[Federal Register Volume 62, Number 173 (Monday, September 8, 1997)]
[Notices]
[Pages 47336-47341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23692]



[[Page 47335]]

_______________________________________________________________________

Part VII





Environmental Protection Agency





_______________________________________________________________________



Regulatory Reinvention (XL) Pilot Projects; Notice

  Federal Register / Vol. 62, No. 173 / Monday, September 8, 1997 / 
Notices  

[[Page 47336]]



ENVIRONMENTAL PROTECTION AGENCY

[FRL-5888-5]


Regulatory Reinvention (XL) Pilot Projects

AGENCY: Environmental Protection Agency (EPA).

ACTION: Publication of proposed Project XL Final Project Agreement 
(FPA) for Vandenberg Air Force Base and related documents.

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SUMMARY: EPA is announcing the publication of the Project XL Final 
Project Agreement (FPA) for Vandenberg Air Force Base in Santa Barbara 
County, California. The FPA is a voluntary agreement developed 
collaboratively by the Department of Defense, Vanderberg Air Force 
Base, the Santa Barbara Air Pollution Control District, local community 
members and EPA. Project XL, announced in the Federal Register on May 
23, 1995 (FRL-5197-9), gives regulated sources the flexibility to 
develop alternative strategies that will replace or modify specific 
regulatory requirements on the condition that they produce greater 
environmental benefits. EPA has set a goal of implementing a total of 
fifty projects undertaken in full partnership with the states.

FOR FURTHER INFORMATION: To obtain a copy of the Proposed Final Project 
Agreement or Supporting Documents contact: John Walser (415) 744-1257; 
US EPA Region IX; Vandenberg Project XL Lead, AIR-3; 75 Hawthorne 
Street, San Francisco, Ca. These documents are also available via the 
internet at the following location: ``http://www.epa.gov/ProjectXL''. 
To be included on the Vandenberg Project XL mailing list to receive 
information about future public meetings, XL progress reports, and 
other mailings from Vandenberg on the XL project, or for questions 
about the Proposed FPA contact John Walser at (415) 744-1257.

DATES: Comments. All public comments must be received on or before 
October 8, 1997.

ADDRESSES: Comments. Written comments should be submitted in duplicate 
to: John Walser; US EPA; Vandenberg Project XL Lead, AIR-3; 75 
Hawthorne Street, San Francisco, Ca.
    Docket. A docket containing supporting information used in 
developing this rulemaking, including the draft FPA and supporting 
materials, is available for public inspection and copying at U.S. EPA, 
Region IX, AIR-3; 75 Hawthorne Street, San Francisco, Ca., during 
normal business hours, and at EPA's Water Docket (Docket name ``XL/
Envest-Vandenberg AFB''); Mailcode 4101, 401 M Street, SW, Washington, 
DC 20460. For access to the Water docket materials, call (202) 260-
3027.
    For information on all other aspects of Project XL contact 
Christopher Knopes at the following address: Emerging Sectors and 
Strategies Division; United States Environmental Protection Agency; 
3202 Mall; 401 M Street, S.W.; Mail Code 2129; Washington, DC 20460. 
The telephone number for the Division is (202) 260-5754. The facsimile 
number is (202) 401-6637. Additional information on Project XL, 
including documents referenced in this notice, other EPA policy 
documents related to Project XL, regional XL contacts, application 
information, and descriptions of existing XL projects and proposals, is 
available via the internet at ``http://www.epa.gov/ProjectXL'' and via 
an automated fax-on-demand menu at (202) 260-8590.

    Dated: September 2, 1997.
Christopher Knopes,
Acting Director, Emerging Sectors and Strategies Division.

FINAL PROJECT AGREEMENT

VANDENBERG AIR FORCE BASE

AIR QUALITY PROJECT XL/ENVVEST INITIATIVE

Table of Contents

PREAMBLE
I. OVERVIEW--PURPOSE OF THIS AGREEMENT
II. DESCRIPTION OF THE PROJECT
    A. GENERAL PROJECT DESCRIPTION
    B. CONFORMITY TO THE MEMORANDUM OF AGREEMENT
    1. Regulatory Flexibility
    2. Cost Savings And Paperwork Reduction
    3. Description Of Stakeholder Involvement
    4. Environmental Results: Innovation/Pollution Prevention
    a. Background
    b. Investigation And Application Of Innovative Control 
Strategies
    c. Pollution Prevention
    d. Emission Reductions
    5. Transferability, Feasibility, Monitoring, Reporting, And 
Evaluation
    a. Transferability
    b. Feasibility
    c. Monitoring And Reporting
    d. Evaluation
    6. Worker Safety And Environmental Justice
III. IMPLEMENTATION OF THE VANDENBERG INITIATIVE
    A. VANDENBERG RESPONSIBILITIES; EMISSION REDUCTIONS
    B. DISTRICT RESPONSIBILITIES
    1. Rule Submission To EPA
    2. Technical Assistance/Plan Review And Submission To EPA
    C. EPA RESPONSIBILITIES
    D. EPA APPROVAL OF RULE 1301
IV. ADMINISTRATION OF THE AGREEMENT
    A. DURATION AND TERMINATION/RENEWAL OF AGREEMENT
    B. TERMINATION
    1. Parties' Termination Rights
    2. Termination of Plan
    3. Stationary Source Redesignation
    4. Achieved Emission Reductions
    C. FUNDING
    D. EVENTS PREVENTING IMPLEMENTATION OF AGREEMENT
    E. DISPUTE RESOLUTION
    F. PUBLIC RECORDS AND THE ADMINISTRATIVE RECORD
    G. ENFORCEMENT
    H. PERIODIC REVIEW AND EVALUATION ACTIVITIES
    I. MEANS OF GIVING NOTICE
    J. EFFECTIVE DATE
LIST OF ATTACHMENTS

Preamble

    This Final Project Agreement (FPA or ``Agreement'') is part of 
President Clinton's Reinventing Environmental Regulation Initiative to 
test innovative approaches to environmental protection. Under this 
Agreement, Vandenberg Air Force Base will go beyond what is required by 
regulation and achieve superior environmental performance at a lower 
cost. By 30 November, 2002, the Base will reduce its annual emissions 
of ozone precursors into the air by 10 tons or more. As a result of 
this initiative, Vandenberg will no longer be a potential major source 
of air pollution under Title V of the Clean Air Act.
    This Agreement states the intention of the United States 
Environmental Protection Agency (``EPA''), the 30th Space Wing at 
Vandenberg Air Force Base, California (``Vandenberg''), and the Santa 
Barbara County Air Pollution Control District (``District'') 
(collectively hereinafter referred to as ``the parties'') to carry out 
a pilot project pursuant to the 1995 Memorandum of Agreement between 
the Department of Defense (``DOD'') and EPA on Regulatory Reinvention 
Projects 1 testing innovative approaches to environmental 
protection. The program resulting from the MOA is called Project XL/
ENVVEST and represents an initiative to develop new approaches for 
meeting DOD and EPA responsibilities while achieving better overall 
environmental performance at lower cost than expected under existing 
regulatory approaches. The ENVVEST program mirrors and supports EPA's 
regulatory relief efforts under Project XL.
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    \1\ See Attachment 1, ``Memorandum of Agreement between the 
Department of Defense and the U.S. Environmental Protection Agency 
on Regulatory Reinvention Pilot Project,'' November 2, 1995.
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    The Vandenberg proposal follows President Clinton's mandate that 
regulatory reinvention under Project

[[Page 47337]]

XL/ENVVEST put the focus on progress rather than process. Vandenberg 
proposes a phased emissions reduction program. In the short-term, the 
focus will be on emission reductions from boilers, furnaces, and 
process heaters. In the long-term, the focus will be on opportunities 
for emission reductions from internal combustion engines, solvent and 
surface coating applications or other suitable sources of ozone 
precursors.
    The District and EPA, in return for the effort by Vandenberg, will 
allow Vandenberg to use innovative ways to comply with District Rule 
370 2 and the District's Title V Federal Operating Permit 
Program.
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    \2\ Rule 370 is based on a model Title V prohibitory rule that 
was developed cooperatively between EPA Region IX and the California 
Air Resources Board. Pursuant to the applicability section of Rule 
370, only sources with actual emissions less than 50% of a major 
source threshold are eligible for coverage (See Rule 370 at 
Attachment 2).
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    The commitment by Vandenberg to achieve significant and superior 
environmental benefits, as detailed in this Agreement, will be formally 
submitted by the District to EPA for approval into the Santa Barbara 
County portion of the California State Implementation Plan (``SIP''). 
The District will also oversee the execution of the plan and provide 
technical assistance.

I. Overview--Purpose of This Agreement

    This Agreement is a joint statement of the parties' intentions with 
regard to the Vandenberg Air Quality Project XL/ENVVEST Initiative. 
This Agreement is not intended to create legal rights or to be a 
contract or a regulatory action, such as a permit or rule. While it 
does not give rise to any rights enforceable in a legal action either 
to compel performance of the Agreement or for damages, it is intended 
to clearly state the plans of the parties and to represent the firm 
commitment of each party to carry out the project.

II. Description of the Project

A. General Project Description

    The 30th Space Wing at Vandenberg Air Force Base is located on the 
central coast of California about 150 miles northwest of Los Angeles. 
Covering more than 98,000 acres, it is the third largest Air Force 
installation, and is the only point in the United States from which 
unmanned government and commercial satellites are launched into polar 
orbit and from which intercontinental ballistic missiles are launched 
to verify weapon system performance.
    The mission of the 30th Space Wing is to: (1) Conduct and support 
space and missile launches; (2) operate the Western Test Range; (3) 
respond to world-wide military contingencies; and (4) host the 
Vandenberg community. Vandenberg, like other military installations, 
differs from civilian stationary sources in that the base hosts and 
supports a unique and wide variety of functions and activities. These 
activities include residential housing, schools, recreational parks, 
wildlife reserves, shopping centers, industrial maintenance, airfield 
operations, and various other mission related activities. As such, base 
activities create criteria pollutants normally associated with 
residential, commercial, and light industrial operations. Most of the 
stationary source ozone precursor emissions at the base are generated 
by boilers, furnaces, process heaters, and internal combustion engines.
    Vandenberg views environmental compliance as integral to its 
mission and, therefore, directs significant resources to ensure 
compliance with all environmental laws and regulations. With the advent 
of regulatory reinvention and the creation of Project XL/ENVVEST, 
Vandenberg saw the opportunity to test alternative ways of achieving 
environmental compliance. Vandenberg evaluated its environmental 
compliance obligations and identified areas where regulatory relief 
would likely result in greater environmental benefits. As a result of 
this evaluation, Vandenberg submitted a Project XL/ENVVEST proposal 
requesting relief from District Regulation XIII, Part 70 Operating 
Permit Program. Under this proposal, Vandenberg proposed to use 
resources allocated for environmental compliance purposes to implement 
pollution prevention activities that would ultimately have a greater 
environmental benefit than compliance with District Regulation XIII.
    Regulation XIII is an EPA approved and federally enforceable 
stationary source operating permit program, implementing Title V of the 
Clean Air Act (``Title V'') and 40 CFR Part 70 (``Part 70''), Title V 
supporting regulations. Regulation XIII requires major stationary 
sources 3 to apply for and obtain a Part 70 operating 
permit. The objective of such permits is to create a comprehensive 
document clearly spelling out all of a source's Clean Air Act 
obligations. While Regulation XIII generally does not impose new 
substantive requirements on sources, it does enhance environmental 
compliance with existing requirements.
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    \3\ To be classified as a ``major stationary source'' in Santa 
Barbara County, a source must emit, or have the potential to emit, 
100 tons per year of any regulated air pollutant or 10 tons per year 
of any hazardous air pollutant (as defined in section 112 (b) of the 
Clean Air Act) , or 25 tons per year of a combination of any 
hazardous air pollutants. Ozone nonattainment areas were classified 
according to the severity of the nonattainment based on the design 
value of a particular Air Quality Control Region at the time of the 
passage of the Clean Air Act Amendments of 1990 (Pub. L. 101-549). 
In the case of the Santa Maria-Santa Barbara-Lompoc area, that area 
was classified as a ``Moderate'' nonattainment area for ozone under 
the provisions of 42 U.S.C.A. section 7511(a) [Clean Air Act 
Sec. 181(a)]. All moderate areas were required to meet the ozone 
National Ambient Air Quality Standards by 15 November 1996.
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    Under the District Rules in effect in 1996, Vandenberg was a 
``major stationary source'' for purposes of Part 70 and subject to the 
permitting requirements of Regulation XIII. This classification was 
based on Vandenberg's potential to emit at least 100 tons per year of 
oxides of nitrogen (``NOX''). Actual emissions of 
NOX at Vandenberg, however, are approximately 50 tons per 
year. Vandenberg, in cooperation with the District and Region IX, 
realized that if actual emissions used to make a Title V applicability 
determination could be reduced and if the District exercised its 
regulatory discretion, then the facility would be eligible to comply 
with District Rule 370, Potential to Emit--Limitations for Part 70 
Sources, a rule that exempts a source from Title V if the actual 
emissions from the source are less than half of the potential to emit 
threshold for Regulation XIII. A source that complies with Rule 370 by 
not exceeding actual emissions of 50 tons per year is not subject to 
Regulation XIII and, therefore, is not required to obtain a Part 70 
permit.
    The District is currently classified as a ``moderate'' 
nonattainment area for the federal one-hour ozone standard. For such 
areas, a ``major stationary source'' subject to the permitting 
requirements of Title V is one whose potential to emit equals or 
exceeds 100 tons per year of any regulated pollutant. In 1996, however, 
the District experienced a number of federal ozone standard violations 
that may require EPA to reclassify the District as a ``serious'' 
nonattainment area. If this occurs, the applicable definition of major 
stationary source for Part 70 purposes under Regulation XIII and Rule 
370 will be lowered to 50 tons potential to emit or 25 tons actual 
emissions of an ozone precursor.
    The Parties acknowledge that EPA has adopted new federal standards 
for ozone and particulate matter. It is unclear how these new standards 
will affect Santa

[[Page 47338]]

Barbara County's nonattainment status. In light of the above, the 
parties recognize the likelihood that the applicable thresholds for the 
District's Regulation XIII and Rule 370 may be lowered to meet the 
requirements for serious ozone nonattainment areas. Therefore, this 
Agreement has been structured to allow the Vandenberg Project XL/
ENVVEST Initiative to proceed while meeting the new more stringent 
definition of major stationary source.
    Together, Region IX, the District, and Vandenberg identified areas 
of regulatory flexibility that allow the District to determine that 
Vandenberg may be classified as a non-major or minor source pursuant to 
Rule 370.4 First, the District amended Rule 1301 
5 to allow Vandenberg to exclude from its Title V major 
source applicability determination, emissions from tactical support 
equipment, infrastructure maintenance equipment, and building 
maintenance equipment that meet the EPA definition of ``nonroad 
engine.''
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    \4\ See Attachment 3, ``Interim Agreement On Implementation Of 
The ENVVEST Title V Initiative.
    \5\ See Attachment 4, Santa Barbara County Air Pollution Control 
District Rule 1301, PART 70 OPERATING PERMITS--GENERAL INFORMATION.
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    Second, the District will use its discretion to modify Rule 1301 to 
allow Vandenberg to group certain sources at the base for the purposes 
of Title V applicability by the methods set forth in the EPA 2 August 
1996 policy entitled ``Major Source Determinations for Military 
Installations under the Air Toxics, New Source Review, and Title V 
Operating Permit Programs of the Clean Air Act'' (``Act'').
    The rule changes are contingent upon Vandenberg obtaining approval 
of and implementing a plan that achieves a reduction in annual 
emissions of ozone precursors by at least 10 tons by 30 November 2002. 
The rule changes and this Agreement will not affect Vandenberg's major 
stationary source designation for programs other than Title V, (e.g., 
Prevention of Significant Deterioration/New Source Review (PSD/NSR)).

B. Conformity to the Memorandum of Agreement

    The following section addresses criteria for consideration under 
the DOD/EPA Memorandum of Agreement.
1. Regulatory Flexibility
    Information pertaining to conformance with this criterion is 
contained in the preceding section.
2. Cost Savings and Paperwork Reduction
    Vandenberg expects to realize cost savings and paperwork reduction 
by being able to comply with Rule 370 in lieu of Regulation XIII and 
complying with the obligations to obtain a Title V permit.
    Administrative and enforcement costs incurred by the District, for 
the development and implementation of this initiative, will be 
documented and made available to the public. Costs that qualify as 
``reimbursable costs'' under District Rule 210.I.C. will be accounted 
for separately and will be reimbursed by Vandenberg from DOD ENVVEST 
funds. In consultation with Vandenberg, the District will establish an 
operating budget to ensure maximum availability of funds for emission 
reduction projects.
3. Description of Stakeholder Involvement
    The base has consulted with the Vandenberg Community Advisory Board 
(``CAB''), and the District Community Advisory Council (``CAC'') in 
formulating this Agreement. The mission of the CAB is to promote 
community awareness and to review the remedial cleanup process at 
Vandenberg. This mission has now been expanded to address the 
Vandenberg Project XL/ENVVEST initiative. The CAC provides advice 
regarding air quality issues to the Air Pollution Control District 
Board of Directors. Pursuant to guidance from the Board, a subcommittee 
was created to participate in this initiative. Each body has met twice 
to receive briefings, discuss the initiative, and provide input.
    The parties have and will continue to issue press releases, run 
informational notices in the newspaper and sponsor public meetings, 
beginning with the initial meeting in October 1996, and every 6 months 
after execution of this Agreement, to advise interested members of the 
public on the progress being made toward meeting the FPA goals. The 
meetings shall inform the public of the steps taken to reduce 
pollution, include information on proposed steps to meet the goals of 
the FPA and solicit comment from the public on the progress made 
towards meeting the goals of the Agreement, or any other matter 
relevant to the execution of the Agreement. These meetings will be held 
in locations in Santa Barbara County that are accessible to the public 
and at a time and place agreed to by the parties to this Agreement. 
6
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    \6\  See Attachment 5, ``Project XL/ENVVEST PUBLIC PARTICIPATION 
PROCESS
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4. Environmental Results: Innovation/ Pollution Prevention
    a. Background. Through the process outlined in this FPA, Vandenberg 
proposes to implement innovative strategies in the selection and 
application of advanced emission reduction technologies to reduce 
emissions below levels they would have been at if the project were not 
being undertaken. Additionally, Vandenberg proposes to categorize the 
emission reduction potential of the available equipment to apply the 
most efficient and cost-effective technologies appropriate to the 
pollution generating equipment.
    During the initial phase of this initiative, Vandenberg will focus 
on boilers, which are the single largest stationary source of ozone 
precursor emissions. Vandenberg operates over 200 boilers rated between 
100,000 Btu/hr and 5 MMBtu/hr. These units are operated for spatial 
heating and heated water applications throughout the base and are 
typically fired on natural gas. Vandenberg has recently researched the 
feasibility of modifying boilers rated between 2 MMBtu/hr and 5 MMBtu/
hr in order to obtain emission reductions. Throughout the course of 
this initiative, Vandenberg will assess the emission reduction 
potential from a variety of sources, including but not limited to 
internal combustion engines and solvent and surface coating 
applications.
    b. Investigation And Application Of Innovative Control Strategies. 
In order to apply the most appropriate and cost effective emission 
control technologies to boilers, Vandenberg is in the process of 
categorizing these emission units by process type and by annual 
operating capacity. Once segregated, Vandenberg proposes to apply 
advanced emission control technologies (<15 ppmvd NOX @ 3% 
O2) to those units capable of providing the greatest 
emission reduction. Also, Vandenberg proposes to apply somewhat less 
advanced emission control technologies (<30 ppmvd NOX @ 3% 
O2) to those units which provide fewer potential emission 
reductions. Finally, the units that operate the least are proposed to 
be tuned and/or modified to meet or exceed an emission standard of >30 
ppmvd NOX @3% O2.
    Advanced boiler emission control technologies available for these 
applications include lean pre-mix combustion techniques, integral flue 
gas recirculation burners, spark-ignited pulse combustion boilers, and 
oscillating gas control valves. Through the implementation of these 
technologies, Vandenberg will be

[[Page 47339]]

demonstrating advanced emission reduction methods emerging into the 
marketplace for these sized units. Through the demonstration of these 
emerging technologies, Vandenberg will be advancing the technologies 
beyond the research and development phases and into the 
commercialization stages of burner development.
    c. Pollution Prevention. Through the investigation and 
implementation of the advanced emission reduction technologies, 
Vandenberg will be demonstrating the effectiveness of pollution 
prevention methods for control of environmental pollution. Classic 
emission control strategies focus on the ability to capture and destroy 
pollution, once generated from industrial processes. These control 
techniques often relied on the use of scrubbing media or catalytic 
exhaust treatment (including ammonia injection) to achieve ultra-low 
emissions thresholds (<20 ppmvd NOX @ 3% O2).
    Through the initiatives outlined in this FPA, Vandenberg is 
proposing to apply innovative pollution prevention techniques in 
reducing emissions from their facilities. Advanced burner development 
provides for the reduction of NOX through alterations in the 
burner configuration, eliminating the need for post exhaust controls. 
By working directly with technology vendors, Vandenberg has the ability 
to apply advanced ultra-low emission technologies.
    d. Emission Reductions. Vandenberg is committed to achieving 
through this initiative a reduction in annual emissions of ozone 
precursors by at least 10 tpy by 30 November 2002. These reductions, 
attained by the use of innovative technology, will be permanent and 
will not be used as bankable emission credits for further growth at 
Vandenberg or any other facility. Sources selected for the Vandenberg 
Air Quality Project XL/ENVVEST Initiative will not affect the 
calculation of the Vandenberg Net Emission Increase. This does not 
prohibit future Net Emission Increases at Vandenberg. However, if 
Vandenberg is required to undergo a mission change or additional 
missions are added to the facility and growth offsets are required to 
accommodate these mission changes, then such offsets must be obtained 
through projects which are not part of the air initiative, or must be 
acquired by the Air Force from qualified areas of sources outside 
Vandenberg.
5. Transferability, Feasibility, Monitoring, Reporting, and Evaluation
    These criteria are addressed further in section III of this FPA.
    a. Transferability. Transferability is envisioned in both a 
procedural and technical context. Procedurally, reallocating funding 
for pollution prevention rather than for compliance can result in 
regulatory requirements no longer being applicable. This funding trade 
off is a transferable mechanism. The technical transferability 
encompasses boiler demonstration projects testing new burner 
technologies that can be replicated at industrial and military 
facilities.
    b. Feasibility. Feasibility, which is achievement of technical 
objectives within applicable cost constraints, is inherent within this 
process.
    c. Monitoring And Reporting. Monitoring and Reporting relates to 
the collection of data necessary to proceed on to the next step which 
will validate the achievement of defined objectives. In this instance, 
adequate data regarding emissions reductions related to selected 
technology applications will be collected to allow for a meaningful 
evaluation of the progress being made to achieve specified milestones.
    d. Evaluation. Evaluation will interpret the data gathered in the 
previous phase and make possible a determination of whether the 
appropriate milestone has been accomplished. This will involve a public 
participation component and should take place within 30 days of the 
completion date of any milestone.
6. Worker Safety and Environmental Justice
    The base is committed to implementing Project XL/ENVVEST, complying 
with Executive Order 12898 and, pursuant to Executive Order 12196, 
complying with Air Force Office of Safety and Health standards. The 
Vandenberg Project XL/ENVVEST initiative will not create worker safety 
hazards or any disproportionately high and adverse human health or 
environmental effects on minority populations and low-income 
populations.

III. Implementation of the Vandenberg Initiative

A. Vandenberg Responsibilities; Emission Reductions

    Vandenberg will implement a phased program to reduce annual 
emissions of ozone precursors by at least 10 tons by 30 November 2002. 
The initial effort will be accomplished through emission reductions 
from boilers, furnaces, or process heaters. Details of the program will 
be specified and made enforceable in the Rule 1301 Plan. The Plan shall 
consist of source selection criteria, technology options, baseline 
emission protocols, emission measurement protocols, and emission 
reduction reporting protocols. Vandenberg will work in conjunction with 
the District Innovative Technology Group. This Plan will be submitted 
to the Air Pollution Control Officer (``Control Officer'') no later 
than 30 November, 1997, to include and execute the following agreed 
upon milestones. Other emission reduction efforts, supporting the 
attainment of the 10 ton reduction goal, will be initiated for other 
sources, such as internal combustion engines and solvent and surface 
coating applications. Details of potential additional emission 
reduction efforts will be in the Plan. The Control Officer will 
approve, conditionally approve, or disapprove the Plan within 60 days 
of submittal.
    The agreed upon milestones are as follows:

    1. Within 30 days of execution of this Agreement, Vandenberg 
shall complete the initial assessment and cost feasibility study.
    2. By 30 April 1999, 30 percent of candidate boilers identified 
in milestone #1 are being retrofitted. 7
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    \7\  The term ``being retrofitted'' encompasses construction, 
testing, and monitoring of emission reductions.
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    3. By 30 April 2000, 2 tons per year of emission reductions 
shall have been accomplished.
    4. By 30 April 2001, 70 percent of candidate boilers identified 
in milestone #1 are being retrofitted.
    5. By 30 November 2002, Vandenberg shall achieve a reduction in 
annual emissions of ozone precursors by 10 tons or more.

    If any of the milestones are not met, this Agreement will terminate 
as provided in Section IV and Vandenberg will be required to comply 
with the requirements of Title V of the 1990 Clean Air Act Amendments, 
consistent with applicable rules and statutes. Compliance with 
milestones will be determined by the Control Officer and will be based 
upon data submitted by Vandenberg pursuant to agreed upon protocols. At 
the time of the execution of the FPA, the governing federal rule 
8 requires a source to submit a compliant permit application 
within one year of the time at which the source becomes subject to the 
permit program.
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    \8\ 40 CFR Part 70, Sec. 70.5 (a)(1)(i).
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B. District Responsibilities

1. Rule Submission to EPA
    The District will submit to Region IX, for inclusion into the 
California State Implementation Plan (``SIP''), the relevant portions 
of District Rule 1301 which allow for the implementation of the Project 
XL/ENVVEST program.

[[Page 47340]]

2. Technical Assistance/Plan Review and Submission to EPA
    The District will provide technical assistance to Vandenberg 
regarding opportunities for emission reductions at Vandenberg. 
Vandenberg may use such assistance when preparing the emission 
reduction Plan. The District will formally review the Plan that 
Vandenberg submits pursuant to Rule 1301 and approve the Plan if it 
meets the requirements of District rules. The District will submit to 
EPA for inclusion into the SIP the Vandenberg emission reduction Plan 
the Control Officer approves pursuant to Rule 1301.

C. EPA Responsibilities

    EPA will review District Rule 370 and portions of Rule 1301 that 
allow for implementation of the Vandenberg Project XL/ENVVEST 
initiative for inclusion in the SIP, and approve those rules if the 
applicable statutory and regulatory criteria are met. EPA will also 
approve incorporation of amended District Rule 1301 into the District's 
Part 70 program if statutory and regulatory criteria are met.

D. EPA Approval of Rule 1301

    All parties recognize and agree that until such time as District 
Rule 1301, as amended to implement this Agreement, is approved by EPA, 
the basis upon which the Control Officer intends to exercise his 
discretion to find Vandenberg a non-major source is not complete and 
Vandenberg is still subject to regulation under Title V. If EPA does 
not approve 9 the amended Rule 1301 as part of the 
District's Part 70 program by 1 January 1998 then this Agreement will 
terminate.
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    \9\ Approval for this paragraph means a letter signed by EPA.
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IV. Administration of the Agreement

A. Duration and Termination/Renewal of Agreement

    This Agreement is effective until 30 November 2002. If, prior to 
expiration on 30 November, 2002, additional emission reduction 
opportunities are identified, the parties may elect to revise the 
reduction goals and extend the Agreement.

B. Termination

1. Parties' Termination Rights
    Any party may terminate this Agreement any time prior to Control 
Officer's approval of the emission reduction Plan submitted to the 
District pursuant to Rule 1301. Such notice will be in writing and sent 
to the other parties. After such approval any party may terminate its 
participation in the Agreement by providing 30 days notice to the other 
parties. Termination of this Agreement will not terminate Vandenberg's 
obligations under District Rules 1301 and 370 as discussed in 
subsections IV.B.2 and IV.B.4 below.
2. Termination of Plan
    If this Agreement is terminated, achieved emission reductions will 
remain in place in accordance with applicable rules. There will be no 
obligation to perform any unachieved reductions that have not been 
completed if any of the following events occur, and Vandenberg's status 
vis-a-vis Regulation XIII will be reassessed as set forth in Section 
IV-B above.
    Vandenberg may withdraw from the approved plan if any of the 
following occur:

    (a) It becomes subject to permit under Title V of the CAA as 
applied by federal, state, or local regulation.
    (b) It does not achieve the emissions reductions required by 
Rule 1301 pursuant to the schedule of milestones included in the 
Plan approved by the District.
    (c) USEPA does not approve the Plan for inclusion in the SIP 
within one year of approval by the District.
3. Stationary Source Redesignation
    If the Plan is terminated in whole or in part for any reason, the 
Title V stationary source designation for Vandenberg will be 
reevaluated by EPA and the District consistent with applicable federal 
and state laws, rules, and regulations at the time of such termination 
or withdrawal of the plan. Such reevaluation will include all equipment 
on the facility. If such inclusion subjects Vandenberg to the 
permitting requirements of Regulation XIII, Vandenberg will apply for 
and obtain a permit in accordance with Regulation XIII and applicable 
federal regulations.
4. Achieved Emission Reductions
    Notwithstanding any other provision in this Agreement, the portion 
of a Plan approved pursuant to Rule 1301 will not expire for any 
emission reductions that have been implemented or any equipment that 
has been or is being retrofitted. Such emission reductions will remain 
in effect and will be enforceable as part of the SIP and District Rules 
and Regulations.

C. Funding

    Upon execution of the interim Agreement in June 1996, Vandenberg 
redirected all remaining Fiscal Year 1996 Title V compliance funds 
($163,000) to implement program emission reduction projects. The Fiscal 
Year 1997 commitment is $465,000 for follow-on projects. At this time 
Vandenberg has requested, through the normal DOD budgeting process, 
funds for the following periods for Title V compliance purposes:


FY '98.....................................................     $550,000
FY '99.....................................................      500,000
FY '00.....................................................      450,000
FY '01.....................................................      400,000
                                                            ------------
    Total..................................................    2,528,000
                                                                        

    All funding commitments by Vandenberg will be in accordance with 
the Anti Deficiency Act (31 U.S.C. 1341).
    Emission reduction projects will be funded from the funds estimated 
to be available in the totals identified above. Failure to achieve the 
milestones will result in these funds being withdrawn from this 
initiative and their utilization to comply with the requirements of 
Title V of the 1990 Clean Air Act Amendments. Costs attributable to 
complying with District Rule 370 will not be supported from those 
funds. All parties agree that administrative costs should be minimized 
to enhance the benefits of pursuing this initiative.

D. Events Preventing Implementation of Agreement

    If at any time during implementation of this FPA, Vandenberg 
reasonably determines and EPA and the District concur that any 
requirement of such Agreement cannot be met due to circumstances beyond 
the control of Vandenberg (including, but not limited to, materially 
changed site conditions that could not reasonably have been 
anticipated, insufficient availability of appropriated funds or the 
significant failure of an innovative technology) EPA, District, and 
Vandenberg will attempt to negotiate mutually acceptable changes to the 
FPA.

E. Dispute Resolution

    Any dispute that arises with respect to the meaning, application, 
implementation, interpretation, amendment, termination, or modification 
of the FPA, or with respect to the Vandenberg implementation of the 
FPA, the resolution of which is not expressly provided for in the FPA, 
will in the first instance, be the subject of informal negotiations, 
except with respect to Section IV.G. (Enforcement). To initiate 
informal negotiations, any signatory which believes it has a dispute 
with any other party will simultaneously notify all of the parties, in 
writing, setting forth the matter(s) in dispute. If the dispute cannot 
be resolved by the parties within 35 days

[[Page 47341]]

of receipt of such notice, then one or both parties may invoke non-
binding mediation by setting forth the nature of the dispute, with a 
proposal for its resolution, in a letter and submit it to a three 
person dispute resolution committee consisting of one member designated 
by each party.

F. Public Records and the Administrative Record

    Vandenberg will issue, within 30 days of execution of this 
Agreement, and every 6 months thereafter until completion of the Air 
Quality initiative, progress reports which document progress toward 
goals established by this Agreement. The reports will document 
equipment changes and replacements, process changes, and other relevant 
facts which support any assertions of actual emission reductions or the 
progress thereof. The reports will be provided to District, Region IX, 
and any interested party that requests such reports. In addition, 
Vandenberg shall maintain the reports in local public libraries. 
Vandenberg will also develop and maintain an Administrative Record of 
all formal documents, records, and correspondence necessary as a basis 
for decision making regarding this initiative.

G. Enforcement

    While this Agreement is not legally binding, the requirements of 
District Rule 370, Potential to Emit--Limitations for Part 70 Sources; 
District Rule 1301, Part 70 Operating Permits, definition of 
``Stationary Source''; and the Vandenberg emission reduction Plan 
approved by the Control Officer,10 are binding and legally 
enforceable by the District, after all rule changes are final. Upon EPA 
approval of these requirements into the SIP, they will also be 
enforceable by EPA and citizens under the Clean Air Act. District and 
federal enforceability of the above provisions will remain in effect 
until such provisions are modified or rescinded by the District and 
approved by EPA.
---------------------------------------------------------------------------

    \10\ Upon approval by the Control Officer, the Plan will be 
appended to this Agreement as Attachment 6.
---------------------------------------------------------------------------

    These enforcement measures make Vandenberg accountable for 
achieving the milestones set out in this FPA and the Plan submitted 
pursuant to Rule 1301.

H. Periodic Review and Evaluation Activities

    Each party will review this Agreement, pursuant to the above 
mentioned milestones in Section III.A. The review will be an evaluation 
of the progress towards achieving the objectives of this Agreement.

I. Means of Giving Notice

    When giving notice with regard to FPA modification or termination, 
the parties will contact the FPA signatories in writing. Informal 
communication may be given by phone or in writing to the following 
contact offices:

Environmental Management Office, (805) 734-8232 (x-61921), 
Vandenberg Air Force Base
Office of Strategic Planning and Emerging Issues, (415) 744-2390, 
U.S. Environmental Protection Agency, Region IX
Manager of Major Source Division, (805) 961-8800, Santa Barbara 
County Air Pollution Control District

J. Effective Date

    This Agreement is effective upon the date of the last signature by 
the parties.
Felicia Marcus,
Regional Administrator, United States Environmental Protection Agency, 
Region IX.
C. Robert Kehler,
Colonel, USAF, Commander, 30th Space Wing, Vandenberg Air Force Base.
Douglas W. Allard,
Air Pollution Control Officer, Santa Barbara County Air Pollution 
Control District.

List of Attachments

    1. Memorandum Of Agreement Between The Department Of Defense And 
The U.S. Environmental Protection Agency On Regulatory Reinvention 
Pilot Projects.
    2. Santa Barbara County Air Pollution Control District Rule 370, 
Potential To Emit, Limitations For Part 70 Sources.
    3. Interim Agreement On The Implementation Of The Project XL/
Envvest ``Title V'' Initiative.
    4. Santa Barbara County Air Pollution Control District Rule 
1301, Part 70 Operating Permits--General Information.
    5. Public Participation Process.
    6. Rule 1301 Plan (Will Be Appended To FPA Upon Approval By The 
Control Officer).

[FR Doc. 97-23692 Filed 9-5-97; 8:45 am]
BILLING CODE 6560-50-U