7330 Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 

E. 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 because it 

does not apply to any Tribes or 

otherwise 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, nonetheless, specifically solicits 

additional comment on this proposed 

rule from tribal officials.

F. Executive Order 13045, Protection of 

Children From Environmental Health 

Risks and Safety Risks 

Protection of Children from 

Environmental Health Risks and Safety 

Risks (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. 

G. 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. 

H. 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, New Source Review, Nitrogen 

dioxide, Ozone, Particulate matter, 

Reporting and recordkeeping 

requirements, Volatile organic 

compounds.

Dated: January 31, 2003. 

Wayne Nastri, 

Regional Administrator, Region IX.

[FR Doc. 03–3416 Filed 2–12–03; 8:45 am] 

BILLING CODE 6560–50–P

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[CA280–0390A ; FRL–7450–9] 

Revisions to the California State 

Implementation Plan, San Joaquin 

Valley Unified Air Pollution Control 

District

AGENCY: Environmental Protection 

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: EPA is proposing to approve 

the San Joaquin Valley Unified Air 

Pollution Control District’s (SJVUAPCD 

or District) revised permit exemption 

and new source review (NSR) rules, 

Rules 2020 and 2201, respectively, for 

stationary sources. The District has 

revised Rules 2020 and 2201 and 

submitted them to EPA as a revision to 

the California State Implementation 

Plan (SIP). The revisions address 

deficiencies identified in our July 19, 

2001 limited approval and limited 

disapproval of the previous version of 

these rules. 

EPA is also publishing in today’s 

Federal Register an interim final 

determination that the District has 

corrected the deficiencies noted in the 

limited disapproval. The interim final 

determination will stay the sanctions 

clock triggered by the July 19, 2001 

limited approval/limited disapproval of 

the previous versions of Rules 2020 and 

2201. If EPA takes final action to 

approve these rules, the sanctions clock 

for this action will be stopped.

DATES: Comments must be sent by 

March 17, 2003. EPA will respond to 

comments in a final action on this 

proposed approval.

ADDRESSES: Send comments to: Ed Pike, 

Permits Office [AIR–3], Air Division, 

U.S. Environmental Protection Agency, 

Region 9, 75 Hawthorne Street, San 

Francisco, CA 94105–3901. 

You can review and copy the 

submitted Rules 2020 and 2201, the 

existing SIP rules, and EPA’s Technical 

Support Document (TSD) at EPA’s 

Region 9 office from 8:30 am to 5 pm, 

Monday-Friday. A reasonable fee may 

be charged for copying. 

Copies of the submitted Rules are also 

available for inspection at the following 

locations: 

California Air Resources Board, 

Stationary Source Division, Rule 

Evaluation Section, 1001 ‘‘I’’ Street, 

Sacramento, CA 95814. 

San Joaquin Valley Unified APCD, 

1990 E. Gettysburg Avenue, Fresno, CA 

93726.

FOR FURTHER INFORMATION CONTACT:

Please call Ed Pike at (415) 972–3970 or 

send e-mail to pike.ed@epa.gov.

SUPPLEMENTARY INFORMATION:

Throughout this document, ‘‘we,’’ ‘‘us’’

and ‘‘our’’ refer to EPA.

Table of Contents 

I. What is EPA proposing to approve? 

II. Background 

A. History of SJVUAPCD NSR SIP 

revisions. 

B. Deficiencies in SJVUAPCD NSR 

regulations and required action. 

C. How has SJVUAPCD corrected these 

rule deficiencies? 

1. Offset equivalency 

a. What is the basis for allowing an annual 

offset equivalency demonstration? 

b. What is the offset equivalency tracking 

system in Rule 2201 and how does it 

satisfy the deficiency noted in the 

limited disapproval? 

c. Does the tracking system replace 

applicable NSR requirements? 

d. What are the requirements for being an 

enforceable emission reduction? 

e. What kinds of emission reductions may 

be creditable? 

f. Are pre-1990 emission reductions 

creditable? 

2. Agricultural exemption 

a. How has the District corrected this 

deficiency? 

b. How is EPA addressing the State 

exemption? 

3. Lowest Achievable Emission Rate 

Applicability 

D. Summary 

III. Statutory and Executive Order Reviews 

A. Executive Order 12866, Regulatory 

Planning and Review 

B. Regulatory Flexibility Act 

Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 7331

1For more information on the District and its 

jurisdiction see 64 FR 51493 (Sept. 23, 1999).

2The previous version of Rule 2020 acted upon 

in the July 19, 2001 final action was the version 

adopted by the District on September 17, 1998. The 

previous version of 2201 was the version adopted 

by the District on August 20, 1998.

3Many California Districts use the term ‘‘Best 

Available Control Technology’’ (BACT) with a 

definition equivalent to LAER. Please see the TSD 

for additional information on the District’s 

definition of BACT.

C. Unfunded Mandates Reform Act 

D. Executive Order 13132, Federalism 

E. Executive Order 13175, Coordination 

with Indian Tribal Governments 

F. Executive Order 13045, Protection of 

Children from Environmental Health 

Risks and Safety Risks 

G. Executive Order 13211, Actions that 

Significantly Affect Energy Supply, 

Distribution, or Use

H. National Technology Transfer and 

Advancement Act

I. What Is EPA Proposing To Approve? 

EPA today proposes to approve 

revisions to the California SIP by 

incorporating the submitted revised 

versions of District Rules 2020 and 2201 

into the SIP. If EPA finalizes this 

proposed action after considering public 

comment, the submitted versions of 

Rules 2020 and 2201 will replace the 

existing versions of those rules currently 

in the SIP for the San Joaquin Valley 

Unified Air Pollution Control District, 

which includes the following counties: 

Fresno, Kern,1 Kings, Madera, Merced, 

San Joaquin, Stanislaus, and Tulare.

The submitted versions of Rules 2020 

and 2201 were adopted by the District 

on December 19, 2002, and submitted to 

EPA by the California Air Resources 

Board (CARB) on December 23, 2002. 

EPA found the submittal to be complete 

on December 30, 2002. EPA’s Technical 

Support Document (TSD) accompanying 

this proposed action describes the 

portions of Rules 2020 and 2201 that 

were revised. 

II. Background 

A. History of SJVUAPCD NSR SIP 

Revisions 

District Rule 2201 specifies the 

requirements for the review of new and 

modified stationary sources and 

outlines the requirements to be included 

in authorities to construct (ATCs) and 

permits to operate (PTOs). Rule 2020 

specifies the emission units that are not 

required to obtain ATCs or PTOs. 

Together, these rules define the 

applicability and requirements of the 

District’s NSR program. 

On July 19, 2001, EPA finalized a 

limited approval and limited 

disapproval of previous versions of 

Rules 2020 and 2201.2 66 FR 37587. 

EPA’s final action in July 2001 was a 

limited disapproval because three 

provisions in the previous versions of 

the rules did not comply with the CAA 

and were not approvable. Because of 

these three deficiencies, the rules failed 

to satisfy the requirements of sections 

172(c)(5) and 173 of the CAA, EPA 

finalized a limited disapproval of the 

previous version of Rules 2020 and 2201 

under section 110(k)(3) and part D of 

CAA title I. EPA’s final limited 

disapproval in July 2001, triggered the 

sanctions (the ‘‘sanctions clock’’) in 

section 179 of the CAA.

Under section 179(a)(2), if the 

Administrator disapproves a submission 

under section 110(k)(3) for an area 

designated nonattainment because of 

the submission’s failure to meet one or 

more of the elements required by the 

Act, the Administrator is required to 

apply one of the sanctions set forth in 

section 179(b) if the deficiency has not 

been corrected within 18 months of 

such disapproval. Section 179(b) 

provides two sanctions available to the 

Administrator: limitations on projects 

and grants for which the Department of 

Transportation may approve federal 

highway funding (‘‘highway sanction’’) 

and increasing the NSR offset 

requirements (‘‘offset sanction’’). By 

regulation, EPA established that we will 

apply the offset sanction 18 months 

after rule disapproval and the highway 

sanction 6 months after the offset 

sanction. 40 CFR 52.31. The CAA also 

provides that final disapproval under 

section 110(k)(3) triggers the federal 

implementation plan (FIP) requirement. 

CAA Section 110(c). The 18 month 

period referred to in section 179(a) and 

40 CFR 52.31, began on August 20, 

2001, which was the effective date of 

EPA’s final limited disapproval, and 

will expire on February 20, 2003. 

With the limited disapproval, the July 

19, 2001 action simultaneously finalized 

a limited approval of Rules 2020 and 

2201. EPA finalized the limited 

approval under section 110(k)(3) in light 

of EPA’s authority pursuant to section 

301(a) to prescribe regulations necessary 

to further air quality by strengthening 

the SIP. Because Rules 2020 and 2201 

strengthened the District’s NSR program 

despite the three cited rule deficiencies, 

EPA’s limited approval incorporated 

Rules 2020 and 2201 into the SIP 

subject to the section 179 mandatory 

sanctions triggered by EPA’s limited 

disapproval. 

B. Deficiencies in SJVUAPCD NSR 

Regulations and Required Action 

EPA’s limited disapproval cited three 

deficiencies in the previous versions of 

Rules 2020 and 2201. First, EPA 

determined that the previous version of 

Rule 2201 was not approvable because 

its offset tracking equivalency system 

failed to contain a mandatory remedy. 

We also found the previous version of 

Rule 2201 deficient because it did not 

require all sources making 

modifications that result in a significant 

increase in emissions to meet the 

Lowest Achievable Emission Rate 

(LAER). Finally, we concluded the 

previous version of Rule 2020 was not 

approvable because section 4.5 of the 

rule exempted agricultural sources from 

permitting. For a more detailed 

discussion of these three rule 

deficiencies please see our final limited 

approval and limited disapproval, 66 FR 

37587 (July 19, 2001), and the 

accompanying Technical Support 

Document dated August 30, 1999 (‘‘1999 

TSD’’). 

EPA’s July 2001 limited disapproval 

informed the District that the following 

actions were required to correct the rule 

deficiencies:

1. The District must revise Rule 2201 

to provide a mandatory, enforceable and 

automatic remedy to cure any annual 

shortfall and, in the future, prevent 

shortfalls in the District’s New Source 

Review Offset Equivalency Tracking 

System. 

2. The District must remove the 

agricultural exemption from District 

Rule 2020. 

3. The District must revise Rule 2201 

to ensure that all sources meet LAER3

if they are allowed to make a significant 

increase in their actual emissions rate.

See 66 FR at 37590. 

C. How Has SJVUAPCD Corrected These 

Rule Deficiencies? 

1. Offset Equivalency 

a. What is the basis for allowing an 

annual offset equivalency 

demonstration? 

Section 173(a)(1)(A) provides that 

new and modified stationary sources 

seeking to commence operating in a 

nonattainment area must be required by 

the state permitting program to obtain 

sufficient offsetting emission reductions 

(‘‘offsets’’) such that, ‘‘the total 

allowable emissions from existing 

sources in the region, from new or 

modified sources which are not major 

emitting facilities, and from the 

proposed source will be sufficiently less 

than total emissions from existing 

sources * * * so as to represent 

reasonable further progress * * *.’’ In 

our July 19, 2001 final action, we 

explained that this statutory focus on 

total regional emissions supported the 

approval of a District offset program that 

7332 Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 

4We relied on this statutory interpretation, in 

part, in approving the RECLAIM Trading Program 

in the South Coast Air Quality Management 

District. See 61 FR 64291 (Dec. 4, 1996).

5We have also noted the ability of States to 

implement accounting or tracking systems to 

demonstrate annual aggregate equivalency with 

federal requirements for surplus adjusting. See

Memo from John S. Seitz, Dir., Office of Air Quality 

Planning and Standards (OAQPS) to David 

Howekamp, Dir., Region IX Air and Toxics Div. 

(Aug. 26, 1994) (‘‘1994 Seitz Memo’’).

6See 65 FR 58252, 58253 (Sept. 28, 2000) (‘‘The 

District committed to demonstrate equivalency by 

calculating on an annual basis the quantity of 

offsets that would be required under federal 

nonattainment NSR regulations (i.e. the quantity of 

offsets that meet all Clean Air Act requirements) 

and the quantity of offsets required under the 

District program.’’).

7For example, the District does not require 

sources to offset the entire quantity of emissions 

increases (Rule 2201, section 4.5) and, in certain 

situations, does not impose the minimum offset 

ratio required under the CAA (Rule 2201, section 

4.8).

8 In our final limited approval/limited 

disapproval, we noted that the District had 

identified different remedies to address potential 

shortfalls including ‘‘using EPA requirements for 

calculating offset baselines and quantities’’ (which 

could address shortfalls related to differences in the 

quantity of offsets required in the first instance) and 

‘‘using credits that are surplus at the time of use’’

(which could address shortfalls related to 

differences in the valuation of emission reductions 

used to meet offset requirements). See 66 FR at 

37590.

ensured equivalency with the federal 

requirements on an annual aggregate 

basis. 66 FR at 37588–89.4 Thus, we 

explained that an offset equivalency 

tracking system with a requirement for 

a mandatory and enforceable remedy for 

any shortfall would comply with the 

requirements of the Act. Id. at 37588.5

The goal of the District’s offset 

equivalency tracking system, therefore, 

is to show that, notwithstanding certain 

differences between the District and 

federal NSR programs, the District’s 

rules would require offsets that are, in 

the aggregate, equivalent to offsets 

required under the federal program.6 In 

the 1999 TSD for the proposed limited 

approval/limited disapproval, 65 FR 

58252 (Sept. 28, 2000), we identified 

areas where the District rules may 

require fewer offsets than the federal 

NSR regulations and directed the 

District to track these sources of 

potential shortfalls. See 1999 TSD at 15–

17; see also 66 FR at 37588 n.3.7 In 

general these differences fall into two 

categories: (1) Differences in the 

quantity of offsets required in the first 

instance and (2) differences in the way 

the value of emission reductions used to 

satisfy offset requirements is calculated. 

Thus, to demonstrate equivalency, the 

District’s rule needs to track and report 

on both of these categories of 

differences. Likewise, if the remedy is to 

cure and prevent future shortfalls, the 

rule must be tailored to address the root 

cause of the shortfalls.8

b. What is the offset equivalency 

tracking system in Rule 2201 and how 

does it satisfy the deficiency noted in 

the limited disapproval? 

Section 7.0 of the revised District Rule 

2201 (adopted Dec. 19, 2002) provides 

for a system to track and demonstrate 

the equivalency of the District’s NSR 

offset requirements to the offset 

requirements of the federal NSR 

program. There are three basic 

components of the tracking system 

provisions. Section 7.1 outlines the 

parameters to be tracked by the District 

on an annual basis. Sections 7.2 and 7.3 

describe how equivalency is to be 

demonstrated each year. Section 7.4 

describes the remedies to take effect to 

cure any annual shortfall and prevent 

future shortfalls. While the District 

action required in EPA’s final limited 

approval/limited disapproval was ‘‘to 

provide a mandatory and enforceable 

remedy to cure any annual shortfall and, 

in the future prevent shortfalls,’’ as 

noted above, the provisions for tracking 

and demonstrating equivalency are 

critical for ensuring that the remedy is 

applied automatically and addresses the 

cause for the shortfall. Thus, each of the 

components provided in section 7.0 is 

necessary to ensure the remedy 

provision satisfies this deficiency. 

The District’s tracking system requires 

two demonstrations to be included in 

the annual report. First, the District is to 

track and compare on an annual basis 

the aggregate quantity of offsets required 

under Rule 2201 and the quantity of 

offsets that would have been required 

under the federal NSR provisions. Rule 

2201, section 7.2.1. This comparison 

will show whether the District rule 

requires as many offsets as the federal 

rules, regardless of the ‘‘creditable’’

value of the actual emission reduction 

used to meet the offset requirements. 

Should there be a shortfall the rule 

provides for two stages of remedy. The 

District may first retire unused emission 

reduction credits that meet federal 

requirements to make up for the 

shortfall. Rule 2201, section 7.4.1.1. If 

sufficient emission reduction credits are 

not available, the District must apply 

federal offset requirements to all permits 

issued after the annual demonstration 

deadline until the District amends its 

NSR provisions to require equivalent 

offsets. Rule 2201, section 7.4.1.2. These 

remedies reasonably address the source 

of the demonstrated shortfall and satisfy 

our requirement for a mandatory, 

enforceable and automatic remedy.

The second piece of the annual 

demonstration addresses whether the 

District’s overall approach is equivalent, 

including the District’s decision not to 

adjust the creditable value of emission 

reductions at time of use (‘‘surplus 

adjusting’’ or ‘‘discounting’’ at time of 

use). The District will determine the 

creditable surplus value of the emission 

reductions actually used each year by 

applying federal creditability criteria, 

and compare this adjusted aggregate 

number to the number of offsets that 

would have been required under the 

federal NSR program. The District shall 

provide an annual report to demonstrate 

that, in the aggregate, it is achieving an 

equivalent number of creditable 

emission reductions as would be 

achieved under the federal program. 

Rule 2201, section 7.2.2. If a shortfall is 

found in this comparison, and it is not 

the result of different offset 

requirements identified in the first piece 

of the demonstration described above, 

the cause of the shortfall must be related 

to differences in the way the District 

determines the creditable value. As a 

result, the remedy for such a shortfall is 

to apply federal creditability criteria, 

including discounting at time of use. In 

the event of a shortfall in this portion 

of the annual demonstration, section 

7.4.2 will automatically require all 

ATCs issued after the annual report 

deadline to ensure emission reductions 

used to satisfy offset requirements are 

creditable and that the surplus value of 

those reductions is determined at the 

time of ATC issuance. EPA proposes to 

conclude that this remedy reasonably 

meets the EPA requirement for a 

mandatory, enforceable and automatic 

remedy to cure any shortfall and 

prevent future shortfalls. 

c. Does the tracking system replace 

applicable NSR requirements? 

The tracking system does not replace 

the applicable requirements of Rule 

2201. It is important to clarify that while 

the tracking system allows EPA to 

approve the District NSR provisions of 

Rule 2201 notwithstanding specific 

differences between the District’s rules 

and federal NSR requirements, nothing 

in section 7.0 of the rule relieves 

sources from the obligation to comply 

with the other requirements of Rule 

2201. For example, sources must 

continue to obtain offsets in compliance 

with section 4.5 of Rule 2201. Emission 

reductions used to meet these offset 

requirements must continue to be ‘‘real, 

enforceable, quantifiable, surplus, and 

permanent.’’ Rule 2201, section 3.2.1. 

Therefore, a source could not rely on the 

annual aggregate demonstration to cure 

the use of unenforceable (or otherwise 

non-creditable) emission reductions to 

meet the District’s offset requirements. 

Such use would be a violation of the 

Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 7333

9The District’s amendments to Rule 2201 

reiterate these criteria in section 7.1.5. These 

criteria derive directly from the offset requirements 

of the CAA section 173(c). See 1994 Seitz Memo; 

see also 51 FR 43814 (Dec. 4, 1986) (‘‘Emissions 

Trading Policy Statement’’). As such, EPA will 

interpret the District requirement in accordance 

with our federal policy and guidance on 

creditability.

10Section 7.1.5 of Rule 2201 expressly notes that 

the creditability of a given emission reduction 

included in the annual demonstration may be 

subject to EPA review.

11These additional credits must of course meet 

the creditability criteria described herein. This is 

expressly required by Rule 2201, section 7.4.1.1. 

The 1999 TSD provides additional discussion on 

the availability of these additional credits.

12The District has asked whether implementation 

of District rules that are not yet in the SIP could 

be counted as generating an ERC. Such rules, used 

to generate innovative offsets, must satisfy EPA 

requirements for Economic Incentive Programs (see

EPA’s guidance document entitled, ‘‘Improving Air 

Quality with Economic Incentive Programs’’

(January 2001)). EPA would not consider as 

creditable, emission reductions achieved through 

early implementation of rules that do not meet 

these requirements. In addition, any credits 

generated through these programs must continue to 

meet the basic criteria for creditability (e.g., 

permanent, surplus, quantifiable and enforceable).

District’s rules and may be subject to 

enforcement by the District or EPA even 

if the District is otherwise required to 

make up for this shortfall through the 

offset tracking system. 

Major sources (and major 

modifications) should therefore ensure 

that the emission reductions used to 

satisfy offset requirements meet federal 

creditability criteria.9 The one potential 

exception is with regard to the federal 

requirement to determine the surplus 

value of an emission reduction at time 

of use. Rule 2201 allows the surplus 

value to be determined at the time the 

ATC for an emission reduction or the 

application for an emission reduction 

credit (ERC) is deemed complete. Rule 

2201, section 3.2.2. With our final 

approval of the District tracking system, 

EPA will allow the District to forgo the 

federal surplus adjusting requirement 

and sources will be able to rely on 

emission reductions EPA might 

otherwise not consider surplus. This 

flexibility, however, is only available for 

sources covered by the District’s 

tracking system. The tracking system 

only covers permits for sources with 

ATC applications that were not deemed 

complete before August 20, 2001. See

Rule 2201, section 7.3.1. Sources with 

ATC applications deemed complete 

before August 20, 2001 must meet all 

federal creditability criteria including 

the requirement that the surplus value 

of emission reductions be discounted at 

time of use (i.e., at time ATC is issued).

Because the criteria for determining 

the creditability of an emission 

reduction will continue to be important 

both for sources seeking permits and for 

the District in implementing the 

tracking system,10 the following 

sections discuss particular creditability 

issues that have recently been raised by 

the District and others.

d. What are the requirements for being 

an enforceable emissions reduction? 

CAA sections 173(a) and (c)(1), 

require emission reductions to be 

federally enforceable before a 

construction permit may be issued, and 

in effect and enforceable by the time a 

new or modified source commences 

operation. EPA has explained that the 

District can make emission reductions 

enforceable by modifying the permit for 

the source reducing emissions or by 

obtaining SIP approval of the rules that 

result in the emission reduction. EPA 

has also explained that while the 

emission reduction need not occur 

before the new or modified source 

commences operation, the specific 

emission reduction credits to be used by 

the source under review must be 

identified and enforceable before the 

authority to construct may be issued. 

See 57 FR at 13553; see also Memo from 

John S. Seitz, Dir. OAQPS to Regional 

Air Dirs (June 14, 1994) (‘‘Offsets 

Required Prior to Permit Issuance’’). 

Thus, even though the emissions 

reduction may not have occurred by the 

time the ATC is issued (e.g., the revised 

permit does not call for the source to 

actually reduce emissions until a later 

date), the new or modified source must 

identify the source of the emissions 

reduction to be used to meet the offset 

requirements, must provide an 

opportunity for review of the proposed 

emission reduction credits and, once the 

ATC is issued, cannot change the 

emission reduction credits unless a new 

ATC is proposed identifying the new 

emission reduction credits to be relied 

upon. 

e. What kinds of emission reductions 

may be creditable? 

Section 7.2.2.2 of Rule 2201 allows 

the District to include in the annual 

equivalency demonstration, ‘‘the 

surplus value of additional creditable 

emission reductions that have not been 

used as offsets and have been banked or 

have been generated as a result of 

permitting actions.’’ These unused 

‘‘additional credits’’ may include 

emission reductions from a number of 

actions. Examples of such additional 

credits include emission reductions 

used to meet offset requirements by 

non-major sources and the 10 percent 

Air quality Improvement Deduction 

applied under section 4.12 of Rule 2201 

for newly banked credits.11 This section 

addresses a few other issues the District 

has raised regarding the creditability of 

other actions that might be considered 

to generate ‘‘additional credits.’’

The central issue for determining the 

creditability of a particular action often 

will be whether the reduction is 

surplus. The surplus requirement 

derives from section 173(c)(2) of the 

Act, which provides, ‘‘Emission 

reductions otherwise required by this 

Act shall not be creditable as emissions 

reductions for purposes of any such 

offset requirement.’’ To be creditable, a 

particular emission reduction must not 

be required by the Act or otherwise 

relied upon to meet a requirement of the 

Act. Thus, District requirements that are 

more stringent than an express 

requirement of the Act may generate 

surplus credits as long as the emission 

reductions are not relied upon 

elsewhere to comply with a requirement 

of the Act (e.g., to achieve the National 

Ambient Air Quality Standards 

(NAAQS)).12

The emission reductions must also be 

real and quantifiable—actual emissions 

to the air must be reduced. Paper 

reductions (i.e., changes in a source’s 

permitted emissions that do not require 

actual emissions to decrease) are not 

creditable. Likewise, rules that limit the 

increase in emissions do not generate 

real, quantifiable reductions in 

emissions. For example, the District 

BACT requirements for modifications to 

existing non-major sources may generate 

emission reductions where the control 

requirement results in actual emissions 

reductions as compared to premodification emission levels. By 

contrast, BACT requirements for new 

non-major sources cannot generate 

emission reduction credits because 

there has been no reduction in actual 

emissions (instead actual emissions 

have increased). 

It is not possible for EPA to predict 

the various potential claims that will be 

made for emission reduction credits. 

Even for the examples described in this 

section and in the TSD, case-specific 

facts may affect the analysis on 

creditability. It is therefore critical for 

the District to raise specific questions to 

EPA so that these issues can be resolved 

on a case-by-case basis. 

f. Are pre-1990 emission reductions 

creditable? 

Pre-1990 emission reduction credits 

pose particular problems under each of 

the criteria for creditability because of 

the age of these credits. Information on 

their generation may be missing, making 

it difficult to verify the quantity of 

emission reductions and ensure their 

continued enforceability. These 

problems, however, can be overcome if 

7334 Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 

13For example, assume the 1990 baseline 

emissions level is 100 tons per year (tpy) and the 

area anticipates 10 percent growth and wishes to 

make available 5 tpy of pre-1990 credits. In order 

to achieve the target level of 85 tpy (i.e., 15 percent 

reduction of baseline emissions), the ROP plan will 

need to identify controls that will achieve 30 tpy 

of reduction—15 tpy to demonstrate reasonable 

further progress, 10 tpy to offset growth and 5 tpy 

to offset the use of pre-1990 credits. This obviously 

is an overly simplistic example and is intended 

only to show how these concepts relate to one 

another.

14EPA addressed similar concerns in its 1986 

Emissions Trading Policy Statement. 51 FR 43814 

(Dec. 4, 1986). In that guidance, EPA described the 

need to distinguish between shutdowns to be used 

to generate credits to meet offset requirements and 

shutdowns built into assumptions on growth. We 

explained, ‘‘In all cases where net turnover 

reductions have been quantified and relied on as 

part of attainment demonstrations, states which 

seek to grant shutdown credit for use in trading 

must be prepared to show clearly and 

unequivocally on the basis of SIP documents or 

tracking that the credit has not been double-counted 

or otherwise relied on for SIP planning purposes.’’

detailed records are available to support 

the required findings on creditability. 

The more difficult issues are related to 

the requirement that emission 

reductions be surplus. 

The basic purpose of the surplus 

requirement is to avoid ‘‘double 

counting’’ emission reductions. Double 

counting can occur where emission 

reductions are the result of, or would 

have been achieved by, controls 

expressly required by the Act or 

controls used to satisfy requirements of 

the Act. Double counting can also occur 

if credit for emission reductions is 

claimed where the State’s planning 

actions do not recognize that the 

reduced emissions existed in the first 

place. This is especially a concern for 

emission reductions that occurred long 

ago. 

To avoid potential double counting, 

EPA has issued guidance on how 

emission reductions should be 

discounted at the time of use and the 

planning assumptions an area must 

make to allow the use of pre-1990 

credits to meet NSR offset requirements. 

The 1992 ‘‘General Preamble for the 

Implementation of title I of the Clean 

Air Act Amendments of 1990’’

(‘‘General Preamble’’) describes the 

planning requirements of the Act as 

amended in 1990. 57 FR 13498 (April 

16, 1992). The General Preamble 

addresses the issue of pre-1990 (or ‘‘preenactment’’) emission reductions and 

how areas need to ensure the use of 

these does not conflict with planning. 

The two types of planning actions that 

need to reflect the use of pre-1990 

credits are Rate of Progress (ROP) plans 

and attainment demonstrations. See id. 

at 13508–509 and 13552–54; see also

1994 Seitz Memo. 

Section 172(c)(2) requires 

implementation plans for nonattainment 

areas to include provisions requiring 

reasonable further progress toward 

attainment. The 1990 Amendments 

added specific reduction requirements 

necessary to satisfy the general 

reasonable further progress requirement. 

For example, ozone areas classified as 

moderate nonattainment and above 

must achieve a 15-percent reduction in 

volatile organic compound (VOC) 

emissions from 1990 baseline levels 

within six years of enactment of the 

CAA Amendments. CAA section 

182(b)(1). Ozone areas classified as 

serious and above must, in general, 

achieve an additional 3-percent 

reduction every three years thereafter 

until the attainment date. CAA section 

182(c)(2)(B).

Because the baseline for measuring 

reasonable further progress is the level 

of actual emissions from anthropogenic 

sources in 1990, pre-1990 emission 

reductions generally are not included in 

the baseline. Thus, to avoid giving 

credit for reductions that the baseline 

already reflects, pre-1990 credits must 

be ‘‘added back.’’ The General Preamble 

explains that the required emission 

reductions necessary to meet reasonable 

further progress (e.g., 15 percent from 

1990 levels) must be net of growth and 

net of any pre-1990 emission reduction 

credits the area plans to allow for use as 

offsets. 57 FR at 13508–509. This means 

that the controls identified to achieve 

the target level of emissions (e.g., 85 

percent of the baseline levels) must also 

achieve reductions to offset growth and 

the addition of any pre-1990 emission 

reduction credits the area wishes to 

make available.13

There are different ways that areas 

can include pre-1990 credits in ROP 

plans. EPA has explained, ‘‘A State may 

choose to show that the magnitude of 

pre-1990 ERC’s (in absolute tonnage) 

was included in the growth factor, or 

the State may choose to show that it was 

not included in the growth factor, but in 

addition to anticipated growth.’’ 1994 

Seitz Memo. Under either approach, the 

quantity of pre-1990 credits added to or 

included in the growth factor must be 

distinguishable and identifiable. Id. If 

the addition of pre-1990 credits cannot 

be distinguished from general growth, 

EPA will not be able to determine 

whether the growth factor used in the 

plan is reasonable or to compare the 

actual use of pre-1990 credits to the cap 

assumed in the plan.14

Pre-1990 credits must also be 

accounted for in an area’s attainment 

demonstration. 57 FR 13509 and 13553; 

see also 1994 Seitz Memo. In addition 

to demonstrations of reasonable further 

progress, the Act requires areas to 

submit a demonstration that the SIP, as 

revised, will provide for attainment of 

the NAAQS by the applicable 

attainment date (‘‘attainment 

demonstration’’). See, e.g., CAA section 

182(c)(2)(A) (attainment demonstration 

required for serious ozone 

nonattainment areas). Attainment 

demonstrations, in very general terms, 

require areas to use modeling or other 

approved analytical techniques to 

determine the level of emissions 

required to achieve the NAAQS and to 

provide projections of emissions 

inventories to show how the area will 

control sources to achieve the necessary 

level of emissions. Because new and 

modified major sources are required to 

offset their emissions increases by 

obtaining emission reductions from 

other sources, there should be no net 

effect on emissions inventories from 

construction or modification of a major 

source if the emissions reduced are 

included in the inventory. This means 

pre-1990 emissions reductions, which 

would otherwise not be included in 

inventories of emissions in 1990 and 

beyond, must be added back into the 

area’s inventories as if these emissions 

were still in the air in order to be used 

as offsets and ensure no net effect on 

emission inventories. See 62 FR at 

13509 and 13553; see also 1994 Seitz 

Memo.

There are multiple ways that these 

pre-1990 emissions can be included in 

the inventories. The simplest would be 

to include a line item for the emissions 

to be added for use as potential offsets. 

No matter what approach an area uses, 

the demonstration must clearly identify 

these emissions so that the 

reasonableness of the approach can be 

evaluated and the actual use of these 

pre-1990 credits can be compared to the 

assumptions in the demonstration. 

To date, SJVUAPCD has failed to 

adequately account for the use of pre1990 emission reduction credits in its 

planning activities. As a result, EPA 

does not consider these reductions to be 

surplus creditable reductions that can 

be used to meet federal offset 

requirements within the District. 

The San Joaquin Valley was originally 

classified as moderate for the PM–10 

NAAQS following enactment of the 

1990 Clean Air Act Amendments. The 

District submitted a moderate area plan 

in December 1991, but this plan was 

never approved by EPA and, in any 

event, did not support the use of pre1990 credits by including these credits 

in the plan’s inventories as emissions in 

the air. On January 8, 1993, EPA 

reclassified the San Joaquin Valley as 

serious for PM–10. 58 FR 3334. The 

attainment deadline for serious PM 

Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 7335

15This conclusion is consistent with our policy 

regarding the use of shutdown credits as offsets. 

Memo from John S. Seitz, Dir., OAQPS to Regional 

Air Dirs (July 21, 1993). Under the policy described 

in the 1993 memo, we explained that the use of 

shutdown credits as offsets was limited to ensure 

that reductions came out of the area’s existing 

emissions and thus assured reasonable further 

progress. Before 1990, this could only be 

accomplished if the area had a demonstration of 

attainment that made this showing. After 1990, 

because the deadlines for submitting attainment 

demonstrations had been extended by the Clean Air 

Act Amendments, we decided that an attainment 

demonstration should not be required before 

shutdown credits could be used. We added, 

however, ‘‘This policy cannot be extended to 

situations where an attainment demonstration is 

lacking.’’ Thus if any of the required planning 

submittals is delinquent, deemed incomplete or 

disapproved, shutdown credits cannot be used to 

meet offset requirements.

16The 2002 ROP Plan was adopted by the District 

Board on December 19, 2002, and submitted to 

ARB. A copy of the Plan can be found at the 

District’s website at http://www.valleyair.org/

Air_Quality_Plans/

AQ_plans_Ozone.htm#Amendment 2002 and 2005 

ROP 103.

17The 1994 Seitz Memo explains that pre-1990 

credits to be used in an area ‘‘must be contained 

in: (1) The current applicable federally-approved 

RFP and ROP plans as growth, and (2) all federallyrequired attainment demonstrations as emissions in 

the air.’’ While an argument could be made that 

inclusion of these credits in the ROP and not in an 

attainment demonstration might be sufficient to 

support their use where the attainment 

demonstration is not yet due, this argument is not 

reasonable where, as here, the area has not only 

failed to meet the plan submission deadlines but 

has had to be reclassified because of the area’s 

failure to attain by the statutory deadlines.

18EPA is proposing this deadline to coincide with 

the deadline for sanctions under title V to correct 

the agriculture exemption in that program. See CAA 

Section 110(k)(5) (providing EPA discretion to 

establish reasonable deadlines).

nonattainment areas was December 31, 

2001. CAA section 188(c)(2). The 

attainment demonstration, due with the 

serious area plan on February 8, 1997, 

was withdrawn by the District on 

February 26, 2002. On July 23, 2002, 

EPA issued a finding that the San 

Joaquin Valley failed to attain the PM–

10 NAAQS by the applicable deadline. 

In accordance with CAA section 189(d), 

the State was required to submit by 

December 31, 2002, a new attainment 

demonstration for San Joaquin Valley, 

along with measures sufficient to 

achieve an annual reduction in PM–10 

or PM–10 precursor emissions of not 

less than 5 percent. This new 

demonstration has not been submitted. 

The District, because it failed to attain 

the PM standard by the statutory 

deadline and has not submitted required 

progress and attainment plans, has 

failed to show how the use of pre-1990 

emission reductions would be 

consistent with the need for expeditious 

attainment of the PM NAAQS.15

The San Joaquin Valley is currently 

designated as a severe nonattainment 

area for the 1-hour ozone NAAQS. 66 

FR 56476 (Nov. 8, 2001). EPA approved 

a serious area plan (the ‘‘1994 ozone 

plan’’) for the District on January 8, 

1997. 62 FR 1150. The plan included a 

demonstration that the area would 

attain the ozone NAAQS by 1999. The 

attainment demonstration in the 1994 

ozone plan did not specifically identify 

and account for the possible use of pre1990 emission reductions. The area 

failed to attain the ozone standard in 

1999, and as a result EPA reclassified 

the area to severe on November 8, 2001. 

66 FR 56476. The severe area plan was 

due on May 31, 2002. 66 FR at 56481. 

The attainment deadline for severe areas 

is November 15, 2005. CAA section 

181(a)(1). The District failed to submit 

the required plan by the May 2002 

deadline and is now subject to the offset 

sanction beginning March 18, 2004, for 

failure to submit the required plan. 67 

FR 61784 (Oct. 2, 2002). 

The 1994 ozone plan included ROP 

milestone provisions for 1996 and 1999. 

The plan, however, did not include pre1990 credits in the ROP provisions or 

attainment demonstration. The District 

has recently prepared and adopted a 

ROP plan for the 2002 and 2005 

milestones.16 We will review this ROP 

plan to determine if the District has 

properly accounted for the use of pre1990 credits and met applicable ROP 

requirements, but this alone will not 

provide the necessary demonstration 

that the use of these credits is consistent 

with the need for the area to attain the 

ozone NAAQS as expeditiously as 

possible.17 Unless and until the area 

submits a new attainment 

demonstration that shows expeditious 

attainment can be achieved while still 

allowing the use of these credits, EPA 

cannot reasonably conclude that these 

pre-1990 reductions are surplus 

creditable reductions.

Based on these findings regarding the 

creditability of pre-1990 credits, EPA 

will consider the creditable value of 

these credits used in the District’s 

tracking system to be zero. EPA, 

therefore, encourages the District and 

sources to avoid using these pre-1990 

credits and, if problems arise, to work 

with EPA to explore options for other 

sources of emission reduction credits. 

2. Agricultural Exemption 

a. How has the District corrected this 

deficiency?

On December 19, 2002, the District 

adopted a version of Rule 2020 that 

deleted section 4.5, and thereby 

eliminated any exemption in its NSR 

rule for permitting a new or modified 

major stationary source of air pollutants. 

The District’s deletion of the exemption 

from its NSR rule corrects the rule 

deficiency set out in our July 2001 

limited disapproval. Because the 

District removed the exemption from its 

rule and for the reasons discussed 

below, EPA is proposing to find that the 

District has corrected the deficiency and 

to approve Rule 2020 as revised. 

b. How is EPA addressing the State 

exemption? 

EPA is aware, however, that 

California Health & Safety Code 

42310(e) continues to preclude the 

District, as well as all other districts in 

California, from permitting agricultural 

sources under either title I or title V of 

the CAA. While the State is on notice of 

the need to remove the exemption for 

major sources for purposes of title V, the 

State must also remove the exemption 

for any major sources for purposes of 

title I. Therefore, concurrent with 

today’s proposed approval of the 

District’s revised version of Rule 2020 

(deleting the exemption), EPA is 

publishing in the Federal Register a 

proposal pursuant to section 110(k)(5) of 

the CAA to find the California SIP is 

substantially inadequate for all 

nonattainment air pollution control 

districts in the State and for all 

attainment area districts that have an 

approved Prevention of Significant 

Deterioration (PSD) program because the 

State cannot provide ‘‘necessary 

assurances’’ that it or the districts have 

authority to carry out the applicable 

nonattainment NSR or PSD portions of 

the SIP. 

This concurrent proposal will inform 

the Executive Officer of the CARB that 

the California SIP is and will remain 

inadequate until the California 

legislature amends Health & Safety Code 

section 42310(e) to the extent necessary 

to allow the State of California through 

the air districts to issue permits under 

title I, parts C and D, to all major 

sources, including those involved in 

agriculture. This action proposes to 

require the State to correct the 

inadequacy by November 23, 2003 to 

avoid a finding under section 179 of the 

Act which would trigger mandatory 

sanctions.18

3. Lowest Achievable Emission Rate 

Applicability 

EPA determined that the previous 

version of District Rule 2201 did not 

always require LAER for major 

modifications because it did not require 

LAER if a modification resulted in an 

increase in actual emissions but not an 

increase in the emission unit’s 

permitted emission rate. Therefore, EPA 

required the District to modify Rule 

2201 to ensure that all major 

7336 Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 

modifications as defined at 40 CFR 

51.165(a)(1)(v) are subject to LAER. 

The District has corrected this 

deficiency by adding a backstop in 

addition to the current LAER 

applicability requirements. This 

backstop requires that any major 

modifications, as defined at 40 CFR 

51.165, must meet LAER. See Rule 2201, 

sections 3.24 and 4.1.3. Sections 4.1.1 

and 4.1.2 also continue to require LAER 

for minor sources regardless of whether 

changes at those sources are defined as 

major modifications. 

D. Summary 

EPA is proposing to approve revised 

versions of SJVUAPCD Rules 2020 and 

2201. The revisions to these rules satisfy 

the requirements outlined in our July 

19, 2001 limited approval/limited 

disapproval of previous versions of 

these rules. EPA is simultaneously 

publishing an interim final 

determination to stay the sanctions 

clock started by the limited disapproval. 

Additional information on the 

amendments to Rules 2020 and 2201 is 

contained in the TSD for this proposal. 

Concurrent with this proposal, we are 

also proposing to call in the State to 

repeal or amend Health and Safety Code 

Section 42310(e). Once EPA determines 

that the State has provided the 

necessary assurances required under 

section 110(a)(2)(E), the NSR program 

for the SJVUAPCD will fully meet the 

requirements of sections 172(c)(5), 173 

and 182 of the CAA. 

III. Statutory and Executive Order 

Reviews 

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. 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 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); CAA 

section 110(a)(2). 

C. Unfunded Mandates Reform Act 

Under sections 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA), 

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. 

D. Executive Order 13132, Federalism 

Federalism (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 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. 

E. 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. We are 

merely proposing to approve a state rule 

implementing a federal standard. EPA’s 

action does not impose requirements on 

Tribes and the rules being approved do 

not significantly or uniquely affect 

Tribes. Thus, Executive Order 13175 

does not apply to this rule. 

EPA specifically solicits additional 

comment on this proposed rule from 

tribal officials. 

Federal Register / Vol. 68, No. 30 / Thursday, February 13, 2003 / Proposed Rules 7337

F. Executive Order 13045, Protection of 

Children From Environmental Health 

Risks and Safety Risks 

Protection of Children from 

Environmental Health Risks and Safety 

Risks (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 a significant regulatory action. 

G. 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. 

H. 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, Incorporation by 

reference, Intergovernmental relations, 

New Source Review, Nitrogen dioxide, 

Ozone, Particulate matter, Reporting 

and recordkeeping requirements, 

Volatile organic compounds.

Note: Incorporation by reference of the 

State Implementation Plan for the State of 

California was approved by the Director of 

the Federal Register on July 1, 1982.

Dated: January 31, 2003. 

Wayne Nastri, 

Regional Administrator, Region IX.

[FR Doc. 03–3418 Filed 2–12–03; 8:45 am] 

BILLING CODE 6560–50–P