[Federal Register Volume 76, Number 244 (Tuesday, December 20, 2011)]
[Rules and Regulations]
[Pages 78829-78831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32475]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2011-0897; FRL-9499-9]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is taking direct final action to approve a revision to the 
South Coast Air Quality Management District (SCAQMD) portion of the 
California State Implementation Plan (SIP). This revision concerns 
oxides of nitrogen (NOX) and oxides of sulfur 
(SOx) emissions from facilities emitting 4 tons or more per 
year of NOX or SOx in the year 1990 or any 
subsequent year under the SCAQMD's Regional Clean Air Incentives Market 
(RECLAIM) program. We are approving a local rule that regulates these 
emission sources under the Clean Air Act as amended in 1990 (CAA or the 
Act).

DATES: This rule is effective on February 21, 2012 without further 
notice, unless EPA receives adverse comments by January 19, 2012. If we 
receive such comments, we will publish a timely withdrawal in the 
Federal Register to notify the public that this direct final rule will 
not take effect.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2011-0897, by one of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the on-
line instructions.
    2. Email: [email protected].
    3. Mail or deliver: Andrew Steckel (Air-4), U.S. Environmental 
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 
94105-3901.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at www.regulations.gov, 
including any personal information provided, unless the comment 
includes Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Information that you 
consider CBI or otherwise protected should be clearly identified as 
such and should not be submitted through www.regulations.gov or email. 
www.regulations.gov is an ``anonymous access'' system, and EPA will not 
know your identity or contact information unless you provide it in the 
body of your comment. If you send email directly to EPA, your email 
address will be automatically captured and included as part of the 
public comment. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters, any form of encryption, and be free of any defects 
or viruses.
    Docket: Generally, documents in the docket for this action are 
available electronically at www.regulations.gov and in hard copy at EPA 
Region IX, 75 Hawthorne Street, San Francisco, California. While all 
documents in the docket are listed at www.regulations.gov, some 
information may be publicly available only at the hard copy location 
(e.g., copyrighted material, large maps), and some may not be publicly 
available in either location (e.g., CBI). To inspect the hard copy 
materials, please schedule an appointment during normal business hours 
with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Lily Wong, EPA Region IX, (415) 947-
4114, [email protected].

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

Table of Contents

I. The State's Submittal
    A. What rule did the State submit?
    B. Are there other versions of this rule?
    C. What is the purpose of the submitted rule revision?

[[Page 78830]]

II. EPA's Evaluation and Action
    A. How is EPA evaluating the rule?
    B. Does the rule meet the evaluation criteria?
    C. EPA Recommendations To Further Improve the Rule
    D. Public Comment and Final Action
III. Statutory and Executive Order Reviews

I. The State's Submittal

A. What rule did the State submit?

    Table 1 lists the rule we are approving with the date that it was 
adopted by the local air agency and submitted by the California Air 
Resources Board (CARB).

                                            Table 1--Submitted Rules
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             Local agency                  Rule No.            Rule title             Adopted        Submitted
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SCAQMD................................            2005  New Source Review for           06/03/11        09/27/11
                                                         RECLAIM.
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    On October 24, 2011, EPA determined that the submittal for SCAQMD 
Rule 2005 met the completeness criteria in 40 CFR Part 51 Appendix V, 
which must be met before formal EPA review.

B. Are there other versions of this rule?

    Table 2 lists the previous version of this rule approved into the 
SIP.

                                  Table 2--Current SIP Approved Version of Rule
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             Rule No.                     Rule title           Adopted        Submitted     Approved FR citation
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2005..............................  New Source Review for      05/06/2005      10/20/2005  08/29/2006, 71 FR
                                     RECLAIM.                                               51120
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C. What is the purpose of the submitted rule revision?

    NOX helps produce ground-level ozone, smog and 
particulate matter, which harm human health and the environment. 
Section 110(a) of the CAA requires States to submit regulations that 
control NOX emissions.
    The RECLAIM program was initially adopted by SCAQMD in October 
1993. The program established for many of the largest NOX 
and SOx facilities in the South Coast Air Basin a regional 
NOX and regional SOx emissions cap and trade 
program, with the regional emissions caps declining over time until 
2003. SCAQMD amended RECLAIM to lower the NOX and 
SOx emissions caps in 2005 and 2010 respectively. The 
program was designed to provide incentives for facilities to reduce 
emissions and advance pollution control technologies by giving 
facilities added flexibility in meeting emission reduction 
requirements. A NOX or SOx RECLAIM Trading Credit 
(RTC) is a limited authorization to emit one pound of NOX or 
SOx during a specified one year period. A RECLAIM facility's 
emissions may not exceed its RTC holding in any compliance year. A 
RECLAIM facility may comply with this requirement by installing control 
equipment, modifying their activities, or purchasing RTCs from other 
facilities.
    The purpose of Rule 2005 was to address how the New Source Review 
(NSR) program requirements would be implemented in the context of a cap 
and trade program. Rule 2005 sets forth the pre-construction review 
requirements for new or modified equipment or processes at RECLAIM 
facilities.
    The rule revision affects existing RECLAIM facilities subject to 
Rule 2005 whose annual allocations \1\ do not exceed its 1994 starting 
allocation plus non-tradable credits. While such facilities are 
required to hold sufficient RTCs to offset emissions increases by the 
beginning of the first year, this rule revision eliminates the 
requirement to hold sufficient RTCs to offset emissions increases at 
the beginning of the second and subsequent years. SCAQMD states that 
the primary purpose of the revision to Rule 2005 was to alleviate the 
disincentives to existing facilities to modernize and replace older, 
more polluting equipment with newer and cleaner equipment.
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    \1\ The RECLAIM program at Rule 2000(c)(3) defines 
``allocation'' as ``the number of RECLAIM Trading Credits (RTCs) [as 
defined in paragraph (c)(63)] a RECLAIM facility holds for a 
specific compliance year, as referenced in the Facility Permit.'' 
Consequently, ``annual allocation'' means the amount of RTCs the 
facility holds for a compliance year, as authorized by its permit.
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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 
each category of sources covered by a Control Techniques Guidelines 
(CTG) document as well as each NOX or VOC major source in 
nonattainment areas (see sections 182(a)(2) 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 classified 
as extreme for the 8-hour ozone NAAQS (40 CFR 81.305), so the RECLAIM 
Program must fulfill RACT.
    Guidance and policy documents that we use to evaluate 
enforceability and RACT requirements consistently include the 
following:

1. ``State Implementation Plans; General Preamble for the 
Implementation of Title I of the Clean Air Act Amendments of 1990,'' 
57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).
2. ``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.
3. ``Issues Relating to VOC Regulation Cutpoints, Deficiencies, and 
Deviations,'' EPA, May 25, 1988 (the Bluebook).
4. ``Guidance Document for Correcting Common VOC & Other Rule 
Deficiencies,'' EPA Region 9, August 21, 2001 (the Little Bluebook).
5. ``Economic Incentive Programs--EPA published the guidance, 
``Improving Air Quality with Economic Incentive Programs'' on 
January 2001 (EPA-452/R-01-001). The guidance available at http://www.epa.gov/ttncaaa1/t1/meta/m1201.html. 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 Clean Air Act. Because this guidance is non-
binding and does not represent final agency action, EPA is using the 
guidance as an initial screen to determine whether potential 
approvability issues arise.

B. Does the rule meet the evaluation criteria?

    We believe this rule is consistent with the relevant policy and 
guidance regarding enforceability and SIP

[[Page 78831]]

relaxations. While the CAA RACT requirements apply to the RECLAIM 
program as a whole, the requirements do not specifically apply to Rule 
2005 because Rule 2005 addresses the NSR permit program requirements. 
In EPA's original approval of the RECLAIM program, EPA determined that 
the RECLAIM program met the CAA RACT requirements. This amendment does 
not change EPA's previous determination. This revision has no effect on 
allowable emissions and would not result in emissions increases. 
Furthermore, this revision is consistent with EPA's original 
understanding of how the NSR offset requirement would be implemented in 
the RECLAIM program. EPA's November 8, 1996 limited approval and 
limited disapproval of RECLAIM (61 FR 57775) stated, ``The NSR offset 
requirements would only be triggered if a particular facility exceeded 
its initial RECLAIM allocation plus nontradeable emission allocation.'' 
(see 61 FR 57777) The Technical Support Document (TSD) has more 
information on our evaluation.

C. EPA recommendations to further improve the rule

    The TSD describes additional rule revisions that we recommend for 
the next time the local agency modifies the RECLAIM rules.

D. Public comment and final action

    As authorized in section 110(k)(3) of the Act, EPA is fully 
approving the submitted rule because we believe it fulfills all 
relevant requirements. We do not think anyone will object to this 
approval, so we are finalizing it without proposing it in advance. 
However, in the Proposed Rules section of this Federal Register,we are 
simultaneously proposing approval of the same submitted rules. If we 
receive adverse comments by January 19, 2012, we will publish a timely 
withdrawal in the Federal Register to notify the public that the direct 
final approval will not take effect and we will address the comments in 
a subsequent final action based on the proposal. If we do not receive 
timely adverse comments, the direct final approval will be effective 
without further notice on February 21, 2012. This will incorporate the 
rule into the federally enforceable SIP.
    Please note that if EPA receives adverse comment on an amendment, 
paragraph, or section of this rule and if that provision may be severed 
from the remainder of the rule, EPA may adopt as final those provisions 
of the rule that are not the subject of an adverse comment.

III. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a 
SIP submission that complies with the provisions of the Act and 
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). 
Thus, in reviewing SIP submissions, EPA's role is to approve State 
choices, provided that they meet the criteria of the Clean Air Act. 
Accordingly, this action merely approves State law as meeting Federal 
requirements and does not impose additional requirements beyond those 
imposed by State law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     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);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to 
address disproportionate human health or environmental effects with 
practical, appropriate, and legally permissible methods under Executive 
Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified 
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the 
SIP is not approved to apply in Indian country located in the State, 
and EPA notes that it will not impose substantial direct costs on 
tribal governments or preempt tribal law.

    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 action 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 action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).

List of Subjects in 40 CFR Part 52

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

    Dated: November 18, 2011.
Jared Blumenfeld,
Regional Administrator, Region IX.

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

PART 52--[AMENDED]

0
1. The authority citation for Part 52 continues to read as follows:

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

Subpart F--California

0
2. Section 52.220, is amended by adding and reserving paragraph 
(c)(403) and by adding paragraph (c)(404) to read as follows:


Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (404) New and amended regulations for the following APCDs were 
submitted on September 27, 2011, by the Governor's Designee.
    (i) Incorporation by Reference
    (A) South Coast Air Quality Management District
    (1) Rule 2005, ``New Source Review for RECLAIM,'' amended on June 
3, 2011.

[FR Doc. 2011-32475 Filed 12-19-11; 8:45 am]
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