[Federal Register Volume 75, Number 8 (Wednesday, January 13, 2010)]
[Rules and Regulations]
[Pages 1716-1723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-353]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R09-OAR-2009-0024; FRL-9097-2]
Revisions to the California State Implementation Plan, San
Joaquin Valley Unified Air Pollution Control District
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is finalizing a limited approval and limited disapproval
of revisions to the San Joaquin Valley Unified Air Pollution Control
District (SJVUAPCD) portion of the California State Implementation Plan
(SIP). This action was proposed in the Federal Register on August 19,
2009, and concerns a local fee rule that applies to major sources of
volatile organic compound and nitrogen oxide emissions in the San
Joaquin Valley ozone nonattainment area. Under authority of the Clean
Air Act as amended in 1990 (CAA or the Act), this action simultaneously
approves a local rule that regulates these emission sources and directs
California to correct rule deficiencies.
DATES: Effective Date: This rule is effective on February 12, 2010.
ADDRESSES: EPA has established docket number EPA-R09-OAR-2009-0024 for
this action. The index to the docket 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.
[[Page 1717]]
FOR FURTHER INFORMATION CONTACT: Mae Wang, EPA Region IX, (415) 947-
4124, [email protected].
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to EPA.
Table of Contents
I. Proposed Action
II. Public Comments and EPA Responses
A. Commenting Parties
B. Summary of Comments and EPA Responses
1. EPA Response to the Clean Air Act Advisory Committee Letter
2. Consideration of Rule 3170 as an Alternative Program
3. Exemption for Units That Begin Operation After the Attainment
Year
4. Exemption for ``Clean Emission Units''
5. Defining the Baseline Period as the Attainment Year and the
Immediately Preceding Year
6. Allowing Averaging Over 2-5 Years To Establish Baseline
Emissions
7. Stationary Versus Mobile Sources
8. Impacts of Rule 3170 on Small Businesses
9. Unintended Consequences of Rule 3170
10. Incorrect Statement of Baseline Emissions
11. Ambiguity on Fees for Both VOCs and NOX
12. Definition of ``Major Source''
13. Sunset Provision for Section 185 Fees
III. EPA Action
IV. Statutory and Executive Order Reviews
I. Proposed Action
On August 19, 2009 (74 FR 41826), EPA proposed a limited approval
and limited disapproval of the following rule that was submitted for
incorporation into the California SIP.
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Local agency Rule No. Rule title Adopted Submitted
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SJVUAPCD.............................. 3170 Federally Mandated Ozone 05/16/02 08/06/02
Nonattainment Fee.
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We proposed a limited approval because we determined that this rule
improves the SIP and is largely consistent with the relevant CAA
requirements. We simultaneously proposed a limited disapproval because
some rule provisions do not fully meet the statutory CAA section 185
requirement. These provisions include the following:
1. An exemption for units that begin operation after the attainment
year.
2. An exemption for any ``clean emission unit.''
3. The definition of the baseline period as two consecutive years.
4. The allowance of averaging baseline emissions over a period of
2-5 years ``if those years are determined by the APCO as more
representative of normal source operation.''
5. An inappropriate definition of the term ``Major Source.'' Our
proposed action contains more information on the basis for this
rulemaking and on our evaluation of the submittal.
II. Public Comments and EPA Responses
A. Commenting Parties
EPA's proposed action provided a 30-day public comment period.
During this period, we received the following 12 comment letters from
11 parties:
1. American Chemistry Council, letter from Lorraine Gershman, dated
September 18, 2009.
2. American Petroleum Institute, letter from Ted Steichen, dated
September 18, 2009.
3. Association of Irritated Residents, letter from Brent Newell,
Center on Race, Poverty, and the Environment, dated September 18, 2009.
4. California Small Business Alliance, letter from William R. La
Marr, dated August 11, 2009.
5. The Clean Energy Group, letter from Michael Bradley, dated
September 18, 2009.
6. County Sanitation Districts of Los Angeles County, letter from
Stephen R. Maguin and Gregory M. Adams, dated August 11, 2009.
7. County Sanitation Districts of Los Angeles County, letter from
Stephen R. Maguin and Gregory M. Adams, dated September 18, 2009.
8. EarthJustice, letter from Paul Cort, dated September 18, 2009.
9. San Joaquin Valley Unified APCD, letter from Seyed Sadredin,
dated September 17, 2009.
10. The Section 185 Working Group, letter from Jason C. Moore,
Baker Botts, dated August 13, 2009.
11. Southern California Air Quality Alliance, letter from Curtis L.
Coleman, Esq., dated August 12, 2009.
12. Western States Petroleum Association, letter from David R.
Farabee, Pillsbury Winthrop Shaw Pittman LLP, dated September 18, 2009.
B. Summary of Comments and EPA Responses
The comments and our responses are summarized below. The comments
have been grouped into general categories.
1. EPA Response to the Clean Air Act Advisory Committee Letter
On May 15, 2009, the Clean Air Act Advisory Committee (CAAAC) sent
a letter to EPA Acting Assistant Administrator Elizabeth Craig
regarding issues related to the implementation of CAA section 185. The
CAAAC 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).
Comments: Several commenters specifically requested that EPA
respond to the CAAAC letter prior to taking final action on SJVUAPCD
Rule 3170. Commenters also suggested that EPA provide final guidance
regarding flexibility under either CAA section 185 or 172(e) before
disapproving any elements of SJVUAPCD Rule 3170.
Response: EPA intends to respond more fully to the issues raised by
the CAAAC letter. EPA, however, cannot delay action on SJVUAPCD Rule
3170 because we are under a legal obligation to sign a Federal Register
notice for our final action on Rule 3170 by December 11, 2009. This
obligation is imposed by a consent decree between EPA and the Center
for Race, Poverty and the Environment (CRPE) to settle CRPE's
litigation alleging that EPA had failed to act on Rule 3170 in a timely
manner. The consent decree was entered on August 18, 2009, by the U.S.
District Court for the Northern District of California, case number 08-
cv-05650 CW.
We note that CAA section 172(e) does not directly apply to the
transition from the 1-hour ozone standard to the 1997 8-hour ozone
standard because that provision applies only where the revised standard
is less stringent than the standard it replaces. However, because the
CAA does not directly address anti-backsliding where there is a new
more stringent standard, EPA determined to apply the principles of CAA
section 172(e) for purposes of addressing anti-backsliding for the
transition from the 1-hour standard to the 1997 8-hour standard. EPA
also notes that the State has not requested that EPA review Rule 3170
pursuant to the principles in CAA section 172(e) and thus, for purposes
of taking action on Rule 3170, it is not necessary for EPA to take a
final position regarding
[[Page 1718]]
whether it could approve a substitute program for the program specified
under CAA section 185.
2. Consideration of Rule 3170 as an Alternative Program
CAAAC's May 15, 2009, letter identifies as a program option an
exemption from fees for ``well-controlled'' sources. In our proposed
action on Rule 3170, we noted this exemption as a basis for not being
able to fully approve the rule as meeting section 185 of the Act. We
further noted that the State has not requested that EPA review the SIP
to determine whether it would be equivalent to CAA section 185 under
the principles of 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 185. Thus, we stated that
we were not addressing whether it is legally permissible for a State to
adopt an alternative program at least as stringent as a section 185 fee
program, or if so, whether such alternative program could contain a
clean unit exemption.
Comments: One commenter encouraged EPA to work with SJVUAPCD to
consider Rule 3170 as an alternative program under the provisions of
CAA section 172(e). The commenter felt that this rule as written would
encourage area-wide emission reductions and meet the goals of CAA
section 185 without sacrificing stringency.
One commenter stated that even if the District had submitted Rule
3170 pursuant to 172(e), or attempts to make a 172(e) demonstration to
justify the clean unit exemption or other deficiency, CAA section
172(e) does not apply in this situation and cannot justify Rule 3170's
failure to comply with CAA section 185. The commenter stated that
section 172(e) only applies where EPA has relaxed a national primary
ambient air quality standard (NAAQS). As a result, CAA section 172(e)
does not support the exemptions in Rule 3170.
Response: We agree with the comment that CAA section 172(e) does
not directly apply where EPA has promulgated a more stringent NAAQS.
However, as noted above, because the Act does not address the
principles that apply when there is a transition to a more stringent
NAAQS, EPA determined that it was reasonable to apply the principles in
section 172(e). Thus, to the extent section 172(e) would authorize EPA
to allow alternatives to statutory programs such as the fee program in
CAA section 185, EPA's application of the principles in section 172(e)
to the anti-backsliding requirements for the 1-hour standard would
provide EPA with the discretion to authorize an alternative program.
Also, as noted above, EPA has not yet stated whether it would approve
such programs for purposes of the anti-backsliding requirements of the
1-hour ozone standard.
Because the State has not submitted the program as an alternative
program consistent with the principles in CAA section 172(e), EPA is
not required to take a position in this rulemaking on whether it would
approve such alternatives or whether the submitted program is
consistent with those principles. We will continue to work with the
State to ensure that they adopt a program that is fully consistent with
the requirements of the CAA.
3. Exemption for Units That Begin Operation After the Attainment Year
Section 4.2 of SJVUAPCD Rule 3170 exempts units that begin
operation after the attainment year. In its proposed action, EPA stated
that 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)).
Comments: Several commenters disagreed with EPA's proposed action
on this particular provision. They felt that this exemption is
consistent with the CAA requirements and therefore should not be
considered a deficiency. They also felt that imposing fees on these
units would be an unfair burden, resulting in an unfair business
environment. One commenter expressed that imposing fees on new units
would only serve to hinder the ability of new, cleaner units to
displace older, dirtier units. Another commenter expressed that while
CAA section 185 does not provide an express exemption for new units,
EPA has sufficient discretion to approve the new unit exemption in Rule
3170.
Two commenters agreed with EPA's proposed action on this particular
provision. They felt that this exemption violates the requirements of
CAA section 185 and is a rule deficiency that is a basis for
disapproval of the rule. One commenter stated that the CAA section 185
language is plain and unambiguous, and clearly does not allow such an
exemption. The other commenter added that there is no statutory
authority for splitting a stationary source into separate emission
units for the purpose of determining fees.
Response: CAA section 185 does not provide for an exemption for
units beginning operation after the attainment year. Rather, it
requires that ``each major stationary source'' must pay the fee and
that the baseline emissions are those from the major source in the
attainment year. The word ``each'' does not lend itself to an
interpretation that would exclude new major sources or new units at
existing major sources from the fee obligation. The equity concerns
cannot override the statutory requirement.
4. Exemption for ``Clean Emission Units''
Section 4.3 of SJVUAPCD Rule 3170 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 (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.'' In its proposed
action, EPA expressed that although EPA understands the District's
intention, the exemption does not comply with CAA section 185, for the
same reason as noted above for new emission units.
Comments: Several commenters disagreed with EPA's proposed action
on this particular provision. They felt that this exemption is
consistent with the CAA requirements and therefore should not be
considered a deficiency. Several commenters believe that Congress did
not intend to impose fees on units that are already as clean as
possible. The imposition of fees on these units may, in many cases,
force a curtailment in operations to reduce emissions.
Two commenters agreed with EPA's proposed action on this particular
provision. They felt that this exemption violates CAA section 185
requirements and is a rule deficiency that is a basis for disapproval
of the rule. These commenters stated that the CAA section 185 language
is plain and unambiguous, clearly does not allow such an exemption,
that there is no suggestion in the CAA that the best controlled sources
are entitled to any other ``reward'' or exemption, and that section 185
is not a program to penalize only the less-regulated sources. One
commenter expressed that Congress understood that the level of control
among sources might vary because CAA section 185(b)(2)
[[Page 1719]]
specifies that the baseline comes from the lower of actuals or
allowables, and that the allowables baseline is to be based on the
emissions allowed ``under the permit'' unless the source has no permit
and is only subject to limits provided under the SIP. The commenter
stated that it would defeat this express language to exempt sources
from paying a fee based on some arbitrary notion of being ``clean
enough.''
Response: As explained above, CAA section 185 mandates that the fee
is paid by ``each'' major source based on the emissions from that
source in the baseline year. There is nothing in the language of CAA
section 185 that contemplates that certain sources or that certain
emissions from a source are not subject to the fee.
5. Defining the Baseline Period as the Attainment Year and the
Immediately Preceding Year
Section 3.2.1 of Rule 3170 defines the baseline period as two
consecutive years consisting of the attainment year and the year
immediately prior to the attainment year. In contrast, CAA section
185(b)(2) establishes the attainment year as the baseline period. While
CAA section 185(b)(2) also provides discretion to calculate 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, in its proposed
action, EPA stated that section 3.2.1 of SJVUAPCD Rule 3170 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, cyclical or vary significantly
from year to year.
Comments: Six commenters disagreed with EPA's proposed action on
this particular provision. They felt that this provision is consistent
with the CAA requirements as interpreted in 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,'' (``Section
185 Baseline Guidance'') and therefore should not be considered a
deficiency.\1\ Commenters objected to EPA's view that the five-year
lookback option in SJVUAPCD Rule 3170 be available only upon a site-
specific consideration of representativeness or cyclicality. One
commenter stated that NSR reform was enacted precisely to replace such
a case-by-case review. The commenter also stated SJVUAPCD's approach
was consistent with EPA's New Source Review approach for multi-year
baselines. The commenter felt that a simple multi-year baseline would
flexibly and efficiently satisfy the statutory language and intent.
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\1\ EPA's Section 185 Baseline Guidance provides that an
acceptable alternative baseline for sources whose emissions are
irregular, cyclical, or otherwise vary significantly from year to
year is the 10-year lookback period found in EPA's regulations for
Prevention of Significant Deterioration of Air Quality (PSD) (40 CFR
52.21(b)(48)).
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Two commenters agreed with EPA's proposed action on this particular
provision. They felt that this exemption violates the CAA section 185
requirements and is a rule deficiency that is a basis for disapproval
of the rule. One commenter stated that CAA section 185 language is
plain and unambiguous, and clearly does not allow the baseline to be
calculated over two years for all sources. The second commenter stated
that section 3.2.1 of Rule 3170 should be revised to clarify that the
baseline for most sources will be the emissions in the attainment year
of 2010, and provide clear criteria for allowing sources to use an
alternative baseline period.
Response: The language of CAA section 185 provides EPA with
discretion to issue guidance that would allow for the baseline period
to be more than one calendar year. However, CAA section 185 allows EPA
to do so only for sources whose emissions are irregular, cyclical, or
otherwise vary significantly from year to year. EPA's Section 185
Baseline Guidance referred to this connection by stating that, ``where
source emissions are irregular, cyclical, or otherwise vary
significantly, the CAA provides that the U.S. Environmental Protection
Agency (EPA) may issue guidance providing an alternative method to
calculate the baseline amount.'' EPA issued the Section 185 Baseline
Guidance to provide guidance for an alternative method for calculating
the emissions baseline in these situations. Hence, section 3.2.1 of
Rule 3170 does not conform to CAA section 185 because it allows all
sources to calculate their baseline over a two-year period, regardless
of whether emissions are irregular, cyclical, or otherwise vary
significantly.
6. Allowing Averaging Over 2-5 Years To Establish Baseline Emissions
Section 3.2.2 of Rule 3170 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. EPA's Section 185 Baseline Guidance addresses the
issue of alternative methods for calculating baseline emissions. The
use of these alternative methods is associated with sources whose
emissions are irregular, cyclical, or otherwise vary significantly from
year to year. The averaging period allowed in section 3.2.2 of Rule
3170 appears consistent with EPA's Section 185 Baseline Guidance. The
language in section 3.2.2, however, allows such averaging ``if those
years are determined by the APCO as more representative of normal
source operation.'' In its proposed action, EPA stated that it
considers this language as less stringent than the criteria in the CAA,
and therefore 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.
Comments: Several commenters disagreed with EPA's proposed action
on this particular provision. They felt that this exemption is
consistent with the CAA requirements and the Section 185 Baseline
Guidance, and therefore should not be considered a deficiency. The
SJVUAPCD stated that its intention in implementing this provision is
that the criteria of being ``more representative of normal source
operation'' would require a source to demonstrate to the satisfaction
of the APCO that the emissions are irregular, cyclical, or otherwise
vary significantly from year to year. One commenter disagreed with
EPA's assessment that the phrase, ``more representative of normal
source operation'' was less stringent that the CAA section 185
language.
Two commenters agreed with EPA's proposed action on this particular
provision. They felt that this exemption violates the CAA section 185
requirements and is a rule deficiency that is a basis for disapproval
of the rule. One commenter stated that the CAA section 185 language is
plain and unambiguous, and clearly does not allow such an exemption.
Response: EPA disagrees that unlimited APCO discretion in
determining normal source operation is consistent with CAA section 185.
Rule 3170 does not specify any criteria for how the APCO would make a
determination that a certain baseline is ``more representative of
normal source operation'' than the baseline specified by CAA section
185 (i.e., the attainment year). It is not clear that the APCO's
[[Page 1720]]
discretion would involve an assessment of whether a source's emissions
are irregular, cyclical, or otherwise variable. Therefore, EPA
continues to view the language in section 3.2.2 of Rule 3170 as a
deficiency that needs to be corrected.
7. Stationary Versus Mobile Sources
Comment: Several commenters stated that most ozone nonattainment
areas classified as severe or extreme are now dominated by mobile
source emissions, and that stationary sources are not the major
contributor of emissions. Commenters stated that CAA section 185 is
functionally obsolete and will result in substantial adverse financial
impacts to facility operators with little or no air quality benefit.
One commenter stated that individual sources do not have the ability to
assure attainment of the standard; consequently, the fee is an
unconstitutional bill of attainder.
Response: The approach outlined in the CAA to reduce emissions in
defined air basins acknowledges that no single source is responsible
for an area's nonattainment, but that the total collective contribution
of many individual sources affects an area's pollution problem. As
such, the CAA extensively regulates both mobile sources and stationary
sources. Whether or not CAA section 185 is functionally obsolete is an
issue for Congress. As long as CAA section 185 remains the law, EPA's
obligation is to ensure compliance with it. We disagree with the
commenter that claims that since individual sources cannot ensure
attainment of the ozone NAAQS, section 185 is an unconstitutional bill
of attainder. Section 185 does not result in any party being declared
guilty of a crime. Rather, it is a means of encouraging certain sources
to reduce emissions of pollutants that contribute to unhealthy ambient
ozone levels. The Courts have long held that the Commerce clause gives
Congress the authority to regulate sources of air pollution. The fee
provision of CAA section 185 acts as an incentive for major sources of
air pollution to reduce emissions. Thus, it is a proper exercise of
Congressional authority under the Commerce clause.
8. Impacts of Rule 3170 on Small Businesses
Comment: Commenters stated that hundreds of small businesses will
be affected by CAA section 185 requirements, as well as hospitals,
medical centers, schools and other essential public services.
Commenters stated that applying CAA section 185 fees to small
businesses that are in compliance with all applicable regulations will
demonstrate that the fees are unreasonable, expensive, and do nothing
to reduce and assure emission reductions. One commenter stated that the
fees would be inconsistent with the Small Business Regulatory
Flexibility Act and that the fees should not be applied to businesses
meeting the definition of ``small'' under CAA section 507.
Response: Although CAA section 185 allows for exemptions for
certain low-population areas (see section 185(e)), section 185 does not
grant States or EPA discretion to exempt small businesses from the
requirements of the program. The Regulatory Flexibility Act applies
where EPA is promulgating regulations that may have a significant
impact on a substantial number of small businesses. Here, it is the
CAA, not EPA's action that imposes the fee on sources. Moreover, in
this instance, EPA is not promulgating regulations, but rather
reviewing a State plan. EPA does not have the authority to consider the
impacts on small businesses that result from direct application of the
statute or through applications of the State program. Moreover, even if
EPA were promulgating a regulation that was determined to have a
significant impact on a substantial number of small entities, we note
that the RFA does not prohibit any specific regulatory result, as
suggested by the commenters. Rather it only requires that the Agency
take certain actions in order to fully consider the potential impacts
of the regulation.
9. Unintended Consequences of Rule 3170
Comment: One commenter stated that renewable energy facilities may
need to reduce throughput as a result of CAA section 185 requirements
and this would be contrary to efforts to reduce greenhouse gases and
increase the penetration of renewable energy.
Response: Sources have several ways to comply with the requirements
of CAA section 185, and this could include reducing throughput to
eliminate or reduce the fee amount. Regardless of the consequence of
the manner in which a major source chooses to comply with the
requirements, section 185 does not provide States or EPA with authority
to exempt major stationary sources from complying with section 185.
10. Incorrect Statement of Baseline Emissions
Comment: One commenter stated that section 5.1 of Rule 3170 needs
to be revised to accurately define the baseline emissions to be used in
the calculation of the fee amount. In addition, the definition of
baseline emissions fails to include the possibility that a source will
not have a permit issued for the attainment year, in which case the
allowable emissions are to be based on the emissions allowed under the
applicable implementation plan (see CAA section 185(b)(2)). While such
circumstances may be rare, the District should include language that
mirrors the statute to avoid any potential conflict.
Response: While we think it is unlikely that any sources would not
fall within the current definition, we agree with the commenter and
recommend that the calculation in section 5.1 of Rule 3170 be revised
to more closely conform to the language in CAA section 185. The
definition of the variable ``B'' in the fee calculation should include
the clarification that if no permit has been issued for the attainment
year, then ``B'' should be the lower of the actual VOC or emissions
during the baseline period, or the amount of VOC or NOX
emissions allowed under the applicable implementation plan during the
baseline period.
11. Ambiguity on Fees for Both VOCs and NOX
Comment: One commenter expressed that the fee calculation in
section 5.0 of Rule 3170 is ambiguous regarding whether the fee is due
for VOCs and NOX, or just one or the other. Sources must pay
a fee for both VOC emissions in excess of 80% of the VOC baseline
emissions and NOX emissions in excess of 80% of the
NOX baseline emissions. Section 5.0 of Rule 3170 should be
revised to clarify this point.
Response: EPA agrees that the fee is required for both VOC and
NOX emissions. We believe that the District and sources
understand the fee program applies to both VOC and NOX
emissions, and that the language in section 5.1 of SJVUAPCD Rule 3170
is sufficiently clear in that respect. For example, the District staff
report for Rule 3170 contained a sample fee calculation which also made
it clear that a separate fee would be assessed for VOC emissions and
NOX emissions. While we do not believe any revisions to the
rule are necessary, we recommend that SJVUAPCD consider whether further
clarification might be helpful.
12. Definition of ``Major Source''
Section 3.4 of Rule 3170 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
[[Page 1721]]
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,
in its proposed action, EPA stated that 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 the proposed
action, then section 3.4 would no longer be cited as a deficiency in
Rule 3170.
Comments: Several commenters disagreed with EPA's proposed action
on this particular provision. They felt that this discrepancy would be
resolved prior to the assessment or collection of any section 185 fees
when Rule 2201 is approved into the SIP. One commenter also expressed
that the thresholds in Rule 2201 are currently binding under State law,
and therefore the ``Major Source'' definition in Rule 3170 should not
be considered a deficiency that would result in the disapproval of the
rule.
Two commenters agreed with EPA's proposed action on this particular
provision. One commenter felt that this definition is currently
inconsistent with CAA requirements, noting that EPA has allowed Rule
2201 to remain out of date for 5 years. However, in the current
situation, the commenter agreed that this definition is a rule
deficiency that is a basis for disapproval of the rule. One commenter
added that the definition of ``Major Source'' in Rule 2201 does not
match the definition in CAA section 182(e). For example, Rule 2201's
definition excludes fugitive emissions for certain sources, only
includes potential emissions from units with valid permits, and credits
limits in authorities to construct that may or may not reflect actual
emissions. As a result, the commenter felt that EPA is incorrect in
suggesting that this deficiency will be resolved once the revised
version of Rule 2201 is approved into the SIP. The commenter felt that
section 3.4 of Rule 3170 should be revised to mirror the definition of
``major source'' in CAA section 182(e), which includes all emissions of
VOC or NOX, and looks at the larger of actual or potential
emissions.
Response: EPA disagrees with the statement that the December 18,
2008, version of Rule 2201 is currently binding under State law. That
version of the rule specifically states that it does not go into effect
until EPA issues final approval of the rule into the SIP. The ``Major
Source'' definition in Rule 3170 continues to be a deficiency until it
is revised to be consistent with the CAA. Further, we agree that since
we have not yet fully reviewed and acted on Rule 2201, we cannot say
for a certainty that approval of that rule would eliminate any
deficiency with respect to the definition of major sources under Rule
3170. We will continue to work with the State to ensure that it
develops a section 185 program that fully complies with the Act.
13. Sunset Provision for Section 185 Fees
Comment: One commenter highlighted the need for EPA to address the
legality and process of establishing a sunset provision for section 185
fees, an issue identified in the CAAAC letter. Because the 1-hour ozone
standard has been replaced with the 8-hour standard, EPA may not be
able to make the findings necessary to redesignate an area as
attainment for the 1-hour standard. This situation would require the
imposition of fees indefinitely. The commenter feels that this issue
must be resolved if EPA finalizes action on Rule 3170.
Response: EPA is aware of the issue raised by the commenter and
intends to address in future guidance or rulemaking the issue of when
section 185 fees would no longer apply.
III. EPA Action
No comments were submitted that change our assessment of the rule
as described in our proposed action. Therefore, as authorized in
sections 110(k)(3) and 301(a) of the Act, EPA is finalizing a limited
approval of the submitted rule. This action incorporates the submitted
rule into the California SIP, including those provisions identified as
deficient. As authorized under section 110(k)(3), EPA is simultaneously
finalizing a limited disapproval of the rule. As a result, sanctions
will be imposed unless EPA approves subsequent SIP revisions that
correct the rule deficiencies within 18 months of the effective date of
this action. These sanctions will be imposed under section 179 of the
Act according to 40 CFR 52.31. In addition, EPA must promulgate a
Federal implementation plan (FIP) under section 110(c) unless we
approve subsequent SIP revisions that correct the rule deficiencies
within 24 months. Note that the submitted rule has been adopted by the
SJVUAPCD, and EPA's final limited disapproval does not prevent the
local agency from enforcing it.
IV. 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 and limited approvals/
limited disapprovals under section 110 and subchapter I, part D of the
Clean Air Act do not create any new requirements but simply approve
requirements that the State is already imposing. Therefore, because
this limited approval/limited disapproval action 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
[[Page 1722]]
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 promulgated 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 approves 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 approves 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 final 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 distribution of power and responsibilities between the Federal
government and Indian Tribes. Thus, Executive Order 13175 does not
apply to this rule.
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.
J. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective February 12, 2010.
K. Petitions for Judicial Review
Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by March 15, 2010. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements (see section 307(b)(2)).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Nitrogen dioxide, Ozone,
Reporting and recordkeeping requirements, Volatile organic compounds.
[[Page 1723]]
Dated: December 11, 2009.
Laura Yoshii,
Acting Regional Administrator, Region IX.
0
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:
PART 52--[AMENDED]
0
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart F--California
0
2. Section 52.220 is amended by adding paragraph (c)(303)(i)(C)(4) to
read as follows:
Sec. 52.220 Identification of plan.
* * * * *
(c) * * *
(303) * * *
(i) * * *
(C) * * *
(4) Rule 3170, ``Federally Mandated Ozone Nonattainment Fee,''
adopted on May 16, 2002.
* * * * *
[FR Doc. 2010-353 Filed 1-12-10; 8:45 am]
BILLING CODE 6560-50-P