[Federal Register Volume 60, Number 210 (Tuesday, October 31, 1995)]
[Proposed Rules]
[Pages 55355-55358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26952]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[CA 79-3-7211; AD-FRL-5322-1]
Clean Air Act Approval and Promulgation of New Source Review
Implementation Plan for Mojave Desert Air Quality Management District
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.
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SUMMARY: The EPA proposes to approve with a contingency, and disapprove
in the alternative, Mojave Desert Air Quality Management District
(MDAQMD) rules 1301, 1302, 1304, 1305, 1306, 1307, 1308, 1310, 1311,
and 1312 (submitted rules) as a revision to the California State
Implementation Plan (SIP). The State of California has submitted these
rules for the purpose of meeting the new source review (NSR)
requirements of the Clean Air Act, as amended in 1990 (CAA or the Act)
for areas that have not attained the national ambient air quality
standards (NAAQS). The submitted rules contain a number of deficiencies
that prevent EPA from approving them as revisions to the SIP. However,
MDAQMD has agreed to correct these deficiencies, and has sent draft
rules (Initial Draft 3, 10/11/95--hereafter: ``proposed revisions'') to
EPA which contain acceptable language. This proposed approval is
therefore contingent upon MDAQMD adopting and submitting to EPA revised
rules which correct the deficiencies identified in this document before
EPA promulgates a final rulemaking on the submitted rules. Should
MDAQMD fail to adopt and submit its proposed revisions, then this
document will serve as a proposed disapproval of the submitted rules.
If the District adopts and submits rules which differ substantially
from those contained in its proposed revisions, then EPA will publish
an additional notice of proposed rulemaking for public review and
comment.
DATES: Comments on this proposed action must be received in writing by
November 30, 1995.
ADDRESSES: To submit comments or receive additional information, please
contact: Steve Ringer, Environmental Engineer, Air & Toxics Division
(A-5-1), EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105.
Copies of MDAQMD's submittal and other information are available for
inspection during normal business hours at the following locations: (1)
EPA Region 9, 75 Hawthorne Street, San Francisco, CA; (2) Mojave Desert
AQMD, 15428 Civic Drive, Suite 200, Victorville, CA 92932; (3) Air
Resources Board, 2020 ``L'' Street, Sacramento, CA 95814.
FOR FURTHER INFORMATION CONTACT: Steve Ringer at (415) 744-1260.
SUPPLEMENTARY INFORMATION: The air quality planning requirements for
nonattainment NSR are set out in Part D of Title I of the Act. EPA has
issued a ``General Preamble'' describing EPA's preliminary views on how
EPA intends to review SIPs and SIP revisions submitted under part D,
including those State submittals containing nonattainment NSR SIP
requirements (see 57 FR 13498 (April 16, 1992) and 57 FR 18070 (April
28, 1992)). Because EPA is describing its interpretations here only in
broad terms, the reader should refer to the General Preamble for a more
detailed discussion. EPA is currently developing proposed regulations
to implement the changes under the 1990 Amendments in the NSR
provisions in Parts C and D of Title I of the Act. EPA expects to
propose these regulations sometime during 1995 or 1996. Upon
promulgation of these regulations, EPA will review those NSR SIP
submittals on which it has taken final action to determine whether
additional SIP revisions are necessary.
Procedural Background
The Act requires States to observe certain procedural requirements
in developing implementation plans and plan revisions for submission to
EPA. Section 110(a)(2) and section 110(l) of the Act provide that each
implementation plan or revision to an implementation plan submitted by
a State must be adopted after reasonable notice and public hearing.
Section 172(c)(7) of the Act provides that plan provisions for
nonattainment areas shall
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meet the applicable provisions of Section 110(a)(2).
The MDAQMD Governing Board held a public hearing on September 22,
1993 to entertain public comment on the NSR implementation plan. The
plan was adopted by the State and submitted to EPA on March 29, 1994 as
a proposed revision to the SIP.
The SIP revision was not reviewed by EPA within six months to
determine completeness, and was therefore deemed complete by default.
The submittal has since been reviewed and found to be complete but
lacking certain requirements that would make it fully approvable.
However, as noted above, MDAQMD has agreed to make the required changes
and has submitted draft versions of its rules which address the
deficiencies described below. Therefore, contingent on the submittal of
a fully approvable SIP in the form of approved rules consistent with
the revised rules, EPA proposes to approve the MDAQMD's nonattainment
NSR SIP submittal. If the District fails to correct the deficiencies in
the submitted rules, then EPA's final action will be a disapproval. If
the District adopts and submits rules which differ substantially from
those contained in its proposed revisions, then EPA will publish an
additional notice of proposed rulemaking for public review and comment.
Summary of Rule Contents
MDAQMD submitted to EPA for adoption into the applicable NSR SIP
Rules 1301, 1302, 1304, 1305, 1306, 1307, 1308, 1310, 1311, and 1312.
These submitted rules constitute MDAQMD's new source permitting
regulations. Rule 1301 outlines the general requirements for
preconstruction review of permit applications. Rule 1302 defines terms
relating to new sources and modifications to existing sources of air
pollution, and their regulation. Rule 1304 allows an exemption from NSR
for a change of ownership. Rule 1305 describes the procedures for
submittal and review of permit modifications. Rule 1306 outlines
calculation methods for emissions increases and decreases, and for
offset requirements. Rule 1307 contains a description of which new and
modified sources require offsets. Rule 1308 outlines which sources are
eligible to create offsets. Rule 1310 describes District requirements
for completeness determinations, final action and public notice on a
permit submittal. Rule 1311 outlines the requirements for electrical
energy generating facilities. Rule 1312 contains an alternative siting
analysis requirement for major new sources and modifications. The
submitted rules are intended to replace the existing rules 1301 through
1313, which were adopted into the San Bernardino SIP by EPA on June 9,
1982. MDAQMD has adopted these new regulations in part to meet the 1990
CAA Amendments and the November 15, 1992 deadline for submittal. A
summary of the changes between the current SIP and the submitted rules
is contained in the Technical Support Document (TSD) for this action.
MDAQMD is currently designated as attainment or unclassifiable for
CO, NO2, Pb, and SO2, and moderate nonattainment for
PM10. In addition, part of the MDAQMD is designated severe
nonattainment for ozone [40 CFR 81.305]. The CAA requirements for
nonattainment NSR permitting are found at sections 172 and 173. With
certain exceptions, described below, MDAQMD's submittal satisfies these
requirements. For a detailed description of how the submitted rules and
MDAQMD's proposed revisions meet the CAA requirements, refer to EPA's
TSD.
Rule Deficiencies Requiring Correction
Below is a list of the deficiencies which must be corrected for EPA
to approve MDAQMD's NSR rules into the SIP.
Rule 1302
Actual Emissions
The definition of ``Actual Emissions'' in the submitted rules
should require that emissions calculations reflect actual production
rates, the actual amount of fuel burned, actual amounts of material
processed, and the actual hours of operation over the two years prior
to such a determination. Emission factors should be established by
source testing or obtained from a reliable source of emission factor
data such as EPA's AP-42.
Major Modification
The submitted rules do not contain this definition. Although the
submitted definition of ``Modification'' contains much of the language
from the definition of a major modification in 40 CFR 51.165(a)(1)(v),
the District must define a ``Major Modification'' as any modification
that results in a significant net emissions increase.
Modification
The definition of ``Modification'' in the submitted rules differs
from the published definition in 40 CFR 52.21(2)(i). The CFR defines a
modification as a ``physical change in or change in the method of
operation.'' The submitted rules, however, define this as ``any
equipment or process which undergoes a physical revision.'' The rules
should be changed to clarify that the term ``Modification'' refers to
the change, rather than to the equipment itself.
Volatile Organic Compound
The definition of ``Reactive Organic Compound'' in the submitted
rules contains a list of substances exempt from regulation as ROC's
which is inconsistent with the exemption list in 40 CFR 51.100(s). This
discrepancy should be corrected to avoid granting ROC emission
reduction credits, as well as requiring ROC offsets, for non-ozone-
precursor emissions. The definition in 40 CFR 51.100(s) should be
adopted verbatim into this section.
Additional Definitions:
In addition to the changes indicated above, it is necessary to add
the following terms to this section: Begin Actual Construction,
Commence Construction, Construction, Enforceable (or Federally
Enforceable), Net Emissions Increase, Secondary Emissions, and
Significant. These definitions should follow the language found at 40
CFR 51.165.
Rule 1306
Calculating Emissions Changes
This section uses a source's pre-modification potential to emit
(PTE), rather than its pre-modification actual emissions, as the
baseline for calculating the offset requirement for major modifications
in nonattainment areas. This method is not acceptable unless the source
has already offset its entire pre-modification PTE. The District must
amend the rule to calculate the offset requirement in this case as the
source's new PTE minus the source's pre-modification actual emissions.
Rule 1307
Determination of Offset Requirements (Non-major Facility)
Section (B)(2)(a) overlooks the case in which a non-major facility
undergoes a modification which is in itself major. In this case, the
entire modification must be offset, and not, as the rule states, only
the portion of the facility's PTE which exceeds the major source
threshold.
Obtaining Offsets
The submitted rules contain no provision, pursuant to section 173
of the Act, which requires that offsets be federally enforceable prior
to the issuance of an authority to construct
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permit, and in effect by the time operation commences. Such provisions
must be added.
Rule 1308
Mobile Source Emission Reductions
EPA has not developed mobile source emission reduction crediting
guidance. The rules should therefore include a case by case approval by
EPA.
Mobile Source Emission Reductions
Section (A)(3)(b) allows emissions reduction credits to be
generated by the ``substitution and use of high occupancy vehicles for
low occupancy vehicles.'' Due to the extreme difficulty in quantifying
these types of emissions reductions, and in making them permanently
enforceable, EPA cannot approve this as a means of generating offsets.
This provision should be removed from the District's rules.
Emission Reduction Credits From Vehicle Scrappage
In order for EPA to determine if the offsets to be generated from a
vehicle scrappage program will be federally approvable, the details of
the program must be submitted with this rule. Section (A)(3)(c), which
states that these are a potential source of offsets, should either
include these details, or reference another section or rule which
contains the details of the program.
Interpollutant Offsets
The use of interpollutant trading to satisfy nonattainment offset
requirements is generally allowable only under very specific
conditions. On April 13, 1995, the Director of EPA Region 9's Air and
Toxics Division sent a letter to MDAQMD outlining an acceptable method
for the use of interpollutant trading. MDAQMD should either incorporate
this method into its NSR rules, or require case-by-case advance
approval by EPA.
Source Eligibility
Energy conservation projects could be an acceptable source of
offsets, but a definition should be included to clarify what is meant
by these. Section (A)(4) should also include a statement that these
projects are subject to the same standards as other sources of offsets
(i.e., the reductions must be real, enforceable, quantifiable, surplus,
and permanent).
Intra-basin and Inter-district Offsets
Section (D) should include the CAA section 173(c)(1) requirements
that sources locating in a nonattainment area may only obtain offsets
from other nonattainment areas which (A) have equal or higher
nonattainment classification, and (B) contribute to a violation of the
NAAQS in the nonattainment area in which the source is located.
Additional Requirements
Surplus Requirement: The submitted rules contain insufficient
provisions to ensure that all emission reduction credits (ERC's) used
to satisfy the nonattainment offset requirements will be surplus. These
provisions must be added to MDAQMD's NSR rules.
Prior Shutdowns: The submitted rules do not prohibit the use of
``prior shutdown'' credits as required in 40 CFR 51.165(a)(1)(xxv).
This provision applies either when the District attainment plan has
been disapproved, or when this plan is not yet due, but a due date
during the creation of this plan is missed. In these cases, sources
which seek ERC's due to a shutdown must do so at the time operation of
the source ceases. This provision must be added to the District's
rules.
Class I Area Visibility Protection: The submitted rules lack the
Class I Area visibility protection provisions of 40 CFR 51.307(b)(2)
for any new major source or major modification, proposing to locate in
a non-attainment area, that may have an impact on visibility in any
mandatory Class I Federal Area. This requirement must be added to the
District's rules.
Applicability: The submitted rules contain no provisions which
require NSR for a source or modification which becomes major due to a
relaxation in a federally-enforceable limit. As described in 40 CFR
51.165(a)(5)(ii), such sources and modifications are subject to NSR
``as though construction had not yet commenced.'' This requirement must
be added to the District's rules.
Proposed Action
EPA is proposing to approve with contingencies, and to disapprove
in the alternative, the SIP revisions submitted by MDAQMD on March 29,
1994. Full approval as a final action on this SIP revision is
contingent upon MDAQMD making the required changes to the submitted
rules as listed above.
If the specified changes to the submitted rules are not made before
EPA's final action on this SIP revision, then EPA's final action will
be a disapproval. If finalized, this disapproval would constitute a
disapproval under section 179(a)(2) of the Act (see 57 FR 13566-13567).
As provided under section 179(a), MDAQMD would have up to 18 months
after a final SIP disapproval to correct the deficiencies that are the
subject of the disapproval before EPA is required to impose sanctions.
If the MDAQMD does not correct its SIP deficiencies within 18 months,
then section 179(a)(4) requires the immediate application of sanctions.
According to section 179(b), sanctions can take the form of a loss of
highway funds or a two to one emissions offset ratio. Once the
Administrator applies one of the section 179(b) sanctions, the State
will then have an additional six months to correct any deficiencies.
Section 179(a)(4) requires that both highway and offsets sanctions must
be applied if any deficiencies are still not corrected after the
additional six month period.
EPA is requesting comments on all aspects of this proposed
rulemaking action. Comments received by the date indicated above will
be considered in EPA's final action.
Administrative Review
Nothing in this action should be construed as permitting, allowing,
or establishing a precedent for any future request for a revision to
any SIP. Each request for revision to a SIP shall be considered
separately in light of specific technical, economic, and environmental
factors and in relation to relevant statutory and regulatory
requirements.
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant impact on a substantial number of small entities. Small
entities include small businesses, small not-for-profit enterprises,
and government entities with jurisdiction over populations of less than
50,000.
SIP approvals under section 110 and subchapter I, part D of the Act
do not create any new requirements, but simply approve requirements
that the State is already imposing. Therefore, because the Federal SIP-
approval does not impose any new requirements, I certify that it does
not have a significant impact on any small entities affected. Moreover,
due to the nature of the Federal-State relationship under the Act,
preparation of a regulatory flexibility analysis would constitute
Federal inquiry into the economic reasonableness of State action. The
Act forbids EPA to base its actions concerning SIPs on such grounds.
Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42
U.S.C. 7410(a)(2). The Office of Management and Budget has exempted
this rule from the requirements of section 6 of Executive Order 12866.
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Unfunded Mandates
Under Section 202 of the Unfunded Mandates Reform Act of 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. EPA has determined that
the approval proposed in this document does not include such a federal
mandate, as this proposed federal action would approve pre-existing
requirements under state or local law, and would impose no new federal
requirements. Accordingly, no additional costs to state, local, or
tribal governments, or to the private sector, will result from this
action.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Intergovernmental relations, nitrogen dioxide, Particulate matter,
Reporting and recordkeeping requirements, Sulfur dioxide, Volatile
organic compounds.
Authority: 42 U.S.C. 7401-7671q.
Dated: October 17, 1995.
Felicia Marcus,
Regional Administrator.
[FR Doc. 95-26952 Filed 10-31-95; 8:45 am]
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