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., Executive Director

- ' . • \ "'. '..' •• 'I " ~., i . !'

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Protecting Texas by Reducing and Preventing Pollution

April 6, 2010

Docket No. 2009-0802-SIP, Project No. 2009-017-SIP-NR

Docket No. 2009-0932-RUL, Rule Project No. 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

Dear Dr. 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 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 - 101.401:130 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 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 of the public

hearings, and the accompanying orders. I look forward to your expeditious approval ofthese SIP revisions.

Sincerely,

B~~ B~haW' Ph.D.

Chairman

BWS/jmm

Enclosures

cc: The Honorable Rick Perry, Governor ofTexas

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

Mr. Mark R. Vickery, P.G., Executive Director, Texas Commission on Environmental Quality

P.O. Box 13087 Austin, Texas 78711-3087 512-239-1000 Internet address: 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., Executive Director

Protecting Texas by Reducing andPreventing Pollution

April 6, 2010

Docket No. 2009-0802-SIP, Project No. 2009-017-SIP-NR

Docket No. 2009-0932-RUL, Rule Project No. 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

Dear Dr. 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 of the 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. Mark R. Vickery, P.G., Executive Director, Texas Commission on Environmental Quality

P.O. Box13087 Austin, Texas 78711-3087 512-239-1000 Internet address: www.tceq.state.tx.us

printed on recycled paper using soy-based ink
TexasCommission on Environmental Quality

Public Hearings

October28 and 29, 2009

Conceming Revisions to 30 TAC Chapter101

HECTProgramCap Reduction and Allowance Reallocation

Rule ProjectNo. 2009-006-101-EN
INTRODUCTION

The Texas Commission on Environmental Quality (commission) held public hearings in Houston on

October 28, 2009, and Austin on October 29, 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 of the

HRVOC Emissions Cap and Trade Program. The adopted rulemaking also updates the definition of

volatile organic compound to link the 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 contact Jay Tonne at (512) 239-1453.
STAFF 

RECOMMENDATIONS
SUBCHAPTER A: 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 of air

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 context clearly indicates

otherwise.

(1) Account--For those 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 intervening roads, railroads, rights-of-way,

waterways, or similar divisions.

(2) Acid gas flare-A flare used exclusively for the incineration of hydrogen sulfide and

other acidic gases derived from natural gas sweetening processes.

(3) Agency established facility identification number-For the purposes of Subchapter F of

this chapter (relating to Emissions Events and Scheduled Maintenance, Startup, and Shutdown Activities),

a unique alphanumeric code required to be assigned by the owner or operator ofa regulated entity that the

emission inventory reporting requirements of §101.10 ofthis title (relating to Emissions Inventory

Requirements) are applicable to each facility at that regulated 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 equipment fired 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 pollutant to 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, operated by, 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 solvent cleaning-A batch process that uses liquid solvent to remove soils from

the surfaces ofparts or to dry the parts by spraying, brushing, flushing, and/or immersion while

maintaining the 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 without power 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

management facility 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 of equipment, including, but not limited to, pumps, valves,

compressors, and pressure relief valves that has the potential to leak volatile organic compounds.

(19) Condensate-Liquids that result from the cooling and/or pressure changes of produced

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 of air

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 either cold solvent or vaporized solvent. A conveyorized degreasing process isfully

enclosed except for the conveyor inlet and exit portals.

(23) Criteria pollutant 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/or condensate, after

processing and/or treating in the producingoperations,from storagetanksor automatic transferfacilities to

pipelines or any other forms oftransportation.

(25) De minimis impact-A change in ground level concentration of an air contaminantas

a result of the operation of any new majorstationary source or of the operation of any existing sourcethat

has undergone a major modification 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/m3

II 51lg/m3 ICI 10

ISulfur Dioxide II 1.01lg/m3

II 51lg/m3

II II

251lg/m3 10

, NitrogeoDioxide

II 1.01lg/m3

II ICC0

ICarbon Monoxide II ICEJCB

(26) Domesticwastes-The garbage and rubbish normally resultingfrom the functions of

life within a residence.

(27) Emissions banking--A system for recording emissions reduction credits so they may

be used or transferred for future use.

(28) Emissions event--Any upset event or unscheduled maintenance, startup, or shutdown

activity, from a common cause that results in unauthorized emissionsof air contaminants from one or more

5
emissions points at a regulated entity.

(29) Emissions reduction credit-Any stationary source emissions reduction that has been

banked in accordance with Chapter 101, Subchapter H, 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 of a stationary source that emits, or would have the

potential to emit, any pollutant subject to 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 cover or roof in 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 roof edge 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 motor vehicle regulation--Control ofAir Pollution from Motor Vehicles 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

under 40 Code ofFederal Regulations (CFR) Parts 60 and 61; requirements within any applicable state

implementation plan (SIP); and any permit requirements established under 40 CFR §52.21 or under

regulations approved under 40 CFR Part 51, Subpart I, including operating permits issued under the

approved program that 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 radiant heat 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 of produce and other food products.

(41) Gasoline-Any petroleum distillate having a Reid vapor pressure 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 ink oil from the printing ink. Hot air dryers are used to deliver the heat.

(44) High-bake coatings-Coatings designed to cure at temperatures 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 of combustion to the

atmosphere. Any combustion device that burns 10% or more ofsolid waste on a total British thermal unit

(Btu) heat input basis averaged over anyone-hour period 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 ofwastewater from 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 of any rule within this title provided

they are installed and operated in compliance with the condition of all applicable permits.

(47) Industrial boiler-A boiler located on the site ofa facility engaged in a manufacturing

process where substances are transformed into new products, including the component parts 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, including pyrometallurgical devices such as

cupolas, reverberator furnaces, sintering machines, roasters, or foundry furnaces; titanium dioxide chloride

process oxidation reactors; methane reforming furnaces; pulping recovery furnaces; combustion devices

used in the recovery ofsulfur values 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 danger to 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 roof in a ftxed rooftank that 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 greater than 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

10
heating value of at least 5,000 British thermal units per pound.

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

between the tank wall and the floating roof around 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 subject to the requirement to develop a maintenance plan under 42 United States Code, §7505a.

The following are the maintenance areas within the state:

(A) Victoria Ozone Maintenance Area 60 (Federal Register (FR) 12453) -

Victoria County; and

(B) Collin County Lead Maintenance Area (64 FR 55421) - Portion ofCollin

County. Eastside: Starting at the intersection of South Fifth Street and the fence line approximately 1,000

feet south ofthe Exide property line going north to the intersection of South 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 of State 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--That organization 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, Subchapter F ofthis title (relating to Vehicle Retirement and

Mobile Emission Reduction 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 excavation that receives

household waste and that is not a land application unit, surface impoundment, injection well, or waste pile,

as those terms are defined under 40 Code ofFederal Regulations §257.2. A municipal solid waste landfill

(MSWLF) unit also may receive other types ofResource Conservation and Recovery Act Subtitle D

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 of an 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 contaminant flowing 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 meet the national ambient air quality

standard for a pollutant for which a standard exists. The EPA will designate the area as nonattainment

under the provisions of42 United States Code, §7407(d). For the official list and boundaries of

nonattainment areas, see 40 Code ofFederal Regulations Part 81 and pertinent Federal Register (FR)

notices. The following areas comprise the nonattainment areas within the state for all national ambient air

quality standards (NAAQS). EPA has indicated that it will revoke the one-hour ozone 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-hour NAAQS ofJune 15,2004.

(A) Carbon monoxide (CO). El Paso CO nonattainment area (56 FR 56694)-

Classified as a Moderate CO nonattainment area with a design value less than or equal to 12.7 parts per

million. Portion ofEl Paso County. Portion ofthe city limits ofEI Paso: That portion ofthe City ofEl Paso

bounded on the north by Highway 10 from Porfrrio Diaz Street to Raynolds Street, Raynolds Street from

Highway 10 to the Southern Pacific Railroad lines, the Southern Pacific Railroad lines from Raynolds

Street to Highway 62, Highway 62 from the Southern Pacific Railroad lines to Highway 20, and Highway

14
20 from Highway 62 to Polo Inn Road. Bounded on the east by Polo InnRoad from Highway 20 to the

Texas-Mexico border. Bounded on the south by the Texas-Mexico border from Polo InnRoad to Porfirio

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

(B) Inhalable particulate matter (PMIO ) . El Paso PMIO nonattainment area (56 FR

56694)-Classified as a Moderate PMIO nonattainment area. Portion ofEl 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,

Fort Bend, 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 ofEl Paso County.

(iii) Beaumont-Port Arthur (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 under the 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) Sulfur dioxide. No designated nonattainment areas.

(71) Non-reportable emissions event-Any emissions event that 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 of air 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 cleaning process that is open to the air

and that uses boiling solvent to create solvent vapor used to clean or dry parts through condensation ofthe

hot solvent vapors on the parts.

(74) Outdoor burning--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 matter emissions-All finely-divided solid or liquid material, other than

uncombined water, emitted to the ambient air 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 caught by an impinger train; 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 in producing gasoline, kerosene, distillate

fuel oils, residual fuel oils, lubricants, or other products through distillation of crude oil, or through the

redistillation, cracking, extraction, reforming, or other processing of unfmished 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 that Part 53.

(79) PMIO 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 equivalent or 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 subject to 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 weight per hour--"Process weight" is the total weight of all materials

introduced or recirculated into any specific process that may cause any discharge ofair 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 per hour" will be derived by

dividing the total process weight by 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 weight per hour" will be derived by dividing the

total process weight for a 24-hour period by 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 contaminant that are sufficient to 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 solvent cleaning operation in

which liquid solvent is pumped to a sink-like work area that drains solvent back into an enclosed container

while parts are being cleaned, allowing no solvent to pool in the work area.

(87) Reportable emissions event-Any emissions event that in any 24-hour period, results

in an unauthorized emission from any emissions point equal to or in excess ofthe reportable quantity as

19
defmed in this section.

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

(A) for individual air contaminant compounds 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-Port Arthur (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 nonattainment areas 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

BPA ozone 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 in the HGB and

BPA ozone nonattainment areas as defmed in paragraph (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 of air contaminant compounds:

(i) where the relative amount of individual air contaminant compounds is

known through common process knowledge or prior engineering analysis or testing, any amount of an

individual air contaminant compound that equals or exceeds the amount specified in subparagraph (A) of

this paragraph;

(ii) where the relative amount of individual 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 contaminant compounds listed in

subparagraph (A)(i) ofthis paragraph are known to be less than 0.02% by weight ofthe mixture, and each

ofthe other individual air contaminant compounds covered by subparagraph (A)(ii) ofthis paragraph are

known to beless than 2.0% by weight ofthe mixture, any total amount ofthe mixture of air 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 known to be in an

amount greater than or equal to 5,000 pounds or the associated hydrogen sulfide and mercaptans in a total

amount greater than 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-half of any applicable ambient air 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 similar materials. Noncombustible rubbish includes

glass, crockery, tin cans, aluminum cans, metal furniture, and like materials that will not bum at ordinary

incinerator temperatures (l,600 degrees Fahrenheit to 1,800 degrees Fahrenheit).

(90) Scheduled maintenance, startup, or shutdown activity-For activities 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 prior notice 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 Event Reporting 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 wastewater treatment plant; water supply treatment plant, exclusive ofthe treated

28
effluent from a wastewatertreatmentplant; or air pollution controlequipment.

(92) Smoke--Small gas-born particlesresultingfromincomplete combustionconsisting

predominately of carbon and other combustible material and present in sufficientquantityto be visible.

(93) Solid waste-Garbage, rubbish, refuse, sludge from a waste water treatmentplant,

water supplytreatment plant, or air pollutioncontrol equipment, and other discardedmaterial, including

solid, liquid, semisolid,or containerized gaseousmaterialresultingfrom industrial, municipal, commercial,

mining, and agriculturaloperations and from communityand institutional activities. The term does not

include:

(A) solid or dissolved material in domesticsewage, or solid or dissolved 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 or man-made inert solid materials used

to fill land, ifthe object of the fill is to make the land suitable for the construction of surface

improvements; or

(C) wastematerials that result from activities associated with the exploration,

development, or production of oil or gas, or geothermalresources, and other substanceor material

regulatedby the Railroad CommissionofTexas under Natural Resources Code, §91.101, unlessthe waste,

substance, or materialresults from activitiesassociatedwith gasolineplants, natural gas liquids processing

plants, pressuremaintenanceplants, or repressurizing 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) Sour crude-A crude oil that will emit a sour gas when in equilibrium at atmospheric

pressure.

(95) Sour gas-Any natural gas containing more than 1.5 grains ofhydrogen sulfide per

100 cubic feet, or more than 30 grains oftotal sulfur per 100 cubic feet.

(96) Source-A point of origin ofair contaminants, whether privately or publicly owned or

operated. Upon request of a source owner, the executive director shall determine whether multiple

processes emitting air contaminants from a single point of emission 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 of 68 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 of a county or one or more

contiguous counties that is officially so designated by the United States Bureau ofthe Budget.

(100) Submerged fill pipe-A fill pipe that extends from the top of a 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

considered to be the same air contaminant calculated 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 of coating solids deposited onto the surface or a

part ofproduct divided by the total amount ofcoating solids delivered to the coating application system;

(106) True vapor pressure-The absolute aggregate partial vapor pressure, measured in

pounds per square inch absolute, of all volatile organic compounds at the temperature ofstorage, handling,

or processing.

31
(107) Unauthorized emissions--Emissions ofany air contaminant except 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 of normal or routine facility

operations, is unpredictable as to timing, and is not the type of event normally authorized by permit; or

(B) a maintenance activity that arises from sudden and unforeseeable events

beyond the control ofthe operator that requires the immediate corrective action to minimize or avoid an

upset or malfunction.

(109) Upset event-An unplanned and unavoidable breakdown or excursion of a 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 amount by more than a

reportable quantity due to an unplanned and unavoidable breakdown or excursion of a 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 of process 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 roof or 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 matter that 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-Any tank, 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 under Texas Water Code (TWC), §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, concerning 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 ofthe 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 ofthe 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 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 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 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 indicates otherwise.

(1) Allowance--The authorizationto emit one ton ofhighly-reactivevolatile organic

compounds, expressed in tenths of a ton, during a control period.

(2) Authorized account representative--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 year of allocation, 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 purpose of establishing

baseline emissionsused for the allocation ofallowances, except as allowed under §101.394(a)(l )(C) and

(D) ofthis title (relatingto Allocation ofAllowances).

(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.

36
(6) Broker account--The account where 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, according to 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, polymer producers, and storage/loading/other,

(9) Level of activity-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 subject to Chapter 115, Subchapter H, Division 1 ofthis title (relating

to Vent Gas Control) or Division 2 ofthis title (relating to Cooling Tower Heat Exchange 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

subject to Chapter 115, Subchapter H ofthis title (relating to Highly-Reactive Volatile Organic

Compounds). For the purpose of compliance with Chapter 115, Subchapter H, Division 1 or Division 2 of

this title, each site that meets the applicability requirements ofthis section will always be subject to 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 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 ofthis division,

(b) All sites in the Houston-Galveston-Brazoria ozone nonattainment area, excluding Harris

County, are exempt from the requirements ofthis 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-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 exceed the emission limitations authorized under Chapter 116, Subchapter B 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 subject to this division must hold a quantity of allowances in its compliance

account that is equal to or greater than 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 of Significant

Deterioration Review).

(d) Allowances may be used simultaneously to satisfy the requirements ofthis division and the

one-to-one portion ofthe offset requirements for new or modified covered facilities, subject to federal

nonattainment new source review requirements as provided in Chapter 116, Subchapter B, Division 7 of

this title (relating to Emission Reductions: Offsets).

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

(f) All allowances will be allocated, transferred, deducted, or used in tenths oftons. The number of

allowances will be rounded down to the nearest tenth of a ton when determining excess allowances and

39
rounded up to the nearest tenth of a ton when determining allowances used.

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

(h) The commission will maintain a registry of compliance 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 of one 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 subject to this division.

n = the total number ofsites subject to this division.

40
LA =the level of activity baseline for a site, calculated as the annual level of activity for any 12

consecutive months during the period of2000 - 2004 for the site, as certified by the executive director.

ACI =3,106.3 tons per year of highly-reactive volatile organic compounds less the total amount allocated

to those sites receiving a minimum allocation.

(B) For calendar-year control periods 2011 and later the following allocation

methodology will apply:

S =ACI 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 combusting highly-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.

ACI =the amount ofHRVOC tons defmed in (1) - (5) ofthis figure less the total amount allocated to those

sites receiving a minimum allocation under §1o1.394(aX I)(E) ofthis title.

(1) For 2011 - 2013, ACI =3,451.5 tons;

(2) For 2014, ACI = 3,105.9 tons;

(3) For 2015, ACI =2,932.9 tons;

(4) For 2016, ACI =2,761.2 tons; and

(5) For 2017 and all subsequent calendar-year control periods, ACI =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 of any 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 under this subparagraph will

be any consecutive 24 months from 2010 - 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 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 greater than 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 Constructionor Modification) 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 following figure.

LA

S = 111 X AC

LLAi

i-I

Where:

s = the greater of 5.0 tons or the allocationfor the site.

i = each site located in Brazoria, Chambers, Fort Bend, Galveston, Liberty,Montgomery, and Waller

Counties and subject to this division.

n = the total number ofsites subject to this division.

LA = the level of activitybaseline for a site, calculated as the annual level of activity for 12 consecutive

months during the period of 2000 - 2004 for the site, as certifiedby the executive director.

AC2

=4,390.8 tons per year ofhighly-reactive volatile organic compounds less the total amount allocated

to those sites receivinga minimum of5.0 tons.

43
(3) Uncontrolled emissions for applicable facility types for use in determining site

allocations under paragraph (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 under paragraph (l)(D)

ofthis subsection, the owner or operator may request to include the amount of any quantifiable reduction

in actual HRVOC emissions attributable to the use offlare or vent gas recovery as uncontrolled emissions,

subject to 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

44
12-month period prior to 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 under this subparagraph must be

determined through continuous flow rate monitoring and HRVOC speciation testing. This allowable

emissions limit must be made enforceable through a permit application submitted under Chapter 116 of

this title to the executive director no later than 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 greater oftheir uncontrolled emissions calculated under 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 event that 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 of activity of a site will be determined by summing the levels of activity 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 subject to the requirements ofthis division or electing to opt-in to the requirements ofthis

45
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 of

HRVOC allowances per year.

(d) Sites subject to 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 subject to the requirements

ofthis division that receive an HRVOC allocation ofgreater than 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 of 10.0 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 of allowances 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 amount equal to the emissions

exceeding the 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 operator will purchase or transfer allowances

sufficient to accommodate the reduction within 30 days ofissuance ofthe notice of deficiency 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 adjust the deposits for any control period to reflect new 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 of each 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 account for 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 subject to 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 under this subsection, the site will include a justification 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 of a site for a control period, the

executive director will 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 director by submitting a completed Form ECT-2, Application for Transfer of

Allowances.

(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.

48
(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.

(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 desiring to transfer the allowances shall apply for approval ofthe

transaction to the executive director by submitting a completed Form ECT-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 director will send a

letter to the seller and purchaser reflecting 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 transfer the allowances shall apply for approval ofthe

transaction to the executive director by 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 transfer under subsections (b), (c), or (d) ofthis section.

(f) 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.

50
(h) Allowances subject to an approved transaction will be deposited into the purchaser's broker or

compliance account within 30 days ofreceipt of a completed transfer application.

(i) Volatile organic compound emission reduction credits (ERC) certified in accordance with

Division 1 ofthis subchapter (relating to Emission Credit Banking 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 other than 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 under this 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 calendar years 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 subject to 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

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.

1

A ... 11.57 L CR, x E)

Where:

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

52
R, = the reactivity of each speciated volatile organic compound reduced as specified in California Code of

Regulations, Title 17, Chapter 1, §94700, concerning MIR Values for Compounds, as amended.

E, = the actual emissions reduced, in tons per year, of each 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 under this subsection must be limited to

a quantity not to exceed more than 5% ofthe 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 ofVOC ERCs under this subsection equivalent to any HRVOC

emissions 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 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 of actual 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 of all fmal transactions for the preceding control period; and

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

subject to 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 of any 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

subsequent control periods.

§101.401. Level of Activity Certification.

(a) No later than April 30, 2005, the owner or operator of each site subject to 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 ofactivity 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.

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 of each site 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 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 of administration 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 authorizing

the 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 authority of 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 Texas Register
(34 TexReg 6989). Sections 101.1, 101.393, and 101.400 are

adopted without changes 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 subject to 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 subject sites 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 Emissions 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 2557
chemical 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, in

pounds, produced or used by a process unit. This productionbased methodology was developed prior to the implementation

of monitoring requirements for applicable sources of HRVOC in

Harris 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 periods

as 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. The

owner 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 of

HRVOC 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 equal

to or greater than 25% of the site's total annual HRVOC emissions and a site-wide reduction in HRVOC emissions subject

to 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 HRVOC

emissions 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 minimization

control 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 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 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 total

industry 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 the

specifications 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 applying
credit 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 other federal 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 sector should 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-year control period will be the 2,588.6-ton value representing

the amount modeled in the 2018 future case 25% HECT Cap Reduction sensitivity run. The allocation methodology for each calendar-year control 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 Register style 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

ADOPTED RULES March 26, 2010 35 TexReg 2559
of 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 ofAllowances

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 addl~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 direct~r the use of any allowance stream acquired from facilities

previously participating in the HECT program in lieu of realloca35 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 director the 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 greater than 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 methodology for 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

emrssions event 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~ §101.3~(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, Reporting
The 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, Level ofActivity 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 allowances

for 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 the

total 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 under

the program. The HECT program was adopted as a control measure for the HGB one-hour attainment demonstration SIP, and

the proposed changes to the program will contribute to HGB's attainment of the 1997 eight-hour ozone NMOS as expeditiously

as 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 general

powers 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) does

require 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

methods to attain 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 emission

reductions 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 adopted

solely 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 2561
rule 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 order to

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 another issue, 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 Govem35 TexReg 2562 March 26, 2010 Texas Register

ment Code, §2001.0225(b), because the rulemaking does not

meet any of the 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 assessment for 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 methodology for 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 necessary to comply with their lower 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 that would be implemented by these 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 necessary for 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 adopted
amendments 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 coastal

natural 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 under

30 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 operating

permit 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. and

6:00 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 Manufacturers

for 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

HECT RULE, HGB 1997 EIGHT-HOUR OZONEATTAINMENT

DEMONSTRATION SIP REVISION, 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 to

model 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 of

monitoring data supports the assertion of an inequitable distribution of allowances. A more equitable allocation of allowances

will 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 the

change 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 reallocation

of 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% cap

reduction 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 expeditiously

as 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 averaged

approximately 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 2563
result 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 in

the HRVOC cap, many sources were operating near their individual cap limits and thus, may see a significant change in their

HRVOC 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 con35 TexReg 2564 March 26,2010 Texas Register

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 SIP

revision proposed on September 23, 2009, describing the practicality issues identified with revising NOx allowances under the

MEeT program because allowance streams have been traded

and relied upon for compliance with the program. Kaneka concluded that if it is impractical to nullify MECT trades, then it is

also 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 acknOWledges

that 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 commission

also 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" 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 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 the

higher 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. iPC

stated 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 controlled

facilities 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 allocation

posted 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 reward

well-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 use

of 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 special

provisions, 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. As

discussed 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 necessary

before 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 HRVOC

emissions 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 2565
Reallocation Methodology

Lyondell and TPC expressed their opposition to the HECT

program uncontrolled emissions-based reallocation methodology and their support for the altemative flat percent allocation

methodology discussed in the rule proposal preamble. TPC

stated 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 controlled

facilities 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 allocation

posted 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 reward

well-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 use

of 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 special

provisions, 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. As

discussed 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 necessary

before 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 HRVOC

emissions 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 2565
TCC 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

another and therefore. the commission should reallocate the program without using industry sectors. TPC commented that the

chemical sector includes widely varying operations with varying

HRVOC uses and throughput. COMAQ supports including a definition of ·'ndustry sector" in the HECT definitions. COMAQ and

Albemarle 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 other

federal 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 Texas Register

to be used to cover actual emissions reported in accordance with

Chapter 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 in

response 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 recognized

HRVOC 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 greater than 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 emission
reductions achieved through the implementation of a VRU

should be added to a site's "Uncontrolled emissions" in the

equation under §101.394(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 for the 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 consider voluntary 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 §101.394(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 year1y allowances 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

ADOPTED RULES March 26, 2010 35 TexReg 2567
amount 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 TexReg 2568 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 §101.392(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 trading

of allowances based on allocation methodology. The use of vintage 2010 allowances in the 2011 calendar-year control period

will benecessary 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 inequitable

program 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 proposed

methodology. 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 required

since 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 regulation

for 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 reductions

while proViding compliance flexibility and maximizing the efficiency of emission reductions through market forces. Individual

sources of HRVOC emissions are SUbjectto permit limits and any

applicable 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 the

rules, and the 25% cap reduction will be fully realized at the beginning of the 2017 calendar-year control period, one full year

before the 2018 attainment year. No changes were made In response to this comment.

SUBCHAPTER A. 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 2569
Robert 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 of a

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 of allocation, 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 ofestablishing baseline emissions used for the allocation of allowances, except as 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 of banking and trading allowances.

(6) Broker account--The account where 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 accounr-The account in which allowances

held by a site are recorded for the purposes ofmeeting the requirements

of this division.

(8) Industry sector-One of the following sectors of industry in which participants of the 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 of HRVOC 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) of this title (relating to Allocation of Allowances).

§I01.391. Applicability.

This division applies to each site, as defined in §122.10 of this title

(relating to General Definitions), in the Houston-Galveston-Brazoria

ozone non attainment area, as defined in §115.1O ofthis title (relating

to Definitions), that is subject to Chapter 115, Subchapter H, Division I

ofthis title (relating to Vent Gas Control) or Division 2 ofthis title (relating to Cooling Tower Heat Exchange 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 subject to Chapter

115, Subchapter H ofthis title (relating to Highly-Reactive Volatile Organic Compounds). For the purpose of compliance with Chapter 115,

Subchapter H, 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) of this title (relating to Level of Activity Certification). The commission may revoke this exemption upon public notice of this revocation. If the exemption is revoked, sites subject to this division located in the Houston-Galveston-Brazoria ozone nonattainment area, excluding Harris

County, will comply by January I, 2007, or within 180 days of public notice, whichever is later.

§JOJ.394. Allocation ofAllowances.

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

(1) For sites located in Harris County, allowances for the

emissions of one or more of the highly-reactive volatile organic compounds (HRVOC) as defined in §115.10 of this 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-year control 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 of any 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 under

this subparagraph will be any consecutive 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 of at

least 25% as calculated by comparing the average HRVOC emissions

from 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 116 ofthis title (relating to Control ofAir Pollution by Permits

for 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 of ethylene 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 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

§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 monitored HRVOC 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 demonstrated combustion 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 under paragraph (I)(D) ofthis

subsection, the owner or operator may 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, subject

to 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

prior to 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 under this subparagraph must be determined through

continuous flow rate monitoring and HRVOC speciation testing. This

allowable emissions limit must be made enforceable through a permit

application submitted under Chapter 116 of this 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 if the HRVOC

stream is sent toanother 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 §115.725(d) ofthis title.

ADOPTED RULES March 26, 2010 35 TexReg 2571
I (E) For sites that have purchased HRVOC allowance

streams, uncontrolled emissions shall be the greater of their unconItrolled emissions calculated under subparagraphs (A) - (C) ofthis para-

!graph, or the sum of their 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

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 of activity of a site will be determined by summing the levels of activity from the chosen 12 consecutive month period for each process unit, as defined 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 subject to 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) of this section will be eligible to receive a

minimum allocation of 5.0 tons of HRVOC allowances per year.

(d) Sites subject to the requirements of this division that receive an HRVOC allocation of'less than 5.0 tons based on the allocation

methodology under 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 ofgreater than 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 of 10.0

tons of HRVOC 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 account for 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 exceeding the allowances in the compliance account plus 10% ofthe exceedance. This allocation reduction

does not preclude the executive director from initiating an enforcement

action. If a 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 operator will purchase or transfer allowances sufficient to accommodate the reduction

within 30 days of issuance of the notice of deficiency 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

(2) subsequently, by January 1 of each following year.

(g) The executive director may adjust the deposits for any control period to reflect new or existing state implementation plan requirements.

(h) The executive director may add or deduct allowances from

compliance accounts based on the review of reports 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 of HRVOC emissions

will be based upon the monitoring and testing protocols established in

35 TexReg 2572 March 26, 2010 Texas Register

§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 subject to the requirements of §101.211 of this 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 of time 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 of HRVOC

emissions under this subsection, the site will include a justification 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

of a site for a control period, the executive director will deduct the allowances beginning with the most recently allocated allowances before

deducting banked vintage allowances.

§101.399. 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 director by submitting a completed Form BCT-2, Application for Transfer ofAllowances.

(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) If the executive director approves the application, the

executivedirector will send a letterto the seller and purchaser reflecting

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.

(I) The person desiring to transfer the allowances shall apply for approval ofthe transaction to the executive director by 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) If the 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 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 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 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

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 of a 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 owner ofthe 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 ofVOC ERCs under this subsection equivalent to any HRVOC

emissions 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 deemed administratively complete by the executive director within

one year of the effective date ofthis rule.

§lOlAOl. Level ofActivity Certification.

(a) No later than April 30, 2005, the owner or operator of each

site subject to 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 of the 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, the

owner or operator of the site subject to this division will provide enforceable documentation of the 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 each

site 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 from theperiod of2006 - 2009 to establish

the baseline emissions period.

ADOPTED RULES March 26, 2010 35 TexReg 2573
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 ofthe Secretary of State on March 12.2010.

TRD·201001269

RobertMartinez

Director. Environmental Law DiVision

Texas Commission on Environmental Quality

Effective date: April 1, 2010

Proposal publication date: October 9, 2009

For furtherinformation, pleasecall: (512) 239-6090

SUBCHAPTER•H. EM1SSIONS t •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 changes to 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 stationary sources

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 nonattainment area. 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 TexReg 2574 March 26,2010 Texas Register

In accordance with §101.360(a), t~ receive an allocation of allowances (one allowance equals orton 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 quipment that 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= theallocation for the site.

i =each site locatedin Harris Countyand subjectto thisdivision.

n =thetotal number of sites subject to this division.

LA = the level of activity baseline for a site, calculated as the annual level of activity for any 12

consecutive monthsduring theperiod of2ooo - 2004for the site,as certified by the executive director.

ACI = 3,106.3tons per year ofhighly-reactive volatileorganiccompounds lessthe total amolDlt allocated

to those sites receivinga minimumallocation.

TABLES AND GRAPHICS March 16, 1010 35 TexReg 1633
-------------------------------~--

Figure:30 TAC §101.394(a)(1)(B)

S=ACI X (IndustrySectorShare)x (SiteShare)

Where:

S=the allocationfor 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

baselineemissionsperiod.

Site Share=The sum ofthe total average actual emissionsfor vents, cooling towers, and other facilities

and uncontrolled emissionsfor flares, heaters, boilers,furnaces, thermal and catalyticoxidizers, and other

combustion control devices combusting highly-reactive volatile organic compound (HRVOC)streams,

during the baseline emissions period divided by the total uncontrolled actual average emissions for the !

industrysectorduringthe baselineemissionperiod. .

ACI =the amount ofHRVOC tons defined in (1) - (5) ofthis figure less the total amount allocated to

thosesitesreceivinga minimumallocationunder §101.394(a)(I)(E) ofthistitle.

(1) For 2011 - 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-year controlperiods, ACI =2,588.6 tons.

35 TexReg 2634 March 26, 2010 Texas Register
Figure: 30TAC §101.399(i)(4)

Where:

A =yearly allocationofhigbly-reactivevolatileorganiccompound allowances.

R, 0= the reactivityofeach speciated volatile organic compound reduced as specified in California Code of

Regulations, Title 17, Chapter 1, §94700, concerning MIR.ValuesforCompounds, as amended.

=the actual emissionsreduced, in tons per year, of each speciated volatileorganiccompound,

Figure: 30TAC §l1S.440(b)(12)

JY, fTD --XJ'AI

MW;

Ww f. f. W; +~--+~--

w .-1 MW. I-I MW,

II

PPc =L+---....!..----

1-1

Where:

ppc =the VOC composite partial pressure of a solution at 20 degrees Celsius, millimeters of mercury

(mmHg);

Wi=the weightofVOC i, grams (g);

MWi =the molecularweightofVOC i, glgVPj = the vapor pressure ofVOC i at 20de

W.,=the weightofwater,g;

MW.,=the molecular weightofwater,glgMWc=the molecularweightofnon-water

Celsius,mmHg;

t compound e, gig-mole.

TABLES AND 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 order wasentered regarding E uistar Chemicals, LP, Docket

No. 2008-1474-AlR-E on 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, Staff Atto

Commission on Environmental 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 Commission on Environmental Q ity, P.O.Box 13087, Austin,

Texas 78711-3087.

An agreed order was entered 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, Staff Atto ey at (512) 239-3400, Texas

Commission on Environmental Quality, .0. Box 13087, Austin, Texas

78711-3087.

A default order was entered regardin Ali Farasat dba Alpine Used

Auto Parts, Docket No. 2009-0690-W -E on March 11, 2010 assessing $29,580 in administrative penalties

Information concerning any aspect of

contacting Gary Shill, Staff Attorney

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, or othersimilar 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 0 I-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, Environmental Defense Fund (EDF) and Galveston Houston

Association for Smog Prevention (GRASP) were incorrectly included

in thelist oforal commenters. In addition, 8-Hour Ozone SIP Coalition

(Coalition) was incorrectly omitted from the list of oral commenters.

EDF and GRASP submitted only 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 g EquistarChemicals, LP, Docket

No. 2008-0080-AlR-E on March 1 ,2010 assessing $50,000 in administrative penalties.

Information concerning any aspe of this 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 wasentered regard g Maulesh 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 Commission on Environmen 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 TexReg 2758 April 2, 2010 Texas Register
TEXAS CO:MMISSION ON ENVIRONMENTAL QUALITY

ORDER ADOPTING 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

of the Texas Clean Air Act, Chapter 382 of the Tex. Health & Safety Code. Notice of the

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 of the hearings. Public hearings were held in Houston on October 28, 2009,

and in Austin on October 29,2009. The comment period 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 of the 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 of testimony incorporated

by reference to this Order. The Commission fmds that the analysis of testimony includes the

names of all 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 of EPA 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 of the 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 of competent

jurisdiction, the invalidity of any portion shall not affect the validity ofthe remaining portions.

Date issued: MAR 12201G TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY