Bryan W. Shaw, Ph.D., Chairman

Buddy Garcia, Commissioner

Carlos Rubinstein, Commissioner

Mark R. Vickery, P.G, Executive Director 10 APR - 9 Pi] I: 55

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

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. 20()9-0867-RUL, Rule Project No. 2009-019-101-EN

AI Armendariz, Ph.D, Regional Administrator

U.S. Environmental Protection Agency - Region 6

1445 Ross Avenue

Dallas,T~ 75202-2733

Dear Dr. Armendariz:

On March 10, 2010, the T~ Commission on Environmental Quality (Commission) adopted revisions to the

state Implementation Plan (SIP) for the control of ozone air pollution for the Houston-Ga1veston-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 Co und Emissions Ca and Trade Pro 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

Emi sions C and trade Pro Sections 101.350 101.351 and 101.353 and carr on' revisions to the

SIP; and an HGB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard. These rule

changes and SIP revisions demonstrate that the HGB area will attain the 1997 eight-hour ozone National

Ambient Air Quality Standard by June 15,2019.

Enclosed are the proposed revisions to the SIP, a public hearing certification, a complete record ofthe public

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

Sincerely,

'B QMwjkJw-' 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 Conlrnission 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" I: 55

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Bryan W. Shaw, Ph.D., Chairman

Buddy Garcia, Commissioner

Carlos Rubinstein, Commissioner

Mark R. 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. 2009-00~lOl-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. Annendariz:

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; 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,/haw- Bry~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

printed OJ) recycled paper using soy-based ink
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Docket No. 2009-0802-SIP

2009-0932-RUL

2009-0867-RUL

THE STATE OF TEXAS

COUNTY OF TRAVIS

Tills is to certify that the attached are true and correct copies of documents for revisions to the Texas

State hnplementation Plan, adopted on March 10,2010, pursuant to 40 Code of Federal Regulations (C.F.R.) §

51.104. I am the records administrator for the Air Quality Division ofthe Texas Commission on Environmental

Quality (Commission).

r~D~'~- .. - Director, Air Quality Division

Texas Commission on Environmental Quality
Texas Commission on Environmental Quality

Public Hearings

October 28 and 29, 2009

Concerning Revisions to 30 TAC Chapter 101

MECT Program Cap Integrity for the

HGB Eight-Hour Ozone Nonattainment Area

Rule Project No. 2009-019-101-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 H, Division 3, Mass Emissions Cap and Trade (MECT)

Program and corresponding revisions to the state implementation plan.

The adopted amendments to §§1 01.350 and 101.351 revise the definition of "Uncontrolled design

capacity" to provide additional flexibility for certain stationary diesel engines and clarify both site and

facility applicability. In addition, the adoption of the amendment to §1 01.353 maintains the integrity

of the nitrogen oxides (NOx) cap in the Houston-Galveston-Brazoria ozone nonattainment area and

minimizes increases in the NOx cap by discontinuing the acceptance of late ECT-3 forms, Level of

Activity Certification, from major sources of NOx submitted after March 3D, 2010.

The comment period closed on November 9, 2009. All testimony and comments have been

reyiewed 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 of this hearing record are maintained in the TCEQ central office at 12100 Park 35

Circle, Austin, Texas 78753. For further information, please contact Brandon Greulich at (512) 239-

4904.
PUBLIC 

NOTIFICATION AND 

PROPOSAL 
PUBLIC NOTIFICATION

Notification to the public of the proposed revisions was conducted by the following procedures:

1. Publication of notice of public hearings in the following newspapers on the date listed:

Austin American-Statesman, September 28, 2009

Houston Chronicle, September 28, 2009

2. Publication of the Notice of Public Hearings in the October 9, 2009, issue of the Texas Register

(34 TexReg 7132)

3. Correspondence forwarding the notice of public hearing to the following officials and agencies:

Speaker of the House

Lieutenant Governor

Alamo Area Council of Governments

Capital Area Planning Council

City of Austin, Mayor's Office

City of EI Paso

City of Houston, Mayor's Omce

City of Victoria Planning Department

Dallas Department of Environmental and Health Services

Dallas Department of Aviation

East Texas Council of Governments

EI Paso Metropolitan Planning Organization

Federal Highway Administration

Fort Worth Environmental Management Department
Galveston County Health District

Houston Department of Health and Human Services

Harris County Public Health and Environmental Services

Houston-Galveston Area Council

North Central Texas Council of Governments

South East Texas Regional Planning Commission

Texas Department of Transportation

Texas Transportation Institute

Travis County Judge

Arkansas Department of Pollution Control and Ecology

Louisiana Department of Environmental Quality

New Mexico Environmental Department

Oklahoma Department of Environmental Quality

U. S. Environmental Protection Agency
Example of Newspaper Classified Ad

Houston Chronicle, September 28, 2009

Ncmc:E ClI' PUIUC HEAlUNGSBY THE'TECAS

CCMMISSIDN ON I!NVIRONMBlTAL QUALrmltI

PRDPOSI!D Il!MSIONS TO 30 TAC CHAP'TBlS 101

AND 115. ANCI TO TH! STATE JMPL!MBlTATION

PLAN

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__tM .1IoCIlIDn Il1ItIIadoIDlIv or .1.._ fDr Plrtil:IpIntIln tile HlIIIl........cIM YoIdII Clrpnlc Compoulld

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wlltllI DlVlnlc CDlllPDllIId (WC) lD Unk tile 30 TAC ....nllIIIn wltIl tile CUINIlt HnnllIDn In 4Cl ClIlIa or ..._,

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Bryan W. Shaw, Ph.D., Chairman

Buddy Garcia, Commissioner

Carlos Rubinstein, Commissionet;

Mark R. Vickery, P.G., Executive Director

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Protecting Texas by Reducing andPreventing Pollution

NOTICE OF PUBLIC HEARINGS BY THE

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

ON PROPOSED REvisIONS TO 30 TAC CHAPTERS 101 AND 115, AND TO THE STATE

IMPLEMENTATION PLAN

The Texas Commission on Environmental Quality (commission) will conduct public hearings to receive

testimony regarding proposed revisions to 30 TAC Chapter 101, General Air Quality Rules, and 30 TAC

Chapter 115, Control of Air Pollution from Volatile Organic Compounds and corresponding revisions to

the state implementation plan (SIP) under the requirements of Texas Health and Safety Code, §382.017;

Texas Government Code, Chapter 2001, Subchapter B; and 40 Code of Federal Regulations §S1.102, and

the United States Environmental Protection Agency (EPA) concerning SIPs. Additi,onally, the

commission will also receive testimony regarding the proposed eight-hour ozone attainment

demonstration and reasonable further progress (RFP) demonstration for the Houston-Galveston-Brazoria

(HGB) area.

The proposed amendment to Chapter 101, Subchapter H, Division 3, Mass Emissions Cap and Trade

(MEeT) Program, would revise the definition of "Uncontrolled design capacity" to provide additional

flexibility for certain stationary diesel engines and clarify both site and facility applicability. In addition,

the proposed amendment would maintain the integrity of the nitrogen oxides (NOx) cap in the HGB

ozone nonattainment area and minimize increases in the NOx cap by discontinuing the acceptance of late

ECT-3 forms, Level of Activity Certification, from major sources of NOx submitted after March 30,

2010. (Rule Project No. 2009-019-101-EN)

The proposed amendment to Chapter 101, Subchapter H, Division 6, Highly-Reactive Volatile Organic

Compound Emissions Cap and Trade Program, would reduce the total cap amount of allowances and

revise the allocation methodology of allowances for participants in the Highly-Reactive Volatile Organic

.Compound (HRVOC) Emissions Cap and Trade Program. A proposed amendment to §101.1 would also

update the definition of volatile organic compound (VOC) to link the 30 TAC definition with the current

definition in 40 Code of Federal Regulations and correct the reportable quantity for 1,1,1,2,3,3,3-

heptafluoropropane. (Rule Project No. 2009-006-101-EN)

The proposed amendments to Chapter 115, Subchapter E, Division 4, Offset Lithographic Printing, would

reduce the VOC content limits on fountain solutions used by sources that are subject to the existing

Chapter 115 rules. The proposed rulemaking would also limit the VOC content of fountain and cleaning

solutions used by certain sources that are exempt from the existing Chapter 115 rules. (Rule Project No.

2008-019-1l5-EN) .

The proposed HGB Attainment Demonstration SIP revision contains Federal Clean Air Act-required SIP

elements, including a photochemical modeling analysis, a weight of evidence analysis, a reasonable

available control technology (RACT) analysis, a reasonably available control measures (RACM) analysis,

a motor vehicle emissions budget (MVEB) for 2018, and a contingency plan. In addition, the HoustonGalveston Area Council has committed to emissions reductions through the Voluntary Mobile Emission

Reduction Program and implementation of transportation control measures. The proposed revision also

describes the concurrently proposed rule revisions in Chapters 101 and 115. The commission is also
soliciting comments on whether it is appropriate to perfonn a 1997 eight-hour ozone standard mid-course

review analysis, and, if so, what elements should be contained in the analysis. The commission is also

seeking input on the appropriate date to submit the mid-course review. (Rule Project No. 2009-017-SIPNR) .

The proposed HGB Eight-Hour Ozone Nonattainment Area RFP SIP revision demonstrates that the 18

percent ozone precursor emissions reduction requirement will be met for the analysis period of 2002 to

2008, 9 percent between 2009 and 2011,9 percent between 2012 and 2014, 9 percent between 2015 and

2017,3 percent in 2018, and 3 percent for contingency purposes. This revision also includes a revised

MVEB for the milestone years 2008, 2011, 2014, 2017, and 2018. No new on-road mobile source

controls have been adopted as part of the plan. However, on-road mobile source emissions inventories

have been updated using the latest available data and the EPA's MOBILE6 inventory development tool.

AB a result ofthe required mobile source emission inventory updates, the MVEBs are updated as part of

this SIP revision. (Rule Project No. 2009-018-SIP-NR)

Public hearings on these proposals will be held at the following times and locations: October 28,2009,

2:00 p.m. and 6:00 p.m., in Conference Room A at the Houston-Galveston Area Council, 3555 Timmons

Lane, Houston; and in Austin on October 29, 2009, 3:00 p.m., at the Texas Commission on

Environmental Quality complex, Building E, Room 20lS, 12100 Park 35 Circle. The hearings will be

structured for the receipt of oral or written comments by interested persons. Registration will begin 30

minutes prior to each hearing. Individuals may present oral statements when called upon in order of

registration. There will be no open discussion during the hearing; however, commission staff members

will be available to discuss the proposals 30 minutes before each hearing and will answer questions before

and after the hearing.

Persons planning to attend the hearing, who have special communication or other accommodation needs,

should contact Charlotte Horn, Texas Register Team (512) 239-0779. Requests should be made as far in

advance as possible.

Comments may be submitted to Jessica Rawlings, Texas Register Team, Office of Legal Services, Texas

Commission on Environmental Quality, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to

(512) 239-4808. Electronic comments may be submitted at www5.tceq.state.tx.uslruleslecommentsl. File

size restrictions may apply to comments being submitted via the eComments system.. All comments

should reference the rule or SIP project number that the comment pertains to: Rule Project No.

2009-019-101-EN for the proposed MEer rule amendments, Rule Project No. 2009-006-101-EN for

the proposed BRVOC rule amendments, Rule Project No. 2008-019-11S-EN for the proposed VOC

rule amendments, SIP Project No. 2009-017-SIP-NR for the proposed BGB Attainment

Demonstration SIP revision and SIP Project No. 2009-018-SIP-NR for the proposed HGB RFP SIP

revision. Comments must be received by November 9, 2009. Copies of the proposed rules can be

obtained from the commission's Web site at http://www.tceq.state.tx.uslnavlrules/propose_adopt.html.

Copies ofthe proposed SIP revisions and all appendices can be obtained from the commission's Web site

at http://www.tceq.state.tx.us/implementation/airlsiplHottop.html. For further information regarding the

proposed rules and SIP revisions, please contact Ray Schubert, Air Quality Planning Section, at (512)

239-6615.

Issued in Austin, Texas, on September 23, 2009.
•

•

(TCEQ) for proposed Registration o. 40243, to construct and operate

a Type V municipal solid waste sfer station. The proposed facility,

River City Recycles, will be locate 8000 Daffan Lane, Austin, Texas

78724, in Travis County. This fa lity is requesting authorization to

recycle and transfer municipal soli waste which includes construction

and demolition waste. The regi ation application is available for

viewing and copying at the TCEQ Region II Office, 2800 S. lH 35,

Suite 100, Austin, Travis County, 78704-5712.

PUBLIC COMMENTIPUBLIC ETING. Written public comments

or written requests for a public mee g must be submitted to the Office

ofChiefClerk at the address includ d in the information section below.

Comments may also be received if public meeting is held on the facility. A public meeting will be held b the executive director ifrequested

by a member ofthe legislature wh represents the general area where

the development is to be located, 0 ifthere is a substantial public interest in the proposed development. The purpose ofthe public meeting

is for the public to provide input fo consideration by the commission,

and for the applicant and the co ission staffto provide information

to the public. A public meeting is ot a contested case hearing. The

executive director will review and nsider public comments and written requests for a public meeting s bmitted prior to the notice offinal

determination. The executive direc or is not required to file a response

to comments.

EXECUTIVE DIRECTOR ACTI . The executive director shall, after review of an application for re 'stration, determine ifthe application will be approved or denied in whole or in part. Ifthe executive

director acts on an application, the hief clerk shall mail or otherwise

transmit notice ofthe action and explanation ofthe opportunity to

file a motion to reconsider the exec tive director's decision. The chief

clerk shall mail this notice to the 0 er and operator, the public interest

counsel. to adjacent landowners as hown on the required land ownership map and landowners list, an to other persons who timely filed

public comment in response to pu lic notice. Not all persons on the

mailing list for this notice will rece ve the notice letter from the Office

ofthe Chief Clerk.

INFORMATION. Written public mments or requests to be placed

on the permanent mailing list fo this application should be submitted to the Office of the Chief lerk, MC 105, TCEQ, P.O. Box

13087, Austin, TX 78711-3088 or electronically submitted to

http;llwwwS.tceq.state.tx.uslecmn index.cfm. Individual members

of the general public may contact e Office of Public Assistance at

1-800-687-4040. General info tiOD regarding the TCEQ can be

found at our web site at www.tc.state.tx.us. Further information

may also be obtained from Ms. K n Rodewald at the address stated

above or by calling (512) 832-830 .

TRD-200904422

LaDonna CastanueJa

Chief Clerk

Texas Commission on Environmen

Filed: September 30,2009

•

Notice ofPublic Hearings on P oposed Revisions to 30 TAC

Chapter 101 and to the State plementation Plan

The Texas Commission OD Enviro ental Quality (commission) will

conduct concurrent public hearin s to receive testimony regarding

proposed revisions to 30 TAC Cha er 101, General Air Quality Rules,

Subchapter A, Definitions, and Su chapter II, Emissions Banking and

Trading, Division 6, Highly-Rea 've Volatile Organic Compound

Emissions Cap and Trade Progr ,and corresponding revisions to

the state implementation plan (S ) under the requirements of Texas

34 TexReg 7132 October 9, 2009 Texas Register

Health and Safety Code, §382.017; exas Government Code, Chapter

2001, Subchapter B; and 40 Code Federal Regulations §51.102, of

the United States Environmental P tection Agency (EPA) concerning

SIPs.

The proposed amendments to C ter 101, Subchapter A, §101.l,

Definitions, would update the de nition of volatile organic compound to link the 30 TAC defini n with the current definition in

40 Code of Federal Regulations d correct the reportable quantity

for 1,1,1,2,3,3,3-heptafluoroprop . The proposed amendment to

Chapter 101, Subchapter H, Div' ion 6, Highly-Reactive Volatile

Organic Compound Emissions Ca and Trade Program. would also

reduce the total cap amount of all wances and revise the allocation

methodology of allowances for p 'cipants in the Highly-Reactive

Volatile Organic Compound Emissi ns Cap and Trade Program. (Rule

Project No. 2009-006-101-EN)

Public hearings for this proposed emaking and corresponding SIP

revision are schedUled in conjuncti n with the proposed amendments

to Chapter 101, Subchapter II, Di ision 3, Mass Emissions Cap and

Trade (MECl) program; and Cha r 115, Subchapter E, Division 4,

Offset Lithographic Printing at the ollowing times and locations; October 28, 2009, 2:00 p.m. and 6:00 .m., in Conference Room A at the

Houston-Galveston Area Council, 555 Timmons Lane, Houston; and

in Austin on October 29, 2009,1:0 p.m. and 3:00 p.m., at the Texas

Commission on Environmental Q 'ty complex, Building E, Room

201S, 12100 Park 35 Circle. The earings will be structured for the

receipt oforal or written comments y interested persons. Registration

will begin 30 minutes prior to eac hearing. Individuals may present

oral statements when called upon order ofregistration. There will

be no open discussion during the aring; however, commission staff

members will be available to disc s the proposals 30 minutes before

each hearing and will answer que ons before and after the hearing.

Persons planning to attend the he . g, who have special communication or other accommodation ne ds, should contact Charlotte Horn,

Texas Register Team (512) 239-07 9. Requests should be made as far

in advance as possible.

Comments may be submitted to essica Rawlings, Texas Register

Team, Office ofLegal Services, Te as Commission on Environmental

Quality, MC 205, P.O. Box 130 7, Austin, Texas 78711-3087, or

faxed to (512) 239-4808. Electro ic comments may be submitted at

www5.tceq.state.tx.uslruleslecom nts!' File size restrictions may apply to comments being submitted ia the eComments system. Copies

ofthe proposed rules can be ob . d from the commission's Web site

at http://www.tceq.state.tx.uslnavli eslpropose_adopt.html. Copies

of the proposed SIP revisions all appendices can be obtained

from the commission's Web site http://www.tceq.state.tx.uslimplementation/air/sipIHottop.html. Fo further information regarding the

proposed rules and SIP revisions, please contact Ray Schubert, Air

Quality Planning Section, at (512) 239-6615.

TRD-200904274

Robert Martinez

Director. Environmental Law Divisi n

Texas Commission on Environmen JQuality

Filed: September 25, 2009

•

Notice ofPublic Hearings on Proposed Revisions to 30 TAC

Chapters 101 and 115 and to the State Implementation Plan

The Texas Commission on Environmental Quality (commission) will

conduct public hearings to receive testimony regarding proposed

revisions to 30 TAC Chapter 101, General Air Quality Rules, and

30 TAC Chapter 115, Control ofAir Pollution from Volatile Organic
•

Compounds and corresponding revisions to the state implementation

plan (SIP) under the requirements of Texas Health and Safety Code,

§382.017; Texas Government Code, Chapter 2001, Subchapter B; and

40 Code ofFederal Regulations §51.102, and the United States Environmental Protection Agency (EPA) concerning SIPs. Additionally,

the commission will also receive testimony regarding the proposed

eight-hour ozone attainment demonstration and reasonable further

progress (RFP) demonstration for the Houston-Galveston-Brazoria

(HGB) area.

The proposed amendment to Chapter 101, Subchapter H, Division 3,

Mass Emissions Cap and Trade (MECT) Program, would revise the

definition of "Uncontrolled design capacity" to provide additional flexibility for certain stationary diesel engines and clarify both site and facility applicability. In addition, the proposed amendment would maintain the integrity ofthe nitrogen oxides (NO.) cap in the HGB ozone

nonattainment area and minimize increases in the NO. cap by discontinuing the acceptance of late ECT-3 forms, Level of Activity Certification, from major sources ofNO. submitted after March 30, 2010.

(Rule Project No. 2009-819-101~EN)

The proposed amendment to Chapter 101, Subchapter H, Division

6, Highly-Reactive Volatile Organic Compound Emissions Cap and

Trade Program, would reduce the total cap amount ofallowances and

revise the allocation methodology of allowances for participants in the

Highly-Reactive Volatile Organic Compound (HRVOC) Emissions

Cap and Trade Program. A proposed amendment to §I01.1 would also

update the definition of volatile organic compound (VOC) to link the

30 TAC definition with the current definition in 40 Code of Federal

Regulations and correct the reportable quantity for 1,1,1,2,3,3,3-heptafluoropropane. (Rule Project No. 2009-806-101-EN)

The proposed amendments to Chapter 115, Subchapter E, Division 4,

Offset Lithographic Printing, would reduce the VOC content limits on

fountain solutions used by sources that are subject to the existing Chapter lIS rules. The proposed rulemaking would also limit the VOC

content offountain and cleaning solutions used by certain sources that

are exempt from the existing Chapter 115 rules. (Rule Project No.

2008-019-115~EN)

The proposed HGB Attainment Demonstration SIP revision contains

Federal Clean Air Act-required SIP elements, including a photochemical modeling analysis, a weight of evidence analysis, a reasonable

available control technology (RACT) analysis, a reasonably available

control measures (RACM) analysis, a motor vehicle emissions budget (MVEB) for 2018, and a contingency plan. In addition, the Houston-Galveston Area Council has committed to emissions reductions

through the Voluntary Mobile Emission Reduction Program and implementation oftransportation control measures. The proposed revision also describes the concurrently proposed rule revisions in Chapters 101 and 115. The commission is also soliciting comments on

whether it is appropriate to perform a 1997 eight-hour ozone standard

mid-course review analysis, and, ifso, what elements should be contained in the analysis. The commission is also seeking input on the

appropriate date to submit the mid-course review. (Rule Project No.

2009-817-SIP-~)

The proposed HGB Eight-Hour Ozone Nonattainment Area RFP SIP

revision demonstratesthat the 18 percent ozone precursor emissionsreduction requirement will be met for the analysis period of2002 to 2008,

9 percent between 2009 and 2011,9 percent between 2012 and 2014,

9 percent between 2015 and 2017, 3 percent in 2018, and 3 percent

for contingency purposes. This revision also includes a revised MVEB

for the milestone years 2008,2011,2014,2017, and 2018. No new

on-road mobile source controls have been adopted as part ofthe plan.

However, on-road mobile source emissions inventories have been updated using the latest available data and the EPA's MOBILE6 inventory

development tool. As a result ofthe required mobile source emission

inventory updates, the MVEBs are updated as part ofthis SIP revision.

(Rule Project No. 2009-818-SIP-NR)

Public hearings on these proposals will be held at the following times

and locations: October 28, 2009, 2:00 p.m. and 6:00 p.m., in Conference Room A at the Houston-Galveston Area Council, 3555 Timmons

Lane, Houston; and in Austin on October 29, 2009, 3:00 p.m., at the

Texas Commission on Environmental Quality complex, Building E,

Room 201S, 12100 Park 35 Circle. The hearings will be structured for

the receipt of oral or written comments by interested persons. Registration will begin 30 minutes prior to each hearing. Individuals may

present oral statements when called upon in order ofregistration. There

will be no open discussion during the hearing; however, commission

staffmembers will be available to discuss the proposals 30 minutes before each hearing and will answer questions before and after the hearing.

Persons planning to attend the hearing, who have special communication or other accommodation needs, should contact Charlotte Horn,

Texas Register Team (512) 239-0779. Requests should be made as far

in advance as possible.

Comments may be submitted to Jessica Rawlings, Texas Register

Team, Office ofLegal Services, Texas Commission on Environmental

Quality, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, or

faxed to (512) 239-4808. Electronic comments may be submitted at

www5.tceq.state.tx.us/ru/es/ecommentsl. File size restrictions may

apply to comments being submitted via the eComments system. All

comments should reference the rule or SIP project number that

the comment pertains to: Rule Project No. 2009-819-101-EN

for the proposed MECT rule amendments, Rule Project No.

2009-806-101-EN for the proposed HRVOC rule amendments,

Rule Project No. 2008-019-115-EN for the proposed VOC rule

amendments, SIP Project No. 2009-817-SIP-~ for the proposed

HGB Attainment Demonstration SIP revision and SIP Project

No. 2009-818-SIP-~ for the proposed HGB RFP SIP revision.

Comments must be received by November 9, 2009. Copies of

the proposed rules can be obtained from the commission's Web site

at http://www.tceq.state.tx.us/nav/ru/es/propose_adopt.htm/. Copies

of the proposed SIP revisions and all appendices can be obtained

from the commission's Web site at http://www.tceq.state.tx.us/imp/ementationlair/sip/Hottop.htm/. For further information regarding the

proposed rules and SIP revisions, please contact Ray Schubert, Air

Quality Planning Section, at (512) 239-6615.

TRD-200904267

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Filed: September 25. 2009

•

Notice ofPublic Hearings on oposed Revisions to 30 TAC

Chapter 115 and to the State I plementation Plan

The Texas Commission on Enviro ental Quality (commission) will

conduct public hearings to rece e testimony regarding proposed

revisions to 30 TAC Chapter 10 General Air Quality Rules, and

30 TAC Chapter lIS, Control of ir Pollution from Volatile Organic

Compounds and corresponding re isions to the state implementation

plan (SIP) under the requirements of Texas Health and Safety Code,

§382.017; Texas Government C ,Chapter 2001, Subchapter B;

and 40 Code of Federal Regulati §51.1 02, and the United States

Environmental Protection Agenc (EPA) concerning SIPs. Additionally, the commission will als receive testimony regarding the

INADDITION October 9, 2009 34 TexReg 7133
·11 [5haH] attach to the ECT·3H

necessary to support the proposed

This agency hereby certifies that he proposal has been reviewed

by legal counsel and found to be ithin the agency's legal authority to adopt.

Filed with the Office of the Seer ary of State on September 25,

2009.

TRD-200904273

Robert Martinez

Director, Environmental Law Divisio

Texas Commission on Environment I Quality

Earliest possible date of adoption: ovember 8, 2009

For further information, please call: 512) 23~090

• •

SUBCHAPTER H. EMISSIONS BANKING

AND TRADING

DIVISION 3. MASS EMISSIONS CAP AND

TRADE PROGRAM

30 TAC §§101.350, 101.351, 1.1.353

The Texas Commission on Environmental Quality (commission

or agency) proposes amendments to §§101.350, 101.351, and

101.353.

The amended sections 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 PROPOSED RULES

The purpose of the proposed amendments to Subchapter H, Division 3, Mass Emissions Cap and Trade Program, is to maintain the integrity of the nitrogen oxides (NO.) cap in the Houston-Galveston-Brazoria (HGB) ozone nonattainment area and

minimize increases in the NO. cap. The proposal would discontinue the acceptance of late ECT-3 forms, Level of Activity Certification, submitted in accordance with §101.36o(a) after March

30,2010, from sites defined on or before December 31,2000,

as major sources of NO., as defined in 3D TAC §117.10. Also,

the proposed rulemaking would amend the definition of "Uncontrolled design capacity" to provide additional flexibility for certain

stationary diesel engines and clarify both site and facility applicability.

The Mass Emissions Cap and Trade (MECT) program is a market-based component ofthe SIP that provides stationary sources

of NO. compliance fleXibility for the emission specifications under 30 TAC Chapter 117, while establishing a mandatory cap for

total NO. emissions from affected source categories in the HGB

ozone nonattainment area. The MECT program was adopted as

a primary control measure ofthe HGB attainment demonstration

for the one-hour ozone National Ambient Air Quality Standard

(NAAQS). The MECT program NO. cap is a product ofthe emission specifications of Chapter 117 and the submitted levels ofactivity from applicable facilities. The proposed rulemaking would

not affect the submittal of ECT-3 forms from minor sources of

NO•.

In accordance with §101.360(a), to receive an allocation of

allowances (one allowance equals one ton of NO.), sites were

required to submit an ECT-3 form with the levels of activity

from their applicable facilities by June 30, 2001. Applicable

facilities with historical actual emission data were allocated

allowances based on actual levels of activity while other applicable facilities without historical actual emission data were

allocated allowances based on permitted allowable emissions.

Representatives of facilities with allocations based on permitted

emissions are required to submit a second ECT-3 form once

a historical emissions baseline is established to convert their

permit-based allocation to a historical level of activity based

allocation in accordance with §101.360(b)(1). The current rUle

doesn't address late submittals of ECT-3 forms. Therefore,

a site that has never complied with the MECT program could

submit a late ECT-3 form in accordance with §101.36o(a) and

receive an allocation of allowances, thus, potentially increasing

the NO. cap. To maintain the integrity and minimize increases

in the NO. cap, the proposed rulemaking would discontinue the

acceptance of late 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 would have to obtain allowances from the

market instead of receiving an allocation of allowances.

Informal comments from industry were received regarding clarification on "air pollution control equipment" in the definition of"Uncontrolled design capacity." Therefore, the proposed rulemaking

PROPOSED RULES October 9, 2009 34 TexReg 7009
would clarify the definition of "Uncontrolled design capacity" by

amending this definition to "Uncontrolled design capacity to emit"

as the maximum capacity of a facility to emit NO. without consideration for post-combustion control equipment, enforceable limitations, or operational limitations. The addition of "post-combustion control equipment" to the proposed definition would account

for any equipment that can be removed without preventing the

facility from operating. NO. control equipment that is not considered post-combustion control equipment, such as low-NO. burners, would be considered when calculating the uncontrolled design capacity to emit.

In 2008, Hurricane Ike increased awareness of the need for

backup generators during extended power outages for activities

such as maintaining water pressure at water treatment plants.

To provide additional flexibility to sites that would potentially

become subject to the MECT program because of a backup

generator, the new sentence to §101.350(14) proposes a new

option for calculating the uncontrolled design capacity to emit

from applicable diesel engines operating less than 100 hours

per year in non-emergency situations and not meeting the applicable EPA Tier standards. Under this proposed rulemaking, a

minor source of NO. with an applicable diesel engine WOUld, depending on the site's collective uncontrolled design capacity to

emit, meet the emission specification listed in §117.2010 either

by participating in the MECT program and acquiring allowances

or not participating in the MECT program and acquiring emission

reduction credits or discrete emission reduction credits.

To clarify site and facility applicability, the proposed rUlemaking

would restructure §1 01.351 to explain that sites must detennine

their status as a minor or major source of NO. in Chapter 117 before detennining applicability of their facilities in the MECT program. Along with the restructuring of §101.351, proposed subsection (c) would clarify a site's duration in the MECT program.

SECTION BY SECTION DISCUSSION

SUBCHAPTER H: EMISSIONS BANKING AND TRADING

DIVISION 3: MASS EMISSIONS CAP AND TRADE PROGRAM

In addition to the proposed amendments to §§1 01.350, 101.351,

and 101.353 discussed elsewhere in this preamble, the commission also proposes to make various stylistic non-substantive

changes to update rule language to current Texas Register style

and fonnat requirements, as well as establish more consistency

in the rules. Such changes include appropriate and consistent

use of acronyms, punctuation, section references, and certain

tenns such as "must" and "shall." These changes are non-substantive and generally are not specifically discussed in this preamble.

§101.350. Definitions.

The proposed amendment to §101.350(14) would revise the

definition of "Uncontrolled design capacity" to "Uncontrolled

design capacity to emir' as the maximum capacity of a facility

to emit NO. without consideration for post-combustion control equipment (e.g., a selective catalytic reduction system),

enforceable limitations (e.g., pennit restrictions, such as a restriction on operating hours per year), or operational limitations

(e.g., using a number lower than the maximum rated capacity).

The addition of "post-combustion control equipment" to the

proposed definition would account for any equipment that can

be removed without preventing the facility from operating. NO.

control equipment that is not considered post-combustion con34 TexReg 7010 October 9,2009 Texas Register

trol equipment, such as low-NO. burners, would be considered

when calculating the uncontrolled design capacity to emit.

The proposed amendment to §101.350(14) would allow flexibility for calculating the uncontrolled design capacity to emit

for stationary diesel engines that are modified, reconstructed,

or relocated, operate less than 100 hours per year (based on

a rolling 12-month average) in non-emergency situations, and

do not meet the applicable EPA Tier standards. In conjunction

with proposed §101.351(c), proposed §101.350(14) would allow

minor sources of NO. not subject to the MECT program the option to calculate the uncontrolled design capacity to emit for an

applicable stationary diesel engine using the lower of 876 hours

or a federally enforceable limitation on total hours of operation.

From the proposed new language, an applicable site with an

applicable stationary diesel engine could meet the emission

specification listed in §117.2010 either by participating in the

MECT program and obtaining allowances or not participating in

the MECT program and obtaining emission credits or discrete

emission credits, depending on the site's collective uncontrolled

design capacity to emit.

For example, on July 21, 2010, a municipal utility district (MUD)

installs a stationary diesel engine for use as a backUp generator

to maintain water pressure during power outages. In this example, the MUD does not have any other applicable facilities subject to §117.2010 and is not subject to the MECT program prior

to the installation of this engine. The diesel engine is rated at

150 horsepower, has an emission factor of 7.0 grams of NO. per

horsepower-hour, and is pennitted to operate at most 876 hours

per year. The engine must comply with the emission specifications listed in §117.2010 since this engine does not meet the

criteria necessary to be considered exempt under §117.2003.

Therefore, the instal/ation of the backup generator requires recalculation ofthe site's collective uncontrolled design capacity to

emit to detennine applicability in the MECT program. Proposed

§101.350(14) would allow using 876 hours when calculating the

uncontrolled design capacity to emit for the diesel engine, therefore equaling 1.01 tons of NO. per year. The MUD in this example could also use the conventional method for calculating the

uncontrolled design capacity to emit using 8,760 hours, therefore equaling 10.14 tons per year. The MUD is subject to the

MECT program if the collective uncontrolled design capacity to

emit is ten tons or more per year of NO•. Since the MUD has the

option of having a collective uncontrolled design capacity to emit

above or below ten tons per year, the MUD could either participate in the MECT program and obtain allowances to cover the

actual emissions of NO. from the diesel engine or obtain emission credits or discrete emission credits for the diesel engine to

meetthe emission specifications listed in §117.2010. Under proposed §101.351(c), if this MUD participates in the MECT program, then this site would remain subject to the MECT program

until pennanently shut down.

§101.351. Applicability.

The proposed amendment to §101.351(a) would require a site

first to detennine its status as a minor or major source of NO. in

Chapter 117. If the site is a major source of NO., the facilities

with emission specifications listed in §117.310 or §117.1210 are

applicable to the MECT program. If the site is a minor source

of NO., the collective uncontrolled design capacity to emit is

calculated from the facilities with emission specifications in

§117.2010. Ifthe collective uncontrolled design capacity to emit

is ten tons or more per year of NO., then the site is SUbject to

the MECT program.
Proposed §101.351 (c) states that once a site becomes subject

to the MECT program, the site will remain SUbject to the MECT

program until permanently shut down. Proposed subsection (c)

would clarify that a site's collective uncontrolled design capacity

to emit will not affect the site's applicability once subject to the

MECT program. In addition, proposed subsection (c) would also

clarify that once a minor source of NO. is SUbject to the MECT

program, any of the facilities at the site subject to the emission

specifications in §117.2010 are subject to the MECT program

until the site is permanently shut down.

§101.353. Allocation of Allowances.

The proposed amendment to §1 01.353(b) would reqUire sites

defined on or before December 31, 2000, as major sources

of NO. with facilities that meet the requirements to receive

allowances in accordance with §101.360(a), but have not submitted an ECT-3 form by March 30, 2010, to obtain allowance

for these facilities from the mar1<et. Under the existing rule,

ECT-3 forms were considered late if submitted in accordance

with §101.360(a) after June 30, 2001, however, the forms were

accepted. Under the proposed amendment, if an ECT-3 form is

submitted in accordance with §101.360(a) and is received after

March 30, 2010, from a site defined on or before December 31,

2000, as a major source of NO., then the ECT-3 form would not

be accepted and the facilities listed on the ECT-3 form would

be required to obtain allowances from the mar1<et instead of

receiving an allocation of allowances based on historical actual

emission data or an allocation of allowances based on permitted

allowable emissions.

The existing rule language regarding the 9Ck:lay submittal deadline for an ECT-3 form from newly applicable sites or facilities

would not be affected by the proposed rulemaking. Also, the

proposed rulemaking would not affect ECT-3 forms submitted in

accordance with §101.360(a) after March 30,2010, from minor

sources of NO•.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

Nina Chamness, Analyst, Strategic Planning and Assessment,

has determined that, for the first five-year period the proposed

rules are in effect, no significant fiscal implications are anticipated for the agency or other units of state or local governments

as a result of administration or enforcement of the proposed

rules. The proposed rules clarify certain provisions ofthe MECT

program.

The proposed rules amend Chapter 101 provisions pertaining to

the MECT program. The proposed rules will: eliminate the allocation of allowances to major sources of NO. in the HGB ozone

nonattainment area that have not submitted proper certification

regarding their level ofactiVity by March 30, 2010; revise adefinition for calculating "Uncontrolled design capacity" to allow minor

sources of NO. not in the MECT program the option to use emission credits, discrete emission credits, or MECT allowances for

modified, reconstructed, or relocated stationary diesel engines

operating less than 100 hours per year in non-emergency situations and not meeting the emission standards for that EPA Tier;

and clarify the policy that once a minor or major source of NO

participates in the MECT program, its participation is permanent

until it is permanently shut down.

In general, the proposed rules are not expected to have a significant fiscal impact on local govemments in the HGB ozone

nonattainment area. Local govemments are not typically major

sources of NO. emissions and eliminating the allocation ofemission allowances after March 30, 2010, should not impact them.

However, due to recent legislative changes, some water systems and wastewater systems in the HGB ozone nonattainment

area may be affected. Those water and wastewater systems

that install diesel engines to ensure emergency operations during extended power outages and are minor sources of NO. not

in the MECT program would benefit from the additional flexibility for calculating the uncontrolled design capacity to emit for a

stationary diesel engine that is not exempt from the provisions of

§117.2003(a)(2)(I) because it does not meet the EPA Tier standard. If the proposed new calculation methodology is chosen

and the site has a collective uncontrolled design capacity to emit

less than 10 tons of NO. per year, the water or wastewater system would have the option to obtain emission credits or discrete

emission credits to meet emission specifications. If the existing

calculation methodology is chosen and the site has a collective

uncontrolled design capacity to emit 10 tons or more of NO. per

year, then the site must participate in the MECT program and obtain allowances. Mar1<et prices of MECT allowances, emission

credits, and discrete emission credits vary according to mar1<et

conditions. The Figure in this preamble estimates the costs of

the allowances and credits according to current mar1<et prices.

Figure: 30 TAC Chapter 101-Preamble

Staff estimates that there may be as many as 3,000 public water

systems and wastewater systems in the HGB ozone nonattainment area.

PUBLIC BENEFITS AND COSTS

Nina Chamness also determined that for each year of the first

five years the proposed rules are in effect, the public benefit anticipated from the changes seen in the proposed rules will be

a restriction on potential increases to the NO. cap in the HGB

ozone nonattainment area and continued protection of public

health and the environment in that area.

Staff estimates that there are 350 sites in the MECT program. If

a major source of NO. does not submit the proper certification

regarding their level of actiVity by March 30, 2010, they will be

required to obtain MECT allowances. Minor sources of NO. not

in the MECT program would benefit from the additional flexibility for calculating the uncontrolled design capacity to emit for a

stationary diesel engine that is not exempt from the provisions of

§117.2003(a)(2)(I) because it does not meet the EPA Tier standard. If the proposed new calculation methodology is chosen

and the site has a collective uncontrolled design capacity to emit

less tha~ 10 tons of NO. per year, the site would have the option

to obtain emission credits or discrete emission credits to meet

emission specifications. If the existing calculation methodology

is chosen and the site has a collective uncontrolled design capacity to emit 10 tons or more of NO. per year, then the site must

participate in the MECT program and obtain allowances. Mar1<et

prices of MECT allowances, emission credits, and discrete emission credits vary according to mar1<et conditions. The Figure in

this preamble estimates the costs of the allowances and credits

according to current mar1<et prices.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated for small or microbusinesses as a result of the proposed rules. Small businesses

do not typically participate in activities that would qualify as a

major source of NO•. Small businesses that might be classified

as a minor source of NO. in the HGB ozone nonattainment area

will see the same flexibility as other minor sources of NO. ifthey

PROPOSED RULES October 9, 2009 34 TexReg 7011
choose to install a stationary diesel engine that does not meet

the EPA Tier standards.

SMALL BUSINESS REGULATORY FLEXIBILITY ANALYSIS

The commission has reviewed the proposed rulemaking and determined that a small business regulatory flexibility analysis is not

required because the emissions banking and trading program is

a component of the state's plan to protect the environment and

reduce risks to human health from environmental exposure to

air pollutants, and the proposed rules do not adversely affect a

small or micro-business in a material way for the firSt five years

that the proposed rules are in effect.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission has reviewed the proposed rulemaking and determined that a local employment impact statement is not reqUired because the proposed rules do not adversely affect a local economy in a material way for the first five years that the

proposed rules are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the ruJemaking action in light of the

regulatory analysis requirements of Texas Government Code,

§2001.0225, and detennined that the action is not subject to

§2001.0225 because it does not meet 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

~he economy, a sector ofthe economy, productivity, competition,

Jobs, the environment, or the public health and safety of the state

or a sector of the state. The amendments to Chapter 101 are not

specifically intended to protect the environment or reduce risks

to human health from environmental exposure to air pollutants;

~ft!'l0ugh, the und~rlying emissions banking and trading program

IS Intended to achieve these goals. The primary purpose of this

rulemaking action is to maintain the integrity of the NO cap in

the HGB. ozone nonattainment area by minimizing potential increases In the cap, to amend the definition of "Uncontrolled design capacity" to "Uncontrolled design capacity to emif' for addition~1 clarity and to prOVide additional flexibility for certain diesel

engines, and to clarify site and facility applicability.

None ofthese amendments place additional financial burdens on

the regulated community. The first purpose ofthis proposed rulemaking is to maintain the integrity of the NO cap and minimize

cap increases, by discontinUing the accep~nce of late ECT-3

fonns submitted in accordance with §101.360(a) after March 30

2010, from sites defined on or before December 31 2000 a~ major sources of NO•. Although a major source of NO that has

not submitted its ECT-3 fonn by March 30, 2010, would have to

purchase MECT allowances, the commission has not received

any late ECT-3 fonns since before 2003 from a major source of

NO.; therefore, it is unlikely that anyone who needs to submit

ECT-3 fonns has not done so. The other purpose of this proposed rulemaking is to provide additional flexibility to sites that

would ent':lr the MECT program because of a backUp generator,

by proposing a.new option. for calculating the uncontrolled design

capacity to emit from ap~hcable diesel engines that operate less

than 100 hours per year In non-emergency situations and do not

meet the appli~~le EPA 1!e.r.standards. This proposed change

would offer additional .flexlbillty for potential applicability of the

ME~T program to a Wider range of sources and would give potentially affected sources additional options instead of requiring

them to participate in the MECT program. Thus, the rulemaking

34 TexReg 7012 Octoher 9,2009 Texas Register

action does not affect in a material way the economy, a sector of

the economy, productivity, competition, jobs, the environment, or

the public health and safety of the state or a sector of the state.

As defined in the Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: exceed a standard set by federal law, unless the rule is specifically

required by state law; exceed an express requirement of state

law, unless the rule is specifically required by federal law; 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 adopt

a rule SOlely under the general powers of the agency instead

of under a specific state law. This rulemaking action does not

meet any of these four applicability requirements of a "major environmental rule." Specifically, the proposed amendments to the

MECT program in this rulemaking action were developed to provide flexibility in meeting the ozone NMOS set by the EPA under 42 United States Code (USC), §7409, and therefore meet

a federal requirement. This rulemaking action does not exceed

an express requirement of state law or a requirement of a delegation agreement, was not developed solely under the general

powers of the agency, but was specifically developed to meet

the NMOS established under federal law and authorized underTexas Health and Safety Code (THSC), §§382.011, 382.012,

and 382.017, as well as under 42 USC, §7410(a)(2)(A).

The commission invites pUblic comment regarding the draft regulatory impact analysis determination during the public comment

period.

TAKINGS IMPACT ASSESSMENT

The commission evaluated the proposed rulemaking and perfonned an assessment of whether Texas Government Code

Chapter 2007, is applicable. The proposed amendments to th~ MECT program would provide additional flexibility for certain

sites in meeting the ozone NMOS set by the EPA under 42

US~, §7409, and also limit increases in the NO. cap. PromUlgatIon and enforcement of the amendments will not burden

private real property. The proposed amendments do not affect

private property in a manner that restricts or limits an owner's

right to the property that would otherwise exist in the absence of

a governmental action. Additionally, the credits and allowances

that would be affected by these proposed amendments are

not property rights. Consequently, this rulemaking action does

not meet the definition of a taking under Texas Government

Code, §2007.002(5). Although the proposed amendments do

not directly prevent a nuisance or prevent an immediate threat

to life or property, they do prevent a real and substantial threat

to public health and safety, and partially fulfill a federal mandate

under 42 USC, §7410. Specifically, the emission limitations

and control requirements within these rules were developed in

order to meet the one-hour ozone NMOS set by the EPA under

42 USC, §7409. States are primarily responsible to ensure

attainment and maintenance of the NMOS 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 NMOS through

control programs directed to sources of the pollutants involved.

Ther~~~, t~e purpos~ of this proposed rulemaking action is

to minimize Increases In the NO cap and to provide additional

flexibility for certain sites to meet the ozone NMOS set by the

EPA. under 42 USC, §7409. Consequently, the exemption that

applies to these proposed amendments is that of an action

reasonably taken to fulfill an obligation mandated by federal
law. Therefore, this rulemaking action will not constitute a taking

under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission determined that this rulemaking action relates

to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code,

§§33.201 et seq.), and the commission rules in 30 TAC Chapter 281, Subchapter B, conceming Consistency with the Texas

Coastal Management Program. As required by §281.45(a)(3)

and 31 TAC §505.11 (b)(2), relating to Actions and RUles SUbject

to the Coastal Management Program, commission rules goveming air pollutant emissions must be consistent with the applicable

goals and policies of the CMP. The commission reviewed this

action for consistency with the CMP goals and policies in accordance with the rules of the Coastal Coordination Council and

determined that the action is consistent with the applicable CMP

goals and policies. The CMP goal applicable to this rulemaking

action is the goal to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC §501.12(1)). The proposed amendments

update a definition and maintain the integrity of the NO. cap. No

new sources of air contaminants will be authorized and the revisions will maintain the same level of emissions control as previous rules. The CMP policy applicable to this rUlemaking action

is the policy that commission rules comply with federal regulations in 40 Code of Federal Regulations (CFR), to protect and

enhance air quality in the coastal areas (31 TAC §501.14(q)).

This rulemaking action complies with 40 CFR Part 51, Reejuirements for Preparation, Adoption, and Submittal of Implementation Plans. Therefore, in accordance with 31 TAC §505.22(e),

the commission affirms that this rulemaking action is consistent

with CMP goals and policies.

Written comments on the consistency of this rulemaking may be

submitted to the contact person at the address listed under the

SUBMITIAL OF COMMENTS section of this preamble.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING

PERMITS PROGRAM

These amendments will not require any changes to outstanding

federal operating permits.

ANNOUNCEMENT OF HEARINGS

The commission will hold public hearings on this proposal in conjunction with the HGB 1997 Eight-Hour Ozone Standard Attainment Demonstration and HGB 1997 Eight-Hour Ozone Reasonable Further Progress SIP revisions, Control Techniques Guidelines rulemaking, and the Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program revisions in Houston

on October 28, 2009, at 2:00 p.m. and 6:00 p.m. in Conference

Room Aatthe Houston-Galveston Area Council, located at 3555

Timmons Lane, and in Austin on October 29, 2009, at 3:00 p.m.

in Building E, Room 201 S, at the commission's central office located at 12100 Pari< 35 Circle. The hearing is structured for the

receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order

of registration. Open discussion will not be permitted dUring the

hearing; however, commission staff members will be available to

discuss the proposal 30 minutes prior to the hearing.

Persons who have special communication or other accommodation needs who are planning to attend the hearing shOUld contact

Charlotte Horn, Office of Legal Services at (512) 239-0779. Requests should be made as far in advance as possible.

SUBMITIAL OF COMMENTS

Comments may be submitted to Jessica Rawlings, MC 205,

Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087,

or faxed to (512) 239-4808. Electronic comments may be

submitted at: http://www5.tceq.state.tx.uslruleslecommentsl.

File size restrictions may apply to comments being submitted

via the eComments system. All comments should reference

Rule Project Number 2009.Q19-101-EN. The comment period

closes November 9, 2009. Copies of the proposed rulemaking can be obtained from the commission's Web site at

http://www.tceq.state.tx.uslnav/ruleslpropose_adopt.html. For

further information, please contact Brandon Greulich, Air Quality

Planning Section, (512) 239-4904.

STATUTORY AUTHORITY

The amendments are proposed underTexas water Code (lWC),

§5.102, conceming General Powers, that provides the commission with the general powers to carry out its duties under the

lWC; lWC, §5.103, concerning Rules, that authorizes the commission to adopt rules necessary to carry out its powers and

duties under the lWC; TWC, §5.105, conceming General Policy, that authorizes the commission by rule to establish and approve all general policy of the commission; and under THSC,

§382.017, conceming Rules, that authorizes the commission to

adopt rules consistent with the policy and purposes of the Texas

Clean AirAct. The amendments are also proposed under THSC,

§382,002, conceming 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, conceming General Powers

and Duties, that authorizes the commission to control the quality of the state's air; and §382.012, 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 proposed under THSC, §382.016,

conceming 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 proposed under Federal Clean

Air Act (FCAA), 42 USC, §§7401 et seq., which requires states

to submit SIP revisions that specify the manner the NAAQS will

be achieved and maintained within each air quality control region

of the state.

The amended sections implement THSC, §§382.002, 382.011,

382.012, 382.016, and 382.017, and FCAA, 42 USC, §§7401 et

seq.

§lOl.350. Definitions.

The following words and tenns, when used in this division (relating

to Mass Emissions Cap and Trade Program), will [;- 5haH] have the

following meanings, unless the context clearly indicates otherwise.

(1) Adjustment period--A period oftime, beginning on the

first day ofoperation ofa facility and ending no more than 180 consecutive days later, used to make corrections and adjustments to achieve

normal technical operating characteristics ofthe facility.

(2) Allowance-The authorization to emit one ton ofnitrogen oxides, expressed in tenths ofa ton, during a control period.

PROPOSED RULES October 9, 2009 34 TexReg 7013
(3) Authorized account representative--The responsible

person who is authorized, in writing, to transfer and otherwise manage

allowances.

(4) Banked a1lowance--An allowance that [whieh] is not

used to reconcile emissions in the designated year of allocation, but

that [whieh] is carried forward for up to one year and noted in the compliance or broker account as "banked."

(5) Broker--A person not required to participate in the requirements ofthis division (relating to Mass Emissions Cap and Trade

Program) who 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 (relating

to Mass Emissions Cap and Trade Program).

(7) Compliance account-The account where allowances

held by a facility or multiple facilities at a single site are recorded for

the purposes of meeting the requirements of this division (relating to

Mass Emissions Cap and Trade Program).

(8) Control period--The 12-month period beginning January I and ending December 31 ofeach year. The initial control period

begins January I, 2002.

(9) Existing Facility-A new or modified facility that either

has submitted an application for a permit under Chapter 116 ofthis title

(relating to Control of Air Pollution by Permits for New Construction

or Modification) that [whieh] the executive director has determined to

be administratively complete before January 2, 2001, or has qualified

for a permit by rule under Chapter 106 ofthis title (relating to Permits

by Rule) and commenced construction before January 2,2001.

(10) Houston-Galveston-Brazoria (HGB) ozone nonattainment area-MAs defined in §101.1 ofthis title (relating to Definitions).

(11) Level of aetivity-The amount of activity at a facility

measured in terms ofproduction, fuel use, raw materials input, or other

similar units.

(12) Person-Forthe purpose ofissuance ofallowances under this division (relating to Mass Emissions Cap and Trade Program),

a person includes an individual, a partnership oftwo or more persons

having a joint or common interest, a mutual or cooperative association,

or a corporation.

(13) Site-As defined in §122.10 of this title (relating to

General Definitions).

@ Uncontrolled design capacity to emit--The maximum

capacity of a facility to emit nitrogen oxides without consideration

for post-combustion pollution control equipment, enforceable limitations, or operational limitations. The owner or operator of a stationary diesel engine may use the lower of 876 hours or a federally enforceable limitation on total hours of operation to calculate uncontrolled design capacity to emit ifthe engine would otherwise be exempt from Chapter 117, Subchapter D, Division 1 ofthis title (relating to Houston-Galveston-Brazoria Ozone Nonattainment Area Minor

Sources) under §117.2003(a)(2)ill ofthis title (relating to Exemptions)

except that the engine does not meet the emission standard requirements of §1I7.2003(a)(2)Q)(ii) ofthis title.

UBeBftB'elleaeesigft ellplleity The mlHfimum tlIlpIlB-

*y-efit.faeility-teemitit pBlhitsBtwithettff'egIlI'd te tmy- eBfereeable ef

physiealopel'QtioBallimiiaaollS iBell:lEIiBg ftip I'olltitioft eeBtfel.

meBt:t

§101.35J. Applicability.

34 TexReg 7014 October 9,2009 Texas Register

(a) This division applies to sites [itli fIleilities whieh emit flitF6gefHHtiEles fN9,,~] in the Houston-Galveston-Brazoria ozone nonattainment area that: [;·titiefiBeEliBflW,-l-efthistitlefrelatiBgtef)efiflitieftstwhiehere5tibjeeftethe emissi6B speeifielltiBBstfftdef §§117.31g,

117.1219, ef 117.2g1g efthistitlefFelatiBgte EmissiBft SpeeifieatiBffS

fef AttIlimBeftt DemBnstfBtiBft-ami EmissiBft Speeifie&tiBffS) -amiwhieh

are;-]

(I) meet [leeIlteEI itt it 5ite whieh meets] the definition of

! major source of nitrogen oxides (NO,), as defined in §117.10 of

this title (relating to Definitions), with iacilities subject to §117.310

or §1I7.1210 of this title (relating to Emission Specifications for Attainment Demonstration); or

(2) do not meet the definition of a major source ofNO" as

defined in §117.10 ofthis title, and have facilities subject to §117.201O

ofthis title (relating to Emission Specifications) with a collective uncontrolled design capacity to emit from these facilities of [leeIlteEI itt

it5ite where they eeileetively htwe it& l:IfteeBtFellea tiesig& to

emit] ten tons or more per year ofNOx'

(b) A site that [whieh] met the definition of major source as

of December 31, 2000, must [5heH] always be classified as a major

source for purposes ofthis chapter. A site that [whieh] did not meet the

definition ofmajorsource (i.e., was a minor source, or did not yet exist)

on December 31,2000, but that [whieh] at any time after December

31, 2000~ becomes a major source, must [5hIllI] from that time forward

always be classified as a major source for purposes ofthis chapter.

Once a site becomes subject to the requirements ofthis division, the site will remain subjectto this division until the site has been

permanently shut down.

§lOJ.353. Allocation ofAlluwances.

.(a) Allowances will be deposited into compliance accounts according to the following equation except as provided in subsection (b)

or (h) ofthis section.

Figure: 30 TAC §101.353(a) (No change.)

@ The owner or operator ofthe following facilities shall ac·

quire allowances for each control period or the annual allocation rights

from facilities already participating under this division in accordance

with §101.356 ofthis title (relating to Allowance Banking and Trading):

ill new and/or modified facilities that have submitted, under Chapter 116 of this title (relating to Control of Air Pollution by

Permits for New Construction or Modification), an application that the

executive director has not determined to be administratively complete

before January 2, 200Ii

ill new and/or modified facilities that qualified for a permit

by rule under Chapter 106 ofthis title (relating to Permits by Rule) and

have not commenced construction before January 2, 200Ii

ill facilities in operation prior to January 1, 1997, located

at a site defined on or before December 31, 2000, as a major source of

nitrogen oxides (NO,), as defined in §117.l0 ofthis title (relating to

Definitions), that have not submitted a ECT-3 Form, Level ofActivity

Certification, in accordance to §I01.360(a)(l) ofthis title (relating to

Level ofActivity Certification) by March 30, 2010i

ill new and/or modified facilities located at a site defined

on or before December 31, 2000, as a major source ofNOT" as defined

in §117.10 of this title, that submitted a permit application that was

determined administratively complete before January 2, 2001, but have

not submitted an ECT-3 Form in accordance to §101.360(a)(2) ofthis

title by March 30, 2010; and
ill new and/or modified facilities located at a site defined

on or before December 31, 2000, as amajorsource ofNo., as defined in

§117.10 ofthis title, that qualified for a permit by rule ano commenced

construction before January 2, 2001, but have not submitted an ECT·3

Form in accordance to §101.360(a)(2) ofthis title by March 30, 2010.

HfitBeWtiBdIeflBedified~~hIIs sw,lBitted, tilt6ef .J.M ef this title (rellltiftg t& efAif Pellutiea by

Pefmi.t fef New CeBsl:FHetieft ef MedifieatieB), tift llfll'lielltieB whieh

.tfte exeeati¥e ilifeetef hils Bet deteFftlifted t& be admiftistf&ti'lely eeHIplete befefe ltimitify 2OOl-; eF hils qtlalified fef it by flIle tilt6eF .J% efthis title (I'tlllltiftg t& PeFftI:itsby eEl hils Bet

eelBBleBeed eeasl:FHeaea -gefefe .Ja:IitHIfy 2OOl-; allevlltftees fef eaelt

eeatfeljMlfiedet'thtHtftftl:Hll· alleelltieft fights shallbe &eqtlil'tld 4femfaeiIitiestilfetldy-JlIIflieil'atiftg tHKief this di'lisieft; et' itt lleeerdaBee witft

§I91.3S6(g) efthistHl&(felatiftgt&,AJlevlltftee BllIiIBBg _ Tradiftg).]

(c) If actual emissions ofNO. [BitfegeftilXities] during a control period exceed the amount of allowances held in a compliance account on March I 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 an additional

10%. This does not preclude additional enforcement action by the executive director.

(d) Allowances will be allocated by the executive director,

who will deposit allowances into each compliance account:

(1) initially, by January 1,2002; and

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

(e) The annual deposit for any control period may be adjusted

by the executive directorto reflect new or existing state implementation

plan requirements.

(f) Allowances may be added or deducted by the executive director from compliance accounts following the review ofreports required under §101.359 ofthis title (relating to Reporting).

(g) The owner or operator ofa facility may, due to extenuating

circumstances, request a baseline period more representative ofnormal

operation as determined by the executive director. Applications for

extenuating circumstances must be submitted by the owner or operator

ofthe facility to the executive director:

(1) no later than June 30, 2001L to request an alternative

three consecutive calendar year period for facilities in operation prior

to January I, 1997;

(2) no later than 90 days after completion ofthe baseline

periodto request up to two additional calendaryearsto establish a baseline period for facilities whose baseline as described by variable (2)(C)

listed in the figure contained in subsection (a) ofthis section is not complete by June 30,2001; or

(3) at any time as authorized by the executive director.

(h) Allowances calculated under subsection (a) ofthis section

will continue to be based on historical activity levels, despite subsequent reductions in activity levels. If allowances are being allocated

based on allowables andthe facility does not achieve two complete consecutive calendar years ofactual level ofactivity data, then allowances

will not continue to be allocated ifthe facility ceases operation or is not

built.

This agency hereby certifies that the proposal has been reviewed

by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 25,

2009.

TRD-200904266

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: November 8, 2009

For further information, please call: (512) 239-0177

CHAPTER • 1 • 115. CONntOL OF AIR

POLLUTION FROM vOtTILE ORGANIC

COMPOUNDS

SUBCHAPTER E. S01· NT-USING

PROCESSES

DIVISION 4. OFFSET ITHOGRAPHIC

PRINTING I

30 TAC §§115.440 -115.443, l15.445, 115.446, 115.449

The Texas Commission on EnJronmental Quality (commission

or agency) proposes amendrrents to §§115.440, 115.442,

115.443, 115.445, 115.446, aod 115.449; and proposes new

§115.441. I

If adopted, the sections will b~ submitted to the United States

Environmental Protection Agenq:y (EPA) as a revision to the state

implementation plan (SIP). I

BACKGROUND AND SUMM4RY OF THE FACTUAL BASIS

FOR THE PROPOSED RULE$

The 1990 Federal Clean Air Actl(FCAA) Amendments (42 United

States Code (USC), §§7401 et:seq.) require the EPA to establish primary National Ambient f6.ir Quality Standards (NAAQS)

that protect public health and to designate areas exceeding the

NAAQS as nonattainment are$s. For each designated nonattainment area, the state is req~ired to submit a SIP revision to

the EPA that provides for attainment and maintenance of the

NAAQS. t'

FCAA, §172(c)(1) requires tha the SIP incorporate all reasonably available control measure , including reasonably available

control technology (RACT), toT sources of relevant pollutants.

The EPA defines RACT as th~ lowest emission limitation that

a particular source is capable !of meeting by the application of

control technology that is reasqnably available considering technological and economic feasiqility (44 Federal Register 53761,

September 17, 1979). For n41nattainment areas classified as

moderate and above, FCAA, !§182(b)(2) requires the state to

submit a SIP revision that impEments RACT for volatile organic

compound (VOC) emission so rces addressed in a control techniques guidelines (CTG) docu ent issued between November

15, 1990, and the area's attai~ment date.

CTG documents provide inforfnation to assist states and local

air pollution control authoritiesIin determining RACT for specific

emission sources. CTG documents describe the EPA's evaluation of available information, i6cluding emission control options

and associated costs, and proVide the EPA's RACT recommendations for controlling emiSSii'S from these sources. CTG documents do not impose any leg lIy binding regulations or change

any applicable regulations. PA guidance on RACT indicates I

,

PROPOSED RULES October 9, 2009 34 TexReg 7015
iFigure: 1TAC §81.152(a)

IThe formlla lor eslinatIng lumout lor the 20 joint prtmary _nsIs:

Where: A =the percentage of voter tumo t for governor or another statewide race In the

2006 party primary (percentage is the sum of all votes cast for all candidates for

governor or other statewide office In the 2006 primary divided by the number of

registered Yoters).

. I

B =the number of registered Yote as of October 2009.

C =25% of the number resulting en you multiply A x B.

D =Other partYs estimated tumo

E =Preliminary estimated 2010 mout for Joint-Primary Election.

Figure: 30 TAC Chapter 101-Preamble

Estimated Cost ofMECI' allowances 5500 - 53.000 per allowance per year or

$75,000 - S150,000 per allowance for

Estimated Cost of Bmission Reduction 53,000 - 5100.000 perton per year

Credits

Estimated Cost of Discrete Emission 51,000 to S10,000 per ton

Reduction Credits

TABLES AND GRAPHICS October 9, 2009 34 Tex.Reg 7109
WRITTEN AND 

ORAL TESTIMONY 
Reference Number

W-l

W-2

W-3

W-4

INDEX OF WRIITEN TESTIMONY

Submitted by

Wendi Hammond, on behalf ofKIDS for Clean Air, the

Sustainable Energy and Economic Development (SEED)

Coalition, the Clean Air Institute ofTexas, and herself

National Aeronautics and Space Administration (NASA)

Brandt Mannchen, Sierra Club, Lone Star Chapter and the

Regional Group

Guy Donaldson, United States Environmental Protection Agency
11/89/2BB9 17~32 469241B438 ' HAMMOND PAGE 81/82

W-1

f

PH: ( )74&8540

LAwOma: OFWENDI HA:M:MOND

7325 Augusta Circle

Plano, TX 75025

Wendi(glTexas~vU:onmeIltalLa.w.net'

RECEIVED

NOV 09lUln:I

AIR QUALITY

DIVISION

lX: (469) 2-f1..04S0

November 9, 2009

,.

HGB AUalnment DemonstraUon SIP, Revision; Project No. 200S-017-SIP·NR

HGP Reas0~able Further Progress SIP RevIsion; Project No. 2009-01~IP-NR

Dear Lola', rown and W~Jker Williamson;

VIA FAX: (512) 239-5687

-7J' Attn: Lola Brown, and

Attn: Wallfr Wilnamson

MC 206~,. Implementation Team,

ChiefEng ears Office, TCEa

P.O. Box '. OB7 ' Austin, '78711-3087 .

1

• Velues for 2DD7 ·2009

On behalff!the KIDS for Clean Air, the Sustainable Energy and economic 'Qevelopment (SEED) CoaJjtioo,

the Clean f'ir Institute of Texas, and myself, I am flllngtha following written comments on the above named

and num~red projects. /n addition to the comments provided be/ow, any other comments sub",itled by

Envlronmita, Defense and/or Siemt Club are hereby adopted and irico~rated by reference.

TCEQ's ~ght ofevidence air quality trends over-itStim8tes the air quality trend for the HGB area

considerin, the past unusual weatherfluctuations. the amount ofmntinued ozone reductions attributable to

the exlstln, and proposed -new" control strategies, and the proposed development of significant paint

sources 10 outside and upwind of the HGB area. such, the proposals fail to adequately

demon 'on the area wftJ atlain by the deadline.

'rhe 1997 . hour standard removed the 1-hour standard ~use in theory the B-hour standard would be as

or more 'va at protecting the publIc health. Unfortunately, air monitoring data has proven this

assumptio,.to be false. . . .

I during the three year period from 2009-2007, the Houston-Gaivestcn-BrazQria area design

value did t violate the &-hour standard, but several monitors did violate the old 1-hOlJf standard forthe

same time period.1 ' .

1 . llhe airmptors included regulatory moniturlnisites Northwest Harris Co. C26/Al1OlXlS4 and WallsvWlS. Road

C617. ~~~data also inoluded n~gu1atory monitoring sites Crosby Library CSS3 and Tom Bass

CSS8. N tbe Tom Bass monitor acma11y had a design value exceeding the 8-bour stan~ but tb.e site is not l!Ul

EPA regu , approwd site.
11/1119/261119 17'· 2 46924111143121 HAMMOND PAGE El2/11I2

!vi explanltion for this phenomenon could be attributed to the implication of unusual and/or extreme

weather t1~ctuations. The current ozone NMOS fonn (forth-highest daily maximum 8-hour concentrailon

averaged 9ver 3years) Was developed to supposedly account for such fluctuations. Unfortunately, 'the real

world ,mpEi'on is that compensates for fluctuations that may provide an unusually high design value,

but it does not compensate forfluctuations that may provide an unusually low design val~.

F.or exam e; Texas experienced unusuaVextreme wealherfluctuations in 2007 and 2009. In 2007, Texas

experten. an unusually rainy and cool ozone season. M n1ustrcrtioo, the Dallas-Fort VVorth araa--an

area that tfPlca11y hits triple digit temperatures throughout the summer-<lld not experience 100°+ tempera;F. until lata August. Once normal oxone season weather patterns occurred, air monitors

registered .xceedances. Likewise, in 2009. Taxas exp~enced an unusually windy ozone season, but

again wh . the areas experienced typical weather patterns for ozone formation. the air monitors once'

again regrred ozone exceeclances (spiking 10 157 ppm at one Houston m~nlto~. .

The attaln,ent demonstration must somehow account for "normal" weather patterns that are conducive for..

ozone fo~BtIon In such 'a ~y that unusual/extreme weather fluctuations do not impact attainment

demonstrations in afavorable or non-favorable manner, Therefore, little weight of evidence should be

afforded the lIfrend8of2007-2009 skewed design values.

ed Controlles

The existi control ,ies shOUld have accomplished expected reductions prior to, or shortly thereafter,

these dam nstrations. ~8 proposed new control strategies have very little future reducUons assocla~

with them.: Thus, little weight should be afforded to 8 continulng.1rencr of ozone reductions when the

demo ons themselVes fails to adequately establish ongoing reductions attrlbutable to e.xJstlng and/or

proposed .ew control stfategies. .

Bofi1 D nstratlons Fail to Ade uate ccount 0 E wn nc' 88 In Ozon8

PrecursoEmlDlons Located 0mide the tfGB Area and WIthin Texas•.

Several m~jor emitting point sources located outside the HGB area (but within Texas) have been pennltted

and/or 8Rt~UrT8nUy undergoing the permitting process {e.g., new power plants In R.obertson, Milam, .

Calhoun, oliad, and Matagorda counties). These point sources wiD emit vast amoun(s ofozone

precurso (e.g., NOX and VQC) that will blow info the HGB nonattainment area and elther cause or .

. contribute. NMOS violations. Both demonstrations fall to adequately account for1hese Increases and

the potenti ·1 impacts on HGB's ability to attain the ozone NMQS standard by the deadline.

Than~ you r your attention to this matter. If you have any questions, feel free to contact me.

2
Comments on TCEQ Rule Project No. 2009-019-101-EN

"Mass Emissions cap and Trade (MECT) Program Cap Integrity for the Houston-Galveston-Brazoria

(HGB) Eight-Hour Ozone Nonattainment Area"

The National Aeronautics and Space Administration (NASA) conducts operations at the Johnson Space

Center (JSC) in Houston, Texas. At NASA JSC, stationary emergency diesel generators provide backup

power to the Mission Control Center (MCC), which is the primary communications hub between ground

operators and all NASA manned space missions.

Stationary emergency diesel generators at JSC also provide backup power to essential

telecommunications systems, satellite ground stations, medical research laboratories, emergency

response dispatch center, space simulation/engineering test chambers, and other crucial facilities, most

of which operate 24-hours per day, 7 days per week. These facilities require continuous, reliable

electrical power.

Our comment below addresses one area of the rule on which NASAJSC requests clarification or

modification:

1. The proposal would discontinue the acceptance of late ECT-3 forms, Level of Activity

Certification, submitted in accordance with §101.360(a) after March 30, 2010, from sites

defined on or before December 31, 2000, as major sources of NOX, as defined in 30 TAC

§117.10.

Comment: We seek clarification that the proposed change will not disallow the acceptance of revised

ECT-3 forms from existing major sources of NOx. For example, TCEQ has on prior occasions approved

ECT-3 revision submittals that added to the MECT cap certain existing stationary diesel engines that

were previously exempt under 30 TAC 117.303(a)(6)(D) or 117.303{a)(11). These engines were added to

the MECT cap with appropriate allowance allocations after it was determined that they no longer met

the exemption criteria. This capability is essential to allow continued safe operation of critical backup

generators and was cited in the Agency's response to a previous comment.1

1 " •.• Should NASA's existing engines not qualifyfor exemption under §117.203(a)(6)(D) and (11), they would be

subject to the ESADs under §117.206(c)(9)(D) in conjunction with the mass emissions cap and trade program of

Chapter 101, Subchapter H, Division 3." 28 TexReg 264, January 3, 2003

W-2
-- -~ .

SIERRA

CLUB

FOUNDED 1892

Houston Regional Group'

P. o. Box,J02l

HouSton, Texas 77253-3021

713-895-9309

http://texas.sierraclub.orglhouston/

W-3

October 6, 2009

Ms. Jessica Rawlings

MC205

Office of Legal Services

. Texas Commission on Environmental Quality

P.O. Box 13087

Austin, Texas 78711-3087

Dear Ms. Rawlings,

Enclosed are the comments of the Houston Regional Group and Lone Star

Chapter of the Sierra Club (Sierra Club) regarding the Texas Commission on

Environmental Quality's (TCEQ) proposed revisions to 30 TAC Chapter 101 and

115 and the State Implementation Plan (SIP) with regard to the Mass Emissions

Cap and Trade Program (MECT)

,The Sierra Club m,akes these comments: '

1) Although this proposal refers to the MECT the Sierra Club prefers no MECT.

The Sierra Club favors the TCEQ return to setting emission limits for each stack

,or emission point. The Sierra Club Qelieves that setting' emission limits for each

emission point is a form of regulation that is simpler, less costly to the public,

easier to enforce, produces greater' air pollution reductions, and will reach

attainment of the ozone standard quicker than the MECT. The Sierra Club urges

the TCEQ to rethink its air,pollution control strategy and scrap the MECT and set

emission limits for each emission point as the main ozone control strategy. :,

2) The Sierra Club ,su'pports ~he implementation of tl:lis proposal with regard to

ECT-3 forms" Level"9f Activity'Certifi9,ation;' ,1 0 .,3.53(b)«3-5),and l'01.,360(~) but

p,refers'the',implementatibn date ,of·Janua'ty,' f,20-10,arid1'lpt'March30, 2010: 'It is

important ,for TCEQ',to.impl~rrient tt1~se rules ',as ,soon as p6ssiblebe~use the

ozone standard should be' attained, as expeditiously, as 'practipable to protect

human health and welfare. This is particularly true 'since TCEQ admits that no

late ECT-3 form have been submitted for many years.. Therefore the regulated

population is well aware of what it should do and TCEQ is under no obligation to

give them another 6 months to do the right thing. ,

3) The Sierra Club is concerned about the present proposal for the definition of

"Uncontrolled design capacity to emit" in 101.350(14) because it is too 'broad.

For instance, if a boiler is new and has 10w-NOx purnersinstalled as part of the

'"When we tIyto pick o~, byitself, we find it hitched to evetytbing else inthe universe.· john¥ . .. . .

Primed OIl 100'II>KeaafIRe free paper
design of the boiler then the proposed definition may make sense. However, if a .

boiler originally had burners that were not 10w-NOx burners and then 10w-NOx

burners were installed for emission reduction purposes then the proposed

definition of "Uncontrolled design capacity to emir' does not make sense and

should not apply because the low-NOx burners were installed as NOx control

equipment for emission reduction purposes and were not designed as a part of

the boiler.

4) The'Sierra Club is also Concerned about 101.350(14) and 101.351 because

the proposed increase in operational hours allowed for emergency stationary

diesel engines goes from 100 hours to 876 hours (a .776% increase in hours). If

the TCEQ concern is supplying freshwater after a storm, hurricane, or other

emergency then this exemption should be worded to apply only to emergency

stationary diesel engines th~t are specifically linked to the generation, supply,

and distribution of freshwater. This would cover municipal utility districts (MUDs)

and other providers of freshwater.

TCEQ should be careful that it does not grant exemptions too broadly because

those who do not need the exemption will qualify for the exemption and air

quality may suffer as a result. This is particularly true since many hurricanes

occur during ~he summer months or'early fall months when ozone levels are

highest. <.. <-'

The Sierra Club appreciates this opportunity to comment. .Thank you~

:::e:~nnchen rn ·""·''"'7...A~~7A..yn..--JV Air Quality Issue Chair

Lone Star Chapter of the· Sierra Club

Chair,Air Quality Committee

.Houston Regional Group of the Sierra Club

5431 Carew '

Houston, Texas 77096

713-664-5962

brandtshnfbt@juno.com

2
UNITED STATES ENVIRONMENTAL PROTECnON AGENCY

REGIONS

1445 ROSS AVENUE, SUrrE 1200

DALLAS, TX 75202·2733

W-4

NOV 092009

Ms. Lola Brown, (MC 206)

State Implementation Plan Team

ChiefEngineers Office

Texas Commission on Environmental Quality,

P.O. Box 13087, Austin, Texas 78711-3087

Dear Ms. Brown:

Thank you for the opportunity to comment on the proposed revisions to the State

Implementation Plan (SIP) for the HoustonlGaivestonlBrazoria (HGB) ozone nonattaimnent

area. We have reviewed the revisions and our comments are enclosed.

With this enclosure we are providing comments on:

• HGB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard

(Project~0.2009-0l7-SIP-~R)

• HGB Reasonable Further Progress SIP Revision for the 1997 Eight-Hour Ozone Standard

(project ~o. 2009-0l8-SIP-~R)

• Highly Reactive VOC Cap and Trade (HECT) Program Cap Reduction and Allowance

Reallocation (Rule Project ~o. 2009-006-10l-E~)

• Mass Emissions Cap and Tfade (MECT) Program Cap Integrity for the HGB Eight-Hour

Ozone ~onattainment Area (Rule Project ~o. 2009-0l9-l0l-E~

We look forward to working with your agency to continue to reduce ozone levels. Ifyou

have any questions, please contact me or Carl Young ofmy staffat 214-665-6645.

Sincerely yours,

~~~ Chief

Air Planning Section

Enclosure

cc: Walker Williamson (TCEQ)

Devon Ryan (TCEQ)

Jessica Rawlings (TCEQ)
Enclosure

Detailed Comments on Proposed Revisions to the

HoustonlGalvestonIBrazoria (HGB) SIP

With this enclosure we are providing detailed comments on:

• HOB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard

(Project No. 2009-017-SIP-NR)

• HOB Reasonable Further Progress SIP Revision for the 1997 Eight-Hour Ozone Standard

(Project No. 2009-018-SIP-NR)

• Highly Reactive VOC Cap and Trade (HECT) Program Cap Reduction and Allowance

Reallocation (Rule Project No. 2009-006-101-EN)

• Mass Emissions Cap and Trade (MECT) Program Cap Integrity for the HOB Eight-Hour

Ozone Nonattainment Area (Rule Project No. 2009-019-101-EN)

HGH Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard

(project No. 2009-o17-SIP-NR)

EPA appreciates the level ofanalysisthat TCEQ has completed in the HOB proposed 1997 eight

hour ozone attainment ~onstration. It is clear that TCEQ and researchers have continued to

advance the science ofmodeling the Houston area and also the understanding ofthe ozone

conceptual model for how ozone is formed in Houston. TCEQ's analysis and analysis ofother

researchers (NOAA, DOE, UT, etc.) that the highest ozone concentrations observed in the HOB

area can invariably be linked to transport ofthe industrial plumes emitted in the vicinity ofthe

Houston Ship Channel (HSC) which is a key finding in developing plans to lower ozone levels in

the HOB area. .

The current modeling indicates several monitors (Deer Park;Bayland Park, and WallisvillC?) will

not be in attainment in 2018 using the 2006 baseline DV. The future ozone levels are higher

using the 2005 baseline DV. Overall, the modeling does not indicate .the area will reach

attainment, but the modeling (using a 2006 baseline DV) is in the range ofEPA's modeling

guidance ofwhen Weight ofEvidence can be used to potentially support an conclusion'that

attainment will still be aChieved.

Recent Ozone monitoring trends and the most recent data (2007-2009) add significant support to

the Weight OfEvidence in the proposed 19978 Hour Attainment Demonstration SIP that the .

area might attain and maintain attainment ofthe standard. Recent trends however to area ozone

f<;>nnation can also be a function ofthe meteorology not being particularly conducive the last few

years. The meteorology in combination with decreased local, regional, and national emissions

due to the economic downturn. must also be considered when evaluating the weight ofevidence.

One qualitative indication that some ofthe ozone decreases are likely driven by meteorology and

economic impactsis that many areas within Region 6 saw their 4lb Highs drop 5-10 ppb the last 2

years and only DFW and Houston areas have had any potentially large local reductions other

than annual fleet turnover. With ozone leve~ decreasing in much'ofRegion 6 the last few years,
it is important to try and·consider how much ofthe Houston monitoring trends are due to control

measures and how much is due to favorable meteorology and emissions decreases due to

regional and temporary"economic downturns.

Even with the recent trend and 2007-2009 preliminary data that indicates a DV of 84 ppb, EPA

remains concerned that the area will continue to attain the 1997 eight hour ozone standard. " . .

The modeling is based on more typical ozone conducive meteorology (2005 and 2006) in the

HGB area. It should be noted that the modeling attainment test allows the use of a 5-year

weighted average that is easier to show attainment than using the worst 3-year DVs that include

the base modeled years. The 5-year weighting was selected by EPA to give some averaging of

meteorology. TCEQ originally modeled using a 2005 Center Weighted DV (CWDV) that

r~su1ted in higher values than the 2006 CWDV included in the proposal. Modeling using both

the more favorable 2006 CWDV and the 2005 CWDV indicates several monitors with 2018

Future DVs (FDVs) several ppb above the 84 ppb standard. The modeling is indicating that even

with additional federal measures that the area will not reach attainment by 2018. Future

reductions not included in this proposed SIP may be necessary to achieve attainment ofthe 1997

eight hour ozone standard.

EPA's guidance is to use the modeling in a relative sense for the monitored attainment test and

also for the areas outside ofthe monitors using EPA's MATS software. In the draft Houston

package, TCEQ has not included the MATS software analysis in the attainment section ofthe

SIP. The MATS software analysis should be included as part ofthe attainment write-up ofthe

SIP to indicate the model's predictions in areas outside the grid cell arrays used in the monitor

attainment test "

TCEQ has utilized their Potential Source Contribution Function (pSCF) to adjust reported

emissions in the 2006 special inventory from 12.44 tpd ofHRVOCs in Harris County (7.39 tpd

for BECT sources and 5.05 tpd for non-HECT sources) to 22.44 tpd ofHRVOCs in Harris

County. Thus adding 10 tpd to reported inventory values. The HECT soUrces (except for some

small emission sources) have been subject to monitoring requirements since 2005/6, so the extra

"emissions from HECT can only be from unmonitored sources or incomplete combustion from

flares. Because unmonitored sources are small the most likely source ofemissions is flares. The

proposed SIP assumes HECT sources emit an additional 6 tpd ofunreported HRVOC emissions.

TCEQ should justify this assumption. .

With the additional 6 tpd TCEQ projects for the future 2018 inventory 13.39 tpd for HECT .

sources. In addition TCEQ added 7tpd from banked emissions, bringing the total to 15.39 tpd

for HRVOC emission in the RECT. Then, TCEQ assumed that the HECT emission will be

reduced to the current cap level of 10 tpd. This reduction is not supported by any regulation or

control measure or enforceable commitment, and therefore should not be included in the

modeled projections.

In addition to our overall concern that the area may not continue to attain the standard and may

.still be in nonattainment with the 1997 eight hour ozone standard in 2018 we have provided

comments.on specific sections ofthe proposal package.
Ozone Model Perfonnanee

Ozone model performance (with the PSCFemissions added) does fairly well at getting the

spatial location of ozone, but continues to underestimate the peak ozone levels. This creates

some concern that the median emission adjustment approach may not be yielding enough

emissions in the modeling to generate the peak ozone levels. Model perfonnance indicates that

the model was .underestimating the peak values ofsome VOC species and also ozone peaks. The

modeled peak should theoretically be higher than the monitored peak, since the odds that the

modeling domain peak are going to happen at a monitor are not a statisticiilly high probability.

TCEQ discussed in chapter 5 the issue ofincommensurability which may explain why the

modeled values seemed to overpredict Ethylene and Olefin species at the Wallisville monitor as

.modeled values represented a value ofthe grid cell versus the monitored data that reflects a

point .This concept ofcomparing model values to monitored values is discussed by TCEQ and

they point out some ofthe"limitations of drawing conclusions from the technique. Overall the

ozone model performance is some ofthe best modeling conducted for the Houston but

concerns about under-prediction bias raises concern that more emissions should be included in

the base and also be left in the future year inventory. Using a multi-year annual mean may result

in an underestimation ofthe actual emissions that occurred.

TCEQ's modeling ofincreased flare emissions as a replacement for the PSCF emission

reconciliation yielded better ozone model performance than the base special inventory. In

addition to the many other scientific studies that indicate that flare emissions are underestimated

in the modeled and reported emission inventories this modeling sensitivity also·supports the

conclusion that flares are a significant source ofthe underestimation ofVOC emissions from

industrial sources in Houston.

We note that TCEQ is in the process ofstudying flare operations and is considering the Opti9fi of

requiring more monitoring and oversight offlare operation in the :future dependent upon findings

ofstudies. Forthis and otherreasons we support a commitment by TCEQ to conduct a Mid

Course Review using photochemical modeling.

Attainment Demonstration and WOE

On Page 5-8 ofthe TCEQ concludes that the retrospective modeling between 2000 and 2006

emission levels "appears to underestimate the response to emission controls". The retrospeCtive

mOdeling is not conclusive in showing the models responsiveness to emission controls as the

DVs from the two periods are made up ofmultiple years worth ofozone data with meteorology

.from two different sets ofmulti-year periods. Considering that the 2006 reported emission

.inventory is having to be adjusted based on monitoring data and using gaussian based models to

estimate emission correction levels for groups offacilities in the same back trajeCtory, it is clear

that TCEQ may potentially have an approximate estimate ofthe multi-year mean emissions that

occurred in 2005/~. Data from field studies indicates significant variability, but ovenill a large

underestimation ofemissions. But to baSe an emission change comparison when no one has an

accurate assessment of2000 and 2006 actual emission inventories raises many

incommensurability issues. These incommensurability issues include: comparing two different
multi-year periods ofmeteorology, using a multi-year mean when the emission inventory

demonstrates a fluctuation of data, the PSCF is likely underestimating the amount ofreported

emission increases that should be done since it does not take into account chemistry that

decreases emission concentrations between the facility and the monitor, an adjustment based on a

multi-year mean overlooks variables that would theoretically lead to higher,ozone pre-cursors on

summer days/meteorological conditions. The 2006 imputed emission estimates apPear to be

getting decent model performan,ce, but there is an under-prediction bias in peak values that is not

necessarily a model formulation issue as an issue that without detailed facility monitoring we '

will never know what are the correct emissions to model. When even the 2006 reported

inventories ofVOCslHRVOCs have to be adjusted by factors of2x to lOx (on a multi-year

mean) to reflect the monitored values, it is clearthat the bigger variable to how the model is

reacting to emission changes is whether we are starting with the correct emissions. The PSCF

technique that TCEQ is utilizing to adjust emissions (2x to lOx reported level from a special

inventory) is getting the model performance to within EPA's performance metrics of+/- 20% and

+/- 35%, but the amount ofpotential change in DVs from 2000 to 2006 is a function ofmany

variables that we do not have sufficient data to conclude the modeling is not reacting sufficiently,

it is more likely the issue ofnot having the correct emissions.

It does not apPear that enough certainty exists in the data and there are incommensurability

issues that seem. to make it inappropriate to conclude that comParing modeling of2000 and 2006

reported emissions (even with imputed estimates) while m9deling the 2006 meteorology with

2000 meteorology indicates the model is not reacting sufficiently to emission changes.

EPA appreciates the level of analysis that TCEQ has completed in the HOB ozone conceptual

model and in the Corroborative analysis on the highest ozone values that impact the Design

Values at the monitors in Houston. The conclusion from TCEQ's analysis and analysis ofother

researchers (NOAA, DOE, lIT, etc.) that the highest ozone concentrations observed in the HOB

area (including areas in the Southeast, Southern, and Southwestern portions ofHouston) can

invariably be linked to transport ofthe industrial plumes emitted in the vicinity ofthe Houston

Ship Channel is a key finding in developing plans to lower ozone levels in the HOB area.

Chapter 5 ofthe Proposal includes many ozone monitoring trends that are very interestfu.g but the

linkage to what is causing the recent decreases in 2007-2009 values (2009 values need to be '

QAlQC'd by TCEQIEPA) is missing. EPA's analysis (including information provided at the

April 2009 Southeast Texas Photochemical Technical Modeling Committee meeting) isthat

values in 2007 and 2008 were influenced by higher than average frequency ofhigh speed winds,

less ozone conducive days than normal, and emissions lower than normal due to the economic

downturn. Industry representatives have commented in past public meetings that their emissions

have been lower the last few years (starting in 2007) due to economic influences and when the

demand improves it is likely their emissions will increase over the levels in 2007-2009. TCEQ's

, HECT cap ~uirements and monitoring requirements were put in place prior to the recent large

changesin 4

th high ozone levels that make up the DV calculations. As ofNovemb.er 1st 2009

four monitors had preliminary 2007-2009 DVs of 84 ppb, but all monitors appeared to be in

attainment. After the economy gains strength and emissions likely increase and when less

favorable meteorology occurs in the future, itseems unlikely that the area will continue to

monitor attainment, especially at the Deer Park monitor. As discussed elsewhere peak ozone
levels are heavily influenced by industrial emissions. Without further reductions over existing

emission levels from industrial sources it seems unlikely that the Deer Park monitor will

maintain attainment and monitors downwind ofthe industrial emissions will continue to have

some high readings. While Fourth High values are down, the area still has a number ofhigh

days. In 2009, eight hour values ofthe monitors (FRM and other) in the Houston area had 22

monitors with 1st High values equal or greater than 90 ppb (9 monitors with values from 100-110

ppb), 12 monitors with 2nd High values equal or greater than 90 ppb, and 12 monitors with 3

rd

Highs greater than 84 ppb. With this many exceedances ofthe standard at many monitors it is

easy to see how the combination of higher emissions and less favorable meteorology could result

in the area not monitoring attainment.

Chapter 5 ofthe proposal did not include any discussion ofemissionstrends and how they

correlate with the recent ozone monitoring trends analysis. EPA's modeling and attainment

guidance indicates that monitoring and emission trends should be included as one ofthe three

areas that should be covered in WOE (including pages 99, 101-103 oftbe 2007 modeling and

attainment guidance). In addition to emission trends analyses and comparisons/correlations of

emissions trends and ozone trends, expected future emission trends (including the major

categories stich as point area, nonroad, onroad, etc.) should be included iri this analysis to help

correlate that future emission reductions will result in lower ozone values in the future. Since

TCEQ and others have concluded that the values setting the DV at monitors in the southwest,

southern and southeastem regions ofHouston are heavily impacted by emissions from the HSC

industrial emissions, a focuS on future changes expected in HSC industrial emissions seems

central to the argument that the HGB area will be in attainment in the future. This specific

analysis ofrecent historical emissions and monitoring trends and future emission trends that

impact the area's DV with expected impacts on ozone levelsis a very key WOE element that

allowed us to move forward with approval ofthe DFW 1997 8-hour Ozone SIP. Including these

analyses in your WOE would help to make sure that you cover the three main areas discussed in

the WOE guidance.

Summary

From the information that TCEQ included in the SIP proposal, it is obvioUs that a lot ofhard

work has gone into the modeling, WOE and other analyses to better understand the phenomena

that result in ozone exceedances in Houston. We appreciate the hard work ofthe many TCEQ

people and researchersthat have contributed to the development ofthe draft Houston SIP.

Other than the fleet turnover and other federal measures between 2009 and 2018, TCEQ has not

proposed in this SIP emission reduction requirements that will lower emissions below current

actual levels. Withoutfurther reductions in the HSC area it is difficult to see how the Deer Park

monitor and other monitors will remain in attainment when economic conditions improve and

less favorable meteorology occurs. EPA encourages TCEQ to consider additio~ controls to

insure the area will continue to be in attainment ofthe 1997 eight hour standard.

i

I

I

--I

!

[
RACM

TCEQ and others have shown that the HOB Nonattainment area is heavily influenced by the

emissions from industry in the Southeast quadrant ofHouston (including industry aroWld the

Houston Ship Channel). Therefore reductions in industry emissions would be most effective in

advancing attainment. Additional monitoring and requirements for flares would aid in

improving the emission inventory and also could lead to real atmospheric reductions ofozone

pre-cursors. We support TCEQ's Flare Task Force initiative and hope that it results in better

flare operations and reduced emissions in the future.

The proposed reduction and reallocation ofthe Harris COWlty HRVOC cap does not require

HRVOC levels to be reduced below currently reported levels. The cmrent 25% reduction in the

HECT Cap would still be higher than reported emissions and would allow for growth and

. allowances for upset conditions. In essence, the proposed 25% HECT Cap reduction would

allow HRVOC emission increase at HECT applicable facilities compared to the highest annual

actual HECT emissions.

As part ofit's RACM analysis, TCEQ should consider whether reductions in "actual" HRVOC

emissions could accelerate attainment. Furthermore, TCEQ should explain why the reductions

can not be implemented sooner than the proposed 2015-2017 timeframe.

Mid-Course Review

We recommend that the attainment demonstration include a TCEQ commitment to a mid-course

review ofthe attainment demonstration. Because ofthe uncertainty in long term projections, we

believe a viable attainment demonstration that relies on weight of evidence should contain

provisions for periodic review ofmonitoring, emissions, and modeling data. Clearly, current

monitoring trends would indicate significant progress is being made. Undoubtedly, control

measures implemented by the Texas and Federal government have contributed to this progress.

Other factors, however, have played a role such as the economic downturn and favorable

meteorology. The current modeling show several monitors exceeding the 1997 standard. The

differen~ between the modeling and monitoring accentuate the overall uncertainty in long term

projections. The mid-comse review would show whether the adopted control measures are

sufficient to reach attainment by the area's. attainment date (based on photochemical modeling),

or that additional control measures are neceSsary. We recommend that the review be completed

by December 2013. We also anticipate that SIPs for a revised ozone standard would be due in

December 2013, so that the review could be done in conjunction with a SIP for the revised '

standard.

Nitrogen Oxides mox) Reasonable Available Control Technology (RAcn Detennination

(Section 4.4.2, page 4-7 and Appendix D)

Please confirm that all NOx point sources in the HOB area with the potential to emit 25 tons/year

or more have been included in the list ofsources that the State has included in its evaluation for

RACT purposes.
As control technology is dynamic and could change with time, please confirm that the level of

NOx control for affected NOx sources in the HGB area still represents RACT today.

RACT should be federally enforceable. Please explain why TCEQ ~lieves it is appropriate to

use a New Source Review pennit condition for a glass manufacturing facility in the affected area

to implement RACT. Please provide a copy ofthe final pennit

Volatile Organic Compound <VOC) RAeT Determination (Section 4.4.3, pages 4-7 to 4-9 and

A~m~~ .

We have reviewed this action with respect to the Clean Air Act (CAA) and the Control

Techniques Guidelines (CTGs) issued by EPA in 2006,2007, and 2008, and have the following

comments.

Work Practice Requirements: For a number ofCTG categories, TCEQ has chosen not to adopt

the recommended work practices. For all applicable CTGs, EPA continues to believe work

practice requirements provide reasonable, cost effective ways to reduce emissions and that these

control requirements should be met In order to meet RACT requirements, the state should· either

adopt rules implementing the work practice requirements, or provide analysis demonstrating that

the requirements are satisfied by existing federally enforceable rules.

CTG categories: Industrial Cleaning Solvents, Miscellaneous Industrial Adhesives, Large

Appliance Coatings, Metal Furniture Coatings and Miscellaneous Metal andPlastic Parts

Coatings (section 4.4.3.3, and Appendix D). For these five CTGs, Texas has neither adopted

rules nor provided a negative declaration. In order for the HGB area to meet the requirements

for RACT (40 CFR 51.912), the state will need to complete RACT determinations and take

appropriate action for the CTG categories ofIndustrial Cleaning Solvents, Miscellaneous

Industrial Adhesives, Large Appliance Coatings, Metal Furniture Coatings and Miscellaneous

. Metal and Plastic Parts Coatings. EPA will be able to consider approval ofthe VOC RACT

update only for those CTGs that have been thoroughly addressed.

We recognize that EPA has not yet responded to the TCEQ letter ofDecember 8, 2008

concerning the eTG documents for Large Appliance Coatings, Metal Furniture Coatings; and

Miscellaneous Metal and Plastic Parts Coatings (section 4.4.3.3, and App~ D). While the

new CTG documents for these source categories recommend more stringent limitsfor general

use coatings, there are some specialty categories for which the new CTGs recommend limits that

are less stringent than the general use limits established in the guidance from the 1970s. For

some ofthe subcategories within these CTGs, the limits in the new CTGs are less stringent than

the approved Texas SIP so it is possible the new limits will result in increased emissions. In

general, EPA expects the limits in the CTG to result in reductions in VOCs but it is unclear for

specific states or areas whether overall reductions will occur.

We believe that Texas has at least two options for moving forward with the specialty coating

types discussed above. The state could leave the limits in place for the specialty categories

where the existing limits are more stringent than the limits in the CTGs orthe state could relax

the limits consistent with the new CTG in which case the state would have to provide additional
analysis to show compliance with 110(1) ofthe CAA. We note that Texas is not required to

adopt the less stringent limits in the CTG. The CTG provides recommendations, but does not

bind states to adopt specific limits or requirements to meet RACT. Ifthe existing Texas rules as

they apply to specialty categories are more stringent than the limits recommended in the CTGJ

the state could choose to submit them as meeting the RACT requirement, and, assuming all other

requirements are met, we anticipate that we would be able to approve them as meeting RACT for

the source categories addressed by the CTGs. The state would still need to evaluate the more

stringent recommendations for general use categories and adopt them as appropriate. ffTexas

chooses to relax limitsfor specialty coatings that are in the approved SIP consistent with the

recommended limits in the CTGs, the state would need to demonstrate under section 110(1) that

the SIP as revised would not interfere with attainment ofor reasonable further progress toward

attainment ofthe National Ambient Air Quality Standard (NAAQS) or interfere with any other

applicable requirement ofthe CAA. In general, ifa submitted revision achieves the same or

greater emission reductions as the approved'SIP within the same timeframe as provided tmder

the existing planJ we have been able to approve the revision as meeting section 110(1).

Flat Wood Paneling Coatings (section 4.4.3.1 and Appendix D). Regarding work practice

requirements, please see the comment above.

Fiberglass Boat Manufacturing Materials (section 4.4.3.2 and Appendix D). For the Fiberglass

Boat Manufacturing Materials source category TCEQ has identified no facilities in HGB subject

to this CTG (pages 4-8, D8 and D-9). However TCEQ is not making definitive negative

decl8:I'ation for this source category. Inste~ the TCEQ "has determined that implementing the

recommended controls in the Fiberglass Boat Manufacturing Materials CTG document would

neither result in substantive VOC reductions nor be economically feasible."

The proposal relies in part on EPA's prior guidance, "Issues Relating to VOC Regulation

Cutpoints, Deficiencies, and Deviations, Clarification to Appendix D ofNovember 24,1987

Federal Register", issued May 25, 1988. In particular, please see Attachment 2 ofthe guidance,

for an Example 5% Rule Calculation. This calculation should be based specifically on sources in

the Houston area We do not, believe the TCEQ's interpretation ofthis 1988 guidance is correct.

EPA continues to believe that these are cost effective controls. To meet VOC RAeT

requirements this category needs to be addressed.

Flexible Packaging Printing Materials (section 4.4.3.2 and Appendix D). Regarding work

practice requirements, please see the comment above.

Paper, Film, andFoil Coatings (section 4.4.3.2 and Appendix D). Regarding work practice

requirements, please see the comment above.

Lithographic Printing Materials and Letterpress Printing Materials (section 4.4.3.4 and

Appendix D). Detailed comments regarding this are included in a separate letter addressing

these rule revisions. (Rule Project No. 2008-019-115-EN).

Automobile andLight-Duty Truck Assembly Coatings (section 4.4.3.1, and Appendix D). No

comments.
Transportation Control Measures (Section 4.6.2.1 and AWendix 0)

The plan specifies that once Transportation Control Measmes (TCMs) are included in the SIP,

the Houston area is legally bound to implement each ofthese control measures in a timely

manner. Please include estimated timeframes for initiation and completion ofthe candidate

TCMs listed in Table 1 ofAppendix O.

HGH Reasonable Further Progress SIP Revision for the 1997 Eight-Hour Ozone Standard

(project N.o. 2009-o18-SIP-NR)

The discussion ofthe updated point source 2002 base year inventory states that VOC emissions

were adjusted to account for unreported VOC emissions (page 2-2). Please further describe how

the unreported emissions were accounted for.

One severe ozone nonattainment area SIP requirement is to identify and adopt transportation

.control measmes (TCMs) that would offset any growth in emissions from growth in vehicle.

. miles traveled (VMT) or numbers ofvehicle trips (CAA section 182(d)(I)(A». The analysis

provided in the Reasonable Further Progress SIP indicates that the predicted growth in VMT in

the area is not .expected to result in a growth in motor vehicle emissions (tables 2-14 and 2-16).

Please confirm that the predicted growth in VMT in the area is not expected to result in a growth

. in motor vehicle emissions and that TCMs are not needed to offset growth in VMT.

Highly-Reactive Volatile Organic Compound Emissions Cap and Trade Program (project

No.2009-o06-101-EN)

Please confirm that the non.,.reportable emission events that exceed the emission event set-aside

in section 101.396(c) will be deducted from the individual site's compliance account no later

than March 31 ofthe year following the applicable calendar-year control period. This approach

.is consistent with the approach outlined at section 101.396(d) for reportable emission events that

exceed the set-aside. The rules should be revised to clearly reflect this approach as well.

Mass Emissions Cap and Trade Program (project No. 2009-o19-101-EN)

Please explain why the revised roles at section 101.353(b) do not require minor sources that

submit late ECT-3 forms to obtain allowances from existing sources. This exemption for minor

sources could increase the overall cap and jeopardize the attainment demonstration modeling for

the HOB area. . .
INDEX OF ORAL TESTIMONY

No oral testimony was received pertaining to this rulemaking.
Pagel

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

PUBUC HEARING REGISlftAnON

october 28, 2009, 2:00 p.m.

Houston-Galveston Area Council, 3655llmmon8 Lane, HoUtJlDn

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TEXAS COMMISSION ON ENVIRONMENTAL QUALITY . PUBUC HEARING REol8TRA1l0N

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EVALUATION OF 

TESTIMONY 
.....

To: Commissione~

JiiliEKbPJiitE MEMORANDUM

Date: February 19,2010

Thru: LaDonna Castafiuela, ChiefClerk

Mark R. Vickery, P.G., Executive Director

From: S.....M. Hildebrand, P.E.,Cbief~

Docket No.: 2009-0867-RUL

Subject: Commission Approval for Rulemaking Adoption

Chapter 101, General Air Quality Rules

Mass Emissions Cap and Trade (MEeT) Program. Cap Integrity for the HoustonGalveston-Brazoria (HGB) 1997 Eight~Hour Ozone Nonattainment Area

Rule Project No; 20~9-o19-101-EN

Background and reason(s) for the rulemaking: .

The MECT program is a market-based component of the state implementation plan (SIP) that provides

stationary sources of nitrogen oxides (N0x) compliance flexibility for the emission specifications under 30

Texas Administrative Code (TAC) ChaPter 117, while establishing a mandatory cap for total NOx emissions

from affected source categories in the HOB ozone nonattainment area. The MECT p~gram was adopted as

a primary control measure ofthe HOB attainment demonstration for the one-hour ozone National Ambient

Air Quality Standard (NAAQS). The MEeT program NOx cap is a product ofthe emission specifications of

Chapter 117 and the submitted levels ofactivity from applicable facilities.

In accordance with §101.360(a), sites were required to submit an ECT-3 form, Level of Activity

Certification, with the levels of activity from their applicable facilities by June 30, 2001, in order to receive

an allocation of allowances (one allowance equals one ton ofNOx'). However, the rule did not address late

submittals ofECT-3 forms. Therefore, a site that has never complied with the MEeT program could submit

a late ECT-3 form in accordance with §101360(a) and receive an allocation of allowances, thus, potentially

increasing the NOx cap. To maintain the integrity and minimiu increases in the NOx cap, the adopted

rulemaking will discontinue the acceptance ofECT-3 forms submitted in accordance with §101.360(a) after

March 30, 2010, from sites defined on or before December 31, 2000, as major sources of NOx. These

applicable facilities will thus have to obtain allowances from the market instead ofreceiving an allocation of

allowances. The adopted rulemaking will not affect ECT..:3 forms submitted in accordance with §101.360(a)

afterMarch 30, 2010, from minor sources ofNOx.

In addition, .the Texas Commission on Environmental Quality (TCEQ) staff received informal comments

from industry regarding clmjfication on "air pollution control equipment" in the definition of "Uncontrolled

design capacity." Therefore, the adopted rulemaking will clarify the definition of ''Uncontrolled design

capacity" by amending this definition to '"Uncontrolled design capacity to emit" as the maximum capacity of

a facility to emit NOx without consideration for post-combustion control equipment, enforceable limitations,

or operational limitations. The addition of "post-combustion control equipment" to the adopted definition

will account for any equipment that can be removed without preventing the facility from operating. NOx

control equipment that is not considered post-combustion control equipment, such as low-NOx burners, will

be considered when calculating the uncontrolled design capacity to emit

In 2008, Hurricane Ike increased awareness of the need for backup generators during extended Power

outages for activities such as maintaining water pressure at water treatment plants. To provide additional

flexibility to sites that would become subject to the MECT program because ofthe installation of a backUp
, Q

Commissioners

Page 2

February 19, 2010

Re: Docket No. 2009-0867·RUL

generator, the adopted new sentence to §101.3S0(14) will provide a new option for calculating the

uncontrolled design capa,?ity to emit from applicable diesel engines operating less than 100 hours per year in

non-emergency situations that do not meet the applicable United States Environmental Protection Agency

(EPA) Tier standards. The adopted rulemaking will allow a minor source of NOx with an applicable diesel

engine, depending on the site's collective uncontrolled design capacity to emit, to meet the emission

specification listed in §117.2010 either by participating in the MECT program and acquiring allowances or

.not participating in the MECT program. and acquiring emission reduction credits or discrete emission

reduction credits.

To clarify site and facility applicability, the adopted rulemaking will restructure §101.3S1 to explain that

sites must determine their status as a minor or major source of NOx in Chapter 117 before determining the

applicability ofthe MECT program to their facilities. Along with the restructuring of §101.351, adopted new

subsection (c) will clarify a site's duration in the MEeT program. Therefore, new §101.3S1(c) will explain

that once a site is subject to the MECT program, that site will remain subject to the MEeT program until the

site is permanently shut down.

Scope ofthe adopted rulemaking:

A) Summary of what the rulemaking wUI do: The adopted rulemaking will maintain the integrity ofthe

NOx cap in the HGB ozone nonattainment area and minimize increases in the cap by discontinuing the

acceptance oflate ECT-3 forms submitted in accordance with §101.360(a) after March 30, 2010, from sites

defined on or before December 31, 2000, as major sources ofNOx. The adopted rulemaking will amend the

definition of "Uncontrolled design capacity" to "Uncontrolled design 'capacity to emit" for additional clarity

and to provide additional flexibility for certain stationary diesel engines. The adopted rulemaking will also

clarify both site and facility applicability in the MECT program. '

B) Scope required by federal regulations or state statutes: N/A

C) Additional staffrecommendations that are not required by federal rule or state statute: None.

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 early out its duties under the TWC; TWC, §5.103,

concerning Rules, that authorizes the commission to adopt rules necessary to carry out its powers and duties

under the TWC; TWC, §5.l05, concerning General Policy, that authorizes the commission by rule to

establish and approve all general policy of'the commission; and under Texas Heal1h 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 lHSC, §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 amendmeI;1ts are also adopted under Federal Clean Air Act (FCAA), 42 United States Code

(USC), §§7401, et seq., which requires states to submit SIP revisions that specify the manner in which the

NAAQS will be achieved and maintained within each air quality control region ofthe state.

The amended sections implement THSC, §§382.002, 382.011, 382.012, 382.016, and 382.017, and FCAA,

42 USC, §§7401 etseq.
•

Commissioners

Page 3

February 19,2010

Re: Docket No. 2009-0867-RUL

Effect on the:

A) Regulated community: The regulated community affected by the adopted rulemaking are sites defined

on or before December 31, 2000, as major sources of NOx that have not submitted an ECT-3 form in

accordance with §101.360(a) by March 30, 2010. No fiscal impact is anticipated because the commission

has not received any late ECT-lforms since before 2003 from a major source ofNOx. In addition, minor

sources ofNOx will be affected by the adopted rulemaking ifthe minor source ofNOx is not subject to the

MECT program but installs a stationary diesel engine that is not exempt under §117.2003(a)(2)(I) because

the diesel engine does not meet the applicable EPA Tier standard. Affected minor sources of NOx will

benefit from the additional flexibility provided by the rule when determining the site's collective

uncontrolled design. capacity to emit.

B) Public: The public will benefit from the availability of energy during emergencies due to the additional

Chapter 117 compliance flexibility for minor sources of NOx not subject to the MECT program that have

applicable diesel engines that supply power during emergency and do not meet an exemption under

§117.2003(a)(2)(I) because the diesel engines do not meet the applicable EPA Tier standards.

C) Agency programs: None.

Stakeholder meetings:

No stakeholdermeetings were held.

Pnblic comment: .

The public comment period opened on October 9, 2009, and closed on November 9, 2009. No oral

comments were received at the public hearings held in Houston on October 28, 2009, and in Austin on

October 29, 2009. A total offour written comments were received. Three of the written comments were

submitted by the EPA, the National Aeronautics and Space Administration (NASA), and the Houston

Regional Group and the Lone Star Chapter of the Sierra Club (HSC). The fourth written comment was

~bmitted on behalfofthe Kids for Clean Air, the Sustainable Energy and Economic Development Coalition,

the Clean Air Institute ofTexas, and one individual.

The EPA requested clarification regarding the continued acceptance of late ECT-3. forms submitted in

accordance with §101.360(a) from minor sources ofNOx. while NASA requested clarification regarding the

acceptance of ECT-3 forms from major sources of NOx for facilities eligible to receive an allocation of

allowances that lose their exemption in Chapter 117.

The HSC expressed concerns regarding the definition ''Uncontrolled design capacity to emit" and suggested.

changes to the rule regarding: the discontinuation ofthe MECT program and setting command and control

emission limits; changing the implementation date of §101.353(bX3) - (5) to January 1,2010; and adopting

specific rules regarding emergency stationary diesel engines at municipal utility districts and other freshwater

providers. The Kids for Clean Air, the Sustainable Energy and Economic Development Coalition, the Clean

Air Institute ofTexas, and one individual expressed supp~rt for the comments submitted by the HSC.

Significant chauges from proposal:

No changes were made in response to comments.

Potential controversial concerns and legislative interest remaining after proposal and public comment:

None.
----------

Commissioners

Page 4

Febnwy 19, 2010

Re: Docket No. 2009-0867-RUL

Does this rulemaking affect any current policies or require d~velopment of new policies?

Policy allowed for the acceptance of late ECT-3 forms from all sites. This adopted rulemaking will

discontinue the acceptance oflate EeT-3 fonos submitted in accordance with §101.360(a) after March 30,

2010, from. sites defined on or before December 31, 2000, as major sources ofNOx.

What are the consequences if this rulemaking does not go forward? Are there alternatives to

rulemaking? .

The consequences of not approving this rulemaking are potential increases to the NOx cap, affecting the

HOB attainment demonstration for the one-hour and eight-hour NAAQS for ozone. Also, not approving this

rulemaking will limit the options for sites with certain backup generators not meeting an exemption under

Chapter 117 that supply power during emergency situations when trying to comply with the Chapter 117

emission specifications.

Key points in adoption rulemaking schedule:

Tf!X/lS Register proposal publication date: October 9, 2009

Anticipated Texas Register publication date: March 26,2010

Anticipated effective date: April 1,2010

Six-month Texas Registerfiling deadline: Apri19, 2010

Agency contacts:

Jay Tonne, Rule Project Manager, 239-1453, Air Quality Division

Brandon Greulich, Rule Project Lead, 239-4904, Air Quality Division

Amy Browning, StaffAttorney, 239-0891 .

Devon Ryan, Texas Register Coordinator, 239-6090

cc: ChiefClerk, 5 copies

Executive Director's Office

Susana M. Hildebrand, P.E.

Kevin Patteson

Curtis Seaton

Daniel Womack

Office ofGeneral Counsel .

Jay Tonne

DevonRyan
EVALUAnON OF TESTIMONY

The Texas Commission on Environmental Quality (commission or agency) adopts the

amendments to §§101.350, 101.351, and 101.353.

Section 101.353 is adopted with changes to the proposed text as published in the October 9,

2009, issue ofthe Texas Register (34 TexReg 7009). Section 101.350 and §101.351 are adopted

without changes to the proposed text and will not be republished.

The commission will submit the amendments 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 purpose ofthe adopted amendments to Subchapter H, Division 3, Mass Emissions Cap and

Trade Program, is to maintain the iritegrity ofthe nitrogen oxides (NOx) cap in the HoustonGalveston-Brazoria (HGB) ozone nonattainment area and minimize increases in the NOx cap.

The adopted rulemaking will discontinue the acceptance oflate ECT-3 forms, Level ofActivity

Certification, submitted in accordance with §101.360(a) after March 30, 2010, from sites

defmed on or before December 31,2000, as major sources ofNOx, as defmed in 30 TAC

§117.10. Also, the adopted rulemaking will amend the defmition of "Uncontrolled design

capacity" to provide additional flexibility for certain stationary diesel engines and clarify both

site and facility applicability.

The Mass Emissions Cap and Trade (MECT) program is a market-based component ofthe SIP

that provides stationary sources ofNOx compliance flexibility for the emission specifications

1
under 30 TAC Chapter 117, while establishing a mandatory cap for total NOx emissions from

affected source categories in the HGB ozone nonattainment area. The MECT program was

adopted as a primary control measure ofthe HGB attainment demonstration for the one-hour

ozone National Ambient Air Quality Standard (NAAQS). The MECT program NOx cap is a

product ofthe emission specifications ofChapter 117 and the submitted levels of activity from

applicable facilities. The adopted rulemaking will not affect the submittal ofECT-3 fonns from

minor sources ofNOx.

In accordance with §101.360(a), to receive an allocation of allowances (one allowance equals

one ton ofNOx), sites were required to submit an ECT-3 fonn with the levels of activity from

their applicable facilities by June 30, 2001. Applicable facilities with historical actual emission

data were allocated allowances based on actual levels of activity while other applicable facilities

without historical actual emission data were allocated allowances based on pennitted allowable

emissions. Representatives offacilities with allocations based on pennitted emissions are

required to submit a second ECT-3 fonn once a historical emissions baseline is established to

convert their permit-based allocation to a historical level of activity based allocation in

accordance with §101.360(b)(1). The rule did not address late submittals ofECT-3 fonns.

Therefore, a site that has never complied with the MECT program could submit a late ECT-3

fonn in accordance with §101.360(a) and receive an allocation of allowances, thus, potentially

increasing the NOx cap. To maintain the integrity and minimize increases in the NOx cap, the

adopted rulemaking will discontinue the acceptance oflate ECT-3 fonns from sites defmed on

or before December 31, 2000, as major sources ofNOx ifsubmitted in accordance with

§101.360(a) after March 30, 2010. These applicable facilities will have to obtain allowances

from the market instead ofreceiving an allocation of allowances.

Infonnal comments from industry were received regarding clarification on "air pollution control

2
equipment" in the definition of "Uncontrolled design capacity." Therefore, the adopted

rulemaking will clarify the defmition of "Uncontrolled design capacity" by amending this

defmition to "Uncontrolled design capacity to emit" as the maximum capacity of a facility to

emit NOx without consideration for post-combustion control equipment, enforceable

limitations, or operational limitations. The addition of "post-combustion control equipment" to

the adopted defmition will account for any equipment that can be removed without preventing

the facility from operating. NOx control equipment that is not considered post-combustion

control equipment, such as low-NOx burners, will be considered when calculating the

uncontrolled design capacity to emit.

In 2008, Hurricane Ike increased awareness ofthe need for backup generators during extended

power outages for activities such as maintaining water pressure at water treatment plants. To

provide additional flexibility to sites that would potentially become subject to the MECT

program because ofa backup generator, the adopted new sentence to §101.350(14) will provide

a new option for calculating the uncontrolled design capacity to emit from applicable diesel

engines operating less than 100 hours per year in non-emergency situations and not meeting the

applicable EPA Tier standards. The adopted rulemaking will allow a minor source ofNOx with

an applicable diesel engine, depending on the site's collective uncontrolled design capacity to

emit, to meet the emission specification listed in §117.2010 either by participating in the MECT

program and acquiring allowances or not participating in the MECT program and acquiring

emission credits or discrete emission credits.

3
To clarify site and facility applicability, the adopted rulemaking will restructure §101.351 to

explain that sites must determine their status as a minor or major source ofNOx in Chapter 117

before determining applicability oftheir facilities in the MECT program. Along with the

restructuring of §101.351, adopted subsection (c) will clarify a site's duration in the MECT

program.

SECTION BY SECTION DISCUSSION

SUBCHAPTER H' EMISSIONS BANKING AND TRADING

DIVISION3: MASS EMISSIONS CAP AND TRADE PROGRAM

In addition to the adopted amendments to §§101.350, 101.351, and 101.353 discussed

elsewhere in this preamble, the commission also adopts various stylistic non-substantive

changes updating rule language to current Texas Register style and format requirements, as well

as establishing 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.

§lOl.350, Definitions

The adopted amendment to §101.350(14) will revise the defmition of "Uncontrolled design

capacity" to "Uncontrolled design capacity to emit" as the maximum capacity of a facility to

emit NOx without consideration for post-combustion control equipment (e.g., a selective

catalytic reduction system), enforceable limitations (e.g., permit restrictions, such as a

restriction on operating hours per year), or operational limitations (e.g., using a number lower

than the maximum rated capacity). The addition of "post-combustion control equipment" to the

adopted definition will account for any equipment that can be removed without preventing the

facility from operating. NOx control equipment that is not considered post-combustion control

equipment, such as 10w-NOx burners, will be considered when calculating the uncontrolled

4
design capacity to emit.

The adopted amendment to §101.350( 14) will allow flexibility for calculating the uncontrolled

design capacity to emit for stationary diesel engines that are modified, reconstructed, or

relocated, operate less than 100 hours per year (based on a rolling 12-month average) in nonemergency situations, and do not meet the applicable EPA Tier standards. In conjunction with

the adoption of §101.351(c), adopted §101.350(14) will allow minor sources ofNOx not subject.

to the MECT program the option to calculate the uncontrolled design capacity to emit for an

applicable stationary diesel engine using the lower of 876 hours or a federally enforceable

limitation on tot8l hours of operation. From the adopted new language, an applicable site with

an applicable stationary diesel engine will meet the emission specification listed in §117.2010

either by participating in the MECT program and obtaining allowances or not participating in

the MECT program and obtaining emission credits or discrete emission credits, depending on

the site's collective uncontrolled design capacity to emit.

For example, on July 21,2010, a municipal utility district (MUD) installs a stationary diesel

engine for use as a backup generator to maintain water pressure during power outages. In this

example, the MUD does not have any other applicable facilities subject to §117.2010 and is not

subject to the MECT program prior to the installation ofthis engine. The diesel engine is rated

at 150 horsepower, has an emission factor of 7.0 grams ofNOx per horsepower-hour, and is

permitted to operate at most 876 hours per year. The engine must comply with the emission

specifications listed in §117.2010 since this engine does not meet the criteria necessary to be

considered exempt under §11 7.2003. Therefore, the installation ofthe backup generator requires

recalculation ofthe site's collective uncontrolled design capacity to emit to determine

applicability in the MECT program. Adopted §101.350(14) will allow using 876 hours when

calculating the uncontrolled design capacity to emit for the diesel engine, therefore equaling

5
1.01 tons ofNOx per year. The MUD in this example can also use the conventional method for

calculating the uncontrolled design capacity to emit using 8,760 hours, therefore equaling 10.14

tons per year. The MUD is subject to the MECT program ifthe collective uncontrolled design

capacity to emit is ten tons or more per year ofNOx. Since the MUD has the option of having a

collective uncontrolled design capacity to emit above or below ten tons per year, the MUD can

either participate in the MECT program and obtain allowances to cover the actual emissions of

NOx from the diesel engine or obtain emission credits or discrete emission credits for the diesel

engine to meet the emission specifications listed in §117.2010. Under adopted §101.351(c), if

this MUD participates in the MECT program, then this site will remain subject to the MECT

program until permanently shut down.

§lOl.351, Applicability

The adopted amendment to §101.351(a) will require a site first to determine its status as a minor

or major source of NOx in Chapter 117. Ifthe site is a major source of NOx, the facilities with

emission specifications listed in §117.310 or §117.1210 are applicable to the MECT program. If

the site is a minor source ofNOx, the collective uncontrolled design capacity to emit is

calculated from the facilities with emission specifications in §117.2010. Ifthe collective

uncontrolled design capacity to emit is ten tons or more per year ofNOx, then the site is subject

to the MECT program.

Adopted §101.351(c) states that once a site becomes subject to the MECT program, the site will

remain subject to the MECT program until permanently shut down. Adopted subsection (c) will

clarify that a site's collective uncontrolled design capacity to emit will not affect the site's

applicability once subject to the MECT program. In addition, adopted subsection (c) will also

clarify that once a minor source ofNOx is subject to the MECT program, any ofthe facilities at

the site subject to the emission specifications in §117.2010 are subject to the MECT program

6
until the site is permanently shut down.

§JOJ.353, Allocation ofAllowances

The commission adopts the amendment to §101.353(b) with changes from the proposal to

correct non-substantive typographical errors and to comply with Texas Register formatting

requirements. Adopted §101.353(b) will require sites defined on or before December 31,2000,

as major sources ofNOx with facilities that meet the requirements to receive allowances in

accordance with §101.360(a), but have not submitted an ECT-3 form by March 30,2010, to

obtain allowance for these facilities from the market. Under the current rule, ECT-3 forms were

considered late ifsubmitted in accordance with §101.360(a) after June 30, 2001; however, the

forms were accepted. Under the adopted amendment, an ECT-3 form submitted in accordance

with §101.360(a) that is received after March 30, 2010, from a site defined on or before

December 31, 2000, as a major source ofNOx, will not be accepted and the facilities listed on

the ECT-3 form will be required to obtain allowances from the market instead ofreceiving an

allocation of allowances based on historical actual emission data or an allocation of allowances

based on permitted allowable emissions.

The existing rule language regarding the 90-day submittal deadline for an ECT-3 form from

newly applicable sites or facilities will not be affected by the adopted rulemaking. Also, the

adopted rulemaking will not affect ECT-3 forms submitted in accordance with §101.360(a) after

March 30, 2010, from minor sources ofNOx.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the rulemaking action in light ofthe regulatory analysis requirements

ofTexas Government Code, §2001.0225, and detennined that the action is not subject to

§2001.0225 because it does not meet the defmition of a "major environmental rule" as defmed

7
in that statute. A "major environmental rule" is a rule, the specific intent ofwhich 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, a sector ofthe economy, productivity,

competition, jobs, the environment, or the public health and safety ofthe state or a sector ofthe

state. The amendments to Chapter 101 are not specifically intended to protect the environment

or reduce risks to human health from environmental exposure to air pollutants; although, the

underlying emissions banking and trading program is intended to achieve these goals. The

primary purpose ofthis rulemaking action is to maintain the integrity ofthe NOx cap in the

HGB ozone nonattainment area by minimizing potential increases in the cap, to amend the

defmition of "Uncontrolled design capacity" to "Uncontrolled design capacity to emit" for

additional clarity and to provide additional flexibility for certain diesel engines, and to clarify

site and facility applicability.

None ofthese amendments place additional financial burdens on the regulated community. The

first purpose ofthis adopted rulemaking is to maintain the integrity ofthe NOx cap and

minimize cap increases, by discontinuing the acceptance oflate ECT-3 forms submitted in

accordance with §101.360(a) after March 30, 2010, from sites defined on or before December

31, 2000, as major sources ofNOx. Although a major source ofNOx that has not submitted its

ECT-3 form by March 30,2010, will have to purchase MECT allowances, the commission has

not received any late ECT-3 forms since before 2003 from a major source ofNOx; therefore, it

is unlikely that anyone who needs to submit ECT-3 forms has not done so. The other purpose of

this adopted rulemaking is to provide additional flexibility to sites that would enter the MECT

program because ofa backup generator, by proposing a new option for calculating the

uncontrolled design capacity to emit from applicable diesel engines that operate less than 100

hours per year in non-emergency situations and do not meet the applicable EPA Tier standards.

This adopted change will offer additional flexibility for potential applicability ofthe MECT

8
program to a wider range ofsources and will give potentially affected sources additional

options, instead ofrequiring them to participate in the MECT program. Thus, the rulemaking

action does not affect in a material way the economy, a sector ofthe economy, productivity,

competition, jobs, the environment, or the public health and safety ofthe state or a sector ofthe

state.

As defmed in the Texas Government Code, §2001.0225 only applies to a major environmental

rule, the result ofwhich is to: exceed a standard set by federal law, unless the rule is specifically

required by state law; exceed an express requirement ofstate law, unless the rule is specifically

required by federal law; exceed a requirement of a delegation agreement or contract between the

state and an agency or representative ofthe federal government to implement a state and federal

program; or adopt a rule solely under the general powers ofthe agency instead of under a

specific state law. This rulemaking action does not meet any ofthese four applicability

requirements of a "major environmental rule." Specifically, the adopted amendments to the

MECT program in this rulemaking action were developed to provide flexibility in meeting the

ozone NAAQS set by the EPA under 42 United States Code (USC), §7409, and therefore, meet

a federal requirement. This rulemaking action does not exceed an express requirement ofstate

law or a requirement of a delegation agreement, was not developed solely under the general

powers ofthe agency, but was specifically developed to meet the NAAQS established under

federal law and authorized under Texas Health and Safety Code (THSC), §§382.011, 382.012,

and 382.017, as well as under 42 USC, §7410(aX2XA).

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.

9
TAKINGS IMPACT ASSESSMENT

The commission evaluated the adopted rulemaking and perfonned an assessment ofwhether

Texas Government Code, Chapter 2007, is applicable. The adopted amendments to the MECT

program will provide additional flexibility for certain sites in meeting the ozone NAAQS set by

the EPA under 42 USC, §7409, and also limit increases in the NOx cap. Promulgation and

enforcement ofthe amendments will not burden private real property. The adopted amendments

do not affect private property in a manner that restricts or limits an owner's right to the property

that would otherwise exist in the absence of a governmental action. Additionally, the credits and

allowances that will be affected by these adopted amendments are not property rights.

Consequently, this rulemaking action does not meet the definition of a taking under Texas

Government Code, §2007.002(5). Although the adopted amendments do not directly prevent a

nuisance or prevent an immediate threat to life or property, they do prevent a real and

substantial threat to public health and safety, and partially fulfill a federal mandate under 42

USC, §7410. Specifically, the emission limitations and control requirements within these rules

were developed in order to meet the one-hour ozone NAAQS set by the EPA under 42 USC,

§7409. States are primarily responsible to ensure attainment and maintenance ofthe NAAQS

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

NAAQS through control programs directed to sources ofthe pollutants involved. Therefore, the

purpose ofthis adopted rulemaking action is to minimize increases in the NOx cap and to

provide additional flexibility for certain sites to meet the ozone NAAQS set by the EPA under

42 USC, §7409. Consequently, the exemption that applies to these adopted amendments is that

of an action reasonably taken to fulfIll an obligation mandated by federal law. Therefore, this

rulemaking action will not constitute a taking under Texas Government Code, Chapter 2007.

10
CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission determined that this rulemaking action relates to an action or actions subject to

the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination

Act of 1991, as amended (Texas Natural Resources Code, §§33.201 etseq.), and the

commission rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the

Texas Coastal Management Program. As required by §281.45(a)(3) and 31 TAC §505.l1(b)(2),

relating to Actions and Rules Subject to the Coastal Management Program, commission rules

governing air pollutant emissions must be consistent with the applicable goals and policies of

the CMP. The commission reviewed this action for consistency with the CMP goals and

policies in accordance with the rules ofthe Coastal Coordination Council and determined that

the action is consistent with the applicable CMP goals and policies. The CMP goal applicable to

this rulemaking action is the goal to protect, preserve, and enhance the diversity, quality,

quantity, functions, and values ofcoastal natural resource areas (31 TAC §501.12(J». The

adopted amendments will update a defmition and maintain the integrity ofthe NOx cap. No new

sources of air contaminants will be authorized, and the revisions will maintain the same level of

emissions control as previous rules. The CMP policy applicable to this rulemaking action is the

policy that commission rules comply with federal regulations in 40 Code ofFederal Regulations

(CFR), to protect and enhance air quality in the coastal areas (31 TAC §501.14(q». This

rulemaking action complies with 40 CFR Part 51, Requirements for Preparation, Adoption, and

Submittal ofImplementation Plans. Therefore, in accordance with 31 TAC §505.22(e), the

commission affirms that this rulemaking action is consistent with CMP goals and policies.

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.

11
EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM

These amendments will not require any changes to outstanding federal operating permits.

PUBLIC COMMENT

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. No oral

comments regarding the MECT program were received.

Written comments regarding the MECT program were provided by the EPA, National

Aeronautics and Space Administration (NASA), and the Houston Regional Group and the Lone

Star Chapter ofthe Sierra Club (HSC). In addition, the Kids for Clean Air, the Sustainable

Energy and Economic Development Coalition, the Clean Air Institute ofTexas, and one

individual expressed support for the comments received from the HSC.

RESPONSE TO COMMENTS

The EPA requested clarification on the amendment to §101.353(b) and why it does not require

minor sources ofNOx submitting late ECT-3 forms to obtain allowances from the market. The

EPA expressed that these minor sources ofNOx could increase the overall cap and jeopardize

the attainment demonstration modeling for the HGB ozone nonattainment area.

The MECT NOx cap is a product ofthe emission specifications ofChapter 117 and the

submitted levels of activity from applicable existing facilities, about an 80% reduction

from each existing facility's baseline. A new facility (e.g., a new or modified facility that is

part of an administratively complete permit application received on or after January 2,

2001) that is subject to the MECT program cannot receive an allocation of allowances,

and the site must obtain allowances to cover the new facility's total emission ofNOx.

12
Minor sources of NOx with applicable facilities that are not in the MECT program must

meet the emission specifications of Chapter 117 on a unit-by-unit basis. A minor source of

NOx with facilities subject to the emission specifications of Chapter 117 must comply by

installing controls, the use of emission credits, or the use of discrete emission credits. A

minor source ofNOx is subject to the MECT program once the site has a collective

uncontrolled design capacity to emit greater than or equal to ten tons per year of NOx•H

an existing facility at a minor source ofNOx transitions from being a non-MECT facility

to a MECT facility, it may receive allowance allocations based on the emission

specifications of Chapter 117. Ha minor source of NOx submits a late ECT-3 form but

installed controls on an existing facility to comply with Chapter 117 prior to entering the

MECT program, the site would undergo both the cost ofinstalling the controls and the

cost of purchasing the entire amount of allowances needed to comply with the MECT

program for each control period ifthe late ECT-3 form was not accepted. This would

penalize sites that choose to install controls on an existing facility and then become subject

to the MECT program. Therefore, the commission is continuing to grant allowances for

the portion of an existing facility's emissions at a minor source ofNOx that were

previously controlled through compliance with the Chapter 117 emission specifications. H

an existing facility required additional allowances for compliance, the allowances would

have to be purchased from the market. Although the existing facility's compliance

mechanism transitions from direct compliance with the emission specifications to

compliance with the MECT program, there is no actual growth in real emissions because

the allowance is based on actual level of activity and the emission specification the existing

facility was already required to meet.

Although granting these allowances to minor sources does slightly increase the MECT

13
NOx cap, it does not interfere with the attainment demonstration modeling for the HGB

area. When analyzing future growth in the attainment demonstration model, it is assumed

that there is no trading because trading is highly unpredictable from fluctuations in needs

and market conditions. Existing facilities subject to the MECT program are modeled at

their allowance allocation amount and not allowed any growth. New facilities subject to

the MECT program are modeled at zero (i.e., allocated zero allowances), because these

facilities are required to obtain allowances from existing facilities through trading. With

respect to the model, the sum ofthe MECT existing facilities and the MECT new facilities

is the MECT NOx cap. With respect to actual emissions, the sum ofthe MECT existing

facilities and the MECT new facilities actual emission of NOx is less than or equal to the

MECT NOx cap.

New and existing facilities not in the MECT program are allowed growth using modeling

values based on EPA-approved growth methodologies. For example, a facility entering

late into the MECT program will switch in the model to the allowance allocation amount

with zero growth, and the modeling value based on an EPA-approved growth

methodology will be discarded. Ifthe modeled MECT NOx cap were to increase, then that

would result in decreases ofthe non-MECT modeled NOx emissions that have this growth

applied. This would actually result in a net decrease in the total point source NOx

emissions inventory in the model, ifthe model were to be run with the new numbers.

Ifan existing facility at a minor source of NOx is in the area source inventory, the

allowances provided to that facility would still be applied to the total point source

inventory modeled MECT NOx cap. However, the commission has decided not to decrease

the area source inventory correspondingly at this time because the change would be so

insignificant. Historically, the increase in the MECT NOx cap due to approved late ECT-3

14
forms submitted by minor sources ofNOx has been insignificant. Since January 1, 2004,

the commission approved 13 late ECT-3 forms that were due by June 30, 2001. These sites

were allocated an average of3.64 tons of allowances persite, or 0.01 tons ofNOx per day

(tpd). The collective total from the 13 sites is about 0.13 tpd. The total 2018 modeled

baseline area source inventory and point source inventory NOx emissions are 42.04 tpd

and 154.36 tpd, respectively. Adjusting the modeled area source inventory for such an

inconsequential decrease is impractical and provides no benefit. Therefore, the

commission has chosen to model such changes conservatively and only include the increase

in the point source MECT NOx cap.

Thus, the continued acceptance oflate ECT-3 forms from existing facilities at minor

sources ofNOx, while slightly increasing the NOx cap, will not interfere with attainment

demonstration modeling for the BGB area. No changes were made in response to this

comment.

NASA requested clarification whether the proposed rule would continue to allow major sources

ofNOx with eligible facilities that have lost their exemption status und~r Chapter 117 to submit

ECT-3 forms requesting an allocation ofallowances.

The commission will continue to accept ECT-3 forms from major sources ofNOx for

facilities eligible under §101.360(c) to receive an allocation of allowances that lose their

exemption status under Chapter 117 iftheir exemption status was lost on or after April 1,

2001. No changes were made in response to this comment.

The HSC commented that the commission should discontinue the MECT program and set

command and control emission limits for each emission point.

15
The commission did not propose discontinuation ofthe MECT program. This comment is

beyond the scope ofthis rulemaking. The commission adopted the MECT program having

determined the MECT program as the most efficient means to achieve cost-effective

reductions ofNOx. The MECT program was approved by the EPA and provides

compliance flexibility while maximizing the efficiency of emission reductions through

market forces. The commission maintains that the MECT program is the most costeffective means of achieving emissions reductions ofNOx•Individual sources ofNOx

emissions also must meet permit limits and any applicable limit as established by rule. The

MECT program provides for additional decreases in NOx emissions limits above and

beyond these basic requirements. No changes were made in response to this comment.

The HSC supports the adoption of §101.353(b)(3) - (5). The HSC commented that the

commission should change the deadline for an applicable major source ofNOx to submit an

ECT-3 form submitted in accordance with §101.360(a) from March 30, 2010, to January 1,

2010, as the ozone standard should be attained as expeditiously as practical.

The commission appreciates the support. The amendments to the MECT program cannot

be enforced until April 1, 2010, the effective date ofthe adopted rulemaking. Therefore,

the March 30, 2010, deadline corresponds with the effective date ofthe adopted

rulemaking. No changes were made in response to this comment.

The HSC is concerned that the defmition "Uncontrolled design capacity to emit" is too broad

regarding facilities with NOx control equipment not considered post-combustion control

equipment.

16
The adoption ofthe definition "Uncontrolled design capacity to emit" will not affect the

requirements ofthe facilities referenced in this comment to meet the emission

specifications ofChapter 117, but will clarify how to calculate the uncontrolled design

capacity to emit from these facilities. No changes were made in response to this comment.

The HSC is concerned that the defmition "Uncontrolled design capacity to emit" allows

increased operation of applicable stationary diesel engines. Instead of adopting the proposed

new sentence to the defmition "Uncontrolled design capacity to emit," the HSC commented that

the commission should adopt specific rules covering emergency stationary diesel engines

located at MUDs and other water treatment plants.

The definition "Uncontrolled design capacity to emit" does not grant an increase in

operation for applicable stationary diesel engines operating less than 100 hours per year in

non-emergency situations that do not meet the applicable EPA Tier standard. No changes

were made in response to this comment.

The definition "Uncontrolled design capacity to emit" is only used to determine if a minor

source ofNOx is applicable to the MECT program. The commission did not propose rules

specificaUy to exempt or limit the emissions from emergency stationary diesel engines at

water treatment plants, so this comment is beyond the scope of this rulemaking.

STATUTORY AUTHORITY

The amendments are adopted under Texas Water Code (TWC), §S.l02, concerning General

Powers, that provides the commission with the general powers to carry out its duties under the

TWC; TWC, §S.103, concerning Rules, that authorizes the commission to adopt rules necessary

to carry out its powers and duties under the TWC; TWC, §S.1 OS, concerning General Policy,

17
that authorizes the commission by rule to establish and approve all general policy ofthe

commission; and under Texas Health and Safety Code (THSC), §382.0 17, 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 the National Ambient Air Quality Standard will be achieved and maintained

within each air quality control region ofthe state.

The amended sections implement THSC, §§382.002, 382.011, 382.012,382.016, and 382.017,

and FCAA, 42 USC, §§7401 et seq.

18
STAFF 

RECOMMENDATIONS
SUBCHAPTER H: EMISSIONS BANKING AND TRADING

DMSION 3: MASS EMISSIONS CAP AND TRADE PROGRAM

§§101.350, 101.351, 101.353

§101.350. Definitions.

The following words and tenns, when used in this division (relating to Mass Emissions Cap and

Trade Program), will have the following meanings, unless the context clearly indicates otherwise.

(1) Adjustment period--A period oftime, beginning on the fIrst day of operation of a facility and

ending no more than 180 consecutive days later, used to make corrections and adjustments to achieve

nonnal technical operating characteristics ofthe facility.

(2) AIlowance--The authorization to emit one ton ofnitrogen oxides, expressed in tenths of a ton,

during a control period.

(3) Authorized account representative-The responsible person who is authorized, in writing, to

transfer and otherwise manage allowances.

(4) Banked allowance-An allowance that is not used to reconcile emissions in the designated

year of allocation, but that is carried forward for up to one year and noted in the compliance or broker

account as "banked."

1
(5) Broker--A person not required to participate in the requirements ofthis division (relating to

Mass Emissions Cap and Trade Program) who 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 (relating to

Mass Emissions Cap and Trade Program).

(7) Compliance account-The account where allowances held by a facility or multiple facilities at

a single site are recorded for the purposes ofmeeting the requirements ofthis division (relating to Mass

Emissions Cap and Trade Program).

(8) Control period--The 12-month period beginning January I and ending December 31 ofeach

year. The initial control period begins January 1.2002.

(9) Existing Facility--A new or modified facility that either has submitted an application for a

permit under Chapter 116 ofthis title (relating to Control ofAir Pollution by Permits for New Construction

or Modification) that the executive director has determined to be administratively complete before January

2.2001. or has qualified for a permit by rule under Chapter 106 ofthis title (relating to Permits by Rule)

and commenced construction before January 2. 2001.

(10) Houston-Galveston-Brazoria (HGB) ozone nonattainment area-As defined in §101.1 of

this title (relating to Definitions).

2
(11) Level of activity--The amount ofactivity at a facility measured in tenns ofproduction, fuel

use, raw materials input, or other similar units.

(12) Person--For the purpose ofissuance of allowances under this division (relating to Mass

Emissions Cap and Trade Program), a person includes an individual, a partnership oftwo or more persons

having a joint or common interest, a mutual or cooperative association, or a corporation.

(13) Site-As defmed in §122.1 0 ofthis title (relating to General Definitions).

(14) UncontroUed design capacity to emit-The maximum capacity of a facility to emit nitrogen

oxides without consideration for post-combustion pollution control equipment, enforceable limitations, or

operational limitations. The owner or operator ofa stationary diesel engine may use the lower of 876 hours

or a federally enforceable limitation on total hours of operation to calculate uncontrolled design capacity to

emit ifthe engine would otherwise be exempt from Chapter 117, Subchapter D, Division 1 ofthis title

(relating to Houston-Galveston-Brazoria Ozone Nonattainment Area Minor Sources) under

§I 17.2003(a)(2)(l) ofthis title (relating to Exemptions) except that the engine does not meet the emission

standard requirements of §117.2003(a)(2)(l)(ii) ofthis title.

§101.3S1. Applicability.

(a) This division applies to sites in the Houston-Galveston-Brazoria ozone nonattainment area that:

(l) meet the definition of a major source ofnitrogen oxides (NOx), as defined in §11 7.10

ofthis title (relating to Definitions), with facilities subject to §117.31 0 or §117.1210 ofthis title (relating

to Emission Specifications for Attainment Demonstration); or

3
(2) do not meet the defmition of a major source ofNOx, as defmed in §117.1 0 ofthis title,

and have facilities subject to §117.201 0 ofthis title (relating to Emission Specifications) with a collective

uncontrolled design capacity to emit from these facilities often tons or more per year ofNOx.

(b) A site that met the defmition ofmajor source as ofDecember 31, 2000, must always be

classified as a major source for purposes ofthis chapter. A site that did not meet the defmition ofmajor

source (i.e., was a minor source, or did not yet exist) on December 31, 2000, but that at any time after

December 31, 2000, becomes a major source, must from that time forward always be classified as a major

source for purposes ofthis chapter.

(c) Once a site becomes subject to the requirements ofthis division, the site will remain subject to

this division until the site has been permanently shut down.

§101.3S3. Allocation of Allowances.

(a) Allowances will be deposited into compliance accounts according to the following equation

except as provided in subsection (b) or (h) ofthis section.

Figure: 30 TAC §101.353(a) (No change.)

A== [B] - X[B _(L4.HA *EFFINALJ]:

2000 .

Where:

(1) A= number ofallowances rounded to tenths oftons;

4
(2) B = the facility's baseline emission rate and is calculated as follows:

(A) For facilities in operation prior to January 1, 1997:

B=(LA91* EF97)+(LA9s*EF98)+(lAJ9*EF99)

3(200~

Where: LA97 = the facility's level of activity, as certified by the

executive director for 1997;

LA98 = the facility's level of activity, as certified by the

executive director for 1998;

LA99 = the facility's level of activity, as certified by the

executive director for 1999;

EF97 = the facility's emission factor for 1997 or the emission

specifications under §§117.310, 117.1210, and 117.2010 ofthis

title (relating to Emission Specifications for Attainment

Demonstration; and Emission Specifications) (ESAD) whichever

is higher, in pounds per unit of activity, (not to exceed any

applicable federal or state regulation, rule, or pennit limit), as

certified by the executive director;

EF98 =the facility's emission factor for 1998 or the emission

specifications under ESAD, whichever is higher, in pounds per

unit ofactivity, (not to exceed any applicable federal or state

regulation, rule, or pennit limit), as certified by the executive

director;

EF99 = the facility's emission factor for 1999 or the emission

specifications under ESAD, whichever is higher, in pounds per

unit of activity, (not to exceed any applicable federal or state

regulation, rule, or pennit limit), as certified by the executive

director.

(B) For existing facilities not in operation prior to January 1, 1997 and that have

been in operation less than five complete consecutive calendar years

beginning after the end ofthe adjustment period and have not established

two years ofbaseline data:

B = LAALLOJJ'ABLE*EFALLOlJ'.ABLE

2000

Where: LAAllowable = The level of activity authorized by the executive director

until such time two consecutive calendar years of actual

level of activity data is available;

5
EFAllowable = The emission factor or the emission specifications

under ESAD, whichever is higher, authorized by the executive

director until such time two consecutive calendar years ofactual

emission data is available.

(C) For existing facilities not in operation prior to January I, 1997, and that have

established two consecutive calendar years ofbaseline data out ofthe first

five years ofoperation following the end ofthe adjustment period:

B= (LAYK.4R-l*EFYlWl-l)+(LAYEAR-2* EFYEAR-2)

2(2000)

Where: LAYear_1 = the facility's level of activity, as certified by the

executive director, for the first ofany two consecutive years

within the first five years of operation;

LAYear-2 = the facility's level of activity, as certified by the

executive director, for the second of any two consecutive years

within the first five years ofoperation;

EFYear-1 = the facility's emission factor or the emission

specifications under ESAD, whichever is higher, in pounds per

unit ofactivity, (not to exceed any applicable federal or state

regulation, rule, or permit limit), as certified by the executive

director, for the first of any two consecutive years within the first

five years of operation;

EFYear-2 = the facility's emission factor or the emission

specifications under ESAD, whichever is higher, in pounds per

unit of activity, (not to exceed any applicable federal or state

regulation, rule, or permit limit), as certified by the executive

director, for the second of any two consecutive years within the

first five years ofoperation.

(3) X = reduction factor, where:

(A) For all boilers, auxiliary steam boilers, and stationary gas turbines (including

duct burners used in turbine exhaust ducts) within an electric power

generating system, as defmed in §117.10(l4)(A) ofthis title (relating to

Defmitions), located in the Houston-Galveston-Brazoria nonattainment area:

(i) for January 1,2002 through March 31,2003, X = 0.00;

(ii) for April I, 2003 through March 31, 2004, X = 0.50;

(iii) on or after April I , 2004, X = 1.00;

(B) For facilities subject to the emission specifications under §117.310(a)(I)(A)

and (B), (2)(A), (5), (8)(A)(i), (8)(B), (9)(A)(ii), (10), or (II) ofthis title:

6
(i) for January 1, 2002 through March 31, 2004, X = 0.00;

(ii) for April 1, 2004 through March 31, 2005, X = 0.47;

(iii) for April 1, 2005 through March 31, 2006, X = 0.80;

(iv) for April 1, 2006 through March 31, 2007, X = 0.93;

(v) on and after April 1, 2007, X = 1.00;

(C) For all other facilities:

(i) for January 1,2002 through March 31, 2004, X = 0.00;

(ii) for April 1, 2004 through March 31, 2005, X = 0.389;

(iii) for April 1, 2005 through March 31, 2006, X = 0.667;

(iv) for April 1,2006 through March 31, 2007, X = 0.778;

(v) on and after April 1, 2007, X = 1.00;

(0) Alternatively, facilities subject to the reduction factors under subparagraph B

ofthis paragraph may elect to comply with the following:

(i) for January 1,2002 through March 31, 2005, X=O.OO;

(ii) on and after April 1, 2005, X=1.00.

(E) Election to comply with the alternative reduction schedule under

subparagraph (0) ofthis paragraph shall be made by letter to the executive

director no later than April 1, 2003.

(F) For calendar years which include two different reduction factors, the

reduction factor shall be adjusted using the appropriate ratio to reflect the

number ofmonths covered by each reduction factor.

(4) LAHA = historical average level ofactivity, where:

(A) For facilities in operation on or before January I, 1997, the average level of

activity, as certified by the executive director, for 1997, 1998, and 1999; or

(B) For existing facilities which began operation after January 1, 1997, LAHA is:

(i) the level ofactivity authorized by the executive director until such time

two consecutive calendar years ofactual level of activity data is

available, beginning after the end ofthe adjustment period; or

(ii) when two complete consecutive calendar years of actual level ofactivity

data is available, beginning after the end ofthe adjustment period, the

level ofactivity becomes the average ofthe facility's actual level of

activity over those two consecutive calendar years of actual level of

activity data.

7
(5) EFfinaI = emission factor, as listed in §§117.310, 117.1210, or 117.2010 ofthis title.

(6) For facilities using alternative emission specifications as allowed in §117.310(a)(17)

or §117.201O(c)(6) ofthis title, the level of activity for any formula will be the lowest

ofthe level of activity as calculated in variables (2)(A), (2)(B), or the level of activity

limited by an enforceable limit or commitment necessary to qualify for an alternative

emission specification in §117.310(a)(17) or §117.2010(c)(6) ofthis title.

(b) The owner or operator ofthe following facilities shall acquire allowances for each control

period or the annual allocation rights from facilities already participating under this division in accordance

with §101.356 ofthis title (relating to Allowance Banking and Trading):

(1) new and/or modified facilities that have submitted, under Chapter 116 ofthis title

(relating to Control ofAir Pollution by Permits for New Construction or Modification), an application that

the executive director has not determined to be administratively complete before January 2, 2001;

(2) new and/or modified facilities that qualified for a permit by rule under Chapter 106 of

this title (relating to Permits by Rule) and have not commenced construction before January 2,2001;

(3) facilities in operation prior to January I, 1997, located at a site defmed on or before

December 31,2000, as a major source of nitrogen oxides (NOx), as defmed in §117.l0 ofthis title

(relating to Definitions), that have not submitted an ECT-3 Form, Level ofActivity Certification, in

accordance with §I01.360(a)(I) ofthis title (relating to Level ofActivity Certification) by March 30, 2010;

(4) new and/or modified facilities located at a site defmed on or before December 31,

2000, as a major source ofNOx, as defmed in §117.10 ofthis title, that submitted a permit application that

was determined administratively complete before January 2, 2001, but have not submitted an ECT-3 Form

in accordance with §101.360(a)(2) ofthis title by March 30, 2010; and

8
(5) new and/or modified facilities located at a site defmed on or before December 31,

2000, as a major source ofNOx, as defmed in §117.1 0 ofthis title, that qualified for a permit by rule and

commenced construction before January 2,2001, but have not submitted an ECT-3 Form in accordance

with §101.360(a)(2) ofthis title by March 30, 2010.

(c) Ifactual emissions ofNOx during a control period exceed the amount ofallowances held in a

compliance account 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

an additional 10%. This does not preclude additional enforcement action by the executive director.

(d) Allowances will be allocated by the executive director, who will deposit allowances into each

compliance account:

(1) initially, by ~anuary 1,2002; and

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

(e) The annual deposit for any control period may be adjusted by the executive director to reflect

new or existing state impl~mentation plan requirements.

(f) Allowances may be added or deducted by the executive director from compliance accounts

following the review ofreports required under §101.359 ofthis title (relating to Reporting).

9
(g) The owner or operator ofa facility may, due to extenuating circumstances, request a baseline

period more representative ofnormal operation as determined by the executive director. Applications for

extenuating circumstances must be submitted by the owner or operator ofthe facility to the executive

director:

(1) no later than June 30, 2001, to request an alternative three consecutive calendar year

period for facilities in operation prior to January 1, 1997;

(2) no later than 90 days after completion ofthe baseline period to request up to two

additional calendar years to establish a baseline period for facilities whose baseline as described by

-variable (2)(C) listed in the figure contained in subsection (a) ofthis section is not complete by June 30,

2001; or

(3) at any time as authorized by the executive director.

(h) Allowances calculated under subsection (a) ofthis section will continue to be based on

historical activity levels, despite subsequent reductions in activity levels. Ifallowances are being allocated

based on allowables and the facility does not achieve two complete consecutive calendar years ofactual

level of activity data, then allowances will not continue to be allocated ifthe facility ceases operation or is

not built.

10
This agency hereby certifiestha~he adoption has been reviewed

by legal counsel and found to bf:j a valid exercise ofthe agency's

legal authority. !

Filed with the Office of the Secr$ary of State on March 12, 2010.

TRD-201001269 I

Robert Martinez !

Director, Environmental Law Divisiqn

Texas Commission on Environment!al Quality

Effective date: April 1, 201 0 t

Proposal publication date: October 9,2009

For further infonnation, please call: (512) 239-6090

• •

SUBCHAPTER H. EMISSIONS BANKING

AND TRADING

DMSION 3. MASS EMISSIONS CAP AND

TRADEPROGRAM

30 TAC §§101.3SO, 101.351, 101.353

The Texas Commission on EnVironmental Quality (commission

or agency) adopts the amendments to §§101.350, 101.351, and

101.353.

Section 101.353 is adopted with changes to the proposed text

as published in the October 9, 2009, issue of the Texas Register

(34 TexReg 7009). Section 101.350 and §101.351 are adopted

without changes to the proposed text and will not be republished.

The commission will submit the amendments 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 purpose of the adopted amendments to Subchapter H, Division 3, Mass Emissions Cap and Trade Program, is to maintain the integrity of the nitrogen oxides (NO.) cap in the Houston-Galveston-Brazoria (HGB) ozone nonattainment area and

minimize increases in the NO. cap. The adopted rulemaking

will discontinue the acceptance of late ECT-3 forms, Level of

Activity Certification, submitted in accordance with §101.360(a)

after March 30, 2010, from sites defined on or before December 31, 2000, as major sources of NO., as defined in 30 TAC

§117.10. Also, the adopted rulemaking will amend the definition

of "Uncontrolled design capacity" to provide additional flexibility

for certain stationary diesel engines and clarify both site and facility applicability.

The Mass EmiSSions Cap and Trade (MECT) program is a market-based component ofthe SIP that provides stationary sources

of NO. compliance flexibility for the emission specifications under 30 TAC Chapter 117, while establishing a mandatory cap for

total NO. emissions from affected source categories in the HGB

ozone nonattainment area. The MECT program was adopted as

a primary control measure of the HGB attainment demonstration

for the one-hour ozone National Ambient Air Quality Standard

(NMQS). The MECT program NO. cap is a product of the emission specifications of Chapter 117 and the submitted levels of

activity from applicable facilities. The adopted rulemaking will

not affect the submittal of ECT-3 forms from minor sources of

NO._

35 TexReg 2574 March 26,2010 Texas Register

In accordance with §101.360(a), to receive an allocation of allowances (one allowance equals one ton of NO.), sites were required to submit an ECT-3 form with the levels of activity from

their applicable facilities by June 30, 2001. Applicable facilities

with historical actual emission data were allocated allowances

based on actual levels of activity while other applicable facilities without historical actual emission data were allocated allowances based on permitted allowable emissions. Representatives of facilities with allocations based on permitted emissions

are required to submit a second ECT-3 form once a historical

emissions baseline is established to convert their permit-based

allocation to a historical level ofactivity based allocation in accordance with §101.360(b)(1). The rule did not address-late submittals of ECT-3 forms. Therefore, a site that has never complied

with the MECT program could submit a late ECT-3 form in accordance with §1 01.360(a) and receive an allocation of allowances,

thus, potentially increasing the NO. cap. To maintain the integrity

and minimize increases in the NO. cap, the adopted rulemaking

will discontinue the acceptance of late ECT-3 forms from sites

defined on or before December 31, 2000, as major sources of

NO. if submitted in accordance with §1 01.360(a) after March 30,

2010. These applicable facilities will have to obtain allowances

from the market instead of receiving an allocation of allowances.

Informal comments from industry were received regarding clarification on "air pollution control equipmenr' in the definition of

"Uncontrolled design capacity." Therefore, the adopted rulemaking will clarify the definition of "Uncontrolled design capacity" by

amending this definition to "Uncontrolled design capacity to emir'

as the maximum capacity of a facility to emit NO. without consideration for post-combustion control equipment, enforceable

limitations, or operational limitations. The addition of "post-combustion control equipmenr' to the adopted definition will account

for any equipment that can be removed without preventing the

facility from operating. NO. control equipment that is not considered post-combustion control equipment, such as low-NO. burners, will be considered when calculating the uncontrolled design

capacity to emit.

In 2008, Hurricane Ike increased awareness of the need for

backup generators dUring extended power outages for activities

such as maintaining water pressure at water treatment plants.

To prOVide additional flexibility to sites that would potentially

become subject to the MECT program because of a backup

generator, the adopted new sentence to §101.350(14) will

provide a new option for calculating the uncontrolled design

capacity to emit from applicable diesel engines operating less

than 100 hours per year in non-emergency situations and

not meeting the applicable EPA Tier standards. The adopted

rulemaking will allow a minor source of NO. with an applicable

diesel engine, depending on the site's collective uncontrolled

design capacity to emit, to meet the emission specification listed

in §117.2010 either by participating in the MECT program and

acquiring allowances or not participating in the MECT program

and acquiring emission credits or discrete emission credits.

To clarify site and facility applicability, the adopted rulemaking will

restructure §101.351 to explain that sites must determine their

status as a minor or major source of NO. in Chapter 117 before

determining applicability of their facilities in the MECT program.

Along with the restructuring of §101.351, adopted subsection (c)

will clarify a site's duration in the MECT program.

SECTION BY SECTION DISCUSSION

SUBCHAPTER H: EMISSIONS BANKING AND TRADING
DIVISION3: MASS EMISSIONS CAPAND TRADE PROGRAM

In addition to the adopted amendments to §§101.350, 101.351,

and 101.353 discussed elsewhere in this preamble, the commissi~n also adopts various stylistic non-substantive changes

updating .rule language to current Texas Register style and format reqUirements, as well as establishing more consistency in

the rules. Such changes include appropriate and consistent use

of acronyms, punctuation, section references, and certain terms

such as "musr' and "shall." These changes are non-substantive

and generally are not specifically discussed in this preamble.

§101.350, Definitions

The adopted amendment to §101.350(14) will revise the definition O! "Uncon~rolled design .capacity" to "Uncontrolled design

capacity to emir' as the maximum capacity of a facility to emit

NO. without consideration for post-combustion control equip-

'!lent ~e.g., a selective catalytic reduction system), enforceable

limitations (e.g., permit restrictions, such as a restriction on

operating hours per year), or operational limitations (e.g., using

a numberlower than the maximum rated capacity). The addition

of "post-combustion control equipmenr' to the adopted definition

will account for any equipment that can be removed without

prev~nting the .facility from operating. NO. control equipment

that IS not conSidered post-combustion control equipment, such

as lOW-NO. burners, will be considered when calculating the

uncontrolled design capacity to emit.

The ad~pted amendment to §1~1.350(14) will allow flexibility for

calculating the uncontrolled deSIgn capacity to emit for stationary

diesel engines that are modified, reconstructed, or relocated, operate less. than 100 hours per year (based on a rolling 12-month

a~erage) In non-emergency situations, and do not meet the applicable EPA Tier standards. In conjunction with the adoption of

§101.351(c), adopted §101.350(14) will allow minor sources of

NO. not subject to the MECT program the option to calculate the

uncontrolled design capacity to emit for an applicable stationary

diese! e~gi~e using the lower of 876 hours or a federally enforceable limItatIon on total hours of operation. From the adopted new

language, an applicable site with an applicable stationary diesel

e~gine will meet the emission specification listed in §117.2010

either by participating in the MECT program and obtaining allowances or not participating in the MECT program and obtaining e!,"i~sion c~its or discrete emi~sjon credits, depending on

the Site s collective uncontrolled deSign capacity to emit.

~or example,. on JUly.21, 2010, a municipal utility district (MUD)

InstaJl~ a ~tatlonary diesel engi~e for use as a backup generator

to maintain water pressure dunng power outages. In this example, the MUD does not have any other applicable facilities subJect to §117.2010 and is not SUbject to the MECT program prior

to the installation of this engine. The diesel engine is rated at

150 horsepower, has an emission factor of7.0 grams of NO per

horsepower-hour, and is permitted to operate at most 876 hours

~r ye.ar. T~e engine must comply with the emission specifications listed In §117.2010 since this engine does not meet the

criteria necess~ry to considered exempt under §117.2003.

Therefore, the installation of the backup gerlerator requires racal?ulation of the site's collective uncontrolled design capacity to

emit to determine applicability in the MECT program. Adopted

§101.350(14) will allow using 876 hours when calculating the uncontr~lIed design capacity to emit for the diesel engine, therefore

equaling 1.01 tons of NO. per year. The MUD in this example can

also use the conventional method for calculating the uncontrolled

design capacity to emit using 8,760 hours, therefore equaling

10.14 tons per year. The MUD is subject to the MECT program

if the collective uncontrolled design capacity to emit is ten tons

or more per year of NO•. Since the MUD has the option of having

a collective uncontrolled design capacity to emit above or below

ten tons per year, the MUD can either participate in the MECT

program and obtain allowances to cover the actual emissions of

NO. from the diesel engine or obtain emission credits or discrete

emission credits for the diesel engine to meet the emission specifications ~is~ed in ~117.2010. Under adopted §101.351(c), ifthis

MUD partiCIpates In the MECT program, then this site will remain

subject to the MECT program until permanently shut down.

§101.351, Applicability

The adopted amendment to §101 :351(a) will require a site firstto

determine i~ s~tus as.a minor or major source of NO. in Chapter

117. If the site IS a major source of NO, the facilities with emission specifications listed in §117.310 o~ §117.1210 are applicable to the MECT program. If the site is a minor source of NO

the collective uncontrolled design capacity to emit is calculated

from the ~cilities with emission specifications in §117.2010. If

the collective uncontrolled design capacity to emit is ten tons or

more per year of NO., then the site is SUbject to the MECT program.

Adopted §101.351 (c) states that once a site becomes subject

to the MECT program, the site will remain subject to the MECT

program until permanently shut down. Adopted subsection (c)

will cl~ri~ that a site's collective uncontrolled design capacity

to emit will not affect the site's applicability once subject to the

ME~T program. In .addition, adopted subsection (c) will also

clarify that once a mmor source of NO. is SUbject to the MECT

program, any of the facilities at the site subject to the emission

specifications in §117.2010 are subject to the MECT program

until the site is permanently shut down.

§101.353, Allocation ofAllowances

The commission adopts the amendment to §101.353(b) with

chan~es from the proposal to correct non-substantive typograp~lcal errors and to comply with Texas Register formatting

reqUirements. Adopted §101.353(b) will require sites defined

on or before December 31, 2000, as major sources of NO with

facilities that meet the requirements to receive allowances in

accordance with §101.360(a), but have not submitted an ECT-3

form by March 30, 2010, to obtain allowance for these facilities

from the mar1<et. Under the current rule, ECT-3 forms were considered late if submitted in accordance with §101.360(a) after

June 30, 2001; however, the forms were accepted. Under the

adopted amendment, an ECT-3 form submitted in accordance

with §101.360(a) that is received after March 30 2010 from

a site defined on. or before December 31, 2000: as a 'major

source of NO., Will not be accepted and the facilities listed on

the ECT-3 form will be required to obtain allowances from the

mar1<et instead of receiving an allocation of allowances based

on historical actual emission data or an allocation of allowances

based on permitted allowable emissions.

~he existing rule language regarding the 9o-ctay submittal deadline for an ECT-3 form from newly applicable sites orfacilities will

not be ~ffe~ by the adopted rulemaking. Also, the adopted

rulemakmg WIll not affect ECT-3 forms submitted in accordance

with §101.360(a) after March 30, 2010, from minor sources of

NO•.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the rulemaking action in light of the

regulatory analysis requirements of Texas Government Code,

ADOPTED RULES March 26, 2010 35 TexReg 2575
§2001.0225, and determined that the action is not subject to

§2001.0225 because it does not meet 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, a sector of the economy, productivity, competition,

jobs, the environment, or the public health and safety ofthe state

or a sector of the state. The amendments to Chapter 101 are not

specifically intended to protect the environment or reduce risks

to human health from environmental exposure to air pollutants;

although, the underlying emissions banking and trading program

is intended to achieve these goals. The primary purpose of this

rulemaking action is to maintain the integrity of the NO. cap in

the HGB ozone nonattainment area by minimizing potential increases in the cap, to amend the definition of "Uncontrolled design capacity" to "Uncontrolled design capacity to emit" for additional clarity and to provide additional flexibility for certain diesel

engines, and to clarify site and facility applicability.

None ofthese amendments place additional financial burdens on

the regUlated community. The first purpose of this adopted rulemaking is to maintain the integrity of the NO. cap and minimize

cap increases, by discontinuing the acceptance of late ECT-3

forms submitted in accordance with §1 01.360(a) atter March 3D,

2010, from sites defined on or before December 31, 2000, as

major sources of NO•. Although a major source of NO. that has

not submitted its ECT-3 form by March 3D, 2010, will have to

purchase MECT allowances, the commission has not received

any late ECT-3 forms since before 2003 from a major source

of NO.; therefore, it is unlikely that anyone who needs to submit ECT-3 forms has not done so. The other purpose of this

adopted rulemaking is to provide additional flexibility to sites that

would enter the MECT program because of a backup generator,

by proposing a new option for calculating the uncontrolled design capacity to emit from applicable diesel engines that operate

less than 100 hours per year in non-emergency situations and

do not meet the applicable EPA Tier standards. This adopted

change will offer additional flexibility for potential applicability of

the MECT program to a wider range of sources and will give p0-

tentially affected sources additional options, instead of requiring

them to participate in the MECT program. Thus, the rulemaking

action does not affect in a material way the economy, a sector of

the economy, productivity, competition, jobs, the environment, or

the public health and safety of the state or a sector of the state.

As defined in the Texas Govemment Code, §2001.0225 only applies to a major environmental rule, the result of which is to: exceed a standard set by federal law, unless the rule is specifically

required by state law; exceed an express requirement of state

law, unless the rule is specifically required by federal law; 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 adopt

a rule solely under the general powers of the agency instead

of under a specific state law. This rulemaking action does not

meet any of these four applicability requirements of a "major environmental rule." Specifically, the adopted amendments to the

MECT program in this rulemaking action were developed to provide flexibility in meeting the ozone NAAOS set by the EPA under 42 United States Code (USC), §7409, and therefore, meet

a federal requirement. This rulemaking action does not exceed

an express requirement of state law or a requirement of a delegation agreement, was not developed solely under the general

powers of the agency, but was specifically developed to meet

35 Tex.Reg 2576 March 26, 2010 Texas Register

the NAAOS established under federal law and authorized under Texas Health and Safety Code (THSC), §§382.011, 382.012,

and 382.017, as well as under 42 USC, §7410(a)(2)(A).

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 evaluated the adopted rulemaking and performed an assessment of whether Texas Government Code,

Chapter 2007, is applicable. The adopted amendments to the

MECT program will provide additional fleXibility for certain sites

in meeting the ozone NAAOS set by the EPA under 42 USC,

§7409, and also limit increases in the NO. cap. Promulgation

and enforcement of the amendments will not burden private

real property. The adopted amendments do not affect private

property in a manner that restricts or limits an owner's right

to the property that would otherwise exist in the absence of a

governmental action. Additionally, the credits and allowances

that will be affected by these adopted amendments are not

property rights. Consequently, this rulemaking action does

not meet the definition of a taking under Texas Government

Code, §2007.002(5). Although the adopted amendments do not

directly prevent a nuisance or prevent an immediate threat to

life or property, they do prevent a real and substantial threat to

pUblic health and safety, and partially fulfill a federal mandate

under 42 USC, §7410. Specifically, the emission limitations

and control requirements within these rules were developed

in order to meet the one-hour ozone NAAOS set by the EPA

under 42 USC, §7409. States are primarily responsible to

ensure attainment and maintenance of the 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, the purpose of this adopted rulemaking

action is to minimize increases in the NO. cap and to provide

additional fleXibility for certain sites to meet the ozone NAAOS

set by the EPA under 42 USC, §7409. Consequently, the

exemption that applies to these adopted amendments is that of

an action reasonably taken to fulfill an obligation mandated by

federal law. Therefore, this rulemaking actiOn will not constitute

a taking under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission determined that this rulemaking action relates

to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended'(Texas Natural Resources Code,

§§33.201 et seq.), and the commission rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the Texas

Coastal Management Program. As required by §281.45(a)(3)

and 31 TAC §505.11 (b)(2), relating to Actions and Rules Subject

to the Coastal Management Program, commission rules governing air pollutant emissions must be consistent with the applicable

goals and policies of the CMP. The commission reviewed this

action for consistency with the CMP goals and policies in accordance with the rules of the Coastal Coordination Council and

determined that the action is consistent with the applicable CMP

goals and policies. The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural
resource areas (31 TAC §501.12(1». The adopted amendments

will update a definition and maintain the integrity of the NO. cap.

No new sources of air contaminants will be authorized, and the

revisions will maintain the same level ofemissions control as previous rules. The CMP policy applicable to this rulemaking action

is the policy that commission rules comply with federal regulations in 40 Code of Federal Regulations (CFR), to protect and

enhance air quality in the coastal areas (31 TAC §501.14(q».

This rulemaking action complies with 40 CFR Part 51, Requirements for Preparation, Adoption, and Submittal of Implementation Plans. Therefore, in accordance with 31 TAC §505.22(e),

the commission affirms that this rulemaking action is consistent

with CMP goals and policies.

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.

EFFECTON SITES SUBJECT TO THE FEDERAL OPERATING

PERMITS PROGRAM

These amendments will not require any changes to outstanding

federal operating permits.

PUBLIC COMMENT

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. No oral

comments regarding the MECT program were received.

Written comments regarding the MECT program were provided

by the EPA, National Aeronautics and Space Administration

(NASA), and the Houston Regional Group and the Lone Star

Chapter of the Sierra Club (HSC). In addition, the Kids for

Clean Air, the Sustainable Energy and Economic Development

Coalition, the Clean Air Institute of Texas, and one individual

expressed support for the comments received from the HSC.

RESPONSE TO COMMENTS

The EPA requested clarification on the amendment to

§101.353(b) and why it does not require minor sources of NO.

submitting late ECT-3 forms to obtain allowances from the

market. The EPA expressed that these minor sour~s of NO.

could increase the overall cap and jeopardize the attainment

demonstration modeling for the HGB ozone nonattainment area.

The MECT NO. cap is a product of the emission specifications

of Chapter 117 and the submitted levels of activity from applicable existing facilities, about an 80% reduction from each existing

facility's baseline. A new facility (e.g., a new or modified facility

that is part of an administratively complete permit application received on or after January 2, 2001) that is subject to the MECT

program cannot receive an allocation of allowances, and the site

must obtain allowances to cover the new facility's total emission

of NO•.

Minor sources of NO. with applicable facilities that are not in the

MECT program must meet the emission specifications of Chapter 117 on a unit-by-unit basis. A minor source of NO. with facilities subject to the emission specifications of Chapter 117 must

comply by installing controls, the use of emission credits, or the

use of discrete emission credits. A minor source of NO. is subject to the MECT program once the site has a collective uncontrolled design capacity to emit greater than or equal to ten tons

per year of NO•. If an existing facility at a minor source of NO.

transitions from being a non-MECT facility to a MECT facility, it

may receive allowance allocations based on the emission specifications of Chapter 117. Ifa minor source of NO. submits a late

ECT-3 form but installed controls on an existing facility to comply

with Chapter 117 prior to entering the MECT program, the site

would undergo both the cost ofinstalling the controls and the cost

of purchasing the entire amount ofallowances needed to comply

with the MECT program for each control period if the late ECT-3

form was not accepted. This would penalize sites that choose to

install controls on an existing facility and then become SUbject to

the MECT program. Therefore, the commission is continuing to

grant allowances forthe portion of an existing facility's emissions

at a minor source of NO. that were previously controlled through

compliance with the Chapter 117 emission specifications. If an

existing facility required additional allowances for compliance,

the allowances would have to be purchased from the market. Although the existing facility's compliance mechanism transitions

from direct compliance with the emission specifications to compliance with the MECT program, there is no actual growth in real

emissions because the allowance is based on actual level of activity and the emission specification the existing facility was already required to meet.

Although granting these allowances to minor sources does

slightly increase the MECT NO. cap, it does not interfere With

the attainment demonstration modeling for the HGB area. When

analyzing future growth in the attainment demonstration model,

it is assumed that there is no trading because trading is highly

unpredictable from fluctuations in needs and market conditions.

Existing facilities subject to the MECT program are modeled at

their allowance allocation amount and not allowed any growth.

New facilities SUbject to the MECT program are modeled at

zero (i.e., allocated zero allowances), because these facilities

are required to obtain allowances from existing facilities through

trading. With respect to the model, the sum of the MECT

existing facilities and the MECT new facilities is the MECT NO.

cap. With respect to actual emiSSions, the sum of the MECT

existing facilities and the MECT new facilities actual emission of

NO. is less than or equal to the MECT NO. cap.

New and existing facilities not in the MECT program are allowed

growth using modeling values based on EPA-approved growth

methodologies. For example, a facility entering late into the

MECT program will switch in the model to the allowance allocation amount with zero growth, and the modeling value based

on an EPA-approved growth methodology will be discarded. If

the modeled MECT NO. cap were to increase, then that would

result in decreases of the non-MECT modeled NO. emissions

that have this growth applied. This would actually result in a net

decrease in the total point source NO. emissions inventory in the

model, if the model were to be run with the new numbers.

If an existing facility at a minor source of NO. is in the area source

inventory, the allowances provided to that facility would still be

applied to the total point source inventory modeled MECT NO.

cap. However, the commission has decided not to decrease the

area source inventory correspondingly at this time because the

change would be so insignificant. Historically, the increase in the

MECT NOx cap due to approved late ECT-3 forms submitted by

minor sources of NO. has been insignificant. Since January 1,

2004, the commission approved 13 late ECT-3 forms that were

due by June 3D, 2001. These sites were allocated an average

of 3.64 tons of allowances per site, or 0.01 tons of NO. per day

(tpd). The collective total from the 13 sites is about 0.13 tpd.

The total 2018 modeled baseline area source inventory and point

source inventory NO. emissions are 42.04 tpd and 154.36 tpd,

respectively. Adjusting the modeled area source inventory for

ADOPTED RULES March 26, 2010 35 TexReg 2577
such an inconsequential decrease is impractical and provides no

benefit. Therefore, the commission has chosen to model such

changes conservatively and only include the increase in the point

source MECT NO. cap.

Thus, the continued acceptance of late ECT-3 forms from existing facilities at minor sources of NO., while slightly increasing the

NO. cap, will not interfere with attainment demonstration modeling for the HGB area. No changes were made in response to

this comment.

NASA requested clarification whether the proposed rule would

continue to allow major sources of NO. with eligible facilities that

have lost their exemption status under Chapter 117 to submit

ECT-3 forms requesting an allocation of allowances.

The commission will continue to accept ECT-3 forms from major

sources of NO. for facilities eligible under §1 o1.36o(c) to receive

an allocation of allowances that lose their exemption status under Chapter 117 iftheir exemption status was lost on or afterApril

1, 2001. No changes were made in response to this comment.

The HSC commented that the commission should discontinue

the MECTprogram and set command and control emission limits

for each emission point.

The commission did not propose discontinuation of the MECT

program. This comment is beyond the scope ofthis rulemaking.

The commission adopted the MECT program having determined

the MECT program as the most efficient means to achieve costeffective reductions of NO•. The MECT program was approved

by the EPA and provides compliance flexibility while maximizing the efficiency of emission reductions through mar1<et forces.

The commission maintains that the MECT program is the most

cost-effective means of achieving emissions reductions of NO•.

Individual sources of NO. emissions also must meet permit limits

and any applicable limit as established by rule. The MECT program provides for additional decreases in NO. emissions limits

above and beyond these basic requirements. No changes were

made in response to this comment.

The HSC supports the adoption of§1o1.353(b)(3)- (5). -rhe HSC

commented that the commission should change the deadline for

an applicable major source of NO. to submit an ECT-3 form submitted in accordance with §101.36o(a) from March 30,2010, to

January 1, 2010, as the ozone standard should be attained as

expeditiously as practical.

The commission appreciates the support. The amendments to

the MECT program cannot be enforced until April 1, 2010, the

effective date of the adopted rulemaking. Therefore, the March

30, 2010, deadline corresponds with the effective date of the

adopted rulemaking. No changes were made in response to this

comment.

The HSC is concemed that the definition "Uncontrolled design

capacity to emit" is too broad regarding facilities with NO. control

equipment not considered post-combustion control equipment

The adoption of the definition "Uncontrolled design capacity to

emir'will notaffectthe requirements ofthe facilities referenced in

this commentto meetthe emission specifications ofChapter 117,

but will clarify how to calculate the uncontrolled design capacity

to emit from these facilities. No changes were made in response

to this comment.

The HSC is concerned that the definition "Uncontrolled design

capacity to emir' allows increased operation of applicable stationary diesel engines. Instead of adopting the proposed new

35 TexReg 2578 March 26, 2010 Texas Register

sentence to the definition "Uncontrolled design capacity to emit,"

the HSC commented that the commission should adopt specific

rules covering emergency stationary diesel engines located at

MUDs and other water treatment plants.

The definition "Uncontrolled design capacity to emit" does not

grant an increase in operation for applicable stationary diesel engines operating less than 100 hours per year in non-emergency

situations that do not meetthe applicable EPA Tier standard. No

changes were made in response to this comment.

The definition "Uncontrolled design capacity to emir' is only used

to determine if a minor source of NO. is applicable to the MECT

program. The commission did not propose rules specifically to

exempt or limit the emissions from emergency stationary diesel

engines at water treatment plants, so this comment is beyond

the scope of this rulemaking.

STATUTORY AUTHORITY

The amendments are 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 TWC; TWC, §5.103, concerning Rules, that authorizes the

commission to adopt rules necessary to carry out its powers

and duties under the TWC; 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, conceming

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.oo2, 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.o11, concerning General Powers and Duties,

that authorizes the commission to control the quality of the

state's air; and §382.o12, concerning StateAir 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.o16,

conceming 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 (FCAA), 42 United States Code (USC), §§7401

et seq., which requires states to submit State Implementation

Plan revisions that specify the manner the National Ambient Air

Quality Standard will be achieved and maintained within each

air quality control region of the state.

The amended sections implement THSC, §§382.oo2, 382.011,

382.012, 382.016, and 382.017, and FCAA, 42 USC, §§7401 et

seq.

§lOl.353. Allocation ofAllowances.

(a) Allowances will be deposited into compliance accounts according to the following equation except as provided in subsection (b)

or (h) ofthis section.

Figure: 30 TAC §101.3S3(a) (No change.)

(b) The owner or operator ofthe following facilities shall acquire allowances for each control period or the annual allocation rights

from facilities already participating under this division in accordance

with §101.3S6 ofthis title (relating to Allowance Banking and Trading):
•

OL OF AIR

ATILE ORGANIC

(I) new and/or modified facilities that have submitted, under Chapter 116 of this title (relating to Control of Air Pollution by

Permits for New Construction or Modification), an application that the

executive director has not determined to be administratively complete

before January 2, 2001;

(2) new and/or modified facilities that qualified for a permit

by rule under Chapter 106 ofthis title (relating to Permits by Rule) and

have not commenced construction before January 2,2001;

(3) facilities in operation prior to January 1, 1997, located

at a site defined on or before December 31, 2000, as a major source

ofnitrogen oxides (N0x)' as defined in §117.1O ofthis title (relating to

Definitions), that have not submitted an ECT-3 Form, Level ofActivity

Certification, in accordance with §101.360(a)(1) ofthis title (relating

to Level of Activity Certification) by March 30, 2010;

(4) new and/or modified facilities located at a site defined

on or before December 31, 2000, as a major source ofNOx' as defined

in §117.10 of this title, that submitted a permit application that was

determined administratively complete before January 2, 200I, but have

not submitted an ECT-3 Form in accordance with §10I.360(a)(2) of

this title by March 30, 20I0; and

(5) new and/or modified facilities located at a site defined

on or before December 31,2000, as amajorsource ofN0x' as defined in

§117.10 ofthis title, that qualified for a permit by rule and commenced

construction before January 2, 2001, but have not submitted an ECT3 Form in accordance with §101.360(a)(2) of this title by March 30,

2010.

(c) If actual emissions ofNOx during a control period exceed

the amount of allowances held in a compliance account 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 an additional 10"10. This does

not preclude additional enforcement action by the executive director.

(d) Allowances will be allocated by the executive director,

who will deposit allowances into each compliance account:

(1) initially, by January 1,2002; and

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

(e) The annual deposit for any control period may be adjusted

by the executive directorto reflect new or existing state implementation

plan requirements.

(f) Allowances may be added or deducted by the executive director from compliance accounts following the review of reports required under §101.359 ofthis title (relating to Reporting).

(g) The owner or operator ofa facility may, due to extenuating

circumstances, request a baseline period more representative ofnormal

operation as determined by the executive director. Applications for

extenuating circumstances must be submitted by the owner or operator

of the facility to the executive director:

(I) no later than June 30, 2001, to request an alternative

three consecutive calendar year period for facilities in operation prior

to January I, 1997;

(2) no later than 90 days after completion ofthe baseline

period to request up to two additional calendar yearsto establish a baseline period for facilities whose baseline as described by variable (2)(C)

listed in the figure contained in subsection (a) ofthis section is not complete by June 30, 2001; or

(3) at any time as authorized by the executive director.

(h) Allowances calculated under subsection (a) ofthis section

will continue to be based on historical activity levels, despite subsequent reductions in activity levels. If allowances are being allocated

based on allowables and the facility does not achieve two complete consecutive calendar years of actual level ofactivity data, then allowances

will not continue to be allocated ifthe facility ceases operation or is not

built

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 ofState on March 12, 2010.

TRD-201001267

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: Apri/1, 2010

Proposal pUblication date: October 9, 2009

For further information, please call: (512) 239-6090

•

CHAPTER 115. CON

POLLUTION FROM V

COMPOUNDS

SUBCHAPTER E. SOi:vENT-USING

PROCESSES

DIVISION 4. OFFSET ITHOGRAPHIC

PRINTING i

30 TAC §§l1S.440 - l1S.443, hS.445, l1S.446, l1S.449

The Texas Commission on E~vironmental Quality (TCEQ or

commission) adopts amend"1ents to §§115.440, 115.442,

115.443, 115.445, 115.446, and 115.449; and adopts new

§115.441 with changes to the ~oposed text as pUblished in the

October 9, 2009, issue of the Texas Register(34 TexReg 7015).

The amendments and new sectjLn will be submitted to the United

States Environmental Protectioh Agency (EPA) as a revision to

the state implementation Planj'p).

BACKGROUND AND SLlMM RY OF THE FACTUAL BASIS

FOR THE ADOPTED RULES

The 1990 Federal Clean AirAct FCAA) Amendments (42 United

States Code (USC), §§7401 et seq.) require the EPA to establish primary National Ambient ~ir Quality Standards (NAAQS)

that protect public health and t! designate areas exceeding the

NAAQS as nonattainment are s. For each designated nonattainment area, the state is req ired to submit a SIP revision to

the EPA that provides for atta~nment and maintenance of the

NAAQS.

FCAA, §172(c)(1) requires tha the SIP incorporate all reasonably available control measure , including reasonably available

control technology (RACT), fO~SOUrces of relevant pollutants.

The EPA defines RACT as th lowest emission limitation that

a particular source is capable f meeting by the application of

control technology that is reaso ably available considering technological and economic feasib ity (44 Federal Register 53761,

September 17, 1979). For ntattainment areas classified as

moderate and above, FCAA, I182(b)(2) requires the state to

ADOPTED RULES March 26, 2010 35 TexReg 2579
TEXAS CONlMISSION ON ENVIRONl\1ENTAL QUALITY

ORDER ADOPTING AMENDED RULES AND

REVISIONS TO THE STATE IMPLEMENTATION PLAN

Docket No. 2009-0867-RUL

On March 10,2010, the Texas Commission on Environmental Quality (Commission),

during a public meeting, considered adoption of amendments to 30 TAC Chapter 101, General

Air Quality Rules, 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 state implementation plan (SIP). Under Tex. Health & Safety Code Ann. §§ 382.011,

382.012, and 382.023 (Vernon 2008), the Commission has the authority to control the quality of

the 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 revision was published for comment in the October 9, 2009, issue of the Texas

Register (34 TexReg 7009).

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

revision. Proper notice included prominent advertisement in the areas affected at least 30 days

prior to the dates ofthe hearings. Public hearings were held in Houston on October 28, 2009,

and in Austin on October 29,2009.

The Commission circulated hearing notices of its intended action to the public,

including interested persons, the Regional Administrator of the United States Environmental

Protection Agency (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 SIP, 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 revision 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 revision 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 oftestimony includes the names

of all interested groups or associations offering comment on the proposed rule changes and the

SIP revision and their position concerning the same.

IT IS THEREFORE ORDERED BY THE COMMISSION that 30 TAC Chapter 101,

General Air Quality Rules, 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 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 12 Z010 TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY