03-10267. Revisions to the California State Implementation Plan, San Joaquin Valley Unified Air Pollution Control District, Yolo-Solano Air Quality Management District

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing a limited approval and limited disapproval of revisions to the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) and Yolo-Solano Air Quality Management District (YSAQMD) portions of the California State Implementation Plan (SIP). These revisions concern volatile organic compound (VOC) emissions from industries storing, loading, and transfering organic liquids as part of their operations. We are proposing action on local rules regulating these emission sources under the Clean Air Act as amended in 1990 (CAA or the Act). We are taking comments on this proposal and plan to follow with a final action.

DATES:

Any comments must arrive by May 27, 2003.

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 revision 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:

California Air Resources Board, Stationary Source Division, Rule Evaluation Section, 1001 “I” Street, Sacramento, CA 95814;

San Joaquin Valley Unified Air Pollution Control District, 1990 East Gettysburg Street, Fresno, CA 93726; and,

Yolo-Solano Air Quality Management District, 1947 Galileo Court, Suite 103, Davis, CA 95616.

A copy of the rule may also be available via the Internet at http://www.arb.ca.gov/​drdb/​drdbltxt.htm. Please be advised that this is not an EPA Web site and may not contain the same version of the rule that was submitted to EPA.

FOR FURTHER INFORMATION CONTACT:

Jerald S. Wamsley, EPA Region IX, [phone].

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 rule revisions?

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. EPA recommendations to further improve the rules.

E. Proposed action and public comment.

III. Background Information

Why were these rules submitted?

IV. Statutory and Executive Order Reviews

I. The State's Submittal

A. What Rules Did the State Submit?

Table 1 lists the rules addressed by this proposal with the dates they were adopted by the local air agency and submitted by the California Air Resources Board (CARB).

Table 1.—Submitted Rules

Local agency	Rule #	Rule title	Adopted	Submitted
SJVUAPCD	4623	Storage of Organic Liquids	12/20/01	03/15/02
YSAQMD	2.21	Organic Liquid Loading	06/12/02	08/06/02

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On May 7, 2002 and August 30, 2002, respectively, EPA found that the SJVUAPCD Rule 4623 and YSAQMD Rule 2.21 submittals met the completeness criteria in 40 CFR part 51, appendix V. These criteria must be met before formal EPA review can begin.

B. Are There Other Versions of These Rules?

We approved a version of SJVUAPCD Rule 4623 into the SIP on May 13, 1993 (see 58 FR 28354). Similarly, we approved a version of YSAQMD Rule 2.21 into the SIP on August 21, 1995 (see 60 FR 43383). CARB has made no subsequent submittals of these rules.

C. What Is the Purpose of the Rule Revisions?

To reduce VOC emissions at industrial sites storing and transfering organic liquids, Rule 4623 establishes vapor pressure containment and control requirements for organic liquid storage tanks. Tanks and systems of tanks must have a vapor recovery system that recovers at least 95% of ROC vapors by weight or combusts excess vapors. Rule 4623 also sets specific requirements for vapor loss control devices, closure devices, external floating roofs, and internal floating roofs.

SJVUAPCD's December 20, 2001 amendments to Rule 4623 included these significant changes to the 1991 version within the SIP.

• Rule applicability was changed from tanks that store organic liquids of 1.5 total vapor pressure (TVP) to tanks storing organic liquids of 0.5 TVP. Also, the rule applies to tanks with a design capacity of 1100 gallons or more.
• Twenty new definitions were added to the rule and several others were amended.
• Section 5.4 was deleted and replaced with an exemption for gasoline storage tanks with a capacity less than 19,800 gallons subject to SJVUAPCD Rule 4621-Gasoline Transfer Into Stationary Storage Container, Delivery Vessels and Bulk Plants.
• An exemption for tanks storing or processing “clean produced water” was added.
• An exemption was added for tanks used in wine fermentation and for the storage of resulting by-products, and spirits.
• The exemption for small producer's tanks with capacity of 2000 barrels (84,000 gallons) or less with a throughput of less than 150 barrels (6300 gallons) of oil per day will sunset by November 14, 2003. This exemption is replaced with one for small producer's tanks having a daily throughput of 50 barrels per tank.
• The rule's general VOC control system requirements are now based on the tank size and the TVP of the stored liquid.
• Requirements were added for when internal and external floating roofs are landed on their leg supports.
• Requirements were added for floating roof deck fittings, inspection of floating roof tanks, and submitting tank inspection plans and deviation inspection reports.
• A voluntary tank inspection, maintenance, and cleaning program was added.
• A requirement was added for initial and periodic TVP and/or API gravity testing of stored organic liquid in each uncontrolled fixed roof tank or a representative tank. Instead of periodic testing, an operator may install and operate the appropriate VOC control system.
• To complement the requirements listed above and to enhance rule effectiveness, several recordkeeping requirements were added.
• A “Test Method for Vapor Pressure of Reactive Organic Compounds for Heavy Crude Oil using Gas Chromatograph” for crude oil with an API gravity of 20 degrees or less was added, as was Test Method ASTM D 323-94 for determining the TVP of other organic liquids.

YSAQMD Rule 2.21 establishes vapor pressure containment and control requirements for organic liquid storage tanks, as well as specific requirements for external floating roofs, internal floating roofs, vapor recovery systems, deck fittings, mechanical shoe seal and secondary seal, resilient toroid or liquid mounted seals and secondary seals, terminal loading, bulk plant loading, transport vessels, switch loading operating practices, and storage tank cleaning. YSAQMD's June 12, 2002 amendments to Rule 2.21 listed below included these significant changes to the 1995 SIP version.

• YSAQMD deleted exemptions for low volume loading facilities, small gasoline storage containers, containers serviced by exempted delivery vessels, and implements of husbandry. Also, special circumstance exemptions for terminals were deleted.
• Thirty new definitions were added.
• A requirement was added that for storage tanks greater than 40,000 gallons using internal and external floating roofs that all new or replacement primary seal installations be a mechanical shoe or liquid mounted. Several other requirements were added for these tanks at sections 301.1-301.5.
• A lower explosive limit monitoring requirement was added for internal floating roof tanks.
• Deck fitting requirements were added for internal and external floating roof tanks.
• Annual emission testing requirements were added for external floating roof tanks, bulk plants and terminals.
• Periodic maintenance, monitoring, reporting, and record keeping requirements were added to stroage tanks, bulk plants, and terminals.

The subject TSD has more information about these rules and their amendments.

II. EPA's Evaluation and Action

A. How Is EPA Evaluating the Rule?

Generally, SIP rules must be enforceable (see section 110(a) of the Act), 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). Both the SJVUAPCD and the YSAQMD regulate an ozone nonattainment area (see 40 CFR part 81), so both SJVUAPCD Rule 4623 and Rule YSAQMD Rule 2.21 must fulfill RACT.

Guidance and policy documents that we used to help evaluate specific enforceability and RACT requirements consistently include the following:

1. Portions of the proposed post-1987 ozone and carbon monoxide policy that concern RACT, 52 FR 45044, November 24, 1987;

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

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

4. “Control of Volatile Organic Emissions from Petroleum Liquid Storage in External Floating Roof Tanks,” EPA-450/2-78-047, USEPA, December 1978;

5. “Control of Volatile Organic Emissions from Storage of Petroleum Liquids in Fixed-Roof Tanks,” EPA-450/2-77-036, USEPA, December 1977; and,

6. “Control of Volatile Organic Compound Leaks from Gasoline Tank Trucks and Vapor Collection Systems,” EPA-450/2-78-051, USEPA, December 1978.

B. Do the Rules Meet the Evaluation Criteria?

Both SJVUAPCD Rule 4623 and YSAQMD 2.21 improve the SIP by establishing more stringent emission limits and monitoring and maintenance requirements, and eliminating exemptions. Each rule is largely consistent with the relevant policy and guidance regarding enforceability, RACT and SIP relaxations. However, within each rule there are provisions which do not meet the evaluation criteria. These provisions are summarized below and discussed further in the TSD.

C. What Are the Rule Deficiencies?

Within SJVUAPCD Rule 4623, the provisions discussed below conflict with section 110 of the Act and raise enforceability issues preventing EPA's full approval of the SIP revision.

• Section 5.6.1 is unclear on two points. First, it references requirements in section 6.4.6; these requirements are unclear in how they apply to section 5.6.1. For example, no VOC control requirement is clearly specified. Second, a typographical error exists in how section 5.6.1 references either section 6.4.6 or section 6.4.7.
• Section 7.1 has a missing compliance date and conflicting dates in its last sentence.

Within YSAQMD 2.21, the provisions discussed below conflict with section 110 of the Act and raise rule enforceability issues preventing EPA's full approval of the SIP revision. In part, Rule 2.21's deficiencies relate to an EPA policy described within a memorandum dated September 20, 1999, entitled “State Implementation Plans: Policy Regarding Excess Emissions During Malfunctions, Start-up, and Shutdown” (the Excess Emissions Policy).

Taken together Section 111 and Section 501 are inconsistent with the EPA policy on exemptions for excess emissions during malfunctions, start-up and shutdown. Furthermore, the Air Pollution Control Officer (APCO) discretion within section 111 for approving maintenance plans is a case of unbounded “director's discretion” as there are no criteria delimiting the APCO's authority for approving maintenance plans. These provisions violate EPA requirements concerning enforceability and and rule relaxations.

D. EPA Recommendations To Further Improve the Rules

SJVUAPCD added an exemption to Rule 4623 for tanks used in wine fermentation and for storage of resulting products, by-products, and spirits. Formerly, these tanks were not subject to the SIP rule given the TVP of ethanol is less than 1.5 psia under the storage conditions assumed by the rule. Now, given the amendment of the rule to include tanks with a TVP of 0.5 psia, wine and spirit industry storage tanks may be subject to the rule depending upon their size. However, an examination of our guidance and the rule's regulatory history shows that Rule 4623 has been and is intended to regulate storage tanks containing organic liquids derived primarily from petroleum extraction, refining, and storage. Consequently, we have not listed the exemption for winery and spirit industry storage tanks as a rule deficiency.

What remains at issue is whether or not winery and spirit industry storage tanks represent a significant source of VOC emissions that must be reduced if the San Joaquin Valley is to meet CAA RACT and NAAQS requirements. Recently, the SJVUAPCD listed a winery rule as a potential control measure in their Reasonable Further Progress Planning Document. They estimated potential VOC emissions from the wine and spirit industries at 8.5 tons per day (page 4-11, Table 4-3: Tier II Control Measures, “Proposed 2003 and 2005 Rate of Progress Plan,” 7/24/02).

We believe this level of VOC emissions to be significant and deserving of further study and analysis. SJVUAPCD should determine whether a regulation reducing VOC emissions from the winery and spirits industry in the San Joaquin Valley should be developed to meet CAA RACT and NAAQS attainment requirements. This determination should be done as part of demonstrating that their attainment plan to meet the ozone NAAQS contains all reasonably available control measures per section 172(c)(1) of the CAA.

E. Proposed Action and Public Comment

As authorized in sections 110(k)(3) and 301(a) of the Act, EPA is proposing a limited approval of these submitted rules to improve the SIP. If finalized, this action would incorporate the submitted rules into the SIP, including those provisions identified as deficient. This approval is limited because EPA is simultaneously proposing a limited disapproval of the rules under section 110(k)(3). If this disapproval is finalized, sanctions will be imposed under section 179 of the Act unless EPA approves subsequent SIP revisions that correct each rule's 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 respective submitted rule has been adopted by the SJVUAPCD and YSAQMD. EPA's final limited disapproval would not prevent these local agencies from enforcing their rule.

We will accept comments from the public on the proposed limited approval and limited disapproval for the next 30 days.

III. Background Information

Why Were These Rules Submitted?

VOCs help produce ground-level ozone and smog, which harm human health and the environment. Section 110(a) of the CAA requires states to submit regulations that control VOC emissions. Table 2 lists some of the national milestones leading to the submittal of this local agency VOC rule.

Table 2.—Ozone Nonattainment Milestones

Date	Event
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.

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 rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

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 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 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).

D. Unfunded Mandates Reform Act

Under sections 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate; or to the private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the partial approval action proposed does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action proposes to approve in part 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 in part a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

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

EPA specifically solicits additional comment on this proposed rule from tribal officials.

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

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.

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

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

I. National Technology Transfer and Advancement Act

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Intergovernmental relations
• Ozone
• Reporting and recordkeeping requirements
• Volatile organic compound

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

Dated: April 11, 2003.

Alexis Strauss,

Acting Regional Administrator, Region IX.