Paragraph 248-1.1(b)(10) is revised as follows:

(10) 'Contractor' means [any person or entity that contracts directly or indirectly with a regulated entity to provide labor, services, materials and/or equipment on behalf of the regulated entity. Contractor includes but is not limited to prime contractor, subcontractor, and any contractor(s) hired by such subcontractor] prime contractor.

Paragraphs 248-1.1(b)(11) through (19) remain unchanged.

Paragraphs 248-1.1(b)(20) is revised as follows:

(20) 'On behalf of' means: [to provide, by a contractor, labor, services, materials and/or equipment to a regulated entity which are integral to the performance of regulated entity work by a regulated entity.] all heavy duty vehicles used to perform regulated entity work by a prime contractor. Those vehicles include, but are not limited to, heavy duty vehicles owned, operated or leased by a prime contractor.

Paragraphs 248-1.1(b)(21) through (22) remain unchanged.

Paragraph 248-1.1(b)(23) is revised as follows:

(23) 'Prime contractor' means any person or entity [which] that contracts directly with [a] the regulated entity to perform regulated entity work ("prime contract") and who is responsible for the completion of the contract with the regulated entity. This definition shall not include subcontractors.

Paragraphs 248-1.1(b)(24) through (25) remain unchanged.

Paragraph 248-1.1(b)(26) is revised as follows:

(26) 'Regulated entity work' means [work or services performed or provided by the regulated entity.] labor, services, material and/or equipment that is provided by the regulated entity through its employees or prime contractors except it does not include labor, services, materials and/or equipment provided by:

(i) a shipping company (including overnight delivery companies); or

(ii) a manufacturer or delivery company that does not deliver materials or equipment to the regulated entity on a regular and frequent basis.

Paragraph 248-1.1(b)(27) through Subdivision 248-3.1(d) remain unchanged.

Subdivisions 248-3.1(e) through Paragraph 248-3.1(f)(1) are revised as follows:

(e) On or after December 31, 2013, [All] all diesel powered heavy duty vehicles owned by, operated by, or leased by each BART regulated entity or which are owned by, operated by, or leased by a contractor and used to provide labor, services, materials and/or equipment on behalf of a BART regulated entity to perform the regulated entity work shall utilize and maintain [the best available retrofit technology according to the following schedule:

(1) at least 33 percent of all such vehicles shall have BART by December 31, 2008;

(2) at least 66 percent of all such vehicles shall have BART by December 31, 2009;

(3) all such vehicles shall have BART by December 31, 2010.]

(f) In order to comply with the requirements of Subdivision 248-3.1(e), the BART regulated entity or contractor shall first perform a HDV inventory according to a department prescribed format. The BART regulated entity or contractor shall then select one of the following [two] three options for each of its inventoried HDVs:

(1) Option 1 - Replacement or Retirement

Paragraph 248-3.1(f)(1) through Clause 248-3.1(f)(2)(ii)('i') remain unchanged.

A new Paragraph 248-3.1(f)(3) is added as follows:

(3) Option 3 - Heavy Duty Vehicle/Engine Useful Life Waiver

Subdivision 248-3.1(g) through Paragraph 248-4.1(a)(1) remain unchanged.

Paragraph 248-4.1(b)(1) through 248-7.1(a) are revised as follows:

(b) Application for Waiver of BART Requirements

(1) Regulated entities and contractors may apply for a waiver from the BART requirements of this Part. All waiver applications submitted to the department shall be provided in a format as prescribed by the department. Such application shall be submitted by the state agency commissioner or other responsible person of the regulated entity or contractor. If, through the BART evaluation and selection process noted in Paragraph 248-3.1(f)(2) of this Part above, it is determined by the BART regulated entity or contractor that none of the PM reduction classification level technologies are applicable or available for a specific covered vehicle, such BART regulated entity or contractor may submit an application for a waiver for the commissioner's approval. A copy of the department's approval of a vehicle waiver shall be kept with the vehicle and provided to the department upon request. Any application for a waiver of BART requirements shall contain the following information:

(i) the name and address of the BART regulated entity or contractor applying for approval of the waiver including the name and phone number of the responsible party;

(ii) the name and identification number of the subject contract, if applicable;

(iii) identification of the specific heavy duty covered vehicle or engine that is the subject of the waiver application;

(iv) the name of the engine manufacturer, engine model year, engine family, and engine series;

(v) VIN, if applicable;

(vi) identification of the required BART; and

(vii) an explanation as to why the BART is not available or not applicable. Such explanation shall include all documentation generated in the BART evaluation and selection process described in Paragraph 248-3.1(f)(2) of this Part.

(1) The department shall issue a waiver of the requirements of this part to a BART regulated entity or contractor upon receipt of request from such entity or contractor provided that such vehicle will be permanently taken out of service in New York State on or before December 31, 2013. The waiver form will be prescribed by the department. A copy of a department issued waiver for a vehicle shall be kept with the vehicle and provided to the department upon request.

[(c)] (d) Applications and forms shall be sent to:

Director, Bureau of Mobile Sources & Technology Development

Division of Air Resources

New York State Department of Environmental Conservation

625 Broadway

Albany, NY 12233-3255

[(d)] (e) The commissioner will make a determination whether to approve the waiver of BART or ULSD requirements no later than 90 days after receipt of the application.

[(e)] (f) Waivers issued by the department pursuant to Subdivisions 248-4.1(a) and 248-4.1(b) shall expire one year after issuance, unless the BART or ULSD regulated entity or contractor submits a renewal application and the commissioner approves such application, in accordance with the provisions set forth in this subdivision. Any such application for renewal shall be submitted no later than 30 days prior to the expiration date of the approval.

248-5.1 Vehicle and Equipment Labeling Requirements

(a) For each covered vehicle that has BART installed or that received a [BART] waiver pursuant to Subdivisions 248-4.1(b) and 248-4.1(c), a label shall be affixed to the vehicle in plain view in the form of a legible and durable label. Each label shall contain the following information:

(1) for those vehicles that have BART installed:

(i) name of the BART regulated entity or contractor whose vehicle received BART;

(ii) vehicle identification number (if appropriate) and engine serial number;

(iii) specific BART product name installed on the vehicle;

(iv) date of installation of the BART product;

(v) PM reduction classification level number;

(vi) vehicle or engine model year;

(vii) name of the engine manufacturer, family and series;

(viii) engine horsepower; and

(ix) if CARB verified technology, the CARB designated diesel emission control strategy family name.

(2) for those vehicles that have received a [BART] waiver pursuant to Subdivisions 248-4.1(b) and 248-4.1(c):

(i) name of the BART regulated entity or contractor receiving the waiver;

(ii) date waiver issued;

(iii) vehicle identification number (if appropriate) and engine serial number;

(iv) vehicle or engine model year; and

(v) name of the engine manufacturer.

(3) the label shall be maintained in a manner that retains its legibility for the entire life of the vehicle.

(b) For each vehicle that has BART installed, a label shall be placed on/near the fuel fill line of such vehicle stating "use ULSD fuel only" unless the selected BART does not require the use of ULSD.

248-6.1 Reporting Requirements

(a) On or before November 1, 2008 and every year thereafter, regulated entities subject to the requirements of this Part shall report to the department on the use of ULSD and BART as described in Subdivision 248-6.1(b) of this Part for all vehicles, including covered vehicles operated on behalf of regulated entities. Contractors shall report required information as described in Subdivision 248-6.1(b) of this Part to the regulated entity on a schedule to be determined by the regulated entity.

(b) Regulated Entity Reporting

(1) Regulated entities shall report to the department on an annual basis. The regulated entity shall perform a HDV inventory to be submitted with the annual report for the regulated entity fleet. [An] A vehicle inventory format and an annual report format will be prescribed by the department. The inventory shall be performed within 30 days after the effective date of this Part and updated in order to determine compliance with the BART requirements of Subdivision 248-3.1(e) of this Part. Based on the information contained in the inventory, the regulated entity shall submit the first annual report to the department by November 1, 2008. Thereafter, and based on updated inventory information, annual reports shall be submitted to the department by November 1st of each year. The regulated entity submittal to the department shall include the regulated entity's vehicle inventory and annual report, along with the regulated entity's contractors' annual reports. [The annual report shall distinguish between the regulated entity vehicles and the contractor vehicles.] The information contained in the annual report submitted by the regulated entity shall include, but not be limited to:

(i) contact information

('a') For the regulated entity, include the name of the regulated entity, contact person and work phone number;

('b') For the contractor, include the name of the contractor, contact person and work phone number;

(ii) For the regulated entity vehicles and certain contractor vehicles. For vehicles owned or operated by contractors, the following only applies to covered vehicles that perform work on the contract site. Contractors shall submit their vehicle inventory and annual report to their contracting agency (regulated entity) on a schedule to be determined by the regulated entity.

('a') the number of diesel fuel-powered motor vehicles owned or operated;

('b') the number of such motor vehicles that were powered by ULSD;

('c') the total number of on road diesel fuel-powered motor vehicles owned or operated having a GVWR of more than 8,500 pounds;

('d') the total number of off road vehicles owned or operated;

('e') the number of such on road and off road vehicles that utilized BART, including a breakdown by BART installation date, vehicle model, VIN (if applicable), engine year and the type and classification level of technology used for each vehicle including the CARB designated diesel emission control strategy family name, if applicable;

('f') the number of such motor vehicles that are originally equipped or have been replaced/repowered with an engine certified to the applicable 2007 USEPA standard for particulate matter as set forth in section 86.007-11 of Title 40 of the Code of Federal Regulations (see Table 1, Section 200.9 of this Title) or to any subsequent USEPA standard for particulate matter that is at least as stringent;

('g') the number of such vehicles that have been replaced with alternative fuel vehicles;

('h') the number of inventoried HDVs retired;

('i') identification of all ULSD waivers, findings, and renewals of such findings, which, for each waiver, shall include, but not be limited to, the quantity of diesel fuel needed to power diesel fuel-powered motor vehicles owned or operated by such regulated entity; and specific information concerning the availability of ULSD;

('j') the identification of BART waivers and useful life waivers issued by the department to the regulated entity and contractor;

('k') the quantity of ULSD used;

[('l') a statement of compliance indicating the percent of inventoried HDVs with option 1 or option 2 technologies installed by the indicated compliance dates so as to determine compliance with Subdivision 248-3.1(e) of this Part requirements; and]

[('m')] ('l') any other such information or report format that the department deems necessary.

248-7.1 Record Keeping Requirements

(a) BART regulated entities and contractors subject to the requirements of this Part shall maintain the following records in hard-copy format or as electronic records where the vehicle is primarily located/garaged. The department's inventory form may be used for this purpose. The BART regulated entity or contractor shall provide the following records where applicable for each inventoried HDV upon request by the department or an authorized representative for all HDVs subject to compliance with this Part:

Paragraphs 248-7.1(a)(1) through (10) remain unchanged.

Paragraph 248-7.1(a)(11) through Subdivision 248-7.1(a)(13) are revised as follows:

(11) useful life waiver and date issued, if applicable:

(i) a copy of the issued waiver shall be kept with the vehicle to which it is applicable.

[(11)] (12) fuel characteristic type including biodiesel, on road specification diesel, non road diesel, other; and

[(12)] (13) the quantity of ULSD used.

The remainder of Part 248 remains unchanged.

In 2006, the Legislature passed and the Governor enacted the "Diesel Emissions Reduction Act of 2006" (DERA). The legislation charged the Department with implementing a regulatory program that would require the use of ULSD fuel and BART for any diesel powered heavy duty vehicle (HDV) that is owned by, operated by or on behalf of, or leased by a state agency and state and regional public authority. The Department subsequently promulgated Part 248, effective as of July 30, 2009, to implement DERA. The Department's initial part 248 regulation included within the program requirements trucks owned by sub-contractors (to contractors) that provided services to State agencies and authorities.

That aspect of the regulation was subsequently challenged in a CPLR Article 78 proceeding. Although Supreme Court (Saratoga County) initially upheld the regulations, the Appellate Division reversed, finding that the Legislature "did not intend to impose DERA's requirements on vehicles other than those used by prime contractors under direct contract with State agencies and public authorities." Matter of N.Y. Constr. Material Ass'n v. DEC, 83 A.D.2d 1323, 1328 (3d Dep't 2011); see also Riccelli Enterprises, Inc. v. Grannis, 30 Misc. 3d 573, 579 (Sup. Ct. Onondaga Co. 2010) (regulations are 'ultra vires'… due to the improper expansion of the meaning of the term "on behalf of" in the regulations).

Additionally, the Legislature amended ECL section 19-0323 in calendar years 2010, 2011 and 2012, in three ways: (i) to provide an extended time frame until December 31, 2013 for all applicable vehicles to comply with the DERA BART requirement; (ii) to allow for a waiver of the DERA requirements to otherwise applicable vehicles that are permanently taken out of service in New York State on or before December 31, 2013; and (iii) to eliminate the 33 percent and 66 percent phase-in deadlines for BART compliance of December 31, 2008 and December 31, 2009 respectively. 'See' L.2010, ch. 59, pt. C. Section 1, Enacted Budget SFY 2011-2012, S2810-C/A 4010-C, Part BB and Enacted Budget SFY 2012-2013, S6258-D/A 9058-D, Part EE. This proposed rulemaking is being revised as a result of the extension of the compliance deadline included in the state budget bill passed in March 2012. Although the Legislature extended the BART compliance date and added the waiver provision, it nevertheless maintained the retrofit requirement for existing vehicles, making plain its continued interest in reducing emissions from heavy duty vehicles owned by or operated on behalf of the State. The Department is seeking comments on the revision to the compliance deadline.

Although the Legislature extended the BART compliance date and added the waiver provision, it nevertheless maintained the retrofit requirement for existing vehicles, making plain its continued interest in reducing emissions from heavy duty vehicles owned by or operated on behalf of the State.

The purpose of this rulemaking is to make Part 248 consistent with both the court decisions in Matter of N.Y. Constr. Material Ass'n and Riccelli Enterprises, Inc. and the amendments to DERA signed into law in 2010, 2011 and 2012.

These revisions to Part 248 would make it consistent with the amendments to ECL section 19-0323 and recent court decisions by changing the definition of "prime contractor", "on behalf of", and "regulated entity work"; and further by changing the existing BART compliance schedule and adding a useful life waiver provision. "Prime contractor" will mean a person or entity that contracts directly with the regulated entity to perform regulated entity work and who is responsible for the completion of the contract with the regulated entity. As noted, recent court decisions require the Department to exclude subcontractors from applicability. This rulemaking will revise the BART compliance schedule and include a useful life waiver provision as permitted by ECL section 19-0323. The Department will include a useful life waiver provision which allows the Department to issue a waiver of the requirements of this Part to a BART regulated entity or contractor upon receipt of request from such entity or contractor provided that such vehicle will be permanently taken out of service in New York State on or before December 31, 2013. The addition of a useful life waiver will provide additional regulatory flexibility to subject entities. The Department is also proposing several minor clarifications to the BART waiver application requirements, the vehicle and equipment labeling requirements, and the reporting and record keeping requirements. These clarifications should assist the regulated entity and contractor in complying with the Part 248 requirements.

The Department has continued to evaluate the costs of various retrofit devices and recently assessed several sources to update cost information. Included in this analysis was actual cost data obtained by the Department from certain state agencies. The Department also considered cost data included in the October 2009 report entitled "Retrofitting Emission Controls for Diesel Powered Vehicles," issued by the Manufacturers of Emission Controls Association (MECA). A more detailed discussion relating to costs can be found in the Regulatory Impact Statement. Prime contractors will incur costs associated with the purchase of the retrofit device and administrative costs similar to many of those costs for state agencies and public authorities. Only the contractor's vehicles which are actually used on behalf of the state agency/public authority work (not necessarily the contractor's entire fleet) and while in use on the state project whether on or off state property are subject to the Part 248 requirements. Subcontractors will no longer be required to comply with DERA and are therefore no longer required to incur costs for this regulation. No additional costs are expected to be incurred by the Department for the administration of the proposed revision to Part 248.

It is important to note that this rulemaking, which proposes to maintain existing requirements except as to subcontractors and to the extent waived (as allowed under the 2010 DERA amendments), would if anything have a positive direct economic effect as compared to the effect that was anticipated from the existing requirements under Part 248. Indeed, although Part 248 would remain applicable to those heavy duty vehicles used by or on behalf of a state agency, state public authority, or regional public authority, requirements as to subcontractors would be removed. Of course, prime contractors like state government entities, would remain subject to both the ULSD requirements effective February 12, 2007 and the BART requirements.

As noted in the 2009 rulemaking, the population of prime contractor vehicles affected by the proposed amended regulation is unknown. As with that rulemaking, the Department remains unable to provide a specific estimate of the number of contract solicitations or awards that will occur because of the difficulty in predicting the number of affected prime contractors at this time. Additionally, the Department expects the cost impact to those affected contractors to be similar to the impacts on government entities which, in turn, may result in somewhat higher bids proposed by prime contractors on state and public authority contract work to compensate for increased costs due to these regulatory requirements. Nevertheless, this rulemaking maintains existing requirements on prime contractors and thus is not expected to have any negative impact on such prime contractors.

Because this rulemaking maintains existing requirements as to State agencies and authorities, as well as to prime contractors, the rulemaking itself would not be expected to have a negative impact on businesses or employment. Indeed, as already noted, the rulemaking proposes to remove trucks owned or operated by sub-contractors from coverage and thus, if anything, may have a positive direct impact on subcontractors.

1. Effect of rule:

As defined in the proposed regulation, "on behalf of" means "all heavy duty vehicles used to perform regulated entity work by a prime contractor. Those vehicles include, but are not limited to, heavy duty vehicles owned, operated or leased by a prime contractor."

As defined in the regulation, "Prime contractor means any person or entity that contracts directly with the regulated entity to perform regulated entity work ("prime contract") and who is responsible for the completion of the contract with the regulated entity. This definition shall not include subcontractors." Prime contractors could include affected small businesses and some local governments. Prime contractors include anyone that performs work for the state or public authority whether on or off state/public authority property. Regulated entities include affected state agencies and state and regional public authorities.

2. Compliance requirements:

Affected small businesses and contracted local governments continue to be required to comply with the ULSD and BART. The ULSD requirement was effective February 12, 2007. Affected small businesses and contracted local governments will be required to install BART on their applicable HDV's on or before December 31, 2013. A useful life waiver provision will be included in the regulation which allows the Department to issue a waiver of the requirements of this part to a BART regulated entity or prime contractor upon receipt of request from such entity or prime contractor provided that such vehicle will be permanently taken out of service in New York State on or before December 31, 2013 pursuant to recent revisions to ECL Section 19-0323.

3. Professional services:

No specific professional services are required by this revision to Part 248.

4. Compliance costs:

The Regulatory Impact Statement addresses compliance costs in detail on a per vehicle basis. We adopt those costs for purpose of this document.

5. Economic and technological feasibility:

The economic feasibility for both affected small businesses and contracted local governments to comply with the proposed regulatory requirements is difficult to determine and unknown since the total cost to comply with the proposed regulation is unknown. Total cost is based on the number of affected HDVs and the specific retrofit device to be installed on those HDVs which are currently unknown. Affected small businesses and contracted local governments also have the option to replace an existing HDV with a 2007 or newer HDV, replace with an alternative fuel HDV, or retire the HDV in lieu of retrofitting the HDV with a BART device, or obtain a useful life waiver or BART device waiver for the vehicle, which adds more uncertainty as to the total cost to comply with the regulation. The specific option that affected small businesses and contracted local governments will choose to comply with the regulatory requirements is unknown. The proposed revisions to Part 248 may reduce the cost for small businesses given that subcontractors will no longer be subject to the regulation. There are specific capital costs for the retrofit devices as mentioned in the RIS. As a result of incurred costs by affected small businesses to comply with the regulatory requirements, businesses may elect to reduce the number of their employees to cover the costs of purchasing/installing BART devices on their affected HDVs or place higher bids on state contracts. Affected local governments may also elect to reduce the number of their employees to cover the costs of the BART devices. Affected small businesses may also choose not to bid on state agency/public authority projects and local governments may choose not to enter or renew contracts with state agencies/public authorities.

6. Minimizing adverse impacts:

The legislation and proposed revised regulation include provisions for an HDV owner/operator to apply for a waiver from the ULSD or BART requirement in certain instances. If specified criteria are met as proposed in the regulation, the department will issue a waiver.

7. Small business and local government participation:

There will be a public comment period in which interested parties can submit written comments on the proposed revisions to the regulation. One stakeholder meeting was held on July 7, 2011 with those representing regulatory affected entities including various contractor associations and state agencies/public authorities to discuss the legislation and proposed revised regulatory requirements.

8. Cure period:

Pursuant to NYS State Administrative Procedures Act (SAPA) Section 202-b, this rulemaking does not include a cure period because the Department is undertaking this rulemaking to comply with changes to state legislation and recent court decisions. The court decisions required the Department to remove a class of entities previously subject to Part 248, specifically subcontractors, thereby removing those entities from any penalties for violations of Part 248. In addition, changes are being made to conform with more generous deadlines imposed upon the program by State legislation.

No changes were made to previously published Rural Area Flexibility Analysis.

1. Nature of impact:

We are revising 6 NYCRR Part 248, "Use of Ultra Low Sulfur Diesel Fuel and Best Available Retrofit Technology for Heavy Duty Vehicles" (Part 248). This rule will continue to potentially impact job and employment opportunities, both negatively and positively.

2. Categories and numbers affected:

The revised regulation requires that covered vehicles have best available retrofit technology (BART) installed on or before December 31, 2013. This proposed revision will eliminate subcontractors from regulatory applicability.

BART refers to retrofit equipment, verified by EPA or the California Air Resources Board (CARB), including diesel particulate filters (DPFs), diesel oxidation catalysts (DOCs), or other devices that reduce particulate matter contained in diesel exhaust. In lieu of retrofitting HDVs, regulated entities and contractors have the option to comply with BART by replacing a HDV engine/vehicle with either a MY 2007 heavy duty vehicle (or subsequent model year vehicle), or replace with an alternative fuel vehicle, or retire the vehicle/engine. Other BART compliance options include obtaining a useful life waiver or a BART device waiver for the vehicle. Contractors may include affected small businesses and local governments. We are proposing to revise the definition "on behalf of" to read: "all heavy duty vehicles used to perform regulated entity work by a prime contractor. Those vehicles include, but are not limited to, heavy duty vehicles owned, operated or leased by a prime contractor." The regulatory requirements will continue to affect several categories of businesses and employment including BART device (DPF and DOC) manufacturers, device substrate manufacturers, authorized installers/distributors of verified BART devices, new engine/vehicle (post model year 2006) manufacturers, and contractors of state agencies/public authorities.

This rulemaking maintains existing requirements as to prime contractors (i.e., prime contractors like state government entities, would remain subject to both the ULSD requirements effective February 12, 2007 and the BART requirements) and thus is not expected to have any negative impacts on such prime contractors. It is conceivable that prime contractors may elect to reduce the number of their employees to cover the costs of purchasing/installing BART devices on their affected HDVs. As noted in the 2009 rulemaking, the population of prime contractor vehicles affected by the proposed amended regulation is unknown. As with that rulemaking, the Department remains unable to provide a specific estimate of the number of contract solicitations or awards that will occur because of the difficulty in predicting the number of affected prime contractors at this time. The Department expects the cost impact to those affected contractors to be similar to the impacts on government entities which, in turn, may result in somewhat higher bids proposed by prime contractors on state and public authority contract work to compensate for the increased cost to comply with the ULSD and BART requirements on their affected vehicles. But such increased costs will primarily occur only until December 31, 2013, when all affected HDVs are required to be BART compliant. Costs associated with regulatory compliance may preclude or prevent some businesses from bidding on state agency/public authority contracts. Again, there would be no reason to expect these impacts to change from those associated with the existing regulation.

As noted in the 2009 rulemaking, businesses and employment expected to continue to be positively impacted as a result of the existing regulation include BART device manufacturers, device substrate manufacturers, authorized installers/ distributors of verified BART devices, new engine/vehicle manufacturers and alternative fuel engine/vehicle manufacturers. However, these positive impacts may be reduced by this rulemaking. Both the addition of useful life waivers and the subtraction of subcontractors from applicability will reduce the number of vehicles required to retrofit. Businesses that may be created or continue to expand include those that manufacture, install, repair, or clean retrofit technologies. Again, since the proposed revised regulation deletes subcontractors from applicability, the degree to which these businesses are positively impacted may be slightly less appreciable as there is the potential for less retrofits which could negatively impact those BART device manufacturers and vendors.

The rulemaking proposes to remove trucks owned or operated by subcontractors from applicability and therefore should have a positive direct impact on subcontractors.

3. Regions of adverse impact:

Statewide.

4. Minimizing adverse impact:

DERA, including recent amendments, provides for waivers related to BART devices. In addition to the previously permitted waiver where BART is not applicable or available for a specific engine application, Part 248 is being revised to allow the department to issue a useful life waiver for a specific vehicle/engine upon request in lieu of retrofitting a vehicle pursuant to amended ECL 19-0323. However, the applicant must certify that the vehicle will be taken out of service in New York State by December 31, 2013. Waivers may be issued by the department only if specific regulatory criteria are met. This will reduce the number of vehicles required to be retrofit.

5. Self employment opportunities:

Entrepreneurial opportunities will continue to exist for those willing to become authorized representatives of BART device manufacturers in order to provide technical support for and any required maintenance of the device.

There were a total of forty (40) comments received from eight individual commentors. The commentors were: Marilyn Stern; Barry Panicola, Sprague Operating Resources, LLC; Joseph A. Foglietta III, P.E., New York State Department of Transportation; Joseph Stelling, New York Public Interest Research Group; Thomas Miller, New York State Department of Environmental Conservation; David S. Hamling, New York Construction Materials Association; Kendra Adams, New York State Motor Truck Association; and Russell Mendell.

Two commentors questioned the scope of applicability and considered the regulation too broad. The Department responded by saying the Diesel Emission Reduction Act of 2006 (DERA) states that those Heavy Duty Vehicles (HDVs) operating "on behalf of" state agencies and public authorities are subject to the use of Ultra Low Sulfur Diesel Fuel (ULSD) and Best Available Retrofit Technology (BART) requirements. Pursuant to two court decisions, the proposed revisions to this regulation remove the applicability of Part 248 to subcontractors and limit applicability to prime contractors' vehicles. 'See' Matter of N.Y. Constr. Material Ass'n v. DEC, 83 A.D.2d 1323, 1328 (3d Dep't 2011) (Matter of N.Y. Construction Materials) and Riccelli Enterprises, Inc. v. Grannis, 30 Misc. 3d 573, 579 (Sup. Ct. Onondaga Co. 2010) (Riccelli). Paragraph 248-1.1(b)(14), pursuant to DERA, defines subject vehicles, and specifically excludes certain HDVs from applicability. This is not being changed in this rulemaking. Section 248-2.1 also continues to include additional exemptions from applicability for certain heavy duty vehicles and is also not being changed in this rulemaking. Moreover, the prime contractors' vehicles operating on behalf of a state agency or affected public authority, continue to be subject to the regulatory requirements. Prime contractor is defined in the regulation as:

any person or entity that contracts directly with the regulated entity to perform regulated entity work ("prime contract") and who is responsible for the completion of the contract with the regulated entity. This definition shall not include subcontractors.

The decision in Riccelli directed the DEC to define prime contractor in Part 248 as noted above. Prime contractor HDVs which are associated with a state contract are covered under the regulation. The prime contractor's entire fleet of HDVs is not necessarily subject to the regulatory requirements, but only those vehicles which are used in support of the relevant state contract.

One commentor was concerned about companies that do not do enough business with the state to amortize the cost of compliance, and therefore will not quote and/or work on state contracts and that there should be a monetary threshold for applicability. The Department responded it recognizes that the regulation may impact different fleets in different ways and that this may result in changes in the way various entities compete for state contracts. DERA does not provide for a threshold dollar amount for applicability and therefore neither does Part 248.

Two commentors suggested that the proposed revised regulation will result in increased costs and create an unnecessary economic burden for those required to comply. Commentors went on to say the regulations as currently drafted drastically underestimate the potentially severe direct and indirect effects on the State's economy. Additionally, commentors suggested the Part 248 regulations go beyond the intent of the Legislature and recent court decisions and are in direct conflict with the goals of the current administration. The Department responded by stating that the Department identified the anticipated costs of the program to the best of our ability in the Regulatory Impact Statement (RIS) and other supporting documents and understands that there may be significant economic impact to some businesses, including those related to the trucking industry, state agencies and public authorities when complying with the retrofit requirements. However, under DERA, the Legislature directed the Department to develop and promulgate regulations to implement the BART requirements. Two recent court decisions, Riccelli and Matter of N.Y. Construction Materials, have narrowed the scope of applicability by removing subcontractors from applicability and these revisions are being proposed in order to comply with said decisions. The Department believes that the proposed regulation conforms to DERA and the recent court decisions regarding prime and subcontractors. Even if these regulations were not in place, the provisions of DERA, enacted in 2006, require the retrofit of vehicles owned and operated by state agencies and authorities, as well as prime contractors to those agencies and authorities, by date certain.

Three commentors requested clarification regarding the rulemaking language "regular and frequent basis". The Department responded with the following statement. The provisions to which the commentors refer exempt those manufacturing or delivery companies who only infrequently do business with state agencies and authorities, and shipping companies such as Federal Express. According to the American Heritage College Dictionary, Third Edition (2000), regular means customary, usual or normal. Ballentines's Law Dictionary (2010) defines regular as conforming to an established rule, principle or custom…consistent…following a fixed procedure or schedule…acting or happening at uniform intervals. Black's Law Dictionary, Sixth Edition (1990) defines regular as … steady or uniform in course, practice or occurrence. American Heritage defines frequent as occurring or appearing quite often or at close intervals. Webster's New World College Dictionary, Fourth Edition (2005), defines frequent as occurring often, happening repeatedly at brief intervals. Each agency and authority must determine what is regular and frequent for its own business model and is in the best position to make that determination.

One commentor wanted clarification regarding the term "contracts" and the same commentor wanted clarification regarding whether "regulated entity work" only applied to construction. The Department responded that broadly speaking, a contract is an agreement between two parties which defines the rights and responsibilities of the parties. Each agency and authority must determine the types of contracts it uses in the course of its regular business. The Department stated that regulated entity work applies broadly, not simply to construction related work.

Two commentors requested clear and defined language regarding the difference between a shipping and a manufacturer or delivery company. The Department responded that these provisions exempt those manufacturing or delivery companies who only infrequently do business with state agencies or authorities, and shipping companies such as Federal Express. For example, a material supplier, under a prime contract with an agency or authority which delivers regularly and frequently is subject to applicability. Conversely, a material supplier who does not deliver regularly or frequently is not subject to applicability. Each agency and authority must determine what is frequent for its own business model and is in the best position to make that determination.

Two commentors questioned the legality of the labeling requirements described in the regulation. They indicated the requirements were not only burdensome, but in violation of federal law which prohibits state specific decals with few exceptions. The Department responded that the label requirements are described in Section 248-5.1 of the proposed regulation. Information required on the label will assist the Department in determining the compliance status of the covered vehicle. The provisions requiring appropriate labels is not a new provision, and it is not being revised during this rulemaking. Such requirement was included in the initial adoption of this regulation and commentors did not make these comments at that time. This comment is outside the scope of these revisions to Part 248.

Two commentors suggested that the proposed regulations fail to satisfy the court orders or the Legislative intent of the statute. They went on to comment that the regulations should apply to state vehicles only. The Department responded that it believes that the New York State Legislature clearly intended that DERA and any subsequent implementing regulations include both state and prime contractor owned and operated vehicles. Revisions to Part 248 concerning applicability conform to the intent of the legislature as determined by two courts. Both 'Matter of N.Y. Construction Materials Association' and 'Riccelli' court decisions specifically mention prime contractors with reference to applicability. The court in 'Riccelli' went so far as to provide the exact regulatory language for use in revising Part 248 concerning prime contractors in its decision including "all heavy duty vehicles used to perform entity work by a prime contractor. Those vehicles include, but not limited to, heavy duty vehicles owned, operated or leased by a prime contractor…". Further, the court stated " [p]rime contractor means any person or entity that contracts directly with the regulated entity to perform regulated entity work ("prime contract" and who is responsible for the completion of the contract with the regulated entity. This definition shall not include subcontractors".

One commentor indicated that in the future, please give more advanced notice of public hearings. The Department responded that the notice of public hearings was published in the Department's Environmental Notice Bulletin, the State Register and several newspapers on December 14, 2011 allowing adequate notice and time to submit public comments to the Department by the January 26, 2012 deadline.

There were three general commentors who supported the regulation with one applauding the Department for its efforts. The Department thanked them for their support.

One commentor indicated that while they understand the concerns associated with diesel emissions, they remain opposed to the proposed regulation. The Department responded that DERA, enacted in 2006, requires the use of BART on affected HDVs including those HDVs used "on behalf of" state agencies and public authorities. Part 248 is the implementing regulation for DERA and is required pursuant to DERA.

Regarding record keeping and reporting requirements, two commentors suggested the requirements were too burdensome. They also failed to see the need to report the consumption of Ultra-Low Sulfur Diesel fuel on an annual basis since ULSD is currently being used on a universal basis. Lastly, the commentors thought that contractors should report directly to the Department, rather than to the agency they contracted with. The Department's response notes that DERA requires the Department to report on the use of ULSD. The record keeping requirements noted in Section 248-7 of the proposed regulation are necessary to ensure compliance, and will assist the regulated entity and prime contractors in meeting the reporting requirements listed in Section 248-6 of the proposed regulation. In order for the Department to report on the use of ULSD, it must receive information from the agencies and prime contractors, and determine compliance. DEC has no way to determine who is a prime contractor to each agency and therefore has no way to determine compliance with the reporting requirement and therefore compliance with DERA. Requiring agencies to keep track of their contractors reporting is a reasonable way to ensure compliance. This requirement is not a new requirement; it was included in the initial rulemaking adopted in 2009.

Two commentors thought that eliminating subcontractors from applicability creates a competitive disadvantage for those carriers that choose to make their own deliveries rather than sub-contract to another carrier. In response, the Department recognizes the regulations may impact different fleets in different ways and that this may result in changes in the way various entities compete for state contracts. The Department, however, is obligated by DERA to promulgate regulations requiring BART for state agencies/public authorities and their contractors pursuant to a specific timeframe. As a result of two previously mentioned court decisions, the Department is removing subcontractors from applicability and believes that the proposed regulation conforms to the recent court decisions regarding prime and subcontractors.

Three commentors were concerned about the compliance deadline and felt the proposed regulations mandate was unrealistic and impracticable. One suggested a process of phasing out older equipment, rather than being forced to purchase expensive retrofits. The Department responded by stating the BART compliance schedule is mandated by DERA and therefore cannot be amended in this regulation. Only the Legislature can amend DERA and its included deadlines. The BART compliance deadline was extended by one year to December 31, 2013 in this year's budget bill. Therefore, the Department will extend the BART compliance deadline in accordance with the statute and will issue a notice of revised rulemaking for the deadline change. Before adopting a final regulation, the Department will accept public comments on the extended BART compliance deadline.

Finally, two commentors discussed waivers. Again, the commentors requested additional time, suggesting the expiration date of useful life waivers be extended to December 31, 2015. The Department responded by stating the BART compliance schedule is mandated by DERA and therefore cannot be amended in this regulation. DERA specifically requires the December 31, 2013 expiration date for HDVs operating in New York State that have been issued useful life waivers.