[Federal Register Volume 80, Number 68 (Thursday, April 9, 2015)]
[Rules and Regulations]
[Pages 19020-19033]
[FR Doc No: 2015-07972]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2013-0754; FRL-9924-69-Region 9]

Revisions to the California State Implementation Plan; San
Joaquin Valley Unified Air Pollution Control District; Quantification
of Emission Reductions From Incentive Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is finalizing a
limited approval and limited disapproval of a revision to the San
Joaquin Valley Unified Air Pollution Control District (SJVUAPCD)
portion of the California State Implementation Plan (SIP). This
regulation establishes requirements and procedures for the District's
quantification of emission reductions achieved through incentive
funding programs implemented in the San Joaquin Valley. The effect of
this action would be to make these requirements and procedures
federally enforceable as part of the California SIP. Under authority of
the Clean Air Act (CAA or the Act), this action simultaneously approves
the local rule and directs California to correct rule deficiencies.

DATES: This rule will be effective on May 11, 2015.

ADDRESSES: EPA has established docket number EPA-R09-OAR-2013-0754 for
this action. Generally, documents in the docket for this action are
available electronically at http://www.regulations.gov or in hard copy
at EPA Region IX, 75 Hawthorne Street, San Francisco, California 94105-
3901. While all documents in the docket are listed at http://www.regulations.gov, some information may be publicly available only at
the hard copy location (e.g., copyrighted material, large maps, multi-
volume reports), and some may not be available in either location
(e.g., confidential business information (CBI)). To inspect the hard
copy materials, please schedule an appointment during normal business
hours with the contact listed in the FOR FURTHER INFORMATION CONTACT
section.

FOR FURTHER INFORMATION CONTACT: Idalia P[eacute]rez, EPA Region IX,
(415) 972-3248<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. Final Action
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

I. Proposed Action

    On May 19, 2014 (79 FR 28650), EPA proposed to fully approve the
following rule, which the California Air Resources Board (CARB)
submitted for incorporation into the California SIP.

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               Local agency                  Rule #              Rule title               Adopted     Submitted
----------------------------------------------------------------------------------------------------------------
SJVUAPCD..................................     9610  State Implementation Plan Credit      06/20/13     06/26/13
                                                      for Emission Reductions
                                                      Generated through Incentive
                                                      Programs.
----------------------------------------------------------------------------------------------------------------

    We proposed to fully approve Rule 9610 based on a proposed
conclusion that the rule satisfied the applicable CAA requirements. We
noted, however, that section 6.2 of the rule contained an incorrect
statutory reference and inaccurately described the statutory
obligations of the U.S. Department of Agriculture's Natural Resources
Conservation Service (NRCS) with respect to disclosure of information
concerning implementation of the Environmental Quality Incentives
Program (EQIP). See 79 FR 28650 at 28657 (May 19, 2014). We strongly
recommended that the District revise section 6.2 of the rule at its
earliest convenience to remove the incorrect reference and to provide
an accurate description of NRCS's statutory obligations with respect to
disclosure of information related to EQIP. See id.
    Based on additional evaluation of this rule and in response to
public comments, we continue to believe that Rule 9610 largely
satisfies the applicable CAA requirements but find that the
deficiencies in section 6.2 of the rule, as described in our proposed
rule, necessitate a limited disapproval. We provide our rationale for
this limited disapproval in our responses to comments below.

II. Public Comments and EPA Responses

    EPA's proposed rule provided a 30-day public comment period. During
this period, we received comments from the following entities:
    1. Paul Cort, Earthjustice; letter dated June 18, 2014.
    2. Seyed Sadredin, SJVUAPCD; letter dated June 17, 2014.
    We summarize these comments and provide our responses below.
    Comment 1: Earthjustice states that EPA should withdraw its
proposed approval of Rule 9610 because approval of the rule will
``create legal confusion over the requirements that must be met for
approval of voluntary incentive measures into the State Implementation
Plan (`SIP').'' Earthjustice further claims that the rule adds no value
to the SIP and that EPA's proposal does not fully identify all of the
``legal defects'' in the rule. ``At best,'' according to Earthjustice,
``EPA's approval of Rule 9610 does nothing, because compliance with
Rule 9610 will not be enough to support approval of future incentive
programs into the SIP,'' and at worst ``it will create legal confusion
over the governing criteria'' and waste resources by encouraging the
development of faulty programs.
    Response 1: We disagree with these comments. We believe Rule 9610
is consistent with the flexibility accorded states in incorporating
discretionary, innovative and non-traditional emission reduction
programs in their SIPs, under CAA sections 110(a)(2)(A) and 172(c)(6).
The CAA establishes a system of cooperative federalism in which EPA
provides national leadership, sets standards for environmental
protection and conducts oversight of state implementation, while states
play a larger role in implementation of these standards including
developing SIPs and adopting emission reduction measures. See CAA
sections 101 and 102. Under section 110 of the Act, states have broad
discretion to choose the mix of emission limitations and other control
measures, means, or techniques (including economic incentive programs)
that they will implement to provide for attainment of the national
ambient air quality standards (NAAQS). See Union Electric Co. v. EPA,
427 U.S. 246 (1976) (``So long as the national standards are met, the
State may select whatever mix of control devices it desires.'').
    As we explained in our proposal, Rule 9610 contains key provisions
designed to establish a regulatory framework for the District's
quantification of emission reductions achieved through incentive
programs and to provide opportunities for EPA, CARB, and the public to
review and comment on the District's evaluations on an annual basis.
See 79 FR 28650 at 28652. We believe the criteria and procedures in
Rule 9610 establish a useful starting point for the District's
development of such programs and for public participation in the
District's development of air quality plans that rely on such
programs.\1\ Upon incorporation of Rule 9610 into the SIP, the
requirements and procedures in the rule become federally enforceable
against the District, enabling EPA and citizens to hold the District
accountable for compliance with these requirements.
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    \1\ EPA has promulgated regulations for statutory EIPs required
under section 182(g) of the Act. See 40 CFR part 51, subpart U. For
discretionary EIPs, EPA has issued guidance entitled ``Improving Air
Quality with Economic Incentive Programs,'' U.S. EPA, Office of Air
and Radiation, January 2001 (EPA-45/R-01-001) (``2001 EIP
Guidance''). Because the 2001 EIP Guidance is non-binding and does
not represent final agency action on discretionary EIPs, EPA uses
the 2001 EIP Guidance as an initial screen to evaluate potential
approvability issues. Final action on any discretionary EIP occurs
when EPA acts on it after its submission as a SIP revision.
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    As we also stated in the proposed rule, nothing in Rule 9610
supplants the applicable requirements of the CAA, and EPA will review
each SIP submittal developed pursuant to Rule 9610 and EPA guidance on
a case-by-case basis, following notice-and-comment rulemaking, to
determine whether the applicable requirements of the Act are met. See
79 FR 28650 at 28658. EPA specifically identified a number of
shortcomings in Rule 9610 to ensure that the State and District are
aware of the rule's limitations. See, e.g., 79 FR 28650 at 28656
(noting that Rule 9610 does not specifically address CAA requirements
concerning funding, personnel, and implementation authority) and 28657
(discussing incorrect statutory reference in section 6.2 of Rule 9610).
To the extent our proposal did not make clear that Rule 9610 in no way
substitutes for the requirements of the CAA, we hereby clarify that the
requirements of the CAA continue to apply to each SIP submitted by the
State and District, notwithstanding any provision in Rule 9610, and
that our action on this rule does not constitute an endorsement of its
content as an adequate representation of the requirements of the Act.
Additionally, we are finalizing a limited approval and limited
disapproval of Rule 9610 because of the deficiencies in section 6.2
concerning disclosure of records related to the NRCS's implementation
of the EQIP program. We explain our reasons for disapproving the rule
on this basis in Response 3.h below.
    Given that the District's stated purpose in adopting Rule 9610 was
to establish an administrative mechanism for crediting emission
reductions achieved through incentive programs toward SIP requirements,
EPA discussed in the proposed rule ``the extent to which the
requirements and procedures contained in the rule

establish a framework for development of SIP submittals that satisfy
the requirements of the Act, as interpreted in EPA policy on
discretionary EIPs and other nontraditional emission reduction
measures.'' 79 FR 28650 at 28653. In the Technical Support Document
(TSD), EPA also provided evaluations of the specific incentive program
guidelines listed in Section 3.1 of the rule, as a ``preliminary guide
to assist the District in its effort to address CAA requirements in SIP
submittals that rely on incentive programs going forward.'' 79 FR 28650
at 28654; see also U.S. EPA Region 9 Air Division, ``Technical Support
Document for EPA's Notice of Proposed Rulemaking for the California
State Implementation Plan, San Joaquin Valley Unified Air Pollution
Control District's Rule 9610, State Implementation Plan Credit for
Emission Reductions Generated through Incentive Programs,'' May 2014
(hereafter ``Proposal TSD''). We provided these evaluations to explain
the minimum statutory requirements that apply to SIPs that rely on
economic incentive programs; to inform the District of both provisions
in Rule 9610 that adequately represent these requirements and
shortcomings in the rule that should be corrected to avoid confusion;
and to invite public comment on EPA's understanding of the way in which
the District would implement Rule 9610 going forward. See, e.g., 79 FR
28650 at 28653 (discussing EPA's recommended programmatic ``integrity
elements'' for innovative measures), 28654 (discussing EPA's
recommended SIP components for innovative measures); and 28657
(recommending rule corrections to avoid confusion concerning NRCS's
statutory obligations and requesting public comment on mechanisms for
tracking the District's compliance with SIP commitments). EPA's limited
approval and limited disapproval of Rule 9610 into the SIP does not, in
any way, constitute endorsement of the rule as a substitute for CAA
requirements.
    Section 110 of the CAA requires each state to submit to EPA for
approval a ``plan which provides for implementation, maintenance, and
enforcement'' of each primary and secondary NAAQS, and EPA is required
to approve a SIP submittal that relates to these purposes and satisfies
the applicable federal requirements. See CAA section 110(k)(3), 42
U.S.C. 7410(k)(3) and 40 CFR 52.02(a). Rule 9610 establishes
requirements and procedures for the District's quantification of
reductions in emissions of NAAQS pollutants (e.g., nitrogen oxides
(NOx) and fine particulate matter (PM2.5)) achieved through
incentive programs and, therefore, relates to the requirements of CAA
section 110. See generally San Joaquin Valley Unified Air Pollution
Control District, Final Staff Report, ``Proposed Rule 9610 (State
Implementation Plan Credit for Emission Reductions Generated through
Incentive Programs),'' June 20, 2013. With the exception of the
deficiencies in section 6.2 of the rule, Rule 9610 satisfies the
requirements concerning enforceability in section 110(a)(2)(A) and SIP
revisions in section 110(l) of the Act. See 79 FR 28650 at 28652
(summarizing rule provisions enforceable against the District) and
28658 (explaining that approval of Rule 9610 would not interfere with
applicable requirements concerning attainment and other CAA
requirements) and Proposal TSD at 3-8; see also Response 3.h
(discussing deficiencies in section 6.2 of Rule 9610). Additionally,
EPA has reviewed Rule 9610 for conflicts with CAA requirements and
identified one provision (section 6.2 of the rule) that clearly
conflicts with the requirements of the Act. Based on these evaluations,
we conclude that Rule 9610 satisfies the statutory requirements for
approval into the SIP, except for the disclosure provision in section
6.2, which we are disapproving. See Response 3.h.
    We expect the District to address the applicable requirements of
the CAA in each individual SIP submittal that relies on incentive
programs, and our recommendations in both the proposal and today's
final rule are intended to provide the District with general guidance
on how these requirements, as interpreted in EPA guidance, apply to
future SIP submittals developed pursuant to Rule 9610 and the
requirements of the Act. To the extent our action on Rule 9610 and the
related public process provide a forum for EPA and the public to
comment on the statutory requirements that the District must address in
future SIP submittals that rely on incentive programs, we view this as
an important step toward clarifying the applicable CAA requirements and
ensuring transparency in SIP actions going forward. In any case, as EPA
stated in the proposed rule, EPA will review each SIP submittal
developed pursuant to Rule 9610 (including the necessary evaluation of
the applicable incentive program guidelines) on a case-by-case basis,
following notice-and-comment rulemaking, to determine whether the
applicable requirements of the Act are met. See 79 FR 28650 at 28654,
28658. Nothing in today's action prohibits EPA from disapproving a SIP
relying on incentive-based emission reductions that fails to satisfy
the requirements of the CAA.
    Comment 2: Earthjustice states that the CAA requires emission
reductions resulting from incentive programs to be ``quantifiable,
surplus, enforceable and permanent'' and asserts that the District's
new definitions for these terms in Rule 9610 are an attempt to redefine
these four integrity elements for ``SIP creditability.'' Quoting EPA's
statement that ``[n]othing in Rule 9610 supplants the applicable
requirements of the CAA,'' Earthjustice states that ``compliance with
the SIP-creditability definitions in Rule 9610 does not mean that a
given incentive program is, in fact, SIP creditable.'' Earthjustice
claims that the potential confusion and conflict caused by EPA's action
beg the question why EPA is approving Rule 9610 and claims that the
purpose of the rule and EPA's action are not evident in the proposal.
In support of these claims, Earthjustice cites a statement in the
Proposal TSD in which EPA disagrees with the District's claims that
Rule 9610 identifies ``pre-approved incentive program guidelines'' for
claiming SIP credit and that certain Carl Moyer programs provide SIP
creditable emission reductions. Earthjustice further asserts that the
District's definitions in Rule 9610 do not meet all of EPA's criteria
and that EPA's analysis of the District's definitions ``notes some of
these deficiencies but ignores others,'' leaving readers to ``puzzle
through'' the reason for EPA's approval of the rule.
    Response 2: We agree that the CAA requires emission reductions
resulting from incentive programs to be ``quantifiable, surplus,
enforceable and permanent'' in order to qualify for emission reduction
credit in a SIP. We disagree, however, with the commenter's claim that
the definitions of the terms ``quantifiable,'' ``surplus,''
``enforceable'' and ``permanent'' in Rule 9610 represent an attempt by
the District to redefine the CAA's requirements for SIP creditability.
As we stated in our proposed action, the SJVUAPCD's stated intent in
adopting Rule 9610 was to establish a regulatory framework to address
the CAA's requirements for crediting incentive-based emission
reductions in SIPs. See 79 FR 28650 at 28651. Upon incorporation of
Rule 9610 into the SIP, its requirements will become federally
enforceable under the CAA and thereby supplement, but not supplant, the
requirements of the Act.

    As we explained in the proposed rule and further in the Proposal
TSD, Rule 9610 does not represent all of the CAA requirements
applicable to SIPs that rely on incentive programs for emission
reduction credit (see, e.g., 79 FR 28650 at 28656, 28657 and Proposal
TSD at 50-52), and we agree with Earthjustice that compliance with the
SIP-creditability definitions in Rule 9610 does not necessarily mean
that a given incentive program is, in fact, SIP creditable under the
CAA. Additionally, as Earthjustice notes, EPA's Proposal TSD identifies
several statements in the District's 2013 Annual Demonstration Report
that improperly characterize the effect of compliance with the rule
(e.g., the District's statement that ``Section 3.1 of Rule 9610
identifies pre-approved incentive program guidelines''). See Proposal
TSD at 53. As we explained in both the proposed rule and the Proposal
TSD, EPA is taking no action on the incentive program guidelines as the
guidelines themselves are not part of Rule 9610, and the State has not
separately submitted any of these guidelines for approval into the SIP.
See 79 FR 28650 at 28653, n. 7 and 28654. It follows that EPA cannot,
in today's action, approve (or ``pre-approve'') any of these guidelines
for use in quantifying SIP emission reduction credit.\2\
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    \2\ We understand that CARB and the District do not intend to
submit any incentive program guidelines to EPA for approval into the
SIP, given that SIP-approval of an incentive program guideline per
se is not necessary to demonstrate that the emission reductions
associated with that program satisfy CAA requirements for SIP
emission reduction credit.
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    We continue to believe, however, that the definitions of the terms
``quantifiable,'' ``surplus,'' ``enforceable'' and ``permanent'' in
Rule 9610 generally represent the four fundamental ``integrity
elements'' defined in EPA guidance for discretionary EIPs and other
innovative emission reduction programs, provided the District
interprets these terms consistent with our interpretations in this
rulemaking, which are the bases for our limited approval of the
rule.\3\ If the District implements Rule 9610 (including its
definitions) in a manner that is consistent with EPA's interpretation
and the recommendations provided in our proposed and final rulemaking
documents, we expect that future SIPs developed in accordance with Rule
9610 would adequately address EPA's policy recommendations with respect
to these four integrity elements.\4\ Conversely, to the extent the
District implements Rule 9610 in a manner that departs significantly
from EPA's understanding of the rule and related recommendations, we
expect such future SIPs would not adequately address the requirements
of the Act. Although we make no determination today concerning SIP
emission reduction credit for any particular incentive program, we
believe that our interpretations of Rule 9610, our related
recommendations for corrections or clarifications to the rule, and our
preliminary reviews of the incentive program guidelines referenced in
the rule (as discussed in the Proposal TSD) provide general guidance to
the State and District that will help clarify the applicable CAA
requirements for future SIPs, compared to EPA inaction on Rule 9610.
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    \3\ Should the District's implementation of Rule 9610 going
forward reveal a conflict between a provision of the rule and the
requirements of the CAA, EPA may exercise its authorities under CAA
sections 110(k)(5) or 110(k)(6) to issue a SIP call or to revise
this action as appropriate.
    \4\ Nothing in the comments submitted by the District on EPA's
proposed rule (see Comment 6) indicates that the District disagrees
with EPA's interpretation of Rule 9610, as provided in the proposed
rule and Proposal TSD.
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    Comment 3: Earthjustice claims that Rule 9610 does not ensure
``surplus'' and ``enforceable'' emission reductions and disagrees with
several aspects of EPA's evaluation of the rule's definitions of these
terms.
    Response 3: EPA is finalizing a limited approval and limited
disapproval of Rule 9610 based on our conclusion that the rule relates
to the requirements of CAA section 110 and, with one exception,
satisfies the statutory criteria for approval into the SIP. See
Response 1 and Response 2, above; see also Response 3.h (discussing
deficiencies in section 6.2 of Rule 9610).
    Nonetheless, the commenter raises a number of important concerns
regarding the adequacy of Rule 9610 as a legal framework for
quantifying SIP emission reduction credit for incentive programs, and
in an effort both to respond to these comments and to provide the
District with specific guidance on the requirements of the Act that
each SIP must satisfy, we respond below (in Response 3.a through
Response 3.j) to each of these concerns.
    Comment 3.a: Earthjustice states that according to EPA, ``emission
reductions are surplus only if they are not otherwise required by or
assumed in a SIP-related program,'' any other adopted State air quality
program, a consent decree, or a federal rule designed to reduce
emissions of a criteria pollutant or its precursors, and that measures
are only surplus for ``the remaining useful life of the vehicle,
engine, or equipment being replaced.'' Rule 9610, on the other hand,
defines ``surplus'' to mean that the emission reductions are ``not
otherwise required by any federal, state, or local regulation, or other
legal mandate, and are in excess of the baseline emission inventories
underlying a SIP attainment demonstration'' (citing Rule 9610, section
2.27). Earthjustice claims that this definition in Rule 9610 is not
consistent with EPA's definition, for example because ``the District's
definition leaves out various other assumptions built into SIP-related
programs, such as growth factors in attainment and other plans,
turnover assumptions in conformity demonstrations, etc.'' and does not
incorporate the ``useful life'' concept into its definition.
Earthjustice claims that EPA's proposal gives only ``short shrift'' to
these differences and provides an unsupported claim that the District's
new definition will ``treat as `surplus' only those emission
reductions'' that meet EPA's definition of the term.
    Response 3.a: We disagree with the commenter's claims about the
definition of ``surplus'' in Rule 9610 and believe that this definition
is generally consistent with EPA's guidance on ``additionality'' of
emission reductions, provided the District interprets the term
consistent with EPA's interpretation, as explained further below.
    Section 2.27 states that ``emission reductions are surplus when
they are not otherwise required by any federal, state, or local
regulation, or other legal mandate, and are in excess of the baseline
emission inventories underlying a SIP attainment demonstration.''
First, we understand that ``any federal, state, or local regulation, or
other legal mandate'' would include: (1) Any federal rule designed to
reduce emissions of a criteria pollutant or its precursors (e.g., a new
source performance standard or federal mobile source requirements); (2)
any State or local regulation concerning air pollutant emissions; and
(3) any obligation in a consent decree, settlement agreement, or other
legal mandate. Read accordingly, the definition would prohibit emission
reductions required by any of these types of legal obligations from
being treated as ``surplus.'' Second, we understand that the phrase
``baseline emission inventories underlying a SIP attainment
demonstration'' means the projection year emission inventories that
provide the basis for the attainment-related demonstrations in a SIP.
Read accordingly, emission reductions ``in excess of the baseline
emission inventories underlying a SIP attainment demonstration'' would
mean

emission reductions that go beyond those already assumed in a SIP-
related program, taking into account growth factors, assumptions
concerning fleet turnover, and other relevant planning assumptions--
that is, any emission reductions assumed in a SIP-related program
(e.g., an attainment or reasonable further progress plan or a
transportation conformity demonstration) would not be treated as
``surplus.''
    Read in its entirety, section 2.27 provides that only those
emission reductions that are not otherwise required by or assumed in a
SIP-related program, any other adopted State air quality program, a
consent decree, or a federal rule designed to reduce criteria pollutant
or precursor emissions will qualify for treatment as ``surplus''
emission reductions, consistent with EPA's definition of the term in
longstanding guidance. See, e.g., ``Guidance on Incorporating Voluntary
Mobile Source Emission Reduction Programs in State Implementation Plans
(SIPs),'' EPA, Office of Air and Radiation, October 24, 1997 (hereafter
``1997 VMEP'') at 6; ``Improving Air Quality with Economic Incentive
Programs,'' EPA, Office of Air and Radiation, January 2001 (hereafter
``2001 EIP Guidance'') at 35; ``Incorporating Emerging and Voluntary
Measures in a State Implementation Plan,'' EPA, Office of Air and
Radiation, September 2004 (hereafter ``2004 Emerging and Voluntary
Measures Guidance'') at 3; and ``Diesel Retrofits: Quantifying and
Using Their Emission Benefits in SIPs and Conformity,'' EPA, Office of
Transportation and Air Quality, February 2014 (hereafter ``2014 Diesel
Retrofits Guidance'') at 27.
    One component of EPA's various policy recommendations that the
definition of ``surplus'' in section 2.27 does not explicitly address
is the recommendation concerning the remaining useful life of the
vehicle, engine, or equipment being replaced. See 2014 Diesel Retrofits
Guidance at 30 (recommending that states ``consider factors that may
affect emission reductions and their surplus status overtime, including
changing patterns of operations or use, vehicle deterioration factors,
equipment useful life, and government emission standards''). Rule 9610
does, however, contain a definition of ``project life'' in section 2.20
that addresses this recommendation. Specifically, section 2.20 defines
``project life'' to mean ``the period of time over which an incentive
program project achieves SIP-creditable emission reductions'' and
states that ``[p]roject life shall not exceed the useful life of
equipment, vehicles, or practices funded through incentive programs,
and may vary across incentive programs and project types.'' As we
explained in the Proposal TSD, in future SIP submittals developed
pursuant to Rule 9610, we expect the State and/or District will
demonstrate: (1) How the ``project life'' for each funded project
relied on for SIP credit takes into account the remaining useful life
of the vehicle, engine, or equipment being replaced, and (2) how the
State and/or District ensure that the emission reductions relied on for
SIP credit are in excess of the reductions attributed to normal fleet
turnover and other assumptions built into future year emissions
inventories (i.e., that the same emission reductions are not ``double
counted''). See Proposal TSD at 18 and 48.
    Comment 3.b: Earthjustice asserts that EPA's analysis of the
District's definition of ``enforceable'' is arbitrary. Quoting from
section 110(a)(2)(A) of the CAA and EPA's interpretative statements in
``State Implementation Plans; General Preamble for the Implementation
of Title I of the Clean Air Act Amendments of 1990'' (57 FR 13498,
April 16, 1992) (hereafter ``General Preamble''), Earthjustice states
that even those ``nontraditional techniques'' for reducing pollution
authorized by section 110(a)(2)(A) must be ``enforceable.''
Additionally, Earthjustice quotes from an EPA docket memorandum for a
rulemaking entitled ``State Implementation Plans: Response to Petition
for Rulemaking; Findings of Substantial Inadequacy; and SIP Calls to
Amend Provisions Applying to Excess Emissions During Periods of
Startup, Shutdown, and Malfunction,'' February 4, 2013 (hereafter
``2013 SSM Memo''), in which EPA highlights the importance of the EPA
and citizen enforcement authorities established by Congress to ensure
compliance with CAA requirements and states that SIP provisions that
function to bar effective enforcement by the EPA or citizens for
violations would be inconsistent with the regulatory scheme established
in title I of the Act. Earthjustice quotes from this memorandum to
support its assertion that according to EPA policy, SIPs must be built
upon emission reductions that are ``enforceable,'' meaning that ``EPA
and citizens must have the ability to bring enforcement actions to
assure compliance.'' For example, Earthjustice states, EPA will not
approve control measures that include ``director discretion'' to define
or redefine compliance requirements and also will ``not allow SIPs to
include state affirmative defenses that would foreclose EPA or other
enforcement.'' Earthjustice further asserts that ``[a] state cannot
claim SIP credit from control measures that shield pollution sources
from independent enforcement actions.'' Earthjustice also references
the 2001 EIP Guidance in support of these arguments.
    Response 3.b: We agree that under the CAA, as interpreted in EPA
policy, all measures approved into a SIP, including those
``nontraditional techniques'' for reducing pollution identified in
section 110(a)(2)(A) of the Act, must be ``enforceable'' to qualify for
SIP emission reduction credit and that EPA and citizens must be able to
bring enforcement actions to assure compliance. See, e.g., General
Preamble at 13556. We disagree, however, with the claim that EPA's
analysis of the definition of ``enforceable'' in Rule 9610 is
arbitrary.
    In our proposed rule and Proposal TSD, we compared the Rule 9610
definition of ``enforceable'' with EPA's recommended enforceability
factors for voluntary and other nontraditional emission reduction
measures, and we found the Rule 9610 definition to be generally
consistent with EPA's recommendations. See 79 FR 28650 at 28654
(discussing components of Rule 9610, section 2.8 that reflect EPA
recommendations) and Proposal TSD at 8-11. Specifically, we highlighted
key components of EPA's policy recommendations concerning
enforceability and found that the District's definition of the term
``ensures that the District will treat as `enforceable' only those
emission reductions that can, as a practical matter, be independently
verified and that result from a program or measure that defines
violations clearly, allows for identification of responsible parties,
requires grantees to provide all records needed to demonstrate that
emission reductions are achieved, and provides for public access to
emissions-related information.'' See 79 FR 28650 at 28653, 28654. We
provided these analyses not to support a regulatory determination
concerning the enforceability of any particular incentive program or
air quality plan that relies on incentive programs, as no such program
or plan is before us in this action, but rather to highlight the
District's obligation under Rule 9610 to ensure that any incentive
program relied upon in a SIP requires documentation adequate for EPA
and the public to independently verify that the necessary emission
reductions have occurred. See 79 FR 28650 at 28654 (noting District's
obligation to demonstrate, in each SIP submittal that relies on an
incentive program, that the

emission reductions relied upon to satisfy SIP requirements are
surplus, quantifiable, enforceable, and permanent).\5\ That is, we
highlighted these provisions of section 2.8 of Rule 9610 in an effort
to ensure that future SIPs that rely on incentive programs in the SJV
will, at minimum, satisfy the rule's enforceability requirements, which
reflect important components of EPA's recommendations concerning
enforceability under the CAA. See 79 FR 28650 at 28654.
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    \5\ Such documentation is necessary to hold the District
accountable for any SIP commitments developed in accordance with
Section 7.0 of Rule 9610, as explained further in Response 3.h.
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    Earthjustice asserts generally that ``[a] state cannot claim SIP
credit from control measures that shield pollution sources from
independent enforcement actions.'' But nothing in Rule 9610 shields
pollution sources from independent enforcement actions and Earthjustice
does not identify any provision that does so. As further explained in
Response 3.d., the CAA authorizes EPA and citizens to enforce
requirements of an ``applicable implementation plan'' \6\ and certain
requirements of the Act. See CAA sections 113 and 304(a), 42 U.S.C.
7413, 7604(a). Specifically, under section 113 of the Act, EPA may
bring an enforcement action against any individual or government agency
for violation of ``any requirement or prohibition of an applicable
implementation plan,'' \7\ and under section 304(a) citizens may bring
suit against any individual or government agency alleged to be in
violation of ``an emission standard or limitation,'' including a
schedule or timetable of compliance which is in effect under an
applicable implementation plan.\8\ To the extent Earthjustice intended
to argue that Rule 9610 would ``shield'' pollution sources from an
action to enforce the requirements of an ``applicable implementation
plan''--e.g., the requirements of an EPA-approved SIP--we disagree as
Rule 9610 does not apply to any pollution source. See 79 FR 28650 at
28652 (``the requirements and procedures in [Rule 9610] apply only to
the District . . . [and] would become federally enforceable against the
District upon EPA's final approval of the rule into the California
SIP'') (emphases added). Earthjustice does not identify any provision
in Rule 9610 that would apply to a pollution source or preclude
enforcement of SIP requirements against a pollution source.
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    \6\ Section 302(q) of the CAA defines ``applicable
implementation plan,'' in relevant part, as ``the portion (or
portions) of the implementation plan, or most recent revision
thereof, which has been approved under section 110 of [title I of
the Act] . . . and which implements the relevant requirements of
[the Act].'' 42 U.S.C. 7602(q).
    \7\ Section 113 of the CAA authorizes EPA to issue notices and
compliance orders, assess administrative penalties, and bring civil
actions against any ``person,'' including a state agency, who ``has
violated or is in violation of any requirement or prohibition of an
applicable implementation plan. . . .'' CAA 113(a)(1)-(2), 42 U.S.C.
7413(a)(1)-(2); CAA 302(e), 42 U.S.C. 7602(e) (defining ``person''
to include a State or political subdivision thereof).
    \8\ Section 304(a)(1) of the CAA authorizes any person to bring
a civil action against any ``person,'' including a state agency (to
the extent permitted by the Eleventh Amendment to the Constitution),
``who is alleged to have violated or to be in violation of . . . an
emission standard or limitation. . . .'' 42 U.S.C. 7604(a)(1); CAA
302(e), 42 U.S.C. 7602(e) (defining ``person'' to include a State or
political subdivision thereof). An ``emission standard or
limitation'' is defined in section 304(f), in relevant part, to mean
``a schedule or timetable of compliance'' which is in effect under
the Act ``or under an applicable implementation plan.'' 42 U.S.C.
7604(f)(1). ``Schedule and timetable of compliance'' is broadly
defined in section 302(p) to mean ``a schedule of required measures
including an enforceable sequence of actions or operations leading
to compliance with an emission limitation, other limitation,
prohibition, or standard.'' 42 U.S.C. 7602(p).
---------------------------------------------------------------------------

    We understand that Earthjustice may have intended to argue that
Rule 9610 would encourage future development of programs that preclude
EPA or citizen enforcement against pollution sources, rather than to
comment on the enforceability of Rule 9610 itself.\9\ Under CAA section
110(a)(2)(A), however, the relevant inquiry is not whether EPA or
citizens may directly sue pollution sources but whether the
``measure,'' ``means,'' or ``technique'' for reducing emissions is
``enforceable.'' Section 110 of the Act requires that each SIP include
``enforceable emission limitations and other control measures, means,
or techniques (including economic incentives such as fees, marketable
permits, and auctions of emissions rights), as well as schedules and
timetables for compliance, as may be necessary or appropriate'' to meet
the Act's requirements. CAA 110(a)(2)(A), 42 U.S.C. 7410(a)(2)(A).
Thus, according to the plain language of the statute, SIPs may contain
``means'' or ``techniques'' including economic incentives and/or
``schedules and timetables for compliance'' that EPA considers
``appropriate'' for attainment, so long as they are ``enforceable.''
Courts have long held that citizen suits can be brought to enforce
specific measures, strategies, or commitments by state or local
agencies that are designed to ensure compliance with the NAAQS. See,
e.g., BCCA Appeal Group v. EPA, 355 F.3d 817 (5th Cir. 2003), reh'g
denied, BCCA Appeal Group v. EPA, 2004 U.S. App. LEXIS 215 (5th Cir.
2004); Conservation Law Foundation, Inc. v. James Busey et al., 79 F.3d
1250, 1258 (1st Cir. 1996) (citing, inter alia, Wilder v. EPA, 854 F.2d
605 at 613-14) and Citizens for a Better Env't v. Deukmejian, 731 F.
Supp. 1448, 1454-59 (N.D. Cal.), modified, 746 F. Supp. 976 (1990).
---------------------------------------------------------------------------

    \9\ Earthjustice does not appear to question EPA's statement
that Rule 9610 itself is enforceable against the District and that
our approval of the rule would make it federally enforceable by EPA
and citizens under the CAA.
---------------------------------------------------------------------------

    Nothing in Rule 9610 undermines the ability of EPA or citizens to
bring enforcement actions to assure compliance with SIP requirements,
nor does the rule contain or authorize the District to develop any
``director discretion'' or ``affirmative defense'' provision that will
apply to SIP requirements. To the contrary, section 7.0 of Rule 9610
requires that the District maintain responsibility for ensuring that
SIP emission reductions occur through an ``enforceable commitment,''
which becomes federally enforceable by EPA and citizens upon approval
into the SIP under CAA section 110(k). See 79 FR 28650 at 28655 (citing
Rule 9610, section 7.0). EPA has approved enforceable commitments in
the past and courts have enforced these commitments against states that
failed to comply with them. See, e.g., American Lung Ass'n of N.J. v.
Kean, 670 F. Supp. 1285 (D.N.J. 1987), aff'd, 871 F.2d 319 (3rd Cir.
1989); NRDC, Inc. v. N.Y. State Dept. of Env. Cons., 668 F. Supp. 848
(S.D.N.Y. 1987); Citizens for a Better Env't v. Deukmejian, 731 F.
Supp. 1448, recon. Granted in par, 746 F. Supp. 976 (N.D. Cal. 1990);
Coalition for Clean Air v. South Coast Air Quality Mgt. Dist., No. CV
97-6916-HLH (C.D. Cal. Aug. 27, 1999). We believe it is appropriate to
allow California to rely in its SIP on voluntary incentive programs,
provided the State and/or District retain clear responsibility through
an enforceable commitment to ensure that the emission reductions
necessary to meet applicable CAA requirements are achieved, which EPA
or citizens may enforce under sections 113 or 304 of the Act,
respectively.
    As we noted previously, following the State's submittal of a
specific air quality plan or measure that relies on incentive programs
for necessary emission reductions, EPA will evaluate that plan or
measure to determine whether it satisfies the enforceability
requirements of the Act. We provide these responses to the commenter's
concerns only as a preliminary explanation of the enforceability
requirements that future SIPs developed through the Rule 9610 process
must satisfy, and we encourage the commenter and the public at large

to participate in future rulemakings on specific air quality plans or
measures that rely on incentive programs for SIP emission reduction
credit.
    Comment 3.c: Citing a 2004 guidance entitled, ``Incorporating
Emerging and Voluntary Measures in a State Implementation Plan''
(September 2004) (hereafter ``2004 Emerging and Voluntary Measures
Guidance''), Earthjustice states that according to EPA, ``emission
reductions are `voluntary,' and therefore subject to a cap on SIP
credit, when the emission reductions are not enforceable against
individual sources.'' According to Earthjustice, ``Rule 9610 suggests
that measures could be SIP creditable even if EPA and the public have
to rely entirely on the State and local air District to ensure source
compliance,'' and that this runs counter to EPA's longstanding policy
and statutory interpretations, under which EPA ``has only been willing
to allow such programs with a cap on the SIP credit that can be
claimed.''
    Response 3.c: We agree with Earthjustice's characterization of
``voluntary'' measures as those that are not directly enforceable
against individual emission sources. See, e.g., 1997 VMEP at 4; 2004
Emerging and Voluntary Measures Guidance at 1, 19; and 2005 Bundled
Measures Guidance at 2, n. 1. We disagree, however, with the
commenter's suggestion that emission reductions from voluntary measures
are ``subject to'' a specific cap on SIP emission reduction credit
because they are unenforceable for SIP purposes under the CAA.
    Under longstanding guidance, EPA has recommended presumptive limits
(sometimes referred to as ``caps'') on the amounts of emission
reductions from certain voluntary and other nontraditional measures
that may be credited in a SIP. Specifically, for voluntary mobile
source emission reduction programs (VMEPs),\10\ EPA has identified a
presumptive limit of three percent (3%) of the total projected future
year emission reductions required to attain the appropriate NAAQS, and
for any particular SIP submittal to demonstrate attainment or
maintenance of the NAAQS or progress toward attainment (RFP), 3% of the
specific statutory requirement. See 1997 VMEP at 5. As explained in the
2001 EIP Guidance, EPA recommended this 3% cap (per pollutant) on the
credit allowed for VMEPs because states are ``not required to play a
direct role in implementing these programs, the programs are not
directly enforceable against participating parties, and there may [be]
less experience in quantifying the emission benefits from these
programs.'' 2001 EIP Guidance at 158; see also 1997 VMEP at 5
(recommending 3% cap due to ``innovative nature of voluntary measures
and EPA's inexperience with quantifying their emission reductions'').
For voluntary stationary and area source measures, EPA has identified a
presumptive limit of 6% of the total amount of emission reductions
required for RFP, attainment, or maintenance demonstration purposes.
See 2004 Emerging and Voluntary Measures Guidance at 9 (``EPA believes
it is appropriate to limit these measures to a small portion of the SIP
given the untested nature of the control mechanisms'') and
``Incorporating Bundled Measures in a State Implementation Plan
(SIP),'' August 2005 (hereafter ``2005 Bundled Measures Guidance'') at
8 (recommending limits ``[d]ue to the innovative nature of voluntary
and emerging measures''). EPA has also long stated, however, that
states may justify higher amounts of SIP emission reduction credit for
voluntary programs on a case-by-case basis, and that EPA may approve
measures for SIP credit in excess of the presumptive limits ``where a
clear and convincing justification is made by the State as to why a
higher limit should apply in [its] case.'' 2004 Emerging and Voluntary
Measures Guidance at 9; see also 2005 Bundled Measures Guidance at 8,
n. 6 and 2014 Diesel Retrofits Guidance at 12. Thus, the presumptive
``cap'' on SIP credit referenced by Earthjustice is not a specific
regulatory cap but a general policy recommendation, which states and
EPA may justify departing from on a case-by-case basis, subject to
notice-and-comment rulemaking on a particular SIP.
---------------------------------------------------------------------------

    \10\ A voluntary mobile source emission reduction program (VMEP)
is a mechanism that supplements traditional emission reduction
strategies through voluntary, nonregulatory changes in local
transportation sector activity levels or changes in in-use vehicle
and engine fleet composition, among other things. See 1997 VMEP at
3.
---------------------------------------------------------------------------

    Importantly, EPA has consistently stated that SIP credit may be
allowed for a voluntary or other nontraditional measure only where the
State submits enforceable mechanisms to ensure that the emission
reductions necessary to meet applicable CAA requirements are achieved--
e.g., an enforceable commitment to monitor and report on emission
reductions achieved and to rectify any shortfall in a timely manner.
See 79 FR 28650 at 28653 (citing, inter alia, 1997 VMEP at 4-7; 2004
Emerging and Voluntary Measures Guidance at 8-12; 2005 Bundled Measures
Guidance at 7-12; and 2004 Electric-Sector EE/RE Guidance at 6-7).
Thus, if California intends to satisfy a SIP requirement through
reliance on an incentive program that EPA and citizens may not directly
enforce against participating sources, the State/District must take
responsibility for assuring that SIP emission reduction requirements
are met through an enforceable commitment, which EPA and citizens may
enforce against the State/District upon EPA's approval of the
commitment into the SIP. EPA continues to believe that voluntary
incentive measures accompanied by an enforceable commitment to monitor
emission reductions achieved and timely rectify any shortfall meet the
SIP control measure requirements of the Act. See Response 3.b above.
    Should California submit a SIP that relies on incentive programs to
satisfy a CAA requirement, EPA intends to evaluate the submittal to
determine whether the necessary emission reductions may be enforced by
EPA and citizens through an enforceable State/District commitment.
Additionally, should such a SIP rely on incentive-based emission
reductions in amounts that exceed EPA's presumptive limits, as
discussed in EPA's longstanding guidance, EPA intends to evaluate the
SIP submittal to determine whether the State and/or District have
provided a clear and convincing justification for such higher amounts.
    Comment 3.d: Citing both the 2001 EIP Guidance and the 2004
Emerging and Voluntary Measures Guidance, Earthjustice states that
emission reductions are ``enforceable'' against the source if: (1) They
are independently verifiable; (2) program violations are defined; (3)
those liable for violations can be identified; (4) the District, State
and EPA maintain the ability to apply penalties and secure appropriate
corrective actions where applicable; (5) citizens have access to all
the emissions-related information obtained from the source; (6)
citizens can file suits against sources for violations; and (7) they
are practicably enforceable in accordance with other EPA guidance on
practicable enforceability. Earthjustice states that EPA's proposed
rule recites all of these criteria except for citizen suit
enforceability and questions whether this was an oversight or a
deliberate attempt to mislead the public on the criteria for
enforceability. In any case, Earthjustice contends that ``nothing in
Rule 9610 would require incentive programs to provide for such citizen
enforcement'' and that the rule ``would only require that violations be
defined through contracts, [which] can only be

enforced by the parties to the contract.'' Earthjustice asserts that
citizens would have no recourse to ``file suits against sources for
violations,'' and that EPA's proposal includes ``no explanation of how
this requirement is met or why it does not apply.'' To the extent EPA
believes it is the latter, Earthjustice states, ``it has now afforded
the public no opportunity to respond to any reasoning behind that
assertion.''
    Response 3.d: First, to the extent the commenter argues that all
SIP emission reduction techniques must provide for citizen suits
directly against emission sources, we disagree. Section 110(a)(2)(A) of
the Act explicitly includes ``economic incentives'' among the ``control
measures, means, or techniques'' that states may use to meet SIP
requirements, and EPA has long interpreted the Act to allow SIPs to
rely on nontraditional emission reduction techniques--including
voluntary measures that are not directly enforceable against emitting
sources--provided the State submits enforceable mechanisms to assure
that the requirements of the Act are met. See Response 3.b and Response
3.c, above. As Earthjustice correctly notes, EPA's 2001 EIP Guidance
states that emission reductions and related actions are ``enforceable''
if, among other things, ``[c]itizens can file suits against sources for
violations. . . .'' 2001 EIP Guidance at 35-36.\11\ As with all
guidance, however, the 2001 EIP Guidance provides only non-binding
recommendations and does not represent final agency action concerning
the requirements for SIPs containing discretionary EIPs. See id. at 12,
19, and 119. Moreover, in several other policies concerning
nontraditional measures, EPA has indicated that provisions for citizen
suits against a state or other responsible entity (other than the
emission source) may suffice to meet the Act's enforceability
requirements. See Response 3.c above. For example, the 2004 Emerging
and Voluntary Measures Guidance recommends provisions authorizing
citizen suits against sources for ``emerging measures'' \12\ but states
that for ``voluntary measures,'' emission reductions and other required
actions are enforceable if, among other things, ``EPA maintains the
ability to apply penalties and secure appropriate corrective action
from the State where applicable and the State maintains the [ability
to] secure appropriate corrective action with respect to portions of
the program that are directly enforceable against the source. . . .''
2004 Emerging and Voluntary Measures Guidance at 3, 4 (emphases added);
see also 2005 Bundled Measures Guidance at 25 (also discussing EPA
enforcement against State) and 1997 VMEP at 6-7 (``[a] State's
obligations with respect to VMEPs must be enforceable at the State and
Federal levels'') (emphasis added). In other guidance concerning
nontraditional emission reduction measures, EPA has indicated that
provisions for enforcement against a ``responsible party'' may be
acceptable in lieu of enforcement directly against the emitting source.
See, e.g., ``Guidance on SIP Credits for Emission Reductions from
Electric-Sector Energy Efficiency and Renewable Energy Measures,''
August 5, 2004 (hereafter ``2004 Electric-Sector EE/RE Guidance'') at
5, 6 (distinguishing emission reductions that are ``enforceable
directly against the source'' from those that are ``enforceable against
another party responsible for the energy efficiency or renewable energy
activity'') and 2014 Diesel Retrofits Guidance at 28 (emission
reductions are federally enforceable only if, among other things,
``[c]itizens can file lawsuits against the responsible party for
violations'') (emphases added). Thus, a number of EPA policies
concerning nontraditional measures indicate that provisions for EPA and
citizen enforcement against the State or against some other
``responsible party'' other than the source may satisfy the Act's
requirements for enforceability. Earthjustice fails to identify any
statutory or regulatory support for a claim that all emission reduction
measures approved into a SIP must provide for citizen suits directly
against emitting sources.
---------------------------------------------------------------------------

    \11\ The 2001 EIP Guidance states that ``[e]mission reductions
use, generation, and other required actions are enforceable if'':
(1) They are independently verifiable; (2) program violations are
defined; (3) those liable for violations can be identified; (4) the
State and EPA maintain the ability to apply penalties and secure
appropriate corrective actions where applicable; (5) citizens have
access to all the emissions-related information obtained from the
source; (6) citizens can file suits against sources for violations;
and (7) they are practicably enforceable in accordance with other
EPA guidance on practicable enforceability. See 2001 EIP Guidance at
35-36.
    \12\ EPA has described ``emerging measures'' as new emission
reduction measures for which pollutant reductions are more difficult
to accurately quantify than traditional SIP emission reduction
measures. See 2004 Emerging and Voluntary Measures Guidance at 13
and 2005 Bundled Measures Guidance at 2.
---------------------------------------------------------------------------

    Second, Earthjustice's claim that Rule 9610 ``would only require
that violations be defined through contracts'' which ``can only be
enforced by the parties to the contract'' overlooks an important
provision in the rule that requires the District to provide a mechanism
for EPA and citizen enforcement in each submitted SIP that relies on an
incentive program. Specifically, section 7.0 of Rule 9610 requires that
each SIP submission in which the District relies on projections of SIP-
creditable emission reductions to satisfy a CAA SIP requirement
contain, among other things, an ``enforceable commitment'' that: (1)
Identifies the applicable incentive program guidelines; (2) identifies
emission reductions not to exceed the amount projected to be achieved
through the use of secured or reasonably anticipated incentive program
funding and the estimated availability of projects and willing
participants, based on historical participation and estimates of
remaining equipment; (3) is specifically adopted by the District as
part of the SIP and accounted for in annual demonstration reports; and
(4) states that ``if either the District or EPA finds that there is a
SIP shortfall for a particular year, the District will adopt and submit
to EPA, by specified dates, substitute rules and measures that will
achieve equivalent emission reductions as expeditiously as practicable
and no later than any applicable implementation deadline in the Clean
air Act or EPA's implementing regulations.'' See 79 FR 28650 at 28655
(citing Rule 9610, sections 7.1-7.4). A District commitment adopted in
accordance with these requirements would, upon approval into the SIP,
become enforceable by EPA and citizens under sections 113 and 304 of
the Act, respectively. See Response 3.b. Thus, although Rule 9610 does
not require that incentive programs provide for citizen enforcement
directly against emission sources for contract violations,\13\ the rule
does require that each SIP in which the District relies on incentive
program emission reductions contain, among other things, an enforceable
commitment that enables EPA and citizens to hold the District
accountable for violations of the SIP. We therefore disagree with the
commenter's suggestion that Rule 9610 deprives citizens of the ability
to enforce SIP emission reduction requirements.
---------------------------------------------------------------------------

    \13\ Under the Carl Moyer, Prop 1B, and EQIP funding programs,
each grantee must sign a contract specifying terms and conditions of
the grant which are enforceable by the funding agency. See, e.g.,
CARB, ``The Carl Moyer Program Guidelines, Approved Revisions
2011,'' Release Date: July 11, 2014, at Chapter 3, Section Y
(``Minimum Contract Requirements'') (available electronically at
http://www.arb.ca.gov/msprog/moyer/guidelines/2011gl/2011cmpgl_12_30_14.pdf).
---------------------------------------------------------------------------

    Finally, with respect to Earthjustice's claim that EPA's proposal
provides ``no explanation of how this requirement is met or why it does
not apply,'' it appears that Earthjustice is referring to

EPA's policy recommendation concerning citizen suits against emission
sources as a ``requirement.'' As discussed above in this response,
however, the CAA does not limit SIPs to those emission reduction
techniques that citizens may directly enforce against an emission
source, nor do EPA's guidance documents establish any requirement that
nontraditional emission reduction measures provide specifically for
citizen suits against sources. In our proposed rule, we referenced
numerous EPA guidance documents addressing nontraditional emission
reduction measures that ``provide for some flexibility in meeting
established SIP requirements for enforceability and quantification,
provided the State takes clear responsibility for ensuring that the
emission reductions necessary to meet applicable CAA requirements are
achieved.'' 79 FR 28650 at 28653 (citing, inter alia, 1997 VMEP, 2004
Emerging and Voluntary Measures Guidance, and 2005 Bundled Measures
Guidance). Consistent with these guidance documents, our proposed rule
highlighted the importance of the enforceable ``backstop'' commitment
from the State to monitor emission reductions achieved and to rectify
shortfalls in a timely manner, which must accompany any nontraditional
emission reduction measure submitted for SIP purposes. Id. and 79 FR
28650 at 28654-55 (discussing necessary components of a SIP submittal
that relies on nontraditional emission reduction measures). Our
proposed rule also discussed the requirements concerning enforceable
SIP commitments in section 7.0 of Rule 9610 and provided specific
recommendations for the District to consider in its development and
adoption of such commitments, to ensure that the requirements of the
Act are met. Id. at 28655. We believe these explanations are adequate
to inform the public of EPA's policies concerning enforceability of
nontraditional emission reduction measures and to provide a preview of
the factors that EPA intends to apply in reviewing enforceable
commitments submitted by the District going forward. As EPA also
explained at proposal, EPA will review each SIP submittal developed
pursuant to Rule 9610 (including the necessary evaluation of the
applicable incentive program guidelines) on a case-by-case basis,
following notice-and-comment rulemaking, to determine whether the
applicable requirements of the Act are met. See 79 FR 28650 at 28654,
28658.
    To the extent the commenter disagrees with EPA's interpretations of
the Act, we encourage the commenter to submit comments on the SIP
rulemakings through which EPA takes final action on air quality plans
or measures that rely on incentive program emission reductions. Nothing
in our approval of Rule 9610 today deprives the public of these
opportunities to comment on these future SIP actions.
    Comment 3.e: Earthjustice states that ``[t]he structure of the CAA
reinforces EPA's conclusion that Congress was not willing to rely on
states alone to guarantee that the claimed emission reductions would
occur or be enforced.'' According to Earthjustice, section 113 of the
Act gives EPA authority to ensure compliance whenever any person is in
violation of any requirement of the Act and section 304 allows citizens
to enforce the requirements of the Act. Earthjustice also quotes from
the Supreme Court's decision in Pennsylvania v. Del. Valley Citizens'
Council for Clean Air, 478 U.S. 546, 560 (1986), to support its
statement that Congress enacted section 304 specifically to encourage
citizen participation in the enforcement of standards and regulations
established under the Act and ``to afford citizens very broad
opportunities to participate in the effort to prevent and abate air
pollution.''
    Response 3.e: We do not dispute the importance of federal
enforcement under section 113 of the Act and citizen enforcement under
section 304 of the Act. As explained in our proposed rule and further
in these responses to comments, EPA has consistently stated in
longstanding guidance that SIP credit may be allowed for a voluntary or
other nontraditional emission reduction measure only where the State
submits enforceable mechanisms to ensure that the emission reductions
necessary to meet applicable CAA requirements are achieved (e.g., an
enforceable commitment to monitor and report on emission reductions
achieved and to timely rectify any shortfall), which EPA and citizens
may enforce under CAA sections 113 and 304, respectively, upon approval
into the SIP. See 79 FR 28650 at 28653-28655 and Response 3.b above. We
encourage citizens to participate in the effort to prevent and abate
air pollution by requesting information from the District concerning
the commitments it has adopted under Rule 9610 and enforcing these
commitments in the U.S. district courts in accordance with section 304
of the Act.
    Comment 3.f: Earthjustice claims that the Rule 9610 definition of
``enforceable'' would not only waive any notion that citizens can file
a suit to enforce the reductions but ``would also waive any requirement
that EPA have any `ability to apply penalties and secure appropriate
corrective actions' against the source.'' The commenter asserts that
EPA cannot enforce the conditions of a contract between the District
and the source and that ``the State and District are free to shield
sources from enforcement, or even amend or rescind these contracts
altogether without EPA oversight.'' According to Earthjustice, ``EPA
simply has no claim that it can apply penalties or secure corrective
actions against the sources responsible for reducing emissions'' and
``no basis for asserting that [the enforceability] criterion is met.''
    Response 3.f: Although we agree that EPA cannot enforce the
conditions of a contract issued by the District pursuant to a state
incentive program that is not approved into the SIP under CAA section
110, we disagree with the claim that this renders the emission
reductions achieved by such a program unenforceable by citizens under
the Act. As explained in response to comment 3.d., above, Rule 9610
requires the District to provide a mechanism for EPA and citizen
enforcement in each submitted SIP that relies on an incentive program.
Specifically, section 7.0 of Rule 9610 requires that each SIP
submission in which the District relies on projections of SIP-
creditable emission reductions to satisfy a CAA SIP requirement
contain, among other things, an ``enforceable commitment'' containing
specific provisions to ensure that the District remains accountable for
the required emission reductions. Upon EPA's approval of an enforceable
SIP commitment by the District, section 113 of the Act authorizes EPA
to apply penalties and secure appropriate corrective actions to enforce
the requirements of the commitment against the District. See Response
3.b. A SIP-approved commitment cannot be modified except through a SIP
revision adopted by the State after reasonable notice and public
hearing and approved by the EPA through notice-and-comment rulemaking.
See CAA section 110(l); 5 U.S.C. 553; 40 CFR 51.105. Consequently,
should the District's amendment or rescission of contracts issued to
participating sources result in a shortfall in the emission reductions
required under a SIP commitment, EPA may enforce the District's
obligation to implement a remedy, provided the District's SIP
commitment includes a schedule for adoption and submittal of

substitute measures to remedy any shortfalls as required by Rule 9610.
See Rule 9610, section 7.4; see also Response 3.d above (discussing
requirements of Rule 9610, section 7.0). EPA would not approve a
submitted SIP revision under Rule 9610 that did not contain such a
schedule.
    Comment 3.g: Earthjustice states that ``EPA seems to imply that it
is enough that EPA can push for the District to fulfill any shortfall
in emission reductions through other means'' but claims that EPA ``has
not analyzed this rule through the relevant criteria for enforceable
SIP commitments, which are subject to limits on quantity, etc.'' As a
result, Earthjustice asserts that commenters have no basis for
unraveling EPA's legal rationale.
    Response 3.g: Because we are not approving any State or District
commitments in today's action, it is not necessary to evaluate this SIP
submittal in accordance with the criteria that EPA has historically
applied in approving enforceable commitments. We will apply the
relevant criteria for evaluating enforceable SIP commitments when we
take action on a SIP that relies on a commitment to satisfy the control
measure requirements of the Act.
    Comment 3.h: Earthjustice claims that the Rule 9610 definition of
enforceable does not allow for independent verification or even the
identification of liable sources. Earthjustice states that EPA
identified several defects in the District's rule that would limit the
disclosure of information necessary to verify compliance, such as
``problems in [the] Annual Report'' and ``the District's mistaken
interpretation of, and reference to, the Federal Food Security Act.''
Based on these defects alone, the commenter claims that it is unclear
why EPA is still proposing to approve the rule.
    Response 3.h: We continue to believe that the definition of
``enforceable'' in Rule 9610 generally allows for independent
verification of emission reductions and identification of liable
sources. As we explained in our proposed rule, Rule 9610 states that
``emission reductions are enforceable if the incentive program includes
provisions for ensuring the following: [1] The emission reductions are
independently and practicably verifiable through inspections,
monitoring, and/or other mechanisms; [2] Incentive program violations
are defined through legally binding contracts, including identifying
the party or parties responsible for ensuring that emission reductions
are achieved; [3] Grantees are obligated to provide all records needed
to demonstrate that emission reductions are achieved; and [4] The
public has access to all emissions-related information for reductions
claimed in the annual demonstration report, as outlined in Section 4.0
[of Rule 9610].'' 79 FR 28650 at 28654 (citing Rule 9610, section 2.8).
Additionally, Rule 9610 requires that each SIP in which the District
relies on emission reductions achieved through incentive programs
contain an ``enforceable commitment'' by the District to adopt and
submit substitute measures to EPA by specified dates if there is a
shortfall in required emission reductions for a particular year, among
other things. See Rule 9610, section 7.4. Read together, these
provisions of Rule 9610 obligate the District to include, with each SIP
submittal that relies on incentive programs for necessary emission
reductions, an enforceable commitment that enables EPA and citizens to
obtain records adequate to independently confirm whether necessary
emission reductions have occurred. Going forward, we intend to review
each SIP commitment submitted by the District for compliance with these
``enforceability'' requirements in section 2.8 and the provisions
concerning commitments in section 7.0 of Rule 9610, in addition to the
applicable requirements of the Act.
    One significant exception to the general enforceability provisions
in Rule 9610 is the provision in section 6.2 that categorically
prohibits public disclosure of records related to NRCS's implementation
of the EQIP program. As explained in our proposed rule (see 79 FR 28650
at 28657 and Proposal TSD at 9-10), section 6.2 of Rule 9610 does not
accurately describe NRCS's statutory obligations with respect to
disclosure of information concerning the EQIP program. Based on further
evaluation of this provision and in response to Earthjustice's
comments, we find that this provision necessitates a limited
disapproval of Rule 9610 because, in addition to stating NRCS's
statutory obligations incorrectly, the provision creates a potential
conflict between the requirements of Rule 9610 and the requirements of
the CAA concerning public availability of emission data. See CAA 114(c)
and 40 CFR 2.301(a)(2); see also 2001 EIP Guidance at section 5.1d
(``Procedures for public disclosure of information''). Therefore, EPA
is finalizing a limited approval and limited disapproval of Rule 9610
on the basis of this deficiency in section 6.2 of the rule. This
limited disapproval does not trigger any sanctions clocks under CAA
section 179(a) because Rule 9610 was not submitted to address a
requirement of part D, title I of the Act or in response to a finding
of substantial inadequacy as described in CAA section 110(k)(5) (i.e.,
a ``SIP Call''), but it does trigger an obligation on EPA to promulgate
a federal implementation plan (FIP) to correct the deficiency, unless
the State submits and EPA approves a corrective SIP revision within two
years of the disapproval (see CAA section 110(c)(1)(B)). EPA expects
the District to revise section 6.2 at its earliest opportunity to
correct the errors in this provision and to ensure that the rule does
not preclude disclosure of emission data related to the EQIP program.
    With respect to any future SIP submittal that relies on emission
reductions achieved through EQIP to satisfy a CAA requirement, we
expect that the annual reports certified by NRCS, as described in the
March 2014 Addendum signed by NRCS, EPA, CARB and the District,\14\
will provide information that enables EPA and the public to verify the
emissions of participating sources with an adequate level of accuracy
and to determine whether the District has violated any SIP emission
reduction commitment. See 79 FR 28650 at 28657 and Proposal TSD at 10-
11. Additionally, in order for emission reductions achieved through
EQIP to be enforceable under the CAA, the District will have to submit
an enforceable SIP commitment to specifically describe the information
obtained from NRCS in the relevant annual demonstration reports, to
incorporate project-specific information obtained from NRCS in the
electronic ``Data Sheet'' associated with each of these annual
demonstration reports, and to make the NRCS's certified annual reports
themselves available to the public upon request. See id. and Rule 9610,
sections 6.1 and 7.0. EPA would not approve any SIP submittal that
relies on emission reductions achieved through EQIP (or any other
incentive program) if it does not provide for public availability of
emission data consistent with CAA requirements. EPA will review each
SIP submittal developed pursuant to Rule 9610 on a case-by-case basis,
following notice-and-comment rulemaking, to determine whether the
applicable requirements of the Act are met. We encourage the District
to consult with us during its

development of any SIP commitments under section 7.0 of Rule 9610 to
ensure that these commitments will be legally and practically
enforceable by EPA and citizens, in accordance with the requirements of
the Act. See Response 3.i, below.
---------------------------------------------------------------------------

    \14\ See ``Addendum to the December 2010 Statement of Principles
Regarding the Approach to State Implementation Plan Creditability of
Agricultural Equipment Replacement Incentive Programs Implemented by
the USDA Natural Resources Conservation Service and the San Joaquin
Valley Air Pollution Control District'' (``NRCS Addendum'').
---------------------------------------------------------------------------

    With respect to the 2013 Annual Demonstration Report, we provided
suggestions for future reports in the Proposal TSD. See Proposal TSD at
52-55. We expect the District to consider these recommendations as it
develops its annual demonstration reports for future years.
    Comment 3.i: Earthjustice argues that EPA's analysis ignores ``the
more fundamental defect which is that EPA and citizens can only rely on
data submitted to, or collected by the District'' and that this defect
undermines any claim that the rule will ensure that citizens have
access to all emissions-related information obtained from participating
sources. According to Earthjustice, EPA has no authority to inspect
sources for compliance with the contracts between the District and the
source--i.e., EPA cannot collect its own information, conduct
inspections, demand additional reporting, or enforce the failure to
submit required reports. Earthjustice contends that EPA's ability to
verify any of these emission reductions is limited because the emission
reductions are secured through contracts that do not include EPA. Thus,
Earthjustice claims, EPA ``lacks the ability to independently verify
compliance and instead must rely on the District and State to determine
compliance.'' For example, with respect to information regarding
sources of EQIP funding, Earthjustice argues that because EPA and the
public will not be provided with any information that can be
independently verified or that identifies the participating sources,
there is no way for EPA or the public to ``verify compliance by `the
source' as EPA's definition of enforceability requires'' or to ``even
identify sources liable for violations.''
    Response 3.i: We disagree with the commenter's claim that EPA's
definition of enforceability ``requires'' that EPA and the public have
the ability to verify compliance by ``the source.'' The commenter cites
two guidance documents (the 2001 EIP Guidance and 2004 Emerging and
Voluntary Measures Guidance \15\) to support its claim that, to be
``enforceable,'' an emission reduction measure must allow citizens to
``file suits against sources for violations.'' As explained above in
Response 3.d, however, the CAA does not limit SIPs to those emission
reduction techniques that citizens may directly enforce against
emission sources, and EPA has indicated in a number of other guidance
documents that provisions for EPA and citizen enforcement against a
state or against some other ``responsible party'' (other than the
source) may satisfy the Act's requirements for enforceability. See
Response 3.d above.
---------------------------------------------------------------------------

    \15\ As explained in Response 3.d., the 2004 Emerging and
Voluntary Measures Guidance recommends provisions authorizing
citizen suits against sources for ``emerging measures'' but states
that for ``voluntary measures,'' emission reductions and other
required actions are enforceable if, among other things, ``EPA
maintains the ability to apply penalties and secure appropriate
corrective action from the State where applicable and the State
maintains the [ability to] secure appropriate corrective action with
respect to portions of the program that are directly enforceable
against the source. . . .'' 2004 Emerging and Voluntary Measures
Guidance at 3, 4 (emphases added).
---------------------------------------------------------------------------

    We continue to believe that Rule 9610 generally ensures that
citizens will have access to all emissions-related information obtained
by the District from sources participating in incentive programs, with
one significant exception in section 6.2 of the rule. As we explained
in the proposed rule, section 6.1 of Rule 9610 specifically requires
the District to keep and maintain ``[a]ll documents created and/or used
in implementing the requirements of Section 4.0'' of the rule and to
make these documents available for public review consistent with the
requirements of the California Public Records Act and related
requirements. See 79 FR 28650 at 28657 (citing Rule 9610, section 6.1).
Section 4.0 of Rule 9610, in turn, requires the District to annually
prepare a public report that contains, among other things,
identification of the amounts of ``SIP-creditable emission reductions''
from incentive programs that the District is relying on for SIP
purposes; descriptions of the applicable incentive program guidelines;
and detailed information about the individual projects relied upon to
achieve the required emission reductions. See 79 FR 28650 at 28656
(citing Rule 9610, sections 4.0-4.6). Additionally, section 7.0 of the
rule requires the District to make enforceable commitments that enable
EPA and citizens to obtain records adequate to independently confirm
whether necessary emission reductions have occurred. See Response 3.d
and Response 3.h, above. Many of the incentive program guidelines
identified in section 3.1 of Rule 9610 require that the District
maintain specific documentation of pre-project and post-project
inspections for each funded project and that all grantees submit
detailed compliance-related documentation to the District on an annual
or biennial basis. See, e.g., Proposal TSD at 15-16 (discussing
provisions of Carl Moyer program guidelines) and 44-45 (discussing
provisions of Prop 1B program guidelines). Provided the District
commits to make these project records and other compliance-related
documents available to the public upon request, consistent with the
requirements of sections 6.1 and 7.0 of Rule 9610, EPA and citizens
would have access to emissions-related information that the District
obtains from participating sources.\16\
---------------------------------------------------------------------------

    \16\ Although EPA or citizen enforcement of a SIP commitment
adopted in accordance with section 7.0 of Rule 9610 generally
depends upon project-related information maintained by the District,
this does not preclude independent verification of the emission
reductions if the applicable incentive program guidelines require
participating sources to regularly submit compliance-related
documentation to the District and require the District to maintain
these records for specified amounts of time. See, e.g., 2011 Carl
Moyer Guidelines at 3-31 and Proposal TSD at 15.
---------------------------------------------------------------------------

    Finally, we disagree with the commenter's claim that EPA lacks
authority to collect information relevant to source compliance with the
contracts issued by the District. Rule 9610 requires the District to
maintain, with respect to all projects that the District relies upon
for SIP emission reduction credit, reports submitted by grantees and
records of all inspections and enforcement actions, among other things.
See Rule 9610, section 6.1. Upon EPA's approval of a District
commitment into the SIP, section 114(a) of the Act authorizes EPA to
require information from ``any person'' who may have information
necessary for the purpose of determining whether the District has
violated such a SIP commitment--including all compliance-related
documentation that the District maintains in accordance with the
applicable incentive program guidelines. See CAA section 114(a)
(authorizing the EPA to require submission of information from ``any
person'' who may have information necessary for the purpose of
determining whether a SIP requirement has been violated) and section
302(e) (defining ``person'' to include a State or political subdivision
thereof). Additionally, both EPA and citizens may obtain compliance-
related records from the District under the California Public Records
Act. See Rule 9610, section 6.1. Thus, although EPA is not authorized
to enforce the individual contracts between the District and the
source, both EPA and citizens may collect information concerning source
compliance from the District and, in

some cases directly from participating sources,\17\ to the extent this
information is necessary for the purpose of determining whether the
District has violated a SIP commitment.
---------------------------------------------------------------------------

    \17\ For example, under certain Prop 1B program guidelines, each
grantee must be subject to detailed contract provisions requiring
the grantee to maintain certain documents for specified periods and/
or submit these documents to the District on a regular basis. See,
e.g., 2008 Prop 1B guidelines at Section III.D (``Local Agency
Project Implementation Requirements''), Section IV (``General
Equipment Project Requirements''), and Appendix A, Section C
(``Recordkeeping Requirements'') and Section D (``Annual Reporting
Requirements''); 2010 Prop 1B guidelines at Section IV.A (``Project
Implementation Requirements''), Section VI (``General Equipment
Project Requirements''), and Appendix A, Section F (``Recordkeeping
Requirements'') and Section G (``Annual Reporting Requirements'').
---------------------------------------------------------------------------

    We expect an enforceable commitment that obligates the District to
comply with adequate monitoring and recordkeeping requirements would
ensure that emission reductions can be independently verified. In any
case, EPA will review each submitted SIP commitment on a case-by-case
basis to determine whether the commitment is legally and practically
enforceable by EPA and citizens, in accordance with the requirements of
the Act.
    Comment 3.j: Earthjustice argues that ``[t]o the extent EPA wishes
to allow credit for unenforceable emission reduction programs, it has a
policy for doing so''--i.e., ``[t]hese programs can be included with a
cap on the credit they can receive.'' Alternatively, Earthjustice
contends, to the extent EPA wishes to treat these programs as
enforceable SIP commitments, it also has a policy for reviewing and
approving those, but the analysis of Rule 9610 is not consistent with
those policies.
    Response 3.j: We disagree with the commenter's suggestions that
emission reductions from voluntary incentive measures are entirely
``unenforceable'' under the CAA or subject to a specific ``cap'' on the
credit allowed in a SIP. As explained above in Response 3.c, EPA has
consistently stated in longstanding guidance that SIP credit may be
allowed for a voluntary or other nontraditional measure only where the
State takes responsibility for assuring that SIP emission reduction
requirements are met through an enforceable commitment, which EPA and
citizens may enforce upon EPA's approval of the commitment into the
SIP. That is, emission reductions achieved by voluntary measures are
enforceable under the Act where they are accompanied by such an
enforceable commitment. In addition, the ``cap'' on SIP credit for
voluntary measures that Earthjustice refers to is not a specific
regulatory cap but a general policy recommendation. States and EPA may
justify departing from these caps on a case-by-case basis, subject to
notice-and-comment rulemaking on a particular SIP. See Response 3.c and
EPA guidance documents referenced therein.
    In any case, we are not approving any State or District commitments
in today's action and therefore do not have reason to evaluate this SIP
submittal in accordance with EPA's policy criteria for approving
enforceable commitments. As EPA stated in the proposed rule, EPA will
review each SIP submittal developed pursuant to Rule 9610 on a case-by-
case basis, following notice-and-comment rulemaking, to determine
whether the applicable requirements of the Act are met. See 79 FR 28650
at 28654, 28658. We will apply the relevant criteria for evaluating SIP
commitments when we take action on a SIP that contains such a
commitment. Nothing in Rule 9610 supplants the applicable requirements
of the Act, nor does anything in EPA's approval of Rule 9610 alter the
requirements of the Act as they apply to SIPs that rely on emission
reductions achieved through voluntary incentive programs.
    Comment 4: Earthjustice claims that the ``best option for
proceeding . . . would be to adopt backstop control measures that are
fully SIP-creditable and use incentive programs to address cost-
effectiveness concerns and incentivize early adoption and turnover.''
    Response 4: We continue to support the use of incentive programs to
address cost-effectiveness concerns and to incentivize early adoption
and turnover to cleaner, less-polluting mobile sources, and we
encourage the commenter to provide these recommendations, together with
any recommendations it may have concerning ``backstop'' control
measures, to the State and/or District during their state and local
rulemaking processes on air quality plans that rely on incentive
programs for necessary emission reductions.
    Comment 5: Earthjustice claims that ``Rule 9610 is a flawed attempt
to make programs `SIP creditable' by fiat'' and that this is not
legitimate under the CAA. Earthjustice also asserts that ``EPA's
inconsistent analysis of the rule does not help in this effort.'' In
conclusion, Earthjustice asserts that if the desired goal is to promote
the adoption of incentive programs, EPA, the State, and the District
should go back to the drawing board and work with stakeholders to come
up with a legally viable approach.''
    Response 5: For the reasons provided in Response 1 through Response
3 above, we disagree with Earthjustice's claims that Rule 9610 is a
flawed attempt to make programs SIP creditable by fiat and that EPA has
provided an inconsistent analysis of the rule. As previously explained,
nothing in Rule 9610 supplants the applicable requirements of the Act,
and EPA will review each SIP submittal developed pursuant to Rule 9610
on a case-by-case basis, following notice-and-comment rulemaking, to
determine whether the applicable requirements of the Act are met. See
79 FR 28650 at 28654, 28658.
    We agree, however, with Earthjustice's suggestion that EPA, the
State, the District and interested stakeholders should work together
toward the development of air quality plans and measures that satisfy
CAA requirements as applied to discretionary incentive programs and
other nontraditional emission reduction measures. We look forward to
the public's continued involvement, both during the State and local
rulemaking processes through which the District and ARB adopt these
plans and during the EPA rulemakings through which EPA takes final
action on these plan submittals under section 110 of the CAA.
    Comment 6: The SJVUAPCD states that incentive funds to reduce
mobile source emissions have become a critical component of the
District's clean air strategy in the SJV and expresses appreciation for
EPA's work with the District and with CARB, NRCS, and other
stakeholders throughout the development of Rule 9610 and related
documents. The District states that it supports EPA's proposal to fully
approve Rule 9610 as a revision to the California SIP.
    Response 6: For the reasons provided in our proposed rule (79 FR
28650 at 28657) and further explained in Response 3.h, EPA is
finalizing a limited approval and limited disapproval of Rule 9610. We
look forward to the District's submittal of a revised rule that
corrects the deficiencies we have identified in section 6.2 of the rule
and addresses the recommendations provided in our proposed rule and
Proposal TSD.
    EPA supports and encourages the continuing efforts by CARB, the
District, and NRCS to make voluntary economic incentive programs an
effective part of the SJV's strategy for clean air. We commit to
continue our work with these agencies to develop reliable methods for
documenting and verifying the emission reductions achieved through
these programs and to ensure that future air

quality plans for the SJV area that rely on economic incentives will
satisfy the requirements of the Act.

III. Final Action

    Under CAA sections 110(k)(3) and 301(a) of the Act and for the
reasons set forth above and in our May 19, 2014 proposed rule, EPA is
finalizing a limited approval and limited disapproval of Rule 9610 as
submitted June 26, 2013. We are finalizing a limited approval of the
submitted rule because we continue to believe that the rule improves
the SIP and is largely consistent with the applicable CAA requirements.
This action incorporates the submitted rule, including those provisions
identified as deficient, into the SJV portion of the federally-
enforceable California SIP.
    We are finalizing a limited disapproval of Rule 9610 because
section 6.2 of the rule incorrectly describes NRCS's statutory
obligations with respect to disclosure of information concerning the
EQIP program and creates a potential conflict with the requirements of
the CAA concerning public availability of emission data. Our reasons
for disapproving the rule on these bases are explained in the proposed
rule and further in our responses to comments above.
    This limited disapproval does not trigger any sanctions clocks
under CAA section 179(a) because Rule 9610 was not submitted to address
a requirement of part D, title I of the Act or in response to a finding
of substantial inadequacy as described in CAA section 110(k)(5) (i.e.,
a ``SIP Call''). The limited disapproval does trigger an obligation on
EPA to promulgate a federal implementation plan (FIP) to correct the
deficiency, unless the State submits and EPA approves a corrective SIP
revision within two years of the disapproval (see CAA section
110(c)(1)(B)). EPA expects the District to revise section 6.2 at its
earliest opportunity to correct the errors in this provision and to
ensure that the rule does not preclude disclosure of emission data
related to the EQIP program.
    Note that the submitted rule has been adopted by the SJVUAPCD, and
EPA's final limited disapproval does not prevent the local agency from
enforcing it. The limited disapproval also does not prevent any portion
of the rule from being incorporated by reference into the federally
enforceable SIP as discussed in a July 9, 1992 EPA memo found at:
http://www.epa.gov/nsr/ttnnsr01/gen/pdf/memo-s.pdf.

IV. Incorporation by Reference

    In this rule, EPA is finalizing regulatory text that includes
incorporation by reference. In accordance with the requirements of 1
CFR 51.5, EPA is finalizing the incorporation by reference of the
SJVUPACD rule described in the amendments to 40 CFR 52 set forth below.
EPA has made, and will continue to make, these documents available
electronically through www.regulations.gov and in hard copy at the
appropriate EPA office (see the ADDRESSES section of this preamble for
more information).

V. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) has exempted this
regulatory action from Executive Order 12866, entitled ``Regulatory
Planning and Review.''

B. Paperwork Reduction Act

    This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions.
    This rule will not have a significant impact on a substantial
number of small entities because SIP approvals and limited approvals/
limited disapprovals under section 110 and subchapter I, part D of the
Clean Air Act do not create any new requirements but simply approve
requirements that the State is already imposing. Therefore, because
this limited approval/limited disapproval action does not create any
new requirements, I certify that this action will not have a
significant economic impact on a substantial number of small entities.
    Moreover, due to the nature of the Federal-State relationship under
the Clean Air Act, preparation of flexibility analysis would constitute
Federal inquiry into the economic reasonableness of State action. The
Clean Air Act forbids EPA to base its actions concerning SIPs on such
grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976);
42 U.S.C. 7410(a)(2).

D. Unfunded Mandates Reform Act

    Under sections 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rule that includes a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
the private sector, of $100 million or more. Under section 205, EPA
must select the most cost-effective and least burdensome alternative
that achieves the objectives of the rule and is consistent with
statutory requirements. Section 203 requires EPA to establish a plan
for informing and advising any small governments that may be
significantly or uniquely impacted by the rule.
    EPA has determined that the limited approval/limited disapproval
action promulgated does not include a Federal mandate that may result
in estimated costs of $100 million or more to either State, local, or
tribal governments in the aggregate, or to the private sector. This
Federal action approves pre-existing requirements under State or local
law, and imposes no new requirements. Accordingly, no additional costs
to State, local, or tribal governments, or to the private sector,
result from this action.

E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces
Executive Orders 12612 (Federalism) and 12875 (Enhancing the
Intergovernmental Partnership). Executive Order 13132 requires EPA to
develop an accountable process to ensure ``meaningful and timely input
by State and local officials in the development of regulatory policies
that have federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.'' Under Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local

governments, or EPA consults with State and local officials early in
the process of developing the proposed regulation. EPA also may not
issue a regulation that has federalism implications and that preempts
State law unless the Agency consults with State and local officials
early in the process of developing the proposed regulation.
    This rule will not have substantial direct effects on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government, as specified in Executive Order 13132, because it
merely approves a State rule implementing a Federal standard, and does
not alter the relationship or the distribution of power and
responsibilities established in the Clean Air Act. Thus, the
requirements of section 6 of the Executive Order do not apply to this
rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This final rule does not have
tribal implications, as specified in Executive Order 13175. It will not
have substantial direct effects on tribal governments, on the
relationship between the Federal government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
government and Indian tribes. Thus, Executive Order 13175 does not
apply to this rule.

G. Executive Order 13045, Protection of Children From Environmental
Health Risks and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997)
as applying only to those regulatory actions that concern health or
safety risks, such that the analysis required under section 5-501 of
the Executive Order has the potential to influence the regulation. This
rule is not subject to Executive Order 13045, because it approves a
State rule implementing a Federal standard.

H. Executive Order 13211, Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act
(NTTAA) of 1995 requires Federal agencies to evaluate existing
technical standards when developing a new regulation. To comply with
NTTAA, EPA must consider and use ``voluntary consensus standards''
(VCS) if available and applicable when developing programs and policies
unless doing so would be inconsistent with applicable law or otherwise
impractical.
    The EPA believes that VCS are inapplicable to this action. Today's
action does not require the public to perform activities conducive to
the use of VCS.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Population

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
    EPA lacks the discretionary authority to address environmental
justice in this rulemaking.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective on May 11, 2015.

L. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by June 8, 2015. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Reporting and recordkeeping
requirements.

    Dated: February 26, 2015.
Jared Blumenfeld,
Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

Subpart F--California

0
2. Section 52.220 is amended by adding paragraph (c)(455) to read as
follows:

Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (455) New and amended regulations for the following APCDs were
submitted on June 26, 2013.
    (i) Incorporation by reference.
    (A) San Joaquin Valley Unified Air Pollution Control District.
    (1) Rule 9610, ``State Implementation Plan Credit for Emission
Reductions Generated through Incentive Programs,'' adopted on June 20,
2013.

[FR Doc. 2015-07972 Filed 4-8-15; 8:45 am]
 BILLING CODE 6560-50-P