2024-08442. Air Plan Approval; California; Antelope Valley Air Quality Management District and Mojave Desert Air Quality Management District

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

The Environmental Protection Agency (EPA) is proposing to approve revisions to the Antelope Valley Air Quality Management District (AVAQMD) and the Mojave Desert Air Quality Management District (MDAQMD) portions of the California State Implementation Plan (SIP) concerning rules submitted to address section 185 of the Clean Air Act (CAA or the Act) with respect to the 1979 1-hour ozone National Ambient Air Quality Standards (NAAQS or standard). We are proposing action on these local rules that were submitted as equivalent alternatives to a statutory section 185 program. We are taking comments on this proposal and plan to follow with a final action.

DATES:

Comments must be received on or before May 22, 2024.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R09-OAR-2024-0142 at http://www.regulations.gov. For comments submitted at Regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from Regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission ( i.e., on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www.epa.gov/​dockets/​commenting-epa-dockets. If you need assistance in a language other than English or if you are a person with disabilities who needs a reasonable accommodation at no cost to you, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT:

Donnique Sherman, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105. By phone: [phone] or by email at [e-mail].

SUPPLEMENTARY INFORMATION:

Throughout this document, “we,” “us,” and “our” refer to the EPA.

Table of Contents

I. Background

A. Section 185 Fees

B. Mojave Desert AQMD and Antelope Valley AQMD

II. 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?

III. EPA's Evaluation and Action

A. How is the EPA evaluating these rules?

B. Do these rules meet the evaluation criteria?

i. Addressing September 29, 2022 Action (87 FR 59021) Deficiencies

ii. Evaluation of MDAQMD Rule 315 and AVAQMD Rule 315 Alternative Section 185 Fee Equivalent Programs

C. Proposed Action and Public Comment

IV. Incorporation by Reference

V. Statutory and Executive Order Reviews

I. Background

A. Section 185 Fees

Under sections 182(d)(3), (e), (f) and 185 of the Act, states with ozone nonattainment areas classified as Severe or Extreme are required to submit a revision to the SIP that would require major stationary sources of VOC or NO_X to pay a fee for each ton of VOC or NO_X emitted in excess of 80% of baseline emissions.^[1] Under section 185(a) of the Act, the SIP revision must provide that the fees be paid if the area to which the SIP revision applies has failed to attain the primary NAAQS by the applicable attainment date. A source's baseline emissions are its actual emissions during the applicable attainment year. The fee rate is $5,000 per ton in 1990 dollars, which must be adjusted for inflation based on the Consumer Price Index (CPI). More information on CAA section 185 is provided in our technical support document (TSD).

B. Mojave Desert AQMD and Antelope Valley AQMD

The Southeast Desert Modified Air Quality Management Area (AQMA) is classified as a “Severe-17” nonattainment area for the 1979 1-hour ozone standard.^[2] Therefore, the AQMA is subject to the CAA section 182(d)(3) requirement to submit a plan revision which includes the provisions required under section 185 of the Act. The MDAQMD and AVAQMD regulate portions of the Southeast Desert Modified AQMA and must therefore include a section 185 program for this NAAQS in their respective portions of the California SIP.

II. The State's Submittal

A. What rules did the State submit?

Table 1 lists the rules proposed for approval with the dates that they were adopted by the local agencies and submitted by the California Air Resources Board (CARB).

Table 1—Submitted Rules

Local agency	Rule No.	Rule title	Amended	Submitted
AVAQMD	315	Federal Clean Air Act Section 185 Penalty	11/21/23	02/14/24
MDAQMD	315	Federal Clean Air Act Section 185 Penalty	02/27/23	05/11/23

On March 13, 2024, the EPA determined that the submittal for AVAQMD Rule 315 met the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.

On October 11, 2023, the submittal for MDAQMD Rule 315 was deemed by operation of law to meet the completeness criteria in 40 CFR part 51 Appendix V.

B. Are there other versions of these rules?

There are no previous versions of AVAQMD Rule 315 and MDAQMD Rule 315 in the SIP. However, on September 29, 2022, EPA disapproved previous submitted versions of these rules due to deficiencies that are discussed in section III. B.

C. What is the purpose of the submitted rules?

Under sections 182(d)(3), (e), (f) and 185 of the Act, states with ozone nonattainment areas classified as Severe or Extreme are required to submit a SIP revision that requires major stationary sources of volatile organic compounds (VOC) or oxides of nitrogen (NO_X) emissions in the area to pay a fee if the area fails to attain the standard by the attainment date. The required SIP revision must provide for annual payment of the fees, computed in accordance with section 185(b).

The purpose of AVAQMD Rule 315 and MDAQMD Rule 315 is to satisfy the requirements of sections 182(d)(3) and 185 of the Act by utilizing an equivalency approach consistent with the principles of section 172(e) of the Act. Under these rules, the AVAQMD and the MDAQMD will track, calculate, analyze, and report on expenditures designed to result in VOC or NO_X reductions within the Districts to implement an alternative program that is not less stringent than a statutory CAA section 185 fee program. The rules include calculation of the CAA section 185 fee obligation, establishment of a CAA section 185 equivalency “Tracking Account,” an annual demonstration of equivalency, reporting to the CARB and the EPA, and a provision requiring major sources to pay fees directly in the event the area fails to establish equivalency. The “Tracking Account” would include funds from qualified programs that are surplus to the SIP and designed to result in direct reductions or facilitate future reductions of VOC or NO_X emissions, as approved by the EPA.

III. EPA's Evaluation and Action

A. How is the EPA evaluating these rules?

SIP rules must be enforceable (see CAA section 110(a)(2)) and must not interfere with applicable requirements concerning attainment and reasonable further progress or other CAA requirements (see CAA section 110(l)). The EPA is also evaluating these rules for consistency with the statutory requirements of CAA section 185. Since the rules allow for equivalent alternative programs to meet the CAA section 185 obligation for the 1-hour ozone NAAQS, they must be consistent with the principles of CAA section 172(e) and must be “not less stringent” than the statutory section 185 program.

Guidance and policy documents that we use to evaluate enforceability, revision/relaxation and rule stringency requirements for the applicable criteria pollutants include the following:

1. “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).

2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook, revised January 11, 1990).

3. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

B. Do these rules meet the evaluation criteria?

AVAQMD Rule 315 and MDAQMD Rule 315 meet CAA requirements and are consistent with relevant guidance regarding enforceability, SIP revisions, and section 185. Because we previously disapproved an earlier version of these rules, we address the deficiencies identified in that action, and the ways that the Districts rectified them, and then examine the alternative equivalent program as a whole in the context of the section 172(e) requirement that the program be “not less stringent” than a statutory program. The TSD has more information on our evaluation.^[3]

i. Addressing September 29, 2022 Action (87 FR 59021) Deficiencies

On December 14, 2011, the CARB submitted AVAQMD Rule 315 and MDAQMD Rule 315 to satisfy the requirements of sections 182(d)(3) and 185 of the Act by utilizing an equivalency approach consistent with the principles of section 172(e) of the Act. In our September 29, 2022 action (87 FR 59021), we found that these rules were largely consistent with general CAA requirements regarding SIP submissions. However, we could not approve the rules because we found that they contained the following summarized deficiencies:

1. There was no justification for the method chosen to calculate alternate baseline emissions for facilities with emissions that are irregular, cyclical, or otherwise vary significantly.

2. The rules establish an area-wide equivalency “Tracking Account” across AVAQMD, MDAQMD, and South Coast Air Quality Management District (SCAQMD) but SCAQMD did not have a rule that contained the same provisions, rendering the rule unenforceable.

3. The formula for calculation for the penalty fee did not properly reflect the inflation adjustment based on the Consumer Price index.

4. AVAQMD Rule 315 defined the term “Major Facility” as defined in “District Rule 1301” but the current SIP-approved Rule 1301 for AVAQMD did not contain a definition of “Major Facility.”

On May 11, 2023, the CARB submitted MDAQMD Rule 315 (amended February 27, 2023) and on February 14, 2024, the CARB submitted AVAQMD Rule 315 (amended November 21, 2023), to correct the deficiencies of the 2022 disapproval and to satisfy the requirements of CAA sections 182(d)(3) and 185 by utilizing a fee equivalency approach consistent with the principles of CAA section 172(e). Summarized below is how each deficiency was addressed by MDAQMD and AVAQMD:

1. MDAQMD and AVAQMD removed section (D)(1)(d), the section that provided for alternate baseline emissions for facilities with emissions that are irregular, cyclical, or otherwise vary significantly.

2. AVAQMD and MDAQMD removed SCAQMD from the accounting system. Accordingly, the two rules only rely on each other, and are enforceable without action from the SCAQMD to ensure that all applicable sources in the AVAQMD and MDAQMD are accounted for. In addition, Section (E)(2) now requires the Air Pollution Control Officer (APCO) for each district to provide the accounting to the other district, rather than to request it from the other district.

3. The formula in section (D)(2)(a) was corrected to add (1+C), to properly reflect the inflation adjustment based on the Consumer Price index.

4. AVAQMD removed references to AVAQMD Rule 1301 in Rule 315, and updated the definition to include that a Major Facility is a Facility that emits or has the Potential to Emit NO_X or VOC in an amount greater than or equal to 25 tons per year. This is consistent with the threshold for major stationary sources for Severe ozone nonattainment areas, as provided in CAA section 182(d).

ii. Evaluation of MDAQMD Rule 315 and AVAQMD Rule 315 Alternative Section 185 Fee Equivalent Programs

The CAA section 185 fee program requirements apply to ozone nonattainment areas classified as Severe or Extreme that fail to attain by the required attainment date. It requires each major stationary source of VOC located in an area that fails to attain by its attainment date to pay a fee to the state for each ton of VOC the source emits in excess of 80 percent of a baseline amount. CAA section 182(f) extends the application of this provision to major stationary sources of NO_X . In 1990, the CAA set the fee as $5,000 per ton of VOC and NO_X emitted, which is adjusted for inflation, based on the Consumer Price Index, on an annual basis. More information on CAA section 185 is provided in our TSD.

On January 5, 2010, the EPA issued the memo “Guidance on Developing Fee Programs Required by Clean Air Act Section 185 for the 1-hour Ozone NAAQS.” ^[4]  The guidance discussed options for the EPA approval of SIPs that included an equivalent alternative program to the section 185 fee program specified in the CAA when addressing anti-backsliding for a revoked ozone NAAQS under the principles of section 172(e). Section 172(e) requires the EPA to develop regulations to ensure that controls in a nonattainment area are “not less stringent” than those that applied to the area before the EPA revised a NAAQS to make it less stringent. Although section 172(e) does not directly apply where the EPA has strengthened the NAAQS, as it did in 1997, 2008, and 2015, the EPA has applied the principles in section 172(e) when revoking less stringent ozone standards. The EPA allows a state to adopt an alternative to CAA section 185 if the state demonstrates that the proposed alternative program is “not less stringent” than the direct application of CAA section 185. The EPA has previously stated that one way to demonstrate this is to show that the alternative program provides equivalent or greater fees and/or emissions reductions directly attributable to the application of CAA section 185. Although the 2010 guidance was vacated and remanded by the D.C. Circuit on procedural grounds, the court did not prohibit alternative programs, stating “neither the statute nor our case law obviously precludes that alternative” ( NRDC v. EPA, 643 F.3d 311 (D.C. Cir. 2011)). The EPA has approved alternative equivalent section 185 fee programs in California for the San Joaquin Valley (77 FR, 50021, August 20, 2012) and the SCAQMD covering both the Los Angeles-South Coast Air Basin Area and the portion of the Southeast Desert Modified Air Quality Management Area that is regulated by SCAQMD (77 FR 74372, December 14, 2012) (upheld in Natural Res. Def. Council v. EPA, 779 F.3d 1119 (9th Cir. 2015)). More recently we approved an alternative 185 fee equivalent program for the New York portion of the New York-Northern New Jersey-Long Island 1-hour ozone nonattainment area (84 FR 12511, April 2, 2019), and the Houston-Galveston-Brazoria area (85 FR 8411, February 14, 2020).

The MDAQMD and the AVAQMD rules which allow for the equivalent program: (1) calculate the amount of fees that major sources would pay each year; (2) allow for offsetting the major source fees with fees collected in the area for programs designed to result in emission reductions within the District portion of the nonattainment area (NAA); and (3) allow for major sources' fee obligations to be offset fully or partially with surplus expenditures that are collected from these programs. In order for expenditures to be creditable to the equivalency tracking account, they must: be surplus to the SIP, have been certified in writing by the APCO, the Executive Officer of CARB, and the USEPA as being surplus to the SIP, and be designed to result in direct, or to facilitate future, reductions in NO_X or VOC emissions within the district portions of the NAA. In the staff reports submitted along with the rules, the MDAQMD and the AVAQMD stated that they intend to credit expenditures from (1) the Carl Moyer Memorial Air Quality Standards Attainment Program, (2) Assembly Bill 2766, (3) the Lawn & Garden Replacement Program, and (4) Assembly Bill 923 (only in the AVAQMD). In a letter dated February 22, 2024, the MDAQMD elaborated on the qualified programs for Section 172(e) and demonstrated how the programs would be evaluated using the 2020 fiscal year as an example, and the AVAQMD provided a similar demonstration in its Rule 315 district staff report. The Carl Moyer Memorial Air Quality Standards Attainment Program provides money to help fund the replacement of engines and other equipment with cleaner versions. Assembly Bill 2766 provides money to assist in public transit and provides monetary incentives to vehicle owners to retire their older polluting vehicles. The Lawn & Garden Replacement Program provides money for replacing lawn and garden equipment with zero emissions alternatives. Assembly Bill 923 collects additional revenue to remediate the air pollution harms caused by motor vehicles under the Carl Moyer program, the new purchase, retrofit, repower, or add-on of equipment for previously unregulated agricultural sources, the new purchase of school buses pursuant to the Lower-Emission School Bus Program, and an accelerated vehicle retirement or repair program. These programs all lead to the replacement of older dirtier equipment with newer, lower-emitting equipment, providing emission reductions in the MDAQMD and the AVAQMD portions of the nonattainment area. We evaluated these programs in the TSD for this action and propose to find that they are surplus to the SIP.^[5]

Based on our evaluation we are proposing to find that the alternative equivalent program established by the MDAQMD and AVAQMD rules are equivalent section 185 fee programs under section 172(e), as they collect greater or equivalent fees than would be collected under a statutory section 185 fee program for each area. It also requires that expenditures from qualified programs result in direct reductions or facilitate future reductions of VOC or NO_X emissions. In contrast, section 185 of the Act requires states to assess fees on stationary sources but does not require that the fees be used for activities beneficial in reducing ozone formation. We believe this requirement in Rule 315 to use the surplus funds for reducing ozone formation will result in further progress toward attainment. A detailed evaluation of the MDAQMD and AVAQMD section 185 alternative fee programs is included in the TSD for this action.

C. Proposed Action and Public Comment

As authorized in section 110(k)(3) of the Act, the EPA proposes to approve the submitted rules because they fulfill all relevant requirements. We will accept comments from the public on this proposal until May 22, 2024. If we take final action to approve the submitted rules, our final action will incorporate these rules into the federally enforceable SIP and stop all sanction clocks associated with our September 29, 2022 disapproval (87 FR 59021). It will also address the EPA's obligation to promulgate a FIP arising from our previous finding that the State of California has failed to submit the required CAA section 185 SIP revisions for the 1-hour ozone NAAQS for the Southeast Desert Modified Air Quality Management Area (75 FR 232).

IV. Incorporation by Reference

In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference MDAQMD Rule 315, Federal Clean Air Act Section 185 Penalty, amended on February 27, 2023, and AVAQMD Rule 315, Federal Clean Air Act Section 185 Penalty, amended on November 21, 2023, described in section II.C. The EPA has made, and will continue to make, these materials available through https://www.regulations.gov and at the EPA Region IX Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information).

V. Statutory and Executive Order Reviews

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed action merely proposes to approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it proposes to approve a state program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act.

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. The EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”

The air agencies evaluated environmental justice considerations as part of its SIP submittal even though the CAA and applicable implementing regulations neither prohibit nor require an evaluation. The analysis was done for the purpose of providing additional context and information about this rulemaking to the public, not as a basis of the action. The EPA has also included an environmental justice analysis in the TSD for this action, utilizing the EPA's environmental justice screening and mapping tool (“EJSCREEN”) to identify environmental burdens and susceptible populations in the Southeast Desert Modified AQMA. The results of this analysis are being provided for informational and transparency purposes. EPA is taking action under the CAA on bases independent of the air agencies' and the EPA's evaluation of environmental justice. Due to the nature of the action being taken here, this action is expected to have a positive impact on the air quality of the affected area. In addition, there is no information in the record upon which this decision is based that is inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Incorporation by reference
• Intergovernmental relations
• Nitrogen oxides
• Ozone
• Reporting and recordkeeping requirements
• Volatile organic compounds

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

Dated: April 16, 2024.

Martha Guzman Aceves,

Regional Administrator, Region IX.

Footnotes

1.  VOC help produce ground-level ozone and smog, which harm human health and the environment. NO_X helps produce ground-level ozone, smog and particulate matter, which harm human health and the environment.

2.  40 CFR 81.305.

3.  See TSD subsection “a. Summary of Evaluation Criteria”.

4.  See https://www.epa.gov/​sites/​production/​files/​2015-09/​documents/​1hour_​ozone_​nonattainment_​guidance.pdf.

5.  See section “Criteria for Expenditures from Qualified Programs” in the TSD for this action.