
[Federal Register Volume 74, Number 159 (Wednesday, August 19, 2009)]
[Proposed Rules]
[Pages 41826-41829]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-19856]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2009-0024; FRL-8943-7]


Revisions to the California State Implementation Plan, San 
Joaquin Valley Unified Air Pollution Control District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing a limited approval and limited disapproval of 
revisions to the San Joaquin Valley Unified Air Pollution Control 
District portion of the California State Implementation Plan. These 
revisions concern a local fee rule that applies to major sources of 
volatile organic compound and nitrogen oxide emissions within the San 
Joaquin Valley ozone nonattainment area. We are proposing action on a 
local rule that regulates these emission sources under the Clean Air 
Act as amended in 1990. We are taking comments on this proposal and 
plan to follow with a final action.

DATES: Any comments must arrive by September 18, 2009.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2009-0024, by one of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the on-line instructions.
    2. E-mail: steckel.andrew@epa.gov.
    3. Mail or deliver: Andrew Steckel (Air-4), U.S. Environmental 
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 
94105-3901.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at http://www.regulations.gov, including any personal information provided, 
unless the comment includes Confidential Business Information (CBI) or 
other information whose disclosure is restricted by statute. 
Information that you consider CBI or otherwise protected should be 
clearly identified as such and should not be submitted through http://www.regulations.gov or e-mail. http://www.regulations.gov is an 
``anonymous access'' system, and EPA will not know your identity or 
contact information unless you provide it in the body of your comment. 
If you send e-mail directly to EPA, your e-mail address will be 
automatically captured and included as part of the public comment. If 
EPA cannot read your comment due to technical difficulties and cannot 
contact you for clarification, EPA may not be able to consider your 
comment.
    Docket: The index to the docket for this action is available 
electronically at http://www.regulations.gov and in hard copy at EPA 
Region IX, 75 Hawthorne Street, San Francisco, California. While all 
documents in the docket are listed in the index, some information may 
be publicly available only at the hard copy location (e.g., copyrighted 
material), and some may not be publicly available in either location 
(e.g., CBI). To inspect the hard copy materials, please schedule an 
appointment during normal business hours with the contact listed in the 
FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Mae Wang, EPA Region IX, (415) 947-
4124, wang.mae@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and 
``our'' refer to EPA.

Table of Contents

I. The State's Submittal
    A. What Rule did the State Submit?
    B. What Is the Purpose of the Submitted Rule?
    C. Why Was This Rule Submitted?
II. EPA's Evaluation and Action
    A. How Is EPA Evaluating the Rule?
    B. Does the Rule Meet the Evaluation Criteria?
    C. What Are the Rule Deficiencies?
    D. Proposed Action and Public Comment
III. Statutory and Executive Order Reviews

I. The State's Submittal

A. What Rule Did the State Submit?

    The San Joaquin Valley Unified Air Pollution Control District 
(SJVUAPCD) adopted Rule 3170, Federally Mandated Ozone Nonattainment 
Fee, on May 16, 2002. This rule was submitted by the California Air 
Resources Board (CARB) on August 6, 2002, for incorporation into the 
California State Implementation Plan (SIP). On August 30, 2002, this 
rule submittal was found to meet the completeness criteria in 40 CFR 
Part 51, Appendix V.

B. What Is the Purpose of the Submitted Rule?

    SJVUAPCD Rule 3170 requires certain major stationary sources of 
volatile organic compounds (VOCs) and nitrogen oxides (NOX) 
in the San Joaquin Valley ozone nonattainment area to pay a fee to the 
SJVUAPCD if the area fails to attain the 1-hour national ambient air 
quality standard (NAAQS) for ozone by its Federally established 
attainment date. The fee must be paid for each calendar year after the 
attainment year until the area is redesignated to attainment of the 1-
hour ozone standard.

C. Why Was This Rule Submitted?

    Under sections 182(d)(3), (e), and 185 of the Clean Air Act as 
amended in 1990 (CAA or the Act), States are required to adopt an 
excess emissions fee regulation for ozone nonattainment areas 
classified as severe or extreme. The 1-hour ozone NAAQS classification 
for the San Joaquin Valley area is extreme (see 69 FR 20550, April 16, 
2004). Although EPA has revoked the 1-hour ozone NAAQS (69 FR 23951, 
April 30, 2004), Section 185 requirements still apply for 1-hour ozone 
non-attainment areas (South Coast Air Quality Management District v. 
EPA, 472 F.3d 882, DC Cir. 2006). The fee regulation specified by the 
Act requires major stationary sources of VOCs in the nonattainment area 
to pay a fee to the State if the area fails to attain the standard by 
the attainment date set forth in the Act. Section 182(f) of the Act 
requires States to apply the same requirements to major stationary 
sources of NOX as are applied to major stationary sources of 
VOCs. Emissions of VOCs and NOX play a role in producing 
ground-level ozone and smog, which harm human health and the 
environment. SJVUAPCD Rule 3170 applies to major sources of both 
NOX and VOCs.

II. EPA's Evaluation and Action

A. How Is EPA Evaluating the Rule?

    Generally, SIP rules must be enforceable (see section 110(a) of the 
Act), and must not relax existing requirements (see sections 110(l) and 
193). Rule 3170 was evaluated for compliance with the requirements in 
CAA section 185. The rule was also

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evaluated for consistency with the CAA and EPA's general SIP policies, 
as well as a March 21, 2008, memorandum from William Harnett, Director 
of the Air Quality Policy Division, to the Regional Air Division 
Directors, entitled, ``Guidance on Establishing Emissions Baselines 
under Section 185 of the Clean Air Act (CAA) for Severe and Extreme 
Ozone Nonattainment Areas that Fail to Attain the 1-hour Ozone NAAQS by 
their Attainment Date.'' Guidance and policy documents that we use to 
help evaluate specific enforceability requirements typically include 
the following:
    1. ``Issues Relating to VOC Regulation Cutpoints, Deficiencies, and 
Deviations'', EPA, May 25, 1988 (the Bluebook).
    2. ``Guidance Document for Correcting Common VOC & Other Rule 
Deficiencies'', EPA Region 9, August 21, 2001 (the Little Bluebook).
    3. ``State Implementation Plans; Nitrogen Oxides Supplement to the 
General Preamble; Clean Air Act Amendments of 1990 Implementation of 
Title I; Proposed Rule'', (the NOX Supplement), 57 FR 55620, 
November 25, 1992.

B. Does the Rule Meet the Evaluation Criteria?

    Rule 3170 improves the SIP by establishing an excess emissions fee 
regulation. Portions of the rule are consistent with the CAA, as well 
as relevant policy and guidance regarding enforceability and SIP 
relaxations. Rule provisions which do not meet the evaluation criteria 
are summarized below.

C. What Are the Rule Deficiencies?

    The following provisions conflict with section 185 of the Act and 
prevent full approval of the SIP revision:
    Section 4.2 of SJVUAPCD Rule 3170 exempts units that begin 
operation after the attainment year. CAA Section 185 does not provide 
for an exemption for emission units that begin operation after the 
attainment year, so this exemption does not fully comply with the CAA. 
Rather, it requires ``each major source'' to pay the fee. See CAA 
section 185(a).
    Section 4.3 exempts any ``clean emission unit'' from the 
requirements of the rule. Section 3.6 defines a clean emission unit as 
a unit that is equipped with an emissions control technology that 
either has a minimum 95% control efficiency (or 85% for lean-burn 
internal combustion engines), or meets the requirements for achieved-
in-practice Best Achievable Control Technology as accepted by the APCO 
during the 5 years immediately prior to the end of the attainment year. 
The District's staff report for Rule 3170 states that the exemption is 
intended to address ``the difficulty of reducing emissions from units 
with recently installed BACT.'' Although EPA understands the District's 
intended purpose for including the exemption, the exemption does not 
comply with CAA section 185, for the same reason as noted above for new 
emission units.
    The EPA's Clean Air Act Advisory Committee (CAAAC) has recently 
asked EPA to review and address whether it is ``legally permissible 
under either section 185 or 172(e) of the Clean Air Act for a State to 
exercise discretion'' to develop fee program SIPs employing one or more 
of a list of CAAAC-identified program options (see http://www.epa.gov/air/caaac/185wg). One of the program options the CAAAC identified is an 
exemption from fees for ``well-controlled'' sources. In today's action, 
EPA is proposing to disapprove the ``clean emission unit'' exemption in 
SJVUAPCD Rule 3170 because we do not believe such an exemption is 
authorized by CAA section 185. However, the State has not requested 
that EPA review the SIP pursuant to section 172(e) and has not made a 
demonstration that the program it has submitted would ensure controls 
that are ``not less stringent'' than those required under section 
172(e). Thus, EPA is not at this time addressing whether it is legally 
permissible under CAA section 172(e) for a State to adopt an 
alternative program at least as stringent as a section 185 fee program, 
and for the alternative program to contain a clean unit exemption.
    Section 3.2.1 defines the baseline period as two consecutive years 
consisting of the attainment year and the year immediately prior to the 
attainment year. CAA Section 185(b)(2) establishes the attainment year 
as the baseline period. While this provision also provides the option 
for calculating baseline emissions over a period of more than one 
calendar year, that option is limited to sources with emissions that 
are irregular, cyclical, or otherwise vary significantly from year to 
year. Thus section 3.2.1 is inconsistent with the CAA because it 
provides a different baseline than that required by the CAA (two years 
instead of one) regardless of whether the emissions are irregular, etc.
    Section 3.2.2 allows averaging over 2-5 years to establish baseline 
emissions. CAA Section 185(b)(2) states that EPA may issue guidance 
authorizing such an alternative method of calculating baseline 
emissions if a source's emissions are irregular, cyclical, or otherwise 
vary significantly from year to year. EPA issued guidance on 
alternative methods for calculating baseline emissions in the form of 
the memorandum from William Harnett, mentioned above. The averaging 
period allowed in Section 3.2.2 of Rule 3170 appears consistent with 
the March 21, 2008, guidance. However, the language in Section 3.2.2 
allows such averaging ``if those years are determined by the APCO as 
more representative of normal source operation.'' This language is 
considered less stringent than the CAA criteria. The rule should be 
amended to specify use of the expanded averaging period only if a 
source's emissions are irregular, cyclical, or otherwise vary 
significantly from year to year.
    Section 3.4 defines the term ``Major Source'' by referring to the 
definition in SJVUAPCD Rule 2201 (New and Modified Stationary Source 
Review Rule). The current SIP-approved version of Rule 2201 was adopted 
by the SJVUAPCD on December 19, 2002, and approved by EPA on May 17, 
2004 (69 FR 27837). This version of Rule 2201 defines ``Major Source'' 
as a stationary source with VOC or NOx emissions of over 50,000 pounds 
per year (25 tons per year). The CAA defines the major source threshold 
as 10 tons per year for ozone nonattainment areas classified as 
extreme. The SJVUAPCD amended Rule 2201 on December 18, 2008, and 
submitted it for inclusion in the SIP on March 17, 2009. This amended 
version includes the 10 tons per year threshold, but has not been 
approved into the SIP. Therefore, Rule 3170's reliance on Rule 2201 to 
define major sources is not approvable at this time. If a version of 
Rule 2201 that contains the appropriate major source threshold is 
approved into the SIP prior to finalizing this proposed action, then we 
will no longer cite Section 3.4 as a deficiency in Rule 3170.

D. Proposed Action and Public Comment

    As authorized in sections 110(k)(3) and 301(a) of the Act, EPA is 
proposing a limited approval of the submitted rule to improve the SIP. 
If finalized, this action would incorporate the submitted rule into the 
SIP, including those provisions identified as deficient. This approval 
is limited because EPA is simultaneously proposing a limited 
disapproval of the rule under section 110(k)(3) because the rule does 
not fully meet the statutory section 185 requirement. If this 
disapproval is finalized, sanctions will be imposed under section 179 
of the Act unless EPA approves subsequent SIP revisions that correct 
the rule deficiencies within 18 months. These sanctions would be 
imposed according to 40 CFR 52.31. A

[[Page 41828]]

final disapproval would also trigger the Federal implementation plan 
(FIP) requirement under section 110(c). Note that the submitted rule 
has been adopted by the SJVUAPCD, and EPA's final limited disapproval 
would not prevent the local agency from enforcing it. Moreover, because 
the rule would be approved into the SIP, it would also be Federally 
enforceable.
    However, the limited approval of Rule 3170 does not override 
specific CAA mandates. If the area fails to attain by its 2010 
attainment date, fees will accrue beginning in 2011 for emissions above 
80% of source baselines for clean units, new units and major sources 
which are exempted from fee collection under the State rule. The State 
must adopt and submit a rule to collect fees for 2011 and future years 
from those units or, consistent with the Administrator's obligation 
under section 185(d), EPA will collect those fees. In addition, all 
sources are liable for fees calculated in accordance with the baseline 
definition in section 185(b)(2) as further interpreted in EPA guidance 
issued pursuant to that provision. The State must adopt and submit a 
rule that ensures fees are collected for 2011 and all future applicable 
years based on the statutory baseline requirement. If the State fails 
to do so, EPA will collect any additional fees owed pursuant to a 
Federal program under section 185(d).
    We will accept comments from the public on the proposed limited 
approval and limited disapproval for the next 30 days.

III. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

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

B. Paperwork Reduction Act

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

C. Regulatory Flexibility Act

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

D. Unfunded Mandates Reform Act

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

E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces 
Executive Orders 12612 (Federalism) and 12875 (Enhancing the 
Intergovernmental Partnership). Executive Order 13132 requires EPA to 
develop an accountable process to ensure ``meaningful and timely input 
by State and local officials in the development of regulatory policies 
that have federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Under Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law unless the 
Agency consults with State and local officials early in the process of 
developing the proposed regulation.
    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, as specified in Executive Order 13132, because it 
merely proposes to approve or disapprove a State rule implementing a 
Federal standard, and does not alter the relationship or the 
distribution of power and responsibilities established in the Clean Air 
Act. Thus, the requirements of section 6 of the Executive Order do not 
apply to this rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

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

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distribution of power and responsibilities between the Federal 
government and Indian Tribes. Thus, Executive Order 13175 does not 
apply to this rule.
    EPA specifically solicits additional comment on this proposed rule 
from Tribal officials.

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

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

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

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

I. National Technology Transfer and Advancement Act

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

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping 
requirements, Volatile organic compounds.

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

    Dated: August 6, 2009.
Jane Diamond,
Acting Regional Administrator, Region IX.
[FR Doc. E9-19856 Filed 8-18-09; 8:45 am]
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