1 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4605 SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

FINAL DRAFT STAFF REPORT

Rule 4605 (Aerospace Assembly and Component Coating Operations)

June 16, 2011

Prepared by: Katy Linebach, Air Quality Specialist Anna Myers, Air Quality Specialist Koshoua Thao, Senior Air Quality Specialist

Reviewed by: Stanley Tom, Senior Air Quality Engine er John Hejde, Air Quality Inspector Dan Barber, Supervising Air Quality Specialist George Heinen, Supervising Air Quality Engineer

Errol Villegas, Strategies and Incentives Manager Samir Sheikh, Director of Strategies and Incentive s

I. SUMMARY

The purpose of this rule development project is to amend the San Joaquin Valley’s Air Pollution Control District (District) September 200 7 version of Rule 4605 (Aerospace Assembly and Component Coating Operations). On July 17, 2009, EPA made the following action:

The submitted changes to Rule 4605 are largely admi nistrative and clarify the SIP rule. The rule largely fulfills the relevant C AA [Clean Air Act] §110 and part D requirements, but the deficiencies discussed [...] preclude full SIP approval. We do not believe the deficiencies underm ine emission reductions claimed for the Rule by the district. EP A staff recommends a simultaneous limited approval and limited disapprov al of Rule 4605 pursuant to CAA §110 (k)(3) and §301 (a) (EPA TSD, 4)

This action was published in Federal Register Vol 7 5, No.16 as 40 CFR Part 52 on January 26, 2010. A copy of this Federal Register publicat ion is included as Appendix D of this Staff Report.

Pursuant to §179 of the CAA, unless the deficiency identified by EPA has been corrected and approved into the State Implementation Plan (SI P) within 18 months after the disapproval, one, or more sanctions shall be impose d, as selected by the EPA, until EPA determines that the State has come into compliance. The sanctions available to the EPA

are as follows:SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

2 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 1. Highway Sanctions EPA may impose prohibitions, applicable to a nonatt ainment area, on the approval by the Secretary of Transportation of any projects or the awarding by the Secretary of any grants, under title 23 other than projects or grants for safety.

2. Offsets In applying the emissions offset requirements of §7 503 of this title to new or modified sources or emissions units for which a per mit is required under this part, the ratio of emission reductions to increased emissions shall be at least two

to one.

The purpose of this rule-amending project is to cor rect the rule deficiency of Rule 4605 as cited by EPA, and to clarify the compliance schedul e and methods by adding administrative language. These amendments are based on guidance received from EPA’s limited approval and limited disapproval Technical Support Document (TSD) issued in June 2009 (Appendix E).

A. Background

Rule 4605 was originally adopted December 1991 and was last amended in September 2007. On July 17, 2009, EPA evaluated Rule 4605 fo r meeting Reasonably Available Control Technology (RACT) requirements and determin ed the rule was deficient since the rule did not include emission limits pursuant to a 1997 Control Techniques Guideline (CTG) Document for the Control of Volatile Organic Compou nd Emissions from Coating Operations at Aerospace Manufacturing and Rework Operations (E PA-453/R-97-004). This evaluation resulted in a limited approval/limited disapproval of Rule 4605, published on January 26, 2010 and started an 18 month sanction clock requiri ng the District to address the deficiency. The limited disapproval, detailed in the EPA Techni cal Support Document (TSD), identified coating categories that should be incorporated into the rule and a few other minor administrative changes in order for the rule to sat isfy RACT requirements.

The CTG contains content limits and control techniq ues to reduce VOC emissions from coatings and solvents used in the aerospace industr y. The purpose of this rule development project is to amend the District’s Rule 4605 (Aerospace Assembly and Component Coating Operations) to incorporate the 17 new VOC coating limits. The District will also address two existing coating cat egories in Rule 4605 that are currently higher than the applicable limits in the CTG.

B. Rule Development Process

As guidelines for amending Rule 4605 to incorporate the 19 VOC coating limits, District staff reviewed the CTG for this source category, th e 2007 Ozone Plan, rules in other air districts, and Federal and State regulations. Staf f also conducted literature and internetSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

3 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 research when evaluating the 19 CTG limits for cont rol of VOC emissions from coating operations at aerospace manufacturing and rework op erations. Staff developed a survey

for sources to inform the District as to the extent that these 19 new CTG limits would affect their business. Over two-thirds of the surveys wer e returned and most sources marked that they are currently using compliant coatings or that compliant coatings are available for them to use. District staff worked closely with th ose sources that indicated that they might be affected by the new limits.

The proposed amendments to Rule 4605 and the Final Draft Staff Report were published

and made available to affected sources and interest ed parties for review prior to a public hearing by the Governing Board. District staff wel comes public participation and invites the public to submit comments on this project. Com ments received from affected source operators and interested parties will be evaluated and incorporated into the proposed amendments to the rule, as appropriate. The Receiv e and File date for this rule development project was held on May 19, 2011. The public hearing to consider adoption of the proposed amendments to Rule 4605 by the Dist rict Governing Board is scheduled for June 16, 2011.

II. DISCUSSION

A. Existing Rule 4605

District Rule 4605, recently amended on September 2 0, 2007, sets VOC content limits for coatings, adhesives, and other related VOC-containi ng materials for coating operations related to aerospace assemblies and components. Th e flushing of jet or rocket engines using any solvent other than trichloroethylene is e xempt. Aerospace assembly and component coating operations using less than four g allons per day of VOC-containing products are exempt as are other coatings or adhesi ves. Materials used in laboratories associated with research and development, quality c ontrol, or production testing are exempt from VOC content limits. There is also a li mited exemption from application equipment standards. VOC emissions are 50% controll ed compared to uncontrolled

emissions. The current rule can be accessed on-lin e at: http://www.valleyair.org/rules/currntrules/r4605.pd f

.

B. CTG for Aerospace Coating

Since the United States Environmental Protection Ag ency (EPA) and the California Air Resources Board (ARB) classified the San Joaquin Va lley Air Basin (SJVAB) as a serious

and severe non-attainment area for federal and stat e ozone standards, the state implementation plans (SIPs) must include reasonably available control measures (RACM), including RACT, for sources of emissions. CCA §183 (e) requires EPA to regulate VOC emissions from consumer and commercial products. C AA §182(b)(2) provides that, for certain nonattainment areas, States must revise the ir SIPs to include RACT for sources of VOC emissions covered by a CTG document issued betw een November 15, 1990 and theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

4 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 date of attainment. CAA §183(e) directs EPA to lis t regulation for those categories of products that account for at least 80 percent of th e VOC emissions, on a reactivityadjusted basis, from consumer and commercial produc ts in areas that violate the national ambient air quality standards (NAAQS) for ozone (i. e., ozone nonattainment areas). Aerospace Coatings is included in the list of consu mer and commercial products that are subject to EPA regulation.

The CTG for control of VOC emissions from coating o perations at aerospace manufacturing and rework operations applies to all manufacturing facilities that produce an aerospace vehicle or component and all facilities t hat rework or repair these aerospace products that are located in marginal, moderate, se rious or severe ozone nonattainment areas that has the potential to emit greater than o r equal to 25 tons/year of VOC, and greater than or equal to 10 tons/year of VOC for ex treme ozone nonattainment areas The CTG may also include specialized shops that meet th e definition of a major source and the definition of an aerospace manufacturing or rew ork facility. Operations and activities that are not subject to this CTG include the follow ing:

• Manufacturing or rework operations involving space vehicles,

• Rework operations performed on antique aerospace v ehicles or components, and

• Cleaning and coating of aerospace components and v ehicles for research and development, quality control, laboratory testin g, or electronic parts and assemblies. (Cleaning and coating of completed ass emblies are not excluded from requirements.)

The CTG provides a list of specialty coatings with VOC content limits for aerospace components and vehicles. EPA considers the CTG to be presumptive RACT standards (63FR 15015). For the other air district’s standard s that are more stringent than the CTG,

the standards are considered Best Available Control Retrofit Technology (BARCT) and may be considered by the District in a separate rul e making action in the future.

The District has already incorporated the VOC coati ng limits for most of the specialty coating types into Rule 4605 during previous rulema king. Rule 4605 is currently more stringent than the CTG limits for 34 specialty coat ings and has 9 categories that are equivalent to the CTG limits. By implementing the remaining CTG limits, Rule 4605 will overall, be more stringent than other air district’ s rule for aerospace assembly and component coating operations.

C. EPA Evaluation of Rule 4605

EPA used the following memoranda, guidance, and sta tute to review the submitted rule to evaluate compliance with RACT requirements of CAA § 182(b)(2):SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

5 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 • SJVAPCD’s 2009 RACT SIP Demonstration (April 16, 2 009);

• EPA’s control Technique Guideline (CTG) titles, “S urface coating Operations at Aerospace Manufacturing & Rework Operations” (EPA-4 53/R-97-004, December 1997);

• “Preamble, Final Rule to Implement the 8-hour Ozon e National Ambient air Quality Standard” (70 FR 71612, November 29, 2005)

• Letters from William T. Hartnett to Regional Air D ivision Directors, “RACT Qs & As – Reasonable Available Control Technology (RACT) Questions and Answers,” (May 18, 2006); and

• Other state and Local rules for this category.

EPA used the following memoranda, guidance, and sta tute to review the submitted rule to evaluate compliance with CAA §110(a)(2)(A) requi rement for enforceability:

• The Bluebook (“Issues Relating to VOC Regulation C utpoints, Deficiencies, and Deviations,” EPA, May 25, 1988);

• The Little Bluebook (“Guidance Document for Correc ting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001); and

• “State Implementation Plans, General Preamble for the Implementation of Title I of the Clean Air Amendments of 1990” (57 FR 13498, April 16, 1992).

D. EPA Recommendations

On January 26, 2010, EPA published a limited approv al and limited disapproval of revisions to the District portion of the California SIP. This action was proposed in the Federal Register on July 17, 2009 regarding VOC emi ssions from aerospace assembly and component coating operations. Under authority of the CAA, as amended in 1990, this action simultaneously approves local rules tha t regulate these emission sources

and directs California to correct rule deficiencies

.

EPA finalized a limited approval of the submitted r ule, as authorized in §110(k)(3) and §301(a) of the CAA; EPA also simultaneously finaliz ed a limited disapproval of a portion of the rule. Because of the limited disapp roval, sanctions will be imposed on the District unless EPA approves subsequent SIP rev isions that correct the rule

deficiencies within 18 months of the effective date of this action. These sanctions will be imposed under §179 of the CAA according to 40 CF R 52.31. In addition, EPA must promulgate a federal implementation plan (FIP) unde r §110(c) unless EPA approves subsequent SIP revisions that correct the rule defi ciencies within 24-months of the

effective date of this action. Note that EPA’s fin al limited disapproval does not prevent the District from enforcing the rule.

The Technical Support Document for the Notice of Pr oposed Rulemaking identifies that the current rule does not include 17 specialty VOC coating limits identified in the CTG and has two other specialty VOC coating limits with limits lower than the CTGSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

6 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 VOC coating limits. EPA also recommends including the full title of the ASTM methods in Section 6.2 and stating that a violation determi ned by either test method shall

constitute a violation of the rule.

The previously mentioned specialty VOC coating limi ts are a rule deficiency because the District has not demonstrated that any of the C TG limits are infeasible in the San Joaquin Valley or otherwise adequately demonstrated that Rule 4605 implements RACT consistent with CAA §180(b)(2).

E. Summary of Amendments to Rule 4605

The amendments to Rule 4605 will fulfill the requir ements of the Control Technology Guidance (CTG) document, as well as fulfill the cha nges necessary for EPA to find Rule 4605 RACT. These changes are based on guidance rec eived from EPA’s limited approval and limited disapproval technical support document issues in June 2009.

Section 3.0 Definitions Definitions for the following coatings were added t o the rule:

Ablative Bearing Coating Caulking and Smoothing Compounds Chemical Agent Resistant Coating Electromagnetic Interference Coating Intermediate Release Coating Lacquer Metalized Epoxy Coating

Mold Release Part Marking Coating Rocket Motor Nozzle Coating

Screen Print Ink

Silicone Insulation Material Specialized Function Coating Thermal Control Coating Topcoat (Epoxy Polyamide) Wet Fastener Installation Coating

These definitions were added to the rule to provide clarity on the new coatings types added, based on the need to incorporate all CTG coatings r equired.

Section 5.0 RequirementsSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

7 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 This section was amended to incorporate the CTG req uirements and VOC limits. Table 3 details the coatings and limits that were changed i n the rule.

Table 3: Coating types and VOC limits to meet CTG R equirements Coating Type to add to the Rule CTG Limit (g/L)

Ablative 600 Bearing Coating 620 Caulking and Smoothing Compounds 850 Chemical Agent Resistant Coating 550 Electromagnetic Interference Coating 800 Intermediate Release Coating 750 Lacquer 830 Table 3: Coating types and VOC limits to meet CTG R equirements (continued) Metalized Epoxy Coating 740

Mold Release 780 Part Marking Coating 850 Rocket Motor Nozzle Coating 660

Screen Print Ink 840

Silicone Insulation Material 850 Specialized Function Coating 890 Thermal Control Coating 800 Topcoat (Epoxy Polyamide) 660 Wet Fastener Installation Coating 675 Existing Coating Type with new lower VOC Limits Sealant (Extrudable/Rollable/Brushable) 280 Sealant (Fastener) 600

A new effective date of January 1, 2013 is included in Table 1 of Section 5.0. This date is to allow time for sources to come into compliance with the new coating categories and limits that previously were not included in the rule. Man y facilities keep stock on site, so time to use current product is necessary before the impleme ntation of new coating VOC limits.

The new coating limits in Table 1 include exemption s for coatings that are considered Department of Defense (DoD) “classified” coatings o r coatings that are used on space vehicles. These two categories were added because of the exemptions provided on page 4- 3 of the 1997 CTG (Attached in Appendix A) and also 40 C.F.R. Appendix A to Subpart GC of Part 63 – Specialty Coating Definitions. DoD cl assified coatings and space vehicle coatings are listed as exempt coatings.

Staff research revealed a local DoD facility that c urrently requires a higher VOC limit for a specific coating for a vehicle in use at their faci lity. Because of the CTG exemption for DoD coatings, this facility will be under the exemption from the new limit level for that coating andSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

8 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 will be able to comply with the rule. In order to prevent a rule relaxation, the DoD classified and space vehicle coatings will have to comply with VOC limits that are currently in place.

Section 6.0 Administrative Requirements

Section 6.5 has been amended to update the test met hods for new requirements and the names of the mentioned test methods. This incorpor ates a change requested by EPA in the Technical Support Document.

F. Global Climate Change and Greenhouse Gases Impac ts

The California Global Warming Solutions Act of 2006 (AB 32) created a comprehensive, multi-year program to reduce greenhouse gas (GHG) e missions in California, with the overall goal of restoring emissions to 1990 levels by the year 2020. In the coming years, the Air Resources Board (ARB) and the Legislature w ill be developing policies and programs to implement AB 32. The District believes that the evidence and the rationale that climate change is occurring is compelling and convincing. In addition to the long-term consequences of climate change, the District is con cerned with the potential ramifications of more moderate but imminent changes in weather pa tterns. The Valley depends heavily on agriculture for its economy and has developed ag ricultural practices based on the last several decades of weather patterns. Unanticipated and large fluctuations in these patterns could have a devastating effect on the Val ley’s economy.

While there are many win-win strategies that can re duce both GHG and criteria/toxic pollutant emissions, when faced with situations tha t involve tradeoffs between the two, District staff believes that the more immediate pub lic health concerns that may arise from an increase in criteria or toxic pollutant emission s should take precedence. The San Joaquin Valley Air Pollution Control District’s Gov erning Board adopted the Climate Change Action Plan (CCAP) in August 2008. For Cali fornia Environmental Quality Act (CEQA) requirements, one of the goals of the CCAP i s to establish District processes for assessing the significance of greenhouse gas impact s. The District has developed a policy and guidance for addressing greenhouse gases under CEQA.

Adoption of the proposed amendments would lower VOC limits from coatings and solvents used in the aerospace industry and two specialty co ating categories in Rule 4605. There are no foreseeable changes in operating practices r esulting from implementation of these changes that would result in increased GHG emission s. Therefore, the District concludes that this rule development project would have a les s than cumulative impact on global climate change.

III. ANALYSIS

A. Emissions and Emissions ReductionsSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

9 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 According to the District’s 2007 Ozone Plan, the so urce category for Aerospace Assembly and Component Coating Operations (S-SOL-7) was not recommended as a control

measure for VOC reduction and no additional reducti ons were available. The District staff is seeking to implement the 19 CTG limits as mentio ned above. Since the federal CAA requires ozone nonattainment areas to implement RAC T and the CTGs promulgated by EPA constitute RACT requirements, at a minimum, Dis trict staff is compelled to incorporate the CTG standards into Rule 4605.

The ARB emissions inventory shows VOC emissions of 0.02 tons of VOC per day for this industry. Research of the District’s permit databa se has indicated that there are 14 facilities that are currently subject to Rule 4605, with 12 currently operating. The District has previously employed more stringent methods than the CTG to achieve emissions reductions, such as the more stringent exemption li mits in Section 4.4.1 of the rule. However, staffs evaluation has found that Valley op erators will not be significantly impacted as they do not use coatings subject to the new categories, or can use readily available coatings compliant with the new categorie s.

B. Cost Effectiveness Analysis

Pursuant to California Health & Safety Code Section 40920.6(a), the District is required to analyze the cost effectiveness of new rules or rule amendments that implement Best Available Retrofit Control Technology (BARCT) or al l feasible measure. The proposed amendments to Rule 4605 would add federal RACT requ irements but not BARCT, and are therefore not subject to the cost effectiveness ana lysis mandate.

C. Socioeconomic Analysis

Pursuant to California Health & Safety Code Section 40728.5 (a) an assessment of the socioeconomic impacts is not required for any rule or regulation that only adopts a requirement that is substantially similar to, or is required by state or federal statute, regulation, or applicable formal guidance, such as a federal CTG. Since the proposed amendments to Rule 4605 implement the CTG standards mandated by the federal Clean Air Act, a socioeconomic impact analysis is not req uired.

D. Environmental Impact Analysis

Pursuant to the California Environmental Quality Ac t (CEQA), staff investigated the likely environmental impacts of the proposed amendments to Rule 4605. Adoption of the proposed amendments would lower VOC limits from coa tings and solvents used in the aerospace industry and two specialty coating catego ries in Rule 4605 to match those specified in the CTG. There are no foreseeable cha nges in operating practices resulting from implementation of these changes that would imp act environmental resources, including than air quality. Therefore, staff concludes that there is no substantial evidence in the whole record before the District that the proposed amendm ents would cause any adverseSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

10 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 environmental effects. The District finds that the project is exempt per the general rule that CEQA applies only to projects which have the potent ial for causing a significant effect on the environment (CCR §15061(b)(3)). For these reasons, staff is proposing to file a Notice of Exemption upon Board adoption of the proposed amend ments to Rule 4605.

E. Rule Consistency Analysis

Pursuant to CH&SC §40727.2, District staff has prep ared a rule consistency analysis that compares the elements of amendments with the corres ponding elements of other District rules, federal regulations and guidelines that appl y to the same source category or type of equipment. District staff found that the proposed amendments and requirements of this rule would not conflict with federal rules, regulat ions, or policies covering similar stationary sources. The rule consistency analysis is presente d in Appendix B of the Final Draft Staff Report. Based on the updated analysis, District sta ff found that the proposed amendments to Rule 4605 would not conflict with federal rules, regulations, or policies covering similar stationary sources.

F. RACT Analysis

CAA §182(b)(2) states that ozone attainment plans s hall assure that RACT for VOC is applied at certain sources. A RACT analysis requir es an examination of a rule against Federal rules, regulations, and technology guidelin es as well as comparing it against rules from other air districts in California. On April 1 6, 2009, the District adopted its “2009 RACT SIP,” which provides the District’s demonstrat ion that RACT is implemented for all appropriate activities. In the RACT SIP, District R ule 4605 was compared to federal and state regulations and guidance in Chapter 4: Rule A nalysis. EPA disapproved part of Rule 4605 in June 2009 because of the analysis not adequ ately demonstration the implementation of RACT. With the incorporated amen dments to the rule, District Rule 4605 will satisfy RACT requirements for aerospace a ssembly and component coating operations.

IV. REFERENCES

1. EPA CTG for Control of Volatile Organic Compound Emissions from Coating Operations at Aerospace Manufacturing and Rework Op erations (EPA 453/R-97- 004), December 1997.

2. EPA Revisions to the California State Implementa tion Plan, San Joaquin Valley Air Pollution Control District, Proposed Rule, (EPA-R09 -OAR-2009-0475), June 30,

2009

2. EPA Technical Support Document for EPA’s Propose d Rulemaking for the California State Implementation Plan, Rule 4605, Ae rospace Assembly and Component Coating Operations, June 2009SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4605 Jun e 16, 2011

11 Final Draft Staff Report with Appendices For Proposed A mendments to Rule 4605 3. SCAQMD Rule 1124 Final Staff Report, August 2001

4. SCAQMD Rule 1124 Final environmental Assessment, August 29, 2001

6. SJVAPCD RACT SIP Analysis, Chapter 4: Rule Analy sis, April 4, 2009, pg. 196 –

205

7. 40 C.F.R. Appendix A to Subpart GG of Part 63 Na tional Emission Standards for Hazardous Air Pollutants for Source Categories – Sp ecialty Coating Definitions, http://law.justia.com/cfr/title40/40-10.0.1.1.1.7.1 8.16.10.html12 Final Draft Staff Report with Appendices For Proposed Amendments to Rule 4605 This page intentionally blank.