[Federal Register Volume 68, Number 153 (Friday, August 8, 2003)]
[Proposed Rules]
[Pages 47279-47282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20306]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA 259-0368; FRL-7542-2]


Revisions to the California State Implementation Plan, Yolo 
Solano, Bay Area, and Mojave Desert Air Quality Management Districts 
and Monterey Bay Unified Air Pollution Control 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 Yolo Solano (YSAQMD), Bay Area (BAAQMD), and Mojave 
Desert (MDAQMD) Air Quality Management Districts' and to the Monterey 
Bay Unified (MBUAPCD) Air Pollution Control District's portions of the 
California State Implementation Plan (SIP). These revisions concern 
volatile organic compound (VOC) emissions from architectural coatings. 
In accordance with the Clean Air Act as amended in 1990 (CAA or the 
Act), we are proposing action on local rules that regulate these 
emission sources. We are taking comments on this proposal and plan to 
follow with a final action.

DATES: Any comments must arrive by September 8, 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 revisions and EPA's 
technical support documents (TSDs) 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.
    Yolo-Solano Air Quality Management District, 1947 Galileo Court, 
Suite 103, Davis, CA 95616-4882.
    Bay Area Air Quality Management District, 939 Ellis Street, San 
Francisco, CA 94109-7799.
    Mojave Desert Air Quality Management District, 14306 Park 
Avenue, Victorville, CA 92392-2310.
    Monterey Bay Unified Air Pollution Control District, 24580 
Silver Cloud Court, Monterey, CA 93940-6536.
    A copy of the rules 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 website and may not contain the same version of the 
rules that were submitted to EPA.


FOR FURTHER INFORMATION CONTACT: Yvonne Fong, EPA Region IX, (415) 947-
4117.

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 submitted 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 rules' deficiencies?
    D. EPA recommendations to further improve the rules
    E. Proposed action and public comment
III. Background information
    A. Why were these rules submitted?
IV. Administrative Requirements

I. The State's Submittal

A. What Rules Did the State Submit?

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

                                            Table 1.--Submitted Rules
----------------------------------------------------------------------------------------------------------------
                                              Rule
               Local Agency                             Rule title               Adopted     Submitted
----------------------------------------------------------------------------------------------------------------
YSAQMD...................................       2.14  Architectural Coatings..........     11/14/01     01/22/02
BAAQMD...................................        8-3  Architectural Coatings..........     11/21/01     06/18/02
MDAQMD...................................       1113  Architectural Coatings..........     02/24/03     04/01/03
MBUAPCD..................................        426  Architectural Coatings..........     04/17/02     06/18/02
----------------------------------------------------------------------------------------------------------------

    On February 27 and July 23, 2002 and May 13, 2003, these rule 
submittals were found to meet the completeness criteria in 40 CFR Part 
51 Appendix V, which must be met before formal EPA review.

B. Are There Other Versions of These Rules?

    We approved versions of YSAQMD Rule 2.14, BAAQMD Rule 8-3, and 
MBUAPCD Rule 426 into the SIP on July 1, 1982, February 18, 1998, and 
March 24, 2000, respectively. We approved versions of Rule 1113 on June 
9, 1982 and January 24, 1985 for various portions of California before 
those portions were unified as the MDAQMD on July 1, 1993. The YSAQMD, 
BAAQMD, MDAQMD, and MBUAPCD adopted revisions to the SIP-approved

[[Page 47280]]

versions of these rules on November 14, 2001, November 21, 2001, 
February 24, 2003, and April 17, 2002, respectively. CARB submitted the 
YSAQMD rule revision to us on January 22, 2002, the BAAQMD and MBUAPCD 
rule revisions on June 18, 2002, and the MDAQMD revision on April 1, 
2003. The YSAQMD rule revision submitted on January 22, 2002 contained 
errors and omissions and a correct version of the rule was forwarded to 
us on January 21, 2003.

C. What Is the Purpose of the Submitted Rule Revisions?

    The rule revisions primarily modify the rules for consistency with 
the Suggested Control Measure for Architectural Coatings (SCM). The SCM 
is a model rule developed by CARB which seeks to provide statewide 
consistency for the regulation of architectural coatings. The 
recommended VOC content limits and other provisions of the SCM are the 
results of an extensive investigation of architectural coatings which 
included a statewide survey of architectural coatings sold in 
California and several technology assessments. CARB adopted the SCM on 
June 22, 2000. The TSDs have more information about these rules.

II. EPA's Evaluation and Action

A. How Is EPA Evaluating the Rules?

    Generally, SIP rules must be enforceable (see section 110(a) of the 
Act), must require Reasonably Available Control Technology (RACT) in 
moderate to extreme nonattainment areas for VOC sources covered by a 
Control Technique Guideline (CTG) and for major sources in 
nonattainment areas (see section 182(a)(2)(A)), must not relax 
requirements adopted before the 1990 CAA amendments in nonattainment 
areas (section 193), and must not interfere with attainment, reasonable 
further progress or other applicable requirements of the CAA (section 
110(1)). The YSAQMD and BAAQMD regulate ozone nonattainment areas (see 
40 CFR part 81), however, because these rules, including MDAQMD and 
MBUAPCD's, regulate sources that are not covered by a CTG and that are 
nonmajor area sources, they are not subject to CAA RACT requirements.
    Guidance and policy documents that we used to help evaluate these 
revised rules to ensure enforceability and compliance with other CAA 
requirements 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. National Volatile Organic Compound Emission Standards for 
Architectural Coatings, September 11, 1998 (40 CFR part 59, Subpart D).
    5. ``Suggested Control Measure for Architectural Coatings,'' CARB, 
June 22, 2000.
    6. ``Improving Air Quality with Economic Incentive Programs,'' EPA-
452/R-01-001, EPA, January 2001 (the EIP).

B. Do the Rules Meet the Evaluation Criteria?

    These rules improve the SIP by establishing more stringent emission 
limits and by clarifying labeling and reporting provisions. They are 
largely consistent with the relevant policy and guidance regarding 
enforceability and SIP relaxations. Provisions of the rules which do 
not meet the evaluation criteria are summarized below and discussed 
further in the TSDs.

C. What Are the Rules' Deficiencies?

    These rules were all based on the same model--the SCM--and, as a 
result, contain many of the same rule deficiencies. The deficiencies 
relate to the averaging provisions incorporated into these rules. While 
we believe the VOC limits contained in these rules to be feasible and 
substantiated by a significant investigation of architectural coatings, 
the averaging provisions provide a valuable alternative compliance 
mechanism for the VOC limits contained in these rules and may reduce 
the overall economic impact of compliance with the VOC limits on 
manufacturers. We have identified five specific problems with these 
provisions. The first four could be addressed through relatively minor 
changes to the averaging provisions which we have described below. The 
fifth could also be addressed by relatively minor changes or by 
clarification of the State's authority. The following provisions common 
to YSAQMD Rule 2.14, BAAQMD Rule 8-3, MDAQMD Rule 1113, and MBUAPCD 
Rule 426 conflict with section 110 of the Act and prevent full approval 
of the SIP revisions.
    1. The rules allow for the sell-through of coatings included in 
approved averaging programs. Because emissions from coatings sold under 
the sell-through provision cannot be distinguished based on the 
information explicitly required to be maintained under the rule from 
emissions from coatings sold under an averaging program, the 
enforceability of the rules may be compromised by manufacturers 
claiming that a certain portion of emissions from coatings sold under 
the sell-through provision should be excluded from averaged emissions. 
One way to correct this is to clarify that manufacturers with an 
approved averaging program cannot also use the sell-through provision.
    2. The provisions of the averaging compliance option that require 
manufacturers to describe the records being used to calculate emissions 
are not specific enough to verify compliance with the rules and 
represent executive officer discretion. More specificity as to the 
types of suitable records is needed to verify compliance with the 
averaging compliance option.
    3. The rules' language regarding how violations of the averaging 
compliance option shall be determined is ambiguous. The language should 
be clarified to specify that ``an exceedance for each coating that is 
over the limit shall constitute a separate violation for each day of 
the compliance period.''
    4. The rules allow manufacturers to average coatings based on 
statewide or district-specific data which makes enforceability more 
difficult and conflicts with other rule provisions which imply that 
averaging will only be implemented by CARB and conducted on a statewide 
basis. The rules should clarify whether emissions from averaging 
programs will be calculated using statewide or district-specific data.
    5. The rules grant the Executive Officer of CARB authority to 
approve or disapprove initial averaging programs, program renewals, 
program modifications, and program terminations. This raises 
jurisdictional issues which could create enforceability problems since 
CARB has not been granted authority by the state Legislature under the 
California Health and Safety Code to regulate architectural coatings.

D. EPA Recommendations to Further Improve the Rules

    The TSDs describe additional rule revisions that do not affect 
EPA's current action but are recommended for the next time the local 
agencies modify the rules.

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 the submitted rules to improve the SIP. 
If finalized,

[[Page 47281]]

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 for the BAAQMD and YSAQMD will be imposed under section 179 
of the Act unless EPA approves subsequent SIP revisions that correct 
the rules' 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). MDAQMD and MBUAPCD do not regulate nonattainment areas, so the 
sanction and FIP implications do not apply. Note that the submitted 
rules have been adopted by the districts and EPA's final limited 
disapproval would not prevent the local agencies from enforcing them.
    All of the identified deficiencies are associated with the 
averaging programs in these rules which sunset on January 1, 2005. If 
we finalize this notice as proposed, the effective date of our action 
will be after July 1, 2003 and would trigger CAA Sec.  179 sanction 
clocks that expire 18 and 24 months later. However, we believe that 
sunsetting the averaging programs effectively corrects all the 
deficiencies associated with averaging, and revisions to these rules is 
not needed to avoid associated sanctions.
    We will accept comments from the public on the proposed limited 
approval and limited disapproval for the next 30 days. EPA proposed a 
similar limited approval and limited disapproval for three other 
California architectural coating rules on September 20, 2002 (67 FR 
59229). While the seven California rules are very similar, we divided 
them into two proposed actions for internal administrative and workload 
management reasons. While we received significant negative public 
comment on the September 20, 2002 proposal, we have not finalized the 
September 20, 2002 proposal and today's proposal should not be 
construed as responsive to comments received on the previous proposal. 
We intend to act on the seven rules consistently, so any comments 
submitted on the September 20, 2002 proposal will be considered before 
finalizing action on today's proposal.

III. Background Information

A. Why Were These Rules Submitted?

    VOCs help produce ground-level ozone and smog, which harm human 
health and the environment. EPA has established a National Ambient Air 
Quality Standard (NAAQS) for ozone. Section 110(a) of the CAA requires 
states to submit regulations necessary to achieve the NAAQS. Table 2 
lists some of the national milestones leading to the submittal of these 
local agencies' VOC rules.

                Table 2.--Ozone Nonattainment Milestones
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                  Date                                Event
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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.
------------------------------------------------------------------------

IV. Administrative Requirements

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 
title 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 section 202 of the Unfunded Mandates Reform Act of 1995, 
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 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 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

    Executive Order 13132 (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

[[Page 47282]]

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 approves 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.

H. Executive Order 13045, Protection of Children from Environmental 
Health Risks and Safety Risks

    Executive Order 13045 (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 and is not ``economically significant'' under Executive 
Order 12866.

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: July 29, 2003.
Wayne Nastri,
Regional Administrator, Region IX.
[FR Doc. 03-20306 Filed 8-7-03; 8:45 am]
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