```

[Federal Register Volume 81, Number 97 (Thursday, May 19, 2016)]
[Proposed Rules]
[Pages 31565-31566]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11843]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 35

[EPA-R09-OAR-2016-0120; FRL-9946-59-Region 9]

Clean Air Act Grant: South Coast Air Quality Management District; 
Opportunity for Public Hearing

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed action; determination with request for comments and 
notice of opportunity for public hearing.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) has made a proposed 
determination that the reduction in expenditures of non-Federal funds 
for the South Coast Air Quality Management District (SCAQMD) in support 
of its continuing air program under section 105 of the Clean Air Act 
(CAA) for the calendar year 2015 is a result of non-selective 
reductions in expenditures. This determination, when final, will permit 
the SCAQMD to receive grant funding for FY2016 from the EPA under 
section 105 of the Clean Air Act.

DATES: Comments and/or requests for a public hearing must be received 
by the EPA at the address stated below by June 20, 2016.

ADDRESSES: Submit your comments, identified by Docket ID No. [EPA-R09-
OAR-2016-0120] at http://www.regulations.gov, or via email to 
Lance.Gary@epa.gov. For comments submitted at Regulations.gov, follow 
the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. For either 
manner of submission, the EPA may publish any comment received to its 
public docket. Do not submit electronically any information you 
consider to be Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Multimedia 
submissions (audio, video, etc.) must be accompanied by a written 
comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. The EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e. on the Web, cloud, or other file sharing 
system). For additional submission methods, please contact the person 
identified in the FOR FURTHER INFORMATION CONTACT section. For the full 
EPA public comment policy, information about CBI or multimedia 
submissions, and general guidance on making effective comments, please 
visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Gary Lance, EPA Region IX, Grants and 
Program Integration Office, Air Division, 75 Hawthorne Street, San 
Francisco, CA 94105-3901; phone: (415) 972-3992, fax: (415) 947-3579 or 
email address at lance.gary@epa.gov.

SUPPLEMENTARY INFORMATION: Section 105 of the Clean Air Act (CAA) 
provides grant support for the continuing air programs of eligible 
state, local, and tribal agencies. In accordance with 40 CFR 35.145(a), 
the Regional Administrator may provide air pollution control agencies 
up to three-fifths of the approved costs of implementing programs for 
the prevention and control of air pollution. Section 105 contains two 
cost-sharing provisions which recipients must meet to qualify for a CAA 
section 105 grant. An eligible entity must meet a minimum 40% match. In 
addition, to remain eligible for section 105 funds, an eligible entity 
must continue to meet the minimum match requirement as well as meet a 
maintenance of effort (MOE) requirement under section 105(c)(1) of the 
CAA, 42 U.S.C. 7405.
    Program activities relevant to the match consist of both recurring 
and non-recurring (unique, one-time only) expenses. The MOE provision 
requires that a state or local agency spend at least the same dollar 
level of funds as it did in the previous grant year, but only for

[[Page 31566]]

the costs of recurring activities. Specifically, section 105(c) (1), 42 
U.S.C. 7405(c)(1) provides that ``no agency shall receive any grant 
under this section during any fiscal year when its expenditures of non-
Federal funds for recurrent expenditures for air pollution control 
programs will be less than its expenditures were for such programs 
during the preceding fiscal year.'' Pursuant to CAA section 105(c)(2), 
however, the EPA may still award a grant to an agency not meeting the 
requirements of section 105(c)(1), ``if the Administrator, after notice 
and opportunity for public hearing, determines that a reduction in 
expenditures is attributable to a non-selective reduction in the 
expenditures in the programs of all Executive branch agencies of the 
applicable unit of Government.'' These statutory requirements are 
repeated in the EPA's implementing regulations at 40 CFR 35.140 through 
35.148. The EPA issued additional guidance to recipients on what 
constitutes a nonselective reduction on September 30, 2011. In 
consideration of legislative history, the guidance clarified that a 
non-selective reduction does not necessarily mean that each Executive 
branch agency need be reduced in equal proportion. However, it must be 
clear to the EPA, from the weight of evidence, that a recipient's CAA-
related air program is not being disproportionately impacted or singled 
out for a reduction.
    A section 105 recipient must submit a final financial status report 
no later than 90 days from the close of its grant period that documents 
all of its federal and non-federal expenditures for the completed 
period. The recipient seeking an adjustment to its MOE for that period 
must provide the rationale and the documentation necessary to enable 
the EPA to make a determination that a nonselective reduction has 
occurred. In order to expedite that determination, the recipient must 
provide details of the budget action and the comparative fiscal impacts 
on all the jurisdiction's executive branch agencies, the recipient 
agency itself, and the agency's air program. The recipient should 
identify any executive branch agencies or programs that should be 
excepted from comparison and explain why. The recipient must provide 
evidence that the air program is not being singled out for a reduction 
or being disproportionately reduced. Documentation in key areas will be 
needed: Budget data specific to the recipient's air program, and 
comparative budget data between the recipient's air program, the agency 
containing the air program, and the other executive branch agencies. 
The EPA may also request information from the recipient about how 
impacts on its program operations will affect its ability to meet its 
CAA obligations and requirements; and documentation which explains the 
cause of the reduction, such as legislative changes or the issuance of 
a new executive order.
    In FY-2015, the EPA awarded the SCAQMD $5,082,526, which 
represented approximately 5% of the SCAQMD budget. In FY-2016, the EPA 
intends to award the SCAQMD approximately $5,039,863, which represents 
roughly 5% of the SCAQMD budget.
    SCAQMD's final Federal Financial Report for FY-2014 indicated that 
SCAQMD's maintenance of effort (MOE) level was $106,315,128. SCAQMD's 
final Federal Financial Report for FY-2015 indicates that SCAQMD's 
maintenance of effort (MOE) level was $105,858,708. The reduced MOE is 
not sufficient to meet the MOE requirements under the CAA section 105 
because it is not equal to or greater than the MOE for the previous 
fiscal year.
    In order for the SCAQMD to be eligible to receive its FY-2016 CAA 
section 105 grant, the EPA must make a determination, (after notice and 
an opportunity for a public hearing), that the reduction in 
expenditures is attributable to a non-selective reduction in the 
expenditures in the programs of the South Coast Air Quality Management 
District.
    The South Coast Air Quality Management District is a single-purpose 
air pollution control agency whose primary source of funding is from 
stationary sources of emissions. It is the ``unit of government for 
section 105 (c)(2) purposes.''
    The Maintenance of Effort (MOE) level for FY-2015 is higher than 
the last MOE adjustment in FY 2013. Specifically, the MOE for FY-2015 
is $762,655 higher than the FY-2013 level, the last time a non-
selective reduction was approved. As compared to the FY-2014 level, the 
FY-2015 MOE is $456,420 or 0.43% lower.
    The FY-2015 MOE was lower than the FY-2014 level due to relatively 
high uncollectible accounts receivable expenditures in FY-2014. Without 
this higher level of uncollectible accounts receivable in FY-2014, the 
MOE level would have been met in FY-2015.
    Also, in FY 2014-15, ``Other Revenue'' decreased by $10.5 million 
from FY 2013-14 and total revenue (Stationary Sources and Other 
Revenue) for this time period decreased by $9.3 million. This 
unpredictable revenue decrease, combined with lower levels of 
Stationary Source revenues since FY-2009-10, results in SCAQMD budget 
reductions. This may cause fluctuations in the MOE level from year to 
year. Stationary Source Revenues and Other Revenue for FY-2012-13 
through 2014-15 is detailed below.

------------------------------------------------------------------------
                                            Stationary
                  Year                        sources      Other revenue
------------------------------------------------------------------------
2013....................................     $83,307,359     $49,624,690
2014....................................      84,341,483      60,438,706
2015....................................      85,546,869      49,962,777
------------------------------------------------------------------------

    The request for a reset of SCAQMD's MOE meets the criteria for a 
non-selective reduction determination based on: 1. SCAQMD's inability 
to levy taxes, 2. regulated and voluntary emissions reductions, 3. 
agency-wide expenditure cuts, and 4. use of financial reserves to 
balance the budget.
    Although SCAQMD receives less than 5 percent of its support from 
the section 105 grant, the loss of that funding would seriously impact 
SCAQMD's ability to carry out its clean air program.
    The SCAQMD's MOE reduction resulted from a loss of revenues due to 
circumstances beyond its control. The EPA proposes to determine that 
lowering SCAQMD's FY-2015 MOE level to $105,858,708 meets the CAA 
section 105(c)(2) criteria as resulting from a non-selective reduction 
of expenditures.
    This notice constitutes a request for public comment and an 
opportunity for public hearing as required by the Clean Air Act. All 
written comments received by June 20, 2016 on this proposal will be 
considered. The EPA will conduct a public hearing on this proposal only 
if a written request for such is received by the EPA at the address 
above by June 20, 2016. If no written request for a hearing is 
received, the EPA will proceed to the final determination. While notice 
of the final determination will not be published in the Federal 
Register, copies of the determination can be obtained by sending a 
written request to Gary Lance at the above address.

    Dated: May 10, 2016.
Deborah Jordan,
Acting Regional Administrator, Region IX.
[FR Doc. 2016-11843 Filed 5-18-16; 8:45 am]
BILLING CODE 6560-50-P
```