[Federal Register Volume 63, Number 186 (Friday, September 25, 1998)]
[Proposed Rules]
[Pages 51325-51329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25760]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[CA172-0103; FRL-6169-1]
Approval and Promulgation of Implementation Plans; California
State Implementation Plan Revision, South Coast Air Quality Management
District
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing to approve a revision to the California State
Implementation Plan (SIP) that concerns the control of criteria
pollutants.
The intended effect of proposing approval of this rule is to
regulate emissions of criteria pollutants in accordance with the
requirements of the Clean Air Act, as amended in 1990 (CAA or the Act).
EPA has evaluated this rule and is proposing to approve it under
provisions of the CAA regarding EPA action on SIP submittals, SIPs for
national primary and secondary ambient air quality standards, and plan
requirements for nonattainment areas.
DATES: Comments must be received on or before October 26, 1998.
ADDRESSES: Comments may be mailed to: Erica Ruhl, Permits Office,(AIR-
3), Air Division, U.S. Environmental Protection Agency, Region IX, 75
Hawthorne Street, San Francisco, CA 94105-3901.
A copy of the rule and EPA's evaluation report of the rule are
available for public inspection at EPA's Region 9 office during normal
business hours. Copies of the submitted rule are also available for
inspection at the following locations:
California Air Resources Board, 2020 L Street, Sacramento, CA 95812
South Coast Air Quality Management District, 21865 E. Copley Drive,
Diamond Bar, CA 91765.
FOR FURTHER INFORMATION CONTACT: Erica Ruhl, Permits Office (AIR-3),
Air Division, U.S. Environmental Protection Agency, Region IX, 75
Hawthorne Street, San Francisco, CA 94105-3901, (415) 744-1171.
SUPPLEMENTARY INFORMATION:
I. Applicability
The rule being proposed for approval into the California SIP is
South Coast Air Quality Management District (``SCAQMD'' or ``the
District''), Rule 518.2, Federal Alternative Operating Conditions. This
rule was adopted on January 12, 1996 and was submitted by the
California Air Resources Board to EPA on May 10, 1996. This rule was
found to be complete on July 19, 1996 pursuant to EPA's completeness
criteria that are set forth in 40 CFR part 51, appendix V 1
and is being proposed for approval into the SIP.
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\1\ EPA adopted the completeness criteria on February 16, 1990
(55 FR 5830) and, pursuant to section 110(k)(1)(A) of the CAA,
revised the criteria on August 26, 1991 (56 FR 42216).
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II. Background
California state law includes provisions for the granting of
variances from air pollution control requirements. When granted, a
variance protects a source from enforcement under California law.
Historically, EPA has not recognized variances issued pursuant to state
law and has taken the position that such variances do not shield
sources from enforcement under federal law. If, however, a variance is
submitted to EPA and is found to meet the substantive requirements of
the Clean Air Act (CAA) governing SIP revisions, it can be approved as
a revision to the SIP, thereby receiving federal recognition. State and
federal law have coexisted in this manner for many years.
The Clean Air Act allows EPA 18 months to act on submitted SIP
revisions 2 and often, because of a large backlog, the
Agency takes that long to process them. Members of the regulated
community have complained that this method for recognizing variances
federally is too time consuming and complex. With this rule, The South
Coast Air Quality Management District (``South Coast'' or ``the
District'') is proposing to make federal recognition of variances more
expeditious by using the title V permitting process.
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\2\ 42 U.S.C. 7410(k), CAA section 110(k).
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South Coast Rule 518.2 is designed to allow federal recognition of
variances through a process that meets the procedural requirements
pertaining to SIP revisions as well as the substantive requirements of
the Clean Air Act. In a
[[Page 51326]]
nutshell, the rule temporarily modifies the applicable requirement
through the title V permit revision process rather than through the
source-specific SIP revision process. The rule accomplishes this by
establishing a mechanism for the creation of alternative operating
conditions (AOCs), a means by which to offset any emissions in excess
of the otherwise applicable requirements that would result, and
provisions for EPA and public review and EPA veto of proposed AOCs.
The rule restricts the issuance of AOCs to circumstances where the
following conditions exist/have been met:
due to conditions beyond the reasonable control of the
petitioner, requiring compliance would result in either an arbitrary or
unreasonable taking of property or the practical closing and
elimination of a lawful business;
the closing or taking would be without a corresponding
benefit in reducing air contaminants;
the petitioner for the Alternative Operating Condition has
given consideration to curtailing operations of the source in lieu of
obtaining an Alternative Operating Condition;
during the period the Alternative Operating Condition is
in effect, the petitioner will reduce excess emissions to the maximum
extent feasible;
during the period the Alternative Operating Condition is
in effect, the petitioner will monitor or otherwise quantify emission
levels from the source and report these emission levels to the District
pursuant to a schedule established by the District;
the Alternative Operating Condition will not result in
noncompliance with the requirements of any NSPS, NESHAP or other
standard promulgated by the U.S. EPA under Sections 111 or 112 of the
Clean Air Act, or any standard or requirement promulgated by the U.S.
EPA under Titles IV or VI of the Clean Air Act, or any requirement
contained in a permit issued by the U.S. EPA; and
any emissions resulting from the Alternative Operating
Condition will not, in conjunction with emissions resulting from all
other Alternative Operating Conditions established by the Hearing Board
and in effect at the time, cause an exceedance of the monthly or annual
SIP allowance established in the rule.
In addition, the rule requires that the Alternative Operating
Condition include enforceable alternative emission limits, operational
requirements that result in the source being operated in a manner that
reduces emissions to the maximum extent feasible, and/or monitoring,
record keeping, and reporting provisions that, to the extent feasible,
meet or are as stringent as the otherwise applicable requirement.
If EPA believes that the proposed AOC does not meet applicable
requirements, including the requirements of Rule 518.2, it may object.
Any AOC will be ineffective if it is not revised to meet EPA's
objection unless EPA issues a written rescission of its objection. If
EPA does not object, or if EPA's objections are resolved, the AOC
constitutes a revision to the source's title V permit and a temporary
modification to the applicable requirement.
III. EPA Evaluation and Proposed Action
In determining the approvability of this rule, EPA must evaluate
the rule for consistency with the requirements of the CAA and EPA
regulations, as found in sections 110, 182, and 193 of the CAA and 40
CFR part 51 (Requirements for Preparation, Adoption, and Submittal of
Implementation Plans).
A. CAA Requirements Governing Approval of 518.2
The Clean Air Act includes several provisions that apply to the
approval of rules, such as Rule 518.2, that would revise the SIP by
relaxing existing requirements. These provisions are discussed below.
1. States' revisions to SIPs require reasonable notice and public
hearing
Congress adopted section 110(l) as part of the 1990 CAA Amendments.
Entitled ``Plan Revisions,'' it provides that States may adopt
revisions to an implementation plan after reasonable notice and public
hearing.
2. Revisions to State Implementation Plans must be submitted to EPA for
review
CAA section 110(a)(3)(C) states that when a State or the
Administrator grants an exemption under certain limited
circumstances,3 neither the State nor the Administrator need
revise a SIP if the plan would have met the requirements of the Act
absent such exemptions. This section suggests that when a State or the
Administrator grants an exemption that does not fall under one of the
specified categories, the applicable implementation plan may require
revision. Since a variance would almost never fall under one of the
listed categories, the State must submit a plan revision for the
Administrator's approval in order for it to be effective as a matter of
federal law.
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\3\ These circumstances include:
42 U.S.C. 7418: Control of pollution from Federal
facilities. This provision permits the President to exempt any
emission source of any department, agency, or instrumentality in the
executive branch if he determines it to be in the paramount interest
of the U.S. to do so.
42 U.S.C. 7413(d): Administrative assessment of civil
penalties. This exemption provides that when the Administrator has
made a finding that a person violated a SIP, EPA need not
concurrently insist on a SIP revision.
42 U.S.C. 7410(f), (g): National or regional energy
emergencies. Both of these subsections create limited authority to
exempt sources from compliance with SIPs for limited time-periods,
provided they meet specified requirements (e.g. severe national or
regional energy emergency).
42 U.S.C. 7419: Primary nonferrous smelter orders. This
section applies only to primary nonferrous smelters in existence on
August 7, 1977.
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Section 110(i) confirms the above interpretation of section
110(a)(3)(C). It states that with certain exceptions, including a plan
revision under subsection (a)(3), neither the State nor the EPA
Administrator may take any action, such as an order, suspension, or
plan revision, that modifies any requirement of the applicable
implementation plan with respect to any stationary source.
A number of courts, including the Supreme Court, have held that
both the State and the Agency must approve plan revisions in order for
them to be held valid under the Act.4 The Supreme Court has
also said that the Agency needs to review proposed SIP revisions to
assure that variances granted are consistent with the Act's requirement
that the national standards be attained as expeditiously as practicable
and maintained thereafter.5
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\4\ See, e.g., Train v. NRDC, 421 U.S. 60 (1975); Illinois v.
Commonwealth Edison Co., 490 F. Supp. 1145 (1980); California Tahoe
Regional Planning Agency v. Sahara Tahoe Corp., 504 F. Supp. 753,
768 (1980).
\5\ Train at 91.
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3. EPA cannot approve proposed revisions if they would cause the SIP to
fail to ensure attainment or maintenance of the NAAQS or any other
requirement included in the Act
Under section 110(l), the Administrator is not to approve a
revision of a plan ``if the revision would interfere with any
applicable requirement concerning attainment and reasonable further
progress, or any other applicable requirement of [the Act].'' Thus this
provision serves to assure that the State, in seeking a revision to its
SIP, does not impair its compliance with the statutory mandates
applicable to the SIP.
a. Attainment and Maintenance of the NAAQS. In General: Under
section 110(l) EPA must conform with the overarching general
requirement that it may not approve a revision to the SIP
[[Page 51327]]
that would cause the SIP to fail to ensure attainment or maintenance of
the NAAQS.
Post 1990 Non-RACT Rules: For non-RACT, post-1990 rules, section
110(l), in conjunction with section 110(a)(3)(C), requires EPA to
assure that the emissions resulting from the relaxation of rule
requirements will not interfere with attainment or reasonable further
progress before it can approve this type of revision.
b. Other Requirements Included in the Act--Post 1990 RACT Rules.
Section 172, which provides general rules for all nonattainment areas,
requires nonattainment areas to adopt a number of measures, including
rules requiring sources to apply reasonably available control
technology (RACT).6 Sections 182(a)(2)(A) and (b)(2) amplify
this requirement for ozone nonattainment areas. The former section
requires areas designated as nonattainment just prior to the 1990
Amendments to submit rules imposing RACT on certain existing sources of
volatile organic compounds (VOC). The latter section requires all
moderate and above nonattainment areas to impose similar control
measures. The purpose of these requirements was essentially to insure
that major sources of VOC and NOx use control measures that
amount to RACT.
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\6\ Congress has not defined RACT in the CAA, but has apparently
adopted EPA's definition of RACT as articulated in a memorandum from
Roger Strelow, Assistant Administrator for Air and Waste Management,
to Regional Administrators, Regions I-X, on ``Guidance for
Determining Acceptability of SIP Regulations in Non-attainment
Areas,'' section 1.a (December 9, 1976). EPA defined RACT as: ``the
lowest emission limitation that a particular source is capable of
meeting by the application of control technology that is reasonably
available considering technological and economic feasibility.'' RACT
for a particular source is to be determined on a case-by-case basis,
considering the technological and economic circumstances of the
individual source.'' 44 FR 53762 (1979).
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RACT requirements are especially relevant because they represent a
significant class of requirements that nonattainment areas must adopt
regardless of the other measures they have enacted as part of their
plans to achieve attainment. Accordingly, section 110(l) appears to
limit a State's ability to adopt revisions that would ``interfere''
with the mandate created by these provisions.
For a variance to a RACT rule put into effect after November 15,
1990, section 110(l) dictates that in the aggregate, the overall level
of reductions that were to be achieved through the imposition of RACT
may not be diminished.
4. The modification of any control requirement in effect before
November 15, 1990 in an area which is a nonattainment area for any air
pollutant is prohibited, unless the modification insures equivalent or
greater emission reductions of such air pollutants
CAA section 193, also known as the General Savings Clause,
preserves the validity of regulations, standards, rules, notices,
orders, and guidance in effect before November 15, 1990. Moreover, it
prohibits the modification of any control requirement in effect before
November 15, 1990 in an area which is a nonattainment area for any air
pollutant, unless the modification insures equivalent or greater
emission reductions of such air pollutants. In nonattainment areas,
section 193 provides that EPA may not approve a variance submitted as a
revision to a control requirement in effect prior to November 1990
unless the submitted revision ensures equivalent or greater emission
reductions.
5. EPA may permit a relaxation of standards or a limited exemption from
compliance with regulations where the effects of the relaxation or
exemption are insignificant and may be deemed de minimis
The D.C. Circuit held that the granting of certain exemptions may
be a permissible exercise of agency power to overlook circumstances
that in context may be considered de minimis. This ability constitutes
not a right to depart from the statute, but rather a tool to be used in
implementing the legislative design. Alabama Power Co. v. Costle, 636
F. 2d 323, 360 (1979). Further, the Court held that:
Unless Congress has been extraordinarily rigid, there is likely
a basis or an implication of de minimis authority to provide
exemption when the burdens of regulation yield a gain of trivial or
no value. That implied authority is not available for a situation
where the regulatory function does provide benefits, in the sense of
furthering the regulatory objectives, but the agency concludes that
the acknowledged benefits are exceeded by the costs. For such a
situation any implied authority to make cost-benefit decisions must
be based on a fair reading of the specific statute, its aims and
legislative history'' Alabama Power Co. v. Costle, 636 F. 2d at 360-
61 (D.C. Cir 1979).
Thus, according to the de minimis rule laid out in Alabama Power,
the EPA may excuse unavoidable excess emissions where these are
insignificant in light of total permissible emissions and where the
applicable statutory provisions are not extraordinarily rigid.
B. EPA Evaluation of Rule 518.2
Given the CAA provisions described above, federal recognition of
state-issued variances can be problematic. First, procedurally, a
variance cannot be federally recognized unless it is submitted as a
revision. Section 110(a)(3)(C), 110(i), Train, and the other cases
discussed above impose this requirement in order to obligate the Agency
to enforce its mandate of ensuring that States are attaining or
maintaining the NAAQS. Second, the Act's substantive requirements limit
EPA's ability to approve variances.
In determining the approvability of this rule, EPA has evaluated
the rule for consistency with the requirements of the CAA and EPA
regulations, as found in sections 110, 172, 182, and 193 of the CAA and
40 CFR part 51 (Requirements for Preparation, Adoption, and Submittal
of Implementation Plans).
1. States' revisions to SIPs require reasonable notice and public
hearing.
The District's rule adoption procedures and EPA's process for SIP
action on rules provide opportunity for public comment on Rule 518.2,
which sets out the process and criteria for establishing AOCs. In
addition, Rule 518.2 meets the CAA section 110(l) requirements for
reasonable notice and public hearing by subjecting each alternative
operating condition to EPA and public review for 45 days.
2. Revisions to State Implementation Plans must be submitted to EPA for
review
To meet the requirements of section 110(i), Rule 518.2 substitutes
the Title V permit modification process for the source-specific SIP
revision process. In effect, Rule 518.2 would be a SIP rule that allows
the local district board to set temporary alternative requirements in
accordance with the criteria spelled out in the rule. The State then
submits the alternative limit to EPA as a proposed Title V permit
modification, which by statute EPA has 45 days to review with the
option of vetoing it if the modification does not meet applicable
requirements. Using this procedural tool, EPA is able to meet the
requirements of section 110(i) because all of the changes occur within
the context of a rule that has already been approved into the SIP and
each alternative operating condition will be submitted to EPA for
review.
[[Page 51328]]
3. EPA cannot approve proposed revisions if they would cause the SIP to
fail to ensure attainment or maintenance of the NAAQS
Rule 518.2 was also designed to meet the requirements of sections
110(l) and 110(a)(3)(C) through the development of an emissions bank.
South Coast demonstrated to EPA that when it created its base-year
inventory, it used actual emission estimates from its sources, some of
which were excess. Further, South Coast showed that its plan to achieve
attainment, required under sections 110 and 182 of the Act, took these
emissions into account. South Coast then argued that as long as the
emissions from variances do not exceed the amount of ``excess
emissions'' already included in the inventory, the requirements of
section 110(l) should be satisfied. Accordingly, South Coast went on to
quantify the amount of emissions included in the base-year inventory
from excess emissions, and then created annual and monthly caps within
Rule 518.2 equivalent to that inventory quantification. This approach
satisfies section 110(a)(3)(C) because as long as the cap is not
exceeded, no variance (or ``alternative operating condition or AOC,''
as denominated in Rule 518.2) would cause a deviation from South
Coast's plan for attainment.
4. EPA cannot approve proposed revisions if they would cause the SIP to
fail to ensure attainment or maintenance of * * * any other requirement
included in the Act
For variances sought from post-1990 RACT standards, EPA must ensure
that the AOC meets the non-interference requirement of section 110(l).
That is, in the aggregate, the overall level of reductions that were to
be achieved through the imposition of RACT may not be diminished. This
indicates that in ordinary circumstances, if RACT standards are to be
relaxed, the equivalent emissions reductions must be obtained from
other sources subject to RACT rules.
As stated above, unless Congress has been extraordinarily rigid,
EPA has an implied de minimis authority to provide exemption when the
burdens of regulation yield but a trivial gain. Alabama Power, 636 F.
2d at 360. While Congress intended EPA to ensure that nonattainment
plans provide for the implementation of RACT, it left the definition of
RACT to EPA's discretion. The legislative history for the 1990 Clean
Air Act Amendments associated with section 172 reveals that while
Congress discussed adding a stringent definition of RACT to the
Act,7 the version it ultimately adopted did not define RACT.
Accordingly, EPA concludes that Congress has given it considerable
flexibility in implementing the RACT program. Therefore, as long as
Rule 518.2 does not significantly affect the reductions to be obtained
from the aggregation of all RACT rules, Rule 518.2 passes, with respect
to RACT, the non-interference requirement of Section 110(l). Turning to
the rule, for all pollutants under 518.2, both the annual and monthly
caps established by 518.2 equal less than one-tenth of one percent of
the total stationary source emissions inventory. Since EPA anticipates
that excess emissions from RACT rules will be a subset of the total
excess emissions covered by the program, EPA believes that ``RACT''
excess emissions are essentially de minimis and do not significantly
impact the reductions expected from RACT in the aggregate.
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\7\ See Report No. 100-231, Committee on Environment and Public
Works (100th. Cong., 1st. Sess., 1987).
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5. The modification of any control requirement in effect before
November 15, 1990 in an area which is a nonattainment area for any air
pollutant is prohibited, unless the modification ensures equivalent or
greater emission reductions of such air pollutants
For variances sought from standards adopted prior to 1990, EPA must
ensure that the AOC meets the CAA section 193 requirement that the
modification of any control requirement in effect before November 15,
1990 in an area which is a nonattainment area for any air pollutant,
must ensure equivalent or greater emission reductions of such air
pollutants. In other words, in nonattainment areas, section 193
provides that EPA may not approve a variance submitted as a revision to
a control requirement in effect prior to November 1990 unless the
submitted revision ensures equivalent or greater emission reductions.
Offsetting excess emissions from variances with the Rule 518.2 bank
does not insure equivalent emission reductions because that bank is
``funded'' with excess emissions included in the inventory rather than
from real reductions.
Under the de minimis rule that the D.C. Circuit established in
Alabama Power, unless Congress has been extraordinarily rigid, EPA may
provide an exemption for minimal increases in emissions. Congress
adopted rigid language when it enacted section 193. It stated: ``No
control requirement in effect * * * before November 15, 1990 in any
area which is a nonattainment area for any air pollutant may be
modified after November 15, 1990, in any manner unless the modification
insures equivalent or greater emission reductions of such air
pollutant.'' 42 U.S.C. 193 (emphasis added). Thus, Congress appears to
have left EPA with little or no discretion to permit the modification
of any pre-1990 control requirement, unless the modification ensures at
least equivalent, if not greater, reductions of such air pollutant.
A review of the legislative history associated with Section 193
supports the interpretation that Congress was being quite rigid when it
enacted this provision. In spite of all the other requirements designed
to bring the South Coast into attainment, Congress still enacted
section 193. The Report on the House Energy and Commerce Committee on
the 1990 Amendments noted that the ``anti-backsliding language'' in
section 193:
[P]rohibits the relaxation of control requirements currently in
effect, or required to be adopted. * * * Although many nonattainment
areas are allotted additional years before they must attain ambient
air quality standards under these amendments, all areas must
continue to use pollution control measures already in place or
scheduled to be put in place, as well as those additional measures
required under this Act, in order to assure attainment as
expeditiously as practical.
Because of Congress's evident intent not to allow relaxation of
section 193 rules, it is possible that 518.2 would violate the
requirements of section 193. However, EPA believes that the inclusion
of pre-1990 rules in Rule 518.2 is justified because the variance bank
in the rule is so small that any excused excess emissions would
essentially be insignificant such that in effect, no relaxation has
occurred. However, given the de minimis rule of Alabama Power, and that
the language of 193 appears to be ``rigid,'' EPA is soliciting comment
on this issue.
EPA has evaluated the submitted rule and has determined that it is
consistent with the CAA, EPA regulations, and EPA policy. Therefore,
South Coast Rule 518.2, Federal Alternative Operating Conditions is
being proposed for approval under section 110(k)(3) of the CAA as
meeting the requirements of section 110(a) and part D.
Nothing in this action should be construed as permitting or
allowing or establishing a precedent for any future request for
revision to any state implementation plan. Each request for revision to
the state implementation plan shall be considered separately in light
of specific technical, economic, and environmental factors and in
[[Page 51329]]
relation to relevant statutory and regulatory requirements.
IV. Administrative Requirements
A. Executive Orders 12866 and 13045
The Office of Management and Budget (OMB) has exempted this
regulatory action from E.O. 12866 review.
The proposed rule is not subject to E.O. 13045, entitled
``Protection of Children from Environmental Health Risks and Safety
Risks,'' because it is not an ``economically significant'' action under
E.O. 12866.
B. Regulatory Flexibility Act
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
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 impose any new requirements, the
Administrator certifies 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 CAA, preparation of a 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).
C. 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 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 approves pre-
existing requirements under State or local law, and imposes no new
Federal requirements. Accordingly, no additional costs to State, local,
or tribal governments, or to the private sector, result from this
action.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Intergovernmental relations, Ozone, Reporting and recordkeeping
requirements, Volatile organic compound.
Authority: 42 U.S.C. 7401-7671q.
Dated: September 17, 1998.
David P. Howekamp,
Regional Administrator, Region 9.
[FR Doc. 98-25760 Filed 9-24-98; 8:45 am]
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