California’s Truck & Bus Regulation (TBR) requires
retrofits of heavy duty vehicles with diesel particular filters (DPFs) and newer
engines. The expenses involved in compliance are significant, and have
transformed the industry as many companies have been forced out of business – unable
to afford the expensive retrofits.
Now that the rule has been in place for a few years, and
phased-in compliance is almost complete , the California Air Resources Board
(CARB) and the U.S. EPA are stepping up enforcement action. CARB has been making hundreds of spot checks
and initiated over ___ enforcement actions just within the last two years. Meanwhile, under its separate enforcement
authority, the U.S. EPA has started issuing information requests to some of the
largest national transportation companies and federal agencies to evaluate
compliance with the TBR.
Last year, EPA initiated its first enforcement action, and
announced it would be the first of many more such enforcement actions. Motor carriers, fleet owners, logistics
companies and others regulated by the TBR should be prepared for enforcement by
both CARB and EPA. There are seven steps that all motor carriers
should take to prepare for the stepped-up enforcement of the TBR.
Applicability of the TBR
The first step is to evaluate how and if the TBR applies to
your company. The TBR imposes
requirements on owners of regulated – but certain requirements also apply to
companies that lease vehicle or use independent contractors for hire or
dispatch. Even vehicles that are used in California for short periods of time
may be subject to the TBR. Logistics companies also have their own, separate reporting
a List of All Owned Vehicles
If you company owns vehicles regulated by the TBR (with some
exceptions, heavy-duty vehicles with a gross weight rating of greater than
14,000 pounds), prepare a list of the vehicles, and for each vehicle determine
whether it operates in California. If
the vehicles are in California for only minor periods of time, evaluate whether
the vehicle is subject to an exemption under the TBR.
DPFs and Engine Model Year for Owned Vehicles
The transportation industry is accustomed to tracking
vehicles by model year. For purposes of the TBR, however, compliance depends on
the engine year of the vehicle. For each owned vehicle, identify whether the
vehicle is equipped with a DPF and appropriate engine model year as required by
the TBR. Be aware that only DPFs
approved by CARB satisfy the requirements of the TBR. CARB maintains an on-line data base of approved
DPFs. Also, some DPFs that were
previously approved have been deleted from the list.
Lease Agreements and Update if Needed
The TBR permits lessors and lessees of vehicles to allocate
responsibility for the TBR between themselves; however, the TBR requires that
specific language be used before the allocation is effective. An assertion that one party is responsible
for compliance with applicable law is not sufficient to transfer that liability
for purposes of the TBR. Without certain
“magic language,” the TBR presumes the lessee is responsible for
compliance. Lease agreements may need to
be modified to reflect the parties’ intent.
Agreements for Hire and Dispatch and Update if Needed
Non-owned vehicles have been a particular target of EPA
enforcement action. As with lease agreements, agreements for hire and dispatch
– typically in the form of independent contractor agreements – should be
reviewed to evaluate whether the intent of the parties to allocate liability is
effective for purposes of the TBR – and update that agreement if needed. Any
revisions should be handled with an eye toward preserving the independent contractor
status of the contracts.
Compliance of Hired and Dispatched Vehicles
Under the TBR, where the motor carrier or broker is not
directly responsible for compliance of vehicles used for hire or dispatch, they
must verify compliance. CARB has
specific requirements and documents that can or must be used to document
compliance. Written confirmation from
the independent contractors are required, and must be obtained on an annual basis.
In addition, CARB imposes additional requirements, including
reasonable inquiry into the accuracy of the representations. As a practical matter, companies will need to
assemble a list of information about hired and dispatched vehicles much like
the list for vehicles they own. Companies should also consider whether they
want to consider options for verifying compliance that may not be required by
the regulation, but will better satisfy state and federal regulators.
Data and Information
One of the more frustrating and unexpected ramifications of
the TBR is that it requires the organization of data in a format that many
companies are not currently using. For
example, companies may maintain an inventory of vehicles designed to best
accommodate payment in different states – rather than geared to the
requirements of the TBR. Some vendors
are already prepared to assist with the organization of data and information to
comply with the TBR.
files and data so that you can easily retrieve the information necessary to
establish compliance with the TBR – and can update this information as
necessary. For example, maintain a file
of your efforts to verify compliance with independent contractors. If you opted
for the phase-in compliance option, maintain a file for the record-keeping and
reporting requirements for the phase-in option.
As EPA and CARB step up enforcement of the TBR, taking steps
to demonstrate compliance with the TBR is a prudent measure.