[Federal Register Volume 79, Number 99 (Thursday, May 22, 2014)]
[Rules and Regulations]
[Pages 29327-29351]
[FR Doc No: 2014-11681]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2013-0534; FRL-9911-07-Region 9]

Approval and Promulgation of Implementation Plans; California;
San Joaquin Valley; Contingency Measures for the 1997 PM2.5
Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving a State
implementation plan (SIP) revision submitted by California that
corrects deficiencies in the Clean Air Act (CAA) contingency measures
for the 1997 annual and 24-hour national ambient air quality standards
(NAAQS) for fine particulate matter (PM2.5) in the San
Joaquin Valley (SJV). Approval of this SIP revision lifts the CAA
section 179(b)(2) offset sanctions and terminates the CAA section
179(b)(1) highway funding sanction clock triggered by the EPA's partial
disapproval of the SJV SIP for attainment of the 1997 PM2.5
NAAQS on November 9, 2011.

DATES: This rule is effective on June 23, 2014.

ADDRESSES: You may inspect the supporting information for this action,
identified by docket number EPA-R09-OAR-2013-0534, by one of the
following methods: Federal eRulemaking portal, http://www.regulations.gov, please follow the online instructions; or, Visit
our regional office at, U.S. Environmental Protection Agency Region 9,
75 Hawthorne Street, San Francisco, CA 94105-3901.
    Docket: The index to the docket (docket number EPA-R09-OAR-2013-
0534) for this action is available electronically at http://www.regulations.gov and in hard copy at EPA Region 9, 75 Hawthorne
Street, San Francisco, California. While documents in the docket are
listed in the index, some information may be publicly available only at
the hard copy location (e.g., voluminous records, large maps,
copyrighted material), and some may not be publicly available in either
location (e.g., Confidential Business Information). To inspect the hard
copy materials, please schedule an appointment during normal business
hours with the contact listed directly below.

FOR FURTHER INFORMATION CONTACT: Frances Wicher, EPA Region 9, (415)
972-3957<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to the EPA.

Table of Contents

I. Background Information
II. Public Comments and the EPA's Responses
    A. Comments Regarding Necessary Types and Quantities of
Contingency Measure Emission Reductions
    B. Comments Regarding Emission Reductions From Waiver Measures
and Incentive Grant Programs
    C. General Comments
III. Final Actions
IV. Statutory and Executive Order Reviews

I. Background Information

    On November 9, 2011, the EPA partially approved and partially
disapproved the San Joaquin Valley PM2.5 State
Implementation Plan (``SJV PM2.5 SIP'') (76 FR 69896). The
SJV PM2.5 SIP is California's plan for attaining the 1997
PM2.5 NAAQS in the San Joaquin Valley.\1\ Our partial
disapproval of the SJV PM2.5 SIP was based on our
determination that its contingency measure provisions failed to meet
the requirements of Clean Air Act (``CAA'' or ``the Act'') section
172(c)(9), which require that the SIP for each PM2.5
nonattainment area contain contingency measures to be implemented if
the area fails to make reasonable further progress (RFP) or to attain
the NAAQS by the applicable attainment date. See 76 FR 41338, 41357 to
41359 (July 13, 2011) (proposed partial approval and partial
disapproval of SJV PM2.5 SIP) and 76 FR 69896, 69918 to
69919 and 69924 (final partial approval and partial disapproval of SJV
PM2.5 SIP). The disapproval became effective on January 9,
2012, starting a sanctions clock for imposition of new source review
offset sanctions 18 months after January 9, 2012, and highway sanctions
6 months after the imposition of offset sanctions, pursuant to CAA
section 179 and our regulations at 40 CFR 52.31.
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    \1\ For a more detailed description of the SJV PM2.5
SIP, see 76 FR 41338, 41339 to 41359 (July 13, 2011).
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    On July 3, 2013, CARB submitted the Contingency Measure SIP as a
revision to the California State Implementation Plan. The Contingency
Measure SIP addresses the SIP deficiencies identified in the EPA's 2011
partial disapproval of the SJV PM2.5 SIP by (1) confirming
that

the SJV area had met its 2012 RFP milestones and (2) expanding upon the
attainment contingency measures in the SJV PM2.5 SIP to
establish a contingency plan that achieves SIP-creditable emission
reductions equivalent to approximately one year's worth of RFP in 2015.
See generally Contingency Measure SIP. Among these SIP-creditable
emission reductions are reductions from a contingency provision in the
District's residential woodburning rule, Rule 4901, and reductions from
the District's implementation of two incentive grant programs: The Carl
Moyer Memorial Air Quality Standards Attainment Program (``Carl Moyer
Program'') and the Proposition 1B: Goods Movement Emission Reduction
Program (``Prop 1B''). Id. at 4 and 6. A detailed description of the
Contingency Measure SIP can be found at 78 FR 53113, 53115 (August 28,
2013).
    On August 28, 2013, we proposed to approve the Contingency Measure
SIP as correcting the deficiency in the SJV PM2.5 SIP
related to the attainment contingency measure requirement (78 FR
53113). At the same time, we also proposed to find, based on
documentation in the Contingency Measure SIP, that the RFP contingency
measure requirement in CAA section 172(c)(9) for the 2012 milestone
year was moot because the SJV has achieved the emission reduction
benchmarks for the 2012 RFP year. Our full evaluation of the
Contingency Measure SIP and our rationale for finding that this SIP
corrects the deficiencies in the SJV PM2.5 SIP can be found
in the August 28, 2013 proposed rule. Based on our proposed approval of
the Contingency Measure SIP, we also issued on August 28, 2013, an
interim final determination that stayed the imposition of the offset
sanctions that became effective in the SJV on July 9, 2013 and tolled
the sanctions clock for the imposition of the highway sanctions (78 FR
53038).

II. Public Comments and the EPA's Responses

    The EPA provided a 30-day period for the public to comment on our
proposed rule. During this comment period, which ended on September 28,
2013, we received four public comments. A copy of these comment letters
can be found in the docket. We provide our responses to these comments
below.

A. Comments Regarding Necessary Types and Quantities of Contingency
Measure Emission Reductions

    Comment 1: Earthjustice cites the D.C. Circuit Court of Appeals'
decision in Natural Resources Defense Council v. EPA, 706 F.3d 428
(D.C. Cir. 2013) (hereafter ``NRDC'') to support its claim that the
Contingency Measure SIP cannot be approved under the CAA. Specifically,
Earthjustice argues that the EPA's approval of the SJV PM2.5
SIP was built upon the EPA's 2007 implementation rule for the 1997
PM2.5 NAAQS (hereafter ``2007 PM2.5
Implementation Rule''),\2\ which the NRDC court has since remanded for
failure to comply with the requirements of subpart 4 of title I, part D
of the CAA; that the SJV PM2.5 SIP and the reasonable
further progress (RFP) projections therein likewise fail to satisfy the
applicable requirements of subpart 4; and that because the contingency
measure obligation is based upon the RFP projections in the SJV
PM2.5 SIP, the Contingency Measure SIP is also flawed.
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    \2\ See ``Clean Air Fine Particle Implementation Rule,'' 72 FR
20586 (April 25, 2007), codified at 40 CFR part 51, subpart Z.
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    Earthjustice argues that the most significant defect in the SJV
PM2.5 SIP is that it assumes the maximum available
attainment deadline without implementing best available control
measures (BACM) under CAA section 189(b)(1)(B), and that because of
this erroneous attainment date the RFP trajectory in the SJV
PM2.5 SIP provides for a 9-year attainment ``glide path''
that fails to comply with the CAA. Under subpart 4, Earthjustice
argues, nonattainment areas relying on reasonably available control
measures have four years to attain and thus have a contingency measure
obligation of 25 percent of the total reductions required for
attainment, rather than the one-ninth of total reductions provided in
the Contingency Measure SIP. Alternatively, Earthjustice argues that
had the SJV qualified for an extended attainment deadline under CAA
section 188(b)(1), the District would have had to implement BACM, which
would have provided for steeper emission reductions than currently
provided in the SJV PM2.5 SIP which is based on the
implementation of reasonably available controls.
    Earthjustice further contends that because the SJV area has failed
to attain the PM2.5 standard by the ``moderate'' area
deadline in subpart 4, a new plan with new controls and an attainment
horizon that is less than 9 years is required. Earthjustice states that
this new plan must include new RFP targets and contingency measures,
and that the calculation of these targets will require more than one-
ninth of the total reductions required, because the interval between
the baseline for the serious area plan and the attainment deadline will
be less than nine years. Thus, according to Earthjustice, ``no matter
how the SJV chooses to comply with subpart 4, there is no scenario in
which the RFP trajectory and therefore the quantity of emission
reductions required for contingency measures will match those
calculated in the [SJV PM2.5 SIP].''
    Response 1: As a threshold matter, to the extent the commenter is
challenging our November 2011 final action on the SJV PM2.5
SIP based on the D.C. Circuit's January 2013 decision in NRDC, such a
challenge may only be brought in the appropriate circuit court within
specified timeframes under CAA section 307(b). Section 307(b)(1)
provides, inter alia, that any petition for review of an EPA action in
``approving or promulgating any implementation plan under [CAA section
110] * * * which is locally or regionally applicable may be filed only
in the United States Court of Appeals for the appropriate circuit'' and
must be filed ``within sixty days from the date notice of such
promulgation, approval, or action appears in the Federal Register,
except that if such petition is based solely on grounds arising after
such sixtieth day, then any petition for review under this subsection
shall be filed within sixty days after such grounds arise.'' Our action
today on the Contingency Measure SIP is not the appropriate forum for a
challenge to our November 2011 final action on the SJV PM2.5
SIP.
    We nonetheless respond below to the substance of Earthjustice's
claims. In NRDC, the U.S. Court of Appeals for the D.C. Circuit
remanded the EPA's 2007 PM2.5 Implementation Rule,\3\
holding that the EPA erred in implementing the 1997 PM2.5
standards solely pursuant to the general implementation provisions of
subpart 1 of part D, title I of the CAA, without also considering the
particulate matter-specific provisions of subpart 4. The court directed
the EPA to re-promulgate the rule pursuant to subpart 4 of part D,
title I of the Clean Air Act but declined to impose a deadline by which
the Agency must do so. See 706 F.3d 428, 437 and n. 10. This decision
has no bearing on our action on the Contingency Measure SIP.
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    \3\ The NRDC decision remanded both the 2007 PM2.5
Implementation Rule and a separate rulemaking to implement the New
Source Review permitting requirements for the 1997 PM2.5
NAAQS. This latter rule is not at issue in this action.
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    Earthjustice's arguments rest on the premise that the NRDC decision
necessarily invalidates our November 2011 final action on the SJV
PM2.5 SIP (76 FR 69896, November 9, 2011) and therefore
renders flawed any assessment of contingency measure obligations

derived from that plan. Nothing in NRDC, however, indicates the court
intended to automatically invalidate other EPA rulemakings that were
based in whole or in part on the 2007 PM2.5 Implementation
Rule. Indeed, the D.C. Circuit remanded but did not vacate the 2007
PM2.5 Implementation Rule,\4\ citing in its opinion (at 706
F.3d at 437 n. 10) a prior decision in which it held that ``it is
appropriate to remand without vacatur in particular occasions where
vacatur `would at least temporarily defeat . . . the enhanced
protection of the environmental values covered by [the EPA rule at
issue].' '' North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir.
2008). Our November 2011 final action on the SJV PM2.5 SIP
included approval of District commitments to adopt and implement
specific control measures on a fixed schedule and State and District
commitments to achieve specific amounts of NOX,
SOX and direct PM2.5 emission reductions by fixed
dates. See 76 FR 69896, 69924 (November 9, 2011), codified at 40 CFR
52.220(c)(392) and (c)(395). Absent an EPA rulemaking to withdraw or
revise this final rule, which NRDC does not compel, our final action on
the SJV PM2.5 SIP remains effective and these State and
District commitments remain federally-enforceable requirements of the
California SIP.\5\ We therefore disagree with the commenter's assertion
that the RFP projections in the SJV PM2.5 SIP render the
Contingency Measure SIP flawed.
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    \4\ The 2007 PM2.5 Implementation Rule therefore
remains ``on the books'' while the EPA effects the required changes
through one or more national rulemakings consistent with the NRDC
decision.
    \5\ To remove these commitments from the applicable SIP before
the EPA has re-promulgated an implementation rule pursuant to
subpart 4 consistent with the NRDC opinion would be to temporarily
defeat the enhanced environmental protections provided by these
federally-enforceable control obligations.
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    Additionally, we do not believe that the NRDC court's January 4,
2013 decision should be interpreted so as to retroactively impose
subpart 4 requirements on the state in the context of our action on
this corrective SIP, as the timing and nature of the court's decision
compound the consequences of disapproval based on such retroactive
application here.\6\ California submitted the various components of the
SJV PM2.5 SIP (and revisions thereto) between June 2008 and
July 2011. On July 13, 2011, we proposed to approve all elements of the
SJV PM2.5 SIP except for its contingency measure provisions
and described the specific deficiencies in the contingency measures
that California would need to address in a corrective SIP submission in
order to avoid mandatory sanctions (76 FR 41338, 41358 to 41359, 41361,
July 13, 2011). We finalized this partial approval and partial
disapproval action on November 9, 2011, effective January 9, 2012,
starting a sanctions clock for imposition of offset sanctions 18 months
after January 9, 2012 and highway sanctions 6 months later, pursuant to
CAA section 179(b) and the EPA's regulations at 40 CFR 52.31 (76 FR
69896, 69924, November 9, 2011) (final rule partially approving and
partially disapproving SJV PM2.5 SIP).\7\ We stated in the
final rule that ``[n]either sanction [would] be imposed under the CAA
if California submits and we approve prior to the implementation of the
sanctions, SIP revisions that correct the deficiencies identified in
our proposed action.'' Id. California reasonably relied upon this
statement to develop a SIP submission addressing the deficiencies
identified in the July 2011 proposed action--i.e., a SIP submission
containing contingency measures that achieve emission reductions
equivalent to one year's worth of RFP, on a pollutant-specific basis,
which are in excess of the emission reductions relied on for RFP and
attainment in the SJV PM2.5 SIP (76 FR 41338, 41358 to
41359, 41361, July 13, 2011).
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    \6\ In rulemakings on individual areas subsequent to the NRDC
decision, the EPA has explained in detail its view that the court's
recently announced interpretation should not be applied
retroactively. See, e.g., 78 FR 20856 (April 8, 2013) (proposed
redesignation of Indianapolis to attainment for 1997 annual
PM2.5 standard) and 78 FR 41698 (July 11, 2013) (final
redesignation of Indianapolis to attainment for 1997 annual
PM2.5 standard). The U.S. District Court for the District
of Colorado recently agreed with the EPA's position that NRDC does
not require retroactive application of Subpart 4 requirements. See
Wildearth Guardians v. Gina McCarthy, Case No. 13-CV-1275-WJM-KMT
(D. Colo., March 11, 2014) (dismissing plaintiff's claim that the
EPA missed a non-discretionary deadline based on retroactive
application of Subpart 4).
    \7\ The disapproval also triggered an obligation on the EPA
under CAA section 110(c)(1) to promulgate a federal implementation
plan to address the deficiency unless the State submits and the EPA
approves a plan revision correcting the deficiency within two years
(76 FR 69896, 69924, November 9, 2011).
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    Over a year later, on January 4, 2013, the D.C. Circuit issued its
decision remanding the EPA's 2007 PM2.5 Implementation Rule.
By this time, just six months remained before mandatory offset
sanctions would apply in the SJV under CAA section 179(b) unless the
State submitted and we approved a SIP revision correcting the
deficiencies that prompted the EPA's disapproval. On June 20, 2013, the
District adopted the Contingency Measure SIP, which it had developed to
address the deficiencies identified in the 2011 action on the SJV
PM2.5 SIP, and CARB submitted this corrective SIP on July 3,
2013.\8\ We proposed to approve the Contingency Measure SIP on August
28, 2013 (78 FR 53113). Concurrently, we issued an interim final
determination to stay offset sanctions and defer highway sanctions in
the SJV area, based on our ``proposal to approve the State's SIP
revision as correcting the deficiency that initiated these sanctions''
(78 FR 53038, August 28, 2013).\9\ To disapprove this corrective SIP
submission now, based on a retroactive application of subpart 4
requirements to the SJV PM2.5 SIP, would immediately subject
the SJV area to offset sanctions and highway sanctions under the EPA's
sanction application sequencing rule in 40 CFR 52.31(d)(2)(ii).\10\ We
believe it would be unreasonable to now disapprove this SIP submission,
which corrects the deficiencies we had identified, and subject the SJV
area to mandatory sanctions solely because the State did not address
subpart 4 requirements of which it had no notice.\11\
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    \8\ Letter dated July 3, 2013, from Richard W. Corey, Executive
Officer, California Air Resources Board, to Jared Blumenfeld,
Regional Administrator, U.S. EPA Region 9, transmitting the San
Joaquin Valley Air Pollution Control District's ``Quantification of
Contingency Reductions for the 2008 PM2.5 Plan'' (adopted
June 20, 2013), with enclosures.
    \9\ Under 40 CFR 52.31(d)(2)(ii), during the period between 18
and 24 months following the EPA's disapproval of a plan submission,
offset sanctions are stayed and highway sanctions deferred if the
EPA proposes to approve a revised plan submitted by the State and
issues an interim final determination that the revised plan
``corrects the deficiency prompting the [disapproval].''
    \10\ The offset sanction initially applied in the SJV area on
July 9, 2013 (78 FR 53038, August 28, 2013). Thus, under 40 CFR
52.31(d)(2)(ii), the offset sanction would reapply on the date the
EPA issued a proposed or final disapproval and the highway sanction
would apply immediately because more than 6 months have passed since
initial application of the offset sanction.
    \11\ As the U.S. District Court for the District of Colorado
recently stated, ``retroactive application of Subpart 4 to impose
deadlines of which the States were not previously aware would be
unfair and contrary to the state/federal balance outlined in the
CAA.'' See Wildearth Guardians v. Gina McCarthy, Case No. 13-CV-
1275-WJM-KMT (D. Colo., March 11, 2014) at 12.
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    Moreover, it is not clear what RFP projections would result from
the new subpart 4 plan that Earthjustice calls for and, consequently,
it is impossible for the State to quantify a contingency measure
obligation based on such a new plan before it is developed.\12\ It
would

be even more unreasonable to disapprove this corrective SIP submission
on the basis of RFP trajectories that cannot currently be ascertained,
particularly given the lengthy rulemakings that would be necessary for
the State to develop a new plan under subpart 4 with new RFP targets
and a new attainment deadline, and the likely economic hardship that
would result from continued application of mandatory offset and highway
sanctions during this time. The D.C. Circuit recognized the inequity of
this type of retroactive impact in Sierra Club v. Whitman, 285 F.3d 63
(D.C. Cir. 2002), where it upheld the district court's ruling refusing
to make retroactive the EPA's determination that the St. Louis area did
not meet its attainment deadline. In that case, petitioners urged the
court to make the EPA's nonattainment determination effective as of the
date that the statute required, rather than the later date on which the
EPA actually made the determination. The court rejected this view,
stating that applying it ``would likely impose large costs on the
States, which would face fines and suits for not implementing air
pollution prevention plans * * * even though they were not on notice at
the time.'' Id. at 68. Similarly, it would be unreasonable to penalize
California by rejecting this corrective SIP on the basis of subpart 4
requirements of which the State was unaware when we partially
disapproved the SJV PM2.5 SIP, particularly when relief from
mandatory sanctions would not be available until after the State
completes a lengthy rulemaking process to adopt an entirely new plan
under subpart 4.
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    \12\ As the EPA explained in the preamble to the 2007
PM2.5 Implementation Rule, contingency measures should
provide for emission reductions equivalent to about one year of
reductions needed for RFP, based on the overall level of reductions
needed to demonstrate attainment divided by the number of years from
the ``base year'' to the attainment year (72 FR 20586, 20643, April
25, 2007). Thus, without first establishing the relevant base year,
the attainment year, and the overall level of reductions needed to
demonstrate attainment, and then considering whether available
controls (whether RACM or BACM) might expedite the attainment date,
it is impossible to determine the rate of emission reductions that
would demonstrate RFP and the corresponding amount of emission
reductions that would be equivalent to about one year of RFP.
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    In separate rulemakings, the EPA has taken steps to respond to the
NRDC decision by addressing the applicable requirements of subpart 4
for areas designated nonattainment for the 1997 PM2.5 NAAQS
and/or the 2006 PM2.5 NAAQS. For example, the EPA recently
completed a rulemaking to classify all PM2.5 nonattainment
areas nationwide, including the San Joaquin Valley, as ``moderate''
nonattainment under subpart 4 and to establish a December 31, 2014
deadline for the states to submit any additional SIP revisions that may
be necessary to satisfy the requirements applicable to moderate
nonattainment areas under CAA section 189(a). See 78 FR 69806 (November
21, 2013) (proposed rule) and ``Identification of Nonattainment
Classification and Deadlines for Submission of State Implementation
Plan (SIP) Provisions for the 1997 Fine Particle (PM2.5)
National Ambient Air Quality Standard (NAAQS) and 2006 PM2.5
NAAQS,'' signed April 25, 2014 (final rule, pre-publication copy). As
explained in that rulemaking, the EPA recognizes that prior to the D.C.
Circuit's decision in NRDC, states have worked towards meeting the air
quality goals of both the 1997 PM2.5 standards and the 2006
PM2.5 standards in accordance with EPA regulations and
guidance derived from subpart 1, including the requirements of the 2007
PM2.5 Implementation Rule (78 FR 69806, 69809). Taking this
history into account, the EPA concluded that a December 31, 2014
deadline would provide states a relatively brief but reasonable amount
of time to ascertain whether and to what extent any additional SIP
submissions would be needed to satisfy the applicable requirements of
subpart 4 in a particular nonattainment area and to develop, adopt and
submit any such SIPs. See id. The EPA explicitly stated that this
rulemaking ``does not affect any action that the EPA has previously
taken under section 110(k) of the Act on a SIP for a PM2.5
nonattainment area.'' Id. at 69810.
    Accordingly, California is obligated to consider whether and to
what extent any additional SIP submissions may be required to satisfy
the applicable requirements of subpart 4 for the 1997 and/or 2006
PM2.5 NAAQS in the SJV and to develop, adopt and submit any
such SIPs, following reasonable notice and public hearings, no later
than December 31, 2014. In the meantime, our November 2011 final action
remains in effect and continues to provide the appropriate basis for
calculating the required quantity of emission reductions in this
corrective SIP. We believe it is appropriate to address the NRDC
decision on a prospective rather than retrospective basis by
maintaining the environmental benefits of air quality plans that the
EPA has previously approved while working with state and local agencies
to supplement these prior submissions as necessary going forward. Our
approval of the Contingency Measure SIP today does not obviate the
State's obligation to submit these additional SIP revisions, consistent
with the requirements of subpart 4, including additional contingency
measures as necessary.
    Comment 2: Earthjustice argues that the EPA cannot claim that the
Contingency Measure SIP and the SJV PM2.5 SIP are consistent
with the implementation rule remanded by the D.C. Circuit pending
adoption of a new implementation rule. According to Earthjustice,
subpart 4 is self-effectuating and directly-enforceable and does not
require EPA regulations in order for states to know their planning
obligations. Additionally, Earthjustice states that the EPA has already
adopted guidance interpreting subpart 4 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'') and in ``State Implementation Plans for Serious
PM-10 Nonattainment Areas, and Attainment Date Waivers for PM-10
Nonattainment Areas Generally; Addendum to the General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990'' (59
FR 41998, August 16, 1994) (hereafter ``Addendum''). According to
Earthjustice, the requirements of subpart 4 are plain on their face and
well understood, and the NRDC holding means that these requirements
have always applied to PM2.5 nonattainment plans
notwithstanding the EPA's efforts to avoid them.
    Response 2: It appears Earthjustice is arguing that NRDC compels us
to disapprove the Contingency Measure SIP based on a retroactive
application of subpart 4 requirements to the underlying SJV
PM2.5 SIP. We disagree with this assertion. As explained
above, we do not believe it would be reasonable to disapprove this
corrective SIP based on a finding that the underlying attainment and
RFP demonstrations in the SJV PM2.5 SIP, which we fully
approved in 2011, now fail to satisfy subpart 4 requirements of which
the State had no notice. As discussed in our proposal (78 FR 53113,
53123), the Contingency Measure SIP corrects the deficiencies that
prompted the partial disapproval of the SJV PM2.5 SIP in
2011. We believe our approval of this corrective SIP submission today
is appropriate in light of the State's reasonable reliance on the 2011
final action, the significant consequences of a disapproval based on
retroactive application of subpart 4 requirements in this context, and
the EPA's separate rulemaking to establish reasonable timeframes for
states to submit additional SIPs that may be required to satisfy the
requirements of under subpart 4. See Response 1.
    The commenter does not appear to challenge our position that the
general contingency measure requirement in subpart 1 (CAA section
172(c)(9)) continues to govern our evaluation of

and action on the Contingency Measure SIP.\13\ Under the EPA's long-
standing policy, which pre-dates the 2007 PM2.5
Implementation Rule by more than a decade, contingency measures in a
SIP should consist of available control measures beyond those required
in the control strategy to attain the standards or demonstrate RFP,
provide SIP-creditable emission reductions equal to approximately one
year of the emission reductions needed for RFP, and be implemented
without further action by the State. See General Preamble at 13543 to
13544 (discussing contingency measures for moderate PM10
nonattainment areas); see also Addendum at 42014 to 42015 (discussing
contingency measures for serious PM10 nonattainment areas).
We are approving the Contingency Measure SIP because it meets these
criteria as applied to the SJV PM2.5 SIP and because it
corrects the deficiencies that prompted the 2011 partial disapproval of
that plan (78 FR 53113, 53123).
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    \13\ As explained in our proposed rule, subpart 4 of part D,
title I of the Act contains no specific provision governing
contingency measures for PM10 or PM2.5
nonattainment areas that supersedes the general contingency measure
requirement for all nonattainment areas in CAA section 172(c)(9).
Thus, even if we apply the subpart 4 requirements to our evaluation
of the Contingency Measure SIP and disregard the provisions of the
2007 PM2.5 Implementation Rule remanded by the NRDC
court, the general requirement for contingency measures in CAA
section 172(c)(9) continues to apply (78 FR 53113, 53115 n. 8).
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    Our approval of the Contingency Measure SIP today does not rest on
a conclusion that compliance with the 2007 PM2.5
Implementation Rule remanded by the court suffices to satisfy CAA
requirements pending adoption of a new implementation rule, nor does
the EPA believe an implementation rule is necessary for states to know
their planning obligations under subpart 4. Indeed, although the EPA
has not yet issued a new or revised implementation rule consistent with
the court's directive in NRDC, the EPA has established a December 31,
2014 deadline for all states with PM2.5 nonattainment areas
to submit any additional SIPs that may be required under subpart 4,
following consultation as appropriate with EPA regional offices. See
``Identification of Nonattainment Classification and Deadlines for
Submission of State Implementation Plan (SIP) Provisions for the 1997
Fine Particle (PM2.5) National Ambient Air Quality Standard
(NAAQS) and 2006 PM2.5 NAAQS,'' signed April 25, 2014 (final
rule, pre-publication copy). To the extent any revisions to the SJV
PM2.5 SIP are necessary to ensure compliance with the
requirements of subpart 4, California is required to adopt and submit
such SIP revisions by December 31, 2014, including additional
contingency measures as appropriate.
    Comment 3: Earthjustice comments that the EPA cannot claim as a
basis for approval that the Contingency Measure SIP satisfies the
obligations identified in the EPA's 2011 final action on the SJV
PM2.5 SIP because that plan does not comply with the Act.
Earthjustice contends that the approval of the Contingency Measure SIP
would ``compound the legal defects of the [SJV PM2.5 SIP]''
and that we should act immediately to ``call'' the SJV PM2.5
SIP under CAA section 110(k)(5) because we now know that the plan fails
to comply with the requirements of the Act. In the meantime,
Earthjustice asserts that we cannot add to the legal defects by
approving contingency measures that are based on a defective plan. In
support of these arguments, Earthjustice cites Association of Irritated
Residents v. EPA, 632 F.3d 584 (9th Cir. 2011), reprinted as amended on
January 27, 2012, 686 F.3d 668, further amended February 13, 2012
(``AIR'').
    Response 3: We disagree with these arguments. First, as discussed
above, nothing in NRDC compels us to retroactively apply subpart 4
requirements to the SJV PM2.5 SIP and to disapprove the
Contingency Measure SIP on that basis. Absent an EPA rulemaking to
withdraw or revise our November 2011 final action on the SJV
PM2.5 SIP (76 FR 69896, November 9, 2011), that final action
remains effective and provides an appropriate basis for our evaluation
of the State's corrective SIP submission in accordance with the EPA's
long-standing policies on contingency measures. See Response 1.
    Second, the EPA's discretionary ``SIP call'' authority in CAA
section 110(k)(5) is not relevant to this action as we have not made
any of the findings that would obligate us to ``call'' the SJV
PM2.5 SIP. Section 110(k)(5) provides, in relevant part,
that ``[w]henever the Administrator finds that the applicable
implementation plan for any area is substantially inadequate to attain
or maintain the relevant [NAAQS] . . . or to otherwise comply with any
requirement of [the CAA],'' the EPA ``shall require the State to revise
the plan as necessary to correct such inadequacies'' and may establish
reasonable deadlines, not to exceed 18 months after providing notice to
the State, for the submission of such plan revisions. CAA section
110(k)(5), 42 U.S.C. 7410(k)(5). Should we find that the SJV
PM2.5 SIP is ``substantially inadequate to attain or
maintain'' the 1997 PM2.5 NAAQS or to otherwise comply with
any requirement of the Act, we would be obligated to require that
California revise the plan as necessary to correct such inadequacies
(i.e., to issue a ``SIP call'') and would be authorized to establish
reasonable deadlines for the State to submit such plan revisions, not
to exceed 18 months after the EPA notifies the State of the
inadequacies. To date, however, we have not made any such finding under
section 110(k)(5) with respect to the SJV PM2.5 SIP. The EPA
believes that its recent rulemaking to classify all PM2.5
nonattainment areas as ``moderate'' nonattainment and to set a December
31, 2014 deadline for subpart 4 SIP submissions provides a reasonable
timeframe for California to develop, adopt and submit any additional
SIP submissions that are necessary to comply with the requirements of
subpart 4 in the San Joaquin Valley. See ``Identification of
Nonattainment Classification and Deadlines for Submission of State
Implementation Plan (SIP) Provisions for the 1997 Fine Particle
(PM2.5) National Ambient Air Quality Standard (NAAQS) and
2006 PM2.5 NAAQS,'' signed April 25, 2014 (final rule, pre-
publication copy). Under CAA section 110(k)(5), the EPA retains the
discretion to determine after this deadline for SIP submissions whether
the PM2.5 SIP for the SJV is substantially inadequate to
comply with CAA requirements.
    Finally, the Ninth Circuit Court of Appeal's decision in AIR is
inapposite. AIR involved our action on proposed revisions to the SIP
for the one-hour ozone standard for the Los Angeles-South Coast air
basin (686 F.3d 668 at 671). An approved SIP for the area was in place,
but after conducting new modeling for the one-hour ozone standard,
California submitted proposed SIP revisions, including a revised
attainment demonstration that relied on additional control measures.
Id. at 672-73. California later withdrew certain of the proposed
additional control measures and the State specifically represented that
the currently approved plan was not sufficient to provide for
attainment. Id. We approved the control measures that had not been
withdrawn. Id. at 673. However, we disapproved the revised attainment
demonstration because California had substantially based it upon
emission reductions resulting from the withdrawn control measures. Id.
This disapproval left in place the existing attainment demonstration,
which the State had specifically characterized as deficient. Id. The
Ninth Circuit held that our action was arbitrary and capricious,

because we had a duty under CAA section 110(l) to evaluate whether the
SIP, as a whole, would provide for attainment of the NAAQS when the EPA
approved a revision to the already approved SIP. Id. at 673-74.
    The circumstances here are significantly different from those in
AIR. First, nothing in the record indicates that California considers
any element of the currently approved SJV PM2.5 SIP
insufficient to provide for attainment of the 1997 PM2.5
standards. Second, the Contingency Measure SIP neither revises nor
replaces the attainment demonstration in the currently approved plan,
nor does it alter any existing emission limitation or other control
requirement in the applicable SIP. Finally, California has not
withdrawn any control measures that provide emission reductions
necessary for attainment of the 1997 PM2.5 standards; to the
contrary, the Contingency Measure SIP expands upon the contingency
measure portion of the SJV PM2.5 SIP by providing additional
NOX, SOX, and direct PM2.5 emission
reductions beyond those relied upon for RFP and attainment in the SJV
PM2.5 SIP, thereby correcting the deficiency that we had
identified in 2011 (78 FR 5311, 53123). In sum, nothing in the
Contingency Measure SIP revises the currently approved attainment
demonstration in the SJV PM2.5 SIP, nor does any information
in the State's submissions raise a question about the plan's
sufficiency to provide for timely attainment of the 1997
PM2.5 standards. The AIR decision therefore is not pertinent
to our action.
    For these reasons, we disagree with the commenter's claim that our
approval of the Contingency Measure SIP would ``compound'' or ``add
to'' existing legal defects in the SJV PM2.5 SIP. Because
our approval of the Contingency Measure SIP strengthens the SIP and
does not interfere with the on-going process for ensuring that
requirements for RFP and attainment of the 1997 PM2.5 NAAQS
are met, we find that it complies with CAA section 110(l). To the
extent California is obligated to submit additional SIP revisions
consistent with subpart 4 requirements by December 31, 2014, these
outstanding obligations do not preclude approval today of the
Contingency Measure SIP as adequate to correct prior SIP deficiencies
that triggered sanctions clocks. See Response 1.
    Comment 4: Earthjustice comments that the SJV PM2.5 SIP
fails to properly address PM2.5 precursor emissions and that
the EPA approved the plan based on the ``illegal presumption'' in the
2007 PM2.5 Implementation Rule that VOC and ammonia need not
be controlled. Earthjustice argues that because the NRDC court has
rejected this presumption, without a showing that sources of these
precursor emissions do not contribute significantly to PM2.5
levels, they are subject to controls and therefore subject to separate
contingency measure targets. Earthjustice further argues that the San
Joaquin Valley APCD has made no such demonstration and that ``the
record currently before EPA suggests that these emissions do contribute
significantly to ambient levels even though the District believes that
a strategy focusing on oxides of nitrogen is better policy.'' In
support of these arguments, Earthjustice references our responses to
comments regarding VOCs in our final action on the SJV PM2.5
SIP (76 FR 69896, 69902).
    Response 4: To the extent the commenter is challenging the November
2011 final action on the SJV PM2.5 SIP based on the D.C.
Circuit's January 2013 decision in NRDC, such a challenge may only be
brought in the U.S. Court of Appeals for the appropriate circuit within
specified timeframes under CAA section 307(b). We are today acting on a
SIP revision submitted by the State to correct SIP deficiencies that
prompted sanctions, and comments concerning the analyses underlying the
November 2011 action on the SJV PM2.5 SIP are not germane to
this action. See Response 1.
    As discussed above, the November 2011 final action on the SJV
PM2.5 SIP remains in effect and we believe that it would be
unreasonable to retroactively apply the requirements of subpart 4 to
our prior evaluation of the PM2.5 precursor assessment in
the SJV PM2.5 SIP. Although the EPA has taken steps in a
separate rulemaking to respond to the NRDC decision regarding subpart 4
and is requiring all states with PM2.5 nonattainment areas,
including California, to submit SIP revisions as necessary to address
subpart 4 requirements no later than December 31, 2014, that rulemaking
specifically notes that it does not affect any action that the EPA has
previously taken under CAA section 110(k) on a SIP for a
PM2.5 nonattainment area. See 78 FR 69806, 69810 (November
21, 2013) and ``Identification of Nonattainment Classification and
Deadlines for Submission of State Implementation Plan (SIP) Provisions
for the 1997 Fine Particle (PM2.5) National Ambient Air
Quality Standard (NAAQS) and 2006 PM2.5 NAAQS,'' signed
April 25, 2014 (final rule, pre-publication copy). Accordingly, the RFP
demonstration in the SJV PM2.5 SIP remains the appropriate
basis for our evaluation of the specific types and amounts of emission
reductions provided by the Contingency Measure SIP at this time. See
Response 1.
    Even if the EPA takes the view that NRDC compels us to
retroactively apply the requirements of subpart 4 to our prior
evaluation of the PM2.5 precursor assessment in the SJV
PM2.5 SIP, it is not clear at this time how such a
reevaluation would affect the assessment of required contingency
measures. The D.C. Circuit remanded the EPA's 2007 PM2.5
Implementation Rule, including the presumptions concerning VOC and
ammonia in 40 CFR 51.1002.\14\ While expressly declining to decide the
specific challenge to these presumptions (see 706 F.3d at 437, n. 10
(D.C. Cir. 2013)), the court cited CAA section 189(e) \15\ to support
its observation that ``[a]mmonia is a precursor to fine particulate
matter, making it a precursor to both PM2.5 and
PM10'' and that ``[f]or a PM10 nonattainment area
governed by subpart 4, a precursor is presumptively regulated.'' 706
F.3d at 436, n. 7 (citing CAA section 189(e), 42 U.S.C. 7513a(e)). The
NRDC court did not, however, address whether and how it was
substantively necessary to regulate any specific precursor in a
particular PM2.5 nonattainment area. Moreover, even assuming
both VOC and ammonia must be regulated for purposes of attaining the
1997 PM2.5 standards in the SJV, it is not clear what
collection of control measures for which specific precursors would
ultimately be necessary to satisfy the requirements in subpart 4
concerning reasonably available control measures (CAA section
189(a)(1)(C)), best available control measures (CAA section
189(b)(1)(B)), or quantitative milestones demonstrating RFP (CAA
section 189(c)). See, e.g., General Preamble at 13540 to 13541
(discussing technological feasibility, cost of control, and ``de
minimis'' emission levels among factors to be considered in

determining RACM and RACT for a particular PM10
nonattainment area); see also Addendum at 42011 to 42014
(distinguishing BACM from RACM standard and discussing factors to be
considered in determining BACM and BACT for a particular
PM10 nonattainment area, including technological and
economic feasibility). Given that it is thus currently impossible to
identify the precise collection of control measures that would be
necessary in a new subpart 4 plan, let alone to quantify the emission
reductions that these measures would collectively achieve and then
calculate the reductions that would be required for associated
contingency measure purposes,\16\ we do not believe it would be
reasonable to penalize the State at this time for failure to carry out
these tasks in the past. The State and District must first address
these issues as appropriate through adoption of a SIP revision
satisfying the requirements of subpart 4, which is due December 31,
2014.
---------------------------------------------------------------------------

    \14\ The 2007 PM2.5 Implementation Rule contained
rebuttable presumptions concerning certain PM2.5
precursors applicable to attainment plans and control measures
related to those plans. Specifically, in 40 CFR 51.1002(c), the EPA
provided, among other things, that a state was ``not required to
address VOC [and ammonia] as . . . PM2.5 attainment plan
precursor[s] and to evaluate sources of VOC [and ammonia] emissions
in the State for control measures,'' unless the State or the EPA
provided an appropriate technical demonstration showing that
emissions from sources of these pollutants ``significantly
contribute'' to PM2.5 concentrations in the nonattainment
area (40 CFR 51.1002(c)(3), (4)).
    \15\ CAA section 189(e) provides that control requirements for
major stationary sources of direct PM10 shall also apply
to PM10 precursors from those sources, except where the
EPA determines that major stationary sources of such precursors ``do
not contribute significantly to PM10 levels which exceed
the standard in the area.''
    \16\ See n. 12, supra.
---------------------------------------------------------------------------

    Under the commenter's read of NRDC, relief from mandatory sanctions
for SIP deficiencies identified prior to the NRDC decision would be
unavailable to California until it completes lengthy State and local
rulemaking processes to develop and adopt an entirely new attainment
plan that satisfies the requirements of subpart 4, requirements that
are not yet due and that we have not, to date, identified as bases for
plan disapproval. We decline to read the court's decision in a way that
would lead to such an inequitable and retroactive result.
    Comment 5: Earthjustice claims that the alleged legal defects of
the SJV PM2.5 SIP preclude the EPA from determining that the
proposed contingency measures are ``beyond or in addition to'' the core
control requirements of the CAA. Earthjustice argues that this problem
is most apparent in the EPA's treatment of the contingency provision in
the District's residential woodburning rule, Rule 4901. Citing our
November 2011 responses to comments on the SJV PM2.5 SIP (76
FR 69896, 69904), Earthjustice states that we did not require
implementation of this measure as a basic control measure on the basis
that it would not ``advance attainment'' by at least a year and argues
that this justification ``is no longer sufficient if the area is
subject to the [BACM] requirement, as it must be given that it has
failed to attain within four years of its designation as nonattainment
for PM2.5.'' Earthjustice asserts that BACM are more
stringent than reasonably available controls and cannot be rejected
based on whether or not they advance attainment, and that credit for
the Rule 4901 contingency measure is therefore inappropriate.
Furthermore, Earthjustice asserts that our 2009 approval of Rule 4901
as BACM for PM10 is ``not sufficient for concluding that
improvements such as those included in the proposed contingency measure
are beyond [BACM]'' as the necessary demonstration has not been made
and ``there is no reason to believe that the lower trigger included in
the proposed contingency measure is not technically feasible or cost-
effective.'' Noting that the problems associated with PM2.5
in the Valley are different than those associated with PM10,
Earthjustice cites the preamble to the EPA's 2007 PM2.5
Implementation Rule (72 FR 20617) to support its conclusion that ``past
determinations on the adequacy of control measures cannot substitute
for a new demonstration for a new state implementation plan.''
    Response 5: As noted above, it appears the commenter is challenging
the November 2011 final action on the SJV PM2.5 SIP based on
the D.C. Circuit's January 2013 decision in NRDC. Such a challenge,
however, may only be brought in the U.S. Court of Appeals for the
appropriate circuit within specified timeframes under CAA section
307(b). We are today acting on a SIP revision submitted by the State to
correct SIP deficiencies that prompted sanctions, and comments
concerning the analyses underlying the EPA's November 2011 action on
the SJV PM2.5 SIP are not germane to this action. See
Response 1.
    We nonetheless respond below to the substance of the commenter's
claims. To the extent the commenter is arguing that our action today on
the Contingency Measure SIP constitutes a determination that the
contingency provision in Rule 4901 is ``beyond BACM,'' this is
incorrect. We have not yet made any determination concerning BACM for
PM2.5 in the SJV and make no such determination today, as
the area has not been classified as a ``Serious Area'' area under
subpart 4 and the State therefore has not submitted a Serious Area plan
for SJV for any PM2.5 standard. See CAA section 189(b)(1)(B)
(requiring that ``each State in which all or part of a Serious Area is
located'' submit a plan for such area that includes BACM for the
control of PM10) and section 189(b)(2) (requiring submission
of BACM provisions ``no later than 18 months after reclassification of
the area as a Serious Area''). Although Earthjustice suggests that we
are relying on the Agency's prior (2009) approval of Rule 4901 as BACM
for the control of PM10 as a basis for today's action, this
suggestion is also incorrect. As part of the 2011 action on the SJV
PM2.5 SIP, we concluded that the contingency provision in
Rule 4901 was not a required RACM under CAA section 172(c)(1) \17\ and
that it qualified for consideration as a contingency measure because it
provided emission reductions beyond those relied upon for RFP or
attainment in that plan. See 76 FR 41338, 41358 (July 13, 2011) and 76
FR 69896, 69904 and 69906 (November 9, 2011). We disagree with the
commenter's claim that we must now also conclude that the contingency
provision in Rule 4901 is not a required BACM under CAA section
189(b)(1)(B).
---------------------------------------------------------------------------

    \17\ In response to comments on the SJV PM2.5 SIP, we
discussed the 2009 approval of Rule 4901 for PM10 BACM
purposes as relevant context, but the Agency's approval of the RACM
demonstration in the SJV PM2.5 SIP did not rely on this
prior action (76 FR 69896, 69904 and 69906, November 9, 2011).
---------------------------------------------------------------------------

    Likewise, we disagree with the commenter's contention that our
November 2011 rationale for not requiring implementation of this
measure as a basic control measure (i.e., on the basis that it would
not ``advance attainment'' by at least a year) is no longer sufficient
because the area has failed to attain within four years of its
designation as nonattainment for PM2.5 and is, therefore,
now subject to the BACM requirement. Under the CAA, BACM is required
only for nonattainment areas classified as serious (CAA section
189(b)(1)(B)). The SJV area is currently classified as moderate
nonattainment. See ``Identification of Nonattainment Classification and
Deadlines for Submission of State Implementation Plan (SIP) Provisions
for the 1997 Fine Particle (PM2.5) National Ambient Air
Quality Standard (NAAQS) and 2006 PM2.5 NAAQS,'' signed
April 25, 2014 (final rule, pre-publication copy). Whether or not the
SJV area has attained the 1997 PM2.5 standards to date, in
the absence of an EPA rulemaking to reclassify the area as a Serious
Area under subpart 4, the requirement to submit a Serious Area plan
that assures implementation of BACM does not apply (CAA sections
189(b)(1)(B) and 189(b)(2)).
    We note also that the commenter's reference to CAA section
188(c)(1) to support its contention that ``[u]nder subpart 4,
nonattainment areas relying on reasonably available controls have four
years to attain'' is not accurate. Section 188(c)(1) states that
``[f]or a Moderate Area, the attainment date shall be as expeditiously
as practicable but no later than the end of the sixth

calendar year after the area's designation as nonattainment, except
that, for areas designated nonattainment for PM10 under
section [107(d)(4) of the Act], the attainment date shall not extend
beyond December 31, 1994'' (CAA section 188(c)(1), 42 U.S.C.
7513(c)(1)). It appears that the commenter is interpreting the
exception specified in the last clause of this provision to mean that
the SJV PM2.5 nonattainment area must attain the 1997
PM2.5 NAAQS within four years of its designation as
nonattainment for these standards. By its terms, however, this
provision establishes an attainment date that has long passed (December
31, 1994) and applies only to those areas that were designated by
operation of law under CAA section 107(d)(4) as nonattainment for the
PM10 NAAQS, pursuant to the CAA Amendments of 1990. See CAA
section 107(d)(4)(B), 42 U.S.C. 7407(d)(4)(B) (establishing
nonattainment designations by operation of law for certain areas
identified by the EPA as ``Group I'' areas prior to November 15, 1990
and areas where air quality monitoring data showed a violation of the
PM-10 NAAQS before January 1, 1989). This provision and the December
31, 1994 attainment date specified therein do not apply for purposes of
establishing the applicable attainment date for an area designated
nonattainment for the 1997 PM2.5 NAAQS in 2005, such as the
San Joaquin Valley.
    If and when the EPA reclassifies the SJV area from ``moderate'' to
``serious'' nonattainment for a PM2.5 standard under subpart
4,\18\ California will be obligated to submit, no later than 18 months
after such reclassification, SIP provisions to assure that BACM for
PM2.5 shall be implemented no later than 4 years after the
date the area is reclassified, among other things (CAA sections
189(b)(1)(B) and 189(b)(2)). Contingency measures for any new or
revised plan submitted to address subpart 4 requirements would have to
provide emission reductions beyond those relied upon in the control
strategy for that plan (i.e., for a ``Serious Area,'' measures that are
``beyond BACM'').
---------------------------------------------------------------------------

    \18\ Under CAA sections 188(b)(2) and 179(c), the EPA must
determine no later than 6 months following the applicable attainment
date for the 1997 PM2.5 standards in the SJV (April 5,
2015), based on air quality data, whether the area attained the
standards by that date. Should we determine that the SJV area has
failed to attain by April 5, 2015, the area will be reclassified by
operation of law as a Serious Area and the State will be required to
submit plan provisions consistent with the requirements of subpart 4
within 18 months. See CAA sections 188(b)(2) and 189(b)(2).
---------------------------------------------------------------------------

    We note that the possibility that a measure may be required as RACM
or BACM in the future does not preclude its use as a contingency
measure now. Likewise, an approval of a measure as a contingency
measure now does not preclude a future determination that it is a
required RACM or BACM under subpart 4. As the EPA explained in the
Addendum, ``if all or part of the moderate area plan contingency
measures become part of the required serious area control measures
(i.e., BACM), then additional contingency measures must be submitted
whether or not the previously submitted contingency measures had
already been implemented.'' Addendum at 42015.
    Comment 6: Earthjustice comments that because the RFP demonstration
will change under a plan that complies with subpart 4, the assessment
of the controls required for demonstrating RFP will also change.
Earthjustice argues that without a new RFP demonstration, the EPA
cannot determine whether the contingency measures are surplus to
measures that are otherwise required by the Act.
    Response 6: As explained above, we do not believe it would be
reasonable to disapprove this corrective SIP based on a finding that
the underlying attainment and RFP demonstrations in the SJV
PM2.5 SIP, demonstrations that we fully approved in 2011,
now fail to satisfy subpart 4 requirements of which the State had no
notice. As discussed in our proposal (78 FR 53113, 53123), the
Contingency Measure SIP corrects the deficiencies that prompted the
partial disapproval of the SJV PM2.5 SIP in 2011. We believe
our approval of this corrective SIP submission today is appropriate in
light of the State's reasonable reliance on our 2011 final action, the
significant consequences of a disapproval based on retroactive
application of subpart 4 requirements in this context, and the EPA's
separate rulemaking to establish reasonable timeframes for states to
submit additional SIPs that may be required under subpart 4 consistent
with the NRDC decision. See Response 1.

B. Comments Regarding Emission Reductions From Waiver Measures and
Incentive Grant Programs

    Comment 7: Earthjustice comments that ``Congress was not willing to
let states merely `promise' to protect air quality'' and that CAA
section 110(a) requires states to formulate plans for meeting and
maintaining compliance with the NAAQS which ``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 may be necessary or appropriate
to meet the applicable requirements of this chapter. . . .''
Earthjustice states that even those nontraditional techniques for
reducing pollution (economic incentives, marketable permits, and
auctions of emissions rights) authorized by section 110(a)(2)(A) must
be ``enforceable,'' meaning that the EPA and citizens must have the
ability to bring enforcement actions to assure compliance. Earthjustice
further asserts that ``[a] state cannot claim SIP credit from control
measures that shield pollution sources from independent enforcement
actions.'' In support of these statements, Earthjustice references the
EPA's 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'');
``Improving Air Quality with Economic Incentive Programs,'' U.S. EPA,
Office of Air and Radiation, January 2001 (EPA-452/R-01-001) (hereafter
``2001 EIP Guidance''); and the February 4, 2013 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'' (EPA-HQ-OAR-2012-0322)
(hereafter ``2013 SSM Memo'').
    Response 7: We agree generally with the statement that the CAA
requires states to submit implementation plans including measures that
the EPA and citizens can enforce. As the commenter notes, the EPA has
long interpreted CAA section 110(a) to mean that control measures and
other means of achieving emission reductions in a SIP, including
``nontraditional techniques for reducing pollution [such as] economic
incentives, marketable permits, and auctions of emissions rights,''
must be ``enforceable'' (General Preamble at 13556). We disagree,
however, with Earthjustice's suggestion that the emission reductions
identified in the Contingency Measure SIP are not enforceable because
they are based on ``measures that shield pollution sources from
independent enforcement actions.'' As explained below in Response 8
through Response 15, all of the measures relied upon in the Contingency
Measure SIP are directly enforceable by the State and/or District
against pollution sources, and the District's commitments concerning
the incentive-based emission reductions are also enforceable by the EPA
and citizens

under the CAA. Nothing in the Contingency Measure SIP ``shields''
pollution sources from enforcement actions brought by the State or
District. See Response 8 through Response 15.
    Comment 8: Earthjustice highlights both the EPA's enforcement
authority in CAA section 113 and the citizen suit provision in CAA
section 304 as indication that ``Congress was not willing to rely on
states alone to guarantee that the claimed emission reductions would
occur or be enforced.'' Citing Pennsylvania v. Del. Valley Citizens'
Council for Clean Air, 478 U.S. 546, 560 (1986), Earthjustice states
that ``[t]he Supreme Court has found that `Congress enacted 304
specifically to encourage citizen participation in the enforcement of
standards and regulations established under this Act, and intended the
section to afford citizens very broad opportunities to participate in
the effort to prevent and abate air pollution.' '' Additionally,
Earthjustice states that ``[t]his notion that SIPs must be built upon
emission reductions that are capable of being enforced by EPA and
citizens pervades a number of EPA policies regarding SIP
approvability.'' For example, Earthjustice states that the ``EPA will
not approve control measures that include `director discretion' to
define or redefine compliance requirements'' and that the EPA also will
``not allow SIPs to include state affirmative defenses that would
foreclose EPA or other enforcement.'' In support of these statements,
Earthjustice references EPA statements in the 2013 SSM Memo and in a
memorandum dated September 20, 1999, from Steven A. Herman, Assistant
Administrator for Enforcement and Compliance, to Regional
Administrators, entitled ``State Implementation Plans (SIPs): Policy
Regarding Excess Emissions During Malfunctions, Startup, and Shutdown''
(hereafter ``1999 SSM Guidance''). Earthjustice asserts that the two
main contingency measures relied upon by the District--excess emission
reductions from State mobile source measures and emission reductions
achieved through incentive programs--fail to meet these criteria for
enforceability.
    Response 8: We agree generally with the commenter's statement that
SIPs must be built upon emission reductions that the EPA and citizens
can enforce under CAA sections 113 and 304, respectively. We disagree,
however, with the commenter's assertion that the contingency measures
relied upon by the District contain any impermissible ``director
discretion'' or ``affirmative defense'' provisions that may bar EPA or
citizen enforcement of these measures or otherwise fail to meet the
Act's requirements for enforceability.
    As Earthjustice correctly states, the EPA has stated in long-
standing policy that it would not approve into a SIP any ``director
discretion'' or ``affirmative defense'' provision that would bar the
EPA or citizens from enforcing applicable SIP requirements, as such
provisions would be inconsistent with the regulatory scheme established
in title I of the Act. See 2013 SSM Memo at 11-13 (quoting 1999 SSM
Guidance at 3). Although some degree of state/local agency discretion
in a SIP rule may be permissible if explicit and replicable procedures
within the rule tightly define how the discretion will be exercised to
assure equivalent emission reductions, the EPA has long stated that SIP
provisions that include unbounded discretion for state personnel
unilaterally to change or to grant variances from applicable SIP
provisions are problematic and inconsistent with the requirements of
the CAA. See ``Guidance Document for Correcting Common VOC and Other
Rule Deficiencies (a.k.a. The Little Bluebook),'' U.S. EPA Region IX,
originally issued April 1991, revised August 21, 2001; see also 78 FR
12460, 12485 to 12486 (February 22, 2013) (proposed findings of
substantial inadequacy and SIP calls to amend provisions applying to
excess emissions during periods of startup, shutdown, and malfunction)
and 2013 SSM Memo at 13. With respect to ``affirmative defenses,'' \19\
the EPA has stated in long-standing policy that a state may include in
a SIP certain narrowly drawn affirmative defense provisions, which
qualifying sources may utilize in enforcement proceedings under
specified circumstances, but that a SIP may not contain any defense to
injunctive relief or any provision that would enable a state to bar EPA
or citizen enforcement of applicable requirements. See 2013 SSM Memo at
11-13; see also 1999 SSM Guidance at 2.
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    \19\ The term ``affirmative defense'' means, in the context of
an enforcement proceeding, a response or defense put forward by a
defendant, regarding which the defendant has the burden of proof,
and the merits of which are independently and objectively evaluated
in a judicial or administrative proceeding. See 1999 SSM Memo,
Attachment at 2, n. 4.
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    Nothing in the Contingency Measure SIP authorizes either CARB or
the District to modify the requirements of the SIP. As explained below
in Response 13, the District has submitted enforceable commitments to
account for specified amounts of NOX and PM2.5
emission reductions to be achieved in 2015 through incentive programs
and to adopt and submit substitute measures on a fixed schedule if the
identified programs fail to achieve these emission reductions in 2015.
Since the EPA is approving these commitments into the SIP, they are
federally enforceable requirements of an applicable implementation
plan, which 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 sections 110(l)
and 302(q), 5 U.S.C. section 553, and 40 CFR 51.105. Additionally,
nothing in the Contingency Measure SIP creates grounds for an
affirmative defense that could be used in proceedings to enforce the
District's SIP commitments, nor does the Contingency Measure SIP
contain any provision that could bar EPA or citizen enforcement of
these SIP commitments. We therefore disagree with the commenter's
suggestion that the Contingency Measure SIP contains any ``director
discretion'' or ``affirmative defense'' provision that would undermine
the enforceability of these emission reductions. We explain more fully
below how the District's SIP commitments can be enforced by the EPA and
citizens. See Response 10 through Response 15.
    In addition, the EPA disagrees with the commenter's assertion that
the CARB mobile source control measures relied upon in the Contingency
Measure SIP are not creditable as contingency measures. As explained in
Response 9 below, the EPA has historically allowed emission reduction
credit for California motor vehicle emissions standards that have
received waivers of federal preemption pursuant to the waiver approval
process of CAA section 209 (``waiver measures''), without requiring
California to submit the standards themselves to the EPA for approval
as part of the California SIP. See, e.g., 76 FR 69896 (November 9,
2011) (final rule partially approving and partially disapproving SJV
PM2.5 SIP) and 77 FR 12652 (March 1, 2012) (final rule
approving SJV 8-hour Ozone SIP). Waiver measures are substituted for
federal mobile source control measures in California, and they become
enforceable by the State once the EPA issues a waiver or authorization.
Based on considerations of permanence, enforceability, and
quantifiability, the EPA continues to believe that it is appropriate
and consistent with the CAA to allow California to rely on emission
reductions resulting from

waiver measures in SIPs. See Response 9.
    Comment 9: Earthjustice states that most of the CARB mobile source
control measures relied upon to provide excess emission reductions are
not approved into the SIP and, therefore, are not enforceable by the
EPA or through independent citizen enforcement. Earthjustice states
that the EPA is aware of this issue from previous comments on the 2008
PM2.5 Plan and incorporates those comments by reference.\20\
Earthjustice contends that because ``the State is free to amend or
rescind these measures altogether without EPA oversight,'' these
emission reductions are not creditable as contingency measures.
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    \20\ Specifically, the commenter states: ``As EPA is well aware
from previous comments on the 2008 PM2.5 Plan
(incorporated by reference here), most of the CARB mobile source
control measures relied upon here to provide excess emission
reductions are not actually approved into the state implementation
plan. As a result, they are not enforceable by EPA or through
independent citizen enforcement. . . .'' See letter dated September
27, 2013, from Paul Cort, at 7. Given the context of this comment
and the broad range of issues raised by commenters during the EPA's
previous rulemaking on the 2008 PM2.5 Plan (referred to
herein as the ``SJV PM2.5 SIP''), we assume Earthjustice
intended here to incorporate by reference only those of its own
comments addressing the EPA's treatment of CARB mobile source
control measures in the SIP (see letter dated August 12, 2011, from
Paul Cort, Staff Attorney, and Sarah Jackson, Research Associate,
Earthjustice, ``Comments on EPA's Partial Approval/Disapproval of
the San Joaquin Valley's State Implementation Plan for Fine
Particulate Matter, Docket  EPA-R09-OAR-2010-0516'').
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    Response 9: We disagree with the commenter's argument that emission
reductions from CARB mobile source control measures may not be credited
as contingency measures. The EPA believes that credit for emission
reductions from implementation of California mobile source rules that
are subject to CAA section 209 waivers (``waiver measures'') is
appropriate notwithstanding the fact that such rules are not approved
as part of the California SIP. In our July 13, 2011 proposed action on
the SJV PM2.5 SIP and the technical support document for
that proposal, we explained why we believe such credit is appropriate.
See 76 FR 41338, 41345 (July 13, 2011) and ``Technical Support Document
and Responses to Comments, Final Rule on the San Joaquin Valley 2008
PM2.5 State Implementation Plan,'' U.S. EPA Region 9,
September 30, 2011 (hereafter ``2011 Final TSD'') at 101-105.
Historically, the EPA has granted credit for the waiver measures
because of special Congressional recognition, in establishing the
waiver process in the first place, of the pioneering California motor
vehicle control program and because amendments to the CAA (in 1977)
expanded the flexibility granted to California in order ``to afford
California the broadest possible discretion in selecting the best means
to protect the health of its citizens and the public welfare,'' (H.R.
Rep. No. 294, 95th Congr., 1st Sess. 301-2 (1977)). In allowing
California to take credit for the waiver measures notwithstanding the
fact that the underlying rules are not part of the California SIP, the
EPA treated the waiver measures similarly to the Federal motor vehicle
control requirements, which the EPA has always allowed States to credit
in their SIPs without submitting the program as a SIP revision. As we
explained in the 2011 Final TSD (p. 87), credit for Federal measures,
including those that establish on-road and nonroad standards,
notwithstanding their absence in the SIP, is justified by reference to
CAA section 110(a)(2)(A), which establishes the following content
requirements for SIPs: ``. . . enforceable emission limitations and
other control measures, means, or techniques (including economic
incentives such as fees, marketable permits, and auctions of emissions
rights), . . . , as may be necessary or appropriate to meet the
applicable requirements of this chapter.'' (emphasis added.) Federal
measures are permanent, independently enforceable (by the EPA and
citizens), and quantifiable without regard to whether they are approved
into a SIP, and thus the EPA has never found such measures to be
``necessary or appropriate'' for inclusion in SIPs to meet the
applicable requirements of the Act. CAA section 209 establishes a
process under which the EPA allows California's waiver measures to
substitute for Federal measures, and like the Federal measures for
which they substitute, the EPA has historically found, and continues to
find, based on considerations of permanence, enforceability, and
quantifiability, that such measures are not ``necessary or
appropriate'' for California to include in its SIP to meet the
applicable requirements of the Act.
    First, with respect to permanence, we note that, to maintain a
waiver, CARB's on-road waiver measures can be relaxed only to a level
of aggregate equivalence to the Federal Motor Vehicle Control Program
(FMVCP) (CAA section 209(b)(1)). In this respect, the FMVCP acts as a
partial backstop to California's on-road waiver measures (i.e., absent
a waiver, the FMVCP would apply in California). Likewise, Federal
nonroad vehicle and engine standards act as a partial backstop for
corresponding California nonroad waiver measures. The constraints of
the waiver process thus serve to limit the extent to which CARB can
relax the waiver measures for which there are corresponding the EPA
standards, and thereby serve an anti-backsliding function similar in
substance to those established for SIP revisions in CAA sections 110(l)
and 193. Meanwhile, the growing convergence between California and EPA
mobile source standards diminishes the difference in the emission
reductions reasonably attributed to the two programs and strengthens
the role of the Federal program in serving as an effective backstop to
the State program. In other words, with the harmonization of EPA mobile
source standards with the corresponding State standards, the Federal
program is becoming essentially a full backstop to most parts of the
California program.
    Second, as to enforceability, we note that the waiver process
itself bestows enforceability onto California to enforce the on-road or
nonroad standards for which the EPA has issued the waiver. CARB has as
long a history of enforcement of vehicle/engine emissions standards as
the EPA, and CARB's enforcement program is equally as rigorous as the
corresponding EPA program. The history and rigor of CARB's enforcement
program lends assurance to California SIP revisions that rely on the
emission reductions from CARB's rules in the same manner as the EPA's
mobile source enforcement program lends assurance to other state's SIPs
in their reliance on emission reductions from the FMVCP. While it is
true that citizens and the EPA are not authorized to enforce California
waiver measures under the Clean Air Act (i.e., because they are not in
the SIP), citizens and the EPA are authorized to enforce EPA standards
in the event that vehicles operate in California without either
California or EPA certification.
    As to quantifiability, the EPA's historical practice has been to
give SIP credit for motor-vehicle-related waiver measures by allowing
California to include motor vehicle emissions estimates made by using
California's EMFAC (and its predecessors) motor vehicle emissions
factor model in SIP inventories. The EPA verifies the emission
reductions from motor-vehicle-related waiver measures through review
and approval of EMFAC, which is updated from time to time by California
to reflect updated methods and data, as well as newly-established
emissions standards. (Emission reductions from the EPA's motor vehicle

standards are reflected in an analogous model known as MOVES.) The
EMFAC model is based on the motor vehicle emissions standards for which
California has received waivers from the EPA but accounts for vehicle
deterioration and many other factors. The motor vehicle emissions
estimates themselves combine EMFAC results with vehicle activity
estimates, among other considerations. See the 1982 Bay Area Air
Quality Plan, and the related the EPA rulemakings approving the plan
(see 48 FR 5074 (February 3, 1983) for the proposed rule and 48 FR
57130 (December 28, 1983) for the final rule) as an example of how the
waiver measures have been treated historically by the EPA in California
SIP actions.\21\ The SJV PM2.5 SIP was developed using a
version of the EMFAC model referred to as EMFAC2007, which the EPA has
approved for use in SIP development in California. (73 FR 3464, January
18, 2008). Thus, the emission reductions that are from the California
on-road ``waiver measures'' and that are estimated through use of EMFAC
are as verifiable as are the emission reductions relied upon by states
other than California in developing their SIPs based on estimates of
motor vehicle emissions made through the use of the MOVES model.
---------------------------------------------------------------------------

    \21\ The EPA's historical practice in allowing California credit
for waiver measures notwithstanding the absence of the underlying
rules in the SIP is further documented by reference to the EPA's
review and approval of a May 1979 revision to the California SIP
entitled, ``Chapter 4, California Air Quality Control Strategies.''
In our proposed approval of the 1979 revision (44 FR 60758, October
22, 1979), we describe the SIP revision as outlining California's
overall control strategy, which the State had divided into vehicular
sources and non-vehicular (stationary source) controls. As to the
former, the SIP revision discusses vehicular control measures as
including technical control measures and transportation control
measures. The former refers to the types of measures we refer to
herein as waiver measures, as well as fuel content limitations, and
a vehicle inspection and maintenance program. The 1979 SIP revision
included several appendices, including appendix 4-E, which refers to
``ARB vehicle emission controls included in title 13, California
Administrative Code, chapter 3 . . . ,'' including the types of
vehicle emission standards we refer to herein as waiver measures;
however, California did not submit the related portions of the
California Administrative Code (CAC) to the EPA as part of the 1979
SIP revision submittal. With respect to the CAC, the 1979 SIP
revision states: ``The following appendices are portions of the
California Administrative Code. Persons interested in these
appendices should refer directly to the code.'' Thus, the State was
clearly signaling its intention to rely on the California motor
vehicle control program but not to submit the underlying rules to
the EPA as part of the SIP. In 1980, we finalized our approval as
proposed (45 FR 63843, September 28, 1980).
---------------------------------------------------------------------------

    Moreover, the EPA's waiver review and approval process is analogous
to the SIP approval process. First, CARB adopts its emissions standards
following notice and comment procedures at the state level, and then
submits the rules to the EPA as part of its waiver request. When the
EPA receives new waiver requests from CARB, the EPA publishes a notice
of opportunity for public hearing and comment and then publishes a
decision in the Federal Register following the public comment period.
Once again, in substance, the process is similar to that for SIP
approval and supports the argument that one hurdle (the waiver process)
is all Congress intended for California standards, not two (waiver
process plus SIP approval process). Second, just as SIP revisions are
not effective until approved by the EPA, changes to CARB's rules (for
which a waiver has been granted) are not effective until the EPA grants
a new waiver, unless the changes are ``within the scope'' of a prior
waiver and no new waiver is needed. Third, both types of final actions
by the EPA--i.e., final actions on California requests for waivers and
final actions on state submittals of SIPs and SIP revisions--may be
challenged under section 307(b)(1) of the CAA in the appropriate United
States Court of Appeals.
    In the 2011 Final TSD (pp. 102-103), we indicated that we believe
that section 193 of the CAA, the general savings clause added by
Congress in 1990, effectively ratified our long-standing practice of
granting credit for the California waiver rules because Congress did
not insert any language into the statute rendering the EPA's treatment
of California's motor vehicle standards inconsistent with the Act.
Rather, Congress extended the California waiver provisions to most
types of nonroad vehicles and engines, once again reflecting
Congressional intent to provide California with the broadest possible
discretion in selecting the best means to protect the health of its
citizens and the public welfare. Requiring the waiver measures to
undergo SIP review in addition to the statutory waiver process is not
consistent with providing California with the broadest possible
discretion as to on-road and nonroad vehicle and engine standards, but
rather, would add to the regulatory burden California faces in
establishing and modifying such standards, and thus would not be
consistent with Congressional intent. In short, we believe that
Congress intended California's mobile source rules to undergo only one
the EPA review process (i.e., the waiver process), not two.
    In summary, the EPA has historically given SIP credit for waiver
measures in our approval of attainment demonstrations and other
planning requirements such as reasonable further progress and
contingency measures submitted by California. We continue to believe
that section 193 ratifies our long-standing practice of allowing credit
for California's waiver measures notwithstanding the fact they are not
approved into the SIP, and correctly reflects Congressional intent to
provide California with the broadest possible discretion in the
development and promulgation of on-road and nonroad vehicle and engine
standards. Further, even without considering section 193, the Act's
structure, evolution, and provision for the waiver of federal
preemption for California mobile source emissions standards all support
the EPA's long-standing interpretation of the CAA to allow California
to rely on emission reductions resulting from waiver measures when
developing SIP emission inventories, related attainment demonstrations,
and contingency measures, even though the waiver measures are not in
the SIP itself.
    Comment 10: Referencing the District's commitments to monitor,
assess, and report on program implementation and to remedy emission
reduction shortfalls, Earthjustice characterizes the ``contingency
measure'' as an ``enforceable commitment to adopt measures as needed''
and asserts that such ``committal SIPs'' have repeatedly been rejected
by the courts. More fundamentally, Earthjustice argues, ``this
commitment does not create enforceable emission limits or control
measures as required by section 110(a)(2)(A)'' but rather ``creates an
enforceable duty to adopt such emission limits or control measures as
contingency measures'' (emphases in original). Earthjustice contends
that this is a plain violation of section 110(a)(2)(A). Moreover,
Earthjustice contends, ``this duty already exists under section
172(c)(9), so this proposed contingency measure adds nothing beyond
what is already required by law.''
    Response 10: We disagree with the commenter's characterization of
the District's commitments in the Contingency Measure SIP as a
``committal SIP.'' Courts have rejected the EPA's use of the
``conditional approval'' procedure in CAA section 110(k)(4) to permit
states to postpone statutory SIP deadlines by submitting ``committal
SIPs'' that contain no specific remedial measures but instead merely
promise to adopt such measures in the future. See, e.g., Natural
Resources Defense Council, Inc. v. EPA, et al, 22 F.3d 1125 (D.C. Cir.
1994) and

Sierra Club v. EPA, 356 F.3d 296 (D.C. Cir. 2004). The District's
commitments in the Contingency Measure SIP, however, are not promises
to adopt measures in the future. Instead, these SIP commitments
identify on-going emission reductions and current obligations that the
District must satisfy on an ongoing basis.\22\ Specifically, the
District's SIP commitments obligate the District to track its ongoing
implementation of the Prop 1B and Carl Moyer Program requirements for
specific projects relied upon for SIP credit and to submit reports to
the EPA, on an annual basis, that include detailed information
regarding the type, location, and duration of each such project. See
Response 13 (referencing SJVUAPCD Board Resolution No. 13-6-18 at pg. 3
and Rule 9610 at Section 4.5). As explained in supporting materials
submitted by the District, all of the projects relied upon for SIP
credit in the Contingency Measure SIP are subject to ``already-
executed, legally binding contracts'' which ensure that the District's
claimed emission reductions are currently being achieved. See SJVUAPCD,
``Quantification of Contingency Reductions for the 2008
PM2.5 Plan'' (June 20, 2013) at 7, 8. Although the
District's SIP commitments include an enforceable requirement to submit
substitute measures in the event of a shortfall in expected emission
reductions for 2015, this secondary obligation does nothing to
undermine the District's current obligation to monitor, assess, and
report on its implementation of the Prop 1B and Carl Moyer Program for
the identified projects and the actual emission reductions achieved
through these projects, consistent with the applicable requirements of
Rule 9610. To the contrary, the secondary commitment to adopt and
submit substitute measures is provided as an additional safeguard to
ensure that, if the projects relied upon for SIP credit fail to achieve
the expected emission reductions by the applicable implementation
deadline (i.e., by December 5, 2015), the District will be required to
implement a timely remedy, i.e., to adopt and submit substitute
measures that achieve equivalent amounts of emission reductions by the
same implementation deadline.\23\ In sum, the District's SIP
commitments establish current obligations as part of an enforceable
sequence of actions leading to compliance with a December 5, 2015
emission reduction obligation, which the EPA or citizens may enforce
under the CAA. See Response 13.
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    \22\ As we explained in our proposed rule (78 FR 53113, 53115),
contingency measures may include Federal, state and local measures
already scheduled for implementation that provide emission
reductions in excess of those needed to provide for RFP or
expeditious attainment. Nothing in the statute precludes a state
from implementing such measures before they are triggered. See,
e.g., LEAN v. EPA, 382 F.3d 575 (5th Cir. 2004) (upholding
contingency measures that were previously required and implemented
where they were in excess of the attainment demonstration and RFP
SIP). The EPA believes that its interpretation of the contingency
measure requirement in section 172(c)(9) of the Act is reasonable
because reductions from these contingency measures are continuing in
nature.
    \23\ See n. 46, infra (discussing December 5, 2015 deadline for
implementation of substitute measures under District's SIP
commitment).
---------------------------------------------------------------------------

    We also disagree with the commenter's characterization of the
District's SIP commitments as a ``duty to adopt'' emission limits or
control measures that violates the requirements of CAA section
110(a)(2)(A). CAA section 110(a)(2)(A) 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 may be necessary
or appropriate to meet the applicable requirements of [the Act].'' CAA
section 110(a)(2)(A); see also CAA section 172(c)(6) (establishing
substantively identical requirements for nonattainment areas). Thus, in
addition to ``emission limitations'' and ``control measures,'' the Act
allows for SIPs to be built upon other ``means or techniques'' as may
be necessary or appropriate to provide for timely attainment of the
NAAQS. See BCCA Appeal Group v. EPA, 355 F.3d 817 (5th Cir. 2003),
reh'g denied, 2004 U.S. App. LEXIS 215 (5th Cir., January 8, 2004)
(noting expansion of the EPA's authority under section 110(a)(2)(A)
following Congress' addition of the ``means'' and ``techniques'' and
``as appropriate'' language as part of the 1990 CAA Amendments).
Moreover, as explained in the EPA's proposed rule, both CAA section
110(a)(2)(A) and section 172(c)(6) explicitly provide for the use of
economic incentives as one tool for states to use to achieve attainment
of the NAAQS. See 78 FR 53113, 53118 (quoting reference in CAA section
110(a)(2)(A) to ``economic incentives such as fees, marketable permits,
and auctions of emissions rights''). Nothing in the Act prohibits the
District's use of economic incentives as part of a contingency measure
plan that ensures an appropriate level of emission reduction progress
if attainment is not achieved and additional planning by the State is
needed.
    The incentive programs relied upon in the Contingency Measure SIP
provide emission reductions in excess of those relied on for RFP or for
expeditious attainment in the SJV PM2.5 SIP (78 FR 53113,
53123). These incentive programs do not alter any existing control
requirement in the applicable SIP and do not interfere with any
applicable requirement concerning attainment and RFP or any other
applicable requirement of the Act. Id. The District has submitted a SIP
commitment to comply with detailed requirements of the Prop 1B program
and Carl Moyer Program guidelines through a sequence of actions leading
to compliance with a December 2015 emission reduction obligation, which
the EPA or citizens may enforce under CAA sections 113 and 304,
respectively. See Response 13. For all of these reasons, we conclude
that the District's SIP commitments are both enforceable ``emission
standards or limitations'' as defined in CAA section 304(f) \24\ and
appropriate ``means or techniques'' for achieving NOX and
PM2.5 emission reductions under CAA sections 110(a)(2)(A)
and 172(c)(6), and that these enforceable commitments are permissible
components of a plan submitted to satisfy the attainment contingency
measure requirement in CAA section 172(c)(9).
---------------------------------------------------------------------------

    \24\ See n. 31, infra.
---------------------------------------------------------------------------

    Comment 11: Earthjustice asserts that the EPA's reliance on the
``enforceable commitment'' to adopt control measures as an enforceable
contingency measure is also a plain violation of section 172(c)(9),
which requires that contingency measures ``take effect . . . without
further action by the State or the Administrator.'' Citing the EPA's
interpretive statements in the Addendum (59 FR 41998, August 16, 1994),
Earthjustice contends that ``[t]he commitment to adopt new rules and
measures is a blatant attempt to allow the District to defer adoption
of enforceable contingency measures until after the attainment failure
occurs'' and that ``[t]his undermines the entire purpose of the
contingency measure requirement.'' Earthjustice concludes that the
incentive program contingency measure therefore cannot be approved.
    Response 11: We disagree. As explained in Response 10 above, the
District's SIP commitments contain both a current obligation for the
District to monitor, assess, and report on its ongoing implementation
of the Prop 1B and Carl Moyer Program requirements with respect to
specified projects and a secondary obligation for the District to
implement a timely remedy, should the

identified projects fail to achieve the expected emission reductions.
These SIP obligations take effect without further action by the State
or the Administrator, in accordance with CAA section 172(c)(9).
    Additionally, consistent with the EPA's longstanding interpretation
of the contingency measure requirement in CAA section 172(c)(9) as
requiring that all actions needed to effect full implementation of
contingency measures occur within 60 days after the EPA notifies the
State of a failure to attain the NAAQS by the applicable attainment
date,\25\ the District's SIP commitments ensure that all actions needed
to effect full implementation of the incentive-based emission
reductions will occur no later than December 5, 2015. Should the EPA
find based on the 2014 annual demonstration report that the required
amounts of NOX and PM2.5 emission reductions may
not continue through 2015 as projected, the EPA will promptly notify
the District of its potential obligation to implement substitute
measures consistent with its Board commitment no later than December 5,
2015, so that the District has ample time for any rulemakings that may
be necessary to meet this implementation deadline. Subsequently, should
the EPA determine that the SJV area has failed to attain the 1997
PM2.5 NAAQS by the applicable attainment date of April 5,
2015,\26\ the District will be obligated under its SIP commitment
either to confirm that the Prop 1B and Carl Moyer Program projects
identified in the 2014 and 2015 annual demonstration reports will
continue to achieve the required amounts of NOX and
PM2.5 emission reductions in December 2015 as projected, or
to adopt and submit substitute measures achieving equivalent amounts of
emission reductions (4.15 tpd of NOX reductions and 0.10 tpd
of direct PM2.5 reductions) no later than December 5,
2015.\27\ See SJVUAPCD Board Resolution No. 13-6-18 at p. 3.
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    \25\ See General Preamble at 13512, 13543-13544 and the Addendum
at 42014-42015 (``EPA generally expects all actions needed to effect
full implementation of the [contingency] measures to occur within 60
days after EPA notifies the State of the area's failure [to
attain]'').
    \26\ Under CAA section 179(c), the EPA must determine whether
the SJV area has attained the 1997 PM2.5 NAAQS ``as
expeditiously as practicable'' and no later than 6 months after the
applicable attainment date, based on the area's air quality as of
the attainment date. Because the applicable attainment date for the
1997 PM2.5 NAAQS in the SJV area is April 5, 2015, the
EPA must make this determination regarding attainment for the SJV no
later than October 5, 2015.
    \27\ See n. 46, infra (discussing December 5, 2015 deadline for
implementation of substitute measures under District's SIP
commitment). In our proposed rule, we erroneously stated that
following an EPA finding that the SJV area has failed to attain the
1997 PM2.5 NAAQS, the District would be obligated to
verify through the 2016 annual demonstration report whether the
required amounts of NOX and direct PM2.5
reductions had occurred or to adopt and submit substitute rules
consistent with its Board commitment (78 FR 53113, 53122). We hereby
clarify that the 2014 annual demonstration report (not the 2016
report) is the vehicle through which the District must either
demonstrate that the required amounts of emission reductions will
continue through 2015 or identify substitute measures to be
implemented by December 5, 2015. See Rule 9610, Section 4.4
(requiring that each annual demonstration report ``identify and
quantify SIP commitment shortfalls, if any, and remedies for
addressing said shortfalls''). We note, however, that under Rule
9610 the District remains subject to an ongoing obligation to
retrospectively assess the performance of its incentive programs for
potential future enhancements and that the 2016 annual demonstration
report should, therefore, contain information adequate to verify
whether the required amounts of NOX and direct
PM2.5 reductions occurred in 2015. See Rule 9610, Section
4.7.
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    Earthjustice suggests that only those ``substitute'' measures that
the District would be obligated to implement in the event of an
emission reduction shortfall constitute enforceable contingency
measures, and that the EPA's approval of this SIP commitment therefore
impermissibly allows the District to delay adoption of required
measures. As discussed above, however, the enforceable contingency
measure here is the District's SIP commitment in its entirety, which
includes a current obligation to monitor, assess, and report on the
District's ongoing implementation of the Prop 1B and Carl Moyer Program
requirements with respect to specified projects which collectively are
expected to achieve 4.15 tpd of NOX reductions and 0.10 tpd
of direct PM2.5 reductions in 2015. This current obligation
constitutes an enforceable measure in itself, and should the District
fail to fully account for the required amounts of NOX and
direct PM2.5 emission reductions in annual demonstration
reports submitted in 2014 and 2015 that satisfy the applicable
requirements of Rule 9610, the EPA may make a finding of failure to
implement the SIP under CAA section 179(a) and either the EPA or
citizens may take enforcement action under CAA section 113 or 304,
respectively. See Response 12 and Response 13. The secondary obligation
to adopt and submit ``substitute'' measures is an additional safeguard
to be effectuated only if the District fails to satisfy its current
obligation to monitor, assess, and report on its ongoing emission
reduction responsibilities. We therefore disagree with the commenter's
assertion that the District's SIP commitment allows it to ``defer
adoption of enforceable contingency measures until after the attainment
failure occurs.''
    In sum, the District's SIP commitments establish current
obligations on the District to take action well before the applicable
attainment date to achieve the required emission reductions by December
5, 2015, whether through annual demonstration reports submitted in 2014
and 2015 or through adoption and submission of substitute measures to
be implemented by December 5, 2015. Given the District's long history
of successful implementation and enforcement of Prop 1B and Carl Moyer
Program grants and the detailed requirements in the associated
incentive program guidelines, as discussed in our technical support
document for the proposed rule (see U.S. EPA Region 9, ``Technical
Support Document, Proposed Approval of Clean Air Act Section 172(c)(9)
Contingency Measures, San Joaquin Valley State Implementation Plan for
Attainment of the 1997 PM2.5 Standards,'' August 15, 2013
(hereafter ``Proposal TSD'')) and further in these responses to
comments, we expect that the District's implementation of these program
requirements for the identified projects will achieve the District's
claimed 4.15 tpd of NOX reductions and 0.10 tpd of direct
PM2.5 reductions in 2015. However, should the EPA find based
on documentation submitted by the District in 2014 that the required
emission reductions may not occur in 2015 as projected, the District
will be obligated under its SIP commitment to adopt and submit
substitute measures achieving the required emission reductions by
December 5, 2015. We find these SIP commitments adequate to ensure that
an appropriate level of emission reduction progress will continue to be
made should the SJV area fail to attain the 1997 PM2.5 NAAQS
by the applicable attainment date of April 5, 2015.
    Comment 12: Earthjustice asserts that the incentive-based emission
reductions are unenforceable by the EPA or citizens and that the EPA
itself has described such emission reductions as ``not enforceable
against individual sources,'' ``voluntary,'' and subject to a cap on
SIP credit.
    Response 12: We disagree with the commenter's assertion that these
emission reductions are unacceptable because they are unenforceable by
the EPA or citizens. As the commenter notes, the EPA has described
``voluntary'' measures as those that are not directly enforceable
against individual sources and has recommended presumptive limits
(sometimes referred to as ``caps'') on the

credit that may be allowed in a SIP for such measures. Such voluntary
measures may be credited for SIP purposes only where the State submits
other enforceable mechanisms to ensure that the required emission
reductions are achieved, subject to EPA and citizen enforcement under
the CAA. As discussed further below, the incentive-based emission
reductions relied upon in the Contingency Measure SIP fall within the
EPA's presumptive limits on credit for voluntary measures and are
consistent with the EPA's recommendations for voluntary mobile source
emission reduction programs. Additionally, these incentive-based
emission reductions are consistent with the EPA's recommendations for
discretionary economic incentive programs. We discuss below EPA's
guidance on both voluntary measures and economic incentive programs
(EIPs) and our rationale for concluding that the Contingency Measure
SIP adequately addresses the applicable requirements of the Act, as
described in these guidance documents.
    The EPA believes that it is appropriate and consistent with the Act
to allow a limited percentage of the total emission reductions needed
to satisfy any statutory requirement to come from ``voluntary'' or
``emerging'' measures or other nontraditional measures and programs,
where the State commits to certain safeguards and satisfies the
statutory criteria for SIP approval. See, e.g., ``Guidance on
Incorporating Voluntary Mobile Source Emission Reduction Programs in
State Implementation Plans (SIPs),'' October 24, 1997 (hereafter ``1997
VMEP'') at 4-7; ``Incorporating Emerging and Voluntary Measures in a
State Implementation Plan,'' September 2004 (hereafter ``2004 Emerging
and Voluntary Measures Policy'') at 8-12; and ``Guidance on
Incorporating Bundled Measures in a State Implementation Plan,'' August
16, 2005 (hereafter ``2005 Bundled Measures Guidance'') at 7-12. The
EPA has described ``voluntary measures'' as measures or strategies that
are not directly enforceable against individual sources, and ``emerging
measures'' as those that are more difficult to accurately quantify than
traditional SIP emission reduction measures.\28\ See 1997 VMEP at 4;
2004 Emerging and Voluntary Measures Policy at 13, 19; and 2005 Bundled
Measures Guidance at 2. ``Voluntary'' measures for stationary and area
sources may include consumer-oriented programs to reduce the use of
high-emitting paints or other consumer products during the ozone
season; mechanisms to encourage pollution prevention or process changes
at unregulated emission points; and voluntary wood stove changeout
programs. See 2004 Emerging and Voluntary Measures Policy at 19, 20.
``Voluntary'' mobile source emission reduction programs (VMEPs) \29\
may include employer-based transportation management programs to manage
employee commute and travel behavior; area-wide rideshare incentives to
encourage commuters to use alternatives to single-occupant vehicles;
and auto restricted zones, no-drive days, or other limitations on
vehicle use in a given geographic area. See 1997 VMEP at Attachment 1.
``Emerging'' measures include activities that indirectly reduce
emissions by promoting more efficient energy use or that promote
renewable resources (e.g., use of solar power, wind power, or biomass)
and activities that improve air quality by means other than emission
reductions (e.g., heat island measures that reduce criteria pollutant
concentrations by lowering ambient temperatures). See 2004 Emerging and
Voluntary Measures Policy at 14-15. Where a State submits a VMEP or
other voluntary or emerging measure for SIP approval, the EPA evaluates
it for consistency with four fundamental ``integrity elements'' and
with SIP attainment and reasonable further progress (RFP) requirements,
and to ensure that it does not interfere with other requirements of the
Act. See 1997 VMEP at 6; see also 78 FR 53113, 53118 and Proposal TSD
at 22-24.
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    \28\ A measure can be both emerging and voluntary. See 2004
Emerging and Voluntary Measures Policy at 1.
    \29\ 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.
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    In light of the increasing incremental cost associated with further
stationary and mobile source emission reductions and the difficulty of
identifying such additional sources of emission reductions, the EPA
encourages innovative approaches to generating emission reductions
through voluntary and emerging measures and other nontraditional
measures and programs. See 1997 VMEP at 4-5; 2004 Emerging and
Voluntary Measures Policy at 9; and 2005 Bundled Measures Guidance at
7. The EPA also recognizes, however, that these nontraditional measures
raise novel issues related to enforceability and quantification of the
associated emission reductions. Accordingly, the EPA's policies
addressing nontraditional measures 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. See 1997 VMEP at 5-7; 2004 Emerging and
Voluntary Measures Policy at 9; 2005 Bundled Measures Guidance at 7;
and ``Roadmap for Incorporating Energy Efficiency/Renewable Energy
Policies and Programs into State and Tribal Implementation Plans,''
July 2012 (hereafter ``2012 Roadmap for EE/RE Programs'') at 37-38.
Importantly, the EPA has consistently stated that any voluntary or
other nontraditional measure submitted for SIP credit must be
accompanied by an appropriate enforceable ``backstop'' commitment from
the State to monitor emission reductions achieved and to rectify any
shortfall in a timely manner. See, e.g., 1997 VMEP at 4-5; 2004
Emerging and Voluntary Measures Policy at 8-12; 2005 Bundled Measures
Guidance at 7-12; and ``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
6-7. Thus, although the State is not necessarily responsible for
implementing a program dependent on voluntary actions, the State is
obligated to monitor, assess and report on the implementation of any
such program and the associated emission reductions, and to remedy
emission reduction shortfalls in a timely manner should the voluntary
measure not achieve the projected emission reductions. See 1997 VMEP at
6-7. The EPA believes that voluntary measures, in conjunction with the
enforceable commitment to monitor emission reductions achieved and
rectify any shortfall, meet the SIP control measure requirements of the
Act. See 1997 VMEP at 5 and 2004 Emerging and Voluntary Measures Policy
at 8-9.
    Given the innovative nature of these nontraditional measures, the
EPA has recommended ``presumptive'' limits on the amounts of emission
reductions from such measures that may be credited in a SIP.
Specifically, for VMEPs, the 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,
the 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. For voluntary stationary and area source measures, the
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 Policy
at 9 and 2005 Bundled Measures Guidance at 8. These limits are
presumptive in that the EPA may approve emission reductions from
voluntary or other nontraditional measures in excess of the presumptive
limits where the State provides a clear and convincing justification
for such higher amounts, which the EPA would review on a case-by-case
basis. See id.
    The incentive-based emission reductions in the Contingency Measure
SIP are consistent with the EPA's recommendations in the 1997 VMEP.
First, the Contingency Measure SIP and related support documents
contain the State's and District's demonstrations that the claimed
incentive-based emission reductions are quantifiable, surplus,
enforceable and permanent consistent with EPA policy. See Proposal TSD
at 29-42. Second, the SIP submission contains enforceable commitments
by the District to monitor, assess and report on its implementation of
specified portions of the Carl Moyer and Prop 1B programs and the
associated emission reductions, and to remedy emission reduction
shortfalls in a timely manner should these programs fail to achieve the
projected amounts (i.e., 4.15 tpd of NOX reductions and 0.10
tpd of direct PM2.5 reductions) in 2015. See 78 FR 53113,
53121-53122 and Proposal TSD at 42-44. These commitments become
federally enforceable by the EPA under CAA section 113 \30\ and by
citizens under CAA section 304 \31\ upon the EPA's approval of the
commitments into the SIP. Thus, although neither the EPA nor citizens
can enforce these emission reductions directly against sources, as a
result of today's action the EPA and citizens may enforce these
emission reductions against the District,\32\ pursuant to the
District's SIP-approved commitments. See Proposal TSD at 42-44; see
also Response 13 below (discussing EPA and citizen enforcement of SIP
commitments under the CAA). Third, the incentive-based emission
reductions relied upon in the Contingency Measure SIP amount to less
than two percent of the total projected NOX reductions and
less than one percent of the total projected PM2.5
reductions needed to attain the 1997 PM2.5 NAAQS in the San
Joaquin Valley by April 5, 2015 (78 FR 53113, 53121, n. 29). These
amounts of emission reductions fall within the EPA's recommended 3% cap
(per pollutant) on the credit allowed for VMEPs. Finally, the
incentive-based emission reductions do not interfere with requirements
of the CAA and are consistent with the attainment and RFP requirements
in the approved SJV PM2.5 SIP (78 FR 53113, 53123
(discussing the EPA's evaluation of the Contingency Measure SIP in
accordance with CAA section 110(l)).
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    \30\ Section 113 of the CAA authorizes the EPA to issue notices
and compliance orders, assess administrative penalties, and bring
civil actions against any ``person,'' including a State, who ``has
violated or is in violation of any requirement or prohibition of an
applicable implementation plan. . . .'' CAA section 113(a)(1)-(2),
42 U.S.C. 7413(a)(1)-(2); CAA section 302(e), 42 U.S.C. 7602(e)
(defining ``person'' to include a State or political subdivision
thereof). ``Applicable implementation plan'' is defined in CAA
section 302(q), 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).
    \31\ CAA section 304(a)(1) authorizes any person to bring a
civil action against any ``person,'' including a State, ``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 section
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).
    \32\ The District Governing Board's commitments are also
enforceable against the State through CARB's adoption of the
Contingency Measure SIP. See State of California, Air Resources
Board, ``San Joaquin Valley PM2.5 Contingency Measures
Update,'' Resolution 13-30 (June 27, 2013) (``the Board hereby
adopts the PM2.5 Contingency Measures Update as a
revision to the California SIP and directs the Executive Officer to
transmit it to the U.S. EPA'' as a SIP revision). Throughout this
document, references to enforcement against the District include
enforcement against the State, which has responsibility for ensuring
adequate implementation of the SIP consistent with CAA section
110(a)(2)(E).
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    Additionally, as explained in our proposed rule, the EPA evaluated
the incentive-based emission reductions in the Contingency Measure SIP
in accordance with the Agency's guidance on discretionary economic
incentive programs (EIPs),\33\ specifically ``financial mechanism
EIPs'' (78 FR 53113, 53118, August 28, 2013). The EPA's approach to
discretionary EIPs differs in several respects from its approach to
``voluntary'' and ``emerging'' measures. A discretionary EIP uses
market-based strategies to encourage the reduction of emissions from
stationary, area, and/or mobile sources in an efficient manner. See
2001 EIP Guidance at 3. To qualify for approval as a discretionary EIP,
emission reductions or actions leading to reductions must be
enforceable either by the State or by the EPA, and the State must be
directly responsible for ensuring that program elements are
implemented. See id. at 157-158 (states may use the 2001 EIP Guidance
where ``[a]ctions and/or emission reductions by identifiable sources
are enforceable by [the State] and/or by the EPA''). Additionally, the
emission reductions resulting from an EIP must be quantifiable with a
higher degree of certainty than the reductions resulting from an
emerging measure. See 2004 Emerging and Voluntary Measures Policy at 5.
Given these more rigorous approval criteria, the EPA's presumptive
limits on SIP credit for voluntary and emerging measures do not apply
to discretionary EIPs. See 2001 EIP Guidance at 158 (``[states] may use
the EIP guidance to implement programs which will generate emission
reductions beyond the 3 percent limit''); see also 2004 Emerging and
Voluntary Measures Policy at 6 (``EIP measures are not subject to a
percentage limitation that applies to voluntary measures'').
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    \33\ The EPA has promulgated regulations for ``statutory EIPs''
required under CAA sections 182(g), 187(d)(3), or 187(g) and has
issued guidance for ``discretionary EIPs.'' See generally 40 CFR
part 51, subpart U; 59 FR 16690 (April 7, 1994); and 2001 EIP
Guidance. A ``discretionary EIP'' is any EIP submitted to the EPA as
an implementation plan revision for purposes other than to comply
with the statutory requirements of CAA sections 182(g)(3),
182(g)(5), 187(d)(3), or 187(g) (40 CFR 51.491). In today's action,
we address only the requirements that apply to discretionary EIPs as
the Contingency Measure SIP does not contain any statutory EIP.
---------------------------------------------------------------------------

    A ``financial mechanism EIP'' is an EIP that indirectly reduces
emissions by increasing costs for high emitting activities--e.g.,
through subsidies targeted at promoting pollution-reducing activities
or products. See 2001 EIP Guidance at 119-122 (Chapter 8.0). The EPA
has identified several attributes that may make subsidy financial
mechanism EIPs successful, including: (1) The relevant governmental
body possesses legal

authority to provide subsidies; (2) the subsidies address activities
reasonably related to actual emissions or potential emissions; (3)
where projected emission reductions are based on changes in behavior,
methods for verifying that such reductions have taken place to the
degree projected are generally accepted as unbiased and trustworthy;
and (4) if needed, adequate penalty provisions are in place to ensure
that the subsidy is used as expected. See 2001 EIP Guidance at 27
(``Attributes That Make Subsidy Financial Mechanism EIPs Successful'').
    As explained further below, the incentive-based emission reductions
in the Contingency Measure SIP are consistent with the EPA's
recommendations for ``financial mechanism EIPs'' in the 2001 EIP
Guidance. First, CARB and the District are directly responsible for
ensuring that the Prop 1B program and Carl Moyer Program are
implemented in accordance with State law. See 2010 Prop 1B guidelines
at 1-4 (``Overview'') and 2011 Carl Moyer Program Guidelines at Chapter
1 (``Program Overview''). Second, these incentive funds address
activities reasonably related to actual or potential air pollutant
emissions by requiring grant recipients to purchase and operate newer,
cleaner vehicles or equipment in place of older, more-polluting
vehicles or equipment, subject to detailed contract requirements. See
Response 13. Third, the 2008 and 2010 Prop 1B guidelines and the 2011
Carl Moyer Program Guidelines establish a number of methods for
verifying that projected emission reductions have taken place through
compliance with the terms and conditions of each funding contract. See
Response 13 and Response 14. Finally, under the applicable guidelines,
actions by grantees that lead to emission reductions are directly
enforceable by the State and/or the District--e.g., CARB and/or the
District may assess fiscal penalties and take certain corrective
actions where contract violations are identified \34\--and EPA and
citizens may, in turn, enforce the annual reporting and emission
reduction obligations against the District. See Response 13 and
Response 14. Consistent with the EPA's recommendations for ``financial
mechanisms EIPs,'' these provisions in the 2008 and 2010 Prop 1B
guidelines and the 2011 Carl Moyer Program Guidelines are adequate to
ensure that program funds are used as expected--i.e., to reduce
emissions from higher-polluting vehicles and equipment by replacing
them with newer, lower-polluting equipment and vehicles.
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    \34\ These State and District enforcement authorities
distinguish both the Prop 1B program and the Carl Moyer Program from
an entirely ``voluntary'' measure, which depends on actions by
individual sources that cannot be enforced. See, e.g., 2001 EIP
Guidance at 157-58 (describing VMEPs as ``innovative mobile source
air quality programs that are voluntary or that are operated by a
non-governmental entity'' and distinguishing these from EIPs, for
which the State is ``directly responsible for ensuring that program
elements are implemented'').
---------------------------------------------------------------------------

    In sum, although the incentive-based emission reductions in the
Contingency Measure SIP are not directly enforceable against individual
sources by the EPA or citizens, the District may enforce specific
emissions-reducing actions against individual sources, and the EPA and
citizens may, in turn, enforce the emission reduction obligations
against the District, pursuant to the District's SIP-approved
commitments. Thus, whether the incentive-based emission reductions are
characterized as dependent upon ``voluntary'' measures (i.e., a VMEP)
or resulting from a discretionary ``financial mechanism EIP,'' we find
the District's SIP commitments in the Contingency Measure SIP adequate
to ensure that the EPA and citizens may enforce these emission
reductions under the Act. The Contingency Measure SIP and related
support documents also adequately address all other applicable
requirements of the CAA and the EPA's recommendations as set forth in
the 1997 VMEP and 2001 EIP Guidance (78 FR 53113, 53118-53122, August
28, 2013). Given all of these considerations, we find that the
incentive-based emission reductions in the Contingency Measure SIP
satisfy the statutory criteria for SIP approval.
    Comment 13: Citing both the 2001 EIP Guidance and the 2004 Emerging
and Voluntary Measures Policy, Earthjustice highlights seven criteria
for enforceability and asserts that the emission reductions identified
in the Contingency Measure SIP do not meet these criteria.
    Response 13: As an initial matter, we note that both the 2001 EIP
Guidance and the 2004 Emerging and Voluntary Measures Policy set forth
the EPA's recommendations for EIPs or voluntary measures submitted for
SIP purposes and do not establish binding legal requirements. See 2001
EIP Guidance at 12 and 19 (stating that the EPA would determine through
notice-and-comment rulemaking whether a particular EIP submission meets
the applicable CAA requirements) and 2004 Emerging and Voluntary
Measures Policy at 2. Moreover, the 2004 Emerging and Voluntary
Measures Policy does not apply to mobile emission sources such as on-
road and non-road vehicles.\35\ See 2004 Emerging and Voluntary
Measures Policy at 5. We have, however, evaluated the incentive-based
emission reductions in the Contingency Measure SIP for consistency with
the fundamental ``integrity elements'' outlined in the 2001 EIP
Guidance, the 2004 Emerging and Voluntary Measures Policy, and other
guidance on innovative measures as part of our evaluation of the SIP
submission in accordance with CAA requirements.
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    \35\ The Contingency Measure SIP relies on emission reductions
from incentive programs that apply only to mobile emission sources--
specifically, ``on-road vehicle replacement'' projects funded
through the Prop 1B program and ``off-road vehicle replacement''
projects funded through the Carl Moyer Program (78 FR 53113, 53120).
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    Based on this evaluation, we disagree with the commenter's
assertion that the incentive-based emission reductions in the
Contingency Measure SIP fail to adequately address the enforceability
recommendations provided in EPA policy. As the commenter notes, the
2001 EIP Guidance identifies enforceability considerations that are
substantively identical to the recommendations in the 2004 Emerging and
Voluntary Measures Policy. According to the 2001 EIP Guidance, emission
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 the 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.
    The actions required of grantees under the applicable portions of
the Prop 1B and Carl Moyer Program guidelines, as discussed in our
proposed rule, the Proposal TSD, and further below, adequately address
these enforceability recommendations. First, the required actions are
independently verifiable through (1) pre-project and post-project on-
site inspections (with photographic documentation) that the District
and/or CARB must carry out pursuant to the applicable guidelines, and
(2) documents that each grantee is required to maintain and/or submit