARB's CHC Amendments primarily subject diesel-fueled engines on crew 
and supply, barge and dredge vessels to the in-use engine emission 
requirements of the original CHC regulations; allow CARB or EPA Tier 2 
or higher tier certified off-road (``nonroad'') engines to be used as 
auxiliary or propulsion engines in both new and in-use CHC vessels; and 
clarify requirements and address certain issues that have arisen during 
CARB's implementation of the original CHC regulations. 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 action under Docket ID 
EPA-HQ-OAR-2014-0534. All documents relied upon in making this 
decision, including those submitted to EPA by CARB, are contained in 
the public docket. Publicly available docket materials are available 
either electronically through www.regulations.gov or in hard copy at 
the Air and Radiation Docket in the EPA Headquarters Library, EPA West 
Building, Room 3334, located at 1301 Constitution Avenue NW., 
Washington, DC. The Public Reading Room is open to the public on all 
federal government working days from 8:30 a.m. to 4:30 p.m.; generally, 
it is open Monday through Friday, excluding holidays. The telephone 
number for the Reading Room is (202) 566-1744. The Air and Radiation 
Docket and Information Center's Web site is http://www.epa.gov/oar/docket.html. The electronic mail (email) address for the Air and 
Radiation Docket is: a-and-r-Docket@epa.gov, the telephone number is 
(202) 566-1742, and the fax number is (202) 566-9744. An electronic 
version of the public docket is available through the federal 
government's electronic public docket and comment system. You may 
access EPA dockets at http://www.regulations.gov. After opening the 
www.regulations.gov Web site, enter EPA-HQ-OAR-2014-0534 in the ``Enter 
Keyword or ID'' fill-in box to view documents in the record. Although a 
part of the official docket, the public docket does not include 
Confidential Business Information (``CBI'') or other information whose 
disclosure is restricted by statute.
    EPA's Office of Transportation and Air Quality (``OTAQ'') maintains 
a Web page that contains general information on its review of 
California waiver requests. Included on that page are links to prior 
waiver Federal Register notices, some of which are cited in today's 
notice. The page can be accessed at http://www.epa.gov/otaq/cafr.htm.

FOR FURTHER INFORMATION CONTACT: David Dickinson, Attorney-Advisor, 
Transportation Climate 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

    EPA granted an authorization for California's initial set of CHC 
regulations on December 5, 2011.\1\ California's initial CHC 
regulations

[[Page 6501]]

established emission standards, requirements related to the control of 
emissions, and enforcement provisions. The requirements are applicable 
to diesel propulsion and auxiliary engines on new and in-use commercial 
harbor craft, with some exceptions. Commercial harbor craft include a 
variety of different types of vessels, including ferries, excursion 
vessels, tugboats, towboats, and commercial and charter fishing boats. 
The initial CHC regulations established in-use emission limits for in-
use ferries, excursion vessels, tugboats, and towboats equipped with 
federal Tier 0 and Tier 1 propulsion and auxiliary marine engines. 
Owners and operators of these vessels were required to upgrade the 
engines to meet emission limits equal to or cleaner than federal Tier 2 
or Tier 3 marine engine certification standards, according to a 
compliance schedule that was also set forth in the regulations. The 
compliance schedule was based on the model year of the original engine 
(``in-use engine model year''), its hours of operation, and the 
vessel's home port location. The CHC regulations apply separately to 
new and in-use engines used on harbor craft.\2\
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    \1\ 76 FR 77521 (December 5, 2011).
    \2\ The regulations are codified at title 13, California Code of 
Regulations (CCR), section 2229.5 and title 17, CCR section 93118.5.
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    In a letter dated May 28, 2014, CARB submitted to EPA its request 
pursuant to section 209(e) of the CAA, regarding authorization of its 
amendments to California's CHC regulations to reduce emissions from 
diesel engines on commercial harbor craft (``CHC Amendments'').\3\ The 
CARB Board approved the CHC Amendments on June 24, 2010 (by Resolution 
10-26).\4\
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    \3\ Letter and attached memo from Richard Corey, CARB to Gina 
McCarthy, EPA dated May 28, 2014 (``Waiver Support Document''), EPA-
HQ-OAR-2014-0534-0002.
    \4\ CARB Resolution 10-26, June 24, 2010, EPA-HQ-OAR-2014-0534-
0008.
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    The CHC Amendments set forth a variety of in-use requirements, 
including extending the applicability of the CHC regulations to in-use 
crew and supply, barge, and dredge vessels that are equipped with 
federal Tier 0 and Tier 1 propulsion and auxiliary marine engines that 
operate within the Regulated California Waters.\5\ The CHC Amendments 
also eliminate certain exemptions for CHC engines that had been 
registered in CARB's portable equipment registration program (``PERP'') 
or permitted by local air pollution districts, and now subject such 
engines to the CHC regulations. In addition, the CHC Amendments clarify 
and define ``swing engines'' as replacement engines that are maintained 
at dockside locations and require such engines to comply with the CHC 
regulation's in-use engine requirements. The original CHC regulations 
required replacement engines for in-use CHC vessels to be certified to 
current EPA model year engines standards. CARB found this requirement 
could present difficulties for in-use CHC vessels in certain 
situations. Therefore, the CHC Amendments allow an owner or operator to 
use a non-current-year certified replacement engine under certain 
circumstances. In addition, the CHC Amendments allow the use of 
existing engines in a fleet to replace an older engine otherwise 
subject to the in-use requirements (the existing engine becomes subject 
to the in-use compliance date that applied to the engine being 
replaced). The CHC Amendments also expand the compliance extension 
options to fleets of three or more vessels.
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    \5\ Regulated California Waters include all California inland 
waters, all California estuarine waters, and all waters within a 
zone 24 nautical miles seaward of the California coastline, except 
for specified areas along the Southern California coastline, Title 
17 CCR 93118.5(d)(68). The original CHC regulations required owners 
or operators of in-use ferries, excursion vessels, and tugboats 
equipped with Tier 0 and Tier 1 propulsion and auxiliary marine 
engines to meet equal to or cleaner than federal Tier 2 or Tier 3 
new marine engine certification standards in effect for the year 
that in-use engine compliance was required. The compliance schedule 
was based on the in-use engine model year, hours of operation, and 
the vessel's home port location. The amendments establish compliance 
schedules applicable to crew and supply vessel engines and a 
separate set of compliance schedules applicable to both barge and 
dredge vessel engines that are based solely on the in-use engine 
model year and annual hours of operation.
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    CARB's CHC Amendments also include requirements that are applicable 
to both new and in-use engines. The original CHC regulation provided 
that new or in-use diesel propulsion or auxiliary engines for in-use 
harbor craft could not be sold, offered for sale, leased, rented, or 
acquired unless the engines were certified to at least federal Tier 2 
or Tier 3 marine emission standards for a new engine of the same power 
rating and displacement in effect at the time of the aforementioned 
actions. The amendments now provide compliance flexibility to CHC 
owners or operators with the option of using EPA or CARB Tier 2 or 
higher tier certified off-road engines provided the engine or vessel 
manufacturer has complied with the provisions of 40 CFR 1042.605, which 
establishes requirements for marinized land-based engines.

A. California's Authorization Request

    California requested that EPA perform two types of review. First, 
CARB requested an EPA determination that certain provisions of the CHC 
Amendments are within the scope of a prior authorization issued by EPA, 
or in the alternative, merit full authorization (``Within-the-Scope 
Amendments''). CARB includes as part of the Within-the-Scope 
Amendments: The provisions allowing use of EPA or CARB certified off-
road CI engines to comply with the new and in-use requirements for 
propulsion and/or auxiliary engines; the amendments that subject CHC 
engines registered and permitted by local air pollution districts prior 
to January 1, 2009, CHC auxiliary engines registered to CARB's PERP 
prior to January 1, 2009, and CHC auxiliary engines not permanently 
affixed to the vessel and registered in PERP on or after January 1, 
2009 to the CHC Regulation; and the amendments that clarify swing 
engines are replacement engines subject to the CHC regulation's in-use 
requirements, along with the exemptions for replacement engines in in-
use CHC vessels, the allowance of the use of existing engines to 
replace an older engine subject to in-use requirements, and the 
expansion of the availability of compliance extensions for CHC vessel 
fleets.
    Second, CARB requests full authorization for amendments that 
establish new requirements (``Full Authorization Amendments''). The 
Full Authorization Amendments pertain to the new provisions 
establishing in-use requirements applicable to crew and supply, barge, 
and dredge vessels. The amendments extend the applicability of the 
previous requirement that specified categories of CHC vessels (ferries, 
excursions vessels tugboats, towboats, push boats, and multipurpose 
harbor craft) to meet emission limits equal to or cleaner than federal 
Tier 2 or Tier 3 new marine engine emission standards, as applicable 
and in effect for the year that in-use engine compliance is required 
under the compliance schedule set forth within the regulation.

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.\6\ For

[[Page 6502]]

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].\7\
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    \6\ 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).
    \7\ 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).
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    On July 20, 1994, EPA promulgated a rule interpreting the three 
criteria set forth in section 209(e)(2)(A) that EPA must consider 
before granting any California authorization request for nonroad engine 
or vehicle emission standards.\8\ EPA revised these regulations in 
1997.\9\ 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.\10\
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    \8\ See ``Air Pollution Control; Preemption of State Regulation 
for Nonroad Engine and Vehicle Standards,'' 59 FR 36969 (July 20, 
1994).
    \9\ 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.
    \10\ 59 FR 36969 (July 20, 1994). EPA has interpreted 
209(b)(1)(C) in the context of section 209(b) motor vehicle waivers.
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    In order to be consistent with section 209(a), California's nonroad 
standards and enforcement procedures must not apply to new motor 
vehicles or new motor vehicle engines. To be consistent with section 
209(e)(1), California's nonroad standards and enforcement procedures 
must not attempt to regulate engine categories that are permanently 
preempted from state regulation. To determine consistency with section 
209(b)(1)(C), EPA typically reviews nonroad authorization requests 
under the same ``consistency'' criteria that are applied to motor 
vehicle waiver requests under section 209(b)(1)(C). That provision 
provides that the Administrator shall not grant California a motor 
vehicle waiver if she finds that California ``standards and 
accompanying enforcement procedures are not consistent with section 
202(a)'' of the Act. Previous decisions granting waivers and 
authorizations have noted that state standards and enforcement 
procedures will be found to be inconsistent with section 202(a) if (1) 
there is inadequate lead time to permit the development of the 
necessary technology, giving appropriate consideration to the cost of 
compliance within that time,\11\ or (2) the federal and state testing 
procedures impose inconsistent certification requirements.\12\
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    \11\ H. Rep. No. 728, 90th Cong., 1st Sess. 21 (1967).
    \12\ S. Rep. No. 403, 90th Cong., 1st Sess. 32 (1967).
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    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).\13\ 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),\14\ 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:
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    \13\ 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.''
    \14\ 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.\15\
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    \15\ ``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.\16\ Thus, EPA's 
consideration of all the evidence submitted concerning an authorization 
decision is circumscribed by its relevance to those questions that may 
be considered under section 209(e)(2)(A).
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    \16\ See, e.g., Motor and Equip. Mfrs Assoc. v. EPA, 627 F.2d 
1095 (D.C. Cir. 1979) (``MEMA I'').
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B. Within-the-Scope Determinations

    If California amends regulations that were 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 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 authorizations.\17\
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    \17\ See ``California State Motor Vehicle Pollution Control 
Standards; Amendments Within the Scope of Previous Waiver of Federal 
Preemption,'' 46 FR 36742 (July15, 1981).

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[[Page 6503]]

C. Deference to California

    In previous waiver and authorization decisions, EPA has recognized 
that the intent of Congress in creating a limited review based on 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.\18\
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    \18\ 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.\19\ This interpretation is supported by relevant 
discussion in the House Committee Report for the 1977 amendments to the 
Clean Air Act.\20\ Congress had the opportunity through the 1977 
amendments to restrict the preexisting waiver provision, but elected 
instead to expand California's flexibility to adopt a complete program 
of motor vehicle emission controls. The report explains that the 
amendment is intended to ratify and strengthen the preexisting 
California waiver provision and to affirm the underlying intent of that 
provision, that is, to afford California the broadest possible 
discretion in selecting the best means to protect the health of its 
citizens and the public welfare.\21\
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    \19\ Id. at 23104; 58 FR 4166 (January 13, 1993).
    \20\ MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 294, 95th 
Cong., 1st Sess. 301-302 (1977)).
    \21\ Id.
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D. Burden and Standard of Proof

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

[T]he language of the statute and its legislative history indicate 
that California's regulations, and California's determinations that 
they must comply with the statute, when presented to the 
Administrator are presumed to satisfy the waiver requirements and 
that the burden of proving otherwise is on whoever attacks them. 
California must present its regulations and findings at the hearing 
and thereafter the parties opposing the waiver request bear the 
burden of persuading the Administrator that the waiver request 
should be denied.\22\
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    \22\ MEMA I, supra note 17, at 1121.

    The same logic applies to authorization requests. 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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    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.\25\
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    \25\ Id. at 1122.

    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.\26\ 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.\27\
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    \26\ Id.
    \27\ 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. 
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.'' \28\
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    \28\ See, e.g., ``California State Motor Vehicle Pollution 
Control Standards; Waiver of Federal Preemption,'' 40 FR 23102 (May 
28, 1975), at 23103.
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E. EPA's Administrative Process in Consideration of California's 
Commercial Harbor Craft Regulations

    Upon review of CARB's request, EPA offered an opportunity for a 
public hearing, and requested written comment on issues relevant to a 
full section 209(e) authorization analysis, by publication of a Federal 
Register notice on November 24, 2014.\29\ Specifically, we requested 
comment on: (a) Whether CARB's determination that its standards, in the 
aggregate, are at least as protective of public health and welfare as 
applicable federal standards is arbitrary and capricious, (b) whether 
California needs such standards to meet compelling and extraordinary 
conditions, and (c) whether California's standards and accompanying 
enforcement procedures are consistent with section 209 of the Act. In 
addition, EPA requested comment on issues relevant to a within-the-
scope analysis for any CARB amendments that may merit confirmation of 
being within the scope of EPA's prior authorization of the CHC 
regulation.
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    \29\ 79 FR 69482 (November 24, 2014).
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    EPA did not receive a request for hearing and therefore no hearing 
was held. EPA did not receive any written comments. EPA's evaluation is 
based on the record, which includes CARB's authorization request and 
accompanying documents.

II. Discussion

A. Within-the-Scope Analysis

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

[[Page 6504]]

within the scope of previous authorizations, EPA looks at whether 
CARB's revisions have 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.
    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 CHC 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 the 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.

C. California's Protectiveness Determination

    Section 209(e)(2)(i) of the Act instructs that EPA cannot grant an 
authorization if the agency 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. CARB's Board made a protectiveness 
determination in Resolution 10-26, finding that ``the California 
emission standards and other requirements related to the control of 
emissions in the amended regulation are, in the aggregate, at least as 
protective of public health and welfare than applicable federal 
standards.'' \30\ CARB asserts that EPA has no basis to find that the 
CARB Board's determination is arbitrary or capricious.\31\ CARB points 
out that because the California and federal emission standards and test 
procedures for off-road CI engines are essentially aligned, and because 
California and federal off-road CI emission standards are generally 
more stringent than the equivalent federal marine engine emission 
standards, that EPA has no basis to find that the option to use the 
off-road CI engines would cause the CHC Amendments to be less 
protective.\32\ With respect to in-use engines, CARB maintains there is 
no question that the option of using EPA or CARB Tier 2 or higher tier 
certified off-road CI engines to meet the CHC regulation's in-use 
requirements are more stringent than applicable federal regulations, 
given that EPA is not authorized to regulate in-use off-road 
engines.\33\ In addition, CARB notes that the Within-the-Scope 
Amendments do not undermine the protectiveness determination made by 
EPA in granting the initially authorized CHC regulation. As explained 
above, CARB adopted the Within-the-Scope Amendments to accommodate 
implementation and compliance issues that have arisen under the 
original CHC regulations. Given that EPA has no authority to regulate 
in-use engines, CARB notes that it is indisputable that its in-use 
provisions are more stringent than non-existent ``applicable'' federal 
requirements.
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    \30\ CARB Resolution 10-26, EPA-HQ-OAR-201-0534-0008.
    \31\ CARB Support Document at 7-8.
    \32\ Id. at 11. In addition, EPA's existing regulations for new 
marine diesel engines also allow the use of certified off-road land-
based engines in marine vessels.
    \33\ Id. at 12.
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    After evaluating the materials submitted by CARB, and since EPA has 
not adopted any standards or requirements for in-use CHC engines and 
based on the lack of any comments submitted to the record, I cannot 
find that California's Within-the-Scope 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.

D. Need for California Standards To Meet Compelling and Extraordinary 
Conditions

    Section 209(e)(2)(ii) of the Act 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 paragraph 
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 
(e.g., on-highway mobile source or nonroad mobile source) 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.\34\
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    \34\ See 74 FR 32744, 32761 (July 8, 2009); 49 FR 18887-18890 
(May 3, 1984).
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    California has asserted its longstanding position that the State 
continues to need its own nonroad engine program to meet serious air 
pollution problems.\35\ CARB notes that ``California, and particularly 
the South Coast and San Joaquin Valley Air Basins, continue to 
experience some of the worst air quality in the nation and continue to 
be in non-attainment with national ambient air quality standards for 
PM2.5 and ozone. The unique geographical and climatic 
conditions, and the tremendous growth in on and off-road vehicle 
population and use that moved Congress to authorize California to 
establish separate on-road motor vehicle standards in 1967 and off-road

[[Page 6505]]

engine standards in 1990 still exists today.\36\
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    \35\ See Waiver Support Document at p. 18.
    \36\ Id. See 74 FR 32744, 32762-32763 (July 8, 2009); 79 FR 
6584, 6588-6590 (February 4, 2014).
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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 air 
quality standards for fine particulate matter (PM2.5) and 
ozone.\37\ In addition, EPA is not aware of any other information that 
would suggest that California no longer needs its nonroad emission 
program.
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    \37\ 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.
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    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 CHC regulations, to address the ``compelling and extraordinary 
conditions'' underlying the state's air pollution problems. I have 
determined that I cannot deny California authorization for its Full 
Authorization Amendments under section 209(e)(2)(A)(ii). As noted 
above, EPA's within-the-scope analysis (that is applicable to the 
Within-the-Scope Amendments) does not require an assessment of section 
209(e)(2)(A)(ii).

E. 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 this 
requirement to mean that California standards and accompanying 
enforcement procedures (under both the full authorization and the 
within-the-scope analysis) must be consistent with at least sections 
209(a), 209(e)(1), and 209(b)(1)(C), as EPA has interpreted this last 
subsection in the context of motor vehicle waivers. Thus, this can be 
viewed as a three-pronged test.
1. Consistency With Section 209(a) and 209(e)(1)
    To be consistent with section 209(a) of the Clean Air Act, 
California's commercial harbor craft regulations must not apply to new 
motor vehicles or new motor vehicle engines. California's commercial 
harbor craft regulations apply to nonroad marine vessels and engines, 
not on-highway motor vehicles or engines. CARB states that the new 
vessel requirements regulate new diesel engines, and apply only to 
nonroad engines that are neither new motor vehicles nor new motor 
vehicle engines. No commenter presented otherwise; therefore, I cannot 
deny California's request on the basis that California's commercial 
harbor craft regulations are not consistent with section 209(a).
    To be consistent with section 209(e)(1) of the Clean Air Act, 
California's commercial harbor craft regulations must not affect new 
farming or construction vehicles or engines that are below 175 
horsepower, or new locomotives or their engines. CARB represents that 
commercial harbor craft engines are not used in locomotives and are not 
primarily used in farm and construction equipment vehicles. No 
commenter presented otherwise and EPA is otherwise not aware of any 
information to the contrary; therefore, I cannot deny California's 
request on the basis that California's commercial harbor craft 
requirements are not consistent with section 209(e)(1).
2. 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. California 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 time. California's accompanying enforcement 
procedures would also be inconsistent with section 202(a) if the 
federal and California test procedures were not consistent. 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 procedure.\38\
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    \38\ MEMA I, 627, F.2d at 1126.
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    Congress has stated that the consistency requirement of section 
202(a) relates to technological feasibility.\39\ Section 202(a)(2) 
states, in part, that any regulation promulgated under its authority 
``shall take effect after such period as the Administrator finds 
necessary to permit the development and application of the requisite 
technology, giving appropriate consideration to the cost of compliance 
within such period.'' Section 202(a) thus requires the Administrator to 
first determine whether adequate technology already exists; or if it 
does not, whether there is adequate time to develop and apply the 
technology before the standards go into effect. The latter scenario 
also requires the Administrator to decide whether the cost of 
developing and applying the technology within that time is feasible. 
Previous EPA waivers are in accord with this position.\40\
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    \39\ H.R. Rep. No. 95-294, 95th Cong., 1st Sess. 301 (1977).
    \40\ See, e.g., 49 FR 1887, 1895 (May 3, 1984); 43 FR 32182, 
32183 (July 25, 1978); 41 FR 44209, 44213 (October 7, 1976).
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    As described above, the Full Authorization Amendments require in-
use Tier 0 and Tier 1 propulsion and auxiliary marine engines on crew 
and supply, barge, and dredge vessels to meet emission limits equal to 
or cleaner than federal Tier 2 or Tier 3 new marine engine 
certification standards in effect for the year that in-use engine 
compliance is required (based on the model year of the in-use engine 
and annual hours of operation). Vessel owners are provided the same 
compliance options that were available to owners of Tier 0 and Tier 1 
marine engines in the initial CHC regulations: (1) Replacing an in-use 
engine with a new marine engine certified to applicable Tier 2 or Tier 
3 marine standards, (2) demonstrating that the in-use marine engine 
already meets the most stringent Tier 2 or Tier 3 marine standards in 
effect for new engines of similar power rating and displacement, (e.g., 
utilizing engine rebuild kits or aftertreatment technologies), (3) 
demonstrating that an in-use marine engine has not and will not operate 
more than a specified number of hours per calendar year (300 hours for 
crew and supply vessel engines or 80 hours for barge and dredge vessel 
engines), or (4) using the flexibility provided through the exemptions 
and compliance extensions of the regulation. CARB

[[Page 6506]]

notes ``In granting California the authorization for the original CHC 
regulation, EPA stated that `no party objected to CARB's demonstration 
that [compliance] technologies are in existence and are being used in 
actual operation,' and also found no issue of incompatibility between 
California and federal test procedures.'' \41\ CARB also notes that the 
CHC Amendments now provide owners or operators the additional 
compliance flexibility option of using CARB or EPA Tier 2 or higher 
tier certified off-road CI engines to meet the requirements for 
auxiliary or propulsion engines, so owners or operators may also elect 
to comply with the amended in-use requirements by replacing an in-use 
engine with a new off-road engine, or by demonstrating that an existing 
in-use engine meets CARB or EPA Tier 2 or Tier 3 off-road CI engines 
standards (e.g., through utilization of engine rebuild kits or 
aftertreatment technologies).
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    \41\ Waiver Support Document at 19 (citing EPA's authorization 
at 76 FR 77521, 77527 (December 13, 2011).
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    CARB maintains that the Within-the-Scope Amendments present no 
issue regarding technical feasibility or inconsistent test procedures 
as the amendments only maintain or relax the stringency of the original 
CHC regulation's in-use requirements.
    EPA did not receive any comments suggesting that California's 
commercial harbor craft regulations are technologically infeasible.
    Therefore, based on the record before us, I cannot find that the 
CHC Amendments are technologically infeasible or otherwise inconsistent 
with section 202(a). Therefore, I cannot deny CARB's authorization 
request for the Full Authorization Amendments and likewise cannot deny 
the within-the-scope request for the Within-the-Scope Amendments based 
on the section 202(a) criterion.

F. 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.\42\ I do not believe that 
the Within-the-Scope Amendments raise any new issues with respect to 
our prior granting of the authorization. Moreover, EPA did not receive 
any comments that CARB's CHC 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.
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    \42\ See, e.g., 78 FR 38970 (June 28, 2013), 75 FR 8056 
(February 23, 2010), and 70 FR 22034 (April 28, 2005).
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III. Decision

    After evaluating California's CHC Amendments and CARB's submissions 
for EPA review as described above, I am 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 EPA's previous authorization.
    This decision will affect not only persons 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).

    Dated: January 11, 2017.
Gina McCarthy,
Administrator.
[FR Doc. 2017-01261 Filed 1-18-17; 8:45 am]
 BILLING CODE 6560-50-P


