[Federal Register Volume 68, Number 80 (Friday, April 25, 2003)]
[Proposed Rules]
[Pages 20356-20360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10267]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA264-373; FRL-7488-3]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

[[Page 20357]]


DATES: Any comments must arrive by May 27, 2003.

ADDRESSES: Mail comments to Andy Steckel, Rulemaking Office Chief (AIR-
4), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne 
Street, San Francisco, CA 94105-3901.
    You can inspect copies of the submitted SIP revision and EPA's 
technical support document (TSD) at our Region IX office during normal 
business hours. You may also see copies of the submitted SIP revisions 
at the following locations:

California Air Resources Board, Stationary Source Division, Rule 
Evaluation Section, 1001 ``I'' Street, Sacramento, CA 95814;
San Joaquin Valley Unified Air Pollution Control District, 1990 East 
Gettysburg Street, Fresno, CA 93726; and,
Yolo-Solano Air Quality Management District, 1947 Galileo Court, Suite 
103, Davis, CA 95616.

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

FOR FURTHER INFORMATION CONTACT: Jerald S. Wamsley, EPA Region IX, 
(415) 947-4111.

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

Table of Contents

I. The State's Submittal
    A. What rules did the State submit?
    B. Are there other versions of these rules?
    C. What is the purpose of the rule revisions?
II. EPA's Evaluation and Action
    A. How is EPA evaluating the rules?
    B. Do the rules meet the evaluation criteria?
    C. What are the rule deficiencies?
    D. EPA recommendations to further improve the rules.
    E. Proposed action and public comment.
III. Background Information
    Why were these rules submitted?
IV. Statutory and Executive Order Reviews

I. The State's Submittal

A. What Rules Did the State Submit?

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

                                                                Table 1.--Submitted Rules
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Rule
          Local agency                                       Rule title                                  Adopted                Submitted
--------------------------------------------------------------------------------------------------------------------------------------------------------
SJVUAPCD.......................        4623  Storage of Organic Liquids.................................  12/20/01                03/15/02
YSAQMD.........................        2.21  Organic Liquid Loading.....................................  06/12/02                08/06/02
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

B. Are There Other Versions of These Rules?

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

C. What Is the Purpose of the Rule Revisions?

    To reduce VOC emissions at industrial sites storing and transfering 
organic liquids, Rule 4623 establishes vapor pressure containment and 
control requirements for organic liquid storage tanks. Tanks and 
systems of tanks must have a vapor recovery system that recovers at 
least 95% of ROC vapors by weight or combusts excess vapors. Rule 4623 
also sets specific requirements for vapor loss control devices, closure 
devices, external floating roofs, and internal floating roofs.
    SJVUAPCD's December 20, 2001 amendments to Rule 4623 included these 
significant changes to the 1991 version within the SIP.
    [sbull] Rule applicability was changed from tanks that store 
organic liquids of 1.5 total vapor pressure (TVP) to tanks storing 
organic liquids of 0.5 TVP. Also, the rule applies to tanks with a 
design capacity of 1100 gallons or more.
    [sbull] Twenty new definitions were added to the rule and several 
others were amended.
    [sbull] Section 5.4 was deleted and replaced with an exemption for 
gasoline storage tanks with a capacity less than 19,800 gallons subject 
to SJVUAPCD Rule 4621-Gasoline Transfer Into Stationary Storage 
Container, Delivery Vessels and Bulk Plants.
    [sbull] An exemption for tanks storing or processing ``clean 
produced water'' was added.
    [sbull] An exemption was added for tanks used in wine fermentation 
and for the storage of resulting by-products, and spirits.
    [sbull] The exemption for small producer's tanks with capacity of 
2000 barrels (84,000 gallons) or less with a throughput of less than 
150 barrels (6300 gallons) of oil per day will sunset by November 14, 
2003. This exemption is replaced with one for small producer's tanks 
having a daily throughput of 50 barrels per tank.
    [sbull] The rule's general VOC control system requirements are now 
based on the tank size and the TVP of the stored liquid.
    [sbull] Requirements were added for when internal and external 
floating roofs are landed on their leg supports.
    [sbull] Requirements were added for floating roof deck fittings, 
inspection of floating roof tanks, and submitting tank inspection plans 
and deviation inspection reports.
    [sbull] A voluntary tank inspection, maintenance, and cleaning 
program was added.
    [sbull] A requirement was added for initial and periodic TVP and/or 
API gravity testing of stored organic liquid in each uncontrolled fixed 
roof tank or a representative tank. Instead of periodic testing, an 
operator may install and operate the appropriate VOC control system.
    [sbull] To complement the requirements listed above and to enhance 
rule effectiveness, several recordkeeping requirements were added.
    [sbull] A ``Test Method for Vapor Pressure of Reactive Organic 
Compounds for Heavy Crude Oil using Gas Chromatograph'' for crude oil 
with an API gravity of 20 degrees or less was added, as was Test Method 
ASTM D 323-94 for determining the TVP of other organic liquids.
    YSAQMD Rule 2.21 establishes vapor pressure containment and control 
requirements for organic liquid storage tanks, as well as specific 
requirements for external floating roofs, internal floating roofs, 
vapor recovery systems, deck fittings, mechanical shoe seal and

[[Page 20358]]

secondary seal, resilient toroid or liquid mounted seals and secondary 
seals, terminal loading, bulk plant loading, transport vessels, switch 
loading operating practices, and storage tank cleaning. YSAQMD's June 
12, 2002 amendments to Rule 2.21 listed below included these 
significant changes to the 1995 SIP version.
    [sbull] YSAQMD deleted exemptions for low volume loading 
facilities, small gasoline storage containers, containers serviced by 
exempted delivery vessels, and implements of husbandry. Also, special 
circumstance exemptions for terminals were deleted.
    [sbull] Thirty new definitions were added.
    [sbull] A requirement was added that for storage tanks greater than 
40,000 gallons using internal and external floating roofs that all new 
or replacement primary seal installations be a mechanical shoe or 
liquid mounted. Several other requirements were added for these tanks 
at sections 301.1-301.5.
    [sbull] A lower explosive limit monitoring requirement was added 
for internal floating roof tanks.
    [sbull] Deck fitting requirements were added for internal and 
external floating roof tanks.
    [sbull] Annual emission testing requirements were added for 
external floating roof tanks, bulk plants and terminals.
    [sbull] Periodic maintenance, monitoring, reporting, and record 
keeping requirements were added to stroage tanks, bulk plants, and 
terminals.
    The subject TSD has more information about these rules and their 
amendments.

II. EPA's Evaluation and Action

A. How Is EPA Evaluating the Rule?

    Generally, SIP rules must be enforceable (see section 110(a) of the 
Act), must require Reasonably Available Control Technology (RACT) for 
major sources in nonattainment areas (see section 182(a)(2)(A)), and 
must not relax existing requirements (see sections 110(l) and 193). 
Both the SJVUAPCD and the YSAQMD regulate an ozone nonattainment area 
(see 40 CFR part 81), so both SJVUAPCD Rule 4623 and Rule YSAQMD Rule 
2.21 must fulfill RACT.
    Guidance and policy documents that we used to help evaluate 
specific enforceability and RACT requirements consistently include the 
following:
    1. Portions of the proposed post-1987 ozone and carbon monoxide 
policy that concern RACT, 52 FR 45044, November 24, 1987;
    2. ``Issues Relating to VOC Regulation Cutpoints, Deficiencies, and 
Deviations,'' EPA, May 25, 1988 (the Bluebook);
    3. ``Guidance Document for Correcting Common VOC & Other Rule 
Deficiencies,'' EPA Region 9, August 21, 2001 (the Little Bluebook);
    4. ``Control of Volatile Organic Emissions from Petroleum Liquid 
Storage in External Floating Roof Tanks,'' EPA-450/2-78-047, USEPA, 
December 1978;
    5. ``Control of Volatile Organic Emissions from Storage of 
Petroleum Liquids in Fixed-Roof Tanks,'' EPA-450/2-77-036, USEPA, 
December 1977; and,
    6. ``Control of Volatile Organic Compound Leaks from Gasoline Tank 
Trucks and Vapor Collection Systems,'' EPA-450/2-78-051, USEPA, 
December 1978.

B. Do the Rules Meet the Evaluation Criteria?

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

C. What Are the Rule Deficiencies?

    Within SJVUAPCD Rule 4623, the provisions discussed below conflict 
with section 110 of the Act and raise enforceability issues preventing 
EPA's full approval of the SIP revision.
    [sbull] Section 5.6.1 is unclear on two points. First, it 
references requirements in section 6.4.6; these requirements are 
unclear in how they apply to section 5.6.1. For example, no VOC control 
requirement is clearly specified. Second, a typographical error exists 
in how section 5.6.1 references either section 6.4.6 or section 6.4.7.
    [sbull] Section 7.1 has a missing compliance date and conflicting 
dates in its last sentence.
    Within YSAQMD 2.21, the provisions discussed below conflict with 
section 110 of the Act and raise rule enforceability issues preventing 
EPA's full approval of the SIP revision. In part, Rule 2.21's 
deficiencies relate to an EPA policy described within a memorandum 
dated September 20, 1999, entitled ``State Implementation Plans: Policy 
Regarding Excess Emissions During Malfunctions, Start-up, and 
Shutdown'' (the Excess Emissions Policy).
    Taken together Section 111 and Section 501 are inconsistent with 
the EPA policy on exemptions for excess emissions during malfunctions, 
start-up and shutdown. Furthermore, the Air Pollution Control Officer 
(APCO) discretion within section 111 for approving maintenance plans is 
a case of unbounded ``director's discretion'' as there are no criteria 
delimiting the APCO's authority for approving maintenance plans. These 
provisions violate EPA requirements concerning enforceability and and 
rule relaxations.

D. EPA Recommendations To Further Improve the Rules

    SJVUAPCD added an exemption to Rule 4623 for tanks used in wine 
fermentation and for storage of resulting products, by-products, and 
spirits. Formerly, these tanks were not subject to the SIP rule given 
the TVP of ethanol is less than 1.5 psia under the storage conditions 
assumed by the rule. Now, given the amendment of the rule to include 
tanks with a TVP of 0.5 psia, wine and spirit industry storage tanks 
may be subject to the rule depending upon their size. However, an 
examination of our guidance and the rule's regulatory history shows 
that Rule 4623 has been and is intended to regulate storage tanks 
containing organic liquids derived primarily from petroleum extraction, 
refining, and storage. Consequently, we have not listed the exemption 
for winery and spirit industry storage tanks as a rule deficiency.
    What remains at issue is whether or not winery and spirit industry 
storage tanks represent a significant source of VOC emissions that must 
be reduced if the San Joaquin Valley is to meet CAA RACT and NAAQS 
requirements. Recently, the SJVUAPCD listed a winery rule as a 
potential control measure in their Reasonable Further Progress Planning 
Document. They estimated potential VOC emissions from the wine and 
spirit industries at 8.5 tons per day (page 4-11, Table 4-3: Tier II 
Control Measures, ``Proposed 2003 and 2005 Rate of Progress Plan,'' 7/
24/02).
    We believe this level of VOC emissions to be significant and 
deserving of further study and analysis. SJVUAPCD should determine 
whether a regulation reducing VOC emissions from the winery and spirits 
industry in the San Joaquin Valley should be developed to meet CAA RACT 
and NAAQS attainment requirements. This determination should be done as 
part of demonstrating that their attainment plan to meet the ozone 
NAAQS contains all reasonably available control measures per section 
172(c)(1) of the CAA.

[[Page 20359]]

E. Proposed Action and Public Comment

    As authorized in sections 110(k)(3) and 301(a) of the Act, EPA is 
proposing a limited approval of these submitted rules to improve the 
SIP. If finalized, this action would incorporate the submitted rules 
into the SIP, including those provisions identified as deficient. This 
approval is limited because EPA is simultaneously proposing a limited 
disapproval of the rules under section 110(k)(3). If this disapproval 
is finalized, sanctions will be imposed under section 179 of the Act 
unless EPA approves subsequent SIP revisions that correct each rule's 
deficiencies within 18 months. These sanctions would be imposed 
according to 40 CFR 52.31. A final disapproval would also trigger the 
federal implementation plan (FIP) requirement under section 110(c). 
Note that the respective submitted rule has been adopted by the 
SJVUAPCD and YSAQMD. EPA's final limited disapproval would not prevent 
these local agencies from enforcing their rule.
    We will accept comments from the public on the proposed limited 
approval and limited disapproval for the next 30 days.

III. Background Information

Why Were These Rules Submitted?

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

                Table 2.--Ozone Nonattainment Milestones
------------------------------------------------------------------------
                   Date                                 Event
------------------------------------------------------------------------
March 3, 1978.............................  EPA promulgated a list of
                                             ozone nonattainment areas
                                             under the Clean Air Act as
                                             amended in 1977. 43 FR
                                             8964; 40 CFR 81.305.
May 26, 1988..............................  EPA notified Governors that
                                             parts of their SIPs were
                                             inadequate to attain and
                                             maintain the ozone standard
                                             and requested that they
                                             correct the deficiencies
                                             (EPA's SIP-Call). See
                                             section 110(a)(2)(H) of the
                                             pre-amended Act.
November 15, 1990.........................  Clean Air Act Amendments of
                                             1990 were enacted. Pub. L.
                                             101-549, 104 Stat. 2399,
                                             codified at 42 U.S.C. 7401-
                                             7671q.
May 15, 1991..............................  Section 182(a)(2)(A)
                                             requires that ozone
                                             nonattainment areas correct
                                             deficient RACT rules by
                                             this date.
------------------------------------------------------------------------

IV. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

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

B. Paperwork Reduction Act

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

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions.
    This rule will not have a significant impact on a substantial 
number of small entities because SIP approvals under section 110 and 
subchapter I, part D of the Clean Air Act do not create any new 
requirements but simply approve requirements that the State is already 
imposing. Therefore, because the Federal SIP approval does not create 
any new requirements, I certify that this action will not have a 
significant economic impact on a substantial number of small entities.
    Moreover, due to the nature of the Federal-State relationship under 
the Clean Air Act, preparation of flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of state action. The 
Clean Air Act forbids EPA to base its actions concerning SIPs on such 
grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 
42 U.S.C. 7410(a)(2).

D. Unfunded Mandates Reform Act

    Under sections 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the partial approval action proposed does 
not include a Federal mandate that may result in estimated costs of 
$100 million or more to either State, local, or tribal governments in 
the aggregate, or to the private sector. This Federal action proposes 
to approve in part pre-existing requirements under State or local law, 
and imposes no new requirements. Accordingly, no additional costs to 
State, local, or tribal governments, or to the private sector, result 
from this action.

E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces 
Executive Orders 12612 (Federalism) and 12875 (Enhancing the 
Intergovernmental Partnership). Executive Order 13132 requires EPA to 
develop an accountable process to ensure ``meaningful and timely input 
by State and local officials in the development of regulatory policies 
that have federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Under Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the

[[Page 20360]]

process of developing the proposed regulation. EPA also may not issue a 
regulation that has federalism implications and that preempts State law 
unless the Agency consults with State and local officials early in the 
process of developing the proposed regulation.
    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, as specified in Executive Order 13132, because it 
merely approves in part a state rule implementing a federal standard, 
and does not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

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

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

    Protection of Children from Environmental Health Risks and Safety 
Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is 
determined to be ``economically significant'' as defined under 
Executive Order 12866, and (2) concerns an environmental health or 
safety risk that EPA has reason to believe may have a disproportionate 
effect on children. If the regulatory action meets both criteria, the 
Agency must evaluate the environmental health or safety effects of the 
planned rule on children, and explain why the planned regulation is 
preferable to other potentially effective and reasonably feasible 
alternatives considered by the Agency.
    This rule is not subject to Executive Order 13045 because it does 
not involve decisions intended to mitigate environmental health or 
safety risks.

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

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

I. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing a new regulation. To comply with 
NTTAA, EPA must consider and use ``voluntary consensus standards'' 
(VCS) if available and applicable when developing programs and policies 
unless doing so would be inconsistent with applicable law or otherwise 
impractical.
    The EPA believes that VCS are inapplicable to this action. Today's 
action does not require the public to perform activities conducive to 
the use of VCS.

List of Subjects in 40 CFR Part 52

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

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

    Dated: April 11, 2003.
Alexis Strauss,
Acting Regional Administrator, Region IX.
[FR Doc. 03-10267 Filed 4-24-03; 8:45 am]
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