BARCLAYS OFFICIAL CALIFORNIA CODE OF

REGULATIONS

TITLE 13. MOTOR VEHICLES

DIVISION 3. AIR RESOURCES BOARD

CHAPTER 5. STANDARDS FOR MOTOR

VEHICLE FUELS

ARTICLE 1. STANDARDS FOR GASOLINE

SUBARTICLE 2. STANDARDS FOR GASOLINE

SOLD BEGINNING MARCH 1, 1996

This database is current through 12/26/08, Register

2008, No. 52

§ 2271. Variances.

(a) Applications for variances. Any person who cannot

comply with the standards or compliance requirements

set forth in sections 2262, 2262.3, 2262.4, 2262.5,

2262.6, 2265.1, or 2265.5 because of reasons beyond

the person's reasonable control may apply to the executive officer for a variance. Except for emergency variances as provided in section (h), the application shall be

accompanied by a fee of $6700.00 to cover the costs of

processing the variance. If the applicant withdraws the

application before the variance hearing is held,

$4100.00 of the fee shall be refunded. The application

shall set forth:

(1) The applicable section(s) from which the variance is

sought;

(2) The specific grounds upon which the variance is

sought;

(3) The proposed date(s) by which compliance with the

provisions of the applicable section(s) will be achieved;

and

(4) A compliance plan reasonably detailing the method

by which compliance will be achieved. That proposed

compliance plan shall include increments of progress

(i.e., specific events and dates) that describe periodic,

measurable steps toward compliance during the proposed term of the variance.

(b)(1) Notices and public hearings for variances. Upon

receipt of an application for a variance containing the

information required in section (a), the executive officer

shall hold a hearing to determine whether, or under

what conditions and to what extent, a variance from the

requirements of the applicable section(s) is necessary

and will be permitted. Notice of the time and place of

the hearing shall be sent to the applicant by certified

mail not less than 20 days prior to the hearing. Notice of

the hearing shall also be submitted for publication in the

California Regulatory Notice Register and sent to every

person who requests such notice, not less than 20 days

prior to the hearing.

(2) Treatment of confidential information. Information

submitted to the executive officer by a variance applicant may be claimed as confidential. Information claimed

as confidential shall be handled in accordance with the

procedures specified in Title 17, California Code of

Regulations (CCR), sections 91000 to 91022 except

that: (A) at the time the information is submitted, the

submitter must provide accompanying documentation in

support of the claim of confidentiality, including the

documentation identified in section 91022(c), and (B)

for the purposes of this section 2271, the time period

specified in section 91022(e)(2) is 10 days instead of 21

days. The executive officer may consider such confidential information in reaching a decision to grant or

deny a variance.

(c) Public participation in the variance process. At least

20 days prior to the hearing, the application for the variance shall be made available to the public for inspection. Interested members of the public shall be allowed

a reasonable opportunity to submit written and oral

testimony at the hearing and their testimony shall be

considered.

(d) Necessary findings for granting variances. The decision to grant or deny a variance shall be based solely

upon substantial evidence in the record of the variance

proceeding. No variance shall be granted unless the executive officer makes all of the following findings:

(1) That, because of reasons beyond the reasonable con13 CA ADC § 2271 Page 1

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trol of the applicant, requiring compliance with the applicable section(s) would result in an extraordinary economic hardship;

(2) That the public interest in mitigating the extraordinary hardship by issuing the variance outweighs the public interest in avoiding any increased emissions of air

contaminants which would result from issuing the variance; and

(3) That the compliance plan proposed by the applicant

can reasonably be implemented and will achieve compliance as expeditiously as possible.

(e) Factors to be considered in making the necessary

findings for granting variances.

In making the findings specified in section (d), the

factors set forth below shall be considered. It is the responsibility of the applicant to provide the information

necessary to adequately evaluate these factors.

(1) Regarding the finding specified in section (d)(1):

(A) To demonstrate that noncompliance is "beyond

the reasonable control of the applicant," the applicant

must demonstrate that reasonably diligent and timely efforts to achieve compliance have been made. Where a

variance is sought from initial compliance with the

CaRFG Phase 3 requirements, the applicant shall show

that timely capital expenditures and efforts to obtain the

permits for necessary refinery modifications have been

made, and that the applicant has been reasonably diligent in attempting to follow the periodic compliance

plans required by section 2269, "Submittal of Compliance Plans." Where a variance is sought due to a breakdown, the applicant shall demonstrate that the breakdown could not have been prevented or mitigated by the

application of standard industrial practices. "Standard

industrial practices" means elements of design, methods

of operation, and levels of oversight and maintenance

that are regarded as generally accepted practice in the

applicant's type of business.

(B) To demonstrate that requiring compliance would

result in an "extraordinary economic hardship," the applicant must make a substantial showing that no alternative to a variance would eliminate or mitigate the need

for a variance. Potential alternatives that the applicant

shall address include the following: 1. obtaining complying gasoline from outside sources, or obtaining

blending materials that would allow production of complying gasoline, 2. using the applicable California Predictive Model (as specified in Title 13, CCR, section

2265) to maximize the production of complying gasoline, or to minimize the degree of noncompliance,

through the use of a PM alternative gasoline formulation, 3. electing to use the PM emissions offsetting compliance option, and 4. applying for an alternative emission reduction plan. The applicant shall compare the

economics of operations without a variance, for the

period over which the variance is proposed, with the

economics of operations after the variance compliance

plan has been implemented (e.g., the economic hardship

during the term of the variance shall be measured

against the eventual cost of long-term compliance.) The

operations may include facets of the applicant's business

other than gasoline operations, if those facets are directly affected by the ability to conduct the gasoline

business. An applicant may also address any supply

shortages that could result from the failure to grant a

variance and the economic affects of such shortages on

the persons who do, or could, receive gasoline from the

applicant.

(2) Regarding the finding specified in section (d)(2):

(A) The executive officer shall consider the potential

effects of issuing or denying the variance on the applicant's customers, the producers of complying fuel, the

general public, and upon air quality. The executive officer shall also consider whether granting the variance

will place the applicant at a cost advantage over other

persons, including those persons who produce complying gasoline.

(B) To evaluate the potential effect upon air quality,

the excess emissions from granting the variance shall be

estimated as follows:

1. Exhaust emissions: The fractional change in emissions from using the variance gasoline shall be estimated with the California Predictive Model (model). In13 CA ADC § 2271 Page 2

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puts to the model shall be the limits to be placed on the

regulated properties of the variance gasoline by the

variance conditions and the limits set forth in section

2262 that correspond in form (flat or averaging) to the

variance limits. For each air basin in which the variance

gasoline will be sold, the estimate of excess exhaust

emissions shall be the fractional change in emissions

(output by the model), times the estimated fraction of

gasoline use in the air basin represented by the variance

gasoline, times the inventory of exhaust emissions from

gasoline-powered vehicles in the air basin.

2. Evaporative hydrocarbon emissions: Excess evaporative emissions shall be estimated for a limit greater

than 7.0 pounds per square inch (psi) on the Reid vapor

pressure (RVP) of variance gasoline. This estimate shall

apply only for the period when RVP is limited to 7.0

psi. The true vapor pressure corresponding to the RVP

limit for variance gasoline shall be divided by the true

vapor pressure corresponding to RVP at 7.0 pounds per

square inch. For each air basin in which the variance

gasoline will be sold, the estimate of excess evaporative

emissions shall be that ratio, minus 1.0, times the estimated fraction of gasoline use in the air basin represented

by the variance gasoline, times the inventory of emissions due to the evaporation of gasoline from all sources

in the air basin.

(3) Regarding the finding specified in section (d)(3):

The applicant shall demonstrate why the proposed compliance plan is the most expeditious way to achieve

compliance, and the applicant shall demonstrate sufficient control over the implementation of the plan to

make the plan practical. In the case of a proposed variance that would begin on December 31, 2003, the compliance plan shall identify and provide a date for each

key step that remains to be accomplished for attaining

compliance. As applicable, these steps shall include financing, engineering plans, ordering and contracts, receipt of major equipment, commencement and completion of construction, and testing.

(f) Conditions and fees in variance orders. In imposing

fees and conditions in variance orders, the executive officer shall take into account the potential for such fees

and conditions to place the applicant at a cost advantage

over other persons, including those persons who produce complying gasoline.

(1) Conditions.

(A) Any variance order shall specify a final compliance date by which the requirements of the applicable

section(s) will be achieved. Any variance order shall

also contain a condition that specified increments of

progress necessary to assure timely compliance be

achieved, and such other conditions that the executive

officer, as a result of the testimony received at the hearing, finds necessary to carry out the purposes of Division 26 of the Health and Safety Code. Such conditions

may include, but are not limited to, reporting requirements, limitations on the gasoline specifications, and

the elements of the variance compliance plan as proposed by the applicant, with any modifications made by

the executive officer.

(B) Any variance order granting a variance from

2262.4 shall impose a substitute gasoline Reid vapor

pressure limit as stringent as feasible under the circumstances, in no case to exceed 9.0 pounds per square

inch. For areas where, and in seasons when, federal regulations require a lesser maximum Reid vapor pressure

limit, a variance order shall not impose a Reid vapor

pressure limit that is less stringent than the federal limit.

(C) The executive officer may require, as a condition

of granting a variance, that a cash bond, or a bond executed by two or more good and sufficient sureties or by

a corporate surety, be posted by the party to whom the

variance was granted to assure performance of any construction, alteration, repair, or other work required by

the terms and conditions of the variance. Such bond

may provide that, if the party granted the variance fails

to perform such work by the agreed date, the cash bond

shall be forfeited to the state board, or the corporate

surety or sureties shall have the option of promptly remedying the variance default or paying to the state board

an amount, up to the amount specified in the bond, that

is necessary to accomplish the work specified as a condition of the variance.

13 CA ADC § 2271 Page 3

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(D) The variance order shall limit the amount of variance gasoline sold or supplied from the applicant's production or import facility during each 30- day period of

the variance, or during such other time period as the executive officer may specify. In determining the limit on

the amount of variance gasoline, the Executive Officer

shall consider available data on the applicant's production of complying gasoline. The limit shall not exceed

the applicant's capacity to produce complying gasoline.

(E) The variance order shall specify that once a

quantity of variance gasoline has been sold or supplied

by the applicant in accordance with the variance, subsequent transactions involving that variance gasoline by

another producer, distributor, retailer, end user, or other

person shall also be exempt from the applicable requirements.

(2) Fees. A fee of $0.15 shall be levied on the applicant

for each gallon of gasoline sold or released for sale under variance during the term of the variance. The fee

shall be paid by the applicant periodically, in advance

of the sale or release of variance gasoline in each period. The executive director shall specify the payment

schedule in the variance order.

(g) Duration of variances.

(1) A variance shall be granted only for the minimum

period necessary for the applicant to attain compliance

with the applicable regulations. Except for a variance

related to a physical catastrophe, no variance shall have

a duration of more than 120 days; however, a variance

may be extended for up to 90 additional days if the applicant demonstrates that the requirements of sections

(d) and (e) are met. In order to receive an extension of a

variance, the applicant must submit an application as

specified in section (a), and a hearing must be held as

specified in sections (b) and (c).

(2) Variances related to a physical catastrophe. Notwithstanding the provisions of section (g)(1), a refiner

may be granted a variance with a duration of more than

120 days, or a variance extension of more than 90 days,

if the applicant demonstrates that the additional time is

necessary due to a physical catastrophe, and the requirements of sections (d) and (e) are met. In order to receive

a variance or variance extension, the applicant must

submit an application as specified in section (a) and a

hearing must be held as specified in sections (b) and (c).

As used in this section, "physical catastrophe" means a

sudden unforseen emergency beyond the reasonable

control of the refiner, causing the severe reduction or

total loss of one or more critical refinery units that materially impact the refiner's ability to produce complying gasoline. "Physical catastrophe" does not include

events which are not physical in nature such as design

errors or omissions, financial or economic burdens, or

any reduction in production that is not the direct result

of qualifying physical damage.

(h) Emergency variances.

(1) The executive officer may, after holding a hearing

without complying with the provisions of sections (b)

and (c), issue an emergency variance to a person from

the requirements of the applicable section(s) upon a

showing of reasonably unforeseeable extraordinary

hardship and good cause that a variance is necessary.

The applicant for an emergency variance shall pay a fee

of $2500.00. Section (f) shall apply to emergency variances, except that a variance order is not required to

specify a final compliance date by which the requirements of the applicable sections(s) will be achieved.

(2) No emergency variance may have a duration of

more than 45 days. If the applicant for an emergency

variance does not demonstrate that he or she can comply with the provisions of the applicable section(s)

within such 45-day period, an emergency variance shall

not be granted unless the applicant makes a prima facie

demonstration that the findings set forth in section (d)

should be made. The executive officer shall maintain a

list of persons who have informed the executive officer

in writing of their desire to be notified by telephone in

advance of any hearing held pursuant to section (h), and

shall provide advance telephone notice to any such person as soon as practicable, considering the nature of the

emergency.

(i) Situations in which variances shall cease to be effective. A variance shall cease to be effective upon fail13 CA ADC § 2271 Page 4

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ure of the party to whom the variance was granted substantially to comply with any condition of the variance.

(j) Modification and revocation of variances. Upon the

application of any person, the executive officer may review and for good cause modify or revoke a variance

from the requirements the applicable section(s) after

holding a hearing in accordance with the provisions of

sections (b) and (c).

<General Materials (GM) - References, Annotations, or

Tables>

Note: Authority cited: Sections 39600, 39601, 43013,

43013.1, 43013.2, 43018 and 43101, Health and Safety

Code; and Western Oil and Gas Ass'n. v. Orange

County Air Pollution Control District, 14 Cal.3d 411,

121 Cal. Rptr. 249 (1975). Reference: Sections 39000,

39001, 39002, 39003, 39010, 39500, 39515, 39516,

40000, 41511, 43000, 43013, 43013.1, 43013.2, 43016,

43018 and 43101, Health and Safety Code; and Western

Oil and Gas Ass'n. v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal. Rptr. 249 (1975).

HISTORY

1. New section filed 11-16-92; operative 12-16-92 (Register 92, No. 47).

2. Change without regulatory effect amending subsections (a), (a)(3)-(a)(4)

and (d)(1)-(d)(3) filed 8-5-93 pursuant to section 100, title 1, California

Code of Regulations (Register 93, No. 32).

3. Amendment of section and Note filed 2-15-96 as an emergency; operative 2-15-

96 (Register 96, No. 7). A Certificate of Compliance must be transmitted to

OAL by 6-14-96 or emergency language will be repealed by operation of law on

the following day.

4. Certificate of Compliance as to 2-15-96 order transmitted to OAL 4-4-96 and

filed 5-16-96 (Register 96, No. 20).

5. Amendment of section and Note filed 8-3-2000; operative 9-2-2000 (Register

2000, No. 31).

6. Amendment of subsection (e)(3) filed 12-24-2002; operative 12-24-2002

pursuant to Government Code section 11343.4 (Register 2002, No. 52).

7. Amendment of subsections (a) and (e)(1)(B) filed 8-29-2008; operative 8-29-

2008 pursuant to Government Code section 11343.4 (Register 2008, No. 35).

13 CCR § 2271, 13 CA ADC § 2271 13 CA ADC § 2271

END OF DOCUMENT

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