[Federal Register Volume 67, Number 178 (Friday, September 13, 2002)]
[Rules and Regulations]
[Pages 57957-57960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23255]



[[Page 57957]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA247-0361; FRL-7272-6]


Revisions to the California State Implementation Plan, South 
Coast Air Quality Management District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing a limited approval and limited disapproval 
of revisions to the South Coast Air Quality Management District portion 
of the California State Implementation Plan (SIP). This action was 
proposed in the Federal Register on March 8, 2002 and concerns volatile 
organic compound (VOC) emissions from aerospace manufacturing and 
coating, metal parts coating, wood products coating, and fiberglass 
composite manufacturing. Under authority of the Clean Air Act as 
amended in 1990 (CAA or the Act), this action simultaneously approves a 
local rule, Rule 1132, that regulates these emission sources and 
directs California to correct the rule's deficiencies.

EFFECTIVE DATE: This rule is effective on October 15, 2002.

ADDRESSES: You can inspect copies of the administrative record for this 
action at EPA's Region IX office during normal business hours. You can 
inspect copies of the submitted SIP revisions at the following 
locations:

Environmental Protection Agency, Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105-3901;
Environmental Protection Agency, Air Docket (6102), Ariel Rios 
Building, 1200 Pennsylvania Avenue, NW., Washington DC 20460;
California Air Resources Board, Stationary Source Division, Rule 
Evaluation Section, 1001 ``I'' Street, Sacramento, CA 95814; and,
South Coast Air Quality Management District, 21865 East Copley Drive, 
Diamond Bar, CA 91765-4182.

FOR FURTHER INFORMATION CONTACT: Jerald S. Wamsley, Rulemaking Office 
(AIR-4), U.S. Environmental Protection Agency, Region IX, (415) 947-
4111.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and 
``our'' refer to EPA.

I. Proposed Action

    On March 8, 2002 (67 FR 10653), EPA proposed a limited approval and 
limited disapproval of the following rule that was submitted for 
incorporation into the California SIP.

 
----------------------------------------------------------------------------------------------------------------
             Local agency                Rule No.            Rule title               Adopted        Submitted
----------------------------------------------------------------------------------------------------------------
SCAQMD...............................         1132  Further Control of VOC              01/19/01        05/08/01
                                                     Emissions from High-
                                                     Emitting Spray Booth
                                                     Facilities.
----------------------------------------------------------------------------------------------------------------

    We proposed a limited approval, because we determined that Rule 
1132 improves the SIP and is largely consistent with the relevant CAA 
requirements. We simultaneously proposed a limited disapproval because 
some of the rule's provisions conflict with section 110 and part D of 
the Act. These provisions are discussed below.
    1. Section (d)(1) describes a series of actions that composite 
manufacturing facilities must comply with as part of submitting an 
Alternative Compliance Plan (ACP.) SCAQMD stated within the rule's 
staff report that these measures can be expected to achieve a facility 
average of 40% emission reductions while new techniques are developed 
by 2002 that will achieve the 65% VOC reduction requirement of the 
rule. However, the rule needs to specify how compliance with the 65% 
requirement will be demonstrated.
    2. Section (d)(3) does not delimit ``director's discretion'' in any 
manner. Such discretion should be limited by emission estimation 
protocols and specific criteria for determining source compliance.
    Our proposed action contains more information on the basis for this 
rulemaking and on our evaluation of the submittal.

II. Public Comments and EPA Responses

    EPA's proposed action provided a 30-day public comment period. 
During this period, we received comments from the following parties:
    1. John Schweitzer, Composites Fabricators Association (CFA), 
letter dated April 2, 2002 with enclosure titled ``Guidance for 
Compliance with Rule 1132(d)(1): Alternative Compliance Plan for 
Composites Manufacturers Adopted by SCAQMD (date),'' dated 3/20/02;
    2. John McKnight, National Marine Manufacturers Association (NMMA), 
letter dated April 2, 2002;
    3. Bruce B. Crowell, Reichhold, letter dated April 4, 2002;
    4. Laki Tisopulos, SCAQMD, letter dated April 5, 2002; and
    5. Craig Peterson, Xerxes Corporation, facsimile dated April 8, 
2002.
    The comments and our responses are summarized below.
    Comment #1: SCAQMD commented that most composite manufacturers will 
be able to meet the 65% reduction requirement of Rule 1132 by complying 
with the standards in Rule 1162 amended November 9, 2001. SCAQMD and 
the composites manufacturing industry have discussed the compliance 
demonstration approach in section (d)(1) and agree on its simplicity. 
Therefore, any further amendments attempting to clarify Rule 1132 are 
unnecessary.
    Response #1: Rule 1132 must be enforceable as it is written. 
Furthermore, since Rule 1162 does not specify a 65% VOC reduction 
requirement, Rule 1132 needs emission reduction quantification 
protocols to demonstrate that compliance with Rule 1162's work practice 
requirements meets Rule 1132's 65% VOC emission reduction requirement.
    Comment #2: The NMMA asserts that EPA's proposal rejects pollution 
prevention technology as a compliance option and indirectly requires 
the use of capture and control technologies such as pollution control 
devices. For instance, Xerxes states that they have already invested in 
pollution prevention technologies; and, any new requirement for capture 
and control technologies would be an added financial burden.
    Response #2: We appreciate that a source may use pollution 
prevention methods such as product input reformulation, lower polluting 
application methods, or a combination thereof to reduce VOC emissions. 
EPA has endorsed pollution prevention (P2) methods in many different 
venues and our proposed action on Rule 1132 did not reject P2 as a VOC 
reduction option. However, our proposal did point out that Rule 1132 
does not specify

[[Page 57958]]

enforceable criteria needed to evaluate ACPs that may apply P2 
techniques.
    Comment #3: Regarding the deficiency in section (d)(1) of the rule, 
all respondents suggest that the Unified Emission Factors (UEF) 
developed by the Composite Fabricators Association (CFA) provide an 
accurate, practical, and enforceable method for sources to demonstrate 
compliance with Rule 1132's 65% emission reduction requirement. 
Consequently, no amendments to Rule 1132 are necessary.
    Response #3: Section (d)(1) is deficient because the rule does not 
specify how the Executive Officer (EO) will determine that the emission 
reductions described in the ACP are indeed real, adequately quantified, 
and verifiable. Although the UEF may represent an adequate set of 
protocols for calculating emission reductions, they have not been 
incorporated within the rule in a manner that requires their use by a 
source in demonstrating compliance and by the EO in determining the 
adequacy of an ACP. For instance, SCAQMD could amend Rule 1132 either 
to incorporate acceptable protocols and bind sources and the EO to 
their use, or to specify EPA review of all ACPs.
    Comment #4: The CFA and NMMA pointed out that the UEF were 
developed using EPA test methods and EPA has certified that they meet 
EPA's Category II Quality Assurance criteria. Furthermore, the UEF may 
be used to replace EPA's withdrawn AP-42 emission factors for composite 
manufacturing operations, and they will be adopted for use in the 
National Emissions Standard for Hazardous Air Pollutants (NESHAP) for 
the same industry.
    Response #4: We understand that the data underlying the UEF were 
developed with EPA test methods and that they meet some level of our 
quality assurance criteria. Although the UEF may have met some criteria 
for reliability and validity and have demonstrated utility in other EPA 
forums, we have not reviewed the UEF for their intended use in Rule 
1132. Consequently, if the UEF are incorporated within Rule 1132 and 
the rule is then submitted to EPA, we will formally review the UEF and 
the propriety of their use within this rule. At the same time, we will 
coordinate our action with other EPA offices also working with the UEF. 
Also, during any SCAQMD rule revision process, we will informally 
review rule amendments and any added protocols, such as the UEF.
    Comment #5: SCAQMD stated that compliance with the rule's 
requirements using section (d)(1) can be demonstrated through mass 
balance calculations using information such as resin usage volume, the 
respective application technique, and associated emissions factors 
derived from the test methods listed in the rule. Under section (d)(1) 
a composites manufacturing facility may use pollution prevention 
strategies such as lower monomer, less polluting resins and gelcoats.
    Response #5: As SCAQMD suggests, sources may calculate their own 
idiosyncratic emission factors for demonstrating compliance. 
Consequently, the EO may determine the adequacy of each source's ACP on 
a case by case basis without regard to specific emission reduction 
calculation protocols within the rule. This kind of compliance scheme 
is unenforceable because the rule lacks the internal means for 
enforcing its own requirements and determining compliance with the 
rule; nothing delimits the EO's judgement. Consequently, EPA cannot 
endorse this regulatory framework. Please also see Response 6.
    Comment #6: SCAQMD disagrees with the deficiency cited in section 
(d)(3); that the EO's discretion is unlimited. SCAQMD suggests that EO 
discretion in section (d)(3) is limited by the following factors:
    a. a facility electing to comply with section (d)(3) must achieve 
an added 10% emissions reduction compared to the requirements of 
subdivision (c);
    b. such a facility will have to demonstrate compliance with the 
emission reduction requirements of (d)(3) on a mass basis;
    c. such a facility must demonstrate compliance with (d)(3) through 
real, quantifiable, and verifiable emission reductions;
    d. the EO shall impose permit conditions that ensure continuous 
compliance with the rule;
    e. all facilities subject to Rule 1132 are major facilities (have a 
potential to emit more than 10 tons per year of VOC) and as a result, 
are subject to Title V of the CAA and permit review by EPA.
    Given these limitations, SCAQMD asserts that further amendment to 
Rule 1132 is unnecessary.
    Response #6: We will address SCAQMD's specific comments in turn.
    a. While it may set aside some uncertainty as to how emission 
reductions may be generated within a given ACP, an added ten percent 
emissions reduction requirement does not address our concerns about how 
emission reductions will be achieved, what protocols will be used to 
predict this, and how those protocols will delimit EO discretion in 
reviewing an ACP.
    b. This SCAQMD comment does not address our concern about how the 
EO will determine that the ACP will achieve its intended effect and 
compliance with the rule. For example, nothing in section (d)(3) or 
elsewhere in the rule prohibits the EO from approving an ACP relying on 
voluntary rideshare programs or any other VOC reduction strategy that 
may be difficult to quantify.
    c. No adequate set of protocols for calculating emission reductions 
have been incorporated within the rule in a manner requiring their use 
by a source in demonstrating compliance and by the EO in determining 
the adequacy of an ACP. It is not sufficient merely to require that 
emission reductions are real, quantifiable and verifiable. Rules must 
specify the protocols that will be used to assure that reductions are 
real, quantifiable and verifiable. Otherwise, there would arguably be 
no need to describe specific test method, recordkeeping, or monitoring 
requirements in any rule.
    d. Incorporation of ACP provisions into a permit does not limit the 
EO's discretion. Permit conditions generally have their basis in the 
specific requirements of a subject rule. Otherwise, these conditions 
are subject to interpretation and, as a result, may be changeable and 
unenforceable. Since the EO's discretion in approving ACPs is not 
adequately delimited by section (d)(3), it would not be adequately 
delimited within a permit. Continuing the example above, nothing in 
Rule 1132 would prevent the EO from incorporating a voluntary rideshare 
program into a facility permit.
    e. Title V permit review is not an adequate substitute for a fully 
enforceable rule. EPA's review of Title V permits generally is 
restricted to assuring that applicable rule requirements are 
appropriately reflected in the permit. If SIP-approved Rule 1132 allows 
inappropriate EO discretion, EPA would lack a basis for objecting to 
use of that discretion when reviewing a Title V permit.
    Comment #7: Xerxes Corp. states that an ACP provision is needed 
because meeting Rule 1132's requirements using a pollution control 
device is unworkable for the following reasons: it is infeasible or 
impractical given their facilities, production processes, or product 
requirements; it is too expensive; it emits greenhouse gases by 
converting styrene to carbon dioxide; noise pollution may be increased; 
and, pollution prevention techiques are effective and in some cases 
have already

[[Page 57959]]

been implemented. For these reasons and the reasons outlined by the 
CFA, Xerxes Corp. requests the EPA approve Rule 1132 in its present 
form.
    Response #7: We acknowledge Xerxes Corp.''s comment. We do not wish 
to dispute their cited impracticalities with using a pollution control 
device.
    However, to correct the deficiencies identified in EPA's March 8, 
2002 proposal, we do not require elimination of the ACP concept 
described in section (d). We require removal of the associated EO 
discretion. This can be accomplished two ways, both of which would 
still allow Xerxes Corp. and other facilities to use ACPs: (1) Require 
EPA approval of ACPs; or, (2) specify emission quantification protocols 
in the rule that would be used by the EO to evaluate ACPs.

III. EPA Action

    No comments were submitted that change our assessment of Rule 1132 
as described in our proposed action. Therefore, as authorized in 
sections 110(k)(3) and 301(a) of the Act, EPA is finalizing a limited 
approval of the submitted rule. This action incorporates the submitted 
rule into the California SIP, including those provisions identified as 
deficient. As authorized under section 110(k)(3), EPA is simultaneously 
finalizing a limited disapproval of the rule. As a result, sanctions 
will be imposed unless EPA approves subsequent SIP revisions that 
correct the rule deficiencies within 18 months of the effective date of 
this action. These sanctions will be imposed under section 179 of the 
Act according to 40 CFR 52.31. In addition, EPA must promulgate a 
federal implementation plan (FIP) under section 110(c) unless we 
approve subsequent SIP revisions that correct the rule deficiencies 
within 24 months. Note that Rule 1132 has been adopted by the SCAQMD, 
and EPA's final limited disapproval does not prevent the local agency 
from enforcing it.

IV. Administrative Requirements

A. Executive Order 12866

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

B. Executive Order 13045

    Executive Order 13045, entitled 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.

C. Executive Order 13132

    Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 
1999) revokes and replaces Executive Orders 12612, Federalism and 
12875, Enhancing the Intergovernmental Partnership. Executive Order 
13132 requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Under 
Executive Order 13132, EPA may not issue a regulation that has 
federalism implications, that imposes substantial direct compliance 
costs, and that is not required by statute, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by State and local governments, or EPA consults with 
State and local officials early in the process of developing the 
proposed regulation. EPA also may not issue a regulation that has 
federalism implications and that preempts State law unless the Agency 
consults with State and local officials early in the process of 
developing the proposed regulation.
    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, as specified in Executive Order 13132, because it 
merely acts on a state rule implementing a federal standard, and does 
not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

D. Executive Order 13175

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This final rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
Thus, Executive Order 13175 does not apply to this rule.

E. Executive Order 13211

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

F. 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 act on 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.

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    EPA's disapproval of the state request under section 110 and 
subchapter I, part D of the Clean Air Act does not affect any existing 
requirements applicable to small entities. Any pre-existing federal 
requirements remain in place after this disapproval. Federal 
disapproval of the state submittal does not affect state 
enforceability. Moreover, EPA's disapproval of the submittal does not 
impose any new Federal requirements. Therefore, 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).

G. 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 promulgated 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 acts on 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.

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.
    EPA believes that VCS are inapplicable to today's action because it 
does not require the public to perform activities conducive to the use 
of VCS.

I. 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).

J. 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 November 12, 2002. 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).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Incorporation by reference, Intergovernmental relations, Ozone, 
Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: August 5, 2002.
Laura Yoshii,
Deputy 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)(284)(i)(B)(6) 
to read as follows:


Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (284) * * *
    (i) * * *
    (B) * * *
    (6) Rule 1132, adopted on January 19, 2001.
* * * * *
[FR Doc. 02-23255 Filed 9-13-02; 8:45 am]
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