[Federal Register Volume 65, Number 22 (Wednesday, February 2, 2000)]
[Rules and Regulations]
[Pages 4887-4891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2177]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA083-0214; FRL-6530-6]


Approval and Promulgation of Implementation Plans; California 
State Implementation Plan Revision, El Dorado County Air Pollution 
Control District

AGENCY:  Environmental Protection Agency (EPA).

ACTION:  Final rule.

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SUMMARY:  EPA is finalizing three actions proposed in the Federal 
Register on October 5, 1999 concerning rules from the El Dorado County 
Air Pollution Control District (EDCAPCD). This final action will 
incorporate Rules 501, 520, 524, and 525 into the Federally approved 
State Implementation Plan (SIP). Today's action also will rescind 36 
rules from the SIP. The intended effect of approving these rules is to 
regulate permitting of stationary sources in accordance with the 
requirements of the Act, as amended in 1990. EPA is finalizing the 
approval of these revisions into the California SIP under provisions of 
the Clean Air Act (CAA) regarding EPA action on SIP submittals, SIPs 
for national primary and secondary ambient air quality standards and 
plan requirements for nonattainment areas. EPA is also finalizing a 
limited approval and limited disapproval of Rule 523 under CAA 
provisions regarding EPA action on SIP submittals and general 
rulemaking authority because these revisions, while strengthening the 
SIP, also do not fully meet the CAA provisions regarding plan 
submissions and requirements for nonattainment areas. As a result of 
this limited disapproval, EPA will be required to impose highway 
funding or emission offset sanctions under the CAA unless the State 
submits and EPA approves corrections to the identified deficiencies 
within 18 months of the effective date of this disapproval. Moreover, 
EPA will

[[Page 4888]]

be required to promulgate a Federal implementation plan (FIP) unless 
the deficiencies are corrected within 24 months of the effective date 
of this disapproval.

EFFECTIVE DATE:  This action is effective on March 3, 2000.

ADDRESSES:  Copies of the rule(s) and EPA's evaluation report for each 
rule are available for public inspection at EPA's Region IX office 
during normal business hours. Copies of the submitted rule(s) are 
available for inspection at the following locations:

(1) EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105;
(2) California Air Resources Board, 2020 L Street, Sacramento, CA 
95814;
(3) El Dorado County Air Pollution Control District, 2850 Fairlane Ct., 
Bldg. C, Placerville, CA 95667-4100.

FOR FURTHER INFORMATION CONTACT:  Roger Kohn, Permits Office (AIR-3), 
Air Division, US Environmental Protection Agency, Region IX, 75 
Hawthorne Street, San Francisco, CA 94105-3901, Telephone: (415) 744-
1238, E-mail: [email protected].

SUPPLEMENTARY INFORMATION:  

I. Rules Incorporated into EDCAPCD SIP
II. Background
III. Response to Public Comments
IV. EPA Action
V. Administrative Requirements
    A. Executive Order 12866
    B. Executive Order 13132
    C. Executive Order 13045
    D. Executive Order 13084
    E. Regulatory Flexibility Act
    F. Unfunded Mandates
    G. Submission to Congress and the Comptroller General
    H. National Technology Transfer and Advancement Act
    I. Petitions for Judicial Review

I. Rules Incorporated into EDCAPCD SIP

    The rules being approved into the California SIP include: EDCAPCD 
Rules 501 (General Permit Requirements), 520 (Enhanced Monitoring and 
Compliance Certification), 524 (Emission Reduction Credits), and 525 
(Priority Reserve). EPA is also granting limited approval (and limited 
disapproval) to EDCAPCD Rule 523. These rules were submitted by the 
California Air Resources Board to EPA on May 24, 1994 (Rules 501, 523, 
524, and 525) and October 13, 1995 (Rule 520).

II. Background

    On October 5, 1999 in 64 FR 53973, EPA proposed to approve Rules 
501, 520, 524, and 525 into the California SIP, and to rescind 36 rules 
from the SIP. EPA also proposed to grant limited approval (and limited 
disapproval) to Rule 523. A detailed discussion of the background for 
each of the above rules is provided in the proposed rule cited above.
    EPA has evaluated the above rules for consistency with the 
requirements of the CAA and EPA regulations and EPA interpretation of 
these requirements as expressed in the various EPA policy guidance 
documents referenced in the proposed rule cited above. EPA has found 
that the rules meet the applicable EPA requirements, with the exception 
of four deficiencies in Rule 523. A detailed discussion of the rule 
provisions and evaluations, including the Rule 523 deficiencies, has 
been provided in the proposed rule and in the technical support 
document (TSD), dated September 16, 1999, which is available at EPA's 
Region IX office.

III. Response to Public Comments

    A 30-day public comment period, which ended on November 4, 1999, 
was provided in 64 FR 18858. EPA received one comment letter on the 
proposed rulemaking, from EDCAPCD. The comments have been evaluated by 
EPA and a summary of the comments and EPA's responses are set forth 
below.
    Comment: EDCAPCD agrees to change the offset ratio for emission 
reductions that occur at a source that is within a 15 mile radius and 
within the District to 1.3 to 1.0.
    Response: EPA and EDCAPCD are in agreement on the necessity to 
revise Rule 523 to meet the offset ratio requirement of section 
182(d)(2) of the CAA.
    Comment: EDCAPCD contends that the offset requirements in Rule 523 
are more stringent than CAA requirements. The District believes that by 
requiring a source to offset emission increases down to the trigger 
level once cumulative emission changes at the source exceed specific 
trigger levels, the rule achieves more emission reductions than the CAA 
and EPA regulations require. EDCAPCD submitted a hypothetical example 
to document this claim.
    Response: The District and EPA use different methodologies to 
determine if offsets are required, and if so, how many. District Rule 
523 establishes offset trigger levels and requires sources, once they 
have exceeded these levels, to offset all future increases in potential 
to emit down to the trigger level. The EPA method determines offset 
applicability on a per project basis by subtracting a source's pre-
modification actual emissions from its post-modification potential to 
emit (while accounting for other creditable and contemporaneous 
emissions increases and decreases). If the resulting emission increase 
triggers offsets, the source must provide offsets for the entire amount 
of the emission increase. EPA agrees that in most cases, Rule 523 
offset requirements are more stringent than CAA requirements. However, 
there is one scenario in which the rule is less stringent than the CAA: 
new major sources. An example of this would be a new 100 ton per year 
(tpy) NOX source proposing to locate in the county. The CAA 
requires that such a source offset all emissions, i.e., 100 tpy. 
However, according to the offset provisions of Rule 523, the new source 
would have to offset down to the trigger level of 7500 lb./quarter or 
85 tpy, which is 15 tpy less than the federal requirement.
    In order to address this limited approval issue, the District must 
revise Rule 523 to require that new major sources offset the total 
amount of their potential to emit, i.e., down to zero.
    Comment: The District's BACT definition is more stringent than 
EPA's because it does not require that a rule containing an emission 
limit or control technique be in a state implementation plan to qualify 
as BACT. The definition is more inclusive and thus more stringent than 
what EPA requires.
    Response: The District BACT definition does not explicitly include 
the most stringent emissions limit contained in any SIP, which is part 
of the EPA definition of Lowest Achievable Emission Rate (California 
BACT). However, EDCAPCD has clarified in writing that the District 
interprets the BACT definition to include the SIP provision (see 
letters dated November 1, 1999 and November 29, 1999 from EDCAPCD to 
EPA, contained in the docket for this rulemaking). As a result, EPA 
agrees that this limited approval issue has been satisfied, and is not 
requiring the District to modify the BACT definition in Rule 523. 
Nevertheless, in order to clarify the definition, EPA encourages the 
District to revise the rule to make the SIP requirement an explicit 
part of the BACT definition.
    Comment: The District cannot remove or change the offset exemption 
in Rule 523 because it is mandated by California Health and Safety Code 
42301.2.
    Response: EPA understands that EDCAPCD is in a difficult position 
because it appears that state law may conflict with the Clean Air Act 
with respect to this exemption. Nevertheless, EPA cannot approve a rule 
provision into the SIP that conflicts with the Act. EPA is willing to 
work with EDCAPCD and the State of California to help resolve this 
deficiency. However, the

[[Page 4889]]

deficiency must be addressed before EPA can grant full approval to Rule 
523.
    Comment: EDCAPCD questions EPA's authority to regulate 
interprecursor offset trading. Since there are no provisions addressing 
interprecursor offsets in the CAA or EPA regulations, EPA has no 
authority to regulate them. In addition, case-by-case EPA approval for 
trades would be a long, burdensome process.
    Response: Section 173(c)(1) of the CAA requires that new or 
modified stationary sources offset emission increases of a given 
pollutant with reductions of the same pollutant. Since the CAA doesn't 
explicitly authorize interprecursor trading, a strict interpretation of 
the Act would prohibit air districts from allowing this practice at all 
in NSR rules.
    Recent EPA policy has allowed interprecursor trading, particularly 
among ozone precursors in ozone nonattainment areas, if certain 
criteria are met. Consistent with this policy, the District has two 
possible ways to address this limited disapproval issue when it revises 
Rule 523. One way is to include rule language requiring written EPA 
concurrence for each proposed interprecursor trade. Alternatively, the 
District could produce a technical justification for various 
interprecursor offset ratios, and then revise Rule 523 to include those 
ratios. In this scenario, rule language requiring case-by-case EPA 
concurrence would not be necessary. Since the CAA does not explicitly 
authorize interprecursor trading, EPA's policy is to require Agency 
concurrence for such trades, either on a case-by-case or one time only 
basis if appropriate ratios are established by rule.
    With respect to the amount of time required for EPA to concur on a 
specific trade in the case-by-case scenario, EPA would have to make its 
determination during the comment period provided for the draft permit. 
This would not delay the permit issuance process.

IV. EPA Action

    EPA is finalizing this action to approve Rules 501, 520, 524, and 
525 for inclusion into the California SIP, to rescind 36 rules from the 
SIP, and to amend 40 CFR 52.232 to delete an obsolete requirement. EPA 
is approving the submittal under section 110(k)(3) as meeting the 
requirements of section 110(a) and parts C and D of the CAA. This 
approval action will incorporate these rules into the Federally 
approved SIP. The intended effect of approving these rules is to 
regulate stationary sources in accordance with the requirements of the 
CAA.
    EPA is also finalizing a limited approval and a limited disapproval 
of Rule 523. The limited approval of this rule is being finalized under 
section 110(k)(3) in light of EPA's authority pursuant to section 
301(a) to adopt regulations necessary to further air quality by 
strengthening the SIP. The approval is limited in the sense that the 
rule strengthens the SIP. However, the rule does not meet the section 
182(a)(2)(A) CAA requirement because of the rule deficiencies which 
were discussed in the proposed rulemaking. Thus, in order to strengthen 
the SIP, EPA is granting limited approval of Rule 523 under sections 
110(k)(3) and 301(a) of the CAA. This action approves the rule into the 
SIP as a federally enforceable rule.
    At the same time, EPA is finalizing the limited disapproval of Rule 
523 because it contains deficiencies that have not been corrected as 
required by section 182(a)(2)(A) of the CAA, and, as such, the rule 
does not fully meet the requirements of part D of the Act. As stated in 
the proposed rule, upon the effective date of this final rule, the 18 
month clock for sanctions and the 24 month FIP clock will begin. If the 
State does not submit the required corrections and EPA does not approve 
the submittal within 18 months of the effective date of the final rule, 
either the highway sanction or the offset sanction will be imposed at 
the 18 month mark. It should be noted that the rule covered by this 
Federal Register has been adopted by EDCAPCD and is currently in effect 
in the District. EPA's limited disapproval action will not prevent 
EDCAPCD or EPA from enforcing the rule.

V. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from Executive Order 12866, entitled ``Regulatory 
Planning and Review.''

B. Executive Order 13132

    Executive Order 13132, 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 final 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. 
Thus, the requirements of section 6 of the Executive Order do not apply 
to this rule.

C. Executive Order 13045

    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.

D. Executive Order 13084

    Under Executive Order 13084, Consultation and Coordination with 
Indian Tribal Governments, EPA may not issue a regulation that is not 
required by statute, that significantly affects or uniquely affects the 
communities of Indian tribal governments, and that imposes

[[Page 4890]]

substantial direct compliance costs on those communities, unless the 
Federal government provides the funds necessary to pay the direct 
compliance costs incurred by the tribal governments. If the mandate is 
unfunded, EPA must provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation.
    In addition, Executive Order 13084 requires EPA to develop an 
effective process permitting elected and other representatives of 
Indian tribal governments ``to provide meaningful and timely input in 
the development of regulatory policies on matters that significantly or 
uniquely affect their communities.'' Today's rule does not 
significantly or uniquely affect the communities of Indian tribal 
governments. Accordingly, the requirements of section 3(b) of Executive 
Order 13084 do not apply to this rule.

E. 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 final 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).

F. 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 
annual 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 promulgated does not 
include a Federal mandate that may result in estimated annual 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 
requirements. Accordingly, no additional costs to State, local, or 
tribal governments, or to the private sector, result from this action.

G. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This rule is not a ``major'' rule as defined by 5 U.S.C. 
804(2).

H. 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.

I. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by April 3, 2000. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

    Dated: January 14, 2000.
Nora L. McGee,
Acting Regional Administrator, Region IX.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:


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

Subpart F--California

    2. Section 52.220 is amended by adding paragraphs 
(c)(103)(xiii)(B), (c)(119)(i)(C), (c)(120)(i)(B), (c)(138)(ii)(D), 
(c)(197)(i)(E), and (c)(225)(i)(C)(3)to read as follows:


Sec. 52.220  Identification of plan.

* * * * *
    (c) * * *
    (103) * * *
    (xiii) * * *
    (B) Previously approved on May 27, 1982 and now deleted without 
replacement rule 501.
* * * * *
    (119) * * *
    (i) * * *
    (C) Previously approved on May 27, 1982 and now deleted without 
replacement Rules 502 to 508, 510 to 513, 515, 517 to 519, and 521.
* * * * *
    (120) * * *
    (i) * * *

[[Page 4891]]

    (B) Previously approved on July 7, 1982 and now deleted without 
replacement Rules 401 to 407, 410 to 411, 415 to 416, and 418 to 424.
* * * * *
    (138) * * *
    (ii) * * *
    (D) Previously approved on November 18, 1983 and now deleted 
without replacement Rule 521.
* * * * *
    (197) * * *
    (i) * * *
    (E) El Dorado County Air Pollution Control District.
    (1) Rules 501, 523, 524, and 525 adopted on April 26, 1994.
* * * * *
    (225) * * *
    (i) * * *
    (C) * * *
    (3) Rule 520 adopted on June 27, 1995.
* * * * *
    3. Section 52.232 is amended by removing and reserving paragraph 
(a)(15).

[FR Doc. 00-2177 Filed 2-1-00; 8:45 am]
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