Proposed Rule2023-22518
Air Plan Approval; California; South Coast Air Quality Management District
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 12, 2023
Issuing agencies
Environmental Protection Agency
Abstract
The Environmental Protection Agency (EPA) is proposing to approve a revision to the South Coast Air Quality Management District (SCAQMD or "the District") portion of the California State Implementation Plan (SIP) as SIP strengthening. This revision concerns emissions of oxides of nitrogen (NO<INF>X</INF>) and particulate matter (PM) from indirect sources associated with warehouses. The EPA is proposing to approve SCAQMD Rule 2305, "Warehouse Indirect Source Rule--Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program," to regulate these emission sources under the Clean Air Act (CAA or the Act). The EPA is taking comments on this proposal and plans to follow with a final action.
Full Text
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<title>Federal Register, Volume 88 Issue 196 (Thursday, October 12, 2023)</title>
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[Federal Register Volume 88, Number 196 (Thursday, October 12, 2023)]
[Proposed Rules]
[Pages 70616-70625]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-22518]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R09-OAR-2023-0494; FRL-11442-01-R9]
Air Plan Approval; California; South Coast Air Quality Management
District
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve a revision to the South Coast Air Quality Management District
(SCAQMD or ``the District'') portion of the California State
Implementation Plan (SIP) as SIP strengthening. This revision concerns
emissions of oxides of nitrogen (NO<INF>X</INF>) and particulate matter
(PM) from indirect sources associated with warehouses. The EPA is
proposing to approve SCAQMD Rule 2305, ``Warehouse Indirect Source
Rule--Warehouse Actions and Investments to Reduce Emissions (WAIRE)
Program,'' to regulate these emission sources under the Clean Air Act
(CAA or the Act). The EPA is taking comments on this proposal and plans
to follow with a final action.
DATES: Comments must be received on or before November 13, 2023.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
OAR-2023-0494 at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. For comments submitted at
<a href="http://Regulations.gov">Regulations.gov</a>, follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or removed from
<a href="http://Regulations.gov">Regulations.gov</a>. The EPA may publish any comment received to its public
docket. Do not submit electronically any information you consider to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Multimedia submissions (audio,
video, etc.) must be accompanied by a written comment. The written
comment is considered the official comment and should include
discussion of all points you wish to make. The EPA will generally not
[[Page 70617]]
consider comments or comment contents located outside of the primary
submission (i.e., on the web, cloud, or other file sharing system). For
additional submission methods, please contact the person identified in
the FOR FURTHER INFORMATION CONTACT section. For the full EPA public
comment policy, information about CBI or multimedia submissions, and
general guidance on making effective comments, please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a>. If you need assistance in a
language other than English or if you are a person with disabilities
who needs a reasonable accommodation at no cost to you, please contact
the person identified in the FOR FURTHER INFORMATION CONTACT section.
FOR FURTHER INFORMATION CONTACT: La Kenya Evans-Hopper, EPA Region IX,
75 Hawthorne St., San Francisco, CA 94105. By phone: (415) 972-3245 or
by email at <a href="/cdn-cgi/l/email-protection#452033242b362d2a353520376b29242e202b3c24052035246b222a33"><span class="__cf_email__" data-cfemail="1b7e6d7a756873746b6b7e6935777a707e75627a5b7e6b7a357c746d">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us,''
and ``our'' refer to the EPA.
Table of Contents
I. The State's Submittal
A. What rule did the State submit?
B. Are there other versions of this rule?
C. What is the purpose of the rule?
D. What requirements does the rule establish?
II. The EPA's Evaluation and Action
A. How is the EPA evaluating the rule?
B. Does the rule meet the evaluation criteria?
C. Public comment and proposed action
III. Incorporation by Reference
IV. Statutory and Executive Order Reviews
I. The State's Submittal
A. What rule did the State submit?
Table 1 lists the rule addressed by this proposal with the dates
that it was adopted by the local air agency and submitted by the
California Air Resources Board (CARB).
Table 1--Submitted Rule
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Local agency Rule # Rule title Amended Submitted
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SCAQMD................................ 2305 Warehouse Indirect 05/07/2021 08/13/2021
Source Rule--Warehouse
Actions and Investments
to Reduce Emissions
(WAIRE) Program.
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On February 13, 2022, the submittal for SCAQMD Rule 2305 was deemed
complete by operation of law with respect to the completeness criteria
in 40 CFR part 51, appendix V, which must be met before formal EPA
review.
B. Are there other versions of this rule?
SCAQMD Rule 2305 is a new rule. There are no previously approved
versions of the rule in the applicable SIP.
C. What is the purpose of the rule?
Emissions of NO<INF>X</INF> contribute to the production of ground-
level ozone, smog and PM, which harm human health and the environment.
Emissions of PM, including PM equal to or less than 2.5 microns in
diameter (PM<INF>2.5</INF>) and PM equal to or less than 10 microns in
diameter (PM<INF>10</INF>), contribute to effects that are harmful to
human health and the environment, including premature mortality,
aggravation of respiratory and cardiovascular disease, decreased lung
function, visibility impairment, and damage to vegetation and
ecosystems. Section 110(a) of the CAA requires States to submit
regulations that control NO<INF>X</INF> and PM emissions for purposes
of attainment and maintenance of the National Ambient Air Quality
Standards (NAAQS) and to meet other CAA requirements.
The purpose of SCAQMD Rule 2305 is to reduce local and area-wide
emissions of NO<INF>X</INF> and PM, by facilitating emission reductions
associated with warehouses and the mobile sources attracted to
warehouses in order to assist in meeting State and Federal air quality
standards for ozone and PM<INF>2.5</INF>. Mobile sources of emissions
associated with warehouses include the trucks that deliver goods to and
from the facilities, yard trucks, transport refrigeration units (TRUs)
located on trucks and trailers, and passenger vehicle trips associated
with employees and visitors.\1\ Most of these vehicles are diesel
powered, except for passenger vehicles which are typically gasoline
powered. Heavy-duty trucks contribute roughly 90% of the overall mobile
source inventory of NO<INF>X</INF> emissions from warehouse operations,
followed in order of importance from an emissions standpoint by TRUs,
passenger vehicles, and then yard trucks.\2\ Additional emissions
sources can include onsite stationary equipment (e.g., diesel backup
generators or manufacturing equipment).\3\ The rule applies within the
jurisdiction of the SCAQMD, which includes all of Orange County, the
non-desert portions of Los Angeles and San Bernardino counties, and all
of Riverside County (except for the Palo Verde Valley in far eastern
Riverside County).
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\1\ SCAQMD, Final Staff Report, ``Proposed Rule 2305--Warehouse
Indirect Source Rule--Warehouse Actions and Investments to Reduce
Emissions (WAIRE) Program and Proposed Rule 316--Fees for Rule
2305'', May 2021, ``SCAQMD Final Staff Report'', 12.
\2\ SCAQMD Final Staff Report, 13.
\3\ Id.
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Also, through adoption of the 2016 South Coast Air Quality
Management Plan (AQMP), the SCAQMD committed to assess and identify
potential actions to further reduce emissions associated with emission
sources operating in and out of warehouse distribution centers,\4\ and
the SCAQMD adopted Rule 2305 to fulfill that commitment. The purpose of
the 2016 South Coast AQMP is to establish a path toward the goal of
attainment for ozone and PM<INF>2.5</INF> NAAQS in the nonattainment
areas subject to SCAQMD jurisdiction.
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\4\ SCAQMD, Final 2016 Air Quality Management Plan, March 2017,
pages 4-25, 4-28, and 4-29. The 2016 South Coast AQMP designates the
warehouse measure as MOB-03 (``Emission Reductions at Warehouse
Distribution Centers'').
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The EPA has taken several actions on the 2016 South Coast AQMP.
With certain exceptions not relevant here, the EPA approved portions of
the 2016 South Coast AQMP addressing the Serious Area requirements for
the 2006 24-hour PM<INF>2.5</INF> NAAQS in the South Coast Air Basin
(``South Coast''); the portions of the 2016 South Coast AQMP updating
the control strategies and attainment demonstrations for the 1-hour and
1997 8-hour ozone NAAQS, and addressing the 2008 8-hour ozone NAAQS in
the South Coast; the portions of the 2016 South Coast AQMP addressing
the Moderate Area requirements for the 2012 annual PM<INF>2.5</INF>
NAAQS in the South Coast; and the portions of the 2016 South Coast AQMP
addressing the Severe Area requirements for the 2008 8-hour ozone NAAQS
in Coachella Valley.\5\ In so doing, the EPA approved the SCAQMD's
Stationary and Mobile
[[Page 70618]]
Source Control Measures, including the facility-based mobile source
measures such as the Emission Reductions at Warehouse Distributions
Center measure. The 2016 South Coast AQMP includes enforceable
commitments by the SCAQMD to achieve certain aggregate emissions
reductions by certain years through adoption and implementation of the
SCAQMD's Stationary and Mobile Source Control Measures.
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\5\ 84 FR 3305 (February 12, 2019), corrected at 84 FR 19680
(May 3, 2019) (2006 PM<INF>2.5</INF> NAAQS); 84 FR 52005 (October 1,
2019) (1-hour, 1997 and 2008 Ozone NAAQS in South Coast); 85 FR
71269 (November 9, 2020) (2012 PM<INF>2.5</INF> NAAQS); and 85 FR
57714 (September 16, 2020) (2008 Ozone NAAQS in Coachella Valley).
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D. What requirements does the rule establish?
Rule 2305 applies to owners and operators of warehouses located in
the SCAQMD with greater than 100,000 square feet of indoor floor space
in a single building and who operate at least 50,000 square feet of the
warehouse for warehousing activities. Warehouse operators are required
either to earn points, as discussed below, from emission reducing
activities, or to pay a mitigation fee. Warehouse facility owners or
warehouse land owners may opt in to earn Warehouse Actions and
Investments to Reduce Emissions Points (``WAIRE Points'') and transfer
these points to a warehouse operator at the same site. Both warehouse
facility owners and operators must comply with certain recordkeeping
and reporting requirements under the rule. Warehouse facility owners
were required to submit initial Warehouse Operations Notifications to
the SCAQMD by September 1, 2021, and then again within certain
prescribed periods thereafter if certain conditions occur. Warehouse
operators are also required to submit their Initial Site Information
Reports (ISIR) and Annual WAIRE Reports to the SCAQMD. All of the
notifications and reports are to be submitted through the WAIRE Program
Online Portal (WAIRE POP). In addition, records which document the
accuracy and validity of all information submitted to the SCAQMD as
required by the rule must be kept by the warehouse owner, or operator
as applicable, for a minimum of seven years from the reporting
deadline. Records must be made available upon request to the SCAQMD
during normal business hours.
The principal substantive requirement in the rule is the
requirement that each warehouse operator meet an annual compliance
obligation by earning WAIRE Points. The annual compliance obligation,
referred to as the WAIRE Points Compliance Obligation (WPCO), for each
warehouse operator is calculated based on Weighted Annual Truck Trips
(WATTs) multiplied by a stringency factor (0.0025 points per WATT) and
an annual variable (which accounts for the phased implementation of the
rule).\6\ WATT reflects all trips in a given year by trucks with gross
vehicle weight ratings (GVWR) greater than 8,500 pounds but multiplies
trips by trucks with GVWRs greater than 33,000 pounds (``Class 8''
trucks) by 2.5.\7\ The WATTs parameter serves as a proxy for overall
warehouse activity and emissions.\8\ A warehouse owner may earn WAIRE
Points and may transfer them to any warehouse operator at the site
where the WAIRE Points were earned within a three-year period.
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\6\ SCAQMD Rule 2305(d)(1)(A) and Tables 1 and 2.
\7\ SCAQMD Rule 2305(d)(1)(B).
\8\ SCAQMD Final Staff Report, 27, 35. As explained in footnote
44 of the SCAQMD Final Staff Report, the SCAQMD adopted WATTs as the
parameter for determining the WPCO for warehouses rather than
emissions or vehicle miles travelled (VMT). SCAQMD decided against a
parameter like emissions or VMT to reduce the administrative burden
on warehouse operators and the SCAQMD compliance staff. Also, the
SCAQMD notes that motor carriers had expressed concern that they do
not want to reveal where or how far they travel to warehouse
operators or SCAQMD in order to keep their clients private.
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The requirement to earn WAIRE points to meet a WPCO does not apply
to warehouse operators who use less than 50,000 square feet for
warehousing activities of a warehouse that is greater than or equal to
100,000 square feet.\9\ This exemption does not apply if the same
parent company owns or controls multiple operators in the same building
who collectively use more than 50,000 square feet of space for
warehousing activity.\10\ A warehouse operator with a WPCO that is less
than 10 in any compliance period also is exempt from earning WAIRE
Points for that compliance period. In both cases, certain recordkeeping
and reporting requirements (as stated above) under the rule continue to
apply.
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\9\ In Rule 2305(c)(33), the term ``warehousing activities'' is
defined as meaning operations at a warehouse related to the storage
and distribution of goods, including but not limited to the storage,
labelling, sorting, consolidation and deconsolidation of products
into different size packages. Supporting office administration,
maintenance, manufacturing areas, or retail sales areas open to the
general public, within the same warehouse building, that are
physically separate from the warehouse area, are not considered
warehousing activities for the purpose of the rule.
\10\ The exemptions are set forth in SCAQMD Rule 2305(g).
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In situations where investments or actions that were completed by a
warehouse owner or operator perform significantly lower than
anticipated due to unforeseen circumstances beyond the control of the
warehouse owners or operators resulting in lower than anticipated
earned WAIRE Points, the warehouse owner or operator may apply to the
Executive Officer \11\ for a partial or complete exemption.\12\ This
application must specify what portion of the WPCO that the
malfunctioning equipment would have satisfied, and all relevant details
on why the anticipated action was unable to earn the expected WAIRE
Points. The Executive Officer will use the following criteria to grant
a partial or complete exemption: (a) there is a manufacturing defect or
an installation defect when using manufacturer-approved methods, and
(b) the warehouse operator can demonstrate that despite good faith
efforts for repairs on the vehicle or equipment, through either the
warranty or other manufacturer and/or installer-approved methods, the
repairs were not completed in a timely manner.
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\11\ Executive Officer refers to the Executive Officer or
designee of the SCAQMD. The Executive Officer is the Air Pollution
Control Officer for the SCAQMD.
\12\ For example, if a warehouse operator purchases a zero-
emission truck and anticipates using this same truck to earn WAIRE
Points, but a malfunction in the powertrain due to an equipment
manufacturer defect (e.g., malfunctioning electric motor, fuel cell
stack, etc.) results in an inability to use the equipment, then the
operator may apply for relief for the WAIRE Points that would have
be earned. The exemption would be granted if the vehicle or
equipment is shown to be due to a manufacturer defect or an
installation defect. SCAQMD Final Staff Report, 37.
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Warehouse owners (who opt in) and operators are required to earn
WAIRE Points either: through the completion of specified actions from
the list of actions in the WAIRE Menu,\13\ completion of actions in an
approved custom plan, through payment of a mitigation fee, or through a
combination of these three options.\14\ The WAIRE Points provision
within Rule 2305 includes a WAIRE Menu with a list of specific actions
that a warehouse owner or operator may take to earn points to meet the
annual WPCO.\15\ The menu includes nine different types of actions or
investments that qualify for points: (i) acquire Zero Emission (ZE)/
Near-Zero Emission (NZE) Trucks, (ii) number of ZE/NZE Truck
Visits,\16\ (iii) acquire ZE Yard Truck, (iv) use ZE Yard Truck, (v)
install onsite ZE charging or fueling infrastructure, (vi) use onsite
ZE charging or fueling infrastructure, (vii) install and energize
onsite solar panels, (viii) use onsite solar panels, and (ix)
[[Page 70619]]
install MERV 16 or greater filters or filter systems in residences,
schools, daycares, hospitals, or community centers.
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\13\ SCAQMD Rule 2305, Table 3.
\14\ SCAQMD Rule 2305(d)(1) and (2).
\15\ SCAQMD Rule 2305, Table 3.
\16\ NZE and ZE truck visits can come from the warehouse
operator's own fleet or by any other third-party fleet (whether
contracted by the warehouse operator or not). See SCAQMD Final Staff
Report, at 99. The term ``truck visits'' refers to the round-trip a
truck takes to and from a warehouse. For example, 520 ``truck
visits'' is the same as 1,040 one-way ``truck trips'' as explained
in the SCAQMD Final Staff Report, 30.
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Rule 2305 specifies the number of points for the different types of
actions or investments, ranging from 1 point (per 165,000 kilowatt-
hours) from the use of onsite solar panels to 1,680 points for
installation of a 700-kilogram-per-day hydrogen (H<INF>2</INF>) fueling
station. SCAQMD assigned WAIRE Points to the different types of actions
or investments based on three key parameters: cost, regional emissions
reductions, and local emissions reduction.\17\ For example, under Rule
2305, acquiring a new class 8 ZE/NZE truck in the warehouse operator
fleet would be worth 126 points. Similarly, 365 visits by class 8 ZE/
NZE trucks to a warehouse would be worth 51 points during a given
annual compliance period.
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\17\ SCAQMD Final Staff Report, 111.
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Based on the most current information contained in the first Annual
Report for the WAIRE Program, the average WPCO per warehouse operator
was rounded to 80 points for the 2022 compliance period.\18\ The same
number of WATTs in 2023 and 2024 (and beyond) for the same warehouse
operators would result in an average WPCO of 160 points and 240 points,
respectively, taking into account the annual variable under Phase I
(which applies to warehouses equal to or greater than 250,000 square
feet) for those years.\19\
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\18\ SCAQMD, Annual Report for the Warehouse Actions and
Investments to Reduce Emissions (WAIRE) Program, January 2023, 16.
The report represents 47% of warehouses in the SCAQMD. The average
WPCO estimate of 80 points reflects SCAQMD's anticipated aggregate
WPCO of approximately 30,000 divided by 380, the number of Phase I
warehouses for which Initial Site Information Reports (ISIR) were
submitted in time for the report. The 30,000 aggregate point value
reflects a 0.33 annual variable for the first compliance period for
Phase I warehouses.
\19\ Rule 2305, table 2 (``Annual Variable'').
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Under the rule, the Custom WAIRE Plan is a second option that
allows warehouse owners or operators to earn WAIRE Points through a
customized plan specific for a warehouse facility.\20\ Custom WAIRE
Plan applications must demonstrate how the proposed action will earn
WAIRE Points based on the incremental cost of the action, the
NO<INF>X</INF> emission reductions from the action, and the diesel PM
(DPM) emission reductions from the action, relative to baseline
conditions. Custom WAIRE Plans may not include actions that are
included in the WAIRE Menu on Table 3 of Rule 2305. The methodology to
determine the total WAIRE Points for an action in a Custom WAIRE Plan
application must be consistent with methods in the WAIRE Program
Implementation Guidelines.\21\ Any WAIRE Points earned from a Custom
WAIRE Plan for emission reductions must be quantifiable, verifiable,
and real as determined by the Executive Officer and consistent with the
WAIRE Implementation Guidelines.
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\20\ SCAQMD Rule 2305(d)(4).
\21\ SCAQMD Final Staff Report, 86. A copy of the current
version of the SCAQMD's WAIRE Implementation Guidelines, version
1.1, is included in the docket for this rulemaking.
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Warehouse owners or operators have a third option to meet the
annual compliance obligation that involves payment of a mitigation fee
in the amount of $1,000 for each WAIRE Point.\22\ The mitigation fee is
an option for warehouse operators to fulfill all or a portion of their
WPCO. In adopting Rule 2305, the SCAQMD Governing Board directed the
Executive Officer to develop the WAIRE Mitigation Program with funds
generated from mitigation fee payments.\23\ Any solicitations for
requests for funding, or funding allocations that would be spent from
the WAIRE Mitigation Program, must be approved by the SCAQMD Governing
Board in a public meeting.\24\ In adopting the Rule 2305, the Board
also specified that proposed solicitations and project awards must be
presented to the Governing Board no less frequently than on an annual
basis. The Board directed the Executive Officer to track mitigation
fees paid by warehouse operators according to the Source Receptor Area
(SRA) \25\ and county in which they are located to achieve or
facilitate emission reductions in the same SRAs and counties in which
the mitigation fees were paid. As adopted by the Board, if sufficient
projects are not identified in each individual SRA relative to the
available funding, then funds may be directed either to an adjacent SRA
in the same county or held for a subsequent funding. The SCAQMD states
that the mitigation fees collected from Rule 2305 will go towards the
purchase of NZE and ZE trucks, installation of ZE charging and/or
hydrogen fueling infrastructure.\26\ Funds may also be combined with
other incentive programs, such as Carl Moyer and Proposition 1B, as
allowable on a case-by-case basis.
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\22\ SCAQMD Rule 2305(d)(5).
\23\ SCAQMD, Resolution 21-9, signed June 4, 2021, 6.
\24\ SCAQMD Final Staff Report, 40.
\25\ Source Receptor Areas (SRAs) are shown in a SCAQMD-prepared
map titled ``General Forecast Areas & Air Monitoring Areas''.
\26\ SCAQMD Final Staff Report, 40.
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As noted above, warehouse operators have three basic options, or
any combination of these options, through which to earn or obtain
points sufficient to meet their WPCO. Warehouse owners may also earn
WAIRE Points using the same methods or options available to warehouse
operators and may transfer these WAIRE Points to any warehouse operator
at the site where the WAIRE Points were earned within a three-year
period.
In the SCAQMD's first Annual Report for the WAIRE Program, the
SCAQMD compiled information from 380 ISIR's that had been submitted by
warehouse operators through September 30, 2022. The first Annual Report
suggests that warehouse operators expect to meet their WPCOs, at least
in the early years of the program, primarily through ZE hostler usage,
(i.e., yard tractors that move trailers and containers around warehouse
facilities; approximately 40% of the anticipated WAIRE points based on
the ISIRs received), NZE Class 8 Truck Visits (approximately 27%), and
ZE hostler acquisition (approximately 8%).\27\ The submitted ISIRs also
suggest that, in addition to taking actions from the WAIRE Menu,
warehouse operators anticipate earning about 5,500 points through
mitigation fees, representing about 3% of total points earned, and
about $5.5 million.\28\
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\27\ SCAQMD, Annual Report for the Warehouse Actions and
Investments to Reduce Emissions (WAIRE) Program, January 2023, 15.
\28\ Id.
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The SCAQMD developed emissions reduction estimates for various
scenarios representing different compliance approaches to Rule
2305.\29\ The estimates of reductions in emissions of NO<INF>X</INF>
and DPM vary widely among the scenarios and from year to year but
represent positive emission reductions beyond those that are expected
by the SCAQMD to occur due to CARB regulations (such as CARB's Advanced
Clean Trucks, Low NO<INF>X</INF> Omnibus, and Heavy Duty Inspection and
Maintenance (I/M) regulations).\30\
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\29\ SCAQMD Final Staff Report, Tables 15 and 16.
\30\ SCAQMD Final Staff Report, 62.
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Lastly, the rule includes recordkeeping and reporting requirements.
The three types of reports that are due under Rule 2305 include: (1)
the Warehouse Operations Notification (WON), which is the
responsibility of the warehouse owner, (2) the ISIR, and (3) the Annual
WAIRE Report, both of which are the responsibility of warehouse
operators. The rule also specifies a sunset date after the EPA finds
that all air basins within the SCAQMD have attained the
[[Page 70620]]
2015 ozone NAAQS and that CARB finds that all air basins within the
SCAQMD have attained the California ozone ambient air quality standard
(which is numerically the same as the 2015 ozone NAAQS).\31\
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\31\ SCAQMD Rule 2305(e) and (h).
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II. The EPA's Evaluation and Action
A. How is the EPA evaluating the rule?
The EPA has evaluated SCAQMD Rule 2305 against the applicable
procedural and substantive requirements of the CAA for SIPs and SIP
revisions and has concluded that, with certain exceptions discussed
below, Rule 2305 meets the applicable requirements and would strengthen
the SIP. Generally, SIPs must include enforceable emission limitations
and other control measures, means, or techniques, as well as schedules
and timetables for compliance, as may be necessary to meet the
requirements of the Act (see CAA section 110(a)(2)(A)); must provide
necessary assurances that the State will have adequate personnel,
funding, and authority under State law to carry out such SIP (and is
not prohibited by any provision of Federal or State law from carrying
out such SIP) (see CAA section 110(a)(2)(E)); must be adopted by a
State after reasonable notice and public hearing (see CAA section
110(a)(1); section 110(a)(2); section 110(l)); and must not interfere
with any applicable requirement concerning attainment and reasonable
further progress, or any other applicable requirement of the Act (see
CAA section 110(l)).\32\
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\32\ CAA section 193, which prohibits any pre-1990 SIP control
requirement relating to nonattainment pollutants in nonattainment
areas from being modified unless the SIP is revised to insure
equivalent or greater emission reductions of such air pollutants,
does not apply to the SCAQMD Rule 2305 because, as a new rule, it
does not represent a pre-1990 SIP control requirement.
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The SCAQMD jurisdiction covers all the South Coast Air Basin, and
portions of the Salton Sea and Mojave Desert Air Basins, and includes
air quality planning areas that are designated as nonattainment for the
1-hour ozone NAAQS and the 1997, 2008 and 2015 8-hour ozone NAAQS
(South Coast and Coachella Valley areas); the 1997 24-hour and annual
PM<INF>2.5</INF> NAAQS, the 2006 24-hour PM<INF>2.5</INF> NAAQS and the
2012 annual PM<INF>2.5</INF> NAAQS (South Coast area), and the 1987 24-
hour PM<INF>10</INF> NAAQS (Coachella Valley area).\33\ The South Coast
Air Basin is currently classified as an Extreme nonattainment area for
the 1-hour ozone NAAQS and the 1997, 2008, and 2015 8-hour ozone NAAQS,
as a Moderate nonattainment area for the 1997 annual and 24-hour
PM<INF>2.5</INF> NAAQS, and as a Serious nonattainment area for the
2006 24-hour and 2012 annual PM<INF>2.5</INF> NAAQS. The Coachella
Valley portion of the Salton Sea Air Basin is classified as a Severe
nonattainment area for the 1-hour ozone NAAQS, as an Extreme
nonattainment area for the 1997 and 2008 8-hour ozone NAAQS,\34\ as a
Severe nonattainment area for the 2015 8-hour ozone NAAQS; and as a
Serious nonattainment area for the 1987 24-hour PM<INF>10</INF> NAAQS.
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\33\ 40 CFR 81.305. In addition, a portion of Los Angeles County
is designated nonattainment for the lead NAAQS, but SCAQMD Rule 2305
does not affect lead emissions, and thus, the lead NAAQS is not
germane to our proposed action and is not discussed further.
\34\ The EPA recently finalized a reclassification requested by
CARB for Coachella Valley from Severe to Extreme for the 2008 ozone
NAAQS. 88 FR 14291 (March 8, 2023).
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CAA section 172(c)(1) requires States with ozone nonattainment
areas to implement all reasonably available control measures (RACM),
including such reductions in emissions from existing sources in the
area as may be obtained through the adoption, at a minimum, of
reasonably available control technology (RACT), as expeditiously as
practicable. CAA sections 182(b)(2) and 182(f) specify that
implementation of RACT under CAA section 172(c)(1) is required for all
major stationary sources of NO<INF>X</INF> in the area. In addition,
the CAA requires States with Serious PM<INF>10</INF> and
PM<INF>2.5</INF> NAAQS nonattainment areas to implement Best Available
Control Measures (BACM), including Best Available Control Technology
(BACT) (see CAA section 189(b)(1)(B)). As noted above, SCAQMD includes
both Extreme and Severe ozone nonattainment areas and Moderate and
Serious PM nonattainment areas.
With respect to rule stringency, the EPA is prohibited by the CAA
from requiring States and local air agencies to submit indirect source
review (ISR) programs as a condition to approving a SIP.\35\ Because
the EPA cannot require a State or local air agency to adopt and
implement an ISR program, the EPA reasons that it likewise cannot
require that such a program meet any particular level of stringency
otherwise required to meet SIP requirements, such as attainment plan
requirements for the ozone or PM NAAQS. Therefore, the EPA is not
evaluating SCAQMD Rule 2305 for compliance with the RACM/RACT or BACM/
BACT requirements.
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\35\ CAA section 110(a)(5)(A)(i); National Association of Home
Builders v. San Joaquin Valley Unified Air Pollution Control
District, 627 F.3d 730, 737-38 (9th Cir. 2010) (``NAHB v.
SJVUAPCD'') (``Congress added section 110(a)(5) to the Act in 1977
after the EPA had tried to force the states to regulate indirect
sources of pollution. When the states had not regulated indirect
sources to the EPA's satisfaction, the EPA began to promulgate its
own rules for indirect sources. The EPA's move `drew heavy criticism
because [it] represented a significant federal intrusion into the
traditionally local domain of land use control.' In response to the
EPA's actions, a 1977 amendment to the Act `severely limit[ed] the
EPA's authority' over indirect sources, but `left largely to the
states' the matter of `whether and how to regulate' indirect
sources.'' (Internal citations omitted)).
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B. Does the rule meet the evaluation criteria?
1. Did the State provide for reasonable public notice and hearing prior
to adoption?
Under CAA section 110(l), SIP revisions must be adopted by the
State, and the State must provide for reasonable public notice and
hearing prior to adoption. Pursuant to 40 CFR 51.102, States must
provide at least 30-days' notice of any public hearing to be held on a
proposed SIP revision. States must provide the opportunity to submit
written comments and allow the public the opportunity to request a
public hearing within that period. Rule 2305 was adopted by SCAQMD on
May 7, 2021, through Resolution 21-9, following a public hearing held
on the same day. Prior to adoption, the SCAQMD published notice of the
May 7, 2021 public hearing on March 31, 2021, and provided more than 30
days for submission of written comments. The CARB subsequently adopted
the rule as a revision to the SIP on August 13, 2021, through Executive
Order S-21-012. The CARB then submitted SCAQMD Rule 2305 to the EPA on
August 13, 2021, as an attachment to a letter with the same date.
Various other materials comprising the SIP submission package were
submitted as well, including copies of public comments received during
the comment period, District responses to comments, and environmental
and socioeconomic impact assessments.
Based on the materials provided in the August 13, 2021 SIP
submission summarized above, we propose to find that the District and
the CARB have met the procedural requirements for adoption and
submission of SIPs and SIP revisions under CAA section 110(l) and 40
CFR 51.102.
2. Does the State have adequate legal authority to implement the rule?
The SCAQMD has been granted both general and specific authority
under the California Health & Safety Code (CH&SC) to adopt and
implement Rule 2305.\36\ Specific authority is found in CH&SC section
40440 (``Rules and
[[Page 70621]]
regulations''), which authorizes the SCAQMD to provide for indirect
source controls in those areas of the South Coast District in which
there are high-level, localized concentrations of pollutants.
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\36\ General authority is found in CH&SC sections 40000 and
40001.
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Moreover, the EPA knows of no obstacle under State or Federal law
in the SCAQMD's ability to implement Rule 2305. With respect to State
law, the EPA notes that, during the rule development phase, certain
commenters challenged the mitigation fee option in Rule 2305 on the
grounds that it imposes an unlawful tax under State law. However,
CARB's August 13, 2021 SIP submission package includes a legal analysis
from the State Attorney General's Office \37\ that concludes that the
mitigation fee is not an unlawful tax under the California Constitution
because, as a compliance option, the fee is not compulsory.\38\ In
explaining how the mitigation fee option is not compulsory, the State
Attorney General's Office letter notes that, under Rule 2305,
``warehouse operators have numerous options to reduce their emissions
or otherwise earn compliance points. If they elect not to take actions
to reduce their emissions or environmental impacts, warehouse operators
may comply by paying the in-lieu fee. A `hallmark' of a tax is that `it
is compulsory.' The in-lieu fee is not compulsory, so it is not a
tax.'' \39\ (Internal citations omitted.) Also, even if viewed as
compulsory, the Attorney General's Office explains how the mitigation
fee option falls under two exceptions to the meaning of ``tax'' under
the relevant provisions of State law.\40\ The EPA proposes to find that
the State Attorney General's Office letter provides the necessary
assurances that State law with respect to the mitigation fee option is
not an obstacle to the SCAQMD's ability to implement Rule 2305.
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\37\ Robert Swanson, Deputy Attorney General, California
Department of Justice, letter to Ellen Peter, Chief Counsel, CARB,
dated May 6, 2021, included as an enclosure to Ellen M. Peter, Chief
Counsel, CARB, letter to Wayne Nastri, Executive Officer, SCAQMD,
dated May 6, 2021.
\38\ Id. at 12-14.
\39\ Id. at 12.
\40\ Id. at 12-14.
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With respect to Federal law, the EPA is aware of an ongoing legal
challenge by the California Trucking Association (CTA), among others,
to the SCAQMD's legal authority to implement Rule 2305 in litigation to
which the EPA is not a party.\41\ In the CTA case, plaintiff CTA and
plaintiff-intervenor Airlines for America assert that implementation
and enforcement of Rule 2305 by the SCAQMD is preempted under the CAA,
the Airline Deregulation Act (ADA) and the Federal Aviation
Administration Authorization Act (FAAAA or F4A). Based on the
information currently before the EPA at this time, the EPA proposes to
find that Rule 2305 is not preempted under the CAA, ADA or the F4A. If
the District Court were to issue a decision against the SCAQMD in the
pending litigation before the EPA takes final action on Rule 2305
pursuant to this proposal, we will take that decision into account and
evaluate appropriate action at that time.\42\
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\41\ California Trucking Association v. South Coast Air Quality
Management District, C.D. Cal., Docket #21-cv-06341 (CTA).
\42\ For instance, the EPA may re-propose action or supplement
the proposed action depending upon the implications of the decision
on the District's authority to implement and enforce the rule, among
other considerations. If an adverse decision were to be issued after
the EPA approves Rule 2305, then the EPA would consider withdrawal
of the approval, again, depending upon the implications of the
decision on the District's authority to implement and enforce the
rule, among other considerations.
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With respect to the CAA, the EPA's evaluation of Rule 2305
indicates that the SCAQMD is authorized to adopt this program for
inclusion into the California SIP. CAA section 110(a)(5) authorizes
States to include any ISR program in their SIPs. Under CAA section
110(a)(5), the EPA may not require a State to adopt an ISR program as
part of its SIP, but the EPA may approve an ISR program that a State
chooses to adopt and submit for inclusion into its approved SIP. In
this context, ``indirect source'' means a facility, building,
structure, installation, real property, road, or highway that attracts,
or may attract, mobile sources of pollution.\43\ ``Indirect source
review program'' means the facility-by-facility review of indirect
sources of air pollution, including such measures as are necessary to
assure, or assist in assuring, that a new or modified indirect source
will not attract mobile sources of air pollution, the emissions from
which would cause or contribute to air pollution concentrations--
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\43\ CAA section 110(a)(5)(C). The term ``indirect source'' as
defined in the CAA includes parking lots, and parking garages, and
other facilities subject to any measure for management of parking
supply, including regulation of existing off-street parking but such
term does not include new or existing on-street parking. ``Indirect
source'' does not include direct emissions sources or facilities at,
within, or associated with, any indirect source.
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<bullet> Exceeding any national primary ambient air quality
standard for a mobile source-related air pollutant after the primary
standard attainment date; or
<bullet> Preventing maintenance of any such standard after such
date.\44\
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\44\ CAA section 110(a)(5)(D). Indirect source review programs
are not considered ``transportation control measures.'' CAA section
110(a)(5)(E).
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Rule 2305 involves the facility-by-facility review of existing and
new warehouses, which are facilities that attract mobile sources of air
pollution. Based on this review, the rule provides a list of specific
measures that, when implemented by the warehouse operator, will reduce
or offset the related mobile source emissions that contribute to the
exceedances of the NAAQS for PM<INF>2.5</INF> and ozone in areas under
SCAQMD jurisdiction. The rule also provides options to allow the
operator of the warehouse to develop a custom WAIRE plan or pay a
mitigation fee or a combination of these options. More specifically,
under Rule 2305, warehouse operators are required, on an annual basis,
to earn or obtain WAIRE points sufficient to meet their WPCO, a value
that reflects the WATTs associated with each warehouse. As noted
previously, the WATTs parameter represents a calculated value that
reflects the number of truck trips to and from a warehouse in a given
year and serves as a proxy for overall warehouse activity and
emissions.
To earn or obtain WAIRE points, warehouse owners and operators have
the option of: (i) taking various types of actions or making variety
types of investments specified in the WAIRE menu; (ii) following an
approved Custom WAIRE Plan; (iii) paying a mitigation fee; (iv) or any
combination of such options (see section I.D of this document). The
SCAQMD anticipates that the same types of actions and investments that
are specified in Rule 2305 will also occur under the WAIRE Mitigation
Program funded by the mitigation fee option under the rule (see section
I.D of this document). As such, Rule 2305 is designed to reduce,
offset, or mitigate the emissions generated by mobile sources attracted
to warehouses in the SCAQMD. This includes the associated contribution
to area-wide exceedances of the NAAQS and to the local pollutant burden
on communities in the vicinities of warehouses.
Rule 2305 is similar to the ISR review program previously adopted
by the San Joaquin Valley Unified Air Pollution Control District
(SJVUAPCD) to reduce or offset emissions of NO<INF>X</INF> and PM in
the San Joaquin Valley from the construction-phase and operational-
phase of development projects through design features, on-site
measures, and through off-site measures paid through implementation of
an in-lieu mitigation fee.\45\ The SJVUAPCD ISR program was
[[Page 70622]]
upheld by the Ninth Circuit in a challenge that claimed that the
program was characterized as an ISR program but was in reality a rule
regulating emissions from nonroad equipment in violation of CAA section
209(e).\46\
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\45\ SJVUAPCD Rule 9510 (``Indirect Source Review (ISR)''),
approved by the EPA at 76 FR 26609 (May 9, 2011), and approved as
amended at 86 FR 33542 (June 25, 2021).
\46\ NAHB v. SJVUAPCD, 627 F.3d 730, 734 (9th Cir. 2010); at
739: ``The Act, by allowing states to regulate indirect sources of
pollution, necessarily contemplates imputing mobile sources of
pollution to an indirect source as a whole. If an indirect source
review program could not attribute the emissions from mobile
sources, while they are stationed at an indirect source, to the
indirect source as a whole, states could not adopt any indirect
source review program. What allows Rule 9510 to qualify as an
indirect source review program under section 110(a)(5) is precisely
what allows the Rule to avoid preemption under section 209(e)(2):
its site-based regulation of emissions. In this way, the two
sections do not conflict, but rather fit together neatly like two
interlocking puzzle pieces.''
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Commenters, objecting to Rule 2305 during its adoption, contended
that an ISR program, for the purposes of CAA section 110(a)(5), is
limited to new or modified indirect sources and that, therefore, Rule
2305 is not authorized under the CAA, at least as it applies to
existing warehouses. This contention is based on the clause in the
definition of the term ``indirect source review program'' describing
such programs as ``including such measures as are necessary to assure,
or assist in assuring, that a new or modified indirect source will not
attract mobile sources of air pollution.'' \47\
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\47\ CAA section 110(a)(5)(D).
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In its own rulemaking process, the SCAQMD responded to this issue
by noting that the SCAQMD's authority derives from State law, not
Federal law. State law does not limit the authority of the SCAQMD to
regulating only new or modified (as opposed to existing) indirect
sources.\48\ The SCAQMD also noted that CAA section 110(a)(5) does not
prescribe limits on State authority but rather prescribes certain
limits on the EPA. Finally, the SCAQMD stated that it has authority
under CAA section 116 for this type of provision.
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\48\ Final SCAQMD Staff Report, Master Responses, 157-158.
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In reviewing Rule 2035, the EPA has specifically evaluated whether
it is consistent with the requirements of CAA section 110(a)(5). When
taking action on any SIP submission, the EPA must evaluate whether the
SIP provisions as issue meet applicable statutory and regulatory
requirements. The EPA acknowledges that there are ambiguities in the
language of section 110(a)(5). For example, section 110(a)(5)(D)
superficially appears to define the term ``indirect source review
program'' in terms of ``new or modified'' indirect sources. That
provision in relevant part defines an indirect source program as one
``including'' such measures at new or modified sources. The EPA does
not, however, interpret this definition to restrict States from having
such programs that extend to existing sources if they elect to do so.
Instead, the use of ``including'' preceding the reference to ``new or
modified indirect source'' indicates that regulation of new or modified
indirect sources is illustrative of the scope of this provision, not
limiting.
Other provisions support this interpretation. Section 110(a)(5)(C)
defines the term ``indirect source'' itself to include many things such
as a building ``which attracts, or may attract, mobile sources of
pollution.'' This definition could encompass both existing and future
structures. By contrast, with respect to parking, section 110(a)(5)(C)
expressly states that an indirect source program can include ``existing
off-street parking'' but not ``new or existing on-street parking.'' If
such an ``indirect source program'' could apply to existing off-street
parking, then it is unclear why this conceptually would not extend to
other existing sources such as existing buildings, notwithstanding the
reference to new or modified sources in the definition of ``indirect
source program.'' At most, there is a small degree of ambiguity with
respect to whether Congress actually intended the definition of
``indirect source program'' to function as a restriction on the EPA's
authority to approve a State indirect source program that extends to
existing buildings into the State's SIP. The EPA does not consider such
a restrictive reading of the provision to be reasonable or logical,
absent a clearer prohibition.
As further support for this interpretation, the EPA notes that CAA
section 116 explicitly provides that States retain authority to
regulate more stringently in SIP provisions than otherwise required by
Federal law, except where preempted from doing so. Even if Congress
anticipated that States might typically elect to adopt such programs
that would include new or modified sources, Congress did not explicitly
appear to preclude States from adopting indirect source programs that
extend to existing sources as well, except with respect to ``new or
existing on street parking.'' In other words, by defining the term
``indirect source program'' in CAA section 110(a)(5)(D), Congress was
not diminishing existing State authority under CAA section 116 to adopt
such programs that apply to existing sources, such as existing
warehouses, if they elect to do so. Thus, the EPA concludes that the
State is not precluded from regulating both existing and new warehouses
in Rule 2305, and thus this poses no issue with respect to the EPA
proposing approval of the rule into the SIP.
During the rule development process, the SCAQMD received comments
objecting to Rule 2305 on the grounds that the rule, while structured
as an ISR program, represents a de facto purchase mandate for ZE or NZE
trucks and is thus preempted under CAA section 209(a). These adverse
comments cited to the Supreme Court decision in Engine Mfrs. Ass'n v.
S. Coast Air Quality Mgmt. Dist, 541 U.S. 246 (2004) (EMA). In EMA, the
Supreme Court held that a ``standard'' under CAA section 209(a), which
the Court described as ``a requirement that a vehicle or engine not
emit more than a certain amount of pollutant, be equipped with a
certain type of pollution-control device, or have some other design
feature related to the control of emissions,'' is preempted under
Section 209(a) whether applied to manufacturers through a sales mandate
or to buyers through a purchase mandate.\49\
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\49\ Engine Manufacturers Ass'n v. South Coast Air Quality
Management District, 541 U.S. 246, 253-255 (2004).
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As noted above, the question of whether an ISR program is preempted
under Section 209 of the CAA was squarely addressed by the Ninth
Circuit in NAHB v. SJVUAPCD. The EPA agrees with the Ninth Circuit's
interpretation of the statute on this point and proposes to find that
Rule 2305 is similar in relevant respects to the ISR program the Court
determined in NAHB was not preempted. Most critically, Rule 2305
regulates at the level of the indirect source, and not at the level of
mobile sources the indirect source may attract. In Rule 2305 ``[t]the
`baseline' amount of emissions, and the required reduction in emissions
from that baseline, are both calculated in terms of the [indirect
source site] as a whole.'' \50\ This ``site-based'' approach to
regulating emissions ``is precisely what allows the Rule to avoid
preemption under section 209(e)(2).'' \51\ That Rule 2305 is properly
characterized as an ISR program under Section 110(a)(5) distinguishes
it from the vehicle purchase mandate at issue in the Supreme Court EMA
case.\52\
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\50\ NAHB v. SJVUAPCD, 627 F.3d 730, 737.
\51\ Id., 739.
\52\ ``Rule 9510 escapes preemption because its regulation of
construction equipment is indirect. Rule 9510 does not measure
emissions by fleets or groups of vehicles; it measures emissions on
a ``facility-by-facility'' basis. 42 U.S.C. 7410(a)(5)(D). Its unit
of measurement is the indirect source, not the fleet. It regulates
development sites directly, but as the term ``indirect source''
implies, it regulates mobile emissions only indirectly. For that
reason, the fleet-based regulations [that were at issue in EMA] are
not analogous to Rule 9510.'' NAHB v. SJVUAPCD, 627 F.3d 740.
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[[Page 70623]]
The EPA has previously acknowledged the possibility that a rule
styled as an ISR program may in effect be a regulation of direct
sources, including motor vehicles or nonroad sources. In other words,
the EPA is not obligated merely to accept at face value a State or
local authority's characterization, but may consider how the program
will work in practice. In its 2011 final approval action on the
SJVUAPCD ISR, the EPA noted factors that might indicate a rule
ostensibly measuring emissions from a site was a de facto regulation of
nonroad engines.\53\ As explained below, Rule 2305 lacks the indicia of
a de facto regulation of either motor vehicles or nonroad vehicles or
engines.
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\53\ ``[I]n the TSD, EPA evaluates the potential for Rule 9510,
as an ISR rule otherwise authorized under CAA section 110(a)(5), to
nevertheless run afoul of CAA section 209(e), and in so doing, EPA
identified two ways that an ISR rule that on its face is authorized
under CAA section 110(a)(5) could nonetheless be preempted. First,
the ISR rule could be preempted if the rule in practice as applied
acts to compel the manufacturer or user of a nonroad engine or
vehicle to change the emission control design of the engine or
vehicle, or second, an ISR rule could be preempted if it creates
incentives so onerous as to be in effect a purchase mandate.'' 76 FR
26609, 26611 (May 9, 2011).
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As explained in section I.D above, Rule 2305 applies to warehouse
operators and provides multiple options for meeting the annual WPCO. As
noted by the SCAQMD in response to comments on proposed Rule 2305,
``the WPCO is not based on truck emissions; it is based on truck trips.
The proposed rule uses truck trips as a proxy for total warehouse
emissions when setting the compliance obligation because the number of
truck visits is representative of the total activity at, and emissions
associated with, a warehouse.'' \54\ The various options available
(WAIRE Menu, Custom WAIRE Plan, or Mitigation Fee) to warehouse
operators that do not involve acquisition of, or contracting for, ZE or
NZE trucks to earn WAIRE Points support a conclusion that in Rule 2305,
the SCAQMD has not adopted or attempted to enforce any standard
relating to the control of emissions from new motor vehicles or new
motor vehicle engines for the purposes of CAA section 209(a).\55\
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\54\ SCAQMD Final Staff Report, 160.
\55\ SCAQMD's Final Socioeconomic Impact Assessment for Proposed
Rule 2305--Warehouse Indirect Source Rule--Warehouse Actions and
Investments to Reduce Emissions (WAIRE) Program and Proposed Rule
316--Fees for Rule 2305 (May 2021), particularly pages ES-5--ES-7,
and table 18, indicates that the ZE/NEZ non-acquisition (or
contracting) scenarios are generally 4 to 5 times more costly (in
terms of average annual dollars per square foot) than the ZE/NZE
acquisition (or contracting) scenarios so as to incentive
acquisition and use of ZE/NZE trucks over the non-acquisition
options. However, the scenarios were developed to identify the
widest range of possible costs assuming that warehouse owners and
operators would only comply with a single scenario approach from
2022 through 2031. The EPA expects warehouse operators will select
multiple points-earning actions or investments along with mitigation
fees to meet the annual compliance obligation, and that the
selection will change over the years in light of the ever-changing
circumstances of individual businesses and the composition of
vehicle fleets.
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Commenters objecting to the SCAQMD's adoption of Rule 2305
contended that the requirements are preempted under the ADA and F4A.
Under the ADA, with certain exceptions not applicable here, a State or
political subdivision of a State may not enact or enforce a law,
regulation, or other provision having the force and effect of law
related to a price, route, or service of an air carrier or carrier
affiliated with a direct air carrier through common controlling
ownership when such carrier is transporting property by aircraft or by
motor vehicle (whether or not such property has had or will have a
prior or subsequent air movement).\56\ The F4A extends the same
preemptive language to any motor carrier (``common carrier'') or any
motor private carrier, broker, or freight forwarder with respect to the
transportation of property.\57\ Rule 2305 applies to owners and
operators of warehouses greater than 100,000 square feet of indoor
floor space in a single building, and both air carriers and common
carriers are subject to the requirements of Rule 2305 because both
types of carriers own or operate such warehouses in the SCAQMD.
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\56\ 49 U.S.C. 41713(b).
\57\ 49 U.S.C. 14501(c)(1).
---------------------------------------------------------------------------
The EPA does not consider the requirements under Rule 2305 as
relating directly to the ``price, route, or service'' of any air
carrier or common carrier but do recognize that an indirect effect on
price is a foreseeable consequence of the additional costs borne by
warehouse owners or operators to comply with the annual WAIRE points
compliance obligation. However, the EPA proposes to find that Rule 2305
is not preempted under either the ADA or F4A because any price effect
is indirect and remote. Moreover, the District is acting under its
delegated police powers to protect public health in a way that is
explicitly authorized under CAA section 110(a)(5) and CAA section 116.
Any incremental increase in price for delivery services due to
compliance with Rule 2305 internalizes costs otherwise borne by the
public, particularly members of the public living and working in the
vicinities of warehouses, through the types of health effects
associated with elevated concentrations of PM.
3. Is the rule enforceable as required under CAA section 110(a)(2)?
The EPA has evaluated the enforceability of Rule 2305 with respect
to applicability and exemptions; standard of conduct; compliance dates;
sunset provisions; discretionary provisions; and test methods,
recordkeeping and reporting,\58\ and the EPA believes, for the reasons
given below, that the regulation is generally enforceable for the
purposes of CAA section 110(a)(2) but with certain deficiencies.
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\58\ These concepts are discussed in detail in an EPA memorandum
dated from September 23,1987, from J. Craig Potter, EPA Assistant
Administrator for Air and Radiation, et al., to Addressees, Subject:
``Review of State Implementation Plans and Revisions for
Enforceability and Legal Sufficiency.''
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First, with respect to applicability, the EPA generally finds that
Rule 2305 is sufficiently clear as to which entities are subject to the
requirements in the regulation and which entities are exempt.\59\ The
EPA finds that Rule 2305 is sufficiently specific so that the persons
affected by the regulation are fairly on notice as to what the
requirements and related compliance dates are.\60\ To a large extent,
the EPA has already described the substantive requirements and
compliance dates set forth in Rule 2305 in section I.D of this
document. The EPA notes, however, that two definitions in Rule 2305
cite to sections of the California Code of Regulations (CCR), and thus,
the two definitions in Rule 2305 would be ambiguous for the purposes of
enforcement of the SIP unless the CCR sections on which Rule 2305
relies are submitted and approved into the SIP.\61\ The CCR sections on
which Rule 2305 relies are included in two new CARB mobile source
regulations that the EPA anticipates that CARB will submit to the EPA
for approval as part of the California SIP. If these two CCR sections
are submitted and the EPA subsequently approves them into the SIP, then
Rule 2305 will avoid this particular potential ambiguity and the
related implications for enforceability.
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\59\ 13 CCR 2023.
\60\ 13 CCR 2023.1.
\61\ The definitions in Rule 2305 of ``Near Zero-Emission''
truck and ``Zero-Emission'' truck cite to 13 CCR 1956.8 and 1963,
respectively.
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Second, with respect to compliance dates, the EPA notes that all
warehouses subject to the rule will be required to meet their WAIRE
points annual compliance obligation requirements beginning with
calendar year 2024. This is consistent with achieving emission
reductions in advance of the July 20,
[[Page 70624]]
2032 attainment deadline for the South Coast Air Basin and Coachella
Valley Extreme nonattainment areas for the 2008 ozone NAAQS. By
extension, Rule 2305 compliance dates are compatible with the
applicable attainment deadlines for the 2015 ozone NAAQS: August 3,
2033, for the Coachella Valley ``Severe'' nonattainment area; and
August 3, 2038, for the South Coast Air Basin ``Extreme'' nonattainment
area. The compliance dates in Rule 2305 are also consistent with
providing emission reductions in advance of the applicable attainment
deadlines in the South Coast of October 16, 2025 for the 2006 24-hour
PM<INF>2.5</INF> NAAQS and December 31, 2025 for the 2012 annual
PM<INF>2.5</INF> NAAQS.\62\
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\62\ See 85 FR 57733 (September 16, 2020) and 40 CFR
51.1004(a)(3) (2006 24-hour PM<INF>2.5</INF> NAAQS); and 85 FR 71264
(November 9, 2020) and 40 CFR 51.1004(a)(2) (2012 annual
PM<INF>2.5</INF> NAAQS).
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Third, Rule 2305 includes a sunset provision.\63\ Specifically,
Rule 2305 provides that the WAIRE points annual compliance obligation
requirements expire in the year following the determinations by the EPA
that the South Coast Air Basin and Coachella Valley have attained the
2015 ozone NAAQS and the determinations by CARB that the South Coast
Air Basin and Coachella Valley have attained the State ambient air
quality standard for ozone (which is numerically the same as the 2015
ozone NAAQS). Generally, the EPA finds sunset provisions in SIP rules
to be a deficiency that must be addressed for full approval because of
the potential to interfere with reasonable further progress (RFP) or
attainment of the NAAQS, and potential inconsistency with CAA section
110(l) requirements through purported elimination of existing control
requirements without a sufficient demonstration at that future date. In
this instance, we are not crediting Rule 2305 at this time with a
specific level of emissions reductions for RFP or attainment
demonstration purposes. This does not mean that the rule would not
achieve emissions reductions in practice over the near-term and well
into the future and, therefore, does not mean that sunsetting the rule
would not result in foregone emissions reductions that would be
relevant for both the ozone and PM<INF>2.5</INF> NAAQS at that future
time. We recommend that SCAQMD amend Rule 2305 to eliminate the sunset
clause. The SCAQMD is free to rescind the rule at any time, but a
future rescission of Rule 2305 must be effectuated though adoption and
submission of the rescission as a SIP revision to the EPA for review
and action under CAA section 110(k), and consistent with CAA section
110(l), at that time.
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\63\ SCAQMD Rule 2305(h).
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The EPA notes that Rule 2305 includes provisions that allow for
discretion on the part of the SCAQMD's Executive Officer. Such
``director's discretion'' provisions can undermine enforceability of a
SIP regulation, and thus prevent full approval by EPA. In the case of
Rule 2305, it allows for director's discretion in connection with the
determination of whether WAIRE Points from a Custom WAIRE Plan are
quantifiable, verifiable, and real and the determination of whether the
warehouse owner or operator is making adequate progress to complete an
approved Custom WAIRE Plan.\64\ Inclusion of such provisions that in
effect give a State official, unilateral, and unbounded authority to
make decisions concerning whether a regulated entity is, or is not, in
compliance that bind the EPA or other parties are inconsistent with
basic SIP requirements.
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\64\ SCAQMD Rule 2305(d)(4)(A)(iii) and (d)(4)(D).
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Lastly, Rule 2305 includes recordkeeping and reporting requirements
that are sufficient to ensure compliance with the applicable
requirements.\65\ The EPA notes that, in adopting Rule 2305, the SCAQMD
Board directed the Executive Officer to develop an online portal for
the purpose of submitting required reports and documents as required by
Rule 2305. The online portal (WAIRE POP) will provide the public
information about how warehouse operators and owners are complying with
Rule 2305 and how WAIRE Mitigation Program funds are spent.\66\ The
SCAQMD has since developed a WAIRE program tab under Rules & Compliance
portion of the District's website. It includes a portal to the WAIRE
POP for warehouse operators to submit reports and includes general
information on the program such as the implementation guidelines,
applications, guidance, and analytical tools, among other things.
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\65\ 13 CCR 2023.8 and 2023.9.
\66\ SCAQMD Resolution 21-9, 7.
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4. Does the rule interfere with reasonable further progress (RFP) and
attainment or any other applicable requirement of the Act?
The SCAQMD adopted Rule 2305 in part to meet a commitment in the
2016 South Coast AQMP to assess and identify potential actions to
further reduce emissions associated with emission sources operating in
and out of warehouse distribution centers. While the EPA is not
proposing to credit Rule 2305 with achieving a specific amount of
emissions reductions, the EPA's evaluation of Rule 2305 indicates that
the rule will achieve additional emission reductions. These additional
reductions will incrementally contribute to the overall reductions
needed to attain the NAAQS in the South Coast Air Basin and Coachella
Valley air quality planning areas.
However, as discussed previously, we find that the sunset clause in
Rule 2305 could interfere with attainment or reasonable further
progress by foregoing emissions reductions that may be needed for
attainment or maintenance of the NAAQS. Thus, the EPA recommends that
the SCAQMD remove the sunset clause and follow the normal course of
action in rescinding rules from the SIP, i.e., through a SIP revision
and EPA approval under CAA section 110(k) and section 110(l).
5. Will the State have adequate personnel and funding for the rule?
The SCAQMD adopted a specific rule, Rule 316 (``Fees for Rule
2305''), for the purpose of recovering the SCAQMD's costs associated
with implementing Rule 2305. In light of the adoption of Rule 316, the
EPA finds that the SCAQMD will have adequate personnel and funding to
implement Rule 2305.
6. EPA's Rule Evaluation Conclusion
Based on the above discussion, the EPA believes Rule 2305 is
consistent with the relevant CAA requirements, policies, and guidance,
except as otherwise noted. As an ISR program under CAA section
110(a)(5), Rule 2305 is not a required submission. The EPA proposes to
find that the District has the authority to implement and enforce Rule
2305 and is not prohibited from doing so by any State or Federal law.
While Rule 2305, as stated previously, will reduce emissions associated
with warehouses, the EPA proposes to find that the rule is not fully
enforceable, and that the amount of associated emissions reductions is
not sufficiently quantifiable for credit at the present time. The EPA
proposes to find that Rule 2305 is SIP-strengthening and proposes to
approve it on this basis. A recent decision by the Ninth Circuit upheld
the EPA's approval of a SIP submission for the San Joaquin Valley on
SIP strengthening grounds.\67\ In that case, like our proposed action
on Rule 2305, the EPA deemed the SIP provision at issue not fully
enforceable and accordingly granted no SIP credit for
[[Page 70625]]
emissions reductions from the provision.
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\67\ Association of Irritated Residents v. EPA, 10 F.4th 937
(9th Cir. 2021).
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C. Public Comment and Proposed Action
As authorized in section 110(k)(3) of the Act, the EPA proposes to
approve the submitted rule. The EPA concludes that, while SCAQMD Rule
2305 does not meet all the evaluation criteria for enforceability, we
are proposing approval because the submitted rule is not a required SIP
element and would strengthen the SIP. In light of the deficiencies
identified above, however, the EPA concludes that the submitted rule
should not be credited in any attainment and rate of progress/
reasonable further progress demonstrations.
We will accept comments from the public on the proposed action, the
rationale and basis for the proposed action, and other relevant matters
until November 13, 2023. If the EPA takes final action to approve the
submitted rule, the final action will incorporate this rule into the
federally enforceable SIP.
III. Incorporation by Reference
In this rule, the EPA is proposing to include in a final EPA rule
regulatory text that includes incorporation by reference. In accordance
with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by
reference SCAQMD Rule 2305, adopted on May 7, 2021, that establishes an
ISR program for certain warehouse owners and operators, as described in
section I of this preamble. The EPA has made, and will continue to
make, these materials available through <a href="https://www.regulations.gov">https://www.regulations.gov</a> and
at the EPA Region IX Office (please contact the person identified in
the FOR FURTHER INFORMATION CONTACT section of this preamble for more
information).
IV. Statutory and Executive Order Reviews
Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, the EPA's role is to approve State
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this proposed action merely proposes to approve State law
as meeting Federal requirements and does not impose additional
requirements beyond those imposed by State law. For that reason, this
proposed action:
<bullet> Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Orders
12866 (58 FR 51735, October 4, 1993), 13563 (76 FR 3821, January 21,
2011) and 14094 (88 FR 21879, April 11, 2023);
<bullet> Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
<bullet> Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
<bullet> Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
<bullet> Does not have federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
<bullet> Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
<bullet> Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001); and
<bullet> Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act.
Executive Order 12898 (Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations, 59 FR 7629,
Feb. 16, 1994) directs Federal agencies to identify and address
``disproportionately high and adverse human health or environmental
effects'' of their actions on minority populations and low-income
populations to the greatest extent practicable and permitted by law.
The EPA defines environmental justice (EJ) as ``the fair treatment and
meaningful involvement of all people regardless of race, color,
national origin, or income with respect to the development,
implementation, and enforcement of environmental laws, regulations, and
policies.'' The EPA further defines the term fair treatment to mean
that ``no group of people should bear a disproportionate burden of
environmental harms and risks, including those resulting from the
negative environmental consequences of industrial, governmental, and
commercial operations or programs and policies.''
The SCAQMD did not evaluate environmental justice considerations as
part of its SIP submittal; the CAA and applicable implementing
regulations neither prohibit nor require such an evaluation. However,
the Community Steering Committees for four environmental justice
communities admitted into the State's AB 617 program in the affected
area requested development of a warehouse ISR rule due to concerns
regarding air pollution impacts from trucks and DPM.\68\ The EPA did
not perform an EJ analysis and did not consider EJ in this action. Due
to the nature of the action being proposed here, this proposed action
is expected to have a neutral to positive impact on the air quality of
the affected area. Consideration of EJ is not required as part of this
action, and there is no information in the record inconsistent with the
stated goal of E.O. 12898 of achieving environmental justice for people
of color, low-income populations, and Indigenous peoples.
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\68\ SCAQMD Final Staff Report, 9 and 10.
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Lastly, the SIP is not approved to apply on any Indian reservation
land or in any other area where the EPA or an Indian tribe has
demonstrated that a tribe has jurisdiction. In those areas of Indian
country, the proposed rule does not have tribal implications and will
not impose substantial direct costs on tribal governments or preempt
tribal law as specified by Executive Order 13175 (65 FR 67249, November
9, 2000).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Nitrogen dioxide, Ozone,
Particulate matter, Reporting and recordkeeping requirements.
Dated: October 5, 2023.
Martha Guzman Aceves,
Regional Administrator, Region IX.
[FR Doc. 2023-22518 Filed 10-11-23; 8:45 am]
BILLING CODE 6560-50-P
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</html>Indexed from Federal Register on October 12, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.