SACRAMENTO METROPOLITAN
AIR QUALITY MANAGEMENT DISTRICT

STAFF REPORT

RULE 448 – GASOLINE TRANSFER INTO STATIONARY STORAGE CONTAINERS

RULE 449 – TRANSFER OF GASOLINE INTO VEHICLE FUEL TANKS

January 23, 2009

Prepared by: Jeffery Yang Assistant Air Quality Engineer

Reviewed by: Kevin J. Williams, Ph.D. Program Coordinator

Aleta Kennard Program Supervisor

Approved by: Brigette Tollstrup Division ManagerStaff Report

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BACKGROUND

Ground level ozone is a secondary pollutant formed from photochemical reactions of nitrogen oxides (NOx) and volatile organic compounds (VOCs) in the presence of sunlight. Ozone is a strong irritant that adversely affects human health and damages crops and other environmental resources. As documented by the U.S. Envir onmental Protection Agency (EPA) in the most recent Criteria Document for ozone (U.S. EPA 2006), both short-term and long-term exposure to ozone can irritate and damage the human respiratory system, resulting in:

• decreased lung function;

• development and aggravation of asthma;

• increased risk of cardiovascular problems such as heart attacks and strokes;

• increased hospitalizations and emergency room visits; and

• premature deaths.

The District is currently designated as a nonattainment area for both the state and federal ozone standards. Since VOCs are a precursor to ozone, one of the strategies to control ozone pollution is to reduce VOC emissions from existing stationary sources.

Gasoline transfer operations emit VOC when gasoline vapor in the vessel being filled is displaced by the liquid gasoline. Gasoline vapors also contain benzene and other toxic chemicals. Rule 448, Gasoline Transfer into Stationary Storage Containers, controls VOC emissions from the transfer of gasoline from delivery vessels into stationary storage tanks or mobile fuelers (Phase I transfers). Rule 449, Transfer of Gasoline into Vehicle Fuel Tanks,
controls VOC emissions from the transfer of gasoline from stationary storage tanks and mobile fuelers into vehicle fuel tanks (Phase II transfers).

Rules 448 and 449 were first adopted by the District on February 5, 1975. Rule 448 was last amended on February 2, 1995, and Rule 449 was last amended on September 26, 2002. These latest amended rules have been incorporated into the State Implementation Plan.

Staff is proposing to amend Rules 448 and 449 to:

• Maintain consistency with state regulations for vapor recovery systems, including the Enhanced Vapor Recovery (EVR) regulations adopted by the California Air Resources Board (CARB);

• Incorporate “all feasible measure” require ments from rules adopted by the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) and the South Coast Air Quality Management District (SCAQMD);

• Provide an exemption from Phase II vapor re covery requirements for the dispensing of E85, a petroleum distillate/alcohol blend, into flexible fuel vehicles; and

• Provide an exemption from Phase II vapor recovery requirements for non-retail gasoline dispensing facilities in which 100% of the vehicles refueled are equipped with Onboard Refueling Vapor Recovery (ORVR).

LEGAL MANDATES

Federal Mandates: The District is designated as a nonattainment area for the federal 8-hour ozone standard (69 FR 23858, April 30, 2004). Section 182(b)(3) of the federal Clean Air Act requires the District to require vapor recove ry systems on gasoline dispensing operations. Sections 172(c)(1) and 182(b)(2) require the District to adopt Reasonably Available ControlStaff Report

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Technology (RACT) for ozone precursors, including RACT for all major sources of VOC and all source categories for which EPA has promul gated a Control Techniques Guidelines (CTG) document. EPA promulgated a CTG for gasoline service stations in November, 1975.

Rules 448 and 449 satisfy the federal mandates for vapor recovery and RACT.

State Mandates:

Serious Nonattainment Plan Requirements: The District is designated as a serious nonattainment area for the state ozone standard. The California Clean Air Act requires areas with this designation to adopt control measures required in sections 40913, 40914, and 40919 of the California Health and Safety Code (HSC):

• HSC Section 40913 requires districts to develop a plan to achieve California’s ambient air quality standards by the earliest practicable date.

• HSC Section 40914(b)(2) requires every nonattainment district which cannot achieve a reduction of 5% or more per year in district wide emissions to include in their state attainment plans “every feasible measure” to reduce the emissions of nonattainment pollutants and their precursors. SJVUAPCD Rules 4621 and 4622 and SCAQMD Rule 461 were reviewed for “feasible measures.” The proposed amendments will be equivalent to the requirements in SJVUAPCD Rule 4621 and 4622 and SCAQMD Rule

461.

• HSC Section 40919(a)(3) requires districts with serious nonattainment for ozone to adopt Best Available Retrofit Control Technology (BARCT) for all existing permitted sources. The proposed amendments will meet the BARCT requirement.

Transport Mitigation Emission Control Requirements : Title 17, Section 70600 of the California Code of Regulations (CCR) requires that districts within the areas of origin of transported air pollutants, as identified in section 70500(c), include sufficient emission control measures (including “all feasible measures” and BARCT) in their attainment plans for ozone to mitigate the impact of pollution sources within their jurisdictions on ozone concentrations in downwind areas commensurate with the level of contribution. An upwind district shall comply with the transport mitigation planning and implementation requirements set forth in this section regardless of its attainment status, unless the upwind district complies with the requirements of section 70601.

Benzene Airborne Toxic Control Measure (ATCM) for Retail Service Stations: Title 17 CCR Section 93101 requires CARB-certified Phase I and Phase II vapor recovery systems at retail service stations. The proposed amendments ar e in compliance with the Benzene ATCM because the ORVR exemption is only applicable to non-retail gasoline dispensing facilities.
CARB Executive Order G-70-212 states that P hase II vapor recovery systems are not yet certified for the dispensing of E85, and that E85 facilities may continue to operate without Phase II vapor recovery until such time as CARB may certify Phase II vapor recovery systems for use with E85. The proposed E85 exemption for Rule 449 will also expire when CARB certifies a Phase II vapor recovery system for the dispensing of E85.

The proposed amendments are based on all f easible control measures and BARCT requirements, and therefore comply with the state mandates.Staff Report

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ENHANCED VAPOR RECOVERY (EVR)

State law (California Health and Safety Code, Division 26, Part 4, Chapter 3, Article 5) requires control of gasoline vapor emissions. Section 41954 requires CARB to adopt performance standards for certifying vapor recovery systems. Section 41954(g)(1) prohibits local districts from establishing performance standards stricter than those adopted by CARB.

CARB first adopted performance standards for vapor recovery systems in 1975. On April 1, 2001, CARB’s regulation to implement EVR (Title 17, California Code of Regulations, Section 94011) took effect. The deadline for Phase I vapor recovery systems to be certified to the new standards was April 1, 2005. By April 1, 2009, a ll Phase II vapor recovery systems at gasoline dispensing facilities with underground storage tanks must meet the new standards.

An EVR regulation (Title 17, California Code of Regulations, Section 94016) for gasoline dispensing facilities with aboveground storage tanks took effect on July 12, 2008. Facilities with aboveground storage tanks will have until July 12, 2012 to meet these new requirements.

Staff’s proposed amendments are consistent with the EVR regulations and associated certification and test procedures.

FEDERAL AND STATE GUIDANCE ON PHASE II EXEMPTIONS

EPA began phasing in Onboard Refueling Vapor Recovery (ORVR) requirements for new light duty vehicles (passenger cars), light duty trucks, medium duty vehicles, and light heavy duty trucks in 1998 (40 CFR Part 86). By 2000, 100% of the new passenger cars sold were required to be equipped with ORVR. Phase-in of ORVR was completed by 2003 for new light duty trucks and by 2006 for medium duty vehicles and light heavy duty trucks.

On December 12, 2006, EPA issued a memorandum (included in Appendix C) to provide guidance concerning the removal of Phase II vapor recovery systems in situations where widespread use of ORVR is demonstrated. Under Section 202(a)(6) of the federal Clean Air Act, EPA may waive the vapor recovery requirements in areas where the agency has determined that ORVR is in widespread use throughout the motor vehicle fleet. Specifically, the guidance suggests that EPA may approve the removal of Phase II vapor recovery requirements in the following circumstances:

• Initial fueling of new vehicles at automobile assembly plants where 95% or more of the vehicle are equipped with ORVR

• Refueling of rental cars at rental car facilities, where 95% or more of the vehicles are equipped with ORVR

• Refueling of flexible fuel vehicles at E85 dispensing pumps

A follow-up memorandum (included in Appendix C), issued by EPA on November 28, 2007, expanded the circumstances under which Phase II vapor recovery requirements may be removed to include corporate or commercial fleets where 95% or more of the vehicles are equipped with ORVR. In addition, CARB Execut ive Officer James Goldstene sent a letter (included in Appendix C) on February 20, 2008, to all California districts, encouraging them to revise their vapor recovery rules to incorporate exemptions for ORVR fleets and E85.Staff Report

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A vapor recovery system that meets the Phase II standards and specifications, including InStation Diagnostics, was not certified for use on E85 dispensing facilities by the operative date of the EVR regulations. On July 16, 2008, CA RB issued Executive Order G-70-212 (included in Appendix C), which allows E85 dispensing facilities to continue to operate without Phase II vapor recovery until such time as CARB may ce rtify Phase II vapor recovery systems for use with E85. This executive order was based on EPA’s guidance letters authorizing districts to amend their rules to exempt E85 because these gasoline dispensing facilities are expected to refuel fleets where 95% or more of the vehicles are equipped with ORVR.

SUMMARY OF RULE AMENDMENTS

The significant proposed amendments are summ arized below. Other changes are proposed to maintain consistency with state regulations and certification procedures. A detailed list of changes, including amendments proposed to be consistent with State regulations, is incorporated in Appendix A.

Rule 448

Currently, Rule 448 requires a CARB-certified vapor recovery system to be used when transferring gasoline into a stationary storage container with a capacity of 250 gallons or more. The proposed amendments will lower the applicability of this requirement to include transfer of gasoline into a mobile fueler with a capacity of 120 gallons or more, and expand the requirements to include vapor recovery for “switch loading.” Switch loading is the transfer of diesel fuel into a container that previously contained gasoline, a process that expels gasoline vapor from the container being filled. The expanded vapor recovery requirements are consistent with feasible requirements in SJVUAPCD Rule 4621 and SCAQMD Rule 461.

Staff is proposing to divide the vapor recovery requirements of Section 301 into three subsections to incorporate requirements that are unique to underground storage tanks, aboveground storage tanks, and mobile fuelers, and to establish more specific requirements for gasoline delivery vessels. The proposed requirements are consistent with feasible requirements in SJVUAPCD Rule 4621 and SCAQMD Rule 461, and are consistent with current CARB certification requirements.

Staff is proposing to require the use of a vapo r recovery system during “pump-out,” which is when gasoline is transferred out of a stationary tank or mobile fueler into a stationary tank or delivery vessel. This requirement closes a loophol e that exists in the current versions of Rules 448 and 449, and is consistent with SCAQMD Rule 461. Staff is also proposing to implement work practices that will assist in reduci ng excess emissions from spillage when gasoline is pumped out of vehicle fuel tanks.

Currently, Rule 448 does not require the owner/operator of gasoline dispensing facilities to perform maintenance inspections on the Phase I vapor recovery system. Staff is proposing to implement an inspection program for the owner/operator of the dispensing facility to inspect the Phase I system after receiving a fuel delivery. Should multiple deliveries be made to a given tank in a single day, the owner/operator is onl y required to inspect a storage tank’s Phase I system once per day. Staff believes the Phase I systems are most susceptible to damage when receiving deliveries. The list of items to be inspected is consistent with SDAPCD Rule 61.3.1, SJVUAPCD Rule 4621, and SCAQMD Rule 461. The inspection frequency most closelyStaff Report

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matches SDAPCD Rule 61.3.1, which requires inspections at frequencies ranging from weekly to monthly.

The proposed amendments include a requirement that 3 months after the date of adoption,

installers/contractors who install or alter v apor recovery systems must be certified by the International Code Council (ICC) for Vapor Recovery System Installation and Repair, and if required by the Executive Order, certified by the system manufacturer; maintain the valid ICC certification; and have on site proof of all required certifications. This requirement is consistent
with SJVUAPCD Rule 4621 and SCAQMD Rule 461

The ICC certification test for Vapor Recovery System Testing and Repair is not yet available. Staff is proposing a requirement that 3 months after the certification test becomes available, testers who perform required performance or recertif ication tests be certified by the International Code Council (ICC) for Vapor Recovery System Testing and Repair. Staff is also proposing that, if required by the Executive Order, test ers be certified by the system manufacturer; maintain the valid ICC certification; and have on site proof of all required certifications. This requirement is consistent with SJVUAPCD Rule 4621 and SCAQMD Rule 461.

Staff also included a list of required performance and reverification tests, unless other tests are specified in the applicable CARB Executive Orders. This list is consistent with SJVUAPCD Rule 4621 and SCAQMD Rule 461. Staff is proposing that reverification tests be performed annually, or more frequently as required by the applicable CARB Executive Order. Most facilities are already performing these tests annually as a permit requirement. However, approximately 20 facilities with aboveground storage tanks and only Phase I vapor recovery systems are expected to be impacted by this requirement.

Lastly, the amendments for Rule 448 include a recordkeeping requirement for performance and reverification tests results and maintenance inspection and repair records. Owner/operators are to retain records onsite for a period not less than 3 years (5 years for Title V sources) and make them available for review upon request. This requirement is consistent with Rule 449, SDAPCD Rule 61.3.1, SJVUAPCD Rule 4621, and SCAQMD Rule 461.

Rule 449

Staff is proposing two exemptions from the P hase II vapor recovery requirements. First, the dispensing of E85 would be exempt from the rule until CARB certifies Phase II vapor recovery systems for dispensing E85. Thi s exemption is consistent with CARB Executive Order G-70- 212, as well as federal guidance.

Second, the dispensing of gasoline for non-retail facilities where 100% of the vehicles refueled are equipped with ORVR would be exempt from the rule requirements, provided that the owner or operator meets recordkeeping requirements and submits an application pursuant to Rule 201- GENERAL PERMIT REQUIREMENTS for an Authority to Construct and Permit to Operate the gasoline dispensing facility and agrees to comply with the following conditions:

• No fuel shall be dispensed into a vehicle that is not owned or under direct control of the operator, except for a vehicle being used in an emergency;

• No fuel shall be dispensed into a vehicle not equipped with an ORVR system, except for a vehicle being used in an emergency.

• The gasoline dispensing facility shall use nozzles that are part of a CARB certified vapor recovery system, except that the vapor return line shall be sealed off. This ensures thatStaff Report

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the nozzles meet CARB performance standards for liquid retention, nozzle spitting, and post-refueling drips.

Although the EPA guidance allows exemptions for as low as 95%, there is a potential emissions increase for the 5% vehicles that are not equipped with ORVR. Therefore, the proposed 100% ORVR exemption was chosen. This level is also consistent with the exemptions in SJVUAPCD
Rule 4622 and SCAQMD Rule 461.

An additional exemption included in the amendments provides owners/operators the flexibility to perform minor, routine work on Phase II components, such as replacing any defective nozzles, hoses and breakaways with new or CARB certified re-manufactured components of the same make and model, or alternatives specifically i dentified in the latest applicable CARB Executive Order, without being ICC certified as an installer/contractor.

Currently, Rule 449 requires a CARB-certified vapor recovery system to be used when transferring gasoline from a storage container with a capacity of 250 gallons or more into a vehicle fuel tank with a capacity of 5 gallons or more. The proposed amendments will lower the applicability of this requirement to include transfer of gasoline from a mobile fueler with a capacity of 120 gallons or more into a vehicle fuel tank with a capacity of 5 gallons or more. This requirement is consistent with feasible requirements in SJVUAPCD Rule 4622 and SCAQMD Rule 461. All mobile fuelers currently operating within the District are in compliance with the proposed requirement.

Under the current rule, operators of retail gasoline dispensing facilities must post a sign warning patrons that topping off vehicle fuel tanks may result in spillage or recirculation of gasoline. Staff proposes to prohibit topping off. This prohibition conforms to EPA Region IX vapor recovery guidelines.

In the current version of Rule 449, the frequency required for gasoline dispensing facilities to perform reverification tests is every six or twelve months, depending on the six-month average of actual monthly gasoline throughput. Staff belie ves that this provision is no longer necessary due to the improved performance and reliability of Phase II systems as a result of CARB’s Enhanced Vapor Recovery Program. Therefore, Staff is proposing to amend this provision so that the testing frequency will be annually, or more frequently as required by the applicable CARB Executive Order. BAAQMD Rule 8-7 and SDAPCD Rule 61.4.1 require only annualtesting. SJVUAPCD Rule 4622 requires annual testing except for air-to-liquid ratio or volumeto-liquid ratio on a system with bellows-less nozzles, which is required every six months. (Note: The District no longer has any gasoline dispensing facilities using bellows-less nozzles. In addition, new Phase II EVR systems certified pursuant to CP-201 are required to have nozzles with bellows or mini-boots that form a face seal against the fill pipe.)

The proposed amendments include a requirement that effective 3 months after the date of adoption, installers/contractors who install or alte r vapor recovery systems must be certified by the International Code Council (ICC) for Vapor Re covery System Installation and Repair, and if required by the Executive Order, certified by the system manufacturer; maintain the valid ICC certification; and have on site proof of all required certifications. This requirement is consistent
with SJVUAPCD Rule 4622 and SCAQMD Rule 461.

The ICC certification test for Vapor Recovery System Testing and Repair is not yet available. Staff is proposing a requirement that 3 months after the certification test becomes available, testers who perform required performance or recertif ication tests be certified by the InternationalStaff Report

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Code Council (ICC) for Vapor Recovery System Testing and Repair. Staff is also proposing that, if required by the Executive Order, test ers be certified by the system manufacturer; maintain the valid ICC certification; and have on site proof of all required certifications. This requirement is consistent with SJVUAPCD Rule 4622 and SCAQMD Rule 461.

EMISSIONS IMPACT

The 2008 emission inventory for gasoline dispensing operations in Sacramento County, including Phase I and Phase II emissions, is shown in the following table.

EIC Code Description 2008 Annual VOC Emissions (tons per year) 330-374-1100-0000 Gasoline Dispensing Tanks – Working Losses 44

330-378-1100-0000 Vehicle Refueling – Vapor Displacement Losses, Gasoline 280

330-376-1100-0000 Gasoline Dispensing Tanks – Breathing Losses 34

330-380-1100-0000 Vehicle Refueling – Spillage, Gasoline 58

Total: 416

The emission inventory takes into account the effect of controls that are already in place. Existing vapor recovery standards have reduced VOC emissions by 3,360 tons per year in the 2008 inventory. These rules achieved the second highest VOC benefit when compared to all other district rules (Rule 447, Organic Liquid Loading is the highest). These rules also reduce the emissions of benzene and other toxic air contaminants. Even after controls, this is the third highest VOC emissions category subject to District control (behind solvents and architectural coatings) and is one of the top ten VOC sources in the Sacramento region.

The proposed amendments improve the maintenance of vapor recovery systems and improve the enforceability of existing provisions. Ther e are no additional emission reductions claimed from the amendments to Rules 448 and 449 that are proposed for consistency with CARB EVR regulations or to improve maintenance and enforceability. No excess emissions are expected from the proposed exemptions in Rule 449 for dispensing into 100% ORVR vehicles and E85 dispensing because ORVR systems on such vehicl es provide emission reductions equivalent to Phase II vapor recovery. An analysis by NESC AUM (see reference 9) shows that Phase II vapor recovery is slightly less effective than ORVR alone.

SOCIOECONOMIC IMPACT ANALYSIS

California Health and Safety Code Section 40728.5 requires a district to perform an assessment of socioeconomic impacts before adopting, amending or repealing a rule that will significantly affect air quality or emission limitations. The District Board is required to actively consider the socioeconomic impacts of the proposal and make a good faith effort to minimize adverse socioeconomic impacts. HSC Section 40728.5 def ines “socioeconomic impact” to mean the following:Staff Report

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1. The type of industry or business, including small business, affected by the proposed rule or rule amendments. 2. The impact of the proposed rule or rule amendments on employment and the economy of the region. 3. The range of probable costs, including costs to industry or business, including

small business. 4. The availability and cost-effectiveness of alternatives to the proposed rule or rule

amendments. 5. The emission reduction potential of the rule or regulation. 6. The necessity of adopting, amending, or repealing the rule or regulation to attain
state and federal ambient air standards.

Type of industries or business, including small business, affected by the rule

amendments: The rule amendments apply to all gasoline dispensing facilities that are required to have vapor recovery systems. There ar e approximately 546 permitted retail and non-retail facilities in the District. Installation and maintenance contractors are also affected by these

amendments. Small businesses include installers/contractors and testers. There are approximately 140 contractors for Healy and VST and three contracting firms for VeederRoot, in Sacramento County and the surrounding areas.

Impact of rule amendments on employment and the economy in the District: The proposed amendments to the rule are not expected to have any impact on employment or economy in the District. EVR upgrades of Phase II vapor recovery systems are already required by CARB regulations (17 CCR 94011).

Range of probable costs of rule amendments: The proposed amendments for both Rules 448 and 449 include requirements for installers/contractors and testers to obtain certifications from the International Code Council, which will cost these parties approximately $75 every two years. Many are already certified as a result of certification requirements in other districts.

Gas station owners are already required to perform daily maintenance inspections of Phase II systems under Rule 449. Staff is proposing an additional inspection of Phase I items after receiving a fuel delivery under Rule 448. It is estimated that such inspections will require an additional 10 minutes per inspection per facility. Assuming a labor rate of $10 per hour, the additional cost per facility for performing these inspections is estimated to be $1.67 per inspection ($87 per year). Typically, these inspections are already being performed and recorded in conjunction with the delivery truck driver, so the cost impact should be minimal.

Over 96% of gasoline dispensing facilities in the District are equipped with both Phase I and Phase II Vapor Recovery Systems, and are already subject to testing and recordkeeping requirements under Rule 449. There are 19 facilities that are exempt from Phase II Vapor Recovery under Rule 449. Under the proposed amendments to Rule 448, these facilities will be required to perform annual reverification tests and maintain records of inspections, tests, maintenance, and repairs. It is assumed that 0.5 hours per week will be required to maintain the records. At a labor rate of $10 per hour, the additional cost per facility for maintaining the records is estimated to be $260 per year. The costs to perform annual reverification tests are estimated to be $600.

Although the proposed amendments will lower the applicability threshold for mobile fuelers to units with a capacity of 120 gallons or more, the one mobile fueler within the District is already in compliance with the proposed requirements and will not incur any additional costs.Staff Report

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The proposed exemptions in Rule 449 for E85 dispensing and dispensing to 100% ORVRequipped vehicles will result in a net cost savings to facilities that can use these exemptions to avoid the cost of installing and maintaining Phase II vapor recovery systems. ORVR-exempt facilities will incur a fee of $634 to modify their permits. The replacement of nozzles costs from $1,600 to $9,600. The savings from avoiding an EVR upgrade ranges from $17,000 to $85,000 including added savings from reduced testing discussed below.

Currently, Rule 449 requires gasoline dispensing faci lities to perform reverification tests every six months if the six month average monthly gasoline throughput is 100,000 gallons or more. Under the proposed amendment, these facilities will be required to test annually, unless more frequent testing is required by the CARB Execut ive Order. The cost savings of reducing the frequency of reverification tests from every si x months to annual, per facility, ranges from $1,100 to $4,500 for tester fees and $1,268 for District source test fees.

The costs and cost savings are presented in the following table.

Item Costs Phase I only, aboveground storage tanks Annual Phase I testing $600/yr Maintenance Records $260/yr Phase I inspections $87/yr District Source Test Fee $1,268/yr Facilities using ORVR exemption Permit modification $634 EVR certified nozzles $1,600 - $9,600 Phase I inspections $87/yr Phase II EVR upgrade $17,000 - $85,000 savings Phase II annual testing $1,100 - $4,500/yr savings District Source Test Fee $1,268/yr savings Facilities using E85 exemption Phase I inspections $87/yr Phase II EVR upgrade $17,000 - $85,000 savings Phase II annual testing $1,100 - $4,500/yr savings District Source Test Fee $1,268/yr savings

Facilities ≥ 100,000 gal/month throughput Phase I inspections $87/yr Phase II annual testing $1,100 - $4,500/yr savings District Source Test Fee $1,268/yr savings

Installers/contractors and testers ICC certification $75 every two years

Availability and cost-effectiveness of alternatives: Although there are fewer constraints on the proposed exemptions, monitoring, and reco rdkeeping requirements, Staff cannot include more stringent vapor recovery standards than those being proposed because HSC Section 41954(g)(1) prevents districts from adopting or enforcing performance standards for vapor recovery systems that are stricter than those adopted by CARB. The adoption of less stringent vapor recovery standards would conflict with the state Benzene ATCM for Retail Service Stations (17 CCR 93101).Staff Report

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Staff is constrained in the selection of alternatives by two additional considerations. First, Rules 448 and 449 have been approved by EPA into the State Implementation Plan (SIP). Second, Staff has determined that adoption of requirements less stringent than CARB’s EVR regulations would not satisfy the District’s obligations to implement RACT under Clean Air Act Sections 172(c)(1) and 182(b)(2), and to implement BARCT under HSC Section 40919(a)(4).

One alternative to the proposed amendments is not to amend the current rules or not to adopt specific provisions. If this alternative were selected, the rule would not include measures (demonstrated to be feasible in other district s) to improve compliance and reduce emissions. HSC Section 40914(b)(2) requires the District to adopt “all feasible measures.” The proposed
amendments include feasible measures that have been adopted by the SCAQMD, SJVUAPCD,

and SDAPCD.

In Rule 448, these feasible measures include: expanded applicability to mobile fuelers with a capacity of 120 gallons or more; separate requirements for underground tanks, aboveground tanks, and mobile fuelers; more specific require ments for delivery vessels; prohibition of sale; maintenance inspections; and ICC certification of installers/contractors and testers. In Rule 449, these feasible measures include: expanded applicability to mobile fuelers with a capacity of 120 gallons or more; prohibition of sale; and ICC certification of installers/contractors and testers. The additional costs to affected parties are minimal, as discussed in the preceding section, Range of Probable Costs.

The proposed ORVR exemption in Rule 449 is for non-retail dispensing facilities in which 100% of the vehicles being refueled are equipped with ORVR, consistent with the South Coast and San Joaquin district rules. Although EPA guidance a llows exemptions for dispensing facilities in which 95% or more of the vehicles are equipped with ORVR, selection of the 95% alternative could potentially increase overall emissions. A simplified analysis shows that the refueling emissions from a facility in which 5% of the vehicles are not ORVR-equipped would be 95% greater if Phase II controls are not used than for the same facility using Phase II controls.

Staff has proposed a requirement in Rule 448 to prohibit the use of equipment with major defects listed on the VRED list. This requirement conforms to EPA Region IX guidelines, and if it were not included, would result in a disapproval of the rule when it is submitted for inclusion in

the SIP.

Emission reduction potential: The proposed amendments improve the maintenance of vapor recovery systems and improve the enforceability of existing provisions. There are no additional

emission reductions claimed with the amendments to Rules 448 and 449. No excess emissions are expected from the proposed exemptions in Rule 449 for dispensing into 100% ORVR vehicles and E85 dispensing because ORVR sy stems on such vehicles provide emission reductions equivalent to Phase II vapor recovery

Necessity of adopting, amending, or repealing: Staff finds that the proposed amendments to the gasoline dispensing rules are necessary to:

• Maintain consistency with state regulations for vapor recovery systems, including the Enhanced Vapor Recovery regulations adopted by the California Air Resources Board (CARB);

• Incorporate “all feasible measure” require ments from rules adopted by the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) and the South Coast Air Quality Management District (SCAQMD);Staff Report

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• Provide an exemption from Phase II vapor re covery requirements for the dispensing of E85, a petroleum distillate/alcohol blend, into flexible fuel vehicles; and

• Provide an exemption from Phase II vapor recovery requirements for non-retail gasoline dispensing facilities in which 100% of the vehicles refueled are equipped with Onboard Refueling Vapor Recovery (ORVR).

ENVIRONMENTAL REVIEW AND COMPLIANCE

Staff finds that the proposed rules are exempt fr om the California Environmental Quality Act as an action by a regulatory agency for protecti on of the environment (Class 8 Categorical Exemption, Section 15308 State CEQA Guidelines) and because it can be seen with certainty that there is no possibility that the activity in question may have a significant adverse effect on the environment (Section 15061(b)(3), State CEQA Guidelines).

California Public Resources Code (Section 21159) requires an environmental analysis of the reasonably foreseeable methods of compliance. The proposed rules will not increase emissions and will not cause any other significant adverse effects on the environment; therefore Staff has concluded that no environmental impacts will be caused by compliance with the proposed rules.

FINDINGS

The California Health and Safety Code, Division 26, Air Resources, requires local Districts to comply with a rule adoption protocol as set forth in Section 40727 of the Code. This section has been revised through legislative mandate to contain six findings that the District must make when developing, amending, or repealing a rule. These findings, effective January 1, 1992, and

their definitions are listed in the table below.

Rule 448

FINDING FINDING DETERMINATION Authority: The District must find that a provision of law or of a state or federal regulation permits or requires the District to adopt, amend, or repeal

the rule. The District is authorized to amend Rule 448 by Health and Safety Code Sections 40001, 40702, 40716, 41010, and 41013. [Health and Safety Code Section 40727(b)(2)]. Necessity: The District must find that the rulemaking demonstrates a need exists for the rule, or for its amendment or repeal. The amendments are necessary to maintain consistency with CARB regulations, including Enhanced Vapor Recovery, and to incorporate “all feasible measures.” [Health and Safety Code Section 40727(b)(1)]. Clarity: The District must find that the rule is written or displayed so that its meaning can be easily understood by the persons directly affected by it. Staff has reviewed the proposed rule amendments and determined that they can be easily understood by the affected industry. In addition, the record

contains no evidence t hat the persons directly affected by the rule cannot understand it. [Health and Safety Code Section 40727(b)(3)]. Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations. The proposed rule amendments do not conflict with and are not contradictory to, existing statutes, court decisions, or state or federal regulations. [Health and Safety Code Section 40727(b)(4)].Staff Report

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FINDING FINDING DETERMINATION
Non-Duplication: The District must find that either: 1) The rule does not impose the same requirements as an existing state or federal regulation; or (2) that the duplicative requirements are necessary or proper to execute the powers and duties granted to, and imposed upon the

District. The proposed rule amendments do not impose the same requirements as any federal regulation. Some of the rule requirements duplicate state regulations in Sections 94011, 94014, and 94016 of Title 17 of the California Code of Regulations. Staff has included these duplicative requirements for completeness and has found that they are necessary and proper to execute the powers and duties granted to and imposed upon the District. [HSC Section 40727(b)(5)].

Reference: The District must refer to any statute, court decision, or other provision of law that the District implements, interprets, or makes specific by adopting, amending or repealing the rule. Federal Clean Air Act sections 182(b)(3), 172(c)(1), and 182(b)(2); California Health and Safety Code Sections 40913, 40914(b)(2), 40919(a)(3), and 41950. [Health and Safety Code Section 40727(b)(6)]. Additional Informational Requirements (Health and Safety Code Section 40727.2): In complying with HSC Section 40727.2, the District must identify all federal requirements and District rules that apply to the same equipment or source type as the proposed rule or amendments. Sources subject to this rule are also subject to District Rule 202, New Source Review, including the requirement for Best Available Control Technology (BACT). For major sources, BACT is also a federal requirement. A summary of these requirements is included in Appendix B.

Rule 449

FINDING FINDING DETERMINATION Authority: The District must find that a provision of law or of a state or federal regulation permits or requires the District to adopt, amend, or repeal

the rule. The District is authorized to amend Rule 449 by Health and Safety Code Sections 40001, 40702, 40716, 41010, and 41013. [Health and Safety Code Section 40727(b)(2)]. Necessity: The District must find that the rulemaking demonstrates a need exists for the rule, or for its amendment or repeal. The amendments are necessary to maintain consistency with CARB regulations, including Enhanced Vapor Recovery; to incorporate “all feasible measures”; and to provide an exemption from Phase II vapor recovery for the dispensing of E85 and the refueling of 100% ORVR-equipped vehicles at non-retail facilities. [Health and Safety Code Section 40727(b)(1)]. Clarity: The District must find that the rule is written or displayed so that its meaning can be easily understood by the persons directly affected by it. Staff has reviewed the proposed rule amendments and determined that they can be easily understood by the affected industry. In addition, the record

contains no evidence t hat the persons directly affected by the rule cannot understand it. [Health and Safety Code Section 40727(b)(3)]. Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations. The proposed rule amendments do not conflict with and are not contradictory to, existing statutes, court decisions, or state or federal regulations. [Health and Safety Code Section 40727(b)(4)]. Non-Duplication: The District must find that either: 1) The rule does not impose the same requirements as an existing state or federal regulation; or (2) that the duplicative requirements are necessary or proper to execute the powers The proposed rule amendments do not impose the same requirements as any federal regulation. Some of the rule requirements duplicate state regulations in Sections 94011 and 94016 of Title 17 of the California Code of Regulations. Staff hasStaff Report

Rules 448 and 449 January 23, 2009, Page 14

FINDING FINDING DETERMINATION and duties granted to, and imposed upon the

District. included these duplicative requirements for completeness and has found that they are necessary and proper to execute the powers and duties granted to and imposed upon the District. [HSC Section 40727(b)(5)].

Reference: The District must refer to any statute, court decision, or other provision of law that the District implements, interprets, or makes specific by adopting, amending or repealing the rule. Federal Clean Air Act sections 182(b)(3), 172(c)(1), and 182(b)(2); California Health and Safety Code Sections 40913, 40914(b)(2), 40919(a)(3), and 41950. [Health and Safety Code Section 40727(b)(6)]. Additional Informational Requirements (Health and Safety Code Section 40727.2): In complying with HSC Section 40727.2, the District must identify all federal requirements and District rules that apply to the same equipment or source type as the proposed rule or amendments. Sources subject to this rule are also subject to District Rule 202, New Source Review, including the requirement for Best Available Control Technology (BACT). For major sources, BACT is also a federal requirement. A summary of these requirements is included in Appendix B.

REFERENCES

1. Air Resources Board. Draft Letter from James Goldstene, Executive Officer to All Local Air District Air Pollution Control Officers, February 20, 2008.

2. United States EPA. Memorandum: Removal of Stage II Vapor Recovery in Situations Where Widespread Use of Onboard Refueling Vapor Recovery is Demonstrated, December 12, 2006.

3. United States EPA. Memorandum: Removal of Stage II Vapor Recovery from Refueling of Corporate Fleets. November 28, 2007.

4. South Coast AQMD, Final Staff Report for: Proposed Amended Rule 461 – Gasoline Transfer and Dispensing, February, 2008.

5. San Joaquin Valley Unified APCD, Final Draft Staff Report for Revised Proposed Amendments to Rule 4622 – Gasoline Transfer into Motor Vehicle Fuel Tanks, December,

2007.

6. San Diego APCD, Final Draft Rule 61.4.1- Transfer of Gasoline From Stationary Underground Storage Tanks Into Vehicle Fuel Tanks, March 2008.

7. San Diego APCD, Final Draft Rule 61.3.1- Transfer of Gasoline into Stationary Underground Storage Tank, March 2006.

8. Bay Area AQMD, Final Draft Staff Report for Proposed Amendments to Regulation 8, Rule 7 – Gasoline Dispensing Facilities. October, 2002.

9. Skelton, E., and Rector, L., Northeast States for Coordinated Air Use Management (NESCAUM), “Onboard Refueling Vapor Recovery Systems Analysis of Widespread Use,” August 20, 2007.Staff Report

Rules 448 and 449 January 23, 2009, Page 15

APPENDIX A

LIST OF CHANGES TO RULE 448

EXISTING
SECTION

NUMBER NEW
SECTION

NUMBER PROPOSED CHANGES

101 Same Revised to reflect added requirements for transfers from delivery vessels and vehicle fuel tanks into stationary storage containers and delivery vessels as well as pump-out from any stationary storage container, mobile fueler, or vehicle fuel tank. N/A 102 Sets the applicability to the transfer of gasoline or switch loading from any delivery vessel into any stationary storage container with a capacity

≥ 250 gallons or mobile fueler with a capacity ≥ 120 gallons. The rule also applies to “pump-out” of stationary storage tanks, mobile fuelers, or

vehicle fuel tanks.

N/A 202 Added definition of CARB as the California Air Resources Board. N/A 203 Added definition of CARB Certified, consistent with SCAQMD Rule 461. N/A 204 Added definition of Delivery Vessel, consistent with Rule 449 –
TRANSFER OF GASOLINE INTO VEHICLE FUEL TANKS. N/A 205 Added definition of Dry Break, consistent with SCAQMD Rule 461. N/A 206 Added definition of Executive Order, consistent with SDAPCD Rule

61.3.1. 202 N/A Eliminated definition of Existing V apor Recovery System. This definition is no longer needed. 203 207 Revised definition of Gasoline to include petroleum distillate/alcohol blend, consistent with SDAPCD Rule 61.3.1. N/A 208 Added definition of Gasoline Dispensing Facility, consistent with
SCAQMD Rule 461.

204 209 Section renumbered. N/A 210 Added definition of Installer/Contractor similar to SCAQMD Rule 461, but including “repair” and “replacement” for completeness.

205 211 Section renumbered. N/A 212 Added definition of Mobile Fueler, consistent with SJVUAPCD Rule

4621. 206 N/A Eliminated definition of New Vapor Recovery System. This definition is no longer needed.

207 213 Section renumbered. N/A 214 Added definition of Rebuild/Rebuilt, consistent with SCAQMD Rule 461. N/A 215 Added definition of Spill Container, consistent with SCAQMD Rule 461.

208 216 Section renumbered. N/A 217 Added definition of Switch Loading, consistent with SJVUAPCD Rule

4621. N/A 218 Added definition of Tester as any person who conducts performance or reverification tests as required by this rule or by a CARB Executive
Order. N/A 219 Added definition of Vapor Recovery Equipment Defects (VRED) List as a list of defects identified by CARB and incorporated by reference into Title 17, CCR Section 94006.Staff Report

Rules 448 and 449 January 23, 2009, Page 16

EXISTING
SECTION

NUMBER NEW
SECTION

NUMBER PROPOSED CHANGES

209 220 Added definition of vapor tight for delivery vessels, consistent with Health and Safety Code Section 41962(h) and CARB CP-204. Revised the definition of vapor tight for all other operations to a concentration less than 10,000 ppm as methane (not propane) above background, consistent with SCAQMD Rule 461, SJVUAPCD Rule 4621, and District Rule 447 – ORGANIC LIQUID LOADING. 301 Same Revised section to include switch loading, replace “tank truck or trailer” with “delivery vessel”, and include requirements for mobile fuelers with capacities ≥ 120 gallons. 301.1 Same Revised section to require CARB certified Phase I vapor recovery for underground storage tanks and changed efficiency to 98%, consistent with CARB CP-201. Moved applicable requirements from Section 303
and revised to be consistent with SCAQMD Rule 461. 301.2 Same Added section to require CARB certified Phase I vapor recovery for aboveground storage tanks with an efficiency of 95%. Moved applicable requirements from Section 303 and revised to be consistent with
SCAQMD Rule 461. N/A 301.3 Added section to require CARB certified Phase I vapor recovery for mobile fuelers with an efficiency of 95%. Moved applicable requirements from Section 303 and revised to be consistent with
SCAQMD Rule 461. 302 Same Revised section to include requirements for delivery vessels, other than mobile fuelers (which are now covered under Section 301.3) to be CARB certified and comply with equipment and maintenance requirements,
consistent with SCAQMD Rule 461. 303 N/A Deleted Other Equipment Requirements for stationary storage containers, which are now covered in Sections 301.1 and 301.2. 304 303 Revised minimum pressure and vac uum settings, consistent with CARB

CP-201 and CP-206. N/A 304 Added a prohibition of sale and marking/identification requirements, consistent with HSC Sections 41854(f) and 41960.2(b).N/A 305.1 Added new requirement that no person shall perform or allow a pumpout of a stationary storage container or mobile fueler, unless using a vapor recovery system capable of re turning the displaced vapors to the storage container being pumped out. This requirement closes a loophole that exists in the current versions of Rule 448 and 449, and is
consistent with SCAQMD Rule 461. N/A 305.2 Added a work practice requirement to prevent excessive spillage of liquid when pumping out vehicle fuel tanks. N/A 306 Added new requirement that owner/operators of gasoline dispensing facilities shall perform maintenance inspections after receiving a fuel delivery to maintain the vapor recovery system in good working order. Added provisions, consistent with Rule 449, regarding tagging, removal from service, and repair of defective components. N/A 307 Added provision, consistent with Rule 449 and HSC Section 41960.2(d), prohibiting the use of a vapor recovery system or component with a major defect on the VRED list. This provision is necessary for SIPStaff Report

Rules 448 and 449 January 23, 2009, Page 17

EXISTING
SECTION

NUMBER NEW
SECTION

NUMBER PROPOSED CHANGES

approval, per EPA Region IX guidance. 400 Same Revised section, Rule 448 now includes administrative requirements. N/A 401 Added new requirement that effective 3 months after date of adoption, Installers/Contractors must be ICC certified, and, if required by Executive Order, manufacturer certified. Testers must be certified by 3 months after a certification test is available. Also must maintain proof of certification on site, consistent with SCAQMD Rule 461 and SJVUAPCD

Rule 4621. N/A 402 Added Notification of Testing provision, consistent with Rule 449. N/A 403 Added Test Requirements section to list all performance and reverification tests required to pass successfully by the facility. 500 Same Revised section to update test methods to the most current approved

versions. 501.1 Same Revised section to update ASTM method reference to the most recent

version. 501.2 Same Added separate method, CARB CP-204.3, for determining leak tightness for delivery vessels, consistent with Health and Safety Code Section 41962(h) and CARB CP-204. All other operations use EPA Method 21 to determine vapor tightness.

N/A 501.3 –

501.6 Added list of applicable test methods for performance and reverification

tests. N/A 501.7 Added to reference additional or complementary test methods of the applicable CARB Executive Orders. N/A 501.8 To clarify enforceability, added paragraph stating that where multiple test methods are specified, a violation established by any one of the test

methods constitutes a violation of the rule.N/A 502 Added Recordkeeping requirement for facilities to maintain records onsite for a period not less than 3 years (5 years for Title V sources) and make available for review upon request, including but not limited to: performance and reverification test results, maintenance and repair records, and maintenance inspection reports.Staff Report

Rules 448 and 449 January 23, 2009, Page 18

LIST OF CHANGES TO RULE 449

EXISTING
SECTION

NUMBER NEW
SECTION

NUMBER PROPOSED CHANGES

111 N/A Eliminated exemption for Odd Fill Configuration, which is no longer necessary because there aren’t any configurations that can’t comply.

112 111 Section renumbered.

113 112 Section renumbered. N/A 113 Added exemption from Phase II vapor recovery requirement for E85 dispensing, consistent with CARB Executive Order G-70-212 and federal guidance.N/A 114 Added exemption from Phase II vapor recovery requirement for nonretail gasoline dispensing facilities refueling 100% ORVR-equipped vehicles, consistent CARB and federal guidance, SJVUAPCD Rule
4622 and SCAQMD Rule 461. N/A 115 Added exemption from ICC certification for owners/operators and their direct employees when replacing nozzles, hoses and breakaways with new or CARB certified re-manufactured components.

N/A 202 Added definition of CARB as the California Air Resources Board. N/A 203 Added definition of CARB Certified, consistent with SCAQMD Rule

461. 202 204 Added “trailer, or rail car” to the definition of delivery vessel. N/A 205 Added definition for E85, consistent with SCAQMD Rule 461, with reference to the definition in Title 13, CCR Section 2292.4.

203 206 Section renumbered.

204 207 Section renumbered. N/A 208 Added definition of Executive Order, consistent with SDAPCD Rule

61.3.1. 205 N/A Eliminated definition of Existing Vapor Recovery System. This definition is no longer needed. 206 209 Revised definition of Gasoline to include petroleum distillate/alcohol blend, consistent with SDAPCD Rule 61.4.1. 207 210 Revised to replace the term “intermediate fueller” with “mobile

fueler.”

208 211 Section renumbered. N/A 212 Added definition of Installer/contractor similar to SCAQMD Rule 461, but including “repair” and “replacement” for completeness. 209 N/A Eliminated definition of Intermediate Fueller, which is no longer

used.

210 213 Section renumbered. N/A 214 Added definition of Mobile Fueler, consistent with SJVUAPCD Rule

4622.

211 215 Revised to reference definition in Section 415 of the California

Vehicle Code. 212 N/A Eliminated definition of New Vapor Recovery System. This definition is no longer needed because the requirements for all systems, new or existing, are now the same.Staff Report

Rules 448 and 449 January 23, 2009, Page 19

EXISTING
SECTION

NUMBER NEW
SECTION

NUMBER PROPOSED CHANGES

N/A 216 Added definition of ORVR, consistent with SDAPCD Rule 61.4.1 N/A 217 Added definition of Owner/Operator, consistent with SCAQMD Rule

461. N/A 218 Added definition of Rebuild/Rebuilt, consistent with SCAQMD Rule

461. N/A 219 Added definition of Retail Gasoline Dispensing Facility, consistent

with SJVUAPCD Rule 4622.

213 220 Section renumbered. N/A 221 Added definition of Summer Fuel, consistent with SDAPCD Rule

61.4.1. This definition is now used in the Standards section. N/A 222 Added definition of Tester as any person who conducts performance or reverification tests as required by Rule 449 or by a CARB
Executive Order. N/A 223 Added definition of Topping Off, consistent with SDAPCD Rule

61.4.1. N/A 224 Added definition of Vapor Recovery Equipment Defects (VRED) List as a list of defects identified by CARB and incorporated by reference into Title 17, CCR Section 94006. 214 225 Revised “as propane” to “as methane” to correct error in previous

version of the rule. N/A 226 Added definition of Winter Fuel, consistent with SDAPCD Rule
64.4.1. This definition is now used in the Standards section. 301 Same Revised section to require CARB certified vapor recovery systems for mobile fuelers with a capacity ≥ 120 gallons, consistent with
SCAQMD Rule 461 and SJVUAPCD Rule 4622. N/A 301.1 Added section for vapor recovery systems using summer fuel to have 95% control efficiency by weight and mass emission factor not exceeding 0.38 pounds of vapors per 1,000 gallons of gasoline,

consistent with CARB CP-201. The mass emission factor is not included in Rule 448 because it is equivalent to the efficiency for

both summer and winter fuel. N/A 301.2 Added section for vapor recovery systems using winter fuel to have 95% control efficiency by weight or mass emission factor not exceeding 0.38 pounds of vapors per 1,000 gallons of gasoline,

consistent with CARB CP-201. The mass emission factor is not included in Rule 448 because it is equivalent to the efficiency for

both summer and winter fuel. 302 Same Revised section to include mobile fuelers, consistent with SCAQMD

Rule 461 and SJVUAPCD Rule 4622. 302.1 Same Revised section to include Executive Orders, consistent with
SCAQMD Rule 461.

302.2 Same Revised to include reference to the VRED List. 303.1 Same Removed past effective date. 303.2 Same Revised to include reference to the VRED List. Deleted requirement to shutdown for a defect not on the VRED List, as this requirement was in conflict with Section 41960.2(e) of the California Health and Safety Code.Staff Report

Rules 448 and 449 January 23, 2009, Page 20

EXISTING
SECTION

NUMBER NEW
SECTION

NUMBER PROPOSED CHANGES

304 Same Revised to include reference to the VRED List and change authority from APCO to operator shall mark system or component “Out of
Order”. 305 Same Revised section to include prohibition of topping off vehicle fuel tanks to prevent excess emissions. This prohibition is consistent with SJVUAPCD Rule 4622, SDAPCD Rule 61.4.1, and EPA Region IX guidance. N/A 307 Added a prohibition of sale and marking/identification requirements, consistent with HSC Sections 41854(f) and 41960.2(b). N/A 308 Added section requiring the owner/operator of a non-retail GDF claiming the 100% ORVR exemption to modify the facility permit to include conditions require the facility to: 1) not dispense fuel into a vehicle that is not owned or under the direct control of the operator, except for a vehicle being used in an emergency, 2) not dispense fuel into a vehicle not equipped with an ORVR system, except for a vehicle being used in an emergency, and 3) use nozzles that are part of a CARB certified vapor recovery system, except that the vapor return line shall be sealed off. These requirements are
consistent with SCAQMD Rule 461. 401 N/A Eliminated Compliance Schedule because these dates have passed.

402 401 Section renumbered. 402.2 401.2 Revised section title to Initial Tests, and clarified that these tests are required within 30 days of completion or modification of any vapor recovery system. 402.3 401.3 Revised section title to Testing Frequency, and changed frequency for facilities to pass reverification tests annually, or more frequently as required by the applicable CARB Executive Order. N/A 402 Added new requirement, effective 3 months after date of adoption, Installers/Contractors must be ICC certified, and, if required by Executive Order, manufacturer certified. Testers must be manufacturer certified if required by Executive Order, and 3 months after certification test is available must be ICC certified for Testing and Repair. Also must maintain proof of certification on site,
consistent with SCAQMD Rule 461 and SJVUAPCD Rule 4622.

403.1 –

403.2 Same Revised section to include IOM and CP-206 requirements.

501.1 Same Revised section to update ASTM method reference to the most

recent version. 501.2 Same Revised to remove TP-204.3 for vapor tightness because this method does not measure organic compound concentrations.

501.3 Same Revised section to include TP-206.3. 501.4 Same Corrected typographical error by changing TP-201 to TP-201.4.

N/A 501.8 Added section requiring different or additional test methods if specified in the applicable Executive Order, consistent with
SJVUAPCD Rule 4622. N/A 501.9 To clarify enforceability, added paragraph stating that where multipleStaff Report

Rules 448 and 449 January 23, 2009, Page 21

EXISTING
SECTION

NUMBER NEW
SECTION

NUMBER PROPOSED CHANGES

test methods are specified, a viol ation established by any one of the

test methods constitutes a violation of the rule. 502 Same Revised to require keeping records on-site and making them available to the APCO immediately upon request.

502.2 Same Revised to include reference to the VRED List. 502.3 Same Revised to delete paragraph (d) because it duplicated paragraph (b).

N/A 503 Added section to require recordkeeping for facilities claiming the 100% ORVR exemption, consistent with SCAQMD Rule 461.Staff Report

Rules 448 and 449 January 23, 2009, Page 22

Appendix B-1

California HSC Section 40727.2 Matrix Proposed Rule 448- Gasoline Transfer into Stationary Storage Containers

Comparative Requirements

Elements of comparison Specific

Provisions Proposed Rule 448 Best Available Control Technology (BACT)

Exemptions Implements of Husbandry 10 lbs VOC per day

Emission

Limits Emission

Reductions CARB certified vapor recovery system with a minimum volumetric efficiency of 98% for underground tanks, 95% for aboveground tanks, and 95% for mobile
fuelers. CARB certified vapor recovery equipment that
achieves at least 95% efficiency

Testing Equipment must be in proper operating order Require annual testing of all

stations to ensure that equipment is operating in
accordance with CARB
certification Equipment must operate in
accordance with CARB
certification and Executive
Orders without a
substantial defect

Recordkeeping Three years (five years for Title V sources)Staff Report

Rules 448 and 449 January 23, 2009, Page 23

Appendix B-2

California HSC Section 40727.2 Matrix Proposed Rule 449-Transfer of Gasoline into Vehicle Fuel Tanks

Comparative Requirements Elements of comparison Specific

Provisions Proposed Rule 449 Best Available Control Technology (BACT)

Exemptions • E85

• 100% ORVR facilities

• Emergency motor

vehicles

• Implements of Husbandry

• Six month average gasoline throughput of less than 100,000 gallons exempt from

maintenance inspections on

weekends and holidays 10 lbs VOC per day

Emission Limits Emission

Reductions CARB certified vapor recovery system with minimum 95% efficiency by weight CARB certified vapor recovery equipment that
achieves at least 95% efficiency

Testing Equipment must be in proper operating order Require annual testing of

all stations to ensure that equipment is operating in
accordance with CARB
certification Equipment must operate in
accordance with CARB
certification and Executive
Orders without a
substantial defect

Recordkeeping Three years (five years for Title V sources)Staff Report

Rules 448 and 449 January 23, 2009, Page 24

APPENDIX C

CARB and EPA Letters Regarding Phase II Exemptions

### State of California

AIR RESOURCES BOARD

EXECUTIVE ORDER G-70-212

Modification of the Operative and E ffective Dates Relating to the Finding that EVR Phase II Vapor Recovery Systems, Including In-Station Diagnostics, Are Not Certified for Use on Dispensing Facilities that Refuel

Vehicles with a Fuel Blend of 85 Percent Ethanol and 15 Percent Gasoline (E85)

WHEREAS, the California Air Resources Board (ARB) has established, pursuant to California Health and Safety Code sections 25290.1.2, 39600, 39601 and 41954, certification procedures for systems designed for the control of gasoline vapor emissions during motor vehicle f ueling operations (Phase II EVR vapor recovery systems) in its CP-201, Certification Procedure for Vapor Recovery Systems at Gasoline Dispensing Facilities (Certification Procedure) as last amended May 25, 2006, incorporated by refer ence in title 17, California Code of Regulations, section 94011;

WHEREAS, ARB has determined, after c onsulting with industry and local air quality management and air pollution control districts (distric ts), that the number of E85 (85 percent ethanol and 15 percent gas oline) dispensing facilities will

increase throughout California;

WHEREAS, ARB has determined, E85 fuel is considered gasoline as the term is

defined in D-200 Definitions for Vapor Recovery Procedures as last amended on May 25, 2006, incorporated by referenc e in title 17, California Code of Regulations, section 94010;

WHEREAS, District vapor recovery rules and regulations may r equire the use of Phase II vapor recovery systems at gasoli ne dispensing facilitie s, including those dispensing E85;

WHEREAS, section 2.4.4 of CP-201 allows the Executive Officer to change the operative and effective dates of new performance standards and specifications when certified systems meeting the applic able standards and specifications are not certified by the operative dates specified in Tabl e 2-1 of CP-201;

WHEREAS, a vapor recovery system t hat meets the Phase II standards and specifications, including In-Station Diagnos tics, was not certified for use on E85 dispensing facilities by the operativ e date in Table 2-1 of CP-201; and

WHEREAS, ARB and the U.S. Environm ental Protection Agency have issued guidance letters authorizing districts to amend their rules to exempt E85 dispensing facilities from Phase II vapor recovery requirements because such-2-

facilities are expected to refuel vehicle fleets where 95 percent of the vehicles are equipped with on-board refueling vapor recovery (ORVR), a vehicle based

system.

NOW, THEREFORE, IT IS HEREBY ORDERED that E85 dispensing facilities

may continue to operate without Phase II vapor recovery until such time as ARB

may certify Phase II vapor recovery systems for use with E85.

Executed at Sacramento, California, thisStaff Report

Rules 448 and 449 January 23, 2009, Page 38

APPENDIX D

Public Comments

Public Workshop Comments (January 13, 2009)

Participants: Karen Carney Mike Krempely George Contos June Livingston

Kaled Cuaresma Rick Mandella

Mike Davirro Ian Moorhead
Tam Dinh Jeff Rivard Larry Gregory Dirk Ruinard George Julian Wayne Todd

Comment #1: What does the EVR upgrade consist of?

Response: EVR upgrade refers to the replacement of an older Phase II vapor recovery system with a new system that has been certified to CARB’s most recent standards. State regulations require these new EVR systems to be in place by April 1, 2009 for facilities with underground storage tanks. Facilities with aboveground storage tanks will need to perform EVR upgrades by July of 2012. District permits are required before installing or modifying the vapor recovery systems.

Comment #2: For public agencies with key control fleets, do we need to submit any documentation or paperwork to get the ORVR exemption?

Response: Yes. As stated in Rule 449 section 308, non-retail dispensing facilities claiming this exemption shall submit an application pursuant to Rule 201 – GENERAL PERMIT REQUIREMENTS for an Authority to Construct and Permit to Operate the facility, agreeing to comply with the conditions for exemption and the recordkeeping requirements.

Comment #3: For facilities going for the ORVR exemption, can we keep the current

Phase II nozzle?

Response: Rule 449 Section 308 requires the nozzles to be part of a CARB certified vapor recovery system, except that the vapor return line shall be sealed off. If your current nozzles are no longer CARB certified, they will have to be replaced.

Comment #4: For the ORVR exemption, do we need to submit an application prior to April 1?

Response: Yes. Please see the response to Comment #2 above. Otherwise, the facility must have an EVR Phase II system in place by April 1, 2009.

Comment #5: Where do we get the applications?Staff Report

Rules 448 and 449 January 23, 2009, Page 39

Response: Applications can be picked up at the District, mailed out upon request, or
downloaded from the District website: http://www.airquality.org/permits/forms/appforms.shtml

Comment #6: How do we document the inspection after each fuel drop?

Response: Inspection log formatting is at the discretion of the source. Staff is open to working with affected sources to develop checklists where needed.

Comment #7: What is the reason for the inspection after each fuel drop if we conduct daily inspections?

Response: Daily inspections are required as part of Phase II systems maintenance. Staff believes the Phase I systems are most susceptible to damage when receiving deliveries. However, Staff has changed the language in Section 306.1 of Rule 448 such that only one inspection is required for each day that fuel is delivered. If you already perform daily inspections, you are complying with the proposed requirement (assuming the required elements are included in your inspections).

Comment #8: When is the effective date of the rule amendments?

Response: Staff has scheduled the proposed rules to be considered for adoption by the Board of Directors at a public hearing on February 26, 2009. Unless, otherwise specified, the rule amendments will take effect immediately upon rule adoption. The exceptions are section 401 of Rule 448 and Section 402 of Rule 449, which contain specific timelines for ICC certification requirements, and section 403.3 of Rule 448, which specifies when annual testing requirements begin.

Comment #9: When do we know that the proposed amendments to the rules have been adopted?

Response: The public is welcome to attend the February adoption hearing to witness firsthand. If adopted, the District website will be updated to reflect the

Board’s decision.

Comment #10: The proposed amendment does not specify that an application is required. Is an application required?

Response: Please see the response to Comment #2 above.

Comment #11: What happens if the rule passes but the permits have not been modified yet?

Response: Assuming that the District Board adopts the ORVR exemption as proposed, the District will not take enforcement action if the application for ORVR exemption is submitted before April 1, 2009 and a permit is subsequently granted.Staff Report

Rules 448 and 449 January 23, 2009, Page 40

Comment #12: What if you already have a Phase II system and you want to use an exemption?

Response: If you are an E85 facility, you can k eep your Phase II system in place or remove it. If you are ORVR exempt, you will need to apply for a permit modification and use CARB certified nozzles with the vapor return line

sealed off.

Written Comments

Andrew Steckel, United States Environmental Protection Agency (December 23, 2008)

Comment #1: We have completed a preliminary review of the draft rules and have identified no significant concerns.

Alex Krichevsky, California Air Resources Board (December 29, 2008)

Comment #1: Rule 448 - We have no comments on this rule.

Comment #2: Rule 449 – Section 301.1: Table 4-1 in ARB Vapor Recovery Certification Procedure CP-201 requires 95% by weight control efficiency and an emission factor < 0.38 lb/1000 gal for summer fuel. Therefore, we recommend to change this section to read as follows:

For summer fuel, a gasoline vapor control efficiency of at least 95% by weight or and a mass emission factor not exceeding 0.38 pounds of gasoline vapors per 1,000 gallons of gasoline dispensed.

Response: Staff agrees and has revised the rule accordingly.

Comment #3: Rule 449 – Section 301.2: Table 4-1 in ARB Vapor Recovery Certification Procedure CP-201 requires 95% by weight control efficiency or an emission factor < 0.38 lb/1000 gal for winter fuel. Therefore, we recommend to change this section to read as follows:

For winter fuel, a gasoline vapor control efficiency of at least 95% by weight and or a mass emission factor not exceeding 0.38 pounds of gasoline vapors per 1,000 gallons of gasoline dispensed.

Response: Staff agrees and has revised the rule accordingly.

Karen Carney, County of Sacramento (January 15, 2009)

Comment #1: Rule 448 Section 306.1, regarding maintenance inspections, how will the owner/operator be able to verify: If the spill containment drain valve is vapor tight? If the poppet valve is damaged? Should we actually compress it to see? If the submerged fill pipe is missing or damaged?

Response: The maintenance inspections proposed for Rule 448, Section 306.1, are intended to be primarily visual inspections that do not require the use of testing equipment. Staff has changed the proposed requirement for drainStaff Report

Rules 448 and 449 January 23, 2009, Page 41

valves from “vapor tight” to “seating properly” so that the use of testing equipment is not required.

Spill containers that contain debris should have the debris removed if gasoline is present in the spill container, the drain valve should be opened to let the gasoline drain into the tank. When not in use, the drain valve should be closed. Inspect for any visual damage or the presence of vapor leaks when the drain valve is closed.

Poppet valves should be inspected visually for obvious mechanical damage and to ensure that the valve is not stuck in an open position, that it is seated properly, and there is no sign of vapor leaks.

The presence or absence of the submerged fill pipe can be seen through a visual inspection of the liquid adapter. The fill tube should be round and
free from deformities.

The District’s compliance assistance staff is available to help educate facilities on specific procedures.