13 CA ADC § 2271 Page 1

13 CCR s 2271

Cal. Admin. Code tit. 13 , s 2271

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works. BARCLAYS OFFICIAL CALIFORNIA CODE OF

REGULATIONS

TITLE 13. MOTOR VEHICLES

DIVISION 3. AIR RESOURCES BOARD

CHAPTER 5. STANDARDS FOR MOTOR V EHICLE FUELS

ARTICLE 1. STANDARDS FOR GASOLINE

SUBARTICLE 2. STANDARDS FOR GASOLINE SOLD BEGINNING MARCH 1, 1996 This database is current through 12/26/2003, Register

2003, No. 52.

s 2271. Variances.

(a) Applications for variances. Any person who cannot comply with the standards or compliance requirements set forth in sections 2262, 2262.3, 2262.4, 2262.5 or 2262.6 because of reasons beyond the person's reasonable control may apply to the executive officer for a variance. Except for emergency variances as provided in section (h), the application shall be accompanied by a fee of $6700.00 to cover the costs of processing the variance. If the applicant withdraws the application before the variance hearing is held, $4100.00 of the fee shall be refunded. The applic ation shall set forth:

(1) The applicable section(s) from which the variance is sought;

(2) The specific grounds upon which the var iance is sought;

(3) The proposed date(s) by which compliance with the provisions of the applicable section(s) will be achieved;

and

(4) A compliance plan reasonably detailing the method by which compliance will be achieved. That proposed co mpliance pl an shall include increments of progress (i.e., specific events and dates) that describe periodic, measu rable steps toward compliance during the proposed term of

the variance.

(b)(1) Notices and public hearings for variances. Upon receipt of an applicatio n for a variance containing the information required in section (a), the executive officer shall hold a hearing to determine whether, or under what conditions and to what extent, a variance from the r equirements of the applicable section(s) is necessary an d will be permitted. Notice of the time and place of the hearing shall be sent to the applicant by certified mail not less than 20 days prior to the hearing. Notice of the hearing shall also be submitted for publication in the California Regulatory Notice Register and sent to every person who requests such notice, not less than 20 days prior to the hearing.

(2) Treatment of confidential information.Information submitted to the executive officer by a variance appli cant may be claimed as confidential. Information claimed as confidential shall be handled in accordance with the pr ocedures specified in Title 17, California Code of Regul ations (CCR), sections 91000 to 91022 except that: (A) at

the time the information is submitted, the submitter must provide accompanying documentation in support of the claim of confidentiality, including the documentation identified in section 91022(c), and (B) for the purposes of this section 2271, the time period specified in section

91 022(e)(2) is 10 days instead of 21 days. The executive officer may consider such confidential information in reaching a decision to grant or deny a variance.

(c) Public participation in the variance process.At least 20 days prior to the hearing, the appl ication for the variance shall be made available to the public for inspection. Inte rested members of the public shall be allowed a reasonable opportunity to submit written and oral testimony at the hearing and their testimony shall be considered.

(d) Necessary findings for granting variances. The dec ision to grant or deny a variance shall be based solely upon substantial evidence in the record of the variance pr oceeding. No variance shall be granted unless the exe cutive officer makes all of the following findings:

(1) That, because of reasons beyond the reasonable control of the applicant, requiring compliance with the applicable section(s) would result in an extraordinary economic hardship;

(2) That the public interest in mitigating the extraordinary hardship by issuing the variance outweighs the public interest in avoiding any increased emissions of air cont aminants which would result from issuing the variance; and13 CA ADC § 2271 Page 2

13 CCR s 2271

Cal. Admin. Code tit. 13 , s 2271

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works. (3) That the compliance plan proposed by the applicant can reasonably be implemented and will achieve co mpliance as expeditiously as possible.

(e) Factors to be considered in making the necessary findings for granting variances.

In making the findings specified in section (d ), the factors set forth below shall be considered. It is the responsibility of the applicant to provide the information necessary to adequately evaluate these factors.

(1) Regarding the finding specified in sect ion (d)(1):

(A) To demonstrate that noncompliance is "beyond the reasonable control of the applicant," the applicant must demonstrate that reasonably diligent and timely efforts to achieve compliance have been made. Where a variance is sought from initia l compliance with the CaRFG Phase 3 requirements, the applicant shall show that timely capital expenditures and efforts to obtain the permits for necessary refinery modifications have been made, and that the a pplicant has been reasonably diligent in attemp ting to follow the periodic compliance plans required by section 2269, "Submittal of Compliance Plans." Where a variance is sought due to a breakdown, the applicant shall demonstrate that the breakdown could not have been prevented or m itigated by the appl ication of standard industrial practices. "Standard industrial practices" means elements of design, methods of operation, and levels of oversight and mai ntenance that are regarded as generally accepted practice in the applicant's type of business.

(B) To demonstrate that requiring compliance would result in an "extraordinary economic hardship," the appl icant must make a substantial showing that no alternative to a variance would eliminate or mitigate the need for a v ariance. Potential alternatives that the applicant shall a ddress include the following: 1. obtaining complying gas oline from outside sources, or obtaining blending materials that would allow production of complying gasoline, and 2. using the applicable California Predictive Model (as sp ecified in Title 13, CCR, section 2265) to maximize the production of complying gasoline, or to minimize the degree of noncompliance, through the use of a PM alte rnative gasoline formulation. The applicant shall compare

th e economics of operations without a variance, for the period over which the variance is proposed, with the ec onomics of operations after the variance compliance plan has been implemented (e.g., the economic hardship during the term of the variance shall be measured against the eventual cost of long

- term compliance.) The operations may include facets of the applicant's business other than gasoline operations, if those facets are directly affected by the ability to conduct the gasoline business. An applicant may also address any supply shortages that could result from the failure to grant a variance and the economic a ffects of such shortages on the persons who do, or could, receive gasoline from the applicant.

(2) Regarding the finding specified in section ( d)(2):

(A) The executive officer shall consider the potential effects of issuing or denying the variance on the applicant's customers, the producers of complying fuel, the general public, and upon air quality. Th e executive officer shall also consider whether granting the variance will place the applicant at a cost advantage over other persons, including those persons who produce complying gasoline.

(B) To evaluate the potential effect upon air quality, the

exce ss emissions from granting the variance shall be e stimated as follows:

1. Exhaust emissions:The fractional change in emissions from using the variance gasoline shall be estimated with the California Predictive Model (model). Inputs to the

model shall be the limits to be placed on the regulated properties of the variance gasoline by the variance cond itions and the limits set forth in section 2262 that corre spond in form (flat or averaging) to the variance limits. For each air basin in which the variance ga soline will be sold,

the estimate of excess exhaust emissions shall be the fra ctional change in emissions (output by the model), times the estimated fraction of gasoline use in the air basin represented by the variance gasoline, times the inventory

of exha ust emissions from gasoline

- powered vehicles in

the air basin.

2. Evaporative hydrocarbon emissions:Excess evaporative emissions shall be estimated for a limit greater than 7.0 pounds per square inch (psi) on the Reid vapor pressure (RVP) of variance gasoline. This estimate shall apply only for the period when RVP is limited to 7.0 psi. The true vapor pressure corresponding to the RVP limit for variance gasoline shall be divided by the true vapor pressure co rrespo nding to RVP at 7.0 pounds per square inch. For each air basin in which the variance gasoline will be sold, the estimate of excess evaporative emissions shall be that ratio, minus 1.0, times the estimated fraction of gasoline use in the air basin represent ed by the variance gasoline,13 CA ADC § 2271 Page 3

13 CCR s 2271

Cal. Admin. Code tit. 13 , s 2271

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works. times the inventory of emissions due to the evaporation of gasoline from all sources in the air basin.

(3) Regarding the finding specified in section (d)(3):

The applicant shall demonstrate why the proposed co mpliance plan is the most expeditious way to achieve co mpliance, and the applicant shall demonstrate sufficient control over the implementation of the plan to make the plan practical. In the case of a pro posed variance that would begin on December 31, 2003, the compliance plan shall identify and provide a date for each key step that remains to be accomplished for attaining compliance. As applicable, these steps shall include financing, engineering plans, o rdering and contracts, receipt of major equipment, commencement and completion of construction, and tes ting.

(f) Conditions and fees in variance orders.In imposing fees and conditions in variance orders, the exec utive officer shall take into account the potential for such fees and conditions to place the applicant at a cost advantage over other persons, including those persons who produce co mplying gasoline.

(1) Conditions.

(A) Any variance order shall specify a final compliance date by which the requirements of the applicable section(s) will be achieved. Any variance order shall also contain a condition that specified increments of progress necessary to assure timely compliance be achieved, and such other

cond itions that the executive officer, as a result of the testimony received at the hearing, finds necessary to carry out the purposes of Division 26 of the Health and Safety Code. Such conditions may include, but are not limited to, reporting requirements, li mitations on the gasoline spec ifications, and the elements of the variance compliance plan as proposed by the applicant, with any modifications made by the executive officer.

(B) Any variance order granting a variance from 2262.4 shall impose a substitut e gasoline Reid vapor pressure limit as stringent as feasible under the circumstances, in no case to exceed 9.0 pounds per square inch. For areas where, and in seasons when, federal regulations require a lesser

m aximum Reid vapor pressure limit, a variance order shall not impose a Reid vapor pressure limit that is less stringent

than the federal limit. (C) The executive officer may require, as a condition of granting a variance, that a cash bond, or a bond execu ted by two or more good and sufficient sureties or by a co rporate surety, be posted by the party to whom the variance was granted to assure performance of any construction, alteration, repair, or other work required by the terms and

conditions of the varia nce. Such bond may provide that, if the party granted the variance fails to perform such work by the agreed date, the cash bond shall be forfeited to the state board, or the corporate surety or sureties shall have the option of promptly remedying the varia nce default or paying to the state board an amount, up to the amount specified in the bond, that is necessary to accomplish the work specified as a condition of the variance.

(D) The variance order shall limit the amount of variance gasoline sold or supp lied from the applicant's production or import facility during each 30

- day period of the variance, or during such other time period as the executive officer may specify. In determining the limit on the amount of

variance gasoline, the Executive Officer shall consider available data on the applicant's production of complying gasoline. The limit shall not exceed the applicant's capacity to produce complying gasoline.

(E) The variance order shall specify that once a quantity of variance gasoline has been sold or supplied by the appl icant in accordance with the variance, subsequent transa ctions involving that variance gasoline by another producer, distributor, retailer, end user, or other person shall also be

exempt from the applicable requirements.

(2) Fees. A fee of $0.15 shall be levied on the applicant for each gallon of gasoline sold or released for sale under variance during the term of the variance. The fee shall be paid by the applicant periodically, in adva nce of the sale or release of variance gasoline in each period. The executive director shall specify the payment schedule in the variance

order.

(g) Duration of variances.

(1) A variance shall be granted only for the minimum period necessary for the ap plicant to attain compliance with the applicable regulations. Except for a variance r elated to a physical catastrophe, no variance shall have a

duration of more than 120 days; however, a variance may

be extended for up to 90 additional days if the applicant demonstrates that the requirements of sections (d) and (e) are met. In order to receive an extension of a variance, the applicant must submit an application as specified in section13 CA ADC § 2271 Page 4

13 CCR s 2271

Cal. Admin. Code tit. 13 , s 2271

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works. (a), and a hearing must be he ld as specified in sections (b) and (c).

(2) Variances related to a physical catastr ophe.Notwithstanding the provisions of section (g)(1), a refiner may be granted a variance with a duration of more than 120 days, or a variance extension of more than 90 days, if the applicant demonstrates that the additional time is necessary due to a physical catastrophe, and the r equirements of sections (d) and (e) are met. In order to receive a variance or variance extension, the applicant must submit an application as specified in section (a) and a hearing must be held as specified in sections (b) and (c). As used in this section, "physical catastrophe" means a sudden unforseen emergency beyond the reasonable control of the refiner, causing the severe reduction or tota l loss of one or more critical refinery units that materially impact the r efiner's ability to produce complying gasoline. "Physical catastrophe" does not include events which are not phys ical in nature such as design errors or omissions, financial

or econo mic burdens, or any reduction in production that is not the direct result of qualifying physical damage.

(h) Emergency variances.

(1) The executive officer may, after holding a hearing without complying with the provisions of sections (b) and (c), issue an emergency variance to a person from the requirements of the applicable section(s) upon a showing of reasonably unforeseeable ext raordinary hardship and good cause that a variance is necessary. The applicant for an emergency variance shall pay a fee of $2500.00. Section (f) shall apply to emergency variances, except that a v ariance order is not required to specify a final compliance date by which the requirements of the applicable se ctions(s) will be achieved.

(2) No emergency variance may have a duration of more than 45 days. If the applicant for an emergency variance does not demonstrate that he or she can comply with the provisi ons of the applicable section(s) within such 45

- day period, an emergency variance shall not be granted unless the applicant makes a prima facie demonstration that the findings set forth in section (d) should be made. The e xecutive officer shall maintain a list of persons who have informed the executive officer in writing of their desire to be notified by telephone in advance of any hearing held pursuant to section (h), and shall provide advance tel ephone notice to any such person as soon as practicable,

con sidering the nature of the emergency.

(i) Situations in which variances shall cease to be effe ctive. A variance shall cease to be effective upon failure of the party to whom the variance was granted substantial ly to comply with any condition of the variance.

(j) Modification and revocation of variances.Upon the application of any person, the executive officer may review and for good cause modify or revoke a variance from the requirements the applicable section (s) after holding a hearing in accordance with the provisions of sections (b) and (c).

< General Materials (GM)

- References, Annotations, or

Tables >

Note: Authority cited: Sections 39600, 39601, 43013, 43013.1, 43013.2, 43018 and 43101, Health and Safet y Code; andWestern Oil and Gas Ass'n. v.Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal. Rptr. 249 (1975). Reference: Sections 39000, 39001, 39002, 39003, 39010, 39500, 39515, 39516, 40000, 41511, 43000, 43013, 43013.1, 43013.2, 43016, 43018 and 43101, Health and Safety Code; andWestern Oil and Gas Ass'n. v.Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal. Rptr. 249 (1975).

HISTORY

1. New sectio n filed 11

- 16

- 92; operative 12

- 16

- 92 (Register 92, No. 47).

2. Change without regulatory effect amending subsections (a), (a)(3)

- (a)(4)
and (d)(1)

- (d)(3) filed 8

- 5

- 93 pursuant to section 100, title 1, California Code of Regulations (Register 93, No. 32).

3. Amendment of section and Note filed 2

- 15

- 96 as an emergency; operative 2

- 15

- 96 (Register 96, No. 7). A Certificate of Compliance must be transmitted to13 CA ADC § 2271 Page 5

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Cal. Admin. Code tit. 13 , s 2271

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works. OAL by 6

- 14

- 96 or emergency language will be repealed by operation of law on the following day.

4. Certificate of Compliance as to 2

- 15

- 96 order transmitted to OAL 4

- 4

- 96 and

filed 5

- 16

- 96 (Register 96, No. 20).

5. Amendment of section and Note filed 8

- 3

- 2000; operative 9

- 2

- 2000 (Register
2000, No. 31).

6. Amendment of subsection (e)(3) filed 12

- 24

- 2 002; operative 12

- 24

- 2002 pursuant to Government Code section 11343.4 (Register 2002, No. 52).

13 CA ADC s 2271

END OF DOCUMENT