Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50021 

9. Civil Justice Reform 

This rule meets applicable standards 

in sections 3(a) and 3(b)(2) of Executive 

Order 12988, Civil Justice Reform, to 

minimize litigation, eliminate 

ambiguity, and reduce burden. 

10. Protection of Children 

We have analyzed this rule under 

Executive Order 13045, Protection of 

Children from Environmental Health 

Risks and Safety Risks. This rule is not 

an economically significant rule and 

does not create an environmental risk to 

health or risk to safety that may 

disproportionately affect children. 

11. Indian Tribal Governments 

This rule does not have tribal 

implications under Executive Order 

13175, Consultation and Coordination 

with Indian Tribal Governments, 

because it does not have a substantial 

direct effect on one or more Indian 

tribes, 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. 

12. Energy Effects 

This action is not a ‘‘significant 

energy action’’ under Executive Order 

13211, Actions Concerning Regulations 

That Significantly Affect Energy Supply, 

Distribution, or Use. 

13. Technical Standards 

This rule does not use technical 

standards. Therefore, we did not 

consider the use of voluntary consensus 

standards. 

14. Environment 

We have analyzed this rule under 

Department of Homeland Security 

Management Directive 023–01 and 

Commandant Instruction M16475.lD, 

which guide the Coast Guard in 

complying with the National 

Environmental Policy Act of 1969 

(NEPA)(42 U.S.C. 4321–4370f), and 

have determined that this action is one 

of a category of actions that do not 

individually or cumulatively have a 

significant effect on the human 

environment. This rule involves 

establishing a temporary safety zone 

that will be enforced for less than a total 

of 23 hours during the specified 

operating hours of the event. This rule 

is categorically excluded from further 

review under paragraph 34(g) of Figure 

2–1 of the Commandant Instruction. An 

environmental analysis checklist 

supporting this determination and a 

Categorical Exclusion Determination are 

available in the docket where indicated 

under ADDRESSES. We seek any 

comments or information that may lead 

to the discovery of a significant 

environmental impact from this rule. 

List of Subjects in 33 CFR Part 165 

Harbors, Marine safety, Navigation 

(water), Reporting and recordkeeping 

requirements, Security measures, 

Waterways. 

For the reasons discussed in the 

preamble, the Coast Guard amends 33 

CFR part 165 as follows: 

PART 165—REGULATED NAVIGATION 

AREAS AND LIMITED ACCESS AREAS 

■ 1. The authority citation for part 165 

continues to read as follows: 

Authority: 33 U.S.C. 1231; 46 U.S.C. 

Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 

33 CFR 1.05–1, 6.04–1, 6.04–6, 160.5; Pub. L. 

107–295, 116 Stat. 2064; Department of 

Homeland Security Delegation No. 0170.1. 

■ 2. Add a temporary § 165.T07–0633 to 

read as follows: 

§ 165.T07–0633 Safety Zone; Cocoa Beach 

Air Show, Atlantic Ocean, Cocoa Beach, FL. 

(a) Regulated Area. The following 

regulated area is a safety zone. All 

waters of the Atlantic Ocean located 

east of Cocoa Beach, Florida 

encompassed within an imaginary line 

connecting the following points: starting 

at Point 1 in position 28°20.654′ N, 

80°35.648′ W; thence South to Point 2 

in position 28°19.658′ N, 80°35.736′ W; 

thence West to Point 3 in position 

28°19.701′ N, 80°36.293′ W; thence 

North to Point 4 in position 28°20.692′ 

N, 80°36.205′ W; thence east back to 

origin. 

(b) Definition. The term ‘‘designated 

representative’’ means Coast Guard 

Patrol Commanders, including Coast 

Guard coxswains, petty officers, and 

other officers operating Coast Guard 

vessels, and Federal, state, and local 

officers designated by or assisting the 

Captain of the Port Jacksonville in the 

enforcement of the regulated area. 

(c) Regulations. (1) All persons and 

vessels are prohibited from entering, 

transiting through, anchoring in, or 

remaining within the regulated area 

unless authorized by the Captain of the 

Port Jacksonville or a designated 

representative. 

(2) Persons and vessels desiring to 

enter, transit through, anchor in, or 

remain within the regulated area may 

contact the Captain of the Port 

Jacksonville by telephone at 904–564– 

7511, or a designated representative via 

VHF radio on channel 16, to request 

authorization. If authorization to enter, 

transit through, anchor in, or remain 

within the regulated area is granted by 

the Captain of the Port Jacksonville or 

a designated representative, all persons 

and vessels receiving such authorization 

must comply with the instructions of 

the Captain of the Port Jacksonville or 

a designated representative. 

(3) The Coast Guard will provide 

notice of the regulated area by Local 

Notice to Mariners, Broadcast Notice to 

Mariners, and on-scene designated 

representatives. 

(d) Effective Date and Enforcement 

Periods. This rule is effective from 10 

a.m. on September 22, 2012 through 

5:30 p.m. on September 23, 2012. This 

rule will be enforced daily from 10 a.m. 

until 5:30 p.m. on September 22, 2012, 

and September 23, 2012. 

Dated: July 26, 2012. 

R.E. Holmes, 

Commander, U.S. Coast Guard, Acting 

Captain of the Port Jacksonville. 

[FR Doc. 2012–20336 Filed 8–17–12; 8:45 am] 

BILLING CODE 9110–04–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R09–OAR–2011–0571; FRL–9691–1] 

Revisions to the California State 

Implementation Plan, San Joaquin 

Valley Unified Air Pollution Control 

District 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: In this action, EPA is 

finalizing approval of San Joaquin 

Valley Unified Air Pollution Control 

District (SJVUAPCD) Rule 3170, 

‘‘Federally Mandated Ozone 

Nonattainment Fee,’’ as a revision to 

SJVUAPCD’s portion of the California 

State Implementation Plan (SIP). Rule 

3170 is a local fee rule submitted to 

address section 185 of the Clean Air Act 

(CAA or Act) with respect to the 1-hour 

ozone standard for anti-backsliding 

purposes. EPA is also finalizing 

approval of SJVUAPCD’s fee-equivalent 

program, which includes Rule 3170 and 

state law authorities that authorize 

SJVUAPCD to impose supplemental fees 

on motor vehicles, as an alternative to 

the program required by section 185 of 

the Act. EPA has determined that 

SJVUAPCD’s alternative fee-equivalent 

program is not less stringent than the 

program required by section 185, and, 

therefore, is approvable as an equivalent 

alternative program, consistent with the 

principles of section 172(e) of the Act. 

DATES: This rule is effective on 

September 19, 2012. 


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1EPA has previously set forth this reasoning in 

a memorandum from Stephen D. Page, Director, 

Office of Air Quality Planning and Standards, to Air 

Division Directors, ‘‘Guidance on Developing Fee 

Programs Required by Clean Air Act Section 185 for 

the 1-hour Ozone NAAQS,’’ January 5, 2010 

(‘‘Section 185 Guidance Memo’’). On July 1, 2011, 

the DC Circuit Court of Appeals vacated this 

guidance, on the ground that it was final agency 

action for which notice-and-comment rulemaking 

procedures were required, and that the Agency’s 

failure to use the required notice and comment 

procedures rendered the guidance invalid. NRDC v. 

EPA, 643 F.3d 311 (DC Cir. 2011). In today’s action, 

EPA, having gone through notice-and-comment 

rulemaking, adopts the reasoning set forth in that 

memorandum as it applies to SJVUAPCD’s 

equivalent alternative program as its basis for 

approving the SJVUAPCD SIP revision. In so doing, 

we have applied the court’s directive to follow the 

rulemaking requirements set forth in the 

Administrative Procedures Act to inform 

consideration of section 185 and equivalent 

alternative programs. 

2These types of programs were identified in our 

proposed rulemaking action concerning SJVUAPCD 

Rule 3170 and its alternative program 76 FR 45212 

(July 28, 2011). 

ADDRESSES: EPA has established docket 

number EPA–R09–OAR–2011–0571 for 

this action. Generally, documents in the 

docket for this action are available 

electronically at http:// 

www.regulations.gov or in hard copy at 

EPA Region IX, 75 Hawthorne Street, 

San Francisco, California. While all 

documents in the docket are listed at 

http://www.regulations.gov, some 

information may be publicly available 

only at the hard copy location (e.g., 

copyrighted material, large maps, multivolume reports), and some may not be 

available in either location (e.g., 

confidential business information 

(CBI)). To inspect the hard copy 

materials, please schedule an 

appointment during normal business 

hours with the contact listed in the FOR

FURTHER INFORMATION CONTACT section. 

FOR FURTHER INFORMATION CONTACT: Lily 

Wong, EPA Region IX, (415) 947–4114, 

wong.lily@epa.gov. 

SUPPLEMENTARY INFORMATION: 

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

and ‘‘our’’ refer to EPA. 

Table of Contents 

I. Proposed Action and Interim Final 

Determination to Defer Sanctions 

II. Rationale for Approving Equivalent 

Alternative Programs 

III. Public Comments and EPA Responses 

IV. EPA Action 

V. Statutory and Executive Order Reviews 

I. Proposed Action and Interim Final 

Determination To Defer Sanctions 

On July 28, 2011 (76 FR 45212), EPA 

proposed to approve the following rule 

into the California SIP. 

Local agency Rule No. Rule title Adopted Submitted 

SJVUAPCD ....... 3170 Federally Mandated Ozone Nonattainment Fee .......................................... 05/19/11 06/14/11 

EPA also proposed to approve 

SJVUAPCD’s fee-equivalent program, 

which includes Rule 3170 and state law 

authorities that authorize SJVUAPCD to 

impose supplemental fees on motor 

vehicles, as an equivalent alternative to 

the program required by section 185 of 

the Act for the 1-hour ozone standard as 

an anti-backsliding measure. 

In addition, on July 28, 2011 (76 FR 

45199), EPA published an Interim Final 

Rule to defer the implementation of 

sanctions that would have resulted from 

EPA’s final limited approval and limited 

disapproval of an earlier version of Rule 

3170 (75 FR 1716, January 13, 2010). 

II. Rationale for Approving Equivalent 

Alternative Programs 

In proposing this action regarding the 

SJVUAPCD, EPA proposed to allow 

states to meet the section 185 obligation 

arising from the revoked 1-hour ozone 

NAAQS through a SIP revision 

containing either the fee program 

prescribed in section 185 of the Act, or 

an equivalent alternative program. 76 

FR 45213 (July 28, 2011). Since our 

proposed action on SJVUAPCD’s 

alternative section 185 program, EPA 

has also proposed to approve an 

alternative section 185 program 

submitted by the State of California on 

behalf of the South Coast Air Quality 

Management District as an equivalent 

alternative program. 77 FR 1895–01 

(January 12, 2012). As further explained 

below, EPA is today approving through 

notice-and-comment rulemaking, 

SJVUAPCD Rule 3170 into the 

California SIP. We are also approving 

SJVUAPCD’s alternative program as an 

equivalent alternative program 

consistent with the principles of section 

172(e) of the CAA and not less stringent 

than a program prescribed by section 

185.1

Section 172(e) is an anti-backsliding 

provision of the CAA that requires EPA 

to develop regulations to ensure that 

controls in a nonattainment area are 

‘‘not less stringent’’ than those that 

applied to the area before EPA revised 

a NAAQS to make it less stringent. In 

the Phase 1 Ozone Implementation Rule 

for the 1997 ozone NAAQS published 

on April 30, 2004 (69 FR 23951), EPA 

determined that although section 172(e) 

does not directly apply where EPA has 

strengthened the NAAQS, as it did in 

1997, it was reasonable to apply to the 

transition from the 1-hour NAAQS to 

the more stringent 1997 8-hour NAAQS, 

the same anti-backsliding principle that 

would apply to the relaxation of a 

standard. Thus, as part of applying the 

principles in section 172(e) for purposes 

of the transition from the 1-hour 

standard to the 1997 8-hour standard, 

EPA can either require states to retain 

programs that applied for purposes of 

the 1-hour standard, or can allow states 

to adopt equivalent alternative 

programs, but only if such alternatives 

are determined through notice-andcomment rulemaking to be ‘‘not less 

stringent’’ than the mandated program. 

EPA has previously identified three 

types of alternative programs that could 

satisfy the section 185 requirement: (i) 

Those that achieve the same emissions 

reductions; (ii) those that raise the same 

amount of revenue and establish a 

process where the funds would be used 

to pay for emission reductions that will 

further improve ozone air quality; and 

(iii) those that would be equivalent 

through a combination of both emission 

reductions and revenues.2 We are today 

determining through notice-andcomment rulemaking that states can 

demonstrate an alternative program’s 

equivalency by comparing expected fees 

and/or emissions reductions directly 

attributable to application of section 185 

to the expected fees, pollution control 

project funding, and/or emissions 

reductions from the proposed 

alternative program. Under an 

alternative program, EPA concludes that 

states may opt to proceed as here, 

shifting the fee burden from a specific 

set of major stationary sources to nonmajor sources, such as owners of mobile 

sources that also contribute to ozone 

formation. EPA also believes that 

alternative programs, if approved as 

‘‘not less stringent’’ than the section 185 

fee program, would encourage one-hour 

ozone NAAQS nonattainment areas to 

reach attainment as effectively and 

expeditiously as a section 185 fee 

program, if not more so, and therefore 

satisfy the CAA’s goal of attainment and 

maintenance of the NAAQS. 

While section 185 focuses most 

directly on assessing emissions fees, we 


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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50023 

3 District comment letter dated August 24, 2011 

and the California Air Resources Board’s California 

Emissions Projection Analysis Model (CEPAM): 

2009 Almanac found at: http://www.arb.ca.gov/ 

app/emsinv/fcemssumcat2009.php. 

believe it is useful to interpret antibacksliding requirements for section 185 

within the context of the CAA’s ozone 

implementation provisions of subpart 2 

(which includes section 185). The 

subpart 2 provisions are designed to 

promote reductions of ozone-forming 

pollutant emissions to levels that 

achieve attainment of the ozone 

NAAQS. In this context, to satisfy the 

anti-backsliding requirements for 

section 185 associated with the 1-hour 

NAAQS, we believe it is appropriate for 

states to implement equivalent 

alternative programs that maintain a 

focus on achieving further emission 

reductions, whether that occurs through 

the incentives created by fees levied on 

pollution sources or other funding of 

pollution control projects, or some 

combination of both. For any alternative 

program adopted by a state, the state’s 

demonstration that the program is not 

less stringent should consist of 

comparing expected fees and/or 

emission reductions directly attributable 

to application of section 185 to the 

expected fees, pollution control project 

funding, and/or emissions reductions 

from the proposed alternative program. 

For a valid demonstration to ensure 

equivalency, the state’s submissions 

should not underestimate the expected 

fees and/or emission reductions from 

the section 185 fee program, nor 

overestimate the expected fees, 

pollution control project funding, and/ 

or emission reductions associated with 

the proposed alternative program. 

We also note that the structure 

established in Subparts 1 and 2 of the 

CAA recognizes that successful 

achievement of clean air goals depends 

in great part on the development by 

states of clean air plans that are 

specifically tailored to the nature of the 

air pollution sources in each state. The 

Act recognizes that states are best suited 

to design plans that will be most 

effective. Allowing states to put forward 

an equivalent program under the 

circumstances that pertain here, and 

under the authority of section 172(e), is 

consistent with this principle of the Act. 

In sum, in order for EPA to approve 

an alternative program as satisfying the 

1-hour ozone section 185 fee program 

SIP revision requirement, the state must 

demonstrate that the alternative 

program is not less stringent than the 

otherwise applicable section 185 fee 

program by collecting fees from owner/ 

operators of pollution sources, 

providing funding for emissions 

reduction projects, and/or providing 

direct emissions reductions equal to or 

exceeding the expected results of the 

otherwise applicable section 185 fee 

program. We have previously accepted 

public comment on whether it is 

appropriate for EPA to consider 

equivalent alternative programs. We 

have concluded that it is appropriate to 

do so, and that SJVUAPCD’s program is 

approvable as an equivalent alternative 

program consistent with the principles 

of section 172(e) of the Act. 

III. Public Comments and EPA 

Responses 

EPA’s proposed action provided a 30- 

day public comment period. During this 

period, we received comments from 

several parties. The comments and our 

responses are summarized below. 

A. Rule 3170 and Section 185 

1. Exemption for Clean Emission Units 

a. Comment: One commenter stated 

that Rule 3170, sections 4.1 and 4.2, 

exempt so-called ‘‘clean emission 

units,’’ but section 185 does not allow 

for such an exemption. The Act 

provides no exemption for any major 

stationary source, regardless of the 

emission control technology employed. 

Congress assumed that areas subject to 

185 will have adopted reasonably 

available control technologies (‘‘RACT’’) 

for major stationary sources, that other 

sources will have gone through new 

source review and be subject to the 

lowest achievable emission rate 

(‘‘LAER’’) requirement, and that SIPs 

may have targeted certain categories for 

more stringent controls than others. All 

of this is laid out in subparts 1 and 2 

of Title I, Part D of the Act. Section 185 

applies when, despite all of these 

controls, the area still fails to attain. 

Another commenter stated that Rule 

3170 allows exemptions for ‘‘clean 

emissions units’’ and stated that the Act 

provides no exemption for any major 

stationary source, regardless of the 

emission control technology employed. 

Response: We agree that section 185 

applies when an ozone nonattainment 

area designated Severe or Extreme fails 

to reach attainment by its attainment 

date and requires assessment of a fee for 

each source, with no exemption for 

clean emission units. Today’s action, 

however, is to approve Rule 3170, in the 

context of the revoked 1-hour ozone 

NAAQS. We conclude that Rule 3170 is 

approvable into the California SIP and 

as part of the District’s equivalent 

alternative program because we have 

determined that Rule 3170 will result in 

the collection of fees at least equal to the 

amount that would be collected under 

section 185, that the fees will be used 

to reduce ozone pollution, and that the 

program therefore satisfies the 

requirements of CAA section 185, 

consistent with the principles of section 

172(e). We also note that the program 

will raise this amount by a combination 

of fees from sources that do not qualify 

as ‘‘clean units’’ as defined in Rule 3170 

and from a fee on vehicles, which are 

responsible for approximately 80 

percent of ozone formation in 

SJVUAPCD.3 Our proposed action 

contains our analysis of how the 

District’s equivalent alternative program 

meets the ‘‘not less stringent than’’ 

criterion of section 172(e), and we 

provide additional explanation below. 

b. Comment: Congress’ decision was 

to make each major stationary source 

pay a penalty based on their individual 

contribution to the continuing problem. 

Larger emitters pay a larger fee and 

small emitters pay a smaller fee. There 

is no suggestion that the best controlled 

sources are entitled to any other 

‘‘reward’’ or exemption. Section 185 is 

not a program to penalize only the lesswell regulated sources. 

Response: We do not agree with the 

commenter’s statement that section 185 

does not provide a ‘‘reward’’ or 

exemption for well-controlled sources. 

In fact, we believe that section 185 

clearly ‘‘rewards’’ well-controlled 

sources by exempting those that reduce 

emissions by 20 percent or more from 

the fee requirements. This ‘‘reward,’’ 

however, is available only if the source 

acts to decrease its emissions after the 

attainment deadline has passed, which 

in San Joaquin’s case was 2010. Rule 

3170, on the other hand, provides an 

exemption from fees for ‘‘clean emission 

units,’’ which are units that have air 

pollution controls that reduce pollution 

by at least 95 percent or units that 

installed Best Available Control 

Technology (BACT) anytime between 

2006 and 2010. The ‘‘clean unit 

exemption’’ in Rule 3170 is thus not 

consistent with the timing envisioned 

by Congress; therefore, we agree with 

the commenter that the exemption is not 

consistent with the express language in 

section 185. We note, however, that in 

the context of the revoked 1-hour ozone 

NAAQS, we are approving Rule 3170 

into the California SIP and as part of the 

District’s equivalent alternative program 

because we have determined that Rule 

3170 will result in the collection of fees 

at least equal to the amount that would 

be collected under section 185, that the 

fees will be used to reduce ozone 

pollution, and that the program 

therefore satisfies the requirements of 

CAA section 185, consistent with the 

principles of section 172(e). Our 


emcdonald on DSK67QTVN1PROD with RULES
50024 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

proposed action contains our analysis of 

how the District’s equivalent alternative 

program meets the ‘‘not less stringent 

than’’ criterion of section 172(e), and we 

provide additional explanation below. 

We also do not agree with the 

comment that, ‘‘Congress’ decision was 

to make each major stationary source 

pay a penalty based on their individual 

contribution to the continuing problem. 

Larger emitters pay a larger fee and 

small emitters pay a smaller fee.’’ In 

fact, under section 185 large emitters 

can completely avoid penalties in any 

year that they emit 20 percent less than 

they emitted in the applicable 

attainment year (2010 for the District). 

As a result, a source in the District that 

emits 500 tons of NOX in 2010 would 

not pay a section 185 fee in any 

subsequent year in which its NOX

emissions are 400 tons or less. On the 

other hand, a source that emits 50 tons 

of NOX in 2010 will still have to pay a 

section 185 fee in every subsequent year 

that it emits more than 40 tons. Thus, 

under these scenarios, after the 

attainment year of 2010, the source that 

emits 400 tons would pay no fee and the 

source that emits 41 tons would pay a 

fee (albeit a nominal one based on 1 ton 

of emissions above the reduction target). 

In this respect, then, section 185 does 

not distinguish between sources based 

on their relative contribution to ozone 

non-attainment. 

c. Comment: That Congress 

understood that the level of control 

between sources could vary is expressly 

acknowledged in section 185(b)(2), 

which specifies that the baseline comes 

from the lower of actuals or allowables, 

and that the allowables baseline is to be 

based on the emissions allowed ‘‘under 

the permit’’ unless the source has no 

permit and is subject only to limits 

provided under the SIP. It would defeat 

this express language to exempt sources 

from paying a fee based on some 

arbitrary notion of being ‘‘clean 

enough.’’ 

Response: The commenter’s 

characterization of Rule 3170’s clean 

unit exemption as ‘‘arbitrary’’ or as 

based on ‘‘being clean enough’’ is 

inaccurate. In fact, Rule 3170, section 

3.3 defines a ‘‘clean unit’’ as: an 

emission unit that (i) has emissions 

control technology with a minimum 

control efficiency of at least 95 percent 

(or at least 85 percent for leanburn, 

internal combustion engines); or (ii) has 

emission control technology that meets 

or exceeds achieved-in-practice BACT 

as accepted by the Air Pollution Control 

Officer (APCO) during the period from 

2006—2010.’’ We believe Rule 3170 

reflects the District’s considered 

determination of what it views as 

‘‘clean’’ sufficient to qualify for an 

exemption from fees as part of an 

equivalent alternative program for antibacksliding purposes. 

Nevertheless, we agree with the 

commenter that Congress did not 

differentiate between sources according 

to the ‘‘level of control.’’ Thus, section 

185 does not distinguish a source with 

a control efficiency of 1 percent from a 

source with a control efficiency of 99 

percent. Under either scenario, sources 

are subject to section 185 fees if those 

reductions occurred prior to the 

attainment year. This aspect of section 

185 does not affect our action to 

approve Rule 3170 into the California 

SIP and as part of SJVUAPCD’s 

equivalent alternative program, as 

discussed further below. 

2. Alternative Baseline 

a. Comment: Two commenters stated 

that Rule 3170 fails to meet the 

requirements of section 185 by allowing 

an alternative baseline period for major 

stationary sources. They claim there is 

no statutory basis for section 3.2.2 of 

Rule 3170, which allows for the 

establishment of ‘‘[a]n alternative 

baseline period reflecting an average of 

at least two consecutive years within 

2006 through 2010, if those years are 

determined by the APCO as more 

representative of normal source 

operation.’’ They further claim that: 

• Section 185 requires the baseline to 

be the lower of actual emissions or 

emissions allowed during the 

attainment year. 

• Only sources with emissions that 

are irregular, cyclical, or otherwise vary 

significantly from year to year can 

extend the baseline period to account 

for that variation. 

• The possibility of extending the 

baseline is not available at the option of 

the source or at the discretion of the 

APCO. 

• Section 185 allows the option of 

extending the baseline only with respect 

to determining actual emissions; section 

5.1 suggests that the APCO might be 

able to change the baseline period for 

determining allowable emissions, which 

is not allowed. 

Response: Section 185(b)(2) 

authorizes EPA to issue guidance that 

allows the baseline to be the lower of 

average actuals or average allowables 

determined over more than one calendar 

year. Section 185(b)(2) further states that 

the guidance may provide that the 

average calculation for a specific source 

may be used if the source’s emissions 

are irregular, cyclical or otherwise vary 

significantly from year to year. Pursuant 

to these provisions, EPA developed and 

issued a memorandum to EPA Regional 

Air Division Directors, ‘‘Guidance on 

Establishing Emissions Baselines under 

Section 185 of the Clean Air Act (CAA) 

for Severe and Extreme Ozone 

Nonattainment Areas that Fail to Attain 

the 1-hour Ozone NAAQS by their 

Attainment Date,’’ William T. Harnett, 

Director, Air Quality Division, March 

21, 2008 (EPA’s Baseline Guidance). 

EPA’s Baseline Guidance suggests as an 

alternative baseline for sources whose 

annual emissions are ‘‘irregular, 

cyclical, or otherwise vary significantly 

from year to year,’’ the baseline 

calculation in EPA’s Prevention of 

Significant Deterioration (PSD) 

regulations at 40 CFR 52.21(b)(48). As 

explained in EPA’s Baseline Guidance, 

the PSD regulations allow a baseline to 

be calculated using ‘‘any 24-consecutive 

month period within the past 10 years 

(‘2-in-10’ concept) to calculate an 

average actual annual emissions rate 

(tons per year).’’ 

Rule 3170, section 3.2.2 allows for an 

alternative baseline based on the 

average of at least two consecutive years 

within 2006 through 2010, ‘‘if those 

years are determined by the APCO as 

more representative of normal source 

operation.’’ Therefore, Rule 3170 differs 

from the PSD-based 2-in-10 concept 

described in EPA’s Baseline Guidance 

because it allows for an alternative 

baseline based on 2006–2010, rather 

than the ‘‘2-in-10’’ concept. 

In response, we note that EPA’s 

Baseline Guidance stated that the 2-in10 concept was ‘‘an acceptable 

alternative method that could be used 

for calculating the ‘baseline amount,’ ’’ 

leaving open the possibility that other 

methods might also be appropriate. We 

also note that EPA’s Baseline Guidance 

described the 2-in-10 concept as 

warranted because it allows for a 

determination of a baseline ‘‘that 

represents normal operation of the 

source’’ over a full business cycle; the 

similar terminology leads to a 

reasonable expectation that 

determinations under Rule 3170 will be 

similar to those contemplated by EPA’s 

Baseline Guidance. In addition, we 

believe that Rule 3170’s use of a 5 year 

‘‘look back,’’ rather than a 10 year ‘‘look 

back’’ actually limits the amount of 

flexibility allowed by Rule 3170’s 

alternative baseline, rather than 

expanding it beyond the scope of EPA’s 

Baseline Guidance. 

We do not agree with the commenter’s 

criticism that Rule 3170 section 5.1 

‘‘suggests that the APCO might be able 

to change the baseline period for 

determining allowable emissions’’ 

whereas section 185 allows for 

extending a baseline based only on 

actual emissions. Section 185 plainly 


emcdonald on DSK67QTVN1PROD with RULES
Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50025 

states that EPA may issue guidance 

authorizing a baseline reflecting an 

emissions period of more than one year 

based on the ‘‘lower of average actual or 

average allowables’’. 

Furthermore, we note that the 

District’s equivalent alternative program 

uses the attainment year, 2010, as the 

baseline period to determine the fees 

that would have been assessed under a 

direct implementation of section 185 

and as the point of comparison for the 

equivalency demonstration. See Rule 

3170, Section 7.2.1.3. In this way, we 

believe the District will be able to make 

a proper comparison between fees owed 

under section 185 and revenues 

resulting from the alternative fee 

program. 

Finally, we note that in the context of 

the revoked 1-hour ozone NAAQS, we 

are approving Rule 3170 into the 

California SIP and as part of the 

District’s equivalent alternative program 

because we have determined that Rule 

3170 will result in the collection of fees 

at least equal to the amount that would 

be collected under section 185, that the 

fees will be used to reduce ozone 

pollution, and that the program 

therefore satisfies the requirements of 

CAA section 185, consistent with the 

principles of section 172(e). Our 

proposed action contains our analysis of 

how the District’s equivalent alternative 

program meets the ‘‘not less stringent 

than’’ criterion of section 172(e). 

3. Major Source Definition 

a. Comment: Cross-references are a 

bad practice because they create a 

potential for conflicts between the 

locally-applicable rule and the SIPapproved rule. 

Response: EPA believes that crossreferences to other district rules can be 

problematic and has commented to our 

state and local agencies to that effect. 

There are also cases where crossreferencing is an efficient and 

reasonable approach to local rule 

development. We do not find that Rule 

3170’s cross-reference to Rule 2201, 

New and Modified Stationary Source 

Review Rule, is an appropriate basis for 

disapproval, nor does the commenter 

seem to claim that we should 

disapprove the rule on that basis. 

b. Comment: Rule 2201’s definition of 

‘‘major source’’ does not match the 

definition of 182(e) of the Act, which 

includes all emissions of VOC or NOX, 

with no exemption for fugitive 

emissions, and looks at the larger of 

actual or potential emissions. Rule 2201 

excludes fugitive emissions for certain 

sources. 

Response: EPA does not agree that 

Rule 3170’s reference to Rule 2201 is 

clearly inconsistent with the 

requirements of section 185. First, we 

note that section 182(e) is silent with 

respect to whether fugitive emissions 

should be included when determining 

whether a source’s actual or potential 

emissions exceed the 10 ton per year 

threshold. That is, section 182(e) neither 

expressly includes nor excludes fugitive 

emissions. Second, we note that 

Congress’ definition of ‘‘major stationary 

source’’ at CAA 302(j) expressly 

delegates to EPA the authority to 

address the inclusion of fugitive 

emissions in major source 

determinations by rule. EPA has 

promulgated such definitions in the 

context of our rules for non-attainment 

major new source review, prevention of 

significant deterioration, state operating 

permit programs, and federal operating 

permit programs. See 40 CFR part 51, 

Appendix S, part 52, part 70 and part 

71. Each of these regulations excludes a 

source’s fugitive emissions from major 

source determinations unless the source 

belongs to one of 28 specifically listed 

categories. Third, we believe that the 

District’s use of its permitting program’s 

definition of major source to implement 

the section 185 fee program is 

reasonable and consistent with 

congressional intent because Congress 

itself recognized the relevancy of permit 

programs to section 185 fee programs 

when it provided that the baseline 

amount for calculating 185 fees should 

be ‘‘the lower of the amount of actual 

VOC emissions (‘actuals’) or VOC 

emissions allowed under the permit 

applicable to the source’’. Fourth, we 

note that CAA section 185 fee programs 

are new and that neither EPA nor the 

states have a history of interpreting or 

implementing section 185 in a way that 

would suggest that states should include 

fugitive emissions when determining 

which sources are subject to the 

program or that failure to do so would 

provide a basis for disapproving Rule 

3170. 

The commenter’s reference to section 

182(e) ‘‘look[ing] at the larger of actual 

or potential emissions’’ is not entirely 

clear. To the extent that the commenter 

is saying that section 182(e) defines a 

major source as a source whose actual 

emissions exceed 10 tons per year or 

whose potential to emit exceeds 10 tons 

per year, we agree with the comment. 

Rule 2201, section 3.23 also defines 

major stationary source as one whose 

post-project emissions or post-project 

PTE exceeds 20,000 pounds (10 tpy). 

c. Comment: Rule 2201 only includes 

potential emissions from units with 

valid permits. 

Response: The comment is vague and 

unclear in its reference to Rule 2201. To 

the extent the commenter is 

complaining that a source’s potential 

emissions are included only if the unit 

has a valid permit, EPA infers that the 

commenter is referencing Rule 2201, 

section 4.10, which provides that the 

calculation of post-project stationary 

source potential to emit shall include 

the potential to emit from all units with 

a valid Authority to Construct (ATC). To 

the extent that the commenter is 

concerned that some sources will not be 

considered major sources subject to 

section 185 fees because the source 

includes unpermitted emission units, 

EPA believes this problem is not an 

inherent defect in either Rule 2201 or 

Rule 3170, but rather a problem that 

should be addressed through 

enforcement action, which presumably 

will result in the issuance of an ATC if 

appropriate, followed by a 

determination of major source status if 

warranted. 

d. Comment: Rule 2201 credits limits 

in authorities to construct that may or 

may not reflect actual emissions. 

Response: The commenter’s 

complaint that Rule 2201 ‘‘credits limits 

in authorities to construct that may or 

may not reflect actual emissions’’ is also 

vague and unclear—both in reference to 

the application of Rule 2201 itself and 

to how this aspect of Rule 2201, if it 

exists, affects determinations of major 

source status for the purposes of Rule 

3170. To the extent the commenter is 

claiming that the application of Rule 

2201 would not result in a calculation 

of major source status consistent with 

the CAA, we disagree. Rule 2201, 

section 3.23 clearly allows for major 

source determinations to be made based 

on a source’s post-project actual 

emissions or its post-project PTE and 

applies the correct trigger for either NOX

or VOCs of 20,000 pounds or 10 tons per 

year. Furthermore, we note that Rule 

3170, section 6.2, requires sources to 

report actual emissions on an annual 

basis and that Rule 2201, sections 3.26 

and 4.10 provide a clear means to 

determine a source’s potential to emit. 

Thus, we do not agree with the 

commenter that Rule 3170 is flawed 

because of its reference to Rule 2201 as 

the basis for defining ‘‘major source.’’ 

4. Motor Vehicle Fees as a ‘‘Cure’’ for 

Rule 3170’s Clean-Unit Exemption and 

Alternative Baseline Provisions 

Comment: Motor vehicle fees do not 

qualify SJVUAPCD for either of the fee 

exemptions provided by the Act: (i) 

extension years under 7511(a)(5), and 

(ii) areas with population below 200,000 

that can demonstrate transport. 

Response: As explained in our 

proposed action, we are approving Rule 


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50026 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

3170 into the California SIP and as part 

of the District’s equivalent alternative 

program as an anti-backsliding measure 

for the revoked 1-hour ozone standard 

because we have determined that Rule 

3170 will result in the collection of fees 

at least equal to the amount that would 

be collected under section 185, that the 

fees will be used to reduce ozone 

pollution, and that the program 

therefore satisfies the requirements of 

CAA section 185, consistent with the 

principles of section 172(e). Thus, it is 

irrelevant that Rule 3170 does not meet 

the precise requirements of section 185. 

B. EPA’s Authority To Approve 

Alternative Fee Programs that Differ 

from CAA Section 185 

1. Authority Under CAA and Case Law 

Comment: One commenter stated that 

nothing in the plain language of the Act, 

the ‘‘principles’’ behind that language, 

or South Coast Air Quality Management 

District v. EPA, 472 F.3d 882 (D.C. Cir. 

2006) gives EPA the power to rewrite 

the terms of section 185. EPA’s 

argument that it can invent alternatives 

that fail to comply with the plain 

language of section 185 has no statutory 

basis. Another commenter stated that 

section 185’s plain language is 

unambiguous, that Congress has 

specified the parameters of the section 

185 program and that to approve a fee 

alternative program that does not meet 

the minimal requirements explicitly set 

out in section 185 violates the plain 

language of the Act. This commenter 

also stated that the South Coast court 

upheld retention of section 185 

nonattainment fees for regions that fail 

to meet the 1-hour ozone standard. 

Other commenters supported EPA’s 

action as a reasonable interpretation of 

the Act and consistent with the South 

Coast decision. 

Response: In a 2004 rulemaking 

governing implementation of the 1997 

8-hour ozone standard, EPA revoked the 

1-hour ozone standard effective June 15, 

2005. 69 FR 23858 (April 30, 2004) and 

69 FR 23951 (April 30, 2004) (‘‘2004 

Rule’’); see also, 40 CFR 50.9(b). EPA’s 

revocation of the 1-hour standard was 

upheld by the Court of Appeals for the 

District of Columbia Circuit. South 

Coast Air Quality Management District 

v. EPA, 472 F.3d 882 (D.C. Cir. 2006) 

reh’g denied, 489 F.3d. 1245 (D.C. Cir.) 

2007) (clarifying that the vacatur was 

limited to the issues on which the court 

granted the petitions for review)(‘‘South 

Coast’’). Thus, the 1-hour ozone 

standard that the District failed to attain 

by its attainment date no longer exists 

and a different standard now applies. 

Section 172(e) provides that, in the 

event of a relaxation of a primary 

NAAQS, EPA must promulgate 

regulations to require ‘‘controls’’ that are 

‘‘not less stringent’’ than the controls 

that applied to the area before the 

relaxation. EPA’s 8-hour ozone standard 

is recognized as a strengthening of the 

NAAQS, rather than a relaxation; 

however, EPA is applying the 

‘‘principles’’ of section 172(e) to prevent 

backsliding of air quality in the 

transition from regulation of ozone 

pollution using a 1-hour metric to an 8- 

hour metric. Our application of the 

principles of section 172(e) in this 

context was upheld by the D.C. Circuit 

in the South Coast decision: ‘‘EPA 

retains the authority to revoke the onehour standard so long as adequate antibacksliding provisions are introduced.’’ 

South Coast, 472 F.3d at 899. Further, 

the court stated, that in light of the 

revocation, ‘‘[t]he only remaining 

requirements as to the one-hour NAAQS 

are the anti-backsliding limitations.’’ Id. 

As stated above, section 172(e) 

requires State Implementation Plans to 

contain ‘‘controls’’ that are ‘‘not less 

stringent’’ than the controls that applied 

to the area before the NAAQS revision. 

EPA’s 2004 Rule defined the term 

‘‘controls’’ in section 172(e) to exclude 

section 185. See 2004 Rule, 69 FR at 

24000. The D.C. Circuit ruled that EPA’s 

exclusion of section 185 from the list of 

‘‘controls’’ for Severe and Extreme nonattainment areas was improper and 

remanded that part of the rule back to 

EPA. See South Coast, 472 F.3d at 902– 

03. The court did not, however, address 

the specific issue of whether the 

principles of section 172(e) required 

section 185 itself or any other controls 

not less stringent, and section 172(e) 

clearly on its face allows such 

equivalent programs. Further, the court 

in NRDC v. EPA, 643 F.3d 311 (D.C. Cir. 

2011), specifically noted with respect to 

equivalent alternative programs that 

‘‘neither the statute nor our case law 

obviously precludes [the program 

alternative.]’’ 643 F.3d at 321. In this 

rulemaking approving SJVUAPCD Rule 

3170, EPA is fully recognizing section 

185 as a ‘‘control’’ that must be met 

through the application of the principles 

of section 172(e). As explained above, 

the D.C. Circuit stated that EPA must 

apply the principles of section 172(e) to 

non-attainment requirements such as 

section 185. Thus, we are following the 

D.C. Circuit’s holding that the principles 

of section 172(e) apply in full to 

implement 185 obligations. 

2. Applicability of Section 172(e) 

Comment: CAA section 172(e) does 

not apply to this situation because EPA 

has adopted a more health protective 

ozone standard. EPA acknowledges that 

section 172(e) by its terms does not 

authorize EPA’s action because the 

newer 8-hour ozone standard is not a 

relaxation of the prior 1-hour ozone 

standard. EPA claims that its authority 

to permit States to avoid the express 

requirements of section 185 derives 

from the ‘‘principles’’ of section 172(e). 

But there is no principle in the CAA 

that Congress intended to give EPA 

authority to rewrite the specific 

requirements of section 185 when EPA 

finds that the health impacts related to 

ozone exposure are even more 

dangerous than Congress believed when 

it adopted the detailed requirements in 

the 1990 Clean Air Act Amendments. 

The South Coast court upheld retention 

of section 185 nonattainment fees for 

regions that fail to meet the 1-hour 

ozone standard. Other commenters 

supported EPA’s action as a reasonable 

application of section 172(e). 

Response: The South Coast court 

agreed with the application of the 

principles of section 172(e) despite the 

fact that section 172(e) expressly refers 

to a ‘‘relaxation’’ of a NAAQS, whereas 

the transition from 1-hour to 8-hour is 

generally understood as increasing the 

stringency of the NAAQS. As the court 

stated, ‘‘Congress contemplated * * * 

the possibility that scientific advances 

would require amending the NAAQS. 

Section 109(d)(1) establishes as much 

and section 172(e) regulates what EPA 

must do with revoked restrictions 

* * *. The only remaining 

requirements as to the one-hour NAAQS 

are the anti-backsliding limitations.’’ 

South Coast, 472 F.3d at 899. (citation 

omitted). 

3. Discretion in Title I, Part D, Subparts 

1 and 2 

Comment: One commenter stated that 

the Supreme Court in Whitman v. Am. 

Trucking Assns, interpreted the CAA as 

showing Congressional intent to limit 

EPA’s discretion. The D.C. Circuit in 

SCAQMD also held that EPA’s statutory 

interpretation maximizing agency 

discretion was contrary to the clear 

intent of Congress in enacting the 1990 

amendments. EPA’s approach [with 

respect to 185] would allow EPA to 

immediately void the specific statutory 

scheme Congress intended to govern for 

decades. EPA cannot reasonably claim 

that Congress meant to give EPA the 

discretion to revise the carefully 

prescribed statutory requirements like 

section 185 that Congress adopted to 

address these exposures. EPA proposes 

to accept a program other than that 

provided by Congress in section 185. 

Given that Congress provided a specific 


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Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 50027 

4 ‘‘Guidance on Developing Fee Programs 

Required by Clean Air Act Section 185 for the 1- 

hour Ozone NAAQS, Stephen D. Page, Director, 

Office of Air Quality Planning and Standards, to 

Regional Air Division Directors, Regions I–X, Jan. 

5, 2010,’’ vacated, NRD.C. v. EPA, 643 F.3d 311 

(D.C. Cir. 2011). 

5EPA previously articulated the dual nature of 

section 185 in its now-vacated section 185 

guidance. See id. at 4. Although the section 185 

guidance policy has been vacated, we agree with, 

and here in this notice and comment rulemaking 

adopt, its reasoning on this point. 

program, EPA has no discretion to 

approve an alternative. Another 

commenter also stated that given that 

Congress provided a specific program, 

EPA has no discretion to approve an 

alternative. 

Response: While one holding in 

Whitman v. Am. Trucking Assns, 531 

U.S. 457 (2001) stands for the general 

proposition that Congress intended to 

set forth prescriptive requirements for 

EPA and states, particularly the 

requirements contained in Subpart 2, 

the D.C. Circuit has noted that the Court 

did not consider the issue of how to 

implement Subpart 2 for the 1-hour 

standard after revocation. See, South 

Coast, 472 F.3d at 893 (‘‘when the 

Supreme Court assessed the 1997 Rule, 

it thought that the one- and eight-hour 

standards were to coexist.’’). Thus, the 

Court did not consider how section 

172(e)’s anti-backsliding requirements 

might be applied in the current context 

of a revoked NAAQS. 

We also believe that the commenter’s 

reliance on South Coast to argue that it 

precludes EPA’s use of section 172(e) 

principles to implement section 185 is 

similarly misplaced. The holding cited 

by the commenter relates to an entirely 

different issue than EPA’s discretion 

and authority under section 172(e)— 

whether EPA had properly allowed 

certain 8-hour ozone non-attainment 

areas to comply with Subpart 1 in lieu 

of Subpart 2. In fact, the South Coast 

court not only upheld EPA’s authority 

under section 109(d) to revise the 

NAAQS, it recognized its discretion and 

authority to then implement section 

172(e): 

Although Subpart 2 of the Act and its 

table 1 rely upon the then-existing 

NAAQS of 0.12 ppm, measured over a 

one-hour period, elsewhere the Act 

contemplates that EPA could change the 

NAAQS based upon its periodic review 

of ‘the latest scientific knowledge useful 

in indicating the kind and extent of all 

identifiable effects on public health’ that 

the pollutant may cause. CAA sections 

108(a), 109(d), 42 U.S.C. sections 

7408(a), 7409(d). The Act provides that 

EPA may relax a NAAQS but in so 

doing, EPA must ‘provide for controls 

which are not less stringent than the 

controls applicable to areas designated 

nonattainment before such relaxation.’ 

CAA 172(e), 42 U.S.C. 7502(e). South 

Coast, 472 F.3d at 888. 

Further, as noted above, EPA believes 

that South Coast supports our reliance 

on section 172(e) principles to approve 

Rule 3170 and SJVUAPCD’s alternative 

program as fulfilling section 185 

requirements for the revoked 1-hour 

standard. As the court stated, ‘‘EPA was 

not, as the Environmental petitioners 

contend, arbitrary and capricious in 

withdrawing the one-hour requirements, 

having found in 1997 that the eight-hour 

standard was ‘generally even more 

effective in limiting 1-hour exposures of 

concern than is the current 1-hour 

standard.’ * * * The only remaining 

requirements as to the one-hour NAAQS 

are the anti-backsliding limitations.’’ Id. 

(citation omitted). 

C. EPA’s Proposed Action and 

Consistency With Section 172(e) 

1. Statutory Analysis for Alternatives to 

a 185 Program 

Comment: EPA’s different and 

inconsistent tests for determining ‘‘not 

less stringent’’ undermine the 

reasonableness of these options as valid 

interpretations of the Act. EPA’s 

interpretation means that a program that 

achieves the same emission reductions 

as section 185 and a program that 

achieves fewer emission reductions than 

section 185 can both be considered ‘‘not 

less stringent.’’ However, stringency is 

either a measure of the emission 

reductions achieved or it is not. If it is, 

then a program that does not achieve 

equivalent reductions cannot pass the 

test. EPA did not actually interpret the 

term ‘‘stringent’’ and offers no basis for 

claiming that Congress intended this 

term to have different meanings and 

allow for different metrics for guarding 

against backsliding. 

Response: We believe that the three 

alternatives we identified in our 

proposed action (i.e., same emission 

reductions; same amount of revenue to 

be used to pay for emission reductions 

to further improve ozone air quality; a 

combination of the two) are reasonable 

and consistent with Congress’ intent. 

First, we note that Congress did not 

define the phrase ‘‘not less stringent’’ or 

the term ‘‘stringent’’ in the Act. EPA, 

therefore, may use its discretion and 

expertise to reasonably interpret section 

172(e). Furthermore, we note that the 

D.C. Circuit, in NRD.C. v. EPA, 643 F.3d 

311 (D.C. Cir. 2011), while finding that 

EPA’s guidance document providing our 

initial presentation of various 

alternatives to section 185 4 should have 

been promulgated through notice-andcomment rulemaking, declined to rule 

on whether the types of alternative 

programs we considered in connection 

with our proposed action on SJVUAPCD 

Rule 3170 were illegal, stating, ‘‘neither 

the statute nor our case law obviously 

precludes [the program alternative].’’ Id. 

at 321. 

We do not agree that evaluating a 

variety of metrics (e.g., fees, emissions 

reductions, or both) to determine 

whether a state’s alternative program 

meets section 172(e)’s ‘‘not less 

stringent’’ criterion undermines our 

interpretation. On its face, section 185 

results in assessing and collecting 

emissions fees, but the fact that section 

185 is also part of the ozone 

nonattainment requirements of Part D, 

Subpart 2, suggests that Congress also 

anticipated that section 185 might lead 

to emissions reductions that would 

improve air quality, and ultimately 

facilitate attainment of the 1-hour ozone 

standard.5 Thus, EPA believes it is 

reasonable to assess stringency of 

alternative programs on the basis of 

either the monetary or emissionsreduction aspects of section 185 or on 

the combination of both. 

Lastly, as discussed in our proposal, 

SJVUAPCD has demonstrated that Rule 

3170 will result in the collection of at 

least as much revenue from owners/ 

operators of relevant emission sources 

as a fee program directly implemented 

under section 185. In addition, it is 

reasonable to expect that SJVUAPCD’s 

alternative program will achieve more 

emission reductions than direct 

implementation of section 185 because 

the District’s alternative program uses 

fees to reduce emissions, while section 

185 has no such direct requirement. 

While the comment suggests that EPA’s 

logic, if unreasonably extended, might 

theoretically lead it to approve a 

program that achieves fewer emission 

reductions than a program directly 

implemented under section 185, we are 

clearly not doing that here, and have no 

intention of doing so in the future. 

2. ‘‘Not Less Stringent’’ and Target of 

Fees 

a. Comment: To be ‘‘not less 

stringent,’’ a control must be no less 

rigorous, strict, or severe; all of these 

qualities focus on the burden to the 

entities responsible for complying with 

the rule or standard. The purpose of 

Rule 3170 is less stringent than section 

185 because Rule 3170 exempts large 

categories of major industrial sources 

and dilutes section 185’s target by 

spreading its impact across the millions 

of individuals registering cars in the 

SJV. 


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50028 Federal Register / Vol. 77, No. 161 / Monday, August 20, 2012 / Rules and Regulations 

6 District comment letter dated August 24, 2011 

and the California Air Resources Board’s California 

Emissions Projection Analysis Model (CEPAM): 

2009 Almanac found at: http://www.arb.ca.gov/ 

app/emsinv/fcemssumcat2009.php. 

7 ‘‘Most stationary sources in the San Joaquin 

Valley are already equipped with Best Available 

Retrofit Control Technology (BARCT) or Best 

Available Control Technology (BACT) * * * most 

businesses have already made significant 

investments and installed the most advanced 

controls available for their facilities.’’ Memorandum 

from Seyed Sadredin, Executive Director/APCO to 

SJVUAPCD Hearing Board, re ‘‘Alternatives for the 

Equitable Application of Mandated Federal 

Nonattainment Penalties to Sources within the San 

Joaquin Valley through the use of Motor Vehicle 

Fees,’’ Oct. 21, 2010, at 4. 

8Rule 3170’s clean unit exemption applies only 

to: (i) Units equipped with emissions control 

technology that meets a minimum control efficiency 

of at least 95% or 85% for lean-burn internal 

combustion engines; or (ii) units equipped with 

BACT as accepted by the APCO during 2006 

through 2010). 

Response: It is difficult to try to assess 

the relative stringency of section 185 

and Rule 3170 based on a comparison 

of which entities are responsible for 

paying fees. The two types of fee 

programs target different types of 

sources, such that all stationary sources 

have the fee obligation under section 

185 while less well-controlled 

stationary sources, along with motor 

vehicle owners have the obligation 

under Rule 3170. Overall, however, we 

believe that SJVUAPCD’s alternative 

program is not less stringent than 

section 185 because it will generate at 

least as much revenue as a program that 

directly implements section 185. Rule 

3170 by its explicit terms requires a 

demonstration that the revenue 

generated by the alternative program 

will equal or exceed the amount that 

would have been generated by a 185 

program. 

In addition, we believe that 

SJVUAPCD’s alternative program will 

result in emissions reductions because 

the demonstration required by Rule 

3170 must rely on ‘‘California Vehicle 

Code fees’’ to offset any fees that would 

otherwise be due from direct 

implementation of section 185. Rule 

3170’s definition of ‘‘California Vehicle 

Code fees’’ specifies that these fees ‘‘are 

required by Health and Safety Code 

Section 40612 to be expended on 

establishing and implementing 

incentive-based programs * * *. These 

fees shall therefore be used in programs 

designed to reduce NOX and VOC 

emissions in the San Joaquin Valley.’’ In 

addition, state law clearly requires that 

the fees be directed towards programs 

that reduce NOX and VOC emissions in 

the San Joaquin Valley. Cal. Health and 

Safety Code 40612. 

Furthermore, we note that, according 

to the District, stationary sources 

currently contribute approximately 20 

percent of the ozone precursor 

emissions, while mobile sources are 

responsible for approximately 80 

percent of such emissions in the 

SJVUAPCD.6 The District also states that 

most stationary sources in its 

jurisdiction have already installed air 

pollution controls as a result of new 

source review or retrofitting 

requirements and that the only options 

to such businesses to avoid fees would 

be to either curtail production or to 

cease operation.7 Rule 3170 places the 

burden of fees under its equivalent 

alternative program on major stationary 

sources that do not qualify as ‘‘clean 

emissions units’’ and on motor vehicle 

owners. To the extent that stringency 

can be evaluated based on which 

entities are subject to fees, we believe 

that SJVUAPCD’s alternative program is 

not less stringent than section 185 

because it imposes the fee obligation on 

the sources most responsible for 

continuing ozone pollution in the 

Valley. And, as noted, it also requires 

that the fees be used to fund ozone 

reduction, something section 185 does 

not do. 

b. Comment: Rule 3170 is less 

stringent than section 185. Section 185 

is not a standard-based provision, nor is 

it based on a specific fee collection 

amount. The purpose of section 185 is 

to penalize major stationary sources in 

Severe and Extreme nonattainment 

areas. The stringency of section 185 

does not stem from a dollar figure or 

emission target, but rather from three 

requirements: (i) Each major stationary 

source pay a fee; (ii) the fee be equal to 

$5000, adjusted for inflation, per ton of 

VOC or NOX emitted in excess of 80 

percent of the baseline; and (iii) the 

baseline amount be established from the 

attainment year inventory, unless the 

source’s emissions are irregular, 

cyclical, or otherwise varying 

significantly from year to year. Charging 

motor vehicle fees merely adds a 

revenue stream. It fails to make up for 

the shortfall of not charging all major 

stationary sources penalty fees and 

basing those fees on the attainment year 

baseline, etc. 

Response: We do not agree that an 

alternative program must adhere to the 

specific criteria identified by the 

commenter. In the context of the 

revoked 1-hour ozone NAAQS, and 

applying the principles of section 172(e) 

as upheld by the D.C. Circuit, the 

alternative program must be 

demonstrated to be ‘‘not less stringent’’ 

than the otherwise applicable required 

‘‘control,’’ i.e., section 185. We are 

approving Rule 3170 into the California 

SIP and as part of the District’s 

equivalent alternative program because 

we have determined that Rule 3170 will 

result in the collection of fees at least 

equal to the amount that would be 

collected under section 185, that the 

fees will be used to reduce ozone 

pollution, and that the program 

therefore satisfies the requirements of 

CAA section 185, consistent with the 

principles of section 172(e). Moreover, 

as explained above, we believe that the 

District’s alternative program, by 

imposing fees on mobile sources—the 

sources most responsible for the 

Valley’s continuing ozone 

nonattainment problems—advances the 

legislative policy of creating incentives 

to facilitate attainment that underlay 

section 185 when it was enacted by 

Congress in 1990. 

In addition, we note that Rule 3170 

allows only money generated by motor 

vehicle registration fees and spent on 

ozone pollution reduction projects in 

the Valley to offset fees that would 

otherwise be due from direct 

implementation of section 185. In 

addition, state law requires that these 

fees be used to reduce NOX and VOC 

pollution in the San Joaquin Valley 

which is consistent with section 185’s 

place within the ozone non-attainment 

provisions of CAA Title 1, part D, 

subpart 2. 

3. ‘‘Not Less Stringent’’ and Equivalent 

Fees 

Comment: A program that raises an 

equivalent amount of money is not 

supported by section 185’s structure and 

legislative history. Section 185 was not 

intended as a revenue generating 

provision. 

Response: Section 185 explicitly 

mandates a specific fee, requires that the 

fee be indexed for inflation, establishes 

a baseline for measuring such fees, and 

authorizes an alternative method for 

calculating that fee. For those reasons, 

and the additional reasons discussed 

above, we believe that section 185 has 

both monetary and emissions-related 

aspects and that it is reasonable for EPA 

to assess stringency of alternative 

programs on the basis of either aspect of 

section 185 or on the combination of 

both. Nevertheless, EPA notes that Rule 

3170 imposes fees on those major 

stationary sources that do not meet the 

criteria for the ‘‘clean emissions unit’’ 

exemption and thereby provides an 

incentive for those stationary sources to 

reduce their emissions.8 In addition, 

SJVUAPCD’s alternative program 

imposes a fee on motor vehicles, the 

largest source of emissions in the 

Valley, thereby supporting emissions 


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reductions from that source as well and 

in that respect will be no less effective 

in reducing ozone-formation than a 

section 185 fee program on major 

sources not meeting the ‘‘clean 

emissions unit’’ exemption would be. 

We further note that SJVUAPCD’s 

alternative program will direct the 

revenues generated from the motor 

vehicle registration fee to VOC and NOX

emissions reductions programs. 

4. ‘‘Not Less Stringent’’ and Equivalent 

Emission Reductions 

a. Comment: The measure of 

equivalency should be section 185’s 

emission reduction incentive. Penalties 

end if an area attains the standard or a 

source reduces its emissions by 20 

percent. As the DC Circuit noted, ‘‘these 

penalties are designed to constrain 

ozone pollution.’’ Nothing in the 

legislative history indicates that 

Congress’ intent was to collect a certain 

amount of money. 

Response: The comment correctly 

points to the fact that section 185 states 

that fees must be paid until an area is 

redesignated to attainment for ozone 

and that section 185 does not require 

fees from sources that reduce emissions 

by 20 percent (compared to emissions 

during the baseline period). Thus, one 

consequence of a section 185 fee 

program may be a reduction in VOC 

and/or NOX emissions. However, EPA 

does not agree with the comment to the 

extent it is saying that emission 

reductions must be the sole basis for 

determining whether an alternative 

program is ‘‘not less stringent’’ than a 

section 185 program. As we stated 

above, we believe the stringency of an 

alternative program may be evaluated by 

comparing either the fees (which must 

be used to pay for emissions reductions) 

or emission reductions otherwise 

achieved from the proposed alternative 

program to the fees or emissions 

reductions directly attributable to 

application of section 185 (or by 

comparing a combination of fees and 

reductions). 

In addition, the comment does not 

acknowledge that section 185 allows 

major sources to pay fees and not reduce 

emissions. The comment also does not 

acknowledge that SJVUAPCD is 

required by state law to use the 

revenues generated by the alternative 

fee program to fund incentive-based 

programs that will result in NOX and 

VOC emissions reductions in the San 

Joaquin Valley. We believe this aspect of 

the District’s alternative program 

reflects the emission reductions aspects 

of section 185. We also believe that it is 

possible that SJVUAPCD’s alternative 

program could result in more emission 

reductions than a section 185 program 

that funds unrelated programs. 

b. Comment: Section 185 is a marketbased policy device to internalize the 

external costs of pollution and thereby 

incentivize emission reductions at major 

stationary sources. EPA should assess 

how the incentives in Rule 3170 

compare to the incentives in section 

185. This analysis would look at how a 

pollution tax might drive sources to 

improve controls, and how the potential 

increase in the price of goods would 

cause consumers to look for alternatives 

that are not subject to the same tax. 

Response: We do not agree that the 

comparison of ‘‘incentives’’ or a 

pollution tax proposed by the 

commenter is the only approach to 

evaluating the relative stringency of an 

alternative program, as explained above. 

In addition, we believe that Rule 3170 

will have a beneficial effect on air 

quality in the San Joaquin Valley 

because state law requires that the fees 

generated by the rule be spent on air 

pollution reduction programs in the 

Valley. 

c. Comment: Rule 3170 severs the link 

between the fee and pollution levels. A 

new Prius is subject to the same fee as 

a dirty clunker, while stationary sources 

exempted from the fee have no 

incentive to improve performance. 

Response: While we agree that in 

theory a section 185 program may 

reduce emissions, section 185 in itself 

does not mandate such reductions. 

Moreover, the link between section 185 

and emission reductions is uncertain to 

the extent that section 185 requires fees 

from a unit that lowered its emissions 

by less than 20 percent at any time, or 

even by more than 20 percent if it did 

so before the attainment year deadline, 

but creates a perverse incentive by 

exempting a source that defers 20 

percent emission reductions until after 

the attainment year. 

In addition, as stated above, Rule 

3170 continues to impose section 185 

fees on emissions units that have not 

taken the emission reduction measures 

needed to qualify for the ‘‘clean 

emissions unit’’ exemption. Moreover, 

the District has determined that most 

stationary sources have installed 

pollution controls that meet BARCT or 

BACT standards and thus there is little 

more these sources can do to reduce 

emissions other than curtailing 

production or ceasing operation. 

5. ‘‘Not Less Stringent’’ and Alternative 

Baseline 

Comment: Rule 3170 is less stringent 

because it exempts certain stationary 

sources from paying penalty fees and 

because it allows sources to use an 

alternative baseline of a 2 year average 

even if the source’s emissions are not 

irregular, cyclical or otherwise vary 

from year to year. 

Response: We do not agree that the 

District’s alternative program is less 

stringent than section 185. As explained 

above, section 185 has both monetary 

and emissions reductions 

characteristics. We believe that the 

District’s alternative program 

implements both aspects of section 185 

by assessing fees on major contributors 

to air pollution in the San Joaquin 

Valley (major sources not qualifying for 

the clean unit exemption and motor 

vehicles), and by obligating these fees to 

NOX and VOC pollution reduction 

programs. Moreover, as explained 

previously, we are approving 

SJVUAPCD’s program as a not less 

stringent alternative program for antibacksliding purposes and therefore 

determine that it complies with the 

statute even though it does not strictly 

follow the requirements of 185. 

6. ‘‘Not Less Stringent’’ and Process for 

Revenues To Be Spent on Air Quality 

Programs 

a. Comment: EPA’s analysis did not 

demonstrate that Rule 3170 includes a 

process for revenues to be spent on 

emission reductions to improve ozone 

air quality. EPA states that alternative 

programs might include those that raise 

the same amount of revenue and 

establish a process where the revenues 

would be used to pay for emission 

reductions that will further improve 

ozone air quality. But Rule 3170 

includes no process or mention of how 

fees will be spent. 

Response: Rule 3170, section 7.2 

requires the District to prepare an 

‘‘Annual Fee Equivalency 

Demonstration Report.’’ Section 7.2.2 

specifies that the report must 

demonstrate whether the sum total of 

fees collected under Rule 3170 and 

‘‘California Vehicle Code fees’’ is equal 

to or greater than the fees that would be 

due under a direct implementation of 

section 185. Rule 3170’s definition of 

‘‘California Vehicle Code fees’’ specifies 

that these fees ‘‘are required by Health 

and Safety Code Section 40612 to be 

expended on establishing and 

implementing incentive-based programs 

* * * These fees shall therefore be used 

in programs designed to reduce NOX

and VOC emissions in the San Joaquin 

Valley.’’ We believe that Rule 3170, 

therefore, will result in the expenditure 

of fees on ozone air pollution reduction 

programs. 

In addition, we note that Health & 

Safety Code section 40612(a)(1) 

authorizes SJVUAPCD to increase motor 


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vehicle fees by up to $30 per motor 

vehicle per year to establish and 

maintain incentive-based programs that 

are intended to address air pollution 

caused by motor vehicles and achieve 

and maintain state and federal air 

quality standards. Health & Safety Code 

section 40612(b) specifies that at least 

ten million dollars of motor vehicle 

registration fees be used to mitigate air 

pollution impacts on disadvantaged 

communities. Section 40612(c) requires 

the District and the California Air 

Resources Board (CARB) to take certain 

steps to effectuate the supplemental 

motor vehicle fee: (1) The District must 

notify CARB that it has adopted the fee 

and provide an estimate of the amount 

of revenue that will be generated; (2) 

CARB must file with the California 

Secretary of State written findings that 

the District has performed the above 

requirements and that the District has 

undertaken all feasible measure to 

reduce nonattainment air pollutants 

from sources within the District’s 

jurisdiction and regulatory control. 

To demonstrate its authority to charge 

the supplemental motor vehicle 

registration fee, the District submitted 

Governing Board Resolution No. 10–10– 

14 dated October 21, 2010 to document 

that its governing board had exercised 

its authority to increase motor vehicle 

fees by $12 per year per motor vehicle 

and that it estimated the additional fee 

would generate approximately $34 

million in additional funds. The District 

also submitted California Air Resources 

Board Executive Order G–10–126, dated 

December 10, 2010, to document that 

CARB had made the findings required 

by Health & Safety Code 40612, as well 

as documentation that the findings had 

been submitted to the California 

Secretary of State. 

b. Comment: Although the state law 

AB2522 requires the District to use 

revenues to fund incentive based 

programs resulting in NOX and VOC 

emission reductions in the SJVUAPCD, 

there is no analysis or demonstration of 

how or whether the District will comply 

with this requirement. 

Response: In our above response to 

the preceding comment, we explained 

how Rule 3170 will result in the 

expenditure of fees on ozone air 

pollution reduction programs. We also 

provided additional explanation of how 

state law requires the District to use the 

supplemental motor vehicle fees to fund 

incentive-based programs that will 

result in NOX and VOC emission 

reductions in the San Joaquin Valley. 

We believe it is reasonable to presume 

that the District will obey the law and 

the documents noted above indicated 

that it has done so for 2010 and 2011. 

c. Comment: EPA has not previously 

given emission reduction credit for 

incentive based programs. It is arbitrary 

for EPA to now assume that funds 

collected by Rule 3170 will in any way 

improve ozone air quality. 

Response: Our basis for approving 

Rule 3170 is that it is not less stringent 

than the requirements of section 185 

because it will result in the collection of 

fees equal to the fees that would be 

collected under section 185. 

Furthermore, we have determined that 

Rule 3170 provides adequate oversight 

and enforcement mechanisms though an 

annual demonstration of fee 

equivalency that will be made available 

to the public and mailed to EPA by 

November 1 of each year. Additionally, 

we believe that the District’s alternative 

program will result in improvements in 

air quality by providing the District with 

approximately $34 million annually to 

use on projects that will reduce NOX

and VOC emissions in the Valley. 

Finally, we note that section 185 does 

not require that the fees paid pursuant 

to a directly implemented section 185 

program be directed to any particular 

purpose. This finding is consistent with 

our actions referenced in the comment 

regarding other incentive programs. In 

those cases, we acknowledged that 

SJVUAPCD’s incentive programs would 

result in some emission reductions but 

noted that SJVUAPCD had not 

adequately demonstrated a specific 

amount of reductions. Similarly, while 

SJVUAPCD has not demonstrated a 

specific amount of emission reductions 

from Rule 3170’s fees, it is reasonable to 

expect that it could be more than the 

reductions resulting from direct 

implementation of section 185, which 

does not require that fees be directed 

towards emission reductions. 

D. Enforceability of Rule 3170 

1. Emission Standards or Limitations 

a. Comment: Section 110(a)(2)(A) 

requires each SIP to include enforceable 

emission limitation and control 

measures such that any person can 

enforce such standards or limitations 

under section 304(a). Rule 3170 

provides no standards or limitations and 

is unenforceable. 

Response: Section 110(a)(2)(A) 

provides that each SIP shall ‘‘include 

enforceable emissions limitations and 

other control measures, means, or 

techniques (including economic 

incentives such as fees, marketable 

permits, and auctions of emissions 

rights), as well as schedules and 

timetables for compliance, as may be 

necessary or appropriate to meet the 

applicable requirements of this 

chapter.’’ Rule 3170 contains 

enforceable requirements such as 

annual emissions reporting and annual 

equivalency demonstrations. Therefore, 

we disagree that Rule 3170 does not 

meet the enforceability requirements of 

the Act and should not be approved. 

b. Comment: Because the equivalency 

demonstration is not an emission 

standard or limitation, citizens are not 

able to enforce the manner in which the 

District demonstrates equivalency. The 

air district methodology provided to 

calculate equivalency is not an emission 

standard or limitation upon which 

citizens can bring suits. 

Response: We note that CAA section 

304(f)(4) defines the term ‘‘emission 

standard or limitation’’ for the purposes 

of citizen suit enforcement, including 

‘‘any other standard, limitation, or 

schedule established * * * under any 

applicable State implementation plan 

approved by the Administrator.’’ 

Further, we note that Rule 3170, section 

6 contains affirmative obligations on 

subject sources to report emissions and 

Rule 3170, section 7 requires the District 

to track actual emissions and to 

demonstrate equivalency between fees 

obtained through the alternative 

program and fees that would have been 

due under a direct implementation of a 

section 185 fee program. We believe the 

obligations set forth in these provisions 

are sufficiently clear and specific that 

they meet the definition of emissions 

standard or limitation and thus the 

failure of a source or the District to 

comply could be enforced. 

2. Practical Enforceability 

Comment: Enforcement of Rule 3170 

is not practical because it is virtually 

impossible for citizens or EPA to 

determine whether CARB and the 

District have, in fact, raised funds 

equivalent to that which would be 

generated under the section 185 penalty 

fee program. 

Response: We disagree that it is 

virtually impossible to determine if the 

District has demonstrated equivalent 

funds. Section 7.2.1.3 of Rule 3170 

specifically requires the District to 

calculate the fees that would have been 

collected from major stationary sources 

under Section 185 of the Act. This 

provision is consistent with Section 

185. The fee obligation is calculated 

based on a source’s actual emissions in 

2010 for the baseline year as well as 

actual emissions in the relevant 

demonstration year. 

Sections 7.1 and 7.2 specify the 

procedures for the equivalency 

demonstration and require the District 

to track collected fees and demonstrate 

equivalency. The tracking provisions are 


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clear and straightforward. If the amount 

of fees collected is not at least equal to 

the amount of fees that would have been 

collected under a direct implementation 

of section 185, Rule 3170 requires the 

District to collect additional fees from 

stationary sources to make up the 

shortfall. If approved into the SIP, Rule 

3170, including the District’s 

obligations, become federally 

enforceable and may serve as the basis 

of citizen suits. We do not agree that 

citizens cannot enforce the manner in 

which the District demonstrates 

equivalency. 

3. Federal Enforceability 

Comment: CARB and the District 

propose to implement the $12 motor 

vehicle fee through state law 

mechanisms which are not federally 

enforceable. Neither EPA nor private 

citizens can enforce the state mandated 

$12 motor vehicle fee. Rule 3170 does 

not include the motor vehicle 

registration funding mechanism itself, 

but rather relies on state law to 

implement and enforce the fee. Even if 

Rule 3170 becomes part of the California 

SIP, EPA will have no way to enforce 

the fee. 

Response: As the commenter states, 

the District’s alternative program relies 

in part on the collection of a $12 motor 

vehicle fee. The commenter is correct 

that EPA’s action will not make the 

payment of the motor vehicle fee 

federally enforceable. However, the 

requirement for the District to 

demonstrate equivalency under Rule 

3170 is federally enforceable, as is the 

requirement to collect additional fees 

from major stationary sources if 

necessary to cover any shortfall and 

demonstrate equivalence. 

4. Analysis of Enforceability 

Comment: The proposed rule fails to 

include any analysis or make any 

finding with respect to enforceability. 

The TSD sets forth a single, conclusory 

sentence stating that the rule is 

enforceable. EPA must articulate a 

rational connection between the facts 

found and the choice made. Because 

EPA fails to make any factual finding of 

enforceability, and fails to articulate a 

rational basis for concluding that Rule 

3170 is enforceable, EPA’s decision to 

approve Rule 3170 is arbitrary and 

capricious. 

Response: EPA’s proposed rule 

described the various requirements of 

Rule 3170 that the District is obligated 

to perform. For example, our proposed 

rule described Rule 3170’s requirements 

for the APCO to track emissions data, 

calculate, assess and collect fees from 

stationary sources and track motor 

vehicle registration fees. 76 FR 45214. 

Our proposal also described Rule 3170’s 

requirement for the APCO to prepare 

and submit to EPA an annual report that 

shows that the sum of fees collected 

from stationary sources and motor 

vehicle registrations are equal to or 

greater than the fees that would have 

been collected under a direct 

implementation of section 185. Id. Our 

proposal also described Rule 3170’s 

requirement that the APCO collect 

additional funds from stationary sources 

if the annual demonstration shows a 

shortfall. Id. Our intention in describing 

these provisions and referring to them 

as ‘‘requirements’’ was to communicate 

our conclusion that Rule 3170 contained 

enforceable provisions that ‘‘will result 

in the collection of fees equal to the fees 

that would be collected under section 

185.’’ Id. at 45215. 

To further clarify our determination 

with respect to the enforceability of 

Rule 3170, we add that the provisions 

of Rule 3170 are sufficiently clear and 

specific as to what is required and when 

these obligations must be completed. In 

particular, we are referring to the 

requirements in Sections 6 and 7 of Rule 

3170. Section 6 requires sources to 

report baseline period actual emissions 

information by a date certain and to 

provide annual emission statements for 

the prior calendar year. See Rule 3170, 

Sections 6.1 and 6.2. Section 7 requires 

the APCO to track emissions and to 

conduct an annual reconciliation 

process comparing fees under Rule 3170 

to fees that would have been collected 

under a direct implementation of 

section 185 and to submit a report with 

the results of this analysis to EPA by 

November 1 of each year. See Rule 3170, 

Sections 7.1 and 7.2. Finally, if there is 

a shortfall in funding, section 7.3 

requires the District to bill major 

sources, within 90 days following the 

demonstration of the shortfall, 

‘‘sufficient fees to recover the entire 

amount of the shortfall.’’ See Rule 3170, 

Section 7.3. Because these provisions 

are clear and specific and compliance 

can be determined by a date certain, we 

determined that Rule 3170 is 

enforceable. 

E. Title VI Implications 

1. Rule 3170 and Disparate Impact 

Comment: Rule 3170 penalizes 

vehicle owners instead of owners of 

major stationary sources. Because the 

motor vehicle owners in the Valley are 

largely low-income and people of color, 

where owners of major stationary 

sources are not, this rule disparately 

impacts low-income and people of 

color, in violation of Title VI of the Civil 

Rights Act, EPA’s regulations 

implementing Title VI, and President 

Clinton’s Executive Order 12898. 

Because the District receives federal 

funding, it is EPA’s duty to ensure that 

the District does not administer its 

Clean Air Act programs in a manner that 

violates Title VI. 

Response: In response to the comment 

on environmental justice, this action 

does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

Specifically, under the Clean Air Act, 

the Administrator is required to approve 

a SIP submission that complies with the 

provisions of the Act and applicable 

Federal regulations. 42 U.S.C. 7410(k); 

40 CFR 52.02(a). Thus, in reviewing SIP 

submissions, EPA’s role is to approve 

state choices, provided that they meet 

the criteria of the Clean Air Act and 

EPA regulations. Accordingly, this 

action merely approves state law as 

meeting Federal requirements and does 

not impose additional requirements 

beyond those imposed by state law. For 

that reason, this action does not provide 

EPA with the discretionary authority to 

address, as appropriate, 

disproportionate human health or 

environmental effects, using practicable 

and legally permissible methods, under 

Executive Order 12898 (59 FR 7629, 

February 16, 1994). In response to the 

comment on Title VI, EPA Region 9 

forwarded a copy of this comment to the 

Office of Civil Rights in Washington, 

DC, which as provided in EPA’s 

regulations implementing Title VI of the 

Civil Rights Act, has the responsibility 

to administer Title VI in the Agency, 

including the decision to accept, reject 

or refer to another Federal agency the 

matter for investigation. 40 CFR 7.20, 

7.125. 

Finally, we note that enabling 

legislation for the District’s alternative 

fee program, AB2522, provides: ‘‘At 

least ten million dollars ($10,000,000) 

shall be used to mitigate the impacts of 

air pollution on public health and the 

environment in disproportionately 

impacted environmental justice 

communities in the San Joaquin 

Valley.’’ Cal. Health & Safety Code, 

§ 40612((b). 

F. Miscellaneous Comments 

1. Other Demonstrations of ‘‘Not Less 

Stringent’’ 

Comment: One commenter asked EPA 

to clarify in our final action that 

alternative programs meeting the ‘‘not 


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less stringent’’ criteria would not be 

limited to just fee-equivalent, emissions 

reduction-equivalent, or a hybrid of the 

two. The commenter suggested other 

options, including (1) programs that 

have a broader environmental purpose 

and would not be limited to only those 

programs that can reduce NOX and VOC 

emissions, and (2) result in reductions 

of NOX and VOC in different proportion 

to that on which the 185 fees were 

assessed. 

Response: Our action relates to 

SJVUAPCD Rule 3170 and SJVUAPCD’s 

alternative program, which rely on an 

annual fee equivalency demonstration 

to show that it is not less stringent than 

section 185. We acknowledge the 

comment and the possibility that 

another program could use different 

elements to demonstrate that it meets 

the not less stringent than standard in 

section 172(e). EPA has not assessed any 

such elements in this rulemaking and 

will do so if and when such alternatives 

are submitted. 

2. Types of Projects to Improve Air 

Quality 

Comment: One commenter 

recommended that EPA allow sources to 

apply the calculated section 185 fees to 

a number of projects at the major 

stationary source or at other sources in 

either the nonattainment area or upwind 

areas. The commenter suggested ten 

examples of eligible projects including 

installing emissions control technology, 

enhancing existing pollution control 

equipment, energy efficiency and 

renewable energy measures, lower 

emitting fuels, retirement or repowering 

of a higher emitting facility, mobile 

source retrofit program, clean vehicle 

fleets, and increasing mass transit 

ridership. 

Response: EPA is acting on 

SJVUAPCD’s Rule 3170 and 

SJVUAPCD’s alternative program, which 

do not include these program features. 

If these program features are included in 

a specific SIP submittal for another 

alternative program, EPA would 

evaluate them at that time. 

G. Interim Final Determination To Defer 

Sanctions 

1. Sanctions Should Continue To Apply 

Because Rule 3170 Contains Two 

Deficiencies and Should Be 

Disapproved 

Comment: Rule 3170 is deficient 

because it exempts ‘‘clean units’’ from 

fee requirements and because it allows 

for an alternative baseline period of two 

consecutive years if the APCD 

determines it would be more 

representative of normal operations. 

Response: Our proposed action was to 

approve Rule 3170 and SJVUAPCD’s 

alternative program in the context of the 

revoked 1-hour ozone NAAQS. We 

concluded that Rule 3170 is approvable 

into the California SIP and as part of the 

District’s alternative fee-equivalent 

program because we have determined 

that Rule 3170 will result in the 

collection of fees at least equal to the 

amount that would be collected under 

section 185, that the fees will be used 

to reduce ozone pollution, and that the 

program therefore satisfies the 

requirements of CAA section 185, 

consistent with the principles of section 

172(e). Our proposed action contained 

our analysis of how the District’s 

alternative fee-equivalent program 

meets the ‘‘not less stringent than’’ 

criterion of section 172(e), and we are 

providing additional explanation in this 

notice. For these reasons we conclude 

that the SIP deficiency has been 

corrected and sanctions would no 

longer be appropriate. 

2. EPA’s Interim Final Determination 

Violates the Administrative Procedures 

Act (APA) 

a. Comment: EPA did not provide an 

opportunity for comment before the 

action took effect. Considering whether 

public comments warrant a reversal of 

action is not the same as providing an 

opportunity to participate in the 

rulemaking. 

Response: As explained in our Interim 

Final Rule, we invoked the good cause 

exception under the APA as the basis 

for not providing public comment 

before the action took effect. Our review 

of the State’s submittal indicated that it 

was more likely than not that the State 

had submitted a revision to the SIP that 

addressed the issues we identified in 

our earlier action that started the 

sanctions clocks. We concluded that it 

was therefore not in the public interest 

to impose sanctions. We also explained 

that the offset sanction was due to be 

imposed 18 months after February 12, 

2010, or August 12, 2011, which was 

approximately 15 days from the date of 

publication of the Interim Final Rule. 

Therefore, it would not have been 

possible for us to provide an 

opportunity for comment before the 

offset sanction would have been 

imposed. Our use of the good cause 

exception thus relieved a restriction and 

avoided the imposition of sanctions 

that, as explained below, were 

unnecessary because the State had 

already taken the steps it needed to take 

to submit an approvable rule. The only 

action that remained to be taken was 

EPA’s action to complete our 

rulemaking, including reviewing and 

responding to public comments on our 

proposed action. As explained in our 

Interim Final Rule, we could have 

disapproved the rule, if justified by 

public comments. However, we are now 

finalizing our action with an approval of 

the State’s submittal, which further 

supports the reasonableness of our use 

of the good cause exception to avoid 

needless hardship on entities and 

individuals in the San Joaquin Valley. 

b. Comment: The Good Cause 

exception does not apply because 

deferring sanctions does not present an 

‘‘imminent threat’’ or otherwise qualify 

for the exception. The danger is actually 

in deferring monetary pressure because 

it relieves pressure to achieve cleaner 

air. 

Response: At the time of our Interim 

Final Rule, the State had already taken 

the steps necessary to correct the issues 

we had identified in a previous action. 

Specifically, on May 19, 2011, 

SJVUAPCD adopted a revised version of 

Rule 3170 and on June 14, 2011, CARB 

submitted the revised rule to EPA. Thus, 

the deferral of sanctions accomplished 

by EPA’s Interim Final Rule did not 

‘‘relieve pressure’’ on the District or 

CARB. For the same reasons, EPA 

believes that the imposition of sanctions 

would not have had any effect towards 

achieving clean air, as the local agency 

and the State had already revised the 

rule and submitted it to EPA for 

incorporation into the State 

Implementation Plan. 

IV. EPA Action 

EPA is finalizing approval of Rule 

3170, ‘‘Federally Mandated Ozone 

Nonattainment Fee,’’ as a revision to 

SJVUAPCD’s portion of the California 

SIP. EPA is also finalizing approval of 

SJVUAPCD’s fee-equivalent program, 

which includes Rule 3170 and state law 

authorities that authorize SJVUAPCD to 

impose supplemental fees on motor 

vehicles, as an alternative to the 

program required by section 185 of the 

Act for anti-backsliding purposes with 

respect to the 1-hour ozone standard. 

No comments were submitted that 

change our assessment that Rule 3170 

and SJVUAPCD’s alternative program 

comply with the relevant CAA 

requirements. Therefore, as authorized 

in section 110(k)(3) of the Act, EPA is 

fully approving Rule 3170 into the 

California SIP and SJVUAPCD’s 

alternative program as an equivalent 

alternative program, consistent with the 

principles of section 172(e) of the Act. 

Final approval of Rule 3170 and 

SJVUAPCD’s equivalent alternative 

program satisfy California’s obligation 

under sections 182(d)(3), (e) and (f) to 

develop and submit a SIP revision for 


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the SJVUAPCD 1-hour ozone 

nonattainment area to meet the 

requirements for a program no less 

stringent than that of section 185. Final 

approval of Rule 3170 and SJVUAPCD’s 

equivalent alternative program also 

permanently terminates all sanctions 

and the Federal Implementation Plan 

(FIP) implications associated with 

section 185 for the 1-hour ozone 

NAAQS and previous action (75 FR 

1716, January 13, 2010) regarding SJV. 

V. Statutory and Executive Order 

Reviews 

Under the Clean Air Act, the 

Administrator is required to approve a 

SIP submission that complies with the 

provisions of the Act and applicable 

Federal regulations. 42 U.S.C. 7410(k); 

40 CFR 52.02(a). Thus, in reviewing SIP 

submissions, EPA’s role is to approve 

State choices, provided that they meet 

the criteria of the Clean Air Act. 

Accordingly, this action merely 

approves State law as meeting Federal 

requirements and does not impose 

additional requirements beyond those 

imposed by State law. For that reason, 

this action: 

• Is not a ‘‘significant regulatory 

action’’ subject to review by the Office 

of Management and Budget under 

Executive Order 12866 (58 FR 51735, 

October 4, 1993); 

• Does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

U.S.C. 3501 et seq.); 

• Is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.); 

• Does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• Does not have Federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• Is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

13045 (62 FR 19885, April 23, 1997); 

• Is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• Is not subject to requirements of 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (15 U.S.C. 272 note) because 

application of those requirements would 

be inconsistent with the Clean Air Act; 

and 

• Does not provide EPA with the 

discretionary authority to address 

disproportionate human health or 

environmental effects with practical, 

appropriate, and legally permissible 

methods under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

In addition, this rule does not have 

tribal implications as specified by 

Executive Order 13175 (65 FR 67249, 

November 9, 2000), because the SIP is 

not approved to apply in Indian country 

located in the State, and EPA notes that 

it will not impose substantial direct 

costs on tribal governments or preempt 

tribal law. 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. EPA will submit a 

report containing this action and other 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States prior to publication of the rule in 

the Federal Register. A major rule 

cannot take effect until 60 days after it 

is published in the Federal Register. 

This action is not a ‘‘major rule’’ as 

defined by 5 U.S.C. 804(2). 

Under section 307(b)(1) of the Clean 

Air Act, petitions for judicial review of 

this action must be filed in the United 

States Court of Appeals for the 

appropriate circuit by October 19, 2012. 

Filing a petition for reconsideration by 

the Administrator of this final rule does 

not affect the finality of this action for 

the purposes of judicial review nor does 

it extend the time within which a 

petition for judicial review may be filed, 

and shall not postpone the effectiveness 

of such rule or action. This action may 

not be challenged later in proceedings to 

enforce its requirements (see section 

307(b)(2)). 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Incorporation by 

reference, Intergovernmental relations, 

Nitrogen dioxide, Ozone, Reporting and 

recordkeeping requirements, Volatile 

organic compounds. 

Dated: June 11, 2012. 

Jared Blumenfeld, 

Regional Administrator, Region IX. 

Part 52, Chapter I, Title 40 of the Code 

of Federal Regulations is amended as 

follows: 

PART 52—[AMENDED] 

■ 1. The authority citation for Part 52 

continues to read as follows: 

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

Subpart F—California 

■ 2. Section 52.220 is amended by 

adding paragraph (c)(412) to read as 

follows: 

§ 52.220 Identification of plan. 

* * * * * 

(412) New regulations were submitted 

on June 14, 2011 by the Governor’s 

designee. 

(i) Incorporation by Reference. 

(A) San Joaquin Valley Unified Air 

Pollution Control District. 

(1) Rule 3170, ‘‘Federally Mandated 

Ozone Nonattainment Fee,’’ amended 

on May 19, 2011. 

* * * * * 

[FR Doc. 2012–20268 Filed 8–17–12; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 52 and 81 

[EPA–R06–OAR–2008–0633; FRL–9713–8] 

Approval and Promulgation of Air 

Quality Implementation Plans; 

Arkansas; Infrastructure Requirements 

for the 1997 Ozone NAAQS and the 

1997 and 2006 PM2.5 NAAQS and 

Interstate Transport Requirements for 

the 1997 Ozone NAAQS and 2006 PM2.5

NAAQS 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: EPA is partially approving 

and partially disapproving submittals 

from the State of Arkansas pursuant to 

the Clean Air Act (CAA or the Act) that 

address certain infrastructure elements 

specified in the CAA necessary to 

implement, maintain, and enforce the 

1997 8-hour ozone and the 1997 and 

2006 fine particulate matter (PM2.5) 

national ambient air quality standards 

(NAAQS or standards). EPA is also 

making a correction to an attainment 

status table in its regulations to 

accurately reflect the redesignation date 

of Crittenden County, Arkansas to 

attainment for the 1997 8-hour ozone 

standard. 

DATES: This final rule is effective on 

September 19, 2012. 

ADDRESSES: EPA has established a 

docket for this action under Docket 

Identification No. EPA–R06–OAR– 


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