82 FR 57133 - Revisions to California State Implementation Plan; Bay Area Air Quality Management District; Emission Reduction Credit Banking

ENVIRONMENTAL PROTECTION AGENCY

Federal Register Volume 82, Issue 231 (December 4, 2017)

The Environmental Protection Agency (EPA) is finalizing action on a revision to the Bay Area Air Quality Management District (BAAQMD or District) portion of the California State Implementation Plan (SIP). We are finalizing a conditional approval of one rule. This revision consists of updates to provisions governing the issuance and banking of Emission Reduction Credits for use in the review and permitting of major sources and major modifications under part D of title I of the Clean Air Act (CAA).

[Federal Register Volume 82, Number 231 (Monday, December 4, 2017)]
[Rules and Regulations]
[Pages 57133-57135]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-25927]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2017-0130; FRL-9970-68-Region 9]


Revisions to California State Implementation Plan; Bay Area Air 
Quality Management District; Emission Reduction Credit Banking

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is finalizing action 
on a revision to the Bay Area Air Quality Management District (BAAQMD 
or District) portion of the California State Implementation Plan (SIP). 
We are finalizing a conditional approval of one rule. This revision 
consists of updates to provisions governing the issuance and banking of 
Emission Reduction Credits for use in the review and permitting of 
major sources and major modifications under part D of title I of the 
Clean Air Act (CAA).

DATES: This rule will be effective on January 3, 2018.

ADDRESSES: The EPA has established a docket for this action under 
Docket No. EPA-R09-OAR-2017-0130. All documents in the docket are 
listed on the http://www.regulations.gov Web site. Although listed in 
the index, some information is not publicly available, e.g., CBI or 
other information whose disclosure is restricted by statute. Certain 
other material, such as copyrighted material, is not placed on the 
Internet and will be publicly available only in hard copy form. 
Publicly available docket materials are available through http://www.regulations.gov, or please contact the person identified in the FOR 
FURTHER INFORMATION CONTACT section for additional availability 
information.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA Region 9, (415) 
972-3534, [email protected].

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

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

I. Proposed Action

    On September 14, 2017 (82 FR 43202), the EPA proposed a conditional 
approval of the following rule that was submitted for incorporation 
into the BAAQMD portion of the California SIP.

[[Page 57134]]



                                             Table 1--Submitted Rule
----------------------------------------------------------------------------------------------------------------
                                                                                     Adopted/
            Regulation and rule No.                        Rule title                 amended        Submitted
----------------------------------------------------------------------------------------------------------------
Regulation 2, Rule 4 (Rule 2-4)...............  Permits, Emissions Banking......        12/19/12         4/22/13
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    We proposed a conditional approval of Regulation 2, Rule 4 because 
we determined that, separate from the deficiencies listed in Section 
II.B of our proposed rulemaking action, the rule: ensures that issued 
ERCs will meet the criteria laid out in 40 CFR 
51.165(a)(3)(ii)(C)(1)(i) at the time of ERC issuance; satisfies the 
requirements of 40 CFR 51.165(a)(3)(i); satisfies the applicable 
requirements found in EPA's Emissions Trading Policy Statement; and 
satisfies the requirements of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii), which 
requires pre-base year shutdown credits to be explicitly added back in 
to the most recent applicable air quality plans. Moreover, we concluded 
that if the District submits the changes it committed to submit in its 
August 28, 2017 commitment letter, the identified deficiencies will be 
cured.

II. Public Comments and EPA Responses

    The EPA's proposed action provided a 30-day public comment period. 
During this period, we received no comments.

III. EPA Action

    No comments were submitted. Therefore, as authorized in sections 
110(k)(4) and 301(a) of the Act, the EPA is finalizing conditional 
approval of Regulation 2, Rule 4 into the BAAQMD portion of the 
California SIP. If the State meets its commitment to submit the 
required measures, the revisions to Rule 2-4 will remain a part of the 
SIP until EPA takes final action approving or disapproving the new SIP 
revisions. However, if the State fails to submit these revisions within 
the required timeframe, the conditional approval will automatically 
become a disapproval, and EPA will issue a finding of disapproval. EPA 
is not required to propose the finding of disapproval.
    There are no sanctions or Federal Implementation Plan (FIP) 
implications should the conditional approval become a disapproval. 
Sanctions would not be imposed under CAA section 179(b) because the 
submittal of Rule 2-4 is discretionary (i.e., not required to be 
included in the SIP). See ETPS, 51 FR 43,813 at 43,825 (``[S]tates are 
by no means required to adopt banking procedures, but . . . banks may 
help states and communities realize important planning and 
environmental benefits.''). A FIP would not be imposed under CAA 
section 110(c)(1) because the disapproval does not reveal a deficiency 
in the SIP that such a FIP must correct. Specifically: (1) The 
deficiencies identified herein do not impact or undermine the 
requirement that offsets satisfy the requirements of 40 CFR 51.165, 
including the requirement that offsets must satisfy the offset 
integrity criteria enumerated in 40 CFR 51.165(a)(3)(ii)(C)(1)(i) at 
the time of use; and (2) Rule 2-4 is not a required CAA submittal 
because states and air districts have the discretion, but are not 
required, to adopt banking rules. This final action will incorporate 
the submitted rule into the SIP, including those provisions identified 
as deficient.
    In addition, because we are finalizing our proposed action, we are 
removing existing Regulation 2, Rule 4 from the BAAQMD portion of the 
California SIP.

IV. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes 
incorporation by reference. In accordance with requirements of 1 CFR 
51.5, the EPA is finalizing the incorporation by reference of BAAQMD 
Regulation 2, Rule 4 (Permits, Emissions Banking), as described in the 
amendments to 40 CFR part 52 set forth below. The EPA has made, and 
will continue to make, this document generally available electronically 
through www.regulations.gov and in hard copy at the U.S. Environmental 
Protection Agency, Region IX (Air-3), 75 Hawthorne Street, San 
Francisco, CA 94105-3901.

V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under 
the PRA because this action does not impose additional requirements 
beyond those imposed by state law.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. This 
action will not impose any requirements on small entities beyond those 
imposed by state law.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. This action does not impose additional requirements 
beyond those imposed by state law. Accordingly, no additional costs to 
State, local, or tribal governments, or to the private sector, will 
result from this action.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It 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.

F. Executive Order 13175: Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175, because the SIP is not approved to apply on any 
Indian reservation land or in any other area where the EPA or an Indian 
tribe has demonstrated that a tribe has jurisdiction, and will not 
impose substantial direct costs on tribal governments or preempt tribal 
law. Thus, Executive Order 13175 does not apply to this action.

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

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern

[[Page 57135]]

environmental health or safety risks that the EPA has reason to believe 
may disproportionately affect children, per the definition of ``covered 
regulatory action'' in section 2-202 of the Executive Order. This 
action is not subject to Executive Order 13045 because it does not 
impose additional requirements beyond those imposed by state law.

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

    This action is not subject to Executive Order 13211, because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the NTTAA directs the EPA to use voluntary 
consensus standards in its regulatory activities unless to do so would 
be inconsistent with applicable law or otherwise impractical. The EPA 
believes that this action is not subject to the requirements of section 
12(d) of the NTTAA because application of those requirements would be 
inconsistent with the CAA.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    The EPA lacks the discretionary authority to address environmental 
justice in this rulemaking.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

L. 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 February 2, 2018. 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, Incorporation by 
reference, Intergovernmental relations, New Source Review, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Volatile 
organic compounds.

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

    Dated: October 31, 2017.
Deborah Jordan,
Acting Regional Administrator, Region IX.

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

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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 paragraphs (c)(199)(i)(A)(10) 
and (c)(429)(i)(E)(3) to read as follows:


Sec.  52.220   Identification of plan--in part.

* * * * *
    (c) * * *
    (199) * * *
    (i) * * *
    (A) * * *
    (10) Previously approved on January 26, 1999 in paragraph 
(c)(199)(i)(A)(8) of this section and now deleted with replacement in 
(c)(429)(i)(E)(3), Regulation 2, Rule 4 adopted on June 15, 1994.
* * * * *
    (429) * * *
    (i) * * *
    (E) * * *
    (3) Regulation 2, ``Permits,'' Rule 4, ``Emissions Banking,'' 
adopted on December 19, 2012.
* * * * *

0
3. Section 52.248 is amended by adding paragraph (c) to read as 
follows:


Sec.  52.248  Identification of plan--conditional approval.

* * * * *
    (c) The EPA is conditionally approving a California State 
Implementation Plan (SIP) revision submitted on April 22, 2013, 
updating Regulation 2--Permits, Rule 4--Emissions Banking. The 
conditional approval is based on a commitment from the State to submit 
a SIP revision that will correct the identified deficiencies in this 
rule. If the State fails to meet its commitment by November 1, 2018, 
the conditional approval is treated as a disapproval.

[FR Doc. 2017-25927 Filed 12-1-17; 8:45 am]
 BILLING CODE 6560-50-P