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Revisions to the California State Implementation Plan, South Coast Air Quality Management District
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: May 13, 2002 (Volume 67, Number 92)]
[Proposed Rules]
[Page 31998-32002]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13my02-26]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[CA 249-0349; FRL-7211-2]
Revisions to the California State Implementation Plan, South
Coast Air Quality Management District
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing a conditional approval of revisions to the
South Coast Air Quality Management District's portion of the California
State Implementation Plan (SIP). These revisions concern oxides of
nitrogen (NOX) and oxides of sulfur (SOX)
emissions from facilities emitting 4 tons or more per year of
NOX and/or SOX in the year 1990 or any subsequent
year. We are proposing action on local rules that regulate these
emission sources under the Clean Air Act as amended in 1990 (CAA or the
Act). These rules compose the South Coast Air Quality Management
District's Regional Clean Air Incentives Market (``RECLAIM'') program.
We are taking comments on this proposal and plan to follow with a final
action.
DATES: Any comments must arrive by July 12, 2002.
ADDRESSES: Mail comments to Andy Steckel, Rulemaking Office Chief (AIR-
4), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne
Street, San Francisco, CA 94105-3901.
You can inspect copies of the submitted SIP revisions and EPA's
technical support document (TSD) at our Region IX office during normal
business hours. You may also see copies of the submitted SIP revisions
at the following locations:
[[Page 31999]]
California Air Resources Board, Stationary Source Division, Rule
Evaluation Section, 1001 ``I'' Street, Sacramento, CA 95814.
South Coast Air Quality Management District (``SCAQMD''), 21865 E.
Copley Dr., Diamond Bar, CA 91765-4182.
FOR FURTHER INFORMATION CONTACT: Thomas C. Canaday, Rulemaking Office
(AIR-4), U.S. Environmental Protection Agency, Region IX, (415) 947-4121.
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to EPA.
Table of Contents
I. The State's Submittal
A. What rules did the State submit?
B. Are there other versions of these rules?
C. What is the purpose of the submitted rules?
II. EPA's Evaluation and Action
A. How is EPA evaluating the rules?
B. Do the rules meet the evaluation criteria?
C. What are the rule deficiencies?
D. Proposed action and public comment.
III. Background information
A. Why were these rules submitted?
IV. Administrative Requirements
I. The State's Submittal
A. What Rules Did the State Submit?
Table 1 lists the rules addressed by this proposal with the dates
that they were adopted by SCAQMD and submitted by the California Air
Resources Board (CARB).
Table 1.--Submitted Rules
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Local agency Rule # Rule title Adopted Submitted
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SCAQMD...... 2000 General................... 05/11/01 05/31/01
SCAQMD...... 2001 Applicability............. 05/11/01 05/31/01
SCAQMD...... 2002 Allocations for Oxides of 05/11/01 05/31/01
Nitrogen (NOX) and Oxides of
Sulfur (SOX).
SCAQMD...... 2004 Requirements.............. 05/11/01 05/31/01
SCAQMD...... 2005 New Source Review for RECLAIM 04/20/01 10/30/01
SCAQMD...... 2006 Permits................... 05/11/01 05/31/01
SCAQMD...... 2007 Trading Requirements 05/11/01 05/31/01
SCAQMD...... 2010 Administrative Remedies and 05/11/01 05/31/01
Sanctions.
SCAQMD...... 2011 Requirements for Monitoring, 05/11/01 05/31/01
Reporting, and Recordkeeping
for Oxides of Sulfur (SOX)
Emissions.
SCAQMD...... 2011-2 Protocol for Monitoring, 03/16/01 05/31/01
Reporting, and Recordkeeping
for Oxides of Sulfur (SOX)
Emissions.
SCAQMD...... 2012 Requirements for Monitoring, 05/11/01 05/31/01
Reporting, and Recordkeeping
for Oxides of Nitrogen (NOX)
Emissions.
SCAQMD...... 2012-2 Protocol for Monitoring, 03/16/01 05/31/01
Reporting, and Recordkeeping
for Oxides of Nitrogen (NOX)
Emissions.
SCAQMD...... 2015 Backstop Provisions......... 05/11/01 05/31/01
SCAQMD...... 2020 RECLAIM Reserve............. 05/11/01 05/31/01
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On, July 20, 2001, these rule submittals (excepting the submittal
for Rule 2005) were found to meet the completeness criteria in 40 CFR
part 51 Appendix V, which must be met before formal EPA review. The
rule submittal for Rule 2005 was found to be complete on January 1, 2002.
B. Are There Other Versions of These Rules?
We approved an amended version of Rule 2000 into the SIP on June
15, 1998. The SCAQMD adopted revisions to the SIP-approved version of
Rule 2000 on February 14, 1997, and April 11, 1997, and CARB submitted
them to us on August 22, 1997. The SCAQMD subsequently adopted
additional revisions to the SIP-approved version of this rule on
October 20, 2000, and CARB submitted those revisions to us on March 14,
2001.
We approved an amended version of Rule 2001 into the SIP on June
15, 1998. The SCAQMD adopted revisions to the SIP-approved version of
Rule 2001 on February 14, 1997, and CARB submitted them to us on August
22, 1997.
We approved an amended version of Rule 2002 into the SIP on March
14, 2000.
We approved an amended version of Rule 2004 into the SIP on June
15, 1998. The SCAQMD adopted revisions to the SIP-approved version of
Rule 2004 on July 12, 1996, and CARB submitted them to us on March 3, 1997.
We approved an amended version of Rule 2005 into the SIP on March
14, 2000.
We approved amended versions of Rules 2006 and 2007 into the SIP on
June 15, 1998.
We approved Rule 2010, adopted by the SCAQMD on October 15, 1993,
into the SIP on November 8, 1996.
We approved versions of Rules 2011 and 2011-2 into the SIP on June
15, 1998. These versions were adopted by the SCAQMD on December 7,
1995. The SCAQMD adopted revisions to the SIP-approved versions of Rule
2011 and 2011-2 on July 12, 1996, and CARB submitted them to us on
March 3, 1997. The SCAQMD adopted additional revisions to the SIP-
approved versions of these rules on February 14, 1997, and CARB
submitted those revisions to us on August 22, 1997. Finally, the SCAQMD
adopted further revisions to the SIP-approved versions of Rules 2011
and 2011-2 on April 11, 1997, and April 9, 1999, and CARB submitted
those revisions to us on July 23, 1999.
We approved versions of Rules 2012 and 2012-2 into the SIP on June
15, 1998. These versions were adopted by the SCAQMD on December 7,
1995. The SCAQMD adopted revisions to the SIP-approved versions of Rule
2012 and 2012-2 on July 12, 1996, and CARB submitted them to us on
March 3, 1997. The SCAQMD adopted additional revisions to the SIP-
approved versions of these rules on February 14, 1997, and April 11,
1997, and CARB submitted those revisions to us on August 22, 1997.
Finally, the SCAQMD adopted further revisions to the SIP-approved
versions of Rules 2012 and 2012-2 on April 9, 1999, and CARB submitted
those revisions to us on July 23, 1999.
We approved an amended version of Rule 2015 into the SIP on June
15, 1998. This version had been adopted by the SCAQMD on December 7,
1995. The SCAQMD adopted revisions to the SIP-approved version of Rule
2015 on July 12, 1996, and CARB submitted them to us on March 3, 1997.
The SCAQMD subsequently adopted additional revisions to the SIP-
approved version of this rule on February 14, 1997, and
[[Page 32000]]
CARB submitted those revisions to us on August 22, 1997.
There is no previous version of Rule 2020 in the SIP. While we can
act on only the most recently submitted versions of submitted rules, we
have reviewed materials provided with previous submittals.
C. What Is the Purpose of the Submitted Rules?
The RECLAIM program is intended to allow facilities subject to the
program to meet their emission reduction requirements in the most cost-
effective manner. The program was designed to provide incentives for
industry to reduce emissions and develop innovative pollution control
technologies, as well as give facilities added flexibility in meeting
emission reduction requirements. Each facility under the program was
given an allocation of RECLAIM Trading Credits (``RTCs'') based on a
declining balance equivalent to the emissions levels that would have
occurred if the facility continued to operate under the then current
command-and-control regulations. Facilities within the RECLAIM program
must reconcile their emissions with their RTC holdings and have the
option of doing so by either installing control equipment, modifying
their activity, or purchasing RTCs from other facilities.
Beginning June 2000, RECLAIM program participants experienced a
sharp and sudden increase in NOX RTC prices for both 1999
and 2000 compliance years. The program rules were amended with the
intent of lowering and stabilizing RTC prices. The submitted rule
revisions isolate existing large power plants (those producing 50
megawatts or more) from the rest of RECLAIM, require these plants to
install emissions control equipment, limit their ability to purchase
RTCs from other program participants, and impose on them a mitigation
fee for emissions in excess of RTC holdings. The revisions also
initiate a temporary, limited, pilot RECLAIM Air Quality Investment
Program; improve registration and timely reporting of RTC trades; and
modify procedures for late electronic emissions reports. The rule
revisions also effect additional changes to the RECLAIM program
predating and unrelated to the sudden increase in RTC prices. Some
definitions in Rule 2000 were added or modified. Rule 2001 was revised
to specify that RECLAIM facilities will be exempt from future
amendments to certain rules listed in Rule 2001. The breakdown
provisions of Rule 2004 were revised. Numerous revisions were made to
the monitoring, reporting, and recordkeeping requirements and protocols
of Rule 2011, Rule 2011-2, Rule 2012, and Rule 2012-2. Rule 2015 was
revised to consolidate some reporting requirements and to specify the
presentation date of the annual RECLAIM audit report. The TSD has more
information about these rules.
II. EPA's Evaluation and Action
A. How Is EPA Evaluating the Rules?
Generally, SIP rules must be enforceable (see section 110(a) of the
Act), must require Reasonably Available Control Technology (``RACT'')
for major sources in nonattainment areas (see section 182(a)(2)(A)),
and must not relax existing requirements (see sections 110(l) and 193).
The SCAQMD regulates an ozone nonattainment area (see 40 CFR part 81),
so the submitted rules must fulfill RACT.
We have used guidance and policy documents to help evaluate
enforceability and RACT requirements consistently. Because this
guidance is non-binding and does not represent final agency action, EPA
uses this guidance as an initial screen to determine whether
approvability issues arise. These documents include the following:
1. ``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.
2. ``Issues Relating to VOC Regulation Cutpoints, Deficiencies, and
Deviations; Clarification to Appendix D of November 24,1987 Federal
Register Notice,'' (Blue Book), notice of availability published in the
May 25, 1988 Federal Register.
3. ``Improving Air Quality with Economic Incentive Programs,''
January 2001, Office of Air and Radiation, EPA-452/R-01-001 (``EIP
Guidance''). This guidance applies to discretionary economic incentive
programs (``EIPs'') and represents the agency's interpretation of what
EIPs should contain in order to meet the requirements of the CAA.
4. ``State Implementation Plans: Policy Regarding Excess Emissions
During Malfunctions, Startup and Shutdown,'' EPA Office of Air and
Radiation, and EPA Office of Enforcement and Compliance Assurance,
September 20, 1999 (``Excess Emissions Policy'').
B. Do the Rules Meet the Evaluation Criteria?
These rules improve the SIP by requiring the installation of
pollution control equipment and by strengthening reporting provisions.
These rules are largely consistent with the relevant policy and
guidance regarding enforceability, RACT, and SIP relaxations. Rule
provisions which do not meet the evaluation criteria are summarized
below and discussed further in the TSD.
C. What Are the Rule Deficiencies?
The rules conflict with section 110 and part D of the Act and
prevent full approval of the SIP revision due to their treatment of
excess emissions which occur due to equipment breakdown. Rules 2000 and
2004 contain provisions which exempt, under certain circumstances,
excess emissions that occur during breakdowns from being counted when a
RECLAIM facility reconciles its emissions with its RTC holdings. In our
EIP Guidance and our Excess Emissions Policy, EPA interprets the CAA as
requiring that such emissions not be exempted.
D. Proposed Action and Public Comment
On April 2, 2002, SCAQMD Executive Officer Barry R. Wallerstein
submitted a commitment on behalf of the SCAQMD staff to adopt and
submit revisions to the RECLAIM program rules within one year after the
date of publication of EPA's final action on today's proposed
conditional approval. These revisions will establish a mechanism within
the RECLAIM program to mitigate all excess emissions resulting from
breakdowns. RECLAIM will be revised to require monitoring and tracking
of excess emissions from breakdowns and comparison of the total amount
of exempted emissions to the amount of unused RTCs for that year. If
total exempted breakdown emissions from all RECLAIM sources exceeds the
total amount of unused RTCs program-wide in any year, RECLAIM
allocations in the following year will be reduced by an amount equal to
that exceedence.
As authorized in section 110(k)(4) of the Act, EPA is proposing a
conditional approval of the submitted rule to improve the SIP. If
finalized, this action would incorporate into the SIP both the
submitted rule and the commitment to correct the identified deficiency
within one year.
This conditional approval shall be treated as a disapproval if the
SCAQMD fails to adopt rule revisions to correct the deficiencies within
the time
[[Page 32001]]
allowed. If this rule is disapproved, 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 final disapproval would
also trigger the federal implementation plan (FIP) requirement under
section 110(c). Note that the submitted rules have been adopted by the
SCAQMD, and EPA's final conditional approval would not prevent the
local agency from enforcing it.
We will accept comments from the public on the proposed conditional
approval for the next 60 days.
III. Background Information
A. Why Were These Rules Submitted?
NOX helps produce ground-level ozone, smog and
particulate matter which harm human health and the environment. Section
110(a) of the CAA requires states to submit regulations that control
NOX emissions. Table 2 lists some of the national milestones
leading to the submittal of these local agency NOX rules.
Table 2.--Ozone Nonattainment Milestones
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Date Event
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March 3, 1978.......................... EPA promulgated a list of ozone
nonattainment areas under the
Clean Air Act as amended in
1977. 43 FR 8964; 40 CFR
81.305.
May 26, 1988........................... EPA notified Governors that
parts of their SIPs were
inadequate to attain and
maintain the ozone standard
and requested that they
correct the deficiencies
(EPA's SIP-Call). See section
110(a)(2)(H) of the pre-
amended Act.
November 15, 1990...................... Clean Air Act Amendments of
1990 were enacted. Pub. L. 101-
549, 104 Stat. 2399, codified
at 42 U.S.C. 7401-7671q.
May 15, 1991........................... Section 182(a)(2)(A) requires
that ozone nonattainment areas
correct deficient RACT rules
by this date.
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IV. Administrative Requirements
A. Executive Order 12866
The Office of Management and Budget has exempted this regulatory
action from Executive Order 12866, Regulatory Planning and Review.
B. Executive Order 13211
This proposed 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.
C. Executive Order 13045
Executive Order 13045, entitled Protection of Children from
Environmental Health Risks and Safety Risks (62 FR 19885, April 23,
1997), applies to any rule that: (1) is determined to be ``economically
significant'' as defined under Executive Order 12866, and (2) concerns
an environmental health or safety risk that EPA has reason to believe
may have a disproportionate effect on children. If the regulatory
action meets both criteria, the Agency must evaluate the environmental
health or safety effects of the planned rule on children, and explain
why the planned regulation is preferable to other potentially effective
and reasonably feasible alternatives considered by the Agency.
This rule is not subject to Executive Order 13045 because it does
not involve decisions intended to mitigate environmental health or
safety risks.
D. Executive Order 13132
Executive Order 13132, entitled 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 proposed 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 acts on 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
proposed rule.
E. Executive Order 13175
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, November 6, 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.'' ``Policies that have tribal
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on one or more Indian tribes, on
the relationship between the Federal government and the Indian tribes,
or on the distribution of power and responsibilities between the
Federal government and Indian tribes.''
This proposed rule does not have tribal implications. 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,
[[Page 32002]]
as specified in Executive Order 13175. Thus, Executive Order 13175 does
not apply to this rule. In the spirit of Executive Order 13175, and
consistent with EPA policy to promote communications between EPA and
tribal governments, EPA specifically solicits additional comment on
this proposed rule from tribal officials.
F. 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 proposed rule will not have a significant impact on a
substantial number of small entities because SIP approvals under
section 110 and subchapter I, part D of the Clean Air Act do not create
any new requirements but simply act on requirements that the State is
already imposing. Therefore, because the Federal SIP approval 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).
G. Unfunded Mandates
Under section 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
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 proposed action 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 proposed Federal action acts on 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.
H. 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.
EPA believes that VCS are inapplicable to today's proposed action
because it 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.
Authority: 42 U.S.C. 7401 et seq.
Dated: April 26, 2002.
Wayne Nastri,
Regional Administrator, Region IX.
[FR Doc. 02-11825 Filed 5-10-02; 8:45 am]
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