[Federal Register Volume 69, Number 99 (Friday, May 21, 2004)]
[Proposed Rules]
[Pages 29250-29252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11559]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA302-0454; FRL-7665-8]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the South Coast Air 
Quality Management District (SCAQMD) portion of the California State 
Implementation Plan (SIP). These revisions concern oxides of nitrogen 
(NOX) and oxides of sulfur (SOX) emissions from 
facilities emitting 4 tons or more per year of NOX and/or 
SOX in the year 1990 or any subsequent year. We are 
proposing to approve local rules to regulate these emission sources 
under the Clean Air Act as amended in 1990 (CAA or the Act). These 
rules are part of the SCAQMD's Regional Clean Air Incentives Market 
(RECLAIM) program. We are taking comments on this proposal and plan to 
follow with a final action.

DATES: Any comments must arrive by June 21, 2004.

ADDRESSES: Send comments to Andy Steckel, Rulemaking Office Chief (AIR-
4), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne 
Street, San Francisco, CA 94105-3901 or e-mail to 
[email protected], or submit comments at http://www.regulations.gov.
    You can inspect copies of the submitted SIP revisions, EPA's 
technical support documents (TSDs), and public comments at our Region 
IX office during normal business hours by appointment. You may see 
copies of the submitted SIP revisions by appointment at the following 
locations:

Environmental Protection Agency, Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105-3901.
Air and Radiation Docket and Information Center, U.S. Environmental 
Protection Agency, Room B-102, 1301 Constitution Avenue, NW., (Mail 
Code 6102T), Washington, DC 20460.
California Air Resources Board, Stationary Source Division, Rule 
Evaluation Section, 1001 ``I'' Street, Sacramento, CA 95814.
South Coast Air Quality Management District, 21865 E. Copley Dr., 
Diamond Bar, CA 91765-4182.

    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 Web site and may not contain the same version of the rules 
that were submitted to EPA.

FOR FURTHER INFORMATION CONTACT: Thomas C. Canaday, EPA Region IX, 
(415) 947-4121, [email protected].

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. Public comment and final action.
III. 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 
that they were adopted by local air agency and submitted by the 
California Air Resources Board (CARB).

                                            Table 1.--Submitted Rules
----------------------------------------------------------------------------------------------------------------
                                       Rule                Rule title               Adopted        Submitted
----------------------------------------------------------------------------------------------------------------
SCAQMD...............................         2007  Trading Requirements........        12/05/03        02/20/04
SCAQMD...............................         2011  Requirements for Monitoring,        12/05/03        02/20/04
                                                     Reporting, and
                                                     Recordkeeping for Oxides of
                                                     Sulfur (SOX) Emissions.
SCAQMD...............................         2012  Requirements for Monitoring,        12/05/03        02/20/04
                                                     Reporting, and
                                                     Recordkeeping for Oxides of
                                                     Nitrogen (NOX) Emissions.
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[[Page 29251]]

    On March 19, 2004, 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 previous versions of Rules 2007, 2011 and 2012 into the 
SIP on September 4, 2003.

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

    The RECLAIM program is intended to allow facilities subject to the 
program to meet their emission reduction requirements in the most cost-
effective manner. The program was designed to provide incentives for 
industry to reduce emissions and develop innovative pollution control 
technologies, as well as give facilities added flexibility in meeting 
emission reduction requirements. Each facility under the program was 
given an allocation of RECLAIM Trading Credits (RTCs) based on a 
declining balance equivalent to the emissions levels that would have 
occurred if the facility continued to operate under the then current 
command-and-control regulations. Facilities within the RECLAIM program 
must reconcile their emissions with their RTC holdings and have the 
option of doing so by either installing control equipment, modifying 
their activity, or purchasing RTCs from other facilities.
    Beginning in June 2000, RECLAIM program participants experienced a 
sharp and sudden increase in NOX RTC prices for both the 
1999 and 2000 compliance years. In response to this SCAQMD adopted and 
EPA subsequently approved into the California SIP rule amendments 
designed to lower and stabilize RTC prices by increasing supply, 
reducing demand, and increasing the exchange of RTC trading 
information. Those rule revisions separated power producing facilities 
from the rest of the RECLAIM market and RTC trading by power producers 
was limited to isolate the rest of the market from the power producers' 
RTC demands. For further information on this previous modification to 
the RECLAIM program see EPA's proposed approval of the RECLAIM program 
rule amendments dated May 13, 2002 (67 FR 31998).
    The submitted rule revisions that are the subject of today's notice 
of proposed rulemaking allow power producing facilities to re-enter the 
general trading market of the RECLAIM program. Further rule revisions 
adopted by SCAQMD clarify the Continuous Emission Monitoring Systems 
(CEMS) requirements for modified equipment operated at RECLAIM 
facilities. With regard to the power producing facilities, Rule 2007--
Trading Requirements has been revised to lift the trading restrictions 
that were placed on power producers under the previous amendments to 
the RECLAIM program. The currently submitted changes to Rule 2007 allow 
power producers to use RECLAIM trading credits (RTCs) to reconcile 
emissions, and to sell or transfer RTCs below their original allocation 
after compliance year 2003. Rule 2011--Requirements for Monitoring, 
Reporting, and Recordkeeping for Oxides of Sulfur (SOX) 
Emissions; and Rule 2012--Requirements for Monitoring, Reporting, and 
Recordkeeping for Oxides of Nitrogen (NOX) Emissions have 
been amended to clarify that the 90-day recertification period for CEMS 
applies to new CEMS or when a component of an existing CEMS is added to 
an existing or modified major RECLAIM source.
    The TSD has 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) for 
major sources in nonattainment areas (see section 182(a)(2)(A) and 
182(f) of the Act), and must not relax existing requirements (see 
sections 110(l) and 193 of the Act). The SCAQMD regulates an ozone 
nonattainment area (see 40 CFR part 81), so Rules 2007, 2011, and 2012 
must fulfill RACT.
    Guidance and policy documents that we used to help evaluate 
enforceability and RACT requirements consistently include the 
following:
    1. ``State Implementation Plans; Nitrogen Oxides Supplement to the 
General Preamble; Clean Air Act Amendments of 1990 Implementation of 
Title I; Proposed Rule,'' (the NOX Supplement), 57 FR 55620, 
November 25, 1992.
    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. ``Improving Air Quality with Economic Incentive Programs,'' 
January 2001, Office of Air and Radiation, EPA-452/R-01-001 (EIP 
Guidance). This guidance applies to discretionary economic incentive 
programs (EIPs) and represents the agency's interpretation of what EIPs 
should contain in order to meet the requirements of the CAA.

B. Do the Rules Meet the Evaluation Criteria?

    We believe these rules are consistent with the relevant policy and 
guidance regarding enforceability, RACT, and SIP relaxations. The TSD 
has more information on our evaluation.

C. Public Comment and Final Action

    Because EPA believes the submitted rules fulfill all relevant 
requirements, we are proposing to fully approve them as described in 
section 110(k)(3) of the Act. We will accept comments from the public 
on this proposal for the next 30 days. Unless we receive convincing new 
information during the comment period, we intend to publish a final 
approval action that will incorporate these rules into the federally 
enforceable SIP.

IV. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
proposed action is not a ``significant regulatory action'' and 
therefore is not subject to review by the Office of Management and 
Budget. For this reason, this action is also not subject to Executive 
Order 13211, ``Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This 
proposed action merely proposes to approve state law as meeting Federal 
requirements and imposes no additional requirements beyond those 
imposed by state law. Accordingly, the Administrator certifies that 
this proposed rule will not have a significant economic impact on a 
substantial number of small entities under the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-
existing requirements under state law and does not impose any 
additional enforceable duty beyond that required by state law, it does 
not contain any unfunded mandate or significantly or uniquely affect 
small governments, as described in the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4).
    This proposed rule also does not have tribal implications because 
it will not have a substantial direct effect on one or more Indian 
tribes, 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 by Executive 
Order 13175 (65 FR 67249, November 9, 2000). This

[[Page 29252]]

action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). 
This action merely proposes to approve state rules implementing a 
Federal standard, and does not alter the relationship or the 
distribution of power and responsibilities established in the Clean Air 
Act. This proposed rule also is not subject to Executive Order 13045 
``Protection of Children from Environmental Health Risks and Safety 
Risks'' (62 FR 19885, April 23, 1997), because it is not economically 
significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus standards (VCS), EPA has no authority 
to disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed 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.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping 
requirements.

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

    Dated: May 11, 2004.
Laura Yoshii,
Deputy Regional Administrator, Region IX.
[FR Doc. 04-11559 Filed 5-20-04; 8:45 am]
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