## 10 t.PR -9 

## p;:j I: 5S Bryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G., ExecutiveDirector - ' . • \ "'. '

..' •• 'I "**~.,** i . !'



## TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas byReducing andPreventingPollution 

### April 6, 2010

Docket No. 2009-0802-SIP, ProjectNo. 2009-017-SIP-NR Docket No. 2009-0932-RUL, Rule ProjectNo. 2009-006-101-EN Docket No. 2009;.0867-RUL, Rule Project No. 2009-019-101-EN

Al Armendariz, Ph.D, Regional Administrator U.S. Environmental ProtectionAgency

- Region 6 1445 Ross Avenue Dallas, Texas 75202-2733 DearDr. Armendariz: On March 10, 2010, the Texas Commission on Environmental Quality (Commission) adopted revisions to the State Implementation Plan (SIP) for the control of ozone air pollution for the Houston-Galveston-Brazoria (HGB) area. The Commission adopted amendments to 30 Texas Administrative Code (TAC) Chapter 101, Subchapter A, General Rules, Section 101.1; and SubchapterH, Emissions Banking and Trading, Division 6, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program. Sections 101.390

- 101.394 101.396 and 101.399

- 101.401:130 TAC Chapter 101, Subchapter H, Emissions Banking and Trading, Division 3, Mass Emissions Cap and Trade Program, Sections 101.350, 101.351, and 101.353 and corresponding revisions to the SIP; and anHGB AttainmentDemonstration SIP Revision for the 1997 Eight-Hour Ozone Standard. These rule changes and SIP revisions demonstrate that the HGB area 

### will attain the 1997 eight-hour ozone National Ambient

### Air Quality Standardby June 15, 2019. Enclosed are the proposed revisions to the SIP, a public hearing certification, a complete record ofthe public hearings, and the accompanying orders. I lookforward to your expeditious approval ofthese SIP revisions. Sincerely,

# B~~**B~haW'** Ph.D. 

### Chairman BWS/jmm Enclosures

cc: The HonorableRickPerry, Governor ofTexas 

### Mr. Toby Baker, Office ofBudget, Planning and Policy, Office ofthe Governor 

### Mr. MarkR. Vickery, P.G., Executive Director, Texas Commission onEnvironmental Quality

P.O. Box 13087 Austin, Texas 78711-3087 512-239-1000 Internetaddress: www.tceq.state.tx.us

## 10 APR -9 Pr;1 I: 55
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY BryanW. Shaw, Ph.D.,Chairman Buddy Garcia, Commissioner CarlosRubinstein, Commissioner MarkR.Vickery, P.G., ExecutiveDirector

Protecting Texas by ReducingandPreventingPollution 

### April 6, 2010

Docket No. 2009-0802-SIP, Project No. 2009-017-SIP-NR DocketNo. 2009-0932-RUL, Rule ProjectNo. 2009-006-101-EN Docket No. 2009-0867-RUL, Rule Project No. 2009-019-101-EN



### Al Armendariz, Ph.D, Regional Administrator U.S. Environmental Protection Agency - Region 6 1445 Ross Avenue Dallas, Texas 75202-2733 DearDr. Armendariz: On March 10, 2010, the Texas Commission on Environmental Quality (Commission) adopted revisions to the State Implementation Plan (SIP) for the control of ozone air 

### pollution for the Houston-Galveston-Brazoria (HGB) area. The Commission adopted amendments to 30 Texas Administrative Code (TAC) Chapter 101, Subchapter A, General Ru1es, Section 101.1; and Subchapter H, Emissions Banking and Trading, Division 6, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program, Sections 101.390 - 101.394, 101.396, and 101.399 - 101.401; 30 TAC Chapter 101, Subchapter H, Emissions Banking and Trading, Division 3, Mass Emissions Cap and Trade Program, Sections 101.350, 101.351, and 101.353 and corresponding revisions to the SIP; and an HGB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard. These rule changes and SIP revisions demonstrate that the HGB area 

### will attain the 1997 eight-hour ozone National Ambient 

### Air Quality Standard by June 15, 2019. Enclosed are the proposed revisions to the SIP, a public hearing certification, a complete record ofthe public hearings, and the accompanying orders. I look forward to your expeditious approval ofthese SIP revisions. Sincerely, 

# B 

# QMW'/kzw-**Bry~haW'** Ph.D. Chairman BWS/jrnm 

### Enclosures cc: The Honorable Rick Perry, Governor ofTexas Mr. Toby Baker, Office ofBudget, Planning and Policy, Office ofthe Governor Mr. MarkR. Vickery, P.G., Executive Director, Texas Commission on Environmental Quality

P.O. Box13087 Austin, Texas 78711-3087 512-239-1000 Internetaddress: www.tceq.state.tx.us printed on recycled paper using soy-based inkTexasCommission on Environmental Quality Public Hearings October28 and 29, 2009 Conceming Revisions to 30 TAC Chapter101 HECTProgramCap Reduction andAllowance Reallocation Rule ProjectNo. 2009-006-101-EN

### INTRODUCTION

The Texas Commission on Environmental Quality (commission) held public hearings in Houston on October28, 2009, and Austin on October29, 2009, to receive testimony regarding 30 TAC Chapter 101, General Air Quality Rules, SUbchapter A, General Rules, §101.1; and SUbchapter H, Emissions Banking and Trading, Division 6, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program, §§101.390

- 101.394, 101.396, and 101.399 - 101.401; and corresponding revisions to the state implementation plan.

The adoption reduces the total cap amount of Highly Reactive Volatile Organic Compounds (HRVOC) allowances and revises the allocation methodology of allowances for participants ofthe HRVOC Emissions Cap and Trade Program. The adopted rulemaking also updates the definition of volatile organic compound to linkthe 30 TAC definition with the current definition in Title 40 Code of Federal Regulations, and corrects the reportable quantity for 1,1,1 ,2,3,3,3-heptafluoropropane.

The comment period closed on November 9, 2009. All testimony and comments have been reviewed and seriously considered. This hearing record contains a complete record of the public hearings and is divided into the following four sections:

o Public Notification and Proposal



### o Written and Oral Testimony

o Evaluation of Testimony

o Staff Recommendations/Order

Additional copies ofthis hearing record are maintained in the TCEQ central office at 12100 Park 35 Circle, Austin, Texas 78753. For further information, please contactJay Tonne at (512) 239-1453.

# STAFF RECOMMENDATIONS

### SUBCHAPTERA: GENERAL RULES §101.1
§101.1. Definitions.

Unless specifically defmed in the Texas Clean Air Act (TCAA) or in the rules ofthe commission, the terms used by the commission have the meanings commonly ascribed to them in the field ofair pollution control. In addition to the terms that are defmed by the TCAA, the,following terms, when used in the air 

### quality rules in this title, have the following meanings, unless the contextclearly indicates otherwise.

(1) Account--Forthose sources required to be permitted under Chapter 122 ofthis title (relating to Federal Operating Permits Program), all sources that are aggregated as a site. For all other
sources, any combination ofsources under common ownership or control and located on one or more contiguous properties, or properties contiguous except for interveningroads, railroads, rights-of-way, waterways, or similar divisions.

(2) Acid gas flare-A flare used exclusively for the incineration ofhydrogen sulfide and other acidic gases derived from natural gas sweetening processes.

(3) Agency established facility identification number-For the purposes ofSubchapterF of this chapter (relating to Emissions Events and Scheduled Maintenance, Startup, and Shutdown Activities), a unique alphanumeric code requiredto be assigned by the owner or operator ofa regulated entitythat the emission inventory reporting requirements of

### §101.10 ofthis title (relating to Emissions Inventory Requirements) are applicable to each facility at thatregulated entity.
1

### (4) Ambient air--That portion ofthe atmosphere, external to buildings, to which the general public has access.

(5) Background--Background concentration, the level ofair contaminants that cannot be reduced by controlling emissions from man-made sources. It 

### is determined by measuring levels in nonurban areas.

(6) Boiler-Any combustion equipmentfired with solid, liquid, and/or gaseous fuel used to produce steam or to heat water.

(7) Capture system-All equipment (including, but not limited to, hoods, ducts, fans, booths, ovens, dryers, etc.) that contains, collects, and transports an air pollutantto a control device.

(8) Captured facility--A manufacturing or production facility that generates an industrial solid waste or hazardous waste that is routinely stored, processed, or disposed ofon a shared basis in an integrated waste management unit owned, operatedby, and located within a contiguous manufacturing complex.

(9) Carbon adsorber-An add-on control device that uses activated carbon to adsorb volatile organic compounds from a gas stream.

(l0) Carbon adsorption system--A carbon adsorber with an inlet and outlet for exhaust gases and a system to regenerate the saturated adsorbent.



### 2

### (11) Coating--A material applied onto or impregnated into a substrate for protective, decorative, or functional purposes. Such materials include, but are not limited to, paints, varnishes, sealants, adhesives, thinners, diluents, inks, maskants, and temporary protective coatings.

(12) Cold solventcleaning-A batch process that uses liquid solventto remove soils from the surfaces ofparts or to dry the parts by spraying, brushing, flushing, and/or immersion while maintainingthe solvent below its boiling point. Wipe cleaning (hand cleaning) is not included in this definition.

(13) Combustion unit-Any boiler plant, furnace, incinerator, flare, engine, or other device or system used to oxidize solid, liquid, or gaseous fuels, but excluding motors and engines used in propelling land, water, and air vehicles.

(14) Combustion turbine--Any gas turbine system that is gas and/or liquid fuel fired with

or withoutpower augmentation. This unit is either attached to a foundation or is portable equipment operated at a specific minor or major source for more than 90 days in any l2-month period. Two or more gas turbines powering one shaft will be treated as one unit.

(15) Commercial hazardous waste management facility-Any hazardous waste managementfacility that accepts hazardous waste or polychlorinated biphenyl compounds for a charge, except a captured facility that disposes only waste generated on-site or a facility that accepts waste only from other facilities owned or effectively controlled by the same person.

(16) Commercial incinerator--An incinerator used to dispose ofwaste material from retail and wholesale trade establishments. 3

### (17) Commercial medical waste incinerator--A facility that accepts for incineration
medical waste generated outside the property boundaries ofthe facility.

(18) Component--A piece ofequipment, including, but not limited to, pumps, valves,
compressors, and pressure reliefvalves that has the potential to leak volatile organic compounds.

(19) Condensate-Liquids that result from the cooling and/orpressure changes ofproduced natural gas. Once these liquids are processed at gas plants or refmeries or in any other manner, they are no longer considered condensates.

(20) Construction-demolition waste--Waste resulting from construction or demolition projects.

(21) Control system or control device-Any part, chemical, machine, equipment, contrivance, or combination ofsame, used to destroy, eliminate, reduce, or control the emission ofair contaminants to the atmosphere.

(22) Conveyorized degreasing-A solvent cleaning process that uses an automated parts handling system, typically a conveyor, to automatically provide a continuous supply ofparts to be cleaned or dried using eithercold solvent or vaporized solvent. A conveyorized degreasing process 

### is fully enclosed exceptfor the conveyor inlet and exit portals.

(23) Criteriapollutant or standard-Any pollutant for which there is a national ambient air quality standard established under 40 Code ofFederal Regulations Part 50. 4

### (24) Custodytransfer-The transfer of produced crude oil and/orcondensate, after processing and/or treating in the producingoperations,from storagetanksorautomatic transferfacilities to pipelines or any otherforms oftransportation.

(25) De minimis 

### impact-A change in ground levelconcentration of an air contaminantas a result of the operation of any new majorstationary source or of theoperation of any existing sourcethat has undergone a majormodification that does not exceedthe following specifiedamounts.



## I AIR CONTAMINANT 

# II ANNUAL 

# II 24-HOUR 

## II 8-HOUR 

## II 3-HOUR 

# I i-HOUR



### InhalableParticulateMatter (PMIO ) 

# I 1.01lg/m 3 

# II 51lg/ m3 

# ICI 

# 10 I Sulfur Dioxide 

# II 1.01lg/m 3 

# II 51lg/ m3 

# II II 251lg/m3 

# 10

, NitrogeoDioxide 

# II 1.01lg/m 3 

# II 

# ICC

# 0 ICarbon Monoxide 

# II 

# ICEJCB

(26) Domesticwastes-The garbage and rubbishnormally resultingfrom the functions of life within aresidence.

(27) Emissionsbanking--A system for recordingemissions reduction credits so they may be used or transferred for future use.

(28) Emissionsevent--Any upset event orunscheduledmaintenance, startup, or shutdown activity, from a common cause that results in unauthorized emissionsof aircontaminants from one or more 5

### emissions points at aregulated entity.

(29) Emissions reduction credit-Any stationary source emissions reduction that has been banked in accordance with Chapter 101, SubchapterH, Division 1 ofthis title (relating to Emission Credit Banking and Trading).

(30) Emissions reduction credit certificate--The certificate issued by the executive director that indicates the amount ofqualified reduction available for use as offsets and the length oftime the reduction is eligible for use.

(31) Emissions unit-Any part ofa stationary source that emits, or would have the potential to 

### emit, any pollutant subjectto regulation under the Federal Clean Air Act.

(32) Excess opacity event--When an opacity reading is equal to or exceeds 15 additional percentage points above an applicable opacity limit, averaged over a six-minute period.

(33) Exempt solvent-Those carbon compounds or mixtures ofcarbon compounds used as solvents that have been excluded from the definition ofvolatile organic compound.

(34) External floating roof--A coveror roofin an open top tank 

### that rests upon or is floated upon the liquid being contained and is equipped with a single or double seal to close the space between the roofedge and tank 

### shell. A double seal consists oftwo complete and separate closure seals, one above the other, containing an enclosed space between them.

(35) Federal motorvehicle regulation--Control ofAir Pollution from MotorVehicles and 6

### Motor Vehicle Engines, 40 Code ofFederal Regulations Part 85.



### (36) Federally enforceable-All limitations and conditions that are enforceable by the United States Environmental Protection Agency administrator, including those requirements developed under40 Code ofFederal Regulations (CFR) Parts 60 and 61; requirements within any applicable state implementationplan (SIP); and any permitrequirements established under40 CFR 

### §52.21 or under regulations approved under40 CFR Part 

### 51, Subpart I, including operating permits issued underthe approved programthat is incorporated into the SIP and that expressly requires adherence to any permit issued under such program.

(37) Flare-An open combustion unit (i.e., lacking an enclosed combustion chamber) whose combustion air is provided by uncontrolled ambient air around the flame, and that is used as a control device. A flare may be equipped with a radiantheat shield (with or without a refractory lining), but is not equipped with a flame air control damping system to control the air/fuel mixture. 

### In addition, a flare may also use auxiliary fuel. The combustion flame may be elevated or at ground level. A vapor combustor,

as defmed in this section, is not considered a flare.

(38) Fuel oil-Any oil meeting the American Society for Testing and Materials (ASTM) specifications for fuel oil in ASTM 

### 0396-01, Standard Specifications for Fuel Oils, revised 

### 2001. This includes fuel oil grades 1, I (Low Sulfur), 2, 2 (Low Sulfur), 4 (Light), 4,5 (Light), 5 (Heavy), and 6.



### (39) Fugitive emission--Any gaseous or particulate contaminant entering the atmosphere that could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening designed to direct or control its flow.



### 7

### (40) Garbage--Solid waste consisting ofputrescible animal and vegetable waste materials resulting from the handling, preparation, cooking, and consumption offood, including waste materials from markets, storage facilities, and handling and sale ofproduce and other food products.

(41) Gasoline-Any petroleum distillate having a Reid vaporpressure offour pounds per square inch (27.6 kilopascals) or greater that is produced for use as a motor fuel, and is 

### commonly called gasoline.

(42) Hazardous wastes--Any solid waste identified or listed as a hazardous waste by the administrator ofthe United States Environmental Protection Agency under the federal Solid Waste Disposal Act, as amended by Resource Conservation and Recovery Act, 42 United States Code, §§6901 

### et
seq., as amended.

(43) Heatset (used in offset lithographic printing)--Any operation where heat is required to evaporate 

### inkoil from the printing 

### ink.Hot air dryers are used to deliver the heat.

(44) High-bake coatings-Coatings designedto cure attemperatures above 194 degrees Fahrenheit.

(45) High-volume low-pressure spray guns-Equipment used to apply coatings by means ofa spray gun that operates between 0.1 and 10.0 pounds per square inch gauge air pressure measured at the air cap.

(46) Incinerator-An enclosed combustion apparatus and attachments that is used in the
process ofburning wastes for the primary purpose ofreducing its volume and weight by removing the 

### 8

### combustibles ofthe waste and is equipped with a flue for conducting products ofcombustion to the atmosphere. Any combustion device thatburns 10% or more ofsolid waste on a total British thermal unit (Btu) heat input basis averaged over anyone-hourperiod is considered to be an incinerator. A combustion device without instrumentation or methodology to determine hourly flow rates ofsolid waste and burning 1.0% or more ofsolid waste on a total Btu heat input basis averaged annually is also considered to 

### bean incinerator. An 

### open-trench type (with closed ends) combustion unit may be considered an incinerator when approved by the executive director. Devices burning untreated wood scraps, waste wood, or sludge from the treatment ofwastewaterfrom the process mills as a primary fuel for heat recovery are not included under this defmition. Combustion devices permitted under this title as combustion devices other than incinerators will not be considered incinerators for application ofany rule within this title provided they are installed and operated in compliance with the condition ofall applicable permits.

(47) Industrial boiler-A boiler located on the site ofafacility engaged in a manufacturing
process where substances are transformed into new products, including the componentparts ofproducts, by mechanical or chemical processes.

(48) Industrial furnace-Cement kilns; lime kilns; aggregate kilns; phosphate kilns; coke ovens; blast furnaces; smelting, melting, or refming furnaces, includingpyrometallurgical devices such as cupolas, reverberatorfurnaces, sintering machines, roasters, or foundry furnaces; titanium dioxide chloride
process oxidation reactors; methane reforming furnaces; pulping recovery furnaces; combustion devices used in the recovery ofsulfurvalues from spent sulfuric acid; and other devices the commission may list.

(49) Industrial solid waste-Solid waste resulting from, or incidental to, any process of industry or manufacturing, or mining or agricultural operations, classified as follows.



### 9

### (A) Class I industrial solid waste or Class I waste is any industrial solid waste designated as Class 1 by the executive director as any industrial solid waste or mixture ofindustrial solid
wastes that because ofits concentration or physical or chemical characteristics is toxic, corrosive, flammable, a strong sensitizer or irritant, a generator ofsudden pressure by decomposition, heat, or other

means, and may pose a substantial present or potential dangerto human health or the environment when improperly processed, stored, transported, or otherwise managed, including hazardous industrial waste, as defmed in §335.1 and §335.505 ofthis title (relating to Defmitions and Class I Waste Determination).

(B) 

### Class 2 industrial solid waste is any individual solid waste or combination of industrial solid wastes that cannot be described as Class I or Class 3, as defmed in §335.506 ofthis title (relating to Class 2 Waste Determination).

(C) 

### Class 3 industrial solid waste is any inert and essentially insoluble industrial solid waste, including materials such as rock, brick, glass, dirt, and certain plastics and rubber, etc., that are
not readily decomposable as defmed in §335.507 ofthis title (relating to Class 3 Waste Determination).

(50) Internal floating cover-A cover or floating roofin a ftxed roof

### tankthat rests upon or is floated upon the liquid being contained, and is equipped with a closure seal or seals to close the space between the cover edge and 

### tank shell.

(51) Leak-A volatile organic compound concentration greaterthan 10,000 parts per million by volume or the amount specified by applicable rule, whichever is lower; or the dripping or exuding ofprocess fluid based on sight, smell, or sound.

(52) Liquid fuel-A liquid combustible mixture, not derived from hazardous waste, with a 10heating value ofat least 5,000 British thermal units perpound.

(53) Liquid-mounted seal--A primary seal mounted in continuous contact with the liquid
between the 

### tankwall and the floating roofaround the circumference ofthe tank.

(54) Maintenance area-A geographic region ofthe state previously designated
nonattainment under the Federal Clean Air Act Amendments of 1990 and subsequently redesignated to attainment subjectto the requirementto develop a maintenance plan under42 United States Code, §7505a.
The following are the maintenance areas within the state:

(A) Victoria Ozone Maintenance Area 60 

### (FederalRegister (FR) 12453)

- Victoria County; and

(B) Collin County Lead Maintenance Area (64 FR 55421)

- Portion ofCollin County. Eastside: Starting at the intersection ofSouth Fifth Street and the fence line approximately 1,000
feet south ofthe Exide property line going north to the intersection ofSouth Fifth Street and Eubanks Street; Northside: Proceeding west on Eubanks to the Burlington Railroad tracks; Westside: Along the Burlington Railroad tracks to the fence line approximately 1,000 feet south ofthe Exide property line; Southside: Fence line approximately 1,000 feet south ofthe Exide property line.

(55) Maintenance plan--A revision to the applicable state implementation plan, meeting the requirements of42 United States Code, §7505a.

(56) Marine vessel--Any watercraft used, or capable ofbeing used, as a means of transportation on water, and that is constructed or adapted to carry, or that carries, oil, gasoline, or other 

### 11

### volatile organic liquid in bulk as a cargo or cargo residue.

(57) Mechanical shoe seal-A metal sheet that is held vertically against the storage tank wall by springs or weighted levers and is connected by braces to the floating roof. A flexible coated fabric (envelope) spans the annular space between the metal sheet and the floating roof.

(58) Medical waste-Waste materials identified by the Department ofState Health Services as "special waste from health care-related facilities" and those waste materials commingled and discarded with special waste from health care-related facilities.

(59) Metropolitan Planning Organization--Thatorganization designated as being responsible, together with the state, for conducting the continuing, cooperative, and comprehensive planning process under 23 United States Code (USC), 

### §134 and 49 USC, 

### §1607.

(60) Mobile emissions reduction credit-The credit obtained from an enforceable, permanent, quantifiable, and surplus (to other federal and state rules) emissions reduction generated by a mobile source as set forth in Chapter 114, SubchapterF ofthis title (relating to Vehicle Retirement and
Mobile EmissionReduction Credits), and that has been banked in accordance with Subchapter H, Division 1 ofthis chapter.

(61) Motor vehicle-A self-propelled vehicle designed for transporting persons or property on a street or highway.

(62) Motor vehicle fuel dispensing facility--Any site where gasoline is dispensed to motor vehicle fuel 

### tanks from stationary storage tanks. 12

### (63) Municipal solid waste--Solid waste resulting from, or incidental to, municipal, community, commercial, institutional, and recreational activities, including garbage, rubbish, ashes, street ICleanings, dead animals, abandoned automobiles, and all other solid waste except industrial solid waste.

(64) Municipal solid waste facility-All contiguous land, structures, other appurtenances, and improvements on the land used for processing, storing, or disposing ofsolid waste. A facility may be publicly or privately owned and may consist ofseveral processing, storage, or disposal operational units,
e.g., one or more landfills, surface impoundments, or combinations ofthem.

(65) Municipal solid waste landfill-A discrete area ofland or an excavationthatreceives household waste and that is not a land application unit, surface impoundment, injection well, or waste pile, as those terms are defined under40 Code ofFederal Regulations §257.2. A municipal solid waste landfill (MSWLF) unit also may receive othertypes ofResource Conservation and Recovery Act SubtitleD wastes, such as commercial solid waste, nonhazardous sludge, conditionally exempt small-quantity generator waste, and industrial solid waste. Such a landfill may be publicly or privately owned. An


### MSWLF unit may be a new MSWLF unit, an existing MSWLF unit, or a lateral expansion.

(66) National ambient air quality standard-Those standards established under 42 United States Code, §7409, including standards for carbon monoxide, lead, nitrogen dioxide, ozone, inhalable particulate matter, and sulfur dioxide.

(67) Net ground-level concentration-The concentration ofan 

### air contaminant as measured
at or beyond the property boundary minus the representative concentration flowing onto a property as measured at any point. Where there is 

### no expected influence ofthe 

### air contaminantflowing onto a property 13

### from other sources, the net ground level concentration may be determined by a measurement at or beyond
the property boundary.

(68) New source--Any stationary source, the construction or modification ofwhich was commenced after March 5, 1972.

(69) Nitrogen oxides (NO" )-The sum ofthe nitric oxide and nitrogen dioxide in the flue
gas or emission point, collectively expressed as nitrogen dioxide.

(70) Nonattainment area--A defined region within the state that is designated by the United States Environmental Protection Agency (EPA) as failing to meetthe national ambient air 

### quality standard for a pollutantfor which a standard exists. The EPA will designate the area as nonattainment underthe provisions of42 United States Code, §7407(d). Forthe official list and boundaries of nonattainment areas, see 40 Code ofFederal Regulations Part 81 and pertinent

### FederalRegister(FR) notices. The following areas comprise the nonattainment areas within the state for all national ambient air quality standards (NAAQS). EPA has indicatedthat it will revoke the one-hourozone standard in full, including the associated designations and classifications, on June 15, 2005, which is 

### one year following the effective date ofthe designations for the eight-hourNAAQS ofJune 15,2004.

(A) Carbon monoxide (CO). El Paso CO nonattainment area (56 FR 56694)- Classified as a Moderate CO nonattainmentarea with a design value less than or equal to 12.7 parts per million. Portion ofEl Paso County. Portion ofthe city limits ofEI Paso: Thatportion ofthe City ofEl Paso bounded on the north by Highway 10 from Porfrrio Diaz Streetto Raynolds Street, Raynolds Street from Highway 10 to the Southern Pacific Railroad lines, the Southern Pacific Railroad lines from Raynolds Streetto Highway 62, Highway 62 from the Southern Pacific Railroad lines to Highway 20, and Highway 14

### 20 from Highway 62 to Polo 

### InnRoad. Bounded on the east by Polo 

### InnRoad from Highway 20 to the Texas-Mexico border. Bounded on the south by the Texas-Mexico borderfrom Polo 

### InnRoad to Porfirio Diaz Street. Bounded on the west byPorfirio Diaz Street from the Texas-Mexico border to Highway 10.

(B) Inhalable particulatematter (PM IO ) . 

### ElPaso PM IO 

### nonattainment area (56 FR 56694)-Classified as a Moderate PM IO 

### nonattainment area. Portion of

### El Paso County that comprises the EI Paso city limit boundaries as they existed on November 15, 1990.



### (C) Lead. No designated nonattainment areas.

(0) 

### Nitrogen dioxide. No designated nonattainment areas.

(E) 

### Ozone (one-hour).

(i) 

### Houston-Galveston-Brazoria (HGB) one-hour ozone nonattainment area (56 FR 56694)

- Classified as a Severe-17 ozone nonattainment area Consists ofBrazoria, Chambers,
FortBend, Galveston, Harris, Liberty, Montgomery, and Waller Counties.

(ii) 

### El Paso one-hour ozone nonattainment area (56 FR 56694)- Classified as a Serious ozone nonattainment area Consists of

### El Paso County.

(iii) 

### Beaumont-PortArthur (BPA) one-hour ozone nonattainrnent area (69 FR 16483) - Classified as a Serious ozone nonattainment area. Consists ofHardin, Jefferson, and Orange Counties.

15

### (iv) Dallas-Fort Worth one-hour ozone nonattainment area (63 FR 8128) - Classified as a Serious ozone nonattainment area Consists ofCollin, Dallas, Denton, and Tarrant Counties.

(F) 

### Ozone (eight-hour).

(i) HGB eight-hour ozone nonattainment area (69 FR 23936)

- Classified

as a Moderate ozone nonattainment area Consists ofBrazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties.

(ii) BPA eight-hour ozone nonattainment area (69 FR 23936)

- Classified

as a Marginal ozone nonattainment area. Consists ofHardin, Jefferson, and Orange Counties.



### (iii) Dallas-Fort Worth eight-hour ozone nonattainment area (69 FR 23936)

- Classified as a Moderate ozone nonattainment area Consists ofCollin, Dallas, Denton, Ellis, Johnson, Kaufinan, Parker, Rockwall, and Tarrant Counties.

(iv) San Antonio eight-hour ozone nonattainment area (69 FR 23936)- Classified underthe Federal Clean Air Act, Title 

### 1,Part D, Subpart 1 (42 United States Code, §7502), nonattainment deferred to September 30,2005, or as extended by EPA.

(G) Sulfurdioxide. No designated nonattainment areas.

(71) Non-reportable emissions 

### event-Any emissions eventthat in any 24-hour period does not result 

### in an unauthorized emission from any emissions point equal to or 

### in excess ofthe reportable 16

### quantity as defined in this section.

(72) Opacity--The degree to which an emission ofair contaminants obstructs the transmission oflight expressed as the percentage oflight obstructed as measured by an optical instrument

or trained observer.

(73) Open-top vapor degreasing--A batch solvent cleaningprocess that is 

### open to the air and that uses boiling solventto create solvent vapor used to clean or dry 

### parts through condensation ofthe hot solventvapors on the parts.

(74) Outdoorburning--Any fire or smoke-producing process that is not conducted in a combustion unit.

(75) Particulate matter--Any material, except uncombined water, that exists as a solid or liquid in the atmosphere or in a gas stream at standard conditions.

(76) Particulate matteremissions-All finely-divided solid or liquid material, otherthan uncombined water, emitted to 

### the ambientair as measured by United States Environmental Protection Agency Reference Method 5, as specified at 40 Code ofFederal Regulations (CFR) Part 60, Appendix A, modified to 

### include particulate caughtby an impingertrain; by an equivalent or alternative method, as specified at 40 CFR Part 51; or by a test method specified in an approved state implementation plan.

(77) Petroleum refmery--Any facility engaged inproducing gasoline, kerosene, distillate fuel oils, residual fuel oils, lubricants, or other products through distillation ofcrude oil, orthrough the redistillation, cracking, extraction, reforming, or other processing ofunfmished petroleum derivatives. 

### 17

### (78) PMIO

### -Particulate matter with an aerodynamic diameter less than or equal to a nominal ten micrometers as measured by a reference method based on 40 Code ofFederal Regulations (CFR) Part 50, Appendix J, and designated in accordance with 40 CFR Part 53, or by an equivalent method designated with thatPart 53.

(79) PM IO

### emissions-Finely-divided solid or liquid material with an aerodynamic diameter less than or equal to a nominal ten micrometers emitted to the ambient 

### air as measured by an applicable reference method, or an equivalentor alternative method specified in 40 Code ofFederal Regulations Part 51, or by a test method specified in an approved state implementation plan.

(80) Polychlorinated biphenyl compound--A compound subjectto 40 Code ofFederal Regulations Part 761.

(81) Process or processes-Any action, operation, or treatment embracing chemical, commercial, industrial, or manufacturing factors such as combustion units, kilns, stills, dryers, roasters, and equipment used in connection therewith, and all other methods or forms ofmanufacturing or processing that may emit smoke, particulate matter, gaseous matter, or visible emissions.

(82) Process weightper hour--"Process weight" is the total weight ofall materials introduced orrecirculated into any specific process that may cause any discharge of

### air contaminants into the atmosphere. Solid fuels charged into the process will be considered as part ofthe process weight, but liquid and gaseous fuels and combustion 

### air will not. The "process weight perhour" will be derived by dividing the total process weightby the number ofhours in one complete operation from the beginning of any given process to the completion thereof, excluding any time during that the equipment used to conduct 18

### the process is idle. For continuous operation, the "process weightper hour" will be derived by dividing the
total process weightfor a 24-hourperiodby 24.

(83) Property--Alliand under common control or ownership coupled with all improvements on such land, and all fixed or movable objects on such land, or any vessel on the waters of
this state.

(84) Reasonable further progress-Annual incremental reductions in emissions ofthe applicable air contaminantthat are sufficientto provide for attainment ofthe applicable national ambient air quality standard in the designated nonattainment areas by the date required in the state implementation plan.

(85) Regulated entity-All regulated units, facilities, equipment, structures, or sources at
one street address or location that are owned or operated by the same person. The term includes any property under common ownership or control identified in a permit or used in conjunction with the regulated activity at the same street address or location. Owners or operators ofpipelines, gathering lines, and flowlines under common ownership or control in a particular county may be treated as a single regulated entity for purposes ofassessment and regulation ofemissions events.

(86) Remote reservoir cold solvent cleaning-Any cold solventcleaning operation in which liquid solvent is pumped to a sink-like work areathat drains solventback into an enclosed container while parts are being cleaned, allowing no solventto pool in the work area.

(87) Reportable emissions event-Any emissions eventthat 

### in any 24-hourperiod, results in an unauthorized emission from any emissions pointequal to or 

### in excess ofthe reportable quantity as 

### 19

### defmed 

### in this section.

(88) Reportable quantity (RQ)-Is as follows:

(A) for individual air contaminantcompounds and specifically listed mixtures by

name or Chemical Abstracts Service (CAS) number, either:

(i) the lowest ofthe quantities:

(1)

### listed in 40 Code ofFederal Regulations (CFR) Part 302,
Table 302.4, the column "final RQ";

(II) 

### listed in 40 CFR Part 355, Appendix A, the column "Reportable Quantity"; or

(III) 

### listed as follows:

(-a-) acetaldehyde - 1,000 pounds, except 

### in the HoustonGalveston-Brazoria (HGB) and Beaumont-PortArthur (BPA) ozone nonattainment areas as defined 

### in paragraph (70)(E)(i) and (iii) 

### ofthis section, where the RQ must be 100 pounds;

(-b-) butanes (any isomer) - 5,000 pounds;

(-c-) butenes (any isomer, except 1,3-butadiene)

- 5,000 pounds, except in the HGB and BPA ozone nonattainmentareas as defmed in paragraph (70)(EXi) and (iii) 

### 20

### ofthis section, where the RQ must be 100 pounds;

(-d-) carbon monoxide

- 5,000 pounds;

(-e-) l-chloro-I,l-difluoroethane (HCFC-142b) - 5,000 pounds;

(-f-) chlorodifluoromethane (HCFC-22)

- 5,000 pounds;

(-g-) 

### l-chloro-l-fluoroethane (HCFC-15Ia)

- 5,000 pounds;

(-h-) chlorofluoromethane (HCFC-31) - 5,000 pounds;

(-i-) 

### chloropentafluoroethane (CFC-115) - 5,000 pounds;

(-j-) 

### 2-chloro-l,1,1,2-tetrafluoroethane (HCFC-124)

- 5,000 pounds;



### (-k-) l-chloro-I, 1,2,2 tetrafluoroethane (HCFC-124a)

- 5,000 pounds;

(-1-) 1,1,1,2,3,4,4,5,5,5-decafluoropentane (lIFC 43- 10mee) - 5,000 pounds;

21

### pounds;

225ca) - 5,000 pounds;

225cb) - 5,000 pounds;

5,000 pounds;

pounds;

5,000 pounds; (-m-) decanes (any isomer) - 5,000 pounds;

(-n-) 1,I-dichloro-l-fluoroethane (HCFC-14Ib) - 5,000

(-0-) 

### 3,3-dichloro-l, 1,2,2-pentafluoropropane (HCFC-

(-p-) 1,3-dichloro-l, 1,2,2,3-pentafluoropropane (HCFC-

(-q-) 1,2-dichloro-1 ,1,2,2-tetrafluoroethane (CFR-114) -

(-r-) 1,1- dichlorotetrafluoroethane (CFC-114a)

- 5,000

(-s-) 1,2-dichloro-I,I,2-trifluoroethane (HCFC-123a)-

(-t-) I,I-difluoroethane (HFC-152a) - 5,000 pounds;

(-u-) difluoromethane (HFC-32) - 5,000 pounds;

(-v-) 

### ethanol- 5,000 pounds; 22

### (-w-) ethylene - 5,000 pounds, except 

### in the HGB and 

### BPAozone nonattainrnent areas as defmed 

### in paragraph (70)(E)(i) and (iii) 

### ofthis section, where the 

### RQ must be 100 pounds;

(-x-) ethylfluoride (HFC-16l) - 5,000 pounds;

(-y -) 1,1,1,2,3,3,3-heptafluoropropane (HFC-227ea)- 5,000 pounds;

(-z-) 1,1,1,3,3,3-hexafluoropropane (HFC-236fa)

- 5,000 pounds;

(-aa-) 

### 1,1,1,2,3,3-hexafluoropropane (HFC-236ea)- 5,000 pounds;

(-bb-) hexanes (any isomer) - 5,000 pounds;

(-cc-) isopropyl alcohol- 5,000 pounds;

(-dd-) mineral spirits - 5,000 pounds;

(-ee-) octanes (any isomer) - 5,000 pounds;

(-ff-) 

### oxides ofnitrogen - 200 pounds 

### in ozone 23

### nonattainment, ozone maintenance, early action compact areas, Nueces County, and San Patricio County, and 5,000 pounds in all other areas ofthe state, which should be used instead ofthe RQs for nitrogen oxide and nitrogen dioxide provided in 40 CFR Part 302, Table 302.4, the column "final RQ";

(-gg-) pentachlorofluoroethane (CFR-lll)

- 5,000 pounds;

(-hh-) 1,1,1,3,3-pentatluorobutane (HFC-365mfc) - 5,000 pounds;

(-ii-) 

### pentatluoroethane (HFC-125)

- 5,000 pounds;

(-jj-) 

### 1,1,2,2,3-pentatluoropropane (HFC-245ca) - 5,000 pounds;

(-kk-) 

### 1,1,2,3,3-pentatluoropropane (HFC-245ea) - 5,000 pounds;

(-11-) 

### 1,1,1,2,3-pentatluoropropane (HFC-245eb) - 5,000 pounds;

(-mm-) 

### 1,1,1,3,3-pentatluoropropane (HFC-245fa)- 5,000 pounds;

(-nn-) 

### pentanes (any isomer) - 5,000 pounds; 24(-00-) propane - 5,000 pounds;

(-pp-) propylene - 5,000 pounds, except

### inthe HGB and
BPA ozone nonattainment areas as defmed 

### inparagraph (70)(E)(i) and (iii) ofthis section, where the RQ

must be 100 pounds;

(-qq-) 1,1,2,2-terachlorodifluoroethane (CFR -112)- 5,000 pounds;

(-rr-) 1,1, 1,2-tetrachlorodifluoroethane (CFC-112a)

- 5,000 pounds;

(-ss-) 1,1,2,2-tetrafluoroethane (HFC-134)

- 5,000 pounds;

(-tt-) 1,I, 1,2-tetrafluoroethane (HFC-134a)

- 5,000 pounds;

(-uu-) 1,1,2-trichloro-I,2,2-trifluoroethane (CFR-l13)- 5,000 pounds;

(-vv-) 1,1,I-trichloro- 2,2,2- trilfloroethane (CFC- 113a)- 5,000 pounds;

25

### (-ww-) 1,1, 1-trifluoro-2,2-dichloroethane (HCFC-123)

- 5,000 pounds;

(-xx-) 1,1,1-trifluoroethane (HFC-143a) - 5,000 pounds;

(-yy-) 

### trifluoromethane (HFC-23) - 5,000 pounds; or

(-zz-) toluene- 1,000 pounds, except in the HGB and BPA ozone nonattainment areas as defmed 

### in paragraph (70)(£)(i) and (iii) 

### ofthis section, where the RQ must be 100 pounds;

(ii) ifnot listed in clause (i) ofthis subparagraph, 100 pounds;

(B) 

### for mixtures ofair contaminant compounds:

(i) where the relative amount ofindividual air contaminant compounds is known through common process knowledge or prior engineering analysis or testing, any amount ofan individual air contaminant compound that equals or exceeds the amount specified in subparagraph (A) of this paragraph;

(ii) where the relative amount ofindividual air contaminant compounds in subparagraph (A)(i) ofthis paragraph is not known, any amount ofthe mixture that equals or exceeds the amount for any single air contaminant compound that is present in the mixture and listed in subparagraph (A)(i) ofthis paragraph;



### 26

### (iii) 

### where each ofthe individual 

### air contaminantcompounds listed in subparagraph (A)(i) ofthis paragraph are known to be less than 0.02% by weight ofthe mixture, and each ofthe otherindividual air contaminant compounds coveredby subparagraph (A)(ii) ofthis paragraph are knownto 

### beless than 2.0% by weight ofthe mixture, any total amount ofthe mixture ofair contaminant compounds greater than or equal to 5,000 pounds; or

(iv) where natural gas excluding carbon dioxide, water, nitrogen, methane, ethane, noble gases, hydrogen, and oxygen or 

### air emissions from crude oil are knownto be in an
amount greaterthan or equal to 5,000 pounds or the associated hydrogen sulfide and mercaptans in a total
amount greaterthan 100 pounds, whichever occurs first;

(C) 

### for opacity from boilers and combustion turbines as defined in this section fueled by natural gas, coal, lignite, wood, fuel oil containing hazardous air pollutants at a concentration of less than 0.02% by weight, opacity that is equal to or exceeds 15 additional percentage points above the applicable limit, averaged over a six-minute period. Opacity is the only RQ applicable to boilers and combustion turbines described in this paragraph; or

(D) 

### for facilities where 

### air contaminant compounds are measured directly by a continuous emission monitoring system providing updated readings at a minimum IS-minute interval an amount, approved by the executive director based on any relevant conditions and a screening model, that would be reported prior to ground level concentrations reaching at any distance beyond the closest regulated entity property line:

(i) less than one-halfofany applicable ambientair standards; and



### 27

### (ii) 

### less than two times the concentration ofapplicable air emission
limitations.

(89) Rubbish-Nonputrescible solid waste, consisting ofboth combustible and noncombustible waste materials. Combustible rubbish includes paper, rags, cartons, wood, excelsior, furniture, rubber, plastics, yard trimmings, leaves, and similarmaterials. Noncombustible rubbish includes glass, crockery, tin cans, aluminum cans, metal furniture, and like materials that will not bum at ordinary incineratortemperatures (l,600 degrees Fahrenheitto 1,800 degrees Fahrenheit).

(90) Scheduledmaintenance, startup, or shutdown activity-Foractivities with unauthorized emissions that are expected to exceed a reportable quantity (RQ), a scheduled maintenance, startup, or shutdown activity is an activity that the owner or operator ofthe regulated entity whether performing or otherwise affected by the activity, provides priornotice and a fmal report as required by 

### §101.211 ofthis title (relating to Scheduled Maintenance, Startup, and Shutdown Reporting and Recordkeeping Requirements); the notice or final report includes the information required in 

### §101.211 of this title; and the actual unauthorized emissions from the activity do not exceed the emissions estimates submitted in the initial notification by more than an RQ. For activities with unauthorized emissions that are
not expected to, and do not, exceed an RQ, a scheduled maintenance, startup, or shutdown activity is one that is recorded as required by 

### §101.211 ofthis title. Expected excess opacity events as described in 

### §101.20 1(e) ofthis title (relating to Emissions EventReporting and Recordkeeping Requirements) resulting from scheduled maintenance, startup, or shutdown activities are those that provide prior notice (if required), and are recorded and reported as required by 

### §101.211 ofthis title.

(91) Sludge--Any solid or semi-solid, or liquid waste generated from a municipal, commercial, or industrial wastewatertreatmentplant; water supply treatmentplant, exclusive ofthe treated 28

### effluent from a wastewatertreatmentplant; or air pollution controlequipment.

(92) Smoke--Small gas-born particlesresultingfromincomplete combustionconsisting predominately of carbon and othercombustible material and present in sufficientquantityto be visible.

(93) Solid waste-Garbage, rubbish, refuse, sludge from a waste water treatmentplant, water supplytreatment plant, or air pollutioncontrolequipment, and other discardedmaterial, including solid, liquid, semisolid,orcontainerized gaseousmaterialresultingfromindustrial, municipal, commercial, mining, and agriculturaloperations and from communityand institutional activities. The term does not include:

(A) solid ordissolved material in domesticsewage, or solid ordissolved material in irrigationreturn flows, or industrial discharges subject to regulation by permit issued under the Texas Water Code, Chapter26;

(B) 

### soil, dirt, rock, sand, and other natural orman-made inert solidmaterials used to fill land, if

### the object of the fill is to make the land suitable for theconstruction of surface improvements; or

(C) 

### wastematerials that result fromactivities associated with the exploration, development, or production of oil or gas, or geothermalresources, and other substanceor material regulatedby the Railroad CommissionofTexas under NaturalResources Code, §91.101, unlessthe waste, substance, or materialresults from activitiesassociatedwith gasolineplants, naturalgas 

### liquids processing plants, pressuremaintenanceplants, orrepressurizing plants and is hazardouswaste as defmed by the administratorof the United StatesEnvironmental Protection Agencyunder the federal Solid Waste 29

### Disposal Act, as amended by Resource Conservation and Recovery Act, as amended (42 United States Code, §§6901 

### et seq.).

(94) Sourcrude-A crude oil that will emit a sour gas when in equilibrium at atmospheric
pressure.

(95) Sourgas-Any natural gas containing more than 1.5 grains ofhydrogen sulfide per 100 cubic feet, or more than 30 grains oftotal sulfurper 100 cubic feet.

(96) Source-A point oforigin ofair contaminants, whetherprivately or publicly owned or operated. Upon request ofa source owner, the executive director shall determine whether multiple processes emitting 

### aircontaminants from a single point ofemission will be treated as a single source or as multiple sources.

(97) Special waste from health care-related facilities-A solid waste that 

### ifimproperly treated or handled, may serve to transmit infectious disease(s) and that is comprised ofthe following: animal waste, bulk blood and blood products, microbiological waste, pathological waste, and sharps.

(98) Standard conditions-A condition at a temperature of68 degrees Fahrenheit (20 degrees Centigrade) and a pressure of 14.7 pounds per square inch absolute (101.3 kiloPascals).

(99) Standard metropolitan statistical area-An area consisting ofa county or one or more contiguous counties that 

### isofficially so designated by the United States Bureau ofthe Budget.

(100) Submerged fill pipe-A fill pipe that extends from the top ofa tank 

### to have a 30

### maximum clearance ofsix inches 

### (15.2 centimeters) from the bottom or, when applied to a tank that is loaded from the side, that has a discharge opening entirely submerged when the pipe used to withdraw liquid from the tank 

### can no longer withdraw liquid in normal operation.



### (101) Sulfur compounds--All inorganic or organic chemicals having an atom or atoms of sulfur in their chemical structure.



### (102) Sulfuric acid mist/sulfuric acid--Emissions ofsulfuric acidmist and sulfuric acid are consideredto be the same air contaminantcalculated as H2 

### S04 and must include sulfuric acid liquid mist, sulfur trioxide. and sulfuric acid vapor as measured by Test Method 8 in 

### 40 Code ofFederal Regulations
Part 

### 60, Appendix 

### A.

(103) Sweet crude oil and gas-Those crude petroleum hydrocarbons that are not "sour" as defmed in this section.



### (104) Total suspended particulate--Particulate matter as measured by the method described in 

### 40 Code ofFederal Regulations Part 

### 50, Appendix B.

(lOS) Transfer efficiency-The amount ofcoating solids deposited onto the surface or a part ofproductdivided by the total amount ofcoating solids deliveredto the coating application system;



### (106) True vapor pressure-The absolute aggregate partial vapor pressure, measured in pounds per square inch absolute, ofall volatile organic compounds at the temperature ofstorage, handling,

or processing.

31

### (107) Unauthorized emissions--Emissions ofany air contaminantexcept carbon dioxide, water, nitrogen, methane, ethane, noble gases, hydrogen, and oxygen that exceed any air emission limitation in a permit, rule, or order ofthe commission or as authorized by Texas Clean Air Act, §382.05l8(g).

(108) Unplanned maintenance, startup, or shutdown activity--For activities with unauthorized emissions that are expected to exceed a reportable quantity or with excess opacity, an unplanned maintenance, startup, or shutdown activity is:

(A) a startup or shutdown that was not part ofnormal or routine facility operations, is unpredictable as to timing, and is not the type ofevent normally authorized by permit; or

(B) a maintenance activity that arises from sudden and unforeseeable events beyond the control ofthe operatorthat requires the immediate corrective action to minimize or avoid an upset or malfunction.

(109) Upset event-An unplanned and unavoidable breakdown or excursion ofa process

or operation that**re~ults** 

### in unauthorized emissions. A maintenance, startup, or shutdown activity that was reported under 

### §101.211 ofthis title (relating to Scheduled Maintenance, Startup, and Shutdown Reporting and Recordkeeping Requirements), but had emissions that exceeded the reported amountby more than a reportable quantity due to an unplanned and unavoidable breakdown or excursion ofa process or operation is an upset event.

(110) Utility boiler--A boiler used to produce electric power, steam, or heated or cooled air, or other gases or fluids for sale. 32

### (111) Vapor combustor--A partially enclosed combustion device used to destroy volatile organic compounds by smokeless combustion without extracting energy in the form ofprocess heat or steam. The combustion flame may be partially visible, but at no time does the device operate with an uncontrolled flame. Auxiliary fuel and/or a flame air control damping system that can operate at all times
to control the air/fuel mixture to the combustor's flame zone, may be required to ensure smokeless combustion during operation.

(112) Vapor-mounted seal-A primary seal mounted so there is an annular space underneath the seal. The annular vapor space is bounded by the bottom ofthe primary seal, the tank 

### wall, the liquid surface, and the floating roofor cover.

(113) 

### Vent-Any duct, stack, chimney, flue, conduit, or other device used to conduct air contaminants into the atmosphere.

(114) Visible emissions-Particulate or gaseous matterthat can be detected by the human eye. The radiant energy from an open flame is not considered a visible emission under this defmition.

(115) Volatile organic compound-As defined 

### in 40 Code ofFederal Regulations §51.100(s), except §51.100(s)(2) - (4), as amended on January 21,2009 (74 FR 3441).

(116) Volatile organic compound (VOe) water 

### separator-Anytank, 

### box, sump, or other container 

### in which any VOC, floating on or contained 

### in water entering such tank, 

### box, sump, or other container, is physically separated and removed from such water prior to outfall, drainage, or recovery of such water. 33

### 34

### SUBCHAPTER H: EMISSIONS BANKING AND TRADING DMSION 6: HIGHLY-REACTIVE VOLATILE ORGANIC COMPOUND EMISSIONS CAP AND TRADE PROGRAM §§101.390 - 101.394, 101.396, 101.399 - 101.401

STATUTORY AUTHORITY The amendments are adopted underTexas Water Code (TWC), §5.102, concerning General Powers, that provides the commission with the general powers to carry

### out its duties underthe Texas Water Code; TWC, §5.103, concerning Rules, that authorizes the commission to adopt rules necessary to carry 

### out its powers and duties underthe Texas Water Code; TWC, §5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy ofthe commission; and underTexas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adopt rules consistentwith the policy and purposes ofthe Texas Clean Air Act. The amendments are also adopted underTHSC, §382.002, concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state's 

### air resources, consistent with the protection ofpublic health, general welfare, and physical property; §382.011, concerning General Powers and Duties, that authorizes the commission to control the quality ofthe state's 

### air; and §382.012, concerning State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the proper control ofthe state's 

### air. The amendments are also adopted under THSC, §382.016, concerning Monitoring Requirements; Examination ofRecords, that authorizes the commission to prescribe reasonable requirements for the measuring and monitoring of

### air contaminant emissions. The amendments are also adopted underFederal Clean Air Act (FCAA), 42 United States Code (USC), §§7401, 

### et seq., which requires states to submit
state implementation plan revisions that specify the manner in which the National AmbientAir Quality Standard will be achieved and maintained within each air quality control region ofthe state.

35

### The adopted amendments implementTHSC, §§382.002, 382.011, 382.012, 382.016, and 382.017, FCAA, 42 USC, §§7401 et seq.



### §101.390. Definitions.



### The following words and terms, when used in this division, have the following meanings, unless the context clearly indicatesotherwise.

(1) Allowance--The authorizationto emit one ton ofhighly-reactivevolatile organic compounds, expressed in tenths ofa ton, during a control period.

(2) Authorized accountrepresentative--The responsibleperson who is authorized in writing to transfer and otherwise manage allowances for the site.

(3) Banked allowance--Anallowancethat is not used to reconcile emissions in the designated yearofallocation, but is carried forward for up to one year and noted as banked in the compliance account or broker account.

(4) Baseline emissions period--The two consecutive calendar-yearcontrol periods from 2006 - 2009 with the highest monitored average actual HRVOC emissions for the purposeofestablishing baseline emissionsused for the allocationofallowances, except as allowed under §101.394(a)(l)(C) 

### and (D) 

### ofthis title (relatingto AllocationofAllowances).

(5) 

### Broker--A person that is not required to participate in the requirementsofthis division, but that opens an account under this division for the purpose ofbanking and trading allowances. 36

### (6) Brokeraccount--The accountwhere allowances held by a broker are recorded. Allowances held in a broker account may not be used to satisfy compliance requirements for this division.

(7) Compliance account--The account in which allowances held by a site are recorded for the purposes ofmeeting the requirements ofthis division.

(8) Industry sector--One ofthe following sectors ofindustry in which participants ofthe Highly Reactive Volatile Organic Carbons (HRVOC) Emissions Cap and Trade program are to be assigned, accordingto the process type and products from which the largest share ofHRVOC emissions is associated, for the purpose ofassigning an industry sector share under the allocation equation located in 

### §101.394(a)(1 )(B) ofthis title (relating to Allocation ofAllowances): petroleum refining, non-polymer chemical producers, polymerproducers, and storage/loading/other,

(9) Level ofactivity-The amount ofhighly-reactive volatile organic compounds, as defined in 

### §115.10 ofthis title (relating to Definitions), in pounds produced as an intermediate, by-product, or final product or used by a process unit during a given period oftime, but excluding any recycled highlyreactive volatile organic compounds internal to the process unit.

(10) Uncontrolled emissions--The total emissions during routine normal operations from each applicable facility calculated as pre-control using the applicable control efficiency for the purpose of determining site allocations under §I 

### 01.394(a)(1)(B) ofthis title (relating to Allocation ofAllowances)

.



### §lOl.391. Applicability.



### 37

### This division applies to each site, as defmed in 

### § 122.10 ofthis title (relating to General Defmitions), in the Houston-Galveston-Brazoria ozone nonattainment area, as defined in 

### §115.10 ofthis title (relating to Defmitions), that is subjectto Chapter 115, SubchapterH, Division 1 ofthis title (relating
to Vent Gas Control) or Division 2 ofthis title (relating to Cooling Tower HeatExchange Systems). Applicable facilities include vent gas streams, flares, and cooling tower heat exchange systems that emit highly-reactive volatile organic compounds, as defmed in 

### §115.10 ofthis title, and that are located at a site subjectto Chapter 115, SubchapterH ofthis title (relating to Highly-Reactive Volatile Organic Compounds). Forthe purpose ofcompliance with Chapter 115, SubchapterH, Division 1 or Division 2 of this title, each site that meets the applicability requirements ofthis section will always be subjectto this division.



### §101.392. Exemptions.

(a) Sites in the Houston-Galveston-Brazoria ozone nonattainment area that have the potential to emit, as defined in 

### §116.12 ofthis title (relating to NonattainmentReview Definitions), ten tons per year or less ofhighly-reactive volatile organic compounds from all applicable facilities at the site are exempt from the requirements ofthis division,



### (b) All sites in the Houston-Galveston-Brazoria ozone nonattainment area, excluding Harris County, are exempt from the requirements ofthis division exceptfor 

### §101.401(a) - (e) ofthis title (relating to Level ofActivity Certification). The commission may revoke this exemption upon public notice ofthis revocation. 

### Ifthe exemption is revoked, sites subjectto this division located in the Houston-GalvestonBrazoria ozone nonattainment area, excluding Harris County, will comply by January 1, 2007, or within 180 days ofpublic notice, whichever is later.

38

### §101.393. General Provisions.

(a) Allowances may be used only for the purposes described in this division and may not be used

to meet or exceedthe emission limitations authorized under Chapter 116, SubchapterB ofthis title (relating to New Source Review Permits), or any other applicable rule or law.

(b) The initial control period is January 1, 2007, through December 31, 2007. Each control period
after December 31, 2007, shall begin January 1 and end December 31 ofeach year. No later than March 1
after each control period, a site subjectto this division musthold a quantity ofallowances in its compliance

accountthat is equal to or greaterthan the total highly-reactive volatile organic compound emissions from
the applicable facilities located at the site during the control period.

(c) Allowances may not be used to satisfy netting requirements under Chapter 116, Subchapter B, Divisions 5 and 6 ofthis title (relating to Nonattainment Review; and Prevention ofSignificant
Deterioration Review).

(d) Allowances may be used simultaneouslyto satisfy the requirements ofthis division and the
one-to-one portion ofthe offsetrequirements for new or modified covered facilities, subjectto federal
nonattainment new sourcereview requirements as provided in Chapter 116, SubchapterB, Division 7 of this title (relating to Emission Reductions: Offsets).

(e) An allowance does not constitute a security or a propertyright.

(f) All allowances will be allocated, transferred, deducted, or used in tenths oftons. The number of
allowances will be rounded down to the nearesttenth ofa ton when determining excess allowances and 

### 39

### rounded up to the nearest tenth ofa ton when determining allowances used.

(g) Each site shall have only one compliance account.

(h) 

### The commission will maintain a registry ofcompliance accounts and broker accounts. The registry will not contain proprietary information.



### §lOl.394. AUocation ofAUowances.

(a) The executive director will deposit allowances into compliance accounts as follows.

(1) 

### For sites located in Harris County, allowances for the emissions ofone or more ofthe highly-reactive volatile organic compounds (HRVOC) as defined in §115.10 ofthis title (relating to Defmitions), will be determined using the equations in subparagraphs (A) and (B) 

### ofthis paragraph.

(A) For calendar-year control periods 2007 - 2010, the following equation will be used to determine the allocation for each site:



### LA S= x

### AC1 If 

# LUi i-1


### Where: 

# s=the allocation for the site. i

### =each site located in Harris County and subjectto this division.

n = 

### the total numberofsites subjectto this division. 

### 40

### LA 

## =the level ofactivity baseline for a site, calculated as the annual level ofactivity for any 12 consecutive months during the period of2000 - 2004 for the site, as certified by the executive director. AC I 

## =3,106.3 tons per year ofhighly-reactive volatile organic compounds less the total amount allocated to those sites receiving a minimum allocation.
(B) 

### For calendar-yearcontrol periods 2011 and later the following allocation methodology will apply:

S 

## =AC I x 

### (Industry Sector Share) x 

### (Site Share) Where: S 

## =the allocation for the site. Industry Sector Share 

## =Total actual average emissions for the industry sector during the baseline emissions period divided by the total actual average emissions for all participating sites during the baseline emissions period. Site Share 

## =The sum ofthe total average actual emissions for vents, cooling towers, and other facilities and uncontrolled emissions for flares, heaters, boilers, furnaces, thermal and catalytic oxidizers, and other combustion control devices combustinghighly-reactive volatile organic compound (HRVOC) streams, during the baseline emissions period divided by the total uncontrolled actual average emissions for the industry sector during the baseline emission period.
AC I 

## =the amount ofHRVOC tons defmed in (1) - 

### (5) ofthis figure less the total amount allocated to those sites receiving a minimum allocation under §1

# o 1.394(aX I)(E) 

### ofthis title. (1) 

### For 2011 - 2013, AC I 

## =3,451.5 tons; (2) 

### For 2014, AC I = 

### 3,105.9 tons; (3) For 2015, AC I 

## =2,932.9 tons; (4) For 2016, AC I 

## =2,761.2 tons; and (5) For 2017 and all subsequentcalendar-yearcontrol periods, AC I 

## =2,588.6 tons.

(C) Qualifying sites not in operation or with HRVOC emissions that are not representative ofpermitted normal routine operation due to an authorized modification that resulted in an 41

## BRvce emission reduction during the baseline emissions period may request from the executive director
the use ofany allowance stream acquired from facilities previously participating in the HRVOC Emissions Cap and Trade program in lieu ofreallocation until the alternate baseline emissions are established for the site, according to the following:

(i) this allowance stream is less than the HRVOC permit allowable limit
in effect at the time the facility commences operation;

(ii) the baseline emissions period for any site underthis subparagraph will
be any consecutive 24 months from 2010

- 2012; and

(iii) beginning with the 2014 calendar-yearcontrol period, all sites will receive an allocation in accordance with the methodology under subparagraph (B) ofthis paragraph.



### (D) A site meeting the following conditions may requestto use an alternative
baseline emissions period consisting ofthe two consecutive calendar-year control periods immediately preceding the baseline emissions period defmed under §101.390 ofthis title (relating to Defmitions):

(i) the site used continuous flow rate monitoring and speciation of HRVOC to determine HRVOC emissions during the alternative baseline period;

(ii) the site had permanent, voluntary, and quantifiable HRVOC emission reductions in an amount equal to or greaterthan 25 tons resulting in a site-wide reduction in HRVOC
emissions ofat least 25% as calculated by comparing the average HRVOC emissions from the alternate 42

### baselineperiod to the baseline emissionsperiod defined under §101.390ofthis title;

(iii) 

### qualifyingHRVOC emissionreductionsmust have been made enforceable by a permit application submittedunder Chapter 116 of this title (relating to Control of Air Pollution by Permits forNew ConstructionorModification) or other submittalto the executivedirector no later than April 1, 2010; and

(iv) a request for an alternativebaselineperiod must be receivedby the executive director no laterthan July 1, 201O.



### (2) For sites located in Brazoria,Chambers,Fort Bend, Galveston, Liberty,Montgomery, and Waller Counties,allowances for emissionsof ethyleneand propylenefor each site will be determined using the equation in the followingfigure.



## LA S 

## = 111 X 

### AC 

# LLAi i-I 

### Where: 

# s = 

### the greater of 5.0 tons or the allocationfor the site. i = 

### each site locatedin

### Brazoria, Chambers, Fort Bend, Galveston, Liberty,Montgomery, and Waller Counties and subject to this division.

n = 

### the total numberofsites subject to this division. LA = 

### the level of activitybaseline for a site, calculated as the annual levelofactivity for 12 consecutive months during the period of 2000 - 2004 for the site, as certifiedby the executive director. AC2

## =4,390.8 tons per yearofhighly-reactive volatile organic compounds less the total amount allocated to those sites receivinga minimumof5.0 tons.

43

### (3) Uncontrolled emissions for applicable facility types for use in determining site
allocations underparagraph (l)(B) 

### ofthis subsection shall be calculated as follows:

(A) For flares, the uncontrolled emissions are equal to actual average HRVOC emissions from routine normal operation during the baseline emissions period for that facility divided by one minus the average percent control efficiency specifications for flares in 

### § 115.72s(d) ofthis title (relating to Monitoring and Testing Requirements).

(B) 

### For heaters, boilers, furnaces, thermal and catalytic oxidizers, and other combustion control devices combusting HRVOC streams, the uncontrolled emissions shall be calculated by dividing actual average emissions from routine normal operation during the baseline emissions period for each facility by one minus 99%, or by one minus the actual monitored HRVOC control efficiency for the facility, not to exceed 99.9%, ifthat facility has demonstrated the actual monitored HRVOC control efficiency through stack performance testing.

(C) 

### For all other facilities without a demonstrated combustion control efficiency, the control efficiency is equal to zero; therefore, the uncontrolled emissions will be equal to the actual**HRVO~** 

### emissions from routine normal operation.

(D) 

### For sites that employ flare or vent gas recovery or flare minimization control strategies that are not requesting the use ofan alternative baseline emissions period underparagraph (l )(D) 

### ofthis subsection, the owner or operatormay requestto include the amount ofany quantifiable reduction in actual HRVOC emissions attributable to the use offlare or vent gas recovery as uncontrolled emissions, subjectto approval by the executive director. The amount ofquantified reductions is equal to 

### the difference ofthe average actual HRVOC emissions from routine normal operation during a consecutive 

### 4412-month period priorto the 2006

- 2009 baseline emissions period and the implementation ofthe HRVOC gas recovery or flare minimization control strategy and the enforceable allowable HRVOC permit
limit for the applicable facilities after the recovery-based emissions reduction strategy implementation. The
average actual HRVOC emissions used for quantifying the reductions underthis subparagraph mustbe determined through continuous flow rate monitoring and HRVOC speciation testing. This allowable emissions limit mustbe made enforceable through a permit application submitted under Chapter 116 of this title to the executive director no laterthan April 1, 2010. Credit allocated for reductions due to flare or
vent gas recovery cannot also be creditable ifthe HRVOC stream is sent to another control device. The creditable emissions from flare gas recovery calculated 

### in this subparagraph are then converted to uncontrolled emissions through the use ofthe average control efficiency specifications under §II5.725(d) ofthis title.

(E) For sites that have purchased HRVOC allowance streams, uncontrolled emissions shall be the greateroftheir uncontrolled emissions calculatedunder subparagraphs (A)

- 

### (C) of this paragraph, or the sum oftheir original existing HRVOC allowance allocated according to paragraph (1) ofthis subsection and the amount ofthe allowance stream in tons. 

### In the eventthat a site's actual twohigh year emissions is less than the sum ofits original existing HRVOC allowance and the amount ofthe
allowance stream 

### in tons, the difference shall be added to the uncontrolled emissions as actual emissions.
(b) The level ofactivity ofa site will be determined by summing the levels ofactivity from the chosen 12 consecutive month period for each process unit, as defmed in §115.10 ofthis title, located at the site that produce one or more HRVOCs as an intermediate, by-product, or final product or that use one or

more HRVOCs as a raw material or intermediate to produce a product.

(c) Sites subjectto the requirements of

### thisdivision or electing to opt-in to the requirements ofthis
45

### division thatreceive an HRVOC allocation ofless than 5.0 tons based on the allocation methodologies under subsection (a)(I)(A) ofthis section will 

### be eligible to receive a minimum allocation of5.0 tons of
HRVOC allowances per year.

(d) Sites subjectto the requirements ofthis division that receive an HRVOC allocation ofless than 5.0 tons based on the allocation methodology under subsection (a)(I)(B) ofthis section will be eligible to receive a minimum allocation of5.0 tons ofHRVOC allowances per year. Sites subjectto the requirements ofthis division thatreceive an HRVOC allocation ofgreaterthan or equal to 5.0 tons but less than 10.0
tons based on the allocation methodology under subsection (a)(l)(B) ofthis section will be eligible to receive a minimum allocation of10.0 tons ofHRVOC allowances per year .

(e) 

### Ifthe total actual HRVOC emissions from the covered facilities at a site during a control period exceed the amount ofallowances in the compliance accountfor the site on March 1 following the control period, allowances for the next control period will be reduced by an amount equal to the emissions exceedingthe allowances in the compliance account plus 10% ofthe exceedance. This allocation reduction does not preclude the executive director from initiating an enforcement action. 

### Ifa compliance account does not hold sufficient allowances to accommodate the reduction, the executive director may issue a notice ofdeficiency to the owner or operator. The owner or operatorwill purchase or transfer allowances sufficientto accommodate the reduction within 30 days ofissuance ofthe notice ofdeficiency from the executive director.



### (f) Allowances will be allocated by the executive director, who will deposit allowances into each compliance account:

(1) initially, by January 1,2007; and 

### 46

### (2) subsequently, by January 1 ofeach following year.

(g) The executive director may adjustthe deposits for any control period to reflectnew or existing
state implementation plan requirements.

(h) 

### The executive director may add or deduct allowances from compliance accounts based on the review ofreports required under §101.400 ofthis title (relating to Reporting).



### §lOl.396. Allowance Deductions.

(a) On 

### March 31 ofeach year after a control period, allowances representing the total highlyreactive volatile organic compounds (HRVOC) emissions from the applicable facilities at a site during the previous control period will 

### bededucted from the compliance accountfor the site. The amount ofHRVOC emissions will be based upon the monitoring and testing protocols established in §115.725 and §115.764 ofthis title (relating to Monitoring and Testing Requirements), as appropriate.

(b) 

### The amount ofHRVOC emissions from applicable facilities will be calculated for each hour of the year and summed to determine the annual emissions for compliance. For emissions from scheduled maintenance, startup, or shutdown activities subjectto the requirements of§101.211 ofthis title (relating
to Scheduled Maintenance, Startup, and Shutdown Reporting and Recordkeeping Requirements), the hourly emissions to be included in the summation shall not exceed the short-term limit of§115.722(c) and §115.761(c) ofthis title (relating to Site-wide Cap and Control Requirements; and Site-wide Cap).

(c) Ifthe monitoring and testing data referenced in subsection (a) ofthis section does not exist or is 47

### unavailable, the site may determine its HRVOC emissions for that period oftime using the following methods and in the following order: continuous monitoring data; periodic monitoring data; testing data;
data from manufacturers; and engineering calculations. When determining the amount ofHRVOC
emissions underthis subsection, the site will include ajustification for using the substitute method or methods in lieu ofthe methods referenced in subsection (a) ofthis section.

(d) When deducting allowances from the compliance account ofa site for a control period, the executive directorwill deduct the allowances beginning with the most recently allocated allowances before deducting banked vintage allowances.



### §lOl.399. Allowance Banking and Trading.

(a) Allowances allocated for a control period that are not used for compliance in that control period may be banked for use in demonstrating compliance for the next control period or transferred.

(b) 

### Allowances that have not expired or been used may be transferred at any time during a control period, except as provided in this section.

(1) The person desiring to transfer the allowances shall apply for approval ofthe transaction to the executive directorby submitting a completedForm ECT-2, Application for Transfer of Allowances.

(2) The ECT-2 form must include the purchase price per allowance proposed to be paid, exceptfor transactions between sites under common ownership or control.



### 48

### (3) All information regarding the quantity and purchase price ofthe allowances will be immediately made availableto the public.

(4) 

### Ifthe executive director approves the application, the executive director will send a letter to the seller and purchaserreflecting the transaction. The transaction is 

### final upon issuance ofthe letter.

(c) A person receiving allowances on an annual basis may permanently transfer ownership of
current and future allowances to any person in accordance with the following requirements.

(1) The person desiringto transferthe allowances shall apply for approval ofthe transactionto the executive directorby submitting a completed FormECT

### -4, Application for Permanent Transfer ofAllowance Ownership.

(2) The ECT

### -4 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ownership or control.

(3) All information regarding the quantity and purchase price ofthe allowances will be immediately made available to the public.

(4) 

### Ifthe executive director approves the application, the executive directorwill send a letter to the seller and purchaserreflecting the transaction. The transaction is final upon issuance ofthe letter.



### 49

### (d) A person may transfer allowances that are scheduled to 

### be allocated in a 

### future control period but have not yet been deposited into an account.

(I) The person desiring to transferthe allowances shall apply for approval ofthe transaction to the executive directorby submitting a completed Form ECT-5, Application for Transfer of Individual Future Year Allowances.

(2) The ECT-5 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ownership or control.

(3) All information regarding the quantity and purchase price ofthe allowances will be immediately made available to the public.

(4) 

### Ifthe executive director approves the application, the executive director will send a letter to the seller and purchaser reflecting the transaction. The transaction is final upon issuance ofthe letter.

(e) Allowances that were provided under 

### §101.394(a)(l)(C) ofthis title (relating to 

### Allocation of Allowances) are not eligible for transferunder subsections (b), 

### (c), or (d) ofthis section.

(f) Allowances generated from sites located in counties otherthan Harris Countymay not be used at sites located in Harris County. Allowances generated from sites located in Harris County may not be used at sites located in counties other than Harris County.

(g) Only authorized accountrepresentatives may transfer allowances. 50(h) 

### Allowances subjectto an approved transaction will be deposited into the purchaser's broker or compliance account within 30 days ofreceipt ofa completed transfer application.

(i) 

### Volatile organic compound emission reduction credits (ERC) certified in accordance with Division 1 ofthis subchapter (relating to Emission CreditBanking and Trading) may be converted to a yearly highly-reactive volatile organic compound (HRVOC) allocation.



### (l) Qualified volatile organic compound (VOC) ERCs must be generated:

(A) from a reduction at a site located in the HoustonlGalvestonlBrazoria nonattainrnent area;

(B) 

### from a reduction strategy implemented after December 31, 2004; and

(C) 

### from a reduction in VOC species otherthan those defined as HRVQCs under §115.10 ofthis title (relating to Definitions).

(2) VOC reductions due to the installation ofbest available control technology do not qualify for conversion underthis subsection.

(3) In addition to the requirements ofDivision 1 ofthis subchapter, a qualified VOC ERC
must meet the following requirements:

51(A) the ERe must 

### be quantifiable, real, surplus, enforceable, and permanent as required in §I01.302 ofthis title (relating to General Provisions) at the time the ERC is converted;

(B) the baseline emissions to which the VOC reduction is compared must consist
ofthe average actual emissions for any two consecutive calendaryears preceding the emission reduction strategy and that include or follow the most recent year ofemission inventory used in the state implementation plan;

(C) the quantification ofVOC reductions must be performed using the monitoring
and testing methods required under §115.725 or §115.764 ofthis title (relating to Monitoring and Testing Requirements) and subjectto the recordkeeping and reporting requirements under §115.726 and §115.766
ofthis title (relating to Recordkeeping and Reporting Requirements);

(D) the ERC must not have expired; and

(E) the owner ofthe ERC shall have prior approval from the executive director to
convertthe ERC to an HRVOC allocation.

(4) VOC ERCs must be converted to HRVOC allowances at a ratio calculated using the equation in the following figure.



### 1 

### A

... 11.57 

# L CR, x 

### E)

Where:
A

## =yearly allocation ofhighly-reactive volatile organic compound allowances. 

### 52R, = the reactivity ofeach speciated volatile organic compound reduced as specified in California Code of Regulations, Title 17, Chapter 1, §94700, concerning MIRValues for Compounds, as amended. E, = the actual emissions reduced, in tons per year, ofeach speciated volatile organic compound.

(5) For each site eligible to receive allowances under §101.394(a) ofthis title, additional HRVOC allowances received from the conversion ofVOC ERCs underthis subsection must be limited to

a quantity notto exceed more than 5% ofthe site's initial HRVOC allocation.

(6) In addition to paragraph (5) ofthis subsection, sites subjectto this division may receive

an HRVOC allocation from the conversion ofVOC ERCs under this subsection equivalentto any HRVOC emissions increases from new or modified covered facilities not in operation priorto January 2, 2004, and
thatwere included in an application for a permitunder Chapter 116 ofthis title (relating to Control ofAir
Pollution by Permits for New Construction or Modification) that was deemed administratively complete by
the executive director within one year ofthe effective date ofthis rule.



### §101.400. Reporting.

(a) No later than March 31 after each control period, each site will submit a completed Form ECTIff. Highly-Reactive Volatile Organic Compound (HRVOC) Emissions Cap and Trade Annual Compliance Report, to the executive director, which will include the following:



### (l) the total amount ofactual HRVOC emissions from applicable facilities at the site during the preceding control period;

(2) the method or methods used to determine the actual HRVOC emissions, including, but 53

### not limited to, monitoring protocol and results, calculation methodologies, and emission factors;

(3) a summary ofall fmal transactions for the preceding control period; and

(4) the total amount and respective dates ofHRVOC emissions from emissions events subjectto the requirements of

### §101.201 ofthis title (relating to Emissions Event Reporting and Recordkeeping Requirements).

(b) 

### For sites failing to submit an ECT-IH form by the required deadline in subsection (a) ofthis section, the executive director may withhold approval ofany proposed trades from that site involving allowances allocated for the control period for which the ECT-IH form is due or to be allocated in subsequentcontrol periods.

§101.401. Level ofActivity Certification.

(a) No later than April 30, 2005, the owner or operator ofeach site subjectto 

### this division will submitto the executive director a completedForm ECT-3H, Highly-Reactive Volatile Organic Compound Emissions Cap and Trade Level ofActivity CertificationForm.

(b) 

### For each process unit subjectto this division, the owner or operatorwill certify in the ECT-3H form the level ofactivity for the selected 12 consecutive months during the period of2000 through 2004.

(c) The owner or operatorwill attach to the ECT-3H form information and documentation
necessary to supportthe proposed level ofactivity baseline.

54

### (d) The owner or operator ofthe site may mark any portion ofthe ECT-3H form, or supporting information and documentation, as confidential under Texas Health and Safety Code, §382.041.

(e) In 

### conjunction with submission ofthe ECT-3H form, the owner or operator ofthe site subject to this division will provide enforceable documentation ofthe maximum allowable emission rate ofhighlyreactive volatile organic compounds from facilities located at that site.



### (f) No later than July 1, 2010, the owner or operator ofeach site subjectto this division will submit to the executive director a completed Form ECT-6H, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Baseline Emissions CertificationForm.

(g) For each site subjectto this division, the owner or operator will certify in the ECT-6H form the
two highest consecutive calendar-year control periods selected from the period of2006

- 2009 to establish the baseline emissions period.



### 55

# • Kimberly L. Kiplin General Counsel Texas LotteryCommission Effective date: March 31, 2010 Proposal publication date: January Forfurtherinfonnation, please call:

The Texas Commission on Environmental Quality (TCEQ or commission) adopts amendments to §§101.1, 101.390 - 101.394,101.396, and 101.399·101.401. Sections 101.390 - 101.392, 101.394, 101.396, 101.399, and 101.401 are adopted with changes to the proposed text as published in the October 9, 2009, issue of the Texas Register 

### CHAPTER 271. EXA ATIONS 22 TAC §271.3 The Texas Optometry Board ad ts amendments to §271.3 without changes to the proposed te published in the December 18, 2009, issue of the TexasRegis r(34 TexReg 9083). The amendments concern mod' cation ofadministration requirements for the Jurisprudence Ex ination such that Intemettechnology can be utilized. No comments were received. The amendments are adopted nder the Texas Optometry Act, Texas Occupations Code, §§3 1.151, 351.253, 351.255, and 351.257. No other sections are ffected by the amendments. The Texas Optometry Board int rprets §351.151 as authorizingthe adoption of procedural and ubstantive rules for the regulation of the optometric professio §351.253 to require passing an examination for license, and §3 1.255 and §351.257 as setting out the requirements for exam dministration. This agency hereby certifies tha the adoption has been reviewed by legal counsel and found to b a valid exercise of the agency's legal authority. Filed with the Office of the Secr tary of State on March 9, 2010. TRD-201001186 ChrisKloeris Executive Director Texas Optometry Board Effective date: March 29, 2010 Proposal publication date: Decem r 18,2009 Forfurtherinformation, please call: (512)305-8502 

# • • TITLE 30. ENVIRONMENTAL QUALITY 

## PART 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 101. GENERAL AIR QUALITY RULES ,2010 512)344-5012 

# • TITLE 22. EXAMININ BOARDS 

## PART 14. TEXAS 0 TOMETRY BOARD

\ the Commission with the authority 0 adopt rules governing the operation of bingo. The amendm nts are also**adopte~** under the authority of Texas Govemmen Code §467.102, which provides the Commission with the au hority to adopt rules for the enforcement and administration of he laws under the Commission's jurisdiction. Texas Govemment Code, Chapt 466, is affected by these amendments. This agency hereby certifies that th adoption has been reviewed by legal counsel and found to be a alid exercise of the agency's legal authority. Filed with the Office of the Secreta of State on March 11,2010. TRD-201001242 Kimberly L. Kiplin General Counsel Texas LotteryCommission Effective dale: March31.2010 Proposal publication date: January 22, Forfurther infonnation, please call: (51 

# • 

# • 16 TAC §401.220 The Texas Lottery Commission ( ommission) adopts amendments to 16 TAC §401.220 (relati g to Motion for Rehearing), without changes to the proposed t xt as published in the January 22, 2010, issue of the Texas egister(35 TexReg 422). The purpose of the amendments is to make the rules consistent with current practice for contested ses at the Commission and consistent with the Rules of Practic and Procedure of the State Office of Administrative Hearings. pecifically, the amendments outline the process for motions for hearing in accordance with the Commission's current practice. No public comments were receive during the public comment period. The amendments are adopted und r the authorityof Texas Govemment Code §466.015, which pr vides the Commission with the authority to adopt rules governi g the operation of the lottery and under Texas Occupations Cod §2001.054, which provides the Commission with the authority 0 adopt rules governing the operation of bingo. The amendm nts are also adopted under the authority of Texas Governmen Code §467.102, which provides the Commission with the au hority to adopt rules for the enforcement and administration of he laws under the Commission's jurisdiction. Texas Government Code, Chapt 466, is affected by these amendments. This agency hereby certifies that th adoption has been reviewed by legal counsel and found to be a lid exercise of the agency's legal authority. Filed with the Office ofthe Secreta of State on March 11,2010. TRD-201001243



### 35 TexReg 2556 

### March 26, 

### 2010 TexasRegister(34 TexReg 6989). Sections 101.1, 101.393, and 101.400 are adopted withoutchanges and will not be republished. These amendments will be submitted to the United States Environmental Protection Agency (EPA) as a revision to the state implementation plan (SIP). BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES The Houston-Galveston-Brazoria (HGB) metropolitan area was designated nonattainment for the 1997 eight-hour ozone National Ambient Air Quality Standard (NAAQS) as a moderate area effective June 15, 2004. In October 2008, the HGB area was reclassified as a severe ozone nonattainment area by the EPA as requested by the governor of Texas. The HGB area is required to attain the 1997 eight-hour ozone standard of 0.08 parts per million as expeditiously as practicable. but no later than by June 15, 2019. The EPA requires submittal of the HGB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard by April 15, 2010. This rulemaking will be submitted as part of the HGB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard. Photochemical modeling analysis demonstrates that a 25% reduction of the highly reactive volatile organic compound (HRVOC) cap in Harris County would contribute to attainment of the 1997 eight-hour ozone NAAQS by reducing the future 2018 ozone design values for all HGB area monitors. The largest reductions are projected at the Deer Park monitoring site, which is the area's driving design value monitor. In addition, some regulated entities participating in the HRVOC Emissions Cap and Trade (HECT) program have commented that the initial allocation of HRVOC allowances was not equitably distributed. The existing allocation methodology is based on the total amount, in pounds, of HRVOC produced as an intermediate, byproduct, or final product, or used by a process unit at each participating site. SUbsequent analysis of the HRVOC emissions data reported under the HECT program for the 2007 and 2008 calendar-year control periods supports the assertion that some industry sectors may have been over-allocated while others may have received an insufficient allocation. Although reallocation is not required to model attainment of the 1997 eight-hour attainment demonstration HGB SIP revision, the adopted reallocation methodology is designed to result in a more equitabte allocation of allowances while establishing an enforceable cap in HRVOC allowances in Harris County in support of HGB's attainment of the NAAQS as expeditiously as practicable. As part of the December 2004 HGB SIP revisions of the midcourse review for the one-hour ozone standard, the commission developed a dual approach to achieve the necessary HRVOC reductions: address variable short-term emissions through a notto-exceed hourly emission limit and address steady-state and routine emissions through an annual cap. The annual HRVOC cap reduced the overall reactivity in the airshed by removing the compounds that are most prevalent and most likely to react rapidly enough to cause one-hour ozone exceedances. For Harris County, the annual HRVOC cap was distributed and enforced through the HECT program under Chapter 101, Subchapter H, Division 6. This program established a mandatory annual HRVOC emissions cap on all sites subjectto the HRVOC control requirements of 30 TAC Chapter 115, SUbchapter H, Division 1 or Division 2, and having a potential to emit (PTE) greater than ten tons per year (tpy). The cap is enforced through the allocation, trading, and banking of allowances. An allowance is the equivalent of one ton of HRVOC emissions. This HRVOC cap, initially implemented on January 1, 2007, was established at a level demonstrated as necessary to allow the HGB area to attain the one-hour ozone standard along with a 5% reduction to safeguard against potential emissions variations. The HECT program also requires subjectsites with new or modified HRVOC sources to obtain unused allowances from other sites already participating in the program for any increased HRVOC emissions. For sites that have a PTE often tpyorless of HRVOC from sources subject to the HRVOC control requirements of Chapter 115, Subchapter H, Divisions 1 or 2, the total, aggregate HRVOC emissions from those sources is limited to ten tpy. Sites exempt from the HECT program were extended an opportunity to opt-in, receive an HRVOC allocation, and thereby not be restricted to the ten tpy limit. Revisions to the HECT program under this rulemaking will reduce the total HECT cap by 25% prior to the attainment year and revise the HRVOC allocation methodology to address inequities from the initial allocation. Photochemical modeling analysis demonstrates that a 25% reduction of the total HRVOC cap in Harris County will advance attainment of the 1997 eight-hour ozone NAAQS by reducing the future 2018 ozone design values at all HGB monitors. The largest decrease in the projected design value was at the Deer Park monitor. The average decrease for all sites was 0.13 parts per billion (ppb). HRVOC monitoring data reported for 2006 - 2008 indicates that the total actual emissions from sources in the HECT program have been approximately 50% of the total current HRVOC cap. Because the HRVOC rules in Chapter 115, SUbchapter H. Divisions 1 and 2, require emissions from maintenance, startup. and shutdown activities and emissions events be included in the HECT program, the total surplus observed in the two years that the program has been active cannot be removed. Therefore, a buffer in the cap is still needed to account for the inherent variability of HRVOC emissions associated with these activities. The adopted rules will implement an initial 10% reduction of the existing available cap of 3,451.5 tons beginning with the 2014 calendar-year control period. The available cap will then be reduced in a 'stepdown" fashion. similarto the existing Mass Emis

### sions Cap and Trade Program (MECT) for nitrogen oxides (NO.). in 5% increments at the start of each calendar-year control period for 2015,2016, and 2017. Therefore, the full 25% cap reduction will have been in effect for one full calendar-year control period by January 1,2018. While historical data demonstrates an overall surplus in the HRVOC cap, the cap reduction and reallocation may require some individual sites to install additional controls. The commission is therefore adopting this stepdown approach to allow companies time to install controls tf necessary. FollOWing the initial allocation of allowances, companies participating in the HECT program commented that the allocation was not equitably distributed. Emissions reported by industry based on their HRVOC monitoring data supports the assertion of an inequitable distribution of allowances. In addition, HECT program participants commented that certain HRVOC-emitting industry sectors were more adversely affected under the existing allocation methodology due to different HRVOC emission rates associated with production throughput. Facilities that use HRVOC as a raw material in the production of olefins have higher HRVOC emissions associated with their process as compared to other chemical manufactures and refineries. Therefore, under the existing HECT program, sites in the refinery and non-polymer



### ADOPTED RULES March 

### 26, 2010 

### 35 TexReg 2557chemical sectors generally have the largest excess HRVOC allowances as compared to actual emissions. HECT program participants also commented on the reluctance of sites to trade due to the inclusion of emissions events in determining compliance with the program and the risk of trading away allowances that may be needed for compliance due to an emissions event later in the calendar-year control period. The commission will reallocate HRVOC allowances under the HECT program based on actual emissions data and implement significant program changes to encourage market activity through trading. The existing HECT allocation methodology is a level of activity production-based calculation of the total amount of HRVOC, inpounds, produced or used by a process unit. This productionbased methodology was developed prior to the implementation of monitoring requirements for applicable sources of HRVOC inHarris County. HECT program participants have been reporting actual monitored emissions data to the HECT program since 2006 as required under Chapter 115. The adoption of this rulemaking creates a new allocation methodology based on actual emissions data with the goals of fairly and equitably distributing the compliance burden for HECT program participants, applying credit for controlling and reducing HRVOC emissions, and not rewarding or encouraging emissions from emissions events. Cap and trade programs aim to provide economic incentives for reducing emissions through controls by allowing excess allowances to be sold to other program participants. However, an allocation methodology based solely on actual emissions has the potential of penalizing sites that are well controlled and/or rewarding sites that are not well controlled. To allow for applicable sites to establish a representative baseline emission period, the rules allow sites to use their two highest consecutive calendar-year control periods out of the four years from 2006 - 2009. Allocations will be distributed based on the new allocation methodology beginning with the 2011 calendar-year control period. Baseline emissions for the purpose of calculating the site allocations would be the average of the actual emissions for the two highest consecutive calendar-year control periodsas submitted in the Form ECT-6H, Highly-Reactive Volatile Organic Compound Emissions Cap and Trade Baseline Emissions Certification Form. The deadline for ECT-6H submission is July 1,2010.The adopted rulemaking includes a provision for HECT participants that qualify to havethe ability to request from the executive director the use of an alternate baseline period from 2004 and 2005 for the purpose of establishing baseline emissions. Theowner or operator of a site must submit a request to the executive director by July 1, 2010, demonstrating that they were performing speciated testing and continuous flow monitoring ofHRVOC emissions during the requested alternative baseline period. This provision is available for participants with substantial HRVOC reductions. In addition, the emission reductions must be permanent, VOluntary, and quantifiable of an amount equalto or greater than 25% of the site's total annual HRVOC emissions and a site-wide reduction in HRVOC emissions subjectto the HECT program of 25 tons or greater. The adopted rulemaking also provides an alternative to the use of an alternative baseline for qualifying sites that made early permitted HRVOCemissions reductions through the installation of flare gas recovery, vent gas recovery, or flare gas minimization control strategies. This alternative includes a provision in which quantified and monitored HRVOC emissions reductions from flare or vent gas


### 35 TexReg 2558 

### March 26, 

### 2010 TexasRegister recovery or flare minimization is added to the calculation of "Uncontrolled emissions" using the flare's average control efficiency.The average actual HRVOC emissions used for quantifying reductions from flare or vent gas recovery or flare minimizationcontrol strategies must be determined through the use of continuous flow rate monitoring and HRVOC speciation testing in order to be applied towards a site's "Uncontrolled emissions.· The emissions reductions must have been made enforceable under a permit action submitted to the executive director no later than April 1, 2010. Additionally, qualifying sites not in operation or with HRVOCemissions that are not representative of permitted normal routine operation, due to an authorized modification that resulted in an HRVOC emission reduction during the baseline emissions period, may request from the executive director the use of any allowance stream acquired from facilities previously participating in the HECT program in lieu of reallocation until an alternative consecutive 24-month baseline emissions period can be established from normal permitted operation from 2010 - 2012. Sites approved by the executive director to use this alternative will receive an allocation in accordance with the adopted allocation methodology in the 2014 calendar-year control period.Recent economic conditions have prompted concerns from industry that the 2006 - 2009 years adopted for establishing baseline emissions activity may not be representative of general production and emission rates due to the recent economic downturn. However, the reallocation methodology 'is based on the percentage of individual site emissions contributing to the totalindustry sector emissions and the fraction that each industry sector's emissions make up toward the total of all HRVOC emissions in the county. Therefore, the allocation of allowances for any individual site would not be significantly affected by general changes in economic conditions. An individual site's allocations would only be significantly altered if their uncontrolled emissions changed as a proportion of the total industry sector emissions.The adopted reallocation methodology is based on calculating "Uncontrolled emissions' or pre-controlled emissions for facilities using reported control efficiencies based on thespecifications for flares in §115.725(d). Heaters, boilers, furnaces, thermal and catalytic oxidizers, and other combustion control devices combusting HRVOC streams would calculate "Uncontrolled emissions' using control efficiencies up to 99.9% with actual monitored control efficiency data derived from stack testing. In the event that actual stack testing data is not available for combustion control devices other than flares, the commission will assign a default control efficiency of 99% due to their closed combustion design and higher flame temperatures. Dividing actual emissions by one minus the percent control efficiency calculates the amount of emissions before controls, therefore allowing sites to receive credit for these reductions in the allocation. HRVOC emissions from other facilities subject to Chapter 115, Subchapter H, Divisions 1 and 2, and the HECT program, such as vents and cooling towers, will be included in the equation for calculating uncontrolled emissions, however because they do not have combustion control efficiencies, uncontrolled emissions from these facility types will be equal to their actual emissions. Only HRVOC emissions from routine, permitted, normal activity will be counted as actual emissions in the calculation of uncontrolled emissions. Emissions from emission events SUbject to §101.201 will not be included in the determination of uncontrolled emissions and will not be applied towards site allocations. As discussed elsewhere in this preamble, the adopted rules contain a provision for applyingcredit towards a site's uncontrolled emissions for quantified and monitored HRVOC emission reductions from flare minimization programs and flare and vent gas recovery systems. In addition, sites that have purchased allowance streams under the existing HECT allocation will be allowed to receive allowance credit for an amount equal to the difference between each site's allowance stream pius its current existing allocation and the amount of its two highest.average actual emission years during the baseline period. The amount of the difference may be applied to a site's ·Uncontrolled ernlsslons" as actual emissions for the calculation of allowances. Sites with emissions from their two highest average actual emission years during the baseline period that are greater than their existing allocation plus any acquired allowance stream will receive an allocation based on their ·Uncontrolled emissions· without the benefit of the allowance stream. The adopted rules define four industry-type sector pools to account for different HRVOC emission rates associated with the processes of the industry sectors with HRVOC emissions in Harris County. The industry sector definition reflects those used in existing regulations and are readily defined by process type and product, The existing application of Best Available Control Technology (BACT) and otherfederal standards within industry sectors would assure a comparable cost of control within the industry sector, and the division of the cap into industry sector share will therefore reflect a more equitable allocation methodology. In addition, the amount of HRVOC product that is recycled and recovered for sites within the same industry sectorshould be comparable due to market forces and competition within the sector. Sites within common industry sectors with HRVOC as product share the economic incentive to reduce emissions using similar recovery techniques. The four industry sectors are petroleum refining, nonpolymer chemical producers, polymer producers, and storagelloading/other. The reallocation methodology then calculates each sector's share of the available cap by dividing the total amount of actual average emissions over the emissions baseline period for the sector by the total available cap. The resulting fraction expressed as a percentage becomes the industry sector share. Applying this sector share to the individual site allocation equation creates a methodology in which only facilities within the individual industry sectors compete with one another for allowances. Sites containing facilities from two or more industry sectors will be included in the industry sector for which the majority of their baseline actiVity is generated, with emissions and allocations for the industry sector and site calculated accordingly. The existing rules' "opt-in" clause specifies that any site wishing to opt-in must have requested to participate by April 30, 2005. The adopted rule revision will not provide an additional opt-in provision. All sites with an HRVOC PTE that is greater than ten tons are required to participate in the HECT program. Sites with a calculated allocation of less than five tons based on the revised allocation methodology will be eligible to receive a minimum allocation of five tons. Sites with a calculated allocation greater than or equal to five but less than ten tons based on the revised allocation methodology will be eligible to receive a minimum allocation of ten tons. Sites receiving a minimum allocation under the adopted rulemaking will not have their allocations "stepped down" and will continue to receive the minimum allocation. According to the reallocation principals above, including a methodology based on average actual emissions during the emissions baseline period and calculating "Uncontrolled emissions" or pre-controlled emissions using reported control efficiencies, the commission adopts a revised reallocation methodology for HRVOC allowances beginning with the 2011 calendar-year control period. The total modeled (future base) cap on HRVOC emissions in Harris County is currently 3,633.1 tons. After deducting the required 5% EPA environmental contribution of 181.65 tons, the total HRVOC cap is 3,451.5 tons. The first 10% cap stepdown will occur at the beginning of the 2014 calendar-year control period. The total amount of HRVOC allowances available in 2014 will therefore be 3,106.3 tons. At the request of stakeholders, the proposed rule initially included an emissions event set-aside pool, however in response to comment, the 250-ton set-aside has been retumed to the available cap for allocation. The adopted rulemaking will then continue to reduce the cap to a total of 25% in annual 5% reductions from 2015 to 2017. Therefore, the final available cap beginning with the 2017 calendar-yearcontrol period will be the 2,588.6-ton value representing the amount modeled in the 2018 future case 25% HECTCap Reduction sensitivity run. The allocation methodology for each calendar-yearcontrol period will be identical to the adopted methodology for 2011. Sites that have made investments on HRVOC stream trades may receive credit for the allowance stream as actual emissions in the calculation of "Uncontrolled emissions." However, in orderto prevent the double counting of the stream and the emissions during the baseline emissions period that the stream allowed them to achieve, the "Uncontrolled emissions" for sites owning a stream of allowances will be considered the greater of their actual emissions during the baseline emissions period or the amount of the original allocation plus the allowance stream. Therefore, if a site's highest emissions during the baseline period were less than its original allocation plus the allowance stream, the difference would be applied toward its "Uncontrolled emissions.· Although some qualifying sites may receive credit for acquired allowance streams after reallocation, HECT allowances are not a property right and site allocations are maintained at the executive director's discretion under §101.394(h). SECTION BY SECTION DISCUSSION In addition to the adopted amendments to §§101.1, 101.390- 101.394, 101.396, and 101.399 - 101.401 discussed elsewhere in this preamble, the commission is also making various stylistic non-substantive changes to update rule language to current Texas Registerstyle and format requirements, as well as establish more consistency in the rules. Such changes include appropriate and consistent use of acronyms, punctuation, section references, and certain terms, such as "must" and ·shall." These changes are non-substantive and generally are not specifically discussed in this preamble. §101.1, Definff10ns Adopted changes to §101.1 amend the definition of reportable quantity for 1,1.1,2,3,3,3-heptafluoropropane (HFC-227ea) in §101.1 (88)(A)(i)(III)(-y-). The commission adopted a reportable quantity of 5,000 pounds for HFC-227ea in 2005 and the adopted rule was published in the December 30, 2005, issue of the Texas Register (30 TexReg 8886). However, the reportable quantity value of 5,000 pounds was inadvertently omitted in the version filed with the Secretary of State's Office. The commission is only adopting the corrected omission in §101.1 (88)(A)(i)(III)(-y-) and no other changes to the definition



### ADOPTEDRULES March 26, 2010 35 TexReg 2559of reportable quantity will be addressed in this rulemaking. Additionally, the commission adopts the updated definition of volatile organic compound in §101.1(115) to be consistent with the current definition in the 40 Code of Federal Regulations, §57.100(s) amended on January 21,2009 (74 Federal Register 3441). §101.390. Definitions The commission adopts revised §101.390(4) and adds §101.390(9) to include the definitions of "Baseline emissions period," "Industry sectors," and "Uncontrolled emissions." "Baseline emissions period" is defined as consecutive calendar-year control periods designated by the site for the purpose of establishing baseline emissions for the allocation of allowances. In response to comment, "Uncontrolled emissions" is**~?fined** as taking the total emissions from each applicable facilIty calculated as pre-controlled using the applicable control efficiency for the purpose of determining site allocations under §101.394(a)(1 )(B). In response to comment, the definition of "Industry sectors" for the purpose of generating the industry sector share for the allocation of HRVOC allowances is included in the adopted rules for clarity. The commission also adopts renumbering the subsequent paragraphs of §101.390. §101.391. Applicability The commission adopts deleting the term "covered" and replacing it with "applicable" in describing sites and facilities subject to the rulemaking for rule consistency and clarity. §101.392. Exemptions The commission adopts deleting the term "covered" and replacing it with "applicable" in describing sites and facilities subject to the rulemaking for consistency and clarity. In response to com- !l1ent, the co":lmission adopts language clarifying the applicabilIty of subsection (b) to only Harris County. §101.393, General Provisions The commission adopts deleting the term "covered" and replacing it with "applicable" in describing sites and facilities subject to the rulemaking for rule consistency and clarity. §101.394. Allocation of Allowances In response to comment, the commission adopts the deletion of the.**re~erence** to January 1, 2007, from §101.394(a). The cornmesion also adopts the removal of the figure located at §101.394(a)(1) and adding a new figure to be located at §101.394(a)(1)(A). In addition, the commission adopts §101.394(a)(1)(B) to revise the reallocation methodology for allowances beginning in the calendar-year control period 2011. The**~dopted** figure .Iocated at §101.394(a)(1)(B) provides the equation for calculating the new allocation methodology and for a stepped down reduction in the total cap of allowances. The first**reducti~n** is a 10% reduction of the total cap in calendar-year control penod 2014, followed by successive 5% reductions per**cale~dar-year ~ntrol**  period until the 25% total reduction in the cap ISreached In calendar-year control period 2017.**I~** .response to comment, the commission also adopts the ad**dl~lon** of**§~01.394(a)(1)(C)** to allow qualifying sites not in operatlon. or WIth HRVOC emissions that are not representative of**~e~ltted** normal routine operation due to an authorized modIfication**t~at res.ult~d**  in an HRVOC emission reduction during the baseline emrssions period to request from the executive di**rect~r** the use of any allowance stream acquired from facilities previously participating in the HECT program in lieu of realloca

### 35 TexReg 2560 March 26, 

### 2010 Texas Register tion until the alternate baseline emissions are established where the site has made HRVOC reductions. The owner or operator of applicable qualifying sites should note that beginning with the 2014 calendar-year control period, all sites will receive an allocation in accordance with the proposed methodology under §101.394(a)(1 )(B). The commission also adopts the addition of §101.394(a)(1 )(0) for HECT**~articipants** that implemented permanent, voluntary, and quantifiable HRVOC emission reductions and monitoring**pr~rams** before the beginning of the 2006 calendar-year control period, The adopted subparagraph (0) provides the ability to request from the executive directorthe use of an alternative baseline period from 2004 and 2005 for the purpose of establishing baseline ?missions. To qualify for this provision, owners or operators of sites must be able to demonstrate to the executive director that they were performing speciated testing and continuous flow rate monitoring of HRVOC emissions during the requested alternative baseline period. In addition, the emission reductions must be permanent, voluntary, and quantifiable of an amount equal to or greaterthan 25 tons resulting in a site-wide reduction in HRVOC emissions of at least 25%. The emissions reductions must also have been made enforceable under an action submitted to the executive director no later than April 1, 2010. This provision will ensure that sites that made early reductions before the adopted baseline emissions period of 2006 - 2009 would receive adequate credit for those early reductions. In**re~~onse** to**com~ent,** the commission adopts §101.394(a)(3) detalhng the calculation methodologyfor uncontrolled emissions for various applicable facility types. The commission adopts the deletion of §101.394(c) because it IS no longer applicable. The existing §101.394(d) will be relettered as subsection (c). Adopted §101.394(d) will ensure that sites with a calculated allocation of less than five tons based on the revised allocation methodologies will be eligible to receive a minimum allocation of five tons. Sites to be allocated greater than or equal to five tons but less than ten tons of allowances would be eligible to receive a minimum allocation of ten tons of allowances per calendar-year control period. §101.396. Allowance Deductions In response to comment, the commission adopts the deletion of**p~posed** subsections (c) and (d) in order to remove the emrssionsevent set-aside and the application for the use of the emissions event set-aside allowances. The commission also adopts**no~-~ubstantive** changes for clarity and consistency. The comrnrssion also adopts relettering SUbsequentsubsections In §101.396. §101.399, Allowance Banking and Trading In response to c0!l1ment, the commission adds clarifying language to subsection (a). The commission adopts amended**~1.01.399(i)(5)** to**d~lete** the reference to §101.394(c) because It IS no longer applicable. In addition, the commission adopts §.101.399(e) to prohibit the transfer of allowances allocated to**~Ites un.de~**  §1**01.3~(a)(1** )(C) that have yet to establish a baseline**~mlsslons** penod. Therefore, sites allowed to maintain an acquired allowance stream derived from the original allocation methodology under §101.394(a)(1)(A) may not benefit from the transfer of these allowances. The commission also adopts relettering the remaining subsections in §101.399. §101.400, ReportingThe commission adopts §101.400(a)(4) to require sites to report the total amount and respective dates of HRVOC emissions from emissions events. §101.401, LevelofActivity Certification The commission adopts §101.401 (f) and (g). Adopted §101.401(f) will require the Form ECT-6H, Highly-Reactive Volatile Organic Compound Emissions Cap and Trade Baseline Emissions Certification Form, to be submitted no later than July 1, 2010. Adopted §101.401(g) will require sites to select two consecutive calendar-year control periods to establish a baseline emissions period. FINAL REGULATORY IMPACT ANALYSIS DETERMINATION The commission reviewed this adopted rulemaking in light of the regulatory impact analysis requirements of Texas Government Code, §2001.0225, and determined that the adopted rulemaking action meets the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" is a rule, the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The adopted amendments to Chapter 101 and revisions to the SIP would reduce the total cap amount of HRVOC allowancesfor the HECT program by 25% and revise the allocation methodology for allowances for participants of the HECT program. The HECT program was adopted as a control measure for the HGB one-hour attainment demonstration SIP revision, and it is currently only applicable in Harris County. Photochemical modeling analysis demonstrates that a 25% reduction of the cap on thetotal Harris County HRVOC allocation would contribute to attainment of the 1997 eight-hour ozone NMOS by reducing future ozone design values at all HGB monitors. Following the initial allocation of allowances, stakeholder comments indicated that the allocation was not equitably distributed. Information from the first three years of monitoring data supports the assertion of an inequitable distribution of allowances. The adopted revisions are necessary to implement a more equitable allocation methodology, while contributing to HGB's attainment of the 1997 eight-hour ozone NMOS as expeditiously as practicable. The adopted change in allocation methodology will result in allowance reductions for certain facilities, and it is possible facilities that have made significant investments on future HRVOC stream trades may see the value of these investments reduced or nullified. Facilities that have their HRVOC allowances reduced, either through the reallocation or reduction of the total HRVOC cap, may incur costs from the installation of additional controls or having to purchase allowances from other sources if necessary to comply with their lower allowances. If the cap is reduced, the price of HRVOC allowances available in the market may increase. This rulemaking does not meet any of the four applicability criteria of a "major environmental rule" as defined in the Texas Government Code. Texas Government Code, §2001.0225 applies only to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. Specifically, the proposed amendments will result in a decrease in the HECT program cap, and will adjust the allocation methodology for allowances underthe program. The HECT program was adopted as a control measure for the HGB one-hour attainment demonstration SIP, andthe proposed changes to the program will contribute to HGB's attainment of the 1997 eight-hour ozone NMOS as expeditiouslyas practicable. The rulemaking does not exceed an express requirement of federal or state law or a requirement of a delegation agreement, and was not developed solely under the generalpowers of the agency, but was specifically developed under federallaw and authorized under the Texas Health and Safety Code (THSC). The rulemaking implements requirements of 42 United States Code (USC), §7410, which requires states to adopt a SIP that provides for "implementation, maintenance, and enforcement" of the NMOS in each air quality control region of the state. While 42 USC, §7410 does not require specific programs, methods,or reductions to meet the standard, SIPs must include "enforceable emission 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," (meaning 42 USC, Chapter 85, Air Pollution Prevention and Control). It is true that the Federal Clean Air Act (FCM) doesrequire some specific measures for SIP purposes, such as the inspection and maintenance program, but those programs are the exception, not the rule, in the SIP structure of 42 USC, §7410. The provisions of the FCM recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the NMOS. This flexibility allows states, affected industry, and the public to collaborate on the best methodstoattain the NMOS for the specific regions in the state. Even though the FCM allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of 42 USC, §7410. Thus, while specific measures are not generally required, the emissionreductions are required. States are not free to ignore the requirements of 42 USC, §7410, and must develop programs to assure that the nonattainment areas of the state would be brought into attainment on schedule. The adopted amendments will help the HBG area attain the 1997 eight-hour ozone NMOS as expeditiously as practicable.The requirement to provide a fiscal analysis of adopted regulations in the Texas Government Code was amended by Senate Bill (SB) 633 during the 75th Legislature, 1997. The intent of SB 633 was to require agencies to conduct a regulatory impact analysis of extraordinary rules. These are identified in the statutory language as major environmental rules that would have a material adverse impact and would exceed a requirement of state law, federal law, or a delegated federal program, or are adoptedsolely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 that concluded "based on an assessment of rules adopted by the agency in the past, it is not anticipated that the bill would have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted proposed rules from the full analysis unless the



### ADOPTED RULES March 

### 26, 2010 

### 35 TexReg 2561rule was a major environmental rule that exceeds a federal law. As discussed previously in this preamble, 42 USC, §7410 does not require specific programs, methods, or reductions in orderto meet the NAAOS; thus, states must develop programs for each nonattainment area to ensure that area would meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative BUdget Board in its fiscal notes. Because the legislature is presumed to understand the fiscal impacts of the bills it passes, and that presumption is based on information provided by state agencies and the Legislative Budget Board, the commission contends that the intent of SB 633 was only to require the full regulatory impact analysis for rules that are extraordinary in nature. While the SIP rules would have a broad impact, that impact is no greater than is necessary or appropriate to meet the requirements of 42 USC, §7410. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Govemment Code, §2001.0225(a), because they are specifically required by federallaw. In addition, 42 USC, §7502(a)(2) requires attainment as expeditiously as practicable, and 42 USC, §7511(a), requires states to submit ozone attainment demonstration SIPs for ozone nonattainment areas, such as the HGB eight-hour ozone nonattainment area. As discussed previously in this preamble, the adopted amendments will help the HBG area attain the 1997 eight-hour ozone NAAOS as expeditiously as practicable. The commission has consistently applied this construction to its rules since this statute was enacted in 1997. Since that time, the legislature has revised the Texas Government Code but left this provision substantially un-amended. The commission presumes that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp, 919 S.W.2d 485. 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting anotherissue, 960 S.w.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. Austin 1990), no writ; Cf. Humble Oil & Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Sharp v. House of Lloyd, lnc., 815 S.W.2d 245 (Tex. 1991); Southwestern Life Ins. Co. v. Montemayor. 24 S.W.3d 581 (Tex. App. Austin 2000), pet. denied; and Coastallndust. Water Auth. v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978). As discussed, this rulemaking action implements requirements of 42 USC, §7410. There is no contract or delegation agreement that covers the topic that is the SUbject of this action. Therefore, the rulemaking does not exceed a standard set by federal law, exceed an express requirement of state law, exceed a requirement of a delegation agreement, nor is it adopted solely under the general powers of the agency. Finally, this rulemaking action was not developed solely under the general powers of the agency, but is authorized by specific sections of THSC, Chapter 382, Texas Clean Air Act (TCAA), and the Texas Water Code that are cited in the STATUTORY AUTHORITY section of this rulemaking, inclUding THSC, §§382.002, 382.011, 382.012, 382.016, and 382.017. Therefore, this rulemaking action is not subject to the regulatory analysis provisions of Texas Govem
### 35 TexReg 2562 

### March 26, 

### 2010 TexasRegister ment Code, §2001.0225(b), because the rulemaking does not meet any ofthe four applicability requirements. The commission invited public comment regarding the draft regulatory impact analysis determination during the public comment period. No comments were received on the draft regulatory impact analysis determination. TAKINGS IMPACT ASSESSMENT The commission completed a takings impact assessmentfor this rulemaking action under Texas Govemment Code, §2007.043. The adopted amendments would reduce the total cap amount of HRVOC allowances for the HECT program by 25% and revise the allocation methodologyfor allowances for participants of the HECT program. Photochemical modeling analysis demonstrates that a 25% reduction of the cap on the total Harris County HRVOC allocation would contribute to attainment of the 1997 eight-hour ozone NAAOS by reducing future ozone design values at all HGB monitors. The adopted changes to the HECT program will result in allowance reductions for certain facilities and it is possible facilities that have made significant investments on future HRVOC stream trades may see the value of these investments reduced or nullified. Facilities that have their HRVOC allowances reduced, either through the reallocation or reducing the total HRVOC cap, may incur costs from the installation of additional controls or haVing to purchase allowances from other sources if necessaryto complywith theirlower allowances. If the cap is reduced, the price of HRVOC allowances available in the market may increase. However, the allowances that will be affected by these rules are not property rights (§101.393(e», and therefore reductions or changes in the allowances do not constitute a taking. Consequently, this rulemaking action does not meet the definition of a takings under Texas Govemment Code, §2007.002(5). Additionally, Texas Government Code, §2007.003(b )(4) provides that Chapter 2007 does not apply to this rulemaking action because it is reasonably taken to fulfill an obligation mandated by federal law. The adopted changes to the HECT program within the HGB area thatwould be implemented bythese adopted rules were developed to advance attainment of the 1997 eight-hour ozone NAAOS in the HGB ozone nonattainment area. States are primarily responsible for ensuring attainment and maintenance of NAAOS once the EPA has established them. Under 42 USC, §7410, and related provisions, states must submit, for approval by the EPA, SIPs that provide for the attainment and maintenance of NAAOS through control programs directed to sources of the pollutants involved. Therefore, one purpose of this adopted rulemaking action is to meet the air quality standards established under federal law as NAAOS. However, this rulemaking is only one step among many necessaryfor attaining the ozone NAAOS. CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM The commission reviewed the adopted rulemaking and found that the adoption is subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act, Texas Natural Resources Code, §§33.201 et seq., and therefore, must be consistent with all applicable CMP goals and policies. The commission conducted a consistency determination for the adopted rules in accordance with Coastal Coordination Act Implementation Rules, 31 TAC §505.22 and found the adopted rulemaking is consistent with the applicable CMP goals and policies. CMP goals applicable to the adoptedamendments are the goals to protect, preserve, restore, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC §501.12(1». This rulemaking will advance these goals through updating a definition, reallocating allowances, and lowering the HRVOC cap. No new sources of air contaminants will be authorized and the revisions will maintain the same level of emissions control as previous rules. CMP policies applicable to the proposed amendments are the policy that the commission's rules comply with federal regulations in 40 Code of Federal Regulations, to protect and enhance air quality in the coastal areas (31 TAC §501.32). Promulgation and enforcement of these rules will not violate or exceed any standards identified in the applicable CMP goals and policies because the proposed rules are consistent with these CMP goals and policies because these rules do not create or have a direct or significant adverse effect on any coastalnatural resource areas. The commission invited public comment regarding the consistency with the coastal management program during the public comment period. No comments were received regarding consistency with the CMP. EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM Chapter 101, Subchapter H is an applicable requirement under30 TAC Chapter 122, Federal Operating Permits Program. Owners or operators subject to the Federal Operating Permits Program must, consistent with the revision process in Chapter 122, upon the effective date of the rulemaking, revise their operatingpermit to include the new Chapter 101, Subchapter H requirements. PUBLIC COMMENT Public hearings for the proposed SIP revision and associated rulemakings were held on October 28, 2009, at 2:00 p.m. and6:00 p.rn., at the Houston-Galveston Area Council (H-GAC) offices in Houston, Texas; and on October 29, 2009, at 3:00 p.m., at the Texas Commission on Environmental Quality (TCEQ) headquarters in Austin, Texas. Question and answer sessions were held 30 minutes prior to the hearings. Neither the October 28, 2009, hearing scheduled for 6:00 p.m., nor the October 29, 2009, hearing was officially opened because no party indicated a desire to provide comment. Five persons presented oral comments concerning this SIP revision at the public hearing held at 2:00 p.m. on October 28, 2009, in Houston. The public comment period opened on October 9, 2009, and closed on November 9, 2009. Written comments were accepted via mail, fax, and through the eComments system. There were 26 written comments received. Oral comments were provided by Kaneka Texas Corporation (Kaneka), Bigler, L.P. (Bigler), Environmental Defense Fund (EDF), and Galveston-Houston Association for Smog Prevention (GHASP). Written comments regarding the HECT rulemaking and Reasonably Available Control Measure (RACM) were provided by the EPA, EDF, GHASP, and Kaneka. Written comments regarding the HECT rulemaking and SIP revision were provided by BCCA Appeal Group (BCCA), 8-Hour Ozone SIP Coalition (Coaltion), Texas Oil and Gas Association (TxOGA), and Texas Association of Business (TAB).Written comments regarding the HECT rulemaking were provided by Texas Chemical Council (TCC), LyondellBasell (Lyondell), Texas Petrochemicals (TPC), Coalition of Manufacturersfor Air Quality (COMAQ), DuPont Packaging and Industrial Polymers (DuPont), Albemarle Corporation (Albemarle), Sunoco Chemicals Inc. (Sunoco), INEOS Olefin & Polymers USA (INEOS), PetroLogistics/PL Propylene L.L.C. (PL Propylene), Coalition, BCCA, TxOGA, TAB, Total Petrochemicals (Total), Kaneka, Bigler, AmericanAcryl. Arkema Inc. (Arkema), EPA, and the Houston Regional Group and the Lone Star Chapter of the Sierra Club (HSC). Kids for Clean Air, the Sustainable Energy and Economic Development (SEED) Coalition, Clean Air Institute of Texas, and one individual expressed support for any comments submitted by EDF and HSC. RESPONSE TO COMMENTS HECTRULE, HGB 1997 EIGHT-HOUR OZONE ATTAINMENT DEMONSTRATIONSIPREVISION, AND RACMCOMMENTS BCCA and the Coalition commented that the reallocation of HRVOC allowances in the HECT program rulemaking included in the proposed attainment demonstration SIP revision is not required for purposes of providing ozone precursor reductions for the 1997 eight-hour ozone attainment demonstration HGB SIP revision package. TxOGA and TAB commented that the proposed attainment demonstration SIP revision does not rely on the reallocation rulemaking. PL Propylene commented that the reallocation of HECT allowances is fair and necessary to protect the integrity of the SIP. The commission agrees with BCCA, the Coalition, TxOGA, and TAB that the reallocation of HECT allowances is not required tomodel attainment of the 1997 eight-hour attainment demonstration HGB SIP revision, The reallocation of HRVOC allowances does not in itself include a mandatory reduction in the HRVOC cap in Harris County. However, following the initial allocation of allowances, TCEQ received comments that the allocation was not equitably distributed. Information from the first two years ofmonitoring data supports the assertion of an inequitable distribution of allowances. A more equitable allocation of allowanceswill stimulate the market, creating incentives for further reductions by industry regulated under the program. The commission therefore agrees with PL Propylene that revisions to the rule are anticipated to result in a more equitable approach. Because thechange in allowance allocation methodology will create incentives for further reductions, it will contribute to the area's attainment of the NAAQS as expeditiously as practicable. No changes were made in response to this comment. EPA commented that the proposed reduction and reallocationof the Harris County HRVOC cap does not require HRVOC levels to be reduced below currently reported levels. EPA stated that the current 25% reduction in the HECT cap would still be higher than reported emissions and would allow for growth and allowances for upset conditions. EPA added that the 25% capreduction would allow HRVOC emission increases at HECT applicable facilities compared to the highest annual actual HECT emissions. EPA suggested that the commission consider as part of the RACM analysis whether reductions in actual HRVOC emissions could accelerate attainment.EDF and GHASP stated that they see no reason to delay additional cap reductions beyond the proposed 25% at this time. The commenters stated that to ensure that the area is meeting the FCAA requirement to implement all RACM as expeditiouslyas practicable, the commission must lower the cap to a meaningfullevel that will produce actual emissions reductions in the near term, or provide a logical, reasoned explanation as to Whydoing so it not feasible. EDF and GHASP stated that since this HECT cap reduction is based on the fact that emissions from capped sources dUring the first two years of the program only averagedapproximately 56% of the total allocated allowances, the commission should not claim that a 25% reduction in the cap would



### ADOPTED RULES March 26, 

### 2010 35 

### TexReg 2563result in any actual emissions reductions. They added that since the reduction is only in allowable emissions there will not be any improvement in actual air quality. EDF and GHASP commented that a HECT cap reduction closer to 50% is necessary in order to achieve any actual reductions and air quality improvement.The commission agrees that the HECT reallocation does not require mandatory reductions of HRVOC emissions from program participants. The purpose of the reallocation is to achieve a more equitable distribution of allowances based on actual monitoring data. A more equitable allocation of allowances will stimulate the market, creating incentives for further reductions by industry regulated under the program.The commission acknowledges that HRVOC monitoring data reported for 2006 - 2008 indicates that the total actual emissions from sources in the HECT program have been approximately 50% of the total current HRVOC cap. The HRVOC cap and trade rules require emissions from scheduled maintenance, startup, and shutdown activities and emissions events be included in determining compliance with the HECT program. Therefore, a buffer in the cap is needed to account for the variability of HRVOC emissions associated with these activities. Photochemical modeling analysis demonstrates an average ozone decrease of 0.13 ppb for the three monitoring sites with 2018 projected eight-hour ozone design values greater than the 1997 eight-hour ozone NMOS, Deer Park, Bayland Park, and Wallisville. The Deer Park monitor's design value was the highest in the HECT sensitivity modeling, which showed a decrease in the Deer Park monitor design value from 86.49 ppb to 86.36 ppb ozone. The 25% reduction in the Harris County HRVOC cap allows for a sufficient buffer to protect against the inherent variability in HRVOC emissions while modeling an average 2018 future cap design value within EPA's range for weight of evidence discussion. During this period, HECT regulated sources have experienced the same economic downtum that other industrial sectors across the country have experienced resulting in lower than normal emissions. The commission contends that in a better economic environment HECT sources operating at normal production levels would have average emissions at levels closer to the current HRVOC cap. No changes were made in response to this comment. EPA requested that the commission explain why the reductions cannot be implemented sooner than the proposed 2015 - 2017 time frame. EDF and GHASP expressed support for reducing the HECT cap for Harris County in stepwise fashion by 10% in 2014, followed by annual 5% reductions through 2017. The adopted rule revisions will reallocate the program in 2011 and implement an initial 10% reduction of the existing available HECT cap of 3,451.5 tons beginning with the 2014 calendar-year control period. The available cap will then be reduced in 5% increments at the start of each calendar-year control period for 2015,2016, and 2017. The full 25% cap reduction will have been in effect for one full calendar-year control period by January 1, 2018. While historical data demonstrate an overall surplus inthe HRVOC cap, many sources were operating near their individual cap limits and thus, may see a significant change in theirHRVOC emissions. The cap reduction and reallocation may require some individual sites to install additional controls or otherwise modify their operations to reduce their HRVOC emissions.The step-down approach allows companies time to install con

### 35 TexReg 2564 

### March 26,2010 TexasRegister trois if necessary. No changes were made in response to this comment. Kaneka cited a portion of the RACM analysis in Appendix E of the 1997 eight-hour ozone attainment demonstration HGB SIPrevision proposed on September 23, 2009, describing the practicality issues identified with revising NOx allowances under the MEeT program because allowance streams have been tradedand relied upon for compliance with the program. Kaneka concluded that if it is impractical to nullify MECT trades, then it isalso impractical to nullify HECT trades that have also been relied upon for compliance with the program. The commission maintains that reducing the Harris County HECT program cap is RACM. The commission acknOWledgesthat practicality is one of the EPA's evaluation criterion considered during the state's RACM analysis. In the portion of the RACM analysis referenced by the commenter, the commissionalso acknowledges practicality issues associated with revising MECT program NOx allocations. However, as discussed at length in Appendix E, 1997 eight-hour ozone attainment demonstration HGB SIP revision, Section 4.2.1: Mass Emission Cap and Trade (MECT) Program and 30 TAC Chapter 117 NOx Rules RACM of this 1997 eight-hour ozone attainment demonstration HGB SIP revision, the commission concluded that further NOx reductions through the MECT program did not constitute RACM on the basis of economic and technological feasibility, rather than practicality. Therefore, the commission respectfully disagrees with the commenter's conclusion that revising the HECT program should not be considered RACM because it is impractical. The commission agrees that the nullification issue should be addressed, and the rules have been revised to allow sites that purchased allowance streams the potential to apply allowances from the stream to the calculation of "Unconfrohed emisslons" as actual emissions. Revised §101.394(a)(1) allows sites holding stream trades to calculate their ·Uncontrolled emissions" asthe greater of their actual average emissions of their two highest emission years from 2006 - 2009 or the sum of their original existing HECT HRVOC allowance and the amount of the allowance stream in tons. In the event that a site's actual twohighest year emissions is less than the sum of its original existing HECT HRVOC allowance and the amount of the allowance stream in tons, the difference shall be added to the ·Uncontrolled emissions" as actual emissions. The purchase of an allowance stream also allowed some sites to operate with higher emissions during the baseline emissions period. Sites that took advantage of allowance streams would therefore realize the benefit of thehigher emissions through the uncontrolled emissions-based reallocation methodology. HECT RULE COMMENTS 25% Cap Reduction TCC, Lyondell, TPC, the Coalition, BCCA, TxOGA, and TAB expressed support for the 25% reduction in the Harris County HRVOC Cap. TCC and TPC stated their agreement with the "stepdown" approach, beginning with a 10% reduction in the cap in 2014, with 5% annual reductions to reach a total 25% cap reduction in 2017. COMAQ stated their strong support for the "stepdown" approach outlined in the definition of"AC" located in the figure in §101.394(a)(1)(B) and believes that it is critical to the ru/emaking. The commission appreciates the comments.Reallocation Methodology LyondeU and ,PC expressed their opposition**~o** the HECi program uncontrolled emissions-based reallocation method,o\- ogy and their support for the alternative flat percent a\\ocat\on methodology discussed in the rule proposal preamble. iPCstated that the proposed uncontrolled emissions-based reallocation methodology does not reward well-controlled facilities and may actually have the opposite effect of providing insufficient allowances for well-controlled facilities, such as TPC. Lyondell stated that some well-controlled facilities receive some of the lowest estimated allocations while some of the least controlledfacilities appear to receive the largest allocations and well-controlled facilities that are under-allocated have no option than to purchase allowances, thereby potentially affecting the viability of the company. TPC commented that its Houston Plant is better controlled than most or all other HECT participating facilities as a result of a Voluntary Emissions Reduction Agreement (VERA) entered into with the commission in 2005. This agreement resulted in HRVOC emissions reductions of more than 120 tpy when comparing 2002 to 2008 HECT emissions. TPC achieved these emissions reductions through the implementation of flare . gas recovery, advanced technology for fence-line monitoring, and other operational changes. TPC stated that despite these reductions, the initial estimated potential HECT allocationposted by the agency awarded TPC with an insufficient allocation to cover its high 2007/2008 HRVOC emissions. TPC further commented that although the flat allocation method does not penalize poorly controlled facilities, the proposed uncontrolled emissions-based reallocation methodology does not rewardwell-controlled facilities. TPC stated that the proposed methodology falls short because it does not reward flare gas recovery. one of the most effective HRVOC emissions controls and does not consider actual control efficiencies where this information is available. TPC recommended that the commission correct the proposed allocation methodology by accounting for flare gas recovery, addressing control mechanisms on vent gas streams, and using actual measured control efficiencies where available. Lyondell stated that it strongly supports the flat percent reallocation methodology as it is the most equitable for all participants, is based on actual data, and is a much simpler and transparent methodology. Lyondell commented that the estimated allocations using the proposed methodology demonstrate that significantly more sites will be under-allocated as compared to their historic highest emissions from 2007 and 2008 than the current allocation, and up to 11 sites may have allocations of more than 200% of their highest emissions. Lyondell also stated that approximately 20% of HECT sites are owned and operated by Lyondell; 30% of the highest emissions from 2007 and 2008 are from Lyondell sites, but under the initial estimated allocation derived from the proposed methodology less than 25% of the allocations go to Lyondell sites. In addition, Lyondell stated that sites that are under-allocated will be further disadvantaged when the HECT cap is further reduced during the stepdown, while over-allocated sites will benefit from an arbitrary business advantage. Albemarle, COMAQ, DuPont, INEOS, PL Propylene, and Sunoco expressed their support for the proposed uncontrolled emissions-based reallocation methodology and their opposition to the flat percent reallocation. Total stated that although they believe the original allocation was fair and equitable, it supports the concept of an uncontrolled emissions-based reallocation methodology. COMAQ stated that it has maintained a consistent position that the existing HRVOC allowance allocation methodology is inequitable and is pleased that the commission has proposed an allocation methodology . \\ n 01 a\\owances. COthat wi\\ resu\t in

### t~e**e~ul\a~e'ead~~hatl~or** a 1air and equitab\e MA.Q and A.\bemalle commen\,

. , HECi program, it is critica\ that the rea\\ocat\on

### m~\hodo**~g,/** recognize demonstrated contro\s through the rewardmg of high \eve\s 01 contro\ and not rewarding \ow\e'Je\s of con\ro\ and\hat the program must be rea\\ocated in the most immediate fashion possible. The proposed alternative flat percent allocation methodology discussed in the proposal preamble, by allocating allowances as a direct percentage of each site's highest actual emissions,ignores reductions from controls, such as flares, heaters, boilers, fumaces, and thermal and catalytic oxidizers, and rewards poorly controlled facilities with high actual emissions while penalizing well-controlled facilities. This results in an inherently inequitable allocation. The adopted uncontrolled emissions based reallocation provides credit for controls through the useof control efficiencies in the calculation of uncontrolled emissions. In order to account for reductions from flare and vent gas recovery and flare minimization programs, the adopted reallocation methodology will allow qualifying sites that achieved early reductions through the implementation of these controls to utilize either an altemative baseline emissions period reflecting these emissions or apply the quantified reductions toward the calculation of the site's uncontrolled emissions. In addition, the elimination of the opt-in provision in combination with the adoption of a two-tier minimum allocation of five and ten tonsaddresses overallocation to sites with actual emissions substantially below ten tons. The uncontrolled emissions based allocation methodology, with the addition of these specialprovisions, will therefore result in an equitable, accurate, representative, and comprehensive allocation of the Harris County HRVOC cap.Coalition and BCCA do not support reallocation as it would penalize facilities that made early and substantial HRVOC emissions reductions and the reallocation is not required for the 1997 eight-hour attainment demonstration HGB SIP revision. The commission respectfully disagrees with the comment. Asdiscussed previously in this response to comments, the commission has adopted an altemative baseline provision and flare and vent gas minimization credits to account for early substantial emissions reductions. TxOGA and TAB stated their opposition to reallocation at this time. TxOGA stated that it believes additional data is necessarybefore reallocation because all sites did not have reliable monitoring and 2007 and 2008 control periods reflect active hurricane seasons and a slower economy. TxOGA stated that well-controlled facilities need to be defined before an equitable allocation can be implemented. The commission respectfully disagrees with the comment. HRVOC stream monitoring under Chapter 115 was required by December 31.2005. As discussed elsewhere in this preamble, the reallocation methodology is based on a comparison of each individual site's HRVOC emissions relative to the total HRVOCemissions from all sites within the same industry sector. Therefore, the commission contends that the allocation of allowances for any individual site would not be significantly affected by general changes in economic conditions. An individual site'sallocations would only be changed if their uncontrolled emissions significantly increased as a proportion of the total industry sector emissions. No changes were made in response to this comment.



### ADOPTED RULES March 26,2010 

### 35 TexReg 2565Reallocation Methodology Lyondell and TPC expressed their opposition to the HECTprogram uncontrolled emissions-based reallocation methodology and their support for the altemative flat percent allocation methodology discussed in the rule proposal preamble. TPCstated that the proposed uncontrolled emissions-based reallocation methodology does not reward well-controlled facilities and may actually have the opposite effect of providing insufficient allowances for well-controlled facilities, such as TPC. Lyondell stated that some well-controlled facilities receive some of the lowest estimated allocations while some of the least controlledfacilities appear to receive the largest allocations and well-controlled facilities that are under-allocated have no option than to purchase allowances, thereby potentially affecting the viability of the company. TPC commented that its Houston Plant is better controlled than most or all other HECT participating facilities as a result of a Voluntary Emissions Reduction Agreement (VERA) entered into with the commission in 2005. This agreement resulted in HRVOC emissions reductions of more than 120 tpy when comparing 2002 to 2008 HECT emissions. TPC achieved these emissions reductions through the implementation of flare gas recovery, advanced technology for fence-line monitoring, and other operational changes. TPC stated that despite these reductions, the initial estimated potential HECT allocationposted by the agency awarded TPC with an insufficient allocation to cover its high 2007/2008 HRVOC emissions. TPC further commented that although the flat allocation method does not penalize poorly controlled facilities, the proposed uncontrolled emissions-based reallocation methodology does not rewardwell-controlled facilities. TPC stated that the proposed methodology falls short because it does not reward flare gas recovery, one of the most effective HRVOC emissions controls and does not consider actual control efficiencies where this information is available. TPC recommended that the commission correct the proposed allocation methodology by accounting for flare gas recovery, addressing control mechanisms on vent gas streams, and using actual measured control efficiencies where available. Lyondell stated that it strongly supports the flat percent reallocation methodology as it is the most equitable for all participants, is based on actual data, and is a much simpler and transparent methodology. Lyondell commented that the estimated allocations using the proposed methodology demonstrate that significantly more sites will be under-allocated as compared to their historic highest emissions from 2007 and 2008 than the current allocation, and up to 11 sites may have allocations of more than 200% of their highest emissions. Lyondell also stated that approximately 20% of HECT sites are owned and operated by Lyondell; 30% of the highest emissions from 2007 and 2008 are from Lyondell sites, but under the initial estimated allocation derived from the proposed methodology less than 25% of the allocations go to Lyondell sites. In addition, Lyondell stated that sites that are under-allocated will be further disadvantaged when the HECT cap is further reduced during the stepdown, while over-allocated sites will benefit from an arbitrary business advantage. Albemarle, COMAQ, DuPont, INEOS, PL Propylene, and Sunoco expressed their support for the proposed uncontrolled emissions-based reallocation methodology and their opposition to the flat percent reallocation. Total stated that although they believe the original allocation was fair and equitable, it supports the concept of an uncontrolled emissions-based reallocation methodology. COMAQ stated that it has maintained a consistent position that the existing HRVOC allowance allocation methodology is inequitable and is pleased that the commission has proposed an allocation methodology that will result in the equitable allocation of allowances. COMAQ and Albemarle commented that for a fair and equitable HECT program, it is critical that the reallocation methodology recognize demonstrated controls through the rewarding of high levels of control and not rewarding low levels of control and that the program must be reallocated in the most immediate fashion possible. The proposed altemative flat percent allocation methodology discussed in the proposal preamble, by allocating allowances as a direct percentage of each site's highest actual emissions,ignores reductions from controls, such as flares, heaters, boilers, furnaces, and thermal and catalytic oxidizers, and rewards poorly controlled facilities with high actual emissions while penalizing well-controlled facilities. This results in an inherently inequitable allocation. The adopted uncontrolled emissions based reallocation provides credit for controls through the useof control efficiencies in the calculation of uncontrolled emissions. In order to account for reductions from flare and vent gas recovery and flare minimization programs, the adopted reallocation methodology will allow qualifying sites that achieved early reductions through the implementation of these controls to utilize either an altemative baseline emissions period reflecting these emissions or apply the quantified reductions toward the calculation of the site's uncontrolled emissions. In addition, the elimination of the opt-in provision in combination with the adoption of a two-tier minimum allocation of five and ten tons addresses overallocation to sites with actual emissions substantially below ten tons. The uncontrolled emissions based allocation methodology, with the addition of these specialprovisions, will therefore result in an equltable, accurate, representative, and comprehensive allocation of the Harris County HRVOC cap.Coalition and BCCA do not support reallocation as it would penalize facilities that made early and substantial HRVOC emissions reductions and the reallocation is not required for the 1997 eight-hour attainment demonstration HGB SIP revision. The commission respectfully disagrees with the comment. Asdiscussed previously in this response to comments, the commission has adopted an alternative baseline provision and flare and vent gas minimization credits to account for early substantial emissions reductions. TxOGA and TAB stated their opposition to reallocation at this time. TxOGA stated that it believes additional data is necessarybefore reallocation because all sites did not have reliable monitoring and 2007 and 2008 control periods reflect active hurricaneseasons and a slower economy. TxOGA stated that well-controlled facilities need to be defined before an equitable allocation can be implemented. The commission respectfully disagrees with the comment. HRVOC stream monitoring under Chapter 115 was required by December 31, 2005. As discussed elsewhere in this preamble, the reallocation methodology is based on a comparison of each individual site's HRVOC emissions relative to the total HRVOCemissions from all sites within the same industry sector. Therefore, the commission contends that the allocation of allowances for any individual site would not be significantly affected by general changes in economic conditions. An individual site's allocations would only be changed if their uncontrolled emissions significantly increased as a proportion of the total industry sector emissions. No changes were made in response to this comment.



### ADOPTED RULES March 26, 

### 2010 35 

### TexReg 2565TCC expressed its support for the definition of "Baseline emissions period" under §101.390(4). The commission appreciates the comment. COMAQ requested that the commission revise §101.394(a) and (a)(1)(A) relating to the allocation methodology such that the January 1,2007, allowance deposit date be clarified to only refer to the calendar-year control periods 2007 - 2010. The commission agrees with the comment. As the allowance deposit date for the existing program has passed and will not be revised, the reference to January 1,2007, has been deleted. Lyondell commented that sites included in the chemical sector include a mix of processes that are difficult to compare with one anotherand therefore. the commission should reallocate the program without using industry sectors. TPC commented that the chemical sector includes widely varying operations with varyingHRVOC uses and throughput. COMAQ supports including a definition of ·'ndustry sector" in the HECT definitions. COMAQ andAlbemarle commented that the use of industry sectors is important in the reallocation methodology because sites in the same industry sector use similar HRVOC recovery and recycle activities that significantly affect HRVOC emissions, and prevent sites with significantly different industrial processes from competing for the same allowance pools. While the commission acknowledges that there will be some varying of operations within industry sectors, it contends that the use of industry sectors is important to establishing an equitable allocation. The existing application of BACT and otherfederal standards within industry sectors would assure a comparable cost of control within the industry sector, and the division of the cap into industry sector share would therefore reflect a more equitable allocation methodology. In addition, the amount of HRVOC product that is recycled and recovered for sites within the same industry sector should be comparable due to market forces and competition within the sector. Sites within industry sectors that produce HRVOC as product share the economic incentive to reduce emissions using similar recovery techniques. The rules have been revised to include definitions of the industry sectors under §101.390.COMAQ supported revising the definition of "Uncontroded emissions" to clarify the term "average percent control efficiency" for flares.The commission appreciates the comment. Revisions to the definition of "Uncontrolled emissions" have been made in response to comment and are discussed elsewhere in this preamble.Lyondell and TPC expressed their concern regarding the proposed use of flare control efficiencies of 99% for ethylene and propylene while allowing only 98% for all other HRVOCs for the detennination of "Uncontrolled emissions.· Lyondell and TPC asserted that this would result in an inadequate allocation for sites with high butadiene and butane emissions as compared to sites emitting primarily ethylene and propylene. The commission respectfully disagrees with the comment. The control efficiencies specified in the rules for the determination of "Uncontrolled emlssions" from flares are consistent with the Chapter 115 specifications for the reporting of HRVOC emissions from flares for sites subject to the HECT program. Allowing sites to use control efficiencies different from those specified for calculating actual emissions in Chapter 115 would result in an allocation methodology that is fundamentally inconsistent with HECT emissions reporting. HECT allocations under the rule are


### 35 TexReg 2566 

### March 26, 

### 2010 TexasRegister to be used to cover actual emissions reported in accordance withChapter 115 requirements, and therefore must be calculated using consistent methodologies. No changes were made in response to this comment. Albemarle, TCC, and TPC commented that only HRVOC emissions from normal, routine, and permitted operations be attributable to the calculation of "Uncontrolled emissions," and all emissions from emissions events subject to the requirements of §101.201 are disallowed from being used for the determination of HECT allowances. The commission agrees and §101.394(a)(3) has been revised inresponse to this comment. Only emissions from routine permitted operations shall be applied to the calculation of ·Uncontrolled emissions" and all emission subject to §101.201 will not be applied for the determination of allocations. Alternative Baseline Provisions and Early/Additional Reduction Credit Lyondell and TCC strongly recommended that the commission expand the definition of "Uncontrolled emissions" to include the pre-control emissions that are routed to emission control devices, such as thermal oxidizers and other generally recognizedHRVOC emissions control devices. TPC and TCC also recommended that the rule allow the use of actual control efficiencies up to 99.9% when demonstrated and recorded during monitored stack performance testing. Total recommended the determination of uncontrolled emissions should allow for the actual control efficiencies derived from performance or stack testing or from the device manufacturer's specifications. Total stated that allowing for control efficiencies greater than 99% when actual testing data is available would provide consistency between what sites report to the HECT program and the allocation methodology and will not penalize sites that have invested in over-control of HRVOC emissions. Albemarle expressed their support for the provision in §101.390(9) applying control efficiencies for heaters, boilers, and furnaces as HRVOC control devices in the definition of uncontrolled emissions and recommends allowing control efficiencies for thennal oxidizers as well. The commission agrees with the commenters and has revised§101.394(a)(3) to allow credit for control efficiencies for combustion devices used in HRVOC control, such as thermal, catalytic, and regenerative oxidizers. The rulemaking has also been revised to allow for control efficiencies up to 99.9% for applicable units. The commission will allow for the use of control efficiencies greaterthan 99% and up to 99.9% only for applicable units for which stack performance testing data has been submitted by the owner or operator as part of the Form ECT-6H, Level of Activity. Allocating allowances based on uncontrolled emissions using control efficiencies greater than 99.9% is impractical as it leads to large variations in allocations on an order of magnitude larger than the highest allocations. The commission will therefore assign a 99.9% control efficiency to any combustion unit that demonstrates an actual measured control efficiency greaterthan 99.9%. TPC**r~commended** that the commission correct the proposed allocatlo.n methodology by accounting for flare gas recovery, addreSSing control mechanisms on vent gas streams. TPC strongly recommended allowance allocation credit for flare gas recovery and similar control strategies. Total stated that allowance credit should be included for Vapor Recovery Units (VRU) that recovers HRVOC emissions previously sent to a process flare. Total stated that quantified HRVOC emissionreductions achieved through the implementation of a VRU should be added to a site's "Uncontrolled emissions" in the equation under §1 01.394(a)(1 )(B) for the calculation of the site's allowance allocation. The commission actively solicited comment on accurate and effective methods for calculating allowance credit for flare gas recovery, vent gas recovery, flare minimization, and other recovery and recycle mechanisms. The commission agrees with the commenters and has added §101.394(a)(3) to allow sites that do not request the use of an alternative emissions baseline period to apply the actual quantified amount of HRVOC emissions reduced through the implementation of flare or vent gas recovery to the site's uncontrolled emissions for the calculation of their allowance allocation. TCC and TPC expressed their support for the alternate baseline emissions period but recommended the deadline for the alternate baseline request be extended to 150 days after the rule effective date in order to allow regulated entities ample time to prepare and submit the request for review. The commission agrees with the comment and has revised the alternative baseline request submittal deadline to July 1,2010. Lyondell expressed its support for the alternative baseline provision, but requested that the potential alternative baseline period be expanded to include 2002 - 2005 and the qualifying reductions in HRVOC be revised from 50% or 50 tons to 25% or 25 tons. Total expressed support for the alternative baseline provision, but stated that the qualifications for use are too restrictive. Total requested that the commission allow for engineering calculations in lieu of continuous flow monitoring, as speciated flow monitoring was not required prior to 2006. Total also requested that the 50 tons or 50% reduction qualification provision be revised to 20 tons or 20% reductions. In addition, Total believes that reductions driven by permit conditions, regUlatory requirements, or consent decrees be included in the provision. The commission has revised the qualifying reduction amount under §101.394(a)(1 )(D)(ii) to allow sites that implemented permanent, voluntary, and quantifiable HRVOC emissions reductions in an amount equal to or greater than 25 tons of site-wide HRVOC emissions resulting in at least a 25% reduction of the site's total annual HRVOC emissions for sites that used continuous speciated flow rate monltorinq of HRVOC. The commission has implemented these revisions in response to comment, however it maintains that the 25-ton reduction resulting in at least a 25% site-wide reduction in HRVOC qualification is necessary to ensure that only sites implementing reductions that are significant to both the site and the total Harris County HRVOC cap be considered for the provision. In addition, the qualification of continuous speciated monitoring is, critical to ensure that these reductions are quantified using monitoring techniques consistent with those used under the current HECT program. The consideration of limiting the alternative baseline emissions period to two consecutive calendar-year control periods immediately preceding 2006
- 2009 baseline emissions period is necessary to ensure that the reductions considered occurred directly before the 2006 baseline period forthe 1997 eight-hour attainment demonstration HGB SIP revision. Albemarle and COMAQ expressed their opposition to any revisions to the definition of "Baseline emissions period" and stated that it is critical that the restrictions on the qualifications for exceptions to the use of the baseline period be sufficiently restrictive to impose at least the use of continuous monitoring, voluntary and permanent reductions. In addition, Albemar1e stated that "site-by-site" evaluations should be avoided to the extent possible to avoid inequitable allocations and the potential for unwarranted advantages to sites given special consideration. The commission agrees with the commenters. The revisions to the alternative baseline emissions period qualifications, from a 50-ton total or 50% site-wide reduction to a 25-ton reduction that results in at least a 25% site-wide reduction, is still consistent with the commission's goal of considering only the reductions that are significant to the site's overall emissions while having an impact in the total cap. In conjunction with this revision, the commission has retained the continuous monitoring qualifications and will only considervoluntary and permanent reductions in HRVOC emissions. PL Propylene strongly supports the provision in §101.394(a)(1)(C) that allows the use of an alternate baseline for sites not in operation from 2006 - 2009. PL Propylene requested that §1 01.394(a)(1 )(C)(i) be revised to state "this allocation is less than the HRVOC permit allowable limit in effect at the time the facility cornmences operation." In addition, PL Propylene requested that the alternative baseline emissions period be revised from any two consecutive calendar-year control periods from 2010
- 2012 to be any consecutive 24 months from 2010 - 2012. The commission agrees with the comments and the adopted rules have been revised in accordance with the requests. TCC, TPC, and Albemar1e stated that they recommend emissions from emission events be removed from the calculation for reallocation and each site's "Uncontrolled emissions" should be based solely on actual emissions from routine operation. Albemarle stated that the inclusion of emissions from emission events in the baseline emissions calculation unduly rewards emission events. The commission agrees with the comment and the definition of "Uncontrolled emissions" has been modified accordingly. Emission Event Set-Aside TCC recommended that proposed §101.396(c) and (d) be deleted from the rule in order to eliminate the proposed 250-ton emissions event set-aside. TCC stated that the elimination of the set-aside would maximize program flexibility and the benefits of cap-and-trade. Albemar1e, COMAQ, Lyondell. TCC, Total, and TPC also requested eliminating the 25O-ton set-aside for emissions events. The commenters believe that emissions from emission events can best be handled through each site's allocation or the purchase of year1yallowances and the allocation of the additional 250 tons would provide for more flexibility. Albemar1e requested the commission retain the emission event reporting requirement under §101.396(c) and (d) due to the value of determining the impact of emissions events on the HECT program. AmericanAcryl expressed its support for the proposed 250-ton emissions event set aside or the elimination of emissions events from applicability to the program. In response to comment, the rule has been revised based on this comment to eliminate the 250-ton emissions event set-aside pool from §101.396(c). Emissions from emissions events will be treated in the same manner as they are currently addressed in the HECT program. All emissions dUring emissions events from HECT subject facilities up to the short-term Iirnits under §115.722(c) and §115.761 (c) must be covered by an equivalent



### ADOPTEDRULES March 26, 2010 35 TexReg 2567amount of HRVOC allowances in each site's respective HECT account by March 1 after the end of the control period. EPA requested clarification that emissions events that exceed the 250-ton set aside will be deducted from each site's account. The commission has revised the rulemaking to omit the proposed emissions event set-aside. All emissions from emissions events will be addressed in the same manner as they are addressed currently under the HECT program. EPA 5% Set-Aside TCC, Lyondell, TPC, and COMAQ expressed their positions that the 5% set-aside to safeguard against potential emission variations is no longer necessary. TCC understood that industry originally agreed to this set-aside as a provision to address new actual HRVOC emissions under the HECT program.The reduction in the overall HRVOC cap by an initial 5% was implemented as a compliance margin and not a provision for new HRVOC emissions. This compliance margin was a negotiated agreement with EPA to address geographiCal emission variations, or the potential for emissions ·spiking, to and will remain necessary after allowance reallocation. No changes were made in response to this comment. Stream Trades and Reallocation TCC expressed their concem with the nullification of purchased stream trades due to reallocation of the program. TCC stated that the nullification of purchased allowance streams may adversely impact the integrity of emissions trading in Texas and may result in encouraging emissions. TCC stated the commission must therefore honor past stream trades. Albemarle, Bigler, Kaneka, Lyondell, and TPC stated their opposition to the automatic voidance of existing HECT allowance stream trades due to reallocation. Albemarle proposed two alternatives to stream trade voidance, a set-aside pool, or incorporating stream trades into a site's ·Uncontrolled emissions· calculation. AmericanAcryl stated that any revised allocation methodology should not reduce a site's allocation below the amount for which a site has traded an allowance stream. The rules have been revised in response to these comments to allow sites that purchased allowance streams the potential to apply allowances from the stream to the calculation of ·Uncontrolled emissions" as actual emissions. Revised §101.394(a)(3)(E) allows sites holding stream trades to calculate their ·Uncontrolled emissions" as the'greater of their actual average emissions of their two highest emission years from 2006 - 2009 or the sum of their original existing HECT HRVOC allowance and the amount of the allowance stream in tons. In the event that a site's actual two highest year emissions is less than the sum of their original eXisting HECT HRVOC allowance and the amount of the allowance stream in tons, the difference shall be added to the ·Uncontrolled emissions" as actual emissions. In addition, qualifying sites not in operation or with HRVOC emissions that are not representative of pennitted normal routine operation, due to an authorized modification that resulted in an HRVOC emission reduction during the baseline emissions period, may request from the executive director the use of any allowance stream from facilities previously participating in the HECT program in lieu of reallocation until the alternate baseline emissions are established. Although the revised rule contains provisions allowing qualified sites to apply for credit for acquired allowance streams towards their allocation in



### 35 TexReg2568 

### March 26,2010 Texas Register 2011, HECT allowances allocated or acquired do not constitute property rights. Minimum Allocation and Opt-In Provision TCC recommended that §101.394 be modified such that only sites with a PTE greater than or equal to ten tons and required to participate in the program receive a minimum allocation often tons. TCC stated that the "opt-in" provlslon should be eliminated to allow for more allowances to be available for sites that are required to participate in the program. TPC recommended sites that opted-in to the program receive a five-ton allocation and these sites with a PTE less than ten tons should be afforded the opportunity to opt-out. Lyondell commented that the opt-in provision from the existing rule be eliminated and opposes the use of the ten ton PTE minimum. Lyondell requested that facilities that have reported less than five tons of actual emissions should not be rewarded with additional allowances. Albemarle recommended increasing the minimum allowance allocation to ten tons and allowing sites with a PTE less than ten tons be allowed to "opt-out" of the program in a manner that allows any allowances that may have been allocated to these sites to be available to the remaining sites required to participate. AmericanAcryl expressed their support for the ten-ton minimum allocation or to ·freeze" all allocations below ten tons at the current allocation amount. The rules have been revised in response to the comments. Sites with a PTE, as defined in §116.12, less than ten tons of HRVOC are exempt from the HECT program and will not be given an allowance allocation. The existing opt-in deadline of April 30, 2005, has passed, no extension or additional opt-in provision has been adopted, and no sites took advantage of the 2005 provision. Therefore, no sites in Harris County with a PTE less than ten tons will participate in the HECT program and be assigned an HRVOC allocation. Participating sites with a calculated allocation of less than five tons based on the revised allocation methodology will be allocated a minimum of five tons. Sites with a calculated al1ocation of greater than or equal to five tons but less than ten tons will receive a minimum allocation of ten tons. Sites provided the minimum allocation will not be subject to the stepdown provisions of the rules and will retain the minimum allocation in 2017 and beyond. COMAQ, Lyondell, TCC, and TPC recommended that the submittal deadline of the Level of Activity Certification, Fonn ECT6H, be revised to JUly1, 2010, in order to allow regulated entities sufficient time to compile and submit the necessary infonnation. The commission agrees with the comment and §101.401(f) has been revised accordingly. General Rule Comments TCC requested that the rule language in §1 01.392(b) be clarified to exclude the seven perimeter counties from the requirements of this division except for §101.401(a) - (e), as the submittal of the ECT-6H fonn is not required from sites in these counties. The commission agrees with the comment and §101.392(b) has been revised as requested to clarify the applicability of §101.392(b) exclusively to Harris County. Albemarle, COMAQ, DuPont, and Sunoco expressed their support for a provislon preventing HECT al10wancesbeing used in lieu of FCCA, §185 fees. The commission appreciates the comment; however, this comment is outside the scope of this rulemaking.COMAQ requested that §101.399(a)

- (c) be revised such that vintage allowances allocated under §101.394(a)(1)(A) using the existing allocation methodology cannot be banked or traded after the 2010 calendar-year control period. The commission respectfully disagrees with the request. The commission does not intend to restrict the banking and tradingof allowances based on allocation methodology. The use of vintage 2010 allowances in the 2011 calendar-year control period will be necessary to provide compliance flexibility during the first year under the revised allocation methodology. All requests for allowance trades under Form ECT-2, Application for Transfer of Allowances, must be approved by the executive director. No change has bsen'mede in response to this comment. Albemarle, COMAQ, DuPont, and Sunoco strongly opposed any delay to the reallocation beyond the beginning ofthe 2011 calendar-year control period. Dupont stated that any delay to the reallocation would exacerbate the issues of an already inequitableprogram and continue to provide a significant economic advantage to companies that were over-allocated under the existing program. The commission agrees with the comment and allowances will be reallocated for the calendar-year control period 2011. No changes have been made in response to this comment.INEOS expressed its support for the inclusion of the 2006 calendar-year control period in the baseline emissions period. INEOS pointed to the compliance requirements in Chapter 115requiring the implementation of HRVOC stream monitoring by December 31, 2005, as justification that 2006 emissions data should be as reliable as 2007 - 2009 data. The commission appreciates the comment. No changes were made in response to this comment. The baseline emissions period will continue to include the 2006 calendar-year control period.

. Lyondell commented that errors in the 2006 Special Inventory,differentiation in facilities covered under each sector, and potential differences in reporting methodologies or assumptions will impact the allocation of allowances under the proposedmethodology. Lyondell provided the example of various industry assumptions in the reporting of HRVOC concentrations in fuel streams and whether emissions should be reported when HRVOC concentrations are below the detection limit in stack gas or when the concentration in the fuel stream is less than 0.5%. The commission appreciates the comment. HECT participants will have an opportunity to provide accurate emissions, control efficiencies, and other relevant data through the submission of the Form ECT-6H, Level of Activity Certification. HRVOC stream monitoring for all applicable HECT sources has been requiredsince December 31, 2005. Allocations for the 2011 calendaryear control period will be calculated using the most accurate monitoring and testing data available for emissions and control efficiencies during the baseline emission period. HSC stated its preference for command and control regulationfor HRVOC emissions in Harris County, increasing the reductions in the cap to 30%, 35%, or 40%, and speeding up the implementation of the rulemaking.Voidance of the HECT program and the implementation of command and control emission specifications were not considered during proposal and are outside the scope of this rulemaking. The commission maintains that the HECT program is the most cost effective means of achieving HRVOC emissions reductionswhile proViding compliance flexibility and maximizing the efficiency of emission reductions through market forces. Individual sources of HRVOC emissions are SUbjectto permit limits and anyapplicable limit as established by rule. The HECT program provides for additional decreases in HRVOC emissions limits above and beyond these basic requirements. This rulemaking is part of the 1997 eight-hour attainment demonstration HGB 2010 SIP revision. Reallocation of the program will take place in 2011, the first full calendar-year control period following adoption of therules, and the 25% cap reduction will be fully realized at the beginning of the 2017 calendar-year control period, one full yearbefore the 2018 attainment year. No changes were made In response to this comment. 

### SUBCHAPTERA. 

### GENERAL RULES 30 TAC §101.1 STATUTORY AUTHORITY The amendment is adopted under Texas Water Code (TWC),§5.102, conceming General Powers, that provides the commission with the general powers to carry out its duties under the Texas Water Code; TWC, §5.103, conceming Rules, that authorizes the commission to adopt rules necessary to carry out its powers and duties under the Texas Water Code: TWC,§5.105, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy of the commission; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act. The amendment is also adopted under THSC, §382.002, concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; §382.011, concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air; and §382.012, concerning State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air. The amendment is also adopted under THSC, §382.Q16, concerning Monitoring Requirements; Examination of Records,that authorizes the commission to prescribe reasonable requirements for the measuring and monitoring of air contaminant emissions. The amendment is also adopted under Federal Clean Air Act (FCAA), 42 United States Code (USC), §§7401, et seq; which requires states to submit state implementation plan revisions that specify the manner in which the National Ambient Air Quality Standard will be achieved and maintained within each air quality control region of the state. The adopted amendment implements THSC, §§382.002, 382.011, 382.012, 382.016, and 382.017, FCAA, 42 USC, §§7401 et seq. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on March 12,2010. TRD-201001268



### ADOPTED RULES March 26, 

### 2010 35 

### TexReg 2569Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Effective date: April 1, 2010 Proposal publication date: October 9, 2009 For further infonnation, please call: (512) 239-6090


### SUBCHAPTER H. EMISSIONS BANKING AND TRADING DIVISION 6. HIGHLY-REACTIVE VOLATILE ORGANlC COMPOUND EMISSIONS CAP AND TRADE PROGRAM 30 TAC §§101.390 - 101.394, 101.396, 101.399 - 101.401 STATUTORY AUTHORITY The amendments are adopted under Texas Water Code (TWG),§5.102, concerning General Powers, that provides the commission with the general powers to carry out its duties under the Texas Water Code; TWC, §5.103, conceming Rules, that authorizes the commission to adopt rules necessary to carry out its powers and duties under the Texas Water Code; TWC,§5.105, conceming General Policy, that authorizes the commission by rule to establish and approve all general policy of the commission; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act. The amendments are also adopted under THSC, §382.002, concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state's air resources, consistent with the protection of public health, general welfare, and physical property; §382.011, concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air, and §382.D12, conceming State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air. The amendments are also adopted under THSC, §382.016, concerning Monitoring ReqUirements; Examination of Records,that authorizes the commission to prescribe reasonable requirements for the measuring and monitoring of air contaminant emissions. The amendments are also adopted under Federal Clean Air Act (FCM), 42 United States Code (USC), §§7401, et seq., which requires states to submit state implementation plan revisions that specify the manner in which the National Ambient Air Quality Standard will be achieved and maintained within each air quality control region of the state. The adopted amendments implement THSC, §§382.002, 382.011, 382.012, 382.016, and 382.017, FCM, 42 USC. §§7401 et seq. §IOI.390. Definitions. The following words and terms. when used in this division, have the following meanings. unless the context clearly indicates otherwise. (1) Allowance--The authorization to emit one ton of highly-reactive volatile organic compounds, expressed in tenths ofa ton, during a control period. 

# • • • (2) Authorized account representative--The responsible person who is authorized in writing to transfer and otherwise manage allowances for the site. (3) Banked allowance--An allowance that is not used to reconcile emissions in the designated year ofallocation, but is carried forward for up to one year and noted as banked in the compliance account or broker account. (4) Baseline emissions period--The two consecutive calendar-year control periods from 2006 - 2009 with the highest monitored average actual HRVOC emissions for the purpose ofestablishingbaseline emissions used for the allocation ofallowances, exceptas allowed under §I01.394(a)(1 )(C) and (D) ofthis title (relating to Allocation of Allowances). (5) Broker-A person that is not required to participate in the requirements ofthis division, but that opens an account under this division for the purpose ofbanking and trading allowances. (6) Brokeraccount--The accountwhere allowancesheld by abrokerare recorded. Allowances held in abroker accountmay not be used to satisfy compliance requirements for this division. (7) Compliance accounr-Theaccountin which allowances heldby a site are recordedfor the purposes ofmeeting the requirements ofthis division. (8) Industry sector-One of the following sectors of industry in which participants ofthe Highly Reactive Volatile Organic Carbons (HRVOC) Emissions Cap and Trade program are to be assigned, according to the process type and products from which the largest share ofHRVOC emissions is associated. for the purpose of assigning an industry sector share under the allocation equation located in §101.394(a)(l)(B) of this title (relating to Allocation of Allowances): petroleum refining, non-polymer chemical producers, polymer producers, and storage/loading/other. (9) Level of activity--The amount of highly-reactive volatile organic compounds, as defined in §115.10 ofthis title (relating to Definitions), in pounds produced as an intermediate, by-product, or final product or used by a process unit during a given period of time. but excluding any recycled highly-reactive volatile organic compounds internal to the process unit. (10) Uncontrolled emissions--The total emissions during routine normal operations from each applicable facility calculated as pre-control using the applicable control efficiency for the purpose of determining site allocations under §101.394(a)(l)(B) ofthis title (relating to Allocation ofAllowances). §I01.391. Applicability. This division applies to each site, as defined in § 122.10 ofthis title (relating to General Definitions), in the Houston-Galveston-Brazoria ozone nonattainment area, as defined in §115.1O ofthis title (relating to Definitions), that is subjectto Chapter 115, SubchapterH, Division I ofthis title (relating to Vent Gas Control) or Division 2 ofthis title (relatingto Cooling Tower HeatExchange Systems). Applicable facilities include vent gas streams, flares, and cooling tower heat exchange systems that emit highly-reactive volatile organic compounds, as defined in §115.10 ofthis title, and that are located at a site subjectto Chapter 115, SubchapterH ofthis title (relating to Highly-Reactive Volatile Organic Compounds). For the purpose ofcompliance with Chapter 115, SubchapterH, Division 1 or Division 2 ofthis title, each site that meets the applicability requirements ofthis section will always be subject to this division. §IOI.392. Exemptions.


### 35 TexReg 2570 March 26, 

### 2010 TexasRegister(a) Sites in the Houston-Galveston-Brazoria ozone nonattainment area that have the potential to emit, as defined in §116.12 of this title (relating to Nonattainment Review Definitions), ten tons per year or less ofhighly-reactive volatile organic compounds from all applicable facilities at the site are exempt from the requirements of this division. (b) All sites in the Houston-Galveston-Brazoria ozone nonattainment area, excluding Harris County, are exempt from the requirements of this division except for §101.401(a) - (e) ofthis title (relating to Level ofActivity Certification). The commission may revoke this exemption upon public notice ofthis revocation. Ifthe exemption is revoked, sites subject to this division located in the Houston-Galveston-Brazoria ozone nonattainment area, excluding HarrisCounty, will comply by January I, 2007, or within 180 days of public notice, whichever is later. §JOJ.394. Allocation of Allowances.(a) The executive director will deposit allowances into compliance accounts as follows. (1) For sites located in Harris County, allowances for the emissions ofone or more of the highly-reactive volatile organic compounds (HRVOC) as defined in §115.10 ofthis title (relating to Definitions), will be determined using the equations in subparagraphs (A) and (B) of this paragraph. (A) For calendar-year control periods 2007 - 2010, the following equation will be used to determine the allocation for each site: Figure: 30 TAC §I01.394(a)(l)(A) (B) For calendar-yearcontrol periods 2011 and later the following allocation methodology will apply: Figure: 30 TAC §101.394(a)(l)(B) (C) Qualifying sites not in operation or with HRVOC emissions that are not representative of permitted normal routine operation due to an authorized modification that resulted in an HRVOC emission reduction during the baseline emissions period may request from the executive director the use ofany allowance stream acquired from facilities previously participating in the HRVOC Emissions Cap and Trade program in lieu ofreallocation until the alternate baseline emissions are established for the site, according to the following: (i) this allowance stream is less than the HRVOCpermit allowable limit in effect at the time the facility commences operation; (ii) the baseline emissions period for any site under this subparagraphwill be anyconsecutive 24 months from 20I0 - 2012; and (iii) beginning with the 2014 calendar-year control period, all sites will receive an allocation in accordance with the methodology under subparagraph (B) ofthis paragraph. (D) A site meeting the-following conditions may request to use an alternative baseline emissions period consisting of the two consecutive calendar-year control periods immediately preceding the baseline emissions period defined under §101.390 ofthis title (relating to Definitions): (i) the site used continuousflow rate monitoring and speciation ofHRVOC to determine HRVOC emissions during the alternative baseline period; (ii) the site had permanent, voluntary, and quantifiable HRVOC emission reductions in an amount equal to or greater than' 25 tons resulting in a site-wide reduction in HRVOC emissions ofat least 25% as calculated by comparing the average HRVOC emissionsfrom the alternate baseline period to the baseline emissions period defined under §101.390 of this title; (iii) qualifying HRVOC emission reductions must have been made enforceable by a permit application submitted under Chapter 116ofthis title (relating to Control ofAirPollutionby Permitsfor New Construction or Modification) or other submittal to the executive director no later than April 1, 20 I0; and (iv) a request for an alternative baseline period must be received by the executive director no later than July 1,2010. (2) For sites located in Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties, allowances for emissions ofethylene and propylene for each site will be determined using the equation in the following figure. Figure: 30 TAC §101.394(a)(2) (No change.) (3) Uncontrolled emissions for applicable facility types for use in determining site allocations under paragraph (I)(B) of this subsection shall be calculated as follows: (A) For flares, the uncontrolled emissions are equal toactual average HRVOC emissions from routine normal operation during the baseline emissions period for that facility divided by one minus the average percent control efficiency specifications for flares in § 1I5. 725(d) of this title (relating to Monitoring and Testing Requirements). (B) For heaters, boilers, furnaces, thermal and catalytic oxidizers, and other combustion control devices combusting HRVOC streams, the uncontrolled emissions shall be calculated by dividing actual average emissions from routine normal operation during the baseline emissions period for each facility by one minus 99%. or by one minus the actual monitoredHRVOC control efficiency for the facility, not to exceed 99.9%, if that facility has demonstrated the actual monitored HRVOC control efficiency through stack performance testing. (C) For all other facilities without a demonstratedcombustion control efficiency, the control efficiency is equal to zero; therefore, the uncontrolled emissions will be equal to the actual HRVOC emissions from routine normal operation. (D) For sites that employ flare or vent gas recovery or flare minimization control strategies that are not requesting the use of an alternative baseline emissions period underparagraph (I)(D) ofthis subsection, the owner oroperatormay request to include the amount of any quantifiable reduction in actual HRVOC emissions attributable to the use of flare or vent gas recovery as uncontrolled emissions, subjectto approval by the executive director. The amount of quantified reductions is equal to the difference ofthe average actual HRVOC emissions from routine normal operation during a consecutive 12-month period priorto the 2006 - 2009 baselineemissions period and the implementation ofthe HRVOC gas recovery or flare minimization control strategy and the enforceable allowable HRVOC permit limit for the applicable facilities after the recovery-based emissions reduction strategy implementation. The average actual HRVOC emissions used for quantifying the reductions under this subparagraphmust be determinedthrough continuous flow rate monitoring and HRVOC speciation testing. This allowable emissions limit must be made enforceable through a permit application submitted under Chapter 116 ofthis title to the executive director no later than April!, 20! O. Credit allocated for reductions due to flare or vent gas recovery cannot also be creditable ifthe HRVOC stream is sent toanothercontrol device. The creditable emissions from flare gas recovery calculated in this subparagraph are then converted to uncontrolled emissions through the use ofthe average control efficiency specifications under §115.725(d) ofthis title.



### ADOPTEDRULES March 26, 

### 2010 35 

### TexReg 2571

## I (E) For sites that have purchased HRVOC allowance streams, uncontrolled emissions shall be the greater oftheir unconItrolledemissions calculatedunder subparagraphs (A) - (C) ofthis para- !graph, or the sum oftheir original existing HRVOC allowance allocated according to paragraph (1) ofthis subsection and the amount of the allowance stream in tons. In the event that a site's actual two-high yearemissions is less than the sum ofits original existing HRVOC allowance and the amount ofthe allowance streamin tons, the difference shall be added to the uncontrolled emissions as actual emissions. (b) The level ofactivity ofa site will be determined by summing the levels ofactivity from the chosen 12 consecutive month period for eachprocess unit, as defined in §115.10 ofthis title, located at the site thatproduce one or moreHRVOCs as an intermediate, by-product, or final productor that use one or moreHRVOCs as a raw material or intermediate to produce a product. (c) Sites subjectto the requirements ofthis division or electing to opt-in to the requirements ofthis division that receive an HRVOC allocation ofless than 5.0 tons based on the allocation methodologies under subsection (a)(I)(A) ofthis section will be eligible to receive a minimum allocation of5.0 tons ofHRVOC allowances per year. (d) Sites subject to the requirements of this division that receive an HRVOC allocation of'less than 5.0 tonsbasedon the allocation methodologyunder subsection (a)(l)(B) ofthis section will be eligible to receive a minimum allocation of5.0 tons ofHRVOC allowances per year. Sites subject to the requirements ofthis division that receive an HRVOC allocation ofgreaterthanor equal to 5.0 tons but less than 10.0 tons based on the allocation methodology under subsection (a)(l)(B) ofthis section will be eligible to receive a minimum allocation of 10.0 tons ofHRVOC allowances per year. (e) Ifthe total actual HRVOC emissions from the covered facilities at a site during acontrolperiodexceedthe amountofallowances in the compliance account for the site on March 1 following the control period, allowances for the next control period will be reduced by an amountequal to the emissions exceeding the allowances in the compliance accountplus 10% ofthe exceedance. This allocation reduction does not preclude the executive directorfrom initiating an enforcement action. Ifa compliance account does not hold sufficient allowances to accommodate the reduction, the executive director may issue a notice ofdeficiency to the owneror operator. The owner or operatorwillpurchase or transfer allowances sufficient to accommodate the reduction within 30 days ofissuance of the notice ofdeficiency from the executive director. (f) Allowances will be allocatedbytheexecutivedirector, who will deposit allowances into each compliance account: (1) initially, by January 1, 2007; and (2) subsequently, by January 1 ofeach following year. (g) The executive directormay adjustthe deposits for any control periodto reflect new or existing state implementationplanrequirements.(h) The executive directormay add or deduct allowances from compliance accounts based on the review ofreports required under §101.400 ofthis title (relating to Reporting). §101.396. Allowance Deductions. (a) On March 31 of each year after a control period, allowances representing the total highly-reactive volatile organic compounds (HRVOC) emissions from the applicable facilities at a site during the previous control period will be deducted from the compliance account for the site. The amount ofHRVOC emissions will be based upon the monitoring and testing protocols established in 

### 35 TexReg 2572 

### March 26, 

### 2010 TexasRegister §115.725 and §115.764 ofthis title (relating to Monitoring and Testing Requirements), as appropriate. (b) The amount ofHRVOC emissions from applicable facilities will be calculated for each hour ofthe year and summed to determine the annual emissions for compliance. Foremissions from scheduled maintenance, startup, or shutdown activities subjectto the requirements of §101.211 ofthis title (relating to Scheduled Maintenance, Startup, and Shutdown Reporting and Recordkeeping Requirements), the hourly emissions to be included in the summation shall not exceed the short-term limit of§115.722(c) and §115.761(c) ofthis title (relating to Site-wide Cap and Control Requirements; and Site-wide Cap). (c) Ifthe monitoring and testing data referenced in subsection (a) ofthis section does not exist or is unavailable, the site may determine its HRVOC emissions for that period oftime using the following methods and in the following order: continuous monitoring data; periodic monitoring data; testing data; data from manufacturers; and engineering calculations. When determining the amount ofHRVOC emissions under this subsection, the site will include ajustification for using the substitute method or methods in lieu ofthe methods referenced in subsection (a) ofthis section. (d) When deducting allowances from the compliance account ofa site for a control period, the executive director will deduct the allowances beginning withthe mostrecently allocated allowancesbefore deducting banked vintage allowances. §101.399. Allowance Banking and Trading. (a) Allowances allocated for a control period that are not used for compliance inthat control periodmay be banked for use in demonstrating compliance for the next control period or transferred. (b) Allowances that have not expired or been used may be transferred at any time during a control period, except as provided in this section. (1) The person desiring to transferthe allowances shall apply for approval ofthe transaction to the executive directorby submitting a completedFormBCT -2, Applicationfor TransferofAllowances. (2) The ECT-2 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ownership or control. (3) All information regarding the quantity and purchase price of the allowances will be immediately made available to the public. (4) Ifthe executive director approves the application, the executivedirectorwill send a letterto the sellerandpurchaserreflecting the transaction. The transaction is final upon issuance ofthe letter. (c) A personreceiving allowances on an annual basis may permanently transfer ownership ofcurrent and future allowances to any person in accordance with the following requirements. (I) The person desiringto transferthe allowances shall apply for approval ofthe transaction to the executive directorby submitting a completed Form ECT-4, Application for Permanent Transfer of Allowance Ownership. (2) The ECT-4 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ownership or control. (3) All information regarding the quantity and purchase price of the allowances will be immediately made available to the public.(4) Ifthe executive director approves the application. the executive director will send a letter to the seller and purchaser reflecting the transaction. The transaction is final upon issuance ofthe letter. (d) A person may transfer allowances that are scheduled to be allocated in a future control period but have not yet been deposited into an account. (I) The person desiring to transfer the allowances shall apply for approval ofthe transaction to the executive director by submitting a completed Form ECT-5, Application for Transfer ofIndividual Future YearAllowances. (2) The ECT-5 form must include the purchase price per allowance proposed to be paid, except for transactions between sites under common ownership or control. (3) All information regarding the quantity and purchase price of the allowances will be immediately made available to the public.

. (4) If the executive director approves the application, the executive director will send a letterto the seller and purchaser reflecting the transaction. The transaction is final upon issuance ofthe letter. (e) Allowances that were provided under §101.394(a)(l)(C) ofthis title (relating to Allocation ofAllowances) are not eligible for transfer under subsections (b), (c). or (d) of this section. (t) Allowances generated from sites located in counties other than Harris County may not be used at sites located in Harris County. Allowances generated from sites located in Harris County may not be used at sites located in counties other than Harris County.(g) Only authorized account representatives may transfer allowances. (h) Allowances subject to an approved transaction will be deposited into the purchaser's broker or compliance account within 30 days of receipt ofa completed transfer application. 0) Volatile organic compound emission reduction credits (ERC) certified in accordance with Division I of this subchapter (relating to Emission Credit Banking and Trading) may be converted to a yearly highly-reactive volatile organic compound (HRVOC) allocation. (I) Qualified volatile organic compound (YOC) ERCs must be generated:(A) from a reduction at a site located in the Houston/GalvestonIBrazoria nonattainment area; (B) from a reduction strategy implemented after December 31, 2004; and (C) from a reduction in VOC species other than those defined as HRVOCs under §115.10 ofthis title (relating to Definitions). (2) VOC reductions due to the installation ofbest available control technology do not qualify for conversion under this subsection. (3) In addition to the requirements ofDivision I ofthis subchapter, a qualified VOC ERC must meet the following requirements: (A) the ERC must be quantifiable, real, surplus, enforceable. and permanent as required in §101.302 of this title (relating to General Provisions) at the time the ERC is converted; (B) the baseline emissions to which the VOC reduction is compared must consist ofthe average actual emissions for any two consecutive calendar years preceding the emission reduction strategy and that include or follow the most recent year of emission inventory used in the state implementation plan; (C) the quantification of VOC reductions must be performed using the monitoring and testing methods required under§115.725 or §115.764 of this title (relating to Monitoring and Testing Requirements) and subject to the recordkeeping and reporting requirements under §115.726 and §115.766 of this title (relating to Recordkeeping and Reporting Requirements); (D) the ERC must not have expired; and (E) the ownerofthe ERC shall have prior approval from the executive director to convert the ERC to an HRVOC allocation. (4) VOC ERCs must be converted to HRVOC allowances at a ratio calculated using the equation in the following figure. Figure: 30 TAC §101.399(i)(4) (5) For each site eligible to receive allowances under §101.394(a) of this title, additional HRVOC allowances received from the conversion of VOC ERCs under this subsection must be limited to a quantity not to exceed more than 5% of the site's initial HRVOC allocation. (6) In addition to paragraph (5) ofthis subsection, sites subject to this division may receive an HRVOC allocation from the conversion ofVOCERCs under this subsection equivalentto any HRVOCemissions increases from new or modified covered facilities not in operation prior to January 2, 2004, and that were included in an application for a permit under Chapter 116 of this title (relating to Control ofAir Pollution by Permits for New Construction or Modification) that was deemedadministrativelycomplete by the executive director within one year of the effective date ofthis rule. §lOlAOl. Level of Activity Certification. (a) No later than April 30, 2005, the owner or operatorof each site subjectto this division will submit to the executive director a completed Form ECT-3H, Highly-Reactive Volatile Organic Compound Emissions Cap and Trade Level ofActivity Certification Form. (b) For each process unit subject to this division, the owner or operator will certify in the ECT-3H form the level of activity for the selected 12 consecutive months during the period of 2000 through 2004. (c) The owner or operator will attach to the ECT-3H form information and documentation necessary to support the proposed level of activity baseline. (d) The owner or operator ofthe site may mark any portion ofthe ECT-3H form, or supporting information and documentation, as confidential under Texas Health and Safety Code. §382.041. (e) In conjunction with submission of the ECT-3H form, theowner or operator of the site subject to this division will provide enforceable documentation ofthe maximum allowable emission rate of highly-reactive volatile organic compounds from facilities located at that site. (t) No later than July 1,2010, the owner or operator of eachsite subject to this division will submit to the executive director a completed Form ECT-6H, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Baseline Emissions Certification Form. (g) For each site subject to this division, the owner or operator will certify in the ECT-6H form the two highest consecutive calendaryear control periods selected fromtheperiod of2006- 2009 to establish the baseline emissions period.



### ADOPTED RULES March 26, 

### 2010 35 

### TexReg 2573This agency hereby certifiesthat the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office ofthe Secretaryof State on March 12.2010. TRD·201001269 RobertMartinez Director. Environmental LawDiVision Texas Commission on Environmental Quality Effective date: April 1, 2010 Proposal publication date: October 9, 2009 For furtherinformation, pleasecall: (512) 239-6090



# • t • SUBCHAPTER H. EM1SSIONS BANKING AND TRADING 

# I DIVISION 3. MASS E SSIONS CAP AND TRADE PROGRAM 30 TAC §§101.350, 101.351,1 1.353 The Texas Commission on Env ronmental Quality (commission or agency) adopts the amendm nts to §§101.350, 101.351. and 101.353. Section 101.353 is adopted wit changes to the proposed text as published in the October 9, 2 09, issue of the Texas Register (34 TexReg 7009). Section**10~350** and §101.351 are adopted without changesto the propose text and will not be republished. The commission will submit t e amendments to the United States Environmental Protectio Agency (EPA) as a revision to the state implementation plan ( IP). BACKGROUND AND SUMMA Y OF THE FACTUAL BASIS FOR THE ADOPTED RULES The purpose of the adopted a ndments to SUbchapter H, Division 3, Mass Emissions Cap nd Trade Program, is to maintain the integrity of the nitrogen oxides (NO.) cap in the Houston-Galveston-Brazoria (HGB) zone nonattainment area and minimize increases in the NO. cap. The adopted rulemaking will discontinue the acceptan of late ECT-3 forms. Level of Activity Certification, submitted accordance with §101.360(a) after March 30, 2010, from site defined on or before December 31. 2000. as major source! of NO., as defined in 30 TAC §117.10. Also, the adopted rule aking will amend the definition of "Uncontrolled design capaci to provide additional flexibility for certain stationary diesel engi es and clarify both site and facility applicability.The Mass Emissions Cap and ade (MECT) program is a market-based component of the SIP hat provides stationarysources of NO. compliance flexibility for he emission specifications under 30 TAC Chapter 117, while tablishing a mandatory cap for total NO. emissions from affecte source categories in the HGB ozone nonattainmentarea. The ECT program was adopted as a primary control measure of the HGB attainment demonstration for the one-hour ozone Nation Ambient Air Quality Standard (NAAQS). The MECT program 0. cap is a product of the emission specifications of Chapter 1 7 and the submitted levels of activity from applicable facilitie The adopted rulemaking will not affect the submittal of ECT forms from minor sources of NO•.


### 35 TexReg2574 

### March 26,2010 TexasRegister In accordance with §101.360(a),

# t~ receive an allocation of allowances (one allowance equals or ton of N.D.), sites were required to submit an ECT-3 form w· h the levels of activity from their applicable facilities by June 3 , 2001. Applicable facilities with historical actual emission da were allocated allowances based on actual levels of activity hile other applicable facilities without historical actual emis ion data were allocated allowances based on permitted allow ble emissions. Representatives of facilities with allocations b ed on permitted emissions are required to submit a second E T-3 form once a historical emissions baseline is established t convert their permit-based allocation to a historical level of acti ty based allocation in accordance with §101.360(b)(1). The rul did not address late submittals of ECT-3 forms. Therefore, a Ite that has never complied with the MECT program could sub t a late ECT-3 form in accordance With§101.360(a) and receiv an allocation of allowances, thus, potentially increasing the NO. p. To maintain the integrity and minimize increases in the NO. ap, the adopted rulemaking will discontinue the acceptance of ate ECT-3 forms from sites defined on or before December 31 2000. as major sources of NO. if submitted in accordance with §101.360(a) after March 30, 2010. These applicable facilities w I have to obtain allowances from the market instead of receivin an allocation of allowances. Informal comments from industry ere received regarding clarification on "air pollution control e ipment" in the definition of "Uncontrolled design capacity." Th efore, the adopted rulemaking will clarify the definition of "Un ntrolled design capacity" by amending this definition to "Uncontr lied design capacity to emit" as the maximum capacity of a faci ity to emit NO. without consideration for post-combustion co rol equipment, enforceable limitations, or operational limitation . The addition of "post-combustion control equipment" to the a opted definition will account for any equipment that can be re ved without preventing the facility from operating. NO. control quipmentthat is not considered post-combustion control equi ent, such as low-NO. burners, will be considered when calcul ting the uncontrolled design capacity to emit. In 2008, Hurricane Ike increased awareness of the need for backup generators during extende power outages for activities such as maintaining water pressu at water treatment plants. To provide additional flexibility to sites that would potentially become SUbject to the MECT p ram because of a backup generator, the adopted new se ence to §101.350(14) will provide a new option for calcula ng the uncontrolled design capacity to emit from applicable d esel engines operating less than 100 hours per year in no -emergency situations and not meeting the applicable EPA er standards. The adopted rulemaking will allow a minor SOUl' of NO. with an applicable diesel engine, depending on the ite's collective uncontrolled design capacity to emit, to meet th emission specification listed in §117.2010 either by participatin in the MECT program and acquiring allowances or not partiei atlng in the MECT program and acquiring emission credits or iscrete emission credits. Toclarify site and facility applicabili •the adopted rulemaking will restructure §101.351 to explain th t sites must determine their status as a minor or major source f NO. in Chapter 117 before determining applicability of their fa i1ities in the MECT program. Along with the restructuring of §10 .351, adopted subsection (c) will clarify a site's duration in the ECT program. SECTION BY SECTION DISCUS ION SUBCHAPTER H: EMISSIONS B NKING AND TRADING

### Figure: 30 TAC §101.394(aXl)(A)



### LA 

# s« II 

## x

# .Ad 

# LUi '-1


### Where: 

# s= the

### allocationfor the site. i 

## =eachsitelocatedin Harris Countyand subjectto 

### this

### division.

n

## =thetotalnumber

### ofsites subjectto this 

### division. LA 

## = the level of activity baseline for a site, 

### calculated as the annual level of activity for any 12 consecutivemonthsduring

### theperiod 

### of2ooo - 2004for the site,ascertifiedby 

### theexecutive director. 

### ACI 

### = 

### 3,106.3tons peryear

### ofhighly-reactive volatileorganiccompounds lessthe total amolDlt allocated to 

### those sites

### receivinga minimumallocation.



### TABLESAND GRAPHICS March 16, 

### 1010 35 

### TexReg 1633**-------------------------------~--** 

### Figure:30 TAC §101.394(a)(1)(B)

S

# =ACI X 

### (IndustrySectorShare)x (SiteShare) 

### Where: S

## =the allocationforthe 

### site. Industry 

### Sector Share 

## = Total actual average emissions for the industry sector during the 

### baseline emissions period 

### divided by 

### the total actual average emissions for all participating sites during the baselineemissionsperiod. 

### Site Share

# =The 

### sumofthe 

### total averageactualemissionsfor vents, cooling towers, and otherfacilities anduncontrolled emissionsfor flares,heaters, boilers,furnaces, thermal and catalyticoxidizers, and other combustion control devices combusting highly-reactive volatile organic compound (HRVOC)streams, duringthe

### baseline emissionsperiod 

### divided by the total uncontrolled actual average emissions for the ! 

### industrysector

### duringthe baselineemissionperiod.

. 

### ACI 

## =the amountofHRVOC tons definedin 

### (1) - (5) ofthis figure less the 

### total amountallocated to thosesitesreceivinga minimumallocationunder§101.394(a)(I)(E) ofthis

### title. (1) For2011 - 2013, ACI 

# =3,451.5tons; (2) For 2014, ACI 

## =3,105.9tons; (3) For 2015,ACI 

## =2,932.9tons; (4) For 2016,ACI 

## =2,761.2tons; and (5) For 2017 and allsubsequentcalendar-yearcontrolperiods, 

### ACI 

## =2,588.6 tons.



### 35 TexReg2634 

### March 26, 

### 2010 TexasRegisterFigure: 30TAC §101.399(i)(4)

Where: 

### A

# = yearly allocationofhigbly-reactivevolatileorganiccompound allowances. R, 0= the

### reactivityofeach speciated 

### volatile organic compoundreducedas specified 

### in 

### California Code 

### of Regulations, Title 17, 

### Chapter 1, §94700, 

### concerning MIR.

### ValuesforCompounds, as amended.



# =the actual emissionsreduced, 

### in tons per

### year,ofeach 

### speciatedvolatileorganiccompound, Figure: 30TAC §l1S.440(b)(12) 

### JY, fTD --XJ'AI 

## MW; W

w 

# f. f. W;**+~--+~--**

w .-1 

## MW. I-I 

### MW, II 

### PP c 

### =

# L+---....!..---- 1-1

Where: 

### ppc 

# =the VOC composite partial 

### pressure 

### of a solution at 20 

### degrees Celsius, millimeters ofmercury 

### (mmHg); 

### Wi

## =the weightofVOC i, grams (g); 

### MW i

## =the molecularweightofVOC i, 

### glgVPj = 

### thevaporpressure 

### ofVOC i 

### at 20

### de W.,

## =the 

### weightofwater,g; MW.,

# =themolecularweightofwater,glgMW c

## =the 

### molecularweightofnon-water Celsius,mmHg;

tcompounde, gig-mole.



### TABLESAND GRAPHICS March 26, 

### 2010 35 

### TexReg 2635·s order may be obtained by ttorney at (713) 422-8914, Quality, P.O. Box 13087, is order may be obtained by y at (512) 239-3400, Texas .0. Box 13087, Austin, Texas

·s order may be obtained by (713) 422-8916, Texas Com- · Box 13087, Austin, Texas Anagreed orderwasenteredregarding E uistar Chemicals, LP, Docket No. 2008-1474-AlR-Eon March 11,201 assessing $29,252 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Harvey Wilson, Enfor ment Coordinator at (512) 239-0321, Texas Commission on Envi nmental Quality, P.O. Box 13087, Austin, Texas 78711-3087. An agreed order was entered regard' g Frank Roberts and Linda Roberts, DocketNo. 2008-1870-MSW- on March 11, 2010 assessing $2,520 in administrative penalties. Information concerning any aspect of contacting Mike Fishburn, StaffAtto CommissiononEnvironmental Quality, 78711-3087.

An agreed order was entered regarding The Premcor Refining Group Inc., Docket No. 2009-0511-AIR-E n March 11, 2010 assessing $24,750 in administrative penalties. Information concerning any aspect of contacting Laurencia Fasoyiro, Staff Texas Commission on Environmen Austin, Texas 78711-3087. An agreed order was entered regardin Genesis Quality Aggregates, Ltd., Docket No. 2009-0544-AIR-E n March 11, 2010 assessing $3,000 in administrative penalties with 600 deferred. Information concerning any aspect of is order may be obtained by contacting James Nolan, Enforcement oordinator at (512) 239-6634, Texas CommissiononEnvironmental Q ity, P.O.Box 13087, Austin, Texas 78711-3087. An agreed order wasentered regarding asell USA Inc., Docket No. 2009-0182-AIR-E on March 11,2010 sessing $2,950 in administrative penalties. Information concerning any aspect of .s order may be obtained by contacting Rebecca Johnson, Enforcem nt Coordinator at (361) 825- 3420, Texas Commission on Environm tal Quality, P.O. Box 13087, Austin, Texas 78711-3087. An agreed order Was entered regarding restonlMery Properties, Inc., DocketNo. 2009-0282-PST-E on Marc 11,2010 assessing $7,000 in administrative penalties. Information concerning any aspect of is order may be obtained by contacting Mike Fishburn, Staff Atto ey at (512) 239-3400, Texas Commission on Environmental Quality, .0. Box 13087, Austin, Texas 78711-3087.

An agreed order was entered regardi Felix Jackson dba Jackson Brothers Ranch, Docket No. 2009-06 4-AIR-E on March 11, 2010 assessing $3,500 in administrative pen ties. Information concerning any aspect of .s order may be obtained by contacting Mike Fishburn, StaffAtto ey at (512) 239-3400, Texas CommissiononEnvironmental Quality, .0. Box 13087, Austin, Texas 78711-3087. A default order was entered regardin Ali Farasat dba Alpine Used Auto Parts, DocketNo. 2009-0690-W -E on March 11, 2010 assessing $29,580 in administrative penalties Information concerning any aspect of contacting Gary Shill, StaffAttorney mission on Environmental Quality, P. 78711-3087. 

# •

ding Exxon Mobil Corporation, arch 11,2010 assessing $30,000
ofthis order may be obtained by Attorney at (512) 239-0107, ntal Quality, P.O. Box 13087, 

# • 2Credit for business, commercial,' estment, orothersimilar purpose. TRD-201001429 Leslie L. Pettijohn Commissioner Office of Consumer Credit Commis ioner Flied: March 23, 2010 

# • • Texas Commission on Environmental Quality Correction ofError The Texas Commission on Environmental Quality (TCEQ) adopted amendments to 30 TAC Chapter 101, General Air Quality Rules (Rule Project No. 2009-006-1 0I-EN), which appeared in the March 26, 2010, issue ofthe Texas Register(35 TexReg 2556). The TCEQ requested this correction because the notice as published was submitted in error. Under the Public Comment section ofthe rule preamble, EnvironmentalDefense Fund (EDF) and GalvestonHouston Association for Smog Prevention (GRASP) were incorrectly included inthelist of oral commenters. In addition, 8-HourOzone SIP Coalition (Coalition) was incorrectly omitted from the list oforal commenters. EDF and GRASP submittedonly written comments regarding this rule project, while the Coalition gave oral comment and submitted written comments regarding the rule. TRD-201001420

Enforcement Orders An agreed order wasentered regar gEquistarChemicals, LP,Docket No. 2008-0080-AlR-Eon March 1 ,2010 assessing $50,000 in administrative penalties. Information concerning any aspe ofthis order may be obtained by contacting Kimberly Morales, Enf cement Coordinator at (713) 422- 8938, Texas Commission on Envi nmental Quality, P.O. Box 13087, Austin, Texas 78711-3087. An agreed order wasenteredregard gMaulesh Shah dba Speedy Mart, DocketNo. 2008-0565-PST-E on ch 11,2010 assessing $4,500 in administrative penalties with $900 eferred. Information concerning any aspe ofthis order may be obtained by contacting Tom Greimel, Enforcem nt Coordinator at (512) 239-5690, Texas CommissiononEnvironmen Quality, P.O. Box 13087, Austin, Texas 78711-3087. An agreed order was entered reg Docket No. 2008-0734-AlR-E on in administrative penalties. Information concerning any aspec contacting Barham A. Richard, Texas Commission on Enviro Austin, Texas 78711-3087. A default order was entered reg ing Hong Nguyen dba Lee Dry Cleaners III, Docket No. 2008- 130-DCL-E on March 11, 2010 assessing $2,088 in administrative enalties. Information concerning any aspe ofthis order may be obtained by contacting Becky Combs, Staff rney at (512) 239-6939, Texas Commission on Environmental ity, P.O. Box 13087, Austin, Texas 78711-3087.



### 35 TexReg2758 

### April2, 

### 2010 Texas Register

### TEXAS CO:MMISSION ON ENVIRONMENTAL QUALITY

ORDERADOPTING AMENDED RULES AND 

### REVISIONS TO THE STATE IMPLEMENTATION PLAN

Docket No. 2009-0932-RUL
On March 10, 2010, the Texas Commission on Environmental Quality (Commission), during a public meeting, considered adoption of amendments 30 Texas Administrative Code (TAC) Chapter 101, Subchapter

### A; General Rules, Section 101.1; and Subchapter H, Emissions Banking and Trading, Division 6, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program, Sections 101.390

- 101.394, 101.396, and 101.399 - 101.401; and corresponding revisions to the state implementation plan. Under Tex. Health & Safety Code Ann. §§ 382.011, 382.012, and 382.023 (Vernon 2008), the Commission has the authority to control the quality ofthe state's air and to issue orders consistent with the policies and purposes ofthe Texas Clean Air Act, Chapter 382 ofthe Tex. Health & Safety Code. Notice ofthe proposed rule changes and the SIP revisions was published for comment in the October 9, 2009 issue ofthe 

### Texas Register (34 TexReg 6989).
Pursuant to 40 Code of Federal Regulations § 51.102 and after proper notice, the Commission conducted public hearings to consider the proposed rule changes and the SIP revisions. Proper notice included prominent advertisement in the areas affected at least 30 days prior to the dates ofthe hearings. Public hearings were held in Houston on October 28, 2009, and in Austin on October 29,2009. The commentperiod opened on October 9,2009, and closed on November 9, 2009.
The Commission circulated hearing notices of its intended action to the public, including interested persons, the Regional Administrator ofthe EPA, and all applicable local air pollution control agencies. The public was invited to submit data, views, and recommendations on the proposed rule changes and corresponding revisions to the state implementation plan, either orally or in writing, at the hearings or during the comment period. Prior to the scheduled hearings, copies ofthe proposed rule changes and the SIP revisions were available for public inspection at the Commission's central office and on the Commission's Web site. Data, views, and recommendations of interested persons regarding the proposed rule changes and the SIP revisions were submitted to the Commission during the comment period, and were considered by the Commission as reflected in the analysis oftestimony incorporated by reference to this Order. The Commission fmds that the analysis oftestimony includes the names ofall interested groups or associations offering comment on the proposed rule changes and the SIP revisions and their position concerning the same. IT IS THEREFORE ORDERED BY THE COMMISSION that 30 TAC Chapter 101, Subchapter A, General Rules, Section 101.1; and Subchapter H, Emissions Banking and Trading, Division 6, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program, Sections 101.390

- 101.394, 101.396, and 101.399 - 101.401 and corresponding

### revisions to the SIP incorporated by reference to this Order are hereby adopted. The adopted rules and the revisions to the SIP are incorporated by reference in this Order as if set forth at length verbatim in this Order. IT IS FURTHER ORDERED BY THE COMMISSION that on behalf of the Commission, the Chairman should transmit a copy ofthis Order, together with the adopted rules and revisions to the SIP, to the Regional Administrator ofEPA as a proposed revision to the Texas SIP pursuant to the Federal Clean Air Act, codified at 42 U.S. Code 

### Ann. §§ 

### 7401 - 7671q, as amended. This Order constitutes the Order ofthe Commission required by the Administrative Procedure Act, Government Code, Section 2001.033. If

### any portion ofthis Order is for any reason held to be invalid by a court ofcompetent jurisdiction, the invalidity ofany portion shall not affect the validity ofthe remaining portions.

Date issued: 

# MAR 12201G TEXAS COMMISSION ON 

### ENVIRONMENTAL QUALITY