Bryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G, 

### ExecutiveDirector 

## 10 APR - 9 Pi] I: 55
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas by

### Reducing andPreventingPollution 

### 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 

### DearDr. 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 Standardby 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: TheHonorableRick 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 BryanW. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G., ExecutiveDirector

Protecting Texas byReducing andPreventingPollution 

### 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 Standardby 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 QMW,/haw-**Bry~haW,** Ph.D.

Chairman BWS/jmm Enclosures

cc: The Honorable RickPerry, 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 ofdocuments for revisions to the Texas State hnplementation Plan, adopted on March 10,2010, pursuant to 40 Code ofFederal 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 QualityTexas 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-ENINTRODUCTION

The Texas Commission on Environmental Quality (commission) held public hearings in Houston on October28,2009, and Austin on October29,2009, 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 ofthe amendment to §1 01.353 maintains the integrity ofthe 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 ofthis hearing record are maintained in the TCEQ central office at 12100 Park 35 Circle, Austin, Texas 78753. Forfurther 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 HEAlUNGSBYTHE'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
The T_ CommiIIIOn ali I!nvII'DIlft*Il:II QuIIIIty (CDmIllluIon) wll CDNIuet public

...rtng. lD rK8MI IMtIIIIDIIY rapnllllll PI'DllllAd

__III lD 30 TAC ChI_ 101. co.-al AIr QIlIIIty RiIIII••nIl 30 TAC ChI.,. 115. CGntl'Dl or Air PoUutIon InIm VOIdIl

. i Clrpnlc CGmllllWllll.nIl Cllnupondlllll rwIIlDIII lD·

.

tM Ilala**I~** plln (SIP) UnMrtM l'tIQull'WMlllll orT_ HMIth MId s.r.tv CocIe, 1312.017; T_ GlMmInMt CocIe, ChI_ 2001. SuIIcIIIo_r I; w 4Cl Colla or "'_1 bgaatlDnl 151.1112••1Id tM Unllad SlalaI !rnIInInJnMla1 Pnac:tIan Apncy (!PA) -.nInlI SlPL AddIlllNIIy. tM CDIlV'IIIIIlon wUI

.. ,..... IMtIlIlDny rapnllllll tM praJlOMd .,ht-llDUr

_

_ Irunent HIllIIIlItmIDn .1Id

_ .... furtlw' 1II'lIlI- (IU'P) cIemllnItmIDn IDr tile HllUIlDn- Ga.-n-IIUlriI (HGI)

..... The praJlOMd .1Mnll_lD ChI_101, Sulldllplar H. IlIvIIIan 3. MaD I!mIulaIll ClIp .1Id 'TIwIII (M!CT) PrDD

..m, would

__ tile ddnItIDn or ·U/ICIlIIItrDIIId HIllIn CIIIIIdtY" lD

__ .lIdItIDnIllIIllIIIIIItY fDr cMIIln 1la1lDniry 11118111III_ .1Id dlrlfy IIaIIlIlla .1Id flc:IIlty .ppllclblllty. In IddItlDn. tM praJlOMd .1Mnll_would IIIIInlilln tile InlalIrity ortile nllrogln lIIlIde (NOlC) ClP In tile HGI_ne IlIInitlIln_

.... MId m1n1mla1lncru1B In tile NOllaIp by IIIKDnt1nu1na tM ICaIIlaIlCll or IIlII E:T-3 farml, "... orktIvttY CIrtIIIcItton, InIm**~r** _ orNOll IUIlmttlIIIIllIIrM.n:II 30. 2010. (RuII1'rQIC No. 2IIllI01t-1D1-!N) The proplIIId .lIlIndlllllnt lD ChI_101. Sulll:hlplar H.llMIlon 6.**HIOIl~** VDlltIII Org.nlc CGmPDund ErniIIIOIII ClIp .1Id TriH PnlII..m. would

__ tile _I CIP .lIlIIUnt or .11DwI_ .1Id

__ tM .1IoCIlIDn Il1ItIIadoIDlIv or .1

..
_ fDr Plrtil:IpIntIln tile HlIIIl

........cIM YoIdII Clrpnlc Compoulld (HRVOC) I!mlIIlDIII ClIp .1Id Tracil PrDD

..m. A IlftIIIllIIIIIIIlInd_lD 1101.1 would .110 upllila tile lI.nnltlllll or wlltllI DlVlnlc CDlllPDllIId (WC) lD Unktile 30 TAC

....nllIIIn wltIl tile CUINIlt HnnllIDn In 4Cl ClIlIa or
..._, bgullllDIII .rId CDIftCttile "PDrtable QUinlItV far**1.1.1.z.3.3.3-IlIpla1lua~** .... (RulI PnIJ.ct ND. 2IIllI-llll6- 101-1!N) The praJlOMd .lIlIlndnulllD ChI_r 115. SUbcIlIPlarEo llMIlon 4. 0ftIIt I.IlIlDDrIpIlIcPrtntlllll. would 

## _IICII tile VOC CIInlant UmID Dn flIunlaln IlIIulIDIII UIId by

_ tIIIt

... 1U1del: lD tile DIItIng ChI_ 115 nllU. The pnIIIlIIId rvIImIldIIII would .110 Unlittilevoc: CIInlant orflIunlilln .1Id dunlng IIIlulIDnI ullll by main

_ tIIIt

... ·.... 1nIm tM aIItIng ChI_ 115 N

.... (Rull No. 2lIll8-0U·115-I!N) The PI'DIlDRd HGI AItIlrunent c.monstnllDn SIP rwIIIDn CIlIllaInI ,...1 Clan AirAct-rtlQul_ SIP lllment1, indudInIl • pIlDlDc:IlIJnIC IIlDlIeIInlI .nllyR, • MIgIlt orawIrIIncII

# .11I".•

_ .....wllll

.... CIIIllnII lIIdllllllDDv (RACT)

...... _nlblv _1IIbII CIIntl'Dl

_ (1tACM) .nllyIiI, •

# _r VIIlIc:IIIftlIlsIllnl (MVEB) far 2011. MId • pIIIn. In IIIdItiDn. tile HIMlDn-GI'-lDn AI8 Olundl

.... CDIIImltllld lD _lIClIDnIllIrDutll tile VDIunIIIry MDIlIII EmIIIIDn lWIIuclIDn PnlII

..m .1Id Impll/llllnlallDn or traMPDrtItIDn CDlIlnlI

__•The prIIIIlIRlIlWIIIDn .110 lMKrIbII tile CDIlQIlIWllIV PI'DJlOMd N11I'1l1111DIII In ChI"'" 101 .11II115. The CDIIImIIIIDn II IiID IlIIIdIInII CDmIIlIlntI on wllltllar It IIl11111'DP1'11t1lD PlrfIlrm • 1117

. 

### -.allt""r

_ lla.nI m1doCllUlM IWVIIw 'nllyIiI, .IId, rIO. wtIIt

....... 1IlDu1d be _IMII In tile 

## .11I

.... The CDIMIlIIIDn II .110 -... Input on tile IIIIl'VPllIDI dlla lD IIlbmIttile mIlI-cDlnsIlWVIIw. (Rull PrQIel: No. 205-CI17-!ilP'N/t) The ,,",JlOMd HGI E1g1lt-HDur 0- NonItlII_ AI8 RPP SIP

.....n cIMIDl

..... tIIIttile 11 PIIant_ne _1IIliaIDnI rIdudIDn rlQulNmlnt wlB be

## "* fDrtile

## .11I_ periDd or 211112 lD 2IllII. II PlIanta.-. ZIICIllInd 2011. II ..-.nt 2012 .1Id 2014. II PlIant 2015 MId 2017. 3..-.nt In 201I••1Id 3 Pllantfllrallll:llllllllCl'

## IIU_. ThIII'IlIIIIDn IilDlndudII. I'IViIIlI

_ far tile mu.tDnII VUIS 2011II. 2011, 2014. 2017. Ind 2011. No

_ DII"ftlId IllllIIIIIlDlrClI CDlItrIIIIllIw bean IdDPlaII II PlItortM pIIII.**~r.** DIHaId mDlIIII _1ftlIIsIIInI .-... 1lIVI

..... upllllallllllnD tM III111t _\IIIblI dIla .1Id tile !PA'. MOID.I!6-=rv
...........«tDDl. AI

..... ortile nlQulrld IIlDblII IDUrca Iftllllkm InVIntDry uPdIlaI. tile MVEIII

... UP!lllaII II PlIt ortIlII SIP 1WIIIDn. (RaM PnIJ.ctNo. 2IIllI011-51P-11R) Public .-.. DIl U- proplIIlIli

.. be IlIIrIIttile fIlIlDWllIII U

.....1Id 1DCItIDnI: OClDbIr 21. 2lIOII. 2:00 p.m••1Id 6:00 p.m.. In "-n A Ittile liDuItDn-GII'-lDn AI8 Olunc:ll, 355511mmolll U1ne. HllUllDn; Ind In A&.SIn DII 0CIDber211. 2lIClII. 3:00 p.m•• Ittile T_ DII Envtnlnmentll QuIIIltII complu, BuDding Eo --.. 2015. Uloo PlIIt 35 CIIaL The "'rtngI will be atruclurId fDrtile or D

..I Dr wrltlan _ntlby I"""" PI-. RIgIItrItIon will

....In 30 mInUIII priorlD ..m
...rllIII. lndlvtclulll nil'( p-.nt_I

__ wMn ClIIId upon In

_ or rwgIItrIlIDn. TIwe will be lID

_ dIIcuaIDn IIurlllll tile IlIIrIng; _.

# CDIIl_Ila" members will be lD cIIIaIa tile proplIIlIli 30 IllInulaI W- .eII IlIIrlng .1Id wlU ._ Q_ befIl

...1Id IftIrtile

........ IWSDIII pllMlng lD .tDInd tile

# -rIIIII. wIlD

_ IIIKlII_nlcIlIDn Dr_r _lIlDdIlIDn _. -...s CDIIlKtCIlIflDCIa Hom. T_1IIgIIlaT T.m (512) 23II-Cl77S

...._ ....... be IIIIde IIfir In 1dVIIlCII_ PIlIIIbIL nil'( be

__ lD JMIlcI Rlwllngl. T_1IIgIIlaT T.m. OIIICII or 1.10I' s.rvas. T_ CDmmIIsIDn Dn !llvll'DII_1 QuIIIIty. Me 205. P.O.

_ 13Cl87. _. T_ 71711-3017. DrtaIlIIIIlD (512) Z3II-oUDI. a.etnlnlc CO_ IlIIV be _mlllllll It www5.ICIQ.DIILCX.UllNIIII_ FIle

_ I8IrIctIDIIIIIlIV

# ."Iv lD COmrnentll llU1IllUlIIllltIlId vii tile .comlllllllS syIlam. All c:amlIIIIIlS

_ tile NIl Dr SIP JII'DJIC1 nu_1IlIt tile

_ pertlins lD: RAI. No. 2aat-D111-101·EN IDrtM ,,",JlOMd MECr NIIIIIlIlnd_. RuII PrQJel: No. 2OClII-Clll6-101-EN far till PI'DJlOMd HIlVOC NIl •

__ntl. RAI. PnIJ.ct No. 2lIllI-0111-115-1!N fartM proJlOMd VOC Nil 'lIlIllldlllllllS, SIP PrQJel: ND. 2lIlIII-Cl17-SII'-NR fartile proJlOMd HGI AtlIln/llllnt c.monstnllDn SIP I'IlIIIIDn .nll SIP No. 2IIllI-D11-SIP-NR. far tile PI'DIIlIAd HGI RPP SIP 1'IlIIIIDn. CGmrnentlI nut be by**~_** 9. ZIICIll. CGpIII or tile ,,",JlOMd

...... Cln lII_tneIllnIm tile com_n's Will t 1lI:lp:/lwww."*!.SlalLtx.lIS/nlV!NIIIIP--..clOPt-IltmI. cap_ Drtile pl'DpDSIlISIPravIIlD

...ndlUlPPI'ld_rm.IIlIIlMdrI'DmtlIICDm_"

__ It 1lI:lp:/lwww."*!.-.tx.lIS/lmpWmlntatlDnl.lrfllp/_p.lltmI. I'DrfurtIler InfDmIItlDn**~nling** the ,,",PDIIlIBryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissionet; Mark R. Vickery, P.G., ExecutiveDirector 

## TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas byReducing andPreventingPollution 

### 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 ofAir 

### Pollution from Volatile Organic Compounds and corresponding revisions to the state implementation plan (SIP) under the requirements ofTexas Health and Safety Code, §382.017; Texas Government Code, Chapter 2001, SubchapterB; and 40 Code ofFederal Regulations §S 1.102, 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 ofthe nitrogen oxides (NOx) cap in the HGB ozone nonattainment area and 

### minimize increases in 

### the NOx cap by discontinuing the acceptance oflate 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 ofallowances 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 ofvolatile 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, 

### SubchapterE, 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 offountain 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, areasonably 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 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 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 submitthe 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 of2002 to 2008, 9 percent between 2009 and 2011,9 percentbetween 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. AB a result ofthe required mobile source emission inventory updates, the MVEBs are updated as part of this SIP revision. (Rule ProjectNo. 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 staffmembers will be available to 

### discuss the proposals 30 minutes before eachhearing and will answer questions before and after 

### thehearing. 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.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 ofthe 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) forproposedRegistration 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 transfermunicipal 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 orwrittenrequests for apublic mee g mustbe submittedto the Office ofChiefClerkatthe address includ d inthe information sectionbelow. Comments may also bereceived if publicmeeting is held onthe facility. A publicmeeting will be heldb the executive directorifrequested 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 nsiderpublic 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 DIRECTORACTI

. The executive director shall, after review ofan 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 hiefclerk shall mail or otherwise transmit notice ofthe action and explanation ofthe opportunity to file a motion to reconsiderthe exec tive director's decision. The chief clerk shall mailthis notice tothe 0 erand 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 ChiefClerk. INFORMATION. Written public mments or requests to be placed on the permanent mailing list fo this application should be submitted to the Office ofthe 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 ofthe general public may contact e Office ofPublic 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 proposedrevisions 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 ofTexas



### 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 ofFederal 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 CompoundEmissi 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 atthe ollowing times and locations; October 28, 2009, 2:00 p.m. and 6:00 .m., in Conference Room A atthe 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 orwritten comments y interestedpersons. 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 afterthe 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 ofTexas Health and Safety Code, §382.017; Texas Government Code, Chapter 2001, SubchapterB; 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"Uncontrolleddesign capacity" to provide additionalflexibility 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 oflate ECT-3 forms, Level ofActivity 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 ofallowances for participants in the Highly-Reactive Volatile Organic Compound (HRVOC) Emissions Cap and Trade Program. A proposed amendmentto §I01.1 would also update the definition ofvolatile organic compound (VOC) to link the 30 TAC definition with the current definition in 40 Code ofFederal 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, SubchapterE, Division 4, Offset Lithographic Printing, wouldreduce the VOC content limits on fountain solutions usedby sources thatare subjecttothe 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 AirAct-required SIP elements, including a photochemical modeling analysis, a weight ofevidence 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 demonstrates thatthe 18 percentozoneprecursoremissionsreductionrequirementwillbe metforthe analysis periodof2002to 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 arevised 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 usingthe latestavailable dataandthe EPA'sMOBILE6 inventory development tool. As a result ofthe required mobile source emission inventory updates, the MVEBs are updated as partofthis 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 atthe Houston-Galveston AreaCouncil, 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 oforal or written comments by interested persons. Registration will begin 30 minutes priorto each hearing. Individuals may presentoral statements when calleduponinorderof registration. There will be no open discussion during the hearing; however, commission staffmembers will be available to discuss the proposals 30minutes before each hearing and will answerquestions before and afterthe hearing. Persons planning to attend the hearing, who have special communication or other accommodation needs, should contact Charlotte Horn, Texas RegisterTeam (512) 239-0779. Requests shouldbe 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 ofTexas Health and Safety Code, §382.017; Texas Government C ,Chapter 2001, Subchapter B; and 40 Code ofFederal 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 necessaryto supporttheproposed

This agency herebycertifiesthat he proposal has been reviewed by legal counsel and found to be ithin the agency's legal authority to adopt. Filed with the Office ofthe Seer ary of State on September25, 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 tothe state implementation plan (SIP). BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES The purpose ofthe 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 under30 TAC Chapter 117, while establishing a mandatory cap for total NO. emissions from affected source categories in the HGB ozone nonattainmentarea. The MECTprogram 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 ofChapter 117and 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 industrywere received regarding clarification on "airpollution control equipment" in the definition of"Uncontrolled design capacity." Therefore, the proposed rulemaking



### PROPOSED RULES October 9, 

### 2009 34 

### TexReg 7009would clarify the definition of "Uncontrolled design capacity" by amending this definition to "Uncontrolled design capacityto emit" as the maximum capacity of afacility 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 equipmentthat 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 Tierstandards. Underthis 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 minoror majorsource of NO. in Chapter 117 before detennining applicability oftheir 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 DIVISION3: MASS EMISSIONS CAPAND TRADEPROGRAM In addition to the proposed amendmentsto §§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 Registerstyle 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 lowerthan 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 con

### 34 TexReg 7010 October9,2009 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 subjectto 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 of7.0 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 capacityto emit to detennine applicability in the MECT program. Proposed §101.350(14) would allow using 876 hours when calculating the uncontrolled design capacity to emitforthe diesel engine, therefore equaling 1.01 tons of NO. peryear. 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 peryear of NO•. Since the MUD has the option of having a collective uncontrolled design capacityto 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. Underproposed §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. §1 01.351. 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 ofAllowances. 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) afterJune 30, 2001, however, the forms were accepted. Underthe 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 majorsource 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 oran 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 forthe agency or other units ofstate 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 exemptfrom 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 capacityto emit less than 10 tons of NO. peryear, the water or wastewater system would have the option to obtain emission credits or discrete emission credits to meet emission specifications. Ifthe 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 Staffestimates thatthere may be as many as 3,000 publicwater 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. Staffestimates thatthere 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 exemptfrom 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. peryear, the site would have the option to obtain emission credits or discrete emission credits to meet emission specifications. Ifthe existing calculation methodology is chosen and the site has a collective uncontrolled design capacityto emit 10tons or more of NO. peryear, then the site must participate in the MECT program and obtain allowances. Mar1<et prices of MECTallowances, emission credits, and discrete emission credits vary according to mar1<et conditions. The Figure in this preamble estimates the costs ofthe 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 ofthe 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 minorsources of NO. ifthey



### PROPOSED RULES October 9, 

### 2009 34 

### TexReg 7011choose 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 regulatoryflexibility 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, orthe 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;**~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 addi**tion~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 sectorof the economy, productivity, competition, jobs, the environment, or the public health and safety ofthe 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 ofthese 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 propertythat 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 bythe 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 federallaw. Therefore, this rulemaking action will not constitute ataking underTexas 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 pollutantemissions must be consistentwith 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 thatthe 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 ofthe 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, 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 ofthis rulemaking may be submitted to the contact person at the address listed underthe SUBMITIAL OF COMMENTS section ofthis preamble. EFFECT ON SITES SUBJECTTO 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 at3555 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 staffmembers will be available to discuss the proposal 30 minutes prior to the hearing. Persons who have special communication orotheraccommodation needswho 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, AirQuality Planning Section, (512) 239-4904. STATUTORY AUTHORITY The amendments are proposed underTexaswaterCode (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 ofthe Texas Clean AirAct. The amendments are also proposed underTHSC, §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 ofthe state's air; and §382.012, conceming State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan forthe proper control ofthe state's air. The amendments are also proposed underTHSC, §382.016, conceming Monitoring Requirements; Examination of Records, that authorizes the commission to prescribe reasonable requirements forthe measuring and monitoring ofaircontaminantemissions. The amendments are also proposed under Federal Clean Air Act (FCAA), 42 USC, §§7401 etseq., which requires states to submit SIP revisions that specify the mannerthe NAAQS will be achieved and maintained within each airquality 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) Adjustmentperiod--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 ofallocation, 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) Brokeraccount--The accountwhere allowancesheldby 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 ofeachyear. The initial controlperiod begins January I, 2002. (9) ExistingFacility-A new ormodified facility thateither has submitted an application for a permitunder Chapter 116 ofthis title (relating to Control ofAir 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 ofaetivity-The amount ofactivity at a facility measured interms of production, fuel use, raw materials input, orother similar units. (12) Person-Forthe purpose ofissuance ofallowances underthis division (relating to Mass Emissions Cap and Trade Program), a person includes an individual, a partnership oftwo or more persons having ajointor common interest, amutual or cooperative association, or a corporation. (13) Site-As defined in §122.10 ofthis 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 ofa stationary diesel engine may use the lower of876 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 NonattainmentArea Minor Sources) under § 117.2003(a)(2)ill of this title (relatingto 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-teemititpBlhitsBtwithettff'egIlI'dtetmy- eBfereeable ef physiealopel'QtioBallimiiaaollS iBell:lEIiBg ftip I'olltitioft eeBtfel. 

### meBt:t §101.35J. Applicability.



### 34 TexReg 7014 October9,2009 Texas Register (a) This division applies to sites [itli fIleilities whieh emit flitF6gefHHtiEles**fN9,,~]** in the Houston-Galveston-Brazoria ozone nonattainmentareathat: [;·titiefiBeEliBflW,-l-efthistitlefrelatiBgtef)efiflitieftstwhiehere5tibjeeftetheemissi6B speeifielltiBBstfftdef §§117.31g, 117.1219, ef 117.2g1g efthistitlefFelatiBgteEmissiBft SpeeifieatiBffS fefAttIlimBefttDemBnstfBtiBft-amiEmissiBft 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 ofthis title (relating to Emission Specifications for Attainment Demonstration); or (2) do not meet the definition ofa major source ofNO" as defined in § 117.10 ofthis title, and have facilities subjectto §117.201O ofthis title (relating to Emission Specifications) with a collective uncontrolled design capacity to emit from these facilities of [leeIlteEI itt it5ite wheretheyeeileetively htwe it& l:IfteeBtFelleatiesig& to emit] ten tons or more per year ofNOx' (b) A site that [whieh] met the definition ofmajor source as ofDecember 31, 2000, must [5heH] always be classified as a major source for purposes ofthis chapter. A site that [whieh] did not meetthe definition ofmajorsource (i.e., was aminor source, ordid notyetexist) on December 31,2000, but that [whieh] at any time after December 31,**2000~** becomes a major source, must [5hIllI] from thattime forward always be classified as a major source for purposes ofthis chapter. Once a site becomes subjectto the requirements of this division, the site will remain subjectto this division untilthe site has been permanently shut down. §lOJ.353. Allocation of Alluwances.

.(a) Allowances will be depositedinto 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 controlperiod orthe annual allocationrights 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 thathave submitted, under Chapter 116 ofthis title (relating to Control ofAir Pollution by Permits for New Construction orModification), an applicationthatthe executive director has not determined to be administratively complete before January 2, 200Ii 

### ill newand/ormodifiedfacilities thatqualifiedfor apermit by rule under Chapter 106 of this 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 ofthis title, that submitted a permit application that was determined administratively complete beforeJanuary 2, 2001, buthave 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 onorbeforeDecember31, 2000, as amajorsource ofNo., as definedin § 117.10 ofthis title, thatqualified for apermitby rule ano commenced construction before January 2, 2001, buthave 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 efthis title (rellltiftg t& efAif Pellutiea by Pefmi.tfef New CeBsl:FHetieft efMedifieatieB), tift llfll'lielltieB whieh .tfte exeeati¥e ilifeetefhils Bet deteFftlifted t&be admiftistf&ti'lely eeHIplete befefe ltimitify 2OOl-; eFhils qtlalified fef it by flIle tilt6eF .J% efthis title (I'tlllltiftg t&PeFftI:itsby eElhils Bet eelBBleBeed eeasl:FHeaea -gefefe.Ja:IitHIfy 2OOl-; allevlltftees fefeaelt eeatfeljMlfiedet'thtHtftftl:Hll· alleelltieftfightsshallbe&eqtlil'tld4femfaeiIitiestilfetldy-JlIIflieil'atiftg tHKiefthis di'lisieft; et' itt lleeerdaBee witft §I91.3S6(g) efthistHl&(felatiftgt&,AJlevlltftee BllIiIBBg

_ Tradiftg).] (c) Ifactual emissions ofNO. [BitfegeftilXities] during acontrol period exceed the amount ofallowances held in a compliance accountonMarch I following the control period, allowances forthe next control periodwill be reducedby an amountequalto 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 ofeach following year. (e) The annual deposit for any control periodmay be adjusted bythe executivedirectorto reflectneworexisting state implementation plan requirements. (f) Allowances may be added ordeductedby the executive director from compliance accounts following the review ofreports required under §101.359 ofthis title (relating to Reporting). (g) The owneroroperatorofafacility may, dueto extenuating circumstances, requestabaselineperiodmorerepresentative ofnormal operation as determined by the executive director. Applications for extenuating circumstancesmustbe submittedby the owneroroperator ofthe facility to the executive director: (1) no later than June 30, 2001 L to request an alternative three consecutive calendaryear period for facilities in operation prior to January I, 1997; (2) no later than 90 days after completion ofthe baseline periodto requestuptotwo additional calendaryearsto establishabaseline periodfor facilities whose baseline as describedby variable (2)(C) listedinthefigure containedin subsection(a) ofthis sectionis notcomplete 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 basedonallowablesandthe facility doesnotachievetwocompleteconsecutivecalendaryears ofactual level ofactivity data, then allowances will notcontinueto be allocated ifthe facility ceases operationoris not built. This agency herebycertifiesthatthe proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office ofthe 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 Forfurther information, please call: (512) 239-0177


# • 1 • CHAPTER 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 tothe state implementation plan (SIP). 

## I BACKGROUND AND SUMM4RY OF THE FACTUAL BASIS FOR THE PROPOSED RULE$ The 1990 Federal Clean AirActl(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 Register53761, 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 forvolatile 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 authorities

## Iin 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

## i Figure: 1 TAC §81.152(a) 

# I The formlla lor 

### eslinatIng 

### lumout lor

### the 

### 20 joint 

### prtmary

# _ns Is:

Where: A

## =the percentage 

### ofvotertumo 

### t for governoror another statewide race In the 2006 party primary (percentage is the sum 

### ofall 

## votes castfor all candidates for governoror other statewide office In the 2006 primary divided bythe number

### of registered 

### Yoters).

. I 

### B

# = the number of registered Yote as of October2009. C

## =25% 

### ofthe number resulting en you multiplyA x B. D 

## =Other partYs estimated tumo E

# = Preliminary estimated 2010 moutfor Joint-Primary Election. 

### Figure: 30TAC Chapter 

### 101-Preamble EstimatedCostofMECI'allowances 5500

- 53.000 per 

### allowance

### peryearor $75,000

- S150,000 per allowance for Estimated 

### Cost 

### ofBmission Reduction 53,000

- 5100.000 per

### ton

### peryear Credits Estimated Cost 

### of Discrete 

### Emission 51,000to 

### S10,000 per

### ton Reduction 

### Credits

TABLESAND GRAPHICS October9, 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 behalfofKIDS 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 StarChapter 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: OFWENDIHA:M:MOND 7325 Augusta Circle



### Plano, TX75025**Wendi(glTexas~vU:onmeIltalLa.w.net'** 

# RECEIVED NOV 09lUln:I AIR QUALITY DIVISION 

## lX: (469) 

# 2-f1..04S0 November9, 2009

,.



### HGBAUalnment 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: WallfrWilnamson MC**206~,** 

### . Implementation Team, ChiefEng ears Office, 

## TCEa P.O. 

## Box '. OB7 ' Austin, '78711-3087

. 

## 1

• Velues for2DD7 ·2009 

### On behalf

# f! the KIDS forClean Air, the Sustainable Energy 

### and economic 'Qevelopment (SEED) CoaJjtioo, the Clean f'ir Institute 

## ofTexas, 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/orSiemt 

## Club are hereby

## adopted and**irico~rated** 

### by 

## reference. TCEQ's**~ght** 

## ofevidenceairqualitytrends over-itStim8testhe 

## airqualitytrend forthe HGB area considerin, the past unusual weatherfluctuations. the amountof

### mntinued ozone reductions attributable

## to the

## exlstln, and proposed -new" control strategies, and the proposed development

### ofsignificant

## paint sources 10 

### outside 

### and upwind 

### ofthe HGB area. such, the proposals 

## fail to 

### adequately demon 'on the 

### area wftJ 

### atlain bythe deadline.

'rhe 1997

. 

### hourstandard removed the 

### 1-hourstandard**~use** 

### in theorythe 

### B-hourstandard would 

### be as ormore 'va

## atprotecting the publIchealth. Unfortunately, airmonitoring data has proven this assumptio,.to 

## befalse.

. . .

I 

### during the three year period from 2009-2007, the Houston-Gaivestcn-BrazQria area design value did 

## tviolatethe &-hour standard, 

## butseveral monitors did violate 

### the old 1-hOlJf

### standard

## forthe sametime period. 1 '

. 

## 1

. llhe airmptors includedregulatorymoniturlni sitesNorthwest

### Harris Co. C26/Al1OlXlS4 

### and

### WallsvWlS. Road C617.**~~~** data also inoluded**n~gu1atory** monitoringsites CrosbyLibrary CSS3 and Tom Bass 

### CSS8. N tbeTomBass monitoracma11yhad adesign value exceeding the 8-bour**stan~** buttb.e site isnot l!Ul 

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



### !vi explanltion forthis 

### phenomenon could 

### be attributed

## to the implication of

### unusual 

### and/orextreme 

### weather**t1~ctuations.** 

### The current ozone NMOS fonn (forth-highestdaily 

### maximum 8-hour

### concentrailon averaged 9ver3years) Was

### developed to 

### supposedlyaccount

### forsuch fluctuations. Unfortunately, 'the real 

## world ,mpEi 'on 

## is that compensates

## forfluctuations that may

### provide an 

### unusually high design value, but

## itdoes notcompensate 

### forfluctuations 

## that may provide an 

### unusually lowdesign**val~.** 

### F.orexam e; Texas

## experienced unusuaVextremewealherfluctuations in 2007 and

# 2009. In 2007, 

## Texas experten. an unusually 

### rainy and cool 

### ozone season. M n1ustrcrtioo, the Dallas-Fort

### VVorth 

## araa--an areathat

### tfPlca11y hitstriple digittemperatures

### throughoutthe summer-<lld notexperience 

## 100°+ 

# tempera;F. until 

## lataAugust. Once normal oxoneseason weatherpatternsoccurred, air

### monitors registered

.xceedances. Likewise, in 2009. Taxas**exp~enced** 

### an 

### unusuallywindy ozone 

### season, but 

### again 

### wh

. the areas experienced typical weatherpatterns

### for ozone formation. the airmonitors once' 

### again

# regrred ozone exceeclances (spiking 10 157 ppm 

### atone Houston**m~nlto~.** 

### . The 

### attaln,ent

### demonstration mustsomehowaccountfor"normal" weatherpatterns thatare conducive for

.. ozone**fo~BtIon** 

### In such'a**~y** 

### that unusual/extreme weatherfluctuationsdo not impactattainment demonstrations 

## in afavorable ornon-favorable manner, 

### Therefore, little

## weightofevidence should 

## be afforded the lIfrend8 

### of2007-2009 skewed design values. 

### ed Controlles The existi 

### control ,ies 

### shOUld have accomplished expected reductions prior

### to, or

### shortlythereafter, these dam nstrations.**~8** 

### proposed newcontrol strategies 

### have very little future 

### reducUons**assocla~** 

### with them.: 

### Thus, little

### weightshould be 

### afforded 

## to 8 

### continulng.1rencr of

### ozone reductions when the 

### demo ons

### themselVes fails to 

### adequatelyestablish ongoing reductions attrlbutableto e.xJstlng and/or proposed

.

## ewcontrol stfategies.

. 

### Bofi1 D nstratlons Fail

# toAde uate ccount 0 E 

## wn nc' 88 In Ozon8 PrecursoEmlDlons Located0mide

### the tfGBArea and WIthin Texas•. 

### Several

# m~jor emitting point

### sources located outside

### the 

### HGB area (butwithin 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 pointsources wiD 

### emitvast 

### amoun(s ofozone precurso (e.g., NOXand VQC) thatwill 

### blow

### infothe HGB nonattainment area and elthercause or
.



### . contribute. NMOSviolations. Both demonstrations 

### fall 

# to adequatelyaccount

### for1hese Increases and

the potenti 

## ·1 impacts on HGB's ability

## to attain the 

### ozone NMQS standard 

## bythe deadline.**Than~** 

### you ryourattention 

### to this matter. Ifyou have 

### anyquestions, feel 

### free

## to contact me.

2Comments 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 NASAJSC, 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 " •.• ShouldNASA's existing engines notqualifyforexemption under§117.203(a)(6)(D) and(11), they wouldbe subjectto the ESADs under§117.206(c)(9)(D) in conjunction with the mass emissions cap and trade program of Chapter 101, SubchapterH, Division 3." 28 TexReg 264, January 3, 2003 

# W-2

# --**-~** 

## . 

# SIERRA CLUB

FOUNDED 1892 

## HoustonRegional 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"

### 9fActivity'Certifi9,ation;'

### ,1 0 .,3.53(b)«3-5) ,and 

### l'0**1.,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

'"WhenwetIyto

### pick

## o~, byitself, we

### find it

### hitchedto 

### evetytbing

### else in

### theuniverse.·

### john¥

. .. . . Primed OIl 100'II> KeaafIRefree 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 appreciatesthis opportunity to comment.

.Thank**you~**

# :::e:~nnchen

# rn**·""·''"'7...A~~7A..yn..--JV** Air Quality Issue Chair Lone Star Chapter ofthe· Sierra Club Chair,Air Quality Committee

.Houston Regional Group ofthe 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 DearMs. Brown: Thank you for the opportunity to comment onthe proposed revisions to the State Implementation Plan (SIP) for the HoustonlGaivestonlBrazoria (HGB) ozone nonattaimnent area. We have reviewed the revisions and ourcomments 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 orCarl 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 

### Withthis enclosure we areproviding detailed comments on:

• HOB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard (ProjectNo. 2009-017-SIP-NR)

• HOB Reasonable FurtherProgress SIP Revision for the 1997 Eight-Hour Ozone Standard (ProjectNo. 2009-018-SIP-NR)

• Highly Reactive VOC Cap and 

### Trade (HECT) Program Cap Reduction andAllowance Reallocation (Rule ProjectNo. 2009-006-101-EN)

• Mass Emissions Cap 

### and Trade (MECT) 

### ProgramCap Integrity for theHOB Eight-Hour Ozone NonattainmentArea 

### (Rule ProjectNo. 2009-019-101-EN) HGH AttainmentDemonstration SIP Revision for the 1997 Eight-Hour Ozone Standard (projectNo. 2009-o17-SIP-NR) 

### EPA appreciates the level ofanalysis that 

### TCEQ has 

### completed in the HOB proposed 1997 eight hour ozone attainment**~onstration.** 

### Itis clearthatTCEQ andresearchers have continuedto advance the science ofmodeling the Houston area and also the understanding ofthe ozone conceptual model forhow ozone is formed in Houston. TCEQ's analysis and analysis ofother researchers (NOAA, DOE, UT, etc.) 

### that the 

### highestozone concentrations observed inthe HOB area caninvariably be linkedto transportofthe industrial plumes emittedin the vicinity ofthe Houston Ship Channel (HSC) which is akey finding in developingplans to lowerozone levels in the HOB area. . The currentmodeling indicates several monitors (Deer 

### Park;BaylandPark, andWallisvillC?) will notbe in attainmentin 2018 usingthe 2006 baseline DV. The future 

### ozone levels are higher using the 2005 baseline DV. Overall, themodeling does not indicate.the areawill reach attainment, butthe modeling (using a 2006 baseline DV) is 

### inthe range ofEPA's modeling guidance ofwhenWeight ofEvidence canbe used

### to potentially support an conclusion'that attainmentwill still 

### be aChieved. Recent Ozone monitoring trends andthe mostrecent data 

### (2007-2009) add 

### significant supportto the 

### Weight Of

### Evidence in the proposed 19978 HourAttainmentDemonstration SIP thatthe

. areamight attain and 

### maintain 

### attainmentofthe 

### standard. Recenttrends howeverto area ozone f<;>nnation can also be afunction ofthe 

### meteorology notbeingparticularly conducive the 

### lastfew years. The meteorology in combinationwith decreased local, regional, and national emissions due to the 

### economic downturn. must also be consideredwhen evaluatingthe weight ofevidence. One qualitative indication that some ofthe ozone decreases are likely driven bymeteorology and economic impacts is that 

### many areas withinRegion 6 sawtheir4lb 

### Highs drop 

### 5-10 ppb the last 2 years and only DFWandHouston areas have had any potentially large localreductions other than 

### annual fleet

### turnover. Withozone**leve~** 

### decreasing in much'ofRegion 6 the 

### lastfew years,

### itis importantto try 

### and·considerhow 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. Evenwiththe recenttrend and 2007-2009 preliminary data

### that indicates aDV of84 ppb, EPA 

### remains concernedthat the areawill continue

### to attainthe 1997 eighthour ozone standard.

" . . 

### The modeling is based onmore typical ozone conducive meteorology (2005 and 2006) inthe HGB 

### area. It should be noted thatthe modeling attainmenttest allows the

### use ofa 5-year weightedaveragethat is easierto show attainmentthan 

### using the worst 3-yearDVs thatinclude the base modeledyears. The 5-yearweighting was selectedby EPA to give some averaging of meteorology. TCEQ originally modeledusing a 2005 CenterWeighted DV (CWDV) that**r~su1ted** 

### in highervalues than 

### the 2006 CWDV includedinthe proposal. Modelingusingboth the morefavorable 2006 CWDV andthe 2005 CWDV indicates several monitors with2018 Future DVs (FDVs) several ppb above the 84ppb standard. The modeling is indicatingthat 

### even with additional federal measures that

### the areawill notreach attainmentby 2018. Future reductions notincluded inthis proposed SIP may be necessary to achieve attainmentofthe 1997 eighthourozone standard. EPA's guidance 

### is to use the modeling ina relative sense for the monitored attainmenttest and also for the areas outside ofthe monitors using EPA'sMATS software. In 

### the draft

### Houston package, TCEQ has 

### notincludedthe MATS software analysis inthe attainment sectionofthe SIP. The MATS software analysis should be included as part

### ofthe attainmentwrite-up ofthe SIP to indicate the 

### model's predictions in 

### areas outsidethe grid cell arrays used 

### inthemonitor attainment

### test " TCEQ has utilizedtheirPotential Source ContributionFunction (pSCF) to adjust

### reported emissions inthe 2006 special inventory from 12.44tpd 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 10tpd 

### to reported inventory values. The HECT soUrces (exceptfor some small emission sources) have been subjectto monitoring requirements since 2005/6, sothe extra "emissions from HECT can only be from unmonitored sources or incomplete combustionfrom flares. Because unmonitored sources are small the mostlikely source ofemissions is flares. The proposed SIP assumes HECT sources emitan additional 6 tpd 

### ofunreported HRVOC emissions. TCEQ shouldjustifythis assumption.

. With the additional 6 tpd 

### TCEQ projects forthe future 

### 2018 inventory 13.39 tpd 

### forHECT

. sources. In 

### addition TCEQ added

# 7tpd 

### from bankedemissions, bringing

### thetotalto 15.39 tpd 

### for HRVOC emissionin the RECT. Then, TCEQ assumedthatthe HECT emissionwill 

### be reduced to 

### the current cap level of10 tpd. This reduction is 

### not supportedby anyregulation or control measure orenforceable commitment, andtherefore shouldnot beincludedinthe modeledprojections. In 

### addition to 

### ouroverall concernthatthe areamay not continue to attain 

### the standardand may

.still be 

### in nonattainmentwith the 1997 eight hour ozone standardin 2018 we haveprovided comments.on specific sections ofthe proposal package.

## Ozone Model

## Perfonnanee Ozone model performance (withthe PSCFemissions added) does fairly well at 

### getting the spatial location ofozone, but continues to underestimatethepeak ozone levels. This creates some concernthat 

### the median emission adjustmentapproach may notbe yielding enough emissions in

### the modelingto generate the peak

### ozone levels. Model perfonnance indicates that the model was 

### .underestimatingthe peakvalues ofsome VOC species and also ozone

### peaks. The modeledpeak should theoretically be higherthan the monitored peak, 

### since the odds that 

### the modeling domainpeakare going to happen at amonitorare nota statisticiillyhighprobability. TCEQ discussed in chapter 5 the issue ofincommensurabilitywhich may explainwhy the modeled values seemedto overpredictEthylene and Olefin species 

### atthe Wallisville monitoras

.modeled values represented avalue ofthe grid cellversus the monitored data

### thatreflects a point

.This conceptofcomparing model values to monitoredvalues is 

### discussed by TCEQ and they point out some ofthe"limitations ofdrawing 

### conclusions from thetechnique. Overall the ozone model performance is 

### some ofthebest modeling conducted for the Houston but concerns aboutunder-predictionbias raises concernthatmore emissions shouldbe includedin the base and 

### also be leftinthe future 

### yearinventory. Using amulti-year annual meanmay result in 

### an underestimation ofthe 

### actual emissions that 

### occurred. TCEQ's modeling ofincreased flare emissions as areplacementfor the PSCF emission reconciliation yielded better ozone model performancethan 

### thebase special inventory. In 

### additionto the many other scientific studies thatindicate that flare emissions are underestimated in 

### the modeled andreported emissioninventories this modeling sensitivity also·supports the conclusionthat 

### flares are asignificant source oftheunderestimation ofVOC emissions from industrial sources in Houston. Wenote that TCEQ is 

### in the

### process ofstudying flare operations and is considering the Opti9fi of requiring moremonitoring and oversight offlare operationinthe :future 

### dependentuponfindings ofstudies. Forthis and otherreasons we supportacommitmentby TCEQ to conductaMid CourseReview using photochemical modeling. AttainmentDemonstration and WOE On Page 5-8 ofthe TCEQ concludes that the retrospectivemodeling between2000 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 datawithmeteorology

.from two different sets ofmulti-yearperiods. Consideringthat

### the 2006 reported emission

.inventory is having to be adjusted 

### basedonmonitoring data 

### and using gaussianbasedmodels to estimate emissioncorrection levels for groups offacilities in the 

### same backtrajeCtory, itis clear that 

### TCEQ maypotentiallyhave an approximate estimate ofthe multi-year mean emissions that occurred 

### in**2005/~.** 

### Datafrom field studies indicates significantvariability, butovenill alarge underestimation ofemissions. But to baSe an emission change comparison whenno onehas 

### an accurate assessmentof2000 and2006 actual emissioninventories raises many incommensurability issues. These incommensurabilityissues include: comparing two different

### multi-yearperiods ofmeteorology, using amulti-yearmeanwhenthe emission inventory demonstrates a fluctuation ofdata, 

### the PSCF is likely underestimatingthe amountofreported emissionincreases that should be 

### done since itdoes nottake into accountchemistry that decreases emissionconcentrations betweenthe facility andthe monitor, an adjustmentbased

### on a multi-yearmean overlooks variables that wouldtheoretically leadto higher,ozonepre-cursors on summerdays/meteorological conditions. The 2006 imputed emissionestimates apPearto be 

### getting decentmodel performan,ce, butthere is 

### an under-predictionbias inpeakvalues that 

### is not necessarily amodel formulation issue as an issue that

### withoutdetailed facility monitoring we ' will 

### neverknowwhat are the correctemissions to model. When 

### eventhe 2006 reported inventories ofVOCslHRVOCs have to be 

### adjusted byfactors of2x to lOx (on amulti-year mean) to reflectthe monitored values, it is clearthatthe biggervariable to howthe model is 

### reacting to emissionchanges is 

### whetherwe are starting 

### withthe correctemissions. The PSCF technique thatTCEQ is utilizing to adjustemissions (2x to lOxreported level from a 

### special inventory) is gettingthe model performanceto within

### EPA's performance metrics of+/- 

### 20% and +/- 

### 35%, butthe amount ofpotential change in DVs from 2000 to 

### 2006 is afunction ofmany 

### variables thatwe do nothave sufficientdata

### to 

### concludethe modeling is 

### notreacting sufficiently, it is 

### more likely the 

### issue ofnothaving the correctemissions. It does not apPearthat 

### enough certainty exists 

### in the data 

### andthere are incommensurability issues that 

### seem. 

### to make itinappropriateto concludethatcomParing modeling of2000 and 2006 reportedemissions (even withimputed estimates) whilem9deling the 2006 meteorology with 2000 meteorology indicates the model is notreacting sufficientlyto emission changes. EPA appreciates the level ofanalysis that TCEQ has completed inthe HOB ozone conceptual model and

### inthe Corroborative analysis onthe highestozonevalues that

### impactthe 

### Design Values atthe monitors in Houston. The conclusionfrom TCEQ's analysis and 

### analysis ofother researchers (NOAA, DOE, lIT, etc.) 

### thatthe highestozone concentrations observed 

### in the HOB area (including areas 

### in

### the Southeast, Southern, and Southwesternportions ofHouston) can invariably

### be linkedto 

### transport ofthe

### industrial plumes emitted 

### in

### the vicinity ofthe Houston Ship Channel is 

### akey finding in 

### developingplans to lowerozone levels inthe HOB 

### area. Chapter5 ofthe Proposal includes many ozone monitoring

### trends thatare very interestfu.g butthe linkage to what is 

### causing the recentdecreases in 

### 2007-2009 values (2009 values needto be ' 

### QAlQC'd

### by TCEQIEPA) is 

### missing. EPA's analysis (including informationprovidedatthe April 2009 SoutheastTexas Photochemical Technical Modeling Committeemeeting) is that 

### 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. Industryrepresentatives have commentedinpastpublicmeetings thattheir

### emissions have been lowerthe lastfew years (starting 

### in 2007) due to economic influences and whenthe demand improves itis 

### likelytheiremissions 

### will increase overthe levels in 2007-2009. TCEQ's

, HECT cap**~uirements** 

### and monitoringrequirements were put inplacepriorto therecentlarge

changes in 

### 4th 

### high ozone levels that make up

### the DV calculations. As 

### ofNovemb.er 1st 

### 2009 four monitors had

### preliminary 2007-2009 DVs of84ppb, but all 

### monitors appearedto be in attainment. After

### the 

### economy gains 

### strength and emissions likely increase and

### whenless favorable meteorology occurs in 

### the future, 

### it seems unlikelythat the 

### areawill continueto 

### monitorattainment, 

### especially atthe DeerParkmonitor. As 

### discussed elsewherepeakozone

### levels areheavily influenced by industrial emissions. Withoutfurtherreductions overexisting emission levels from industrial sources it seems unlikelythatthe DeerParkmonitorwill maintain attainmentand monitors downwind ofthe industrial emissions will continue to have some highreadings. While FourthHighvalues are down, the area stillhas anumber ofhigh days. In 

### 2009, eighthourvalues ofthe monitors (FRM and other) inthe Houston areahad 

### 22 monitors with 1st

### High values equal or greaterthan 90 ppb (9 monitors withvalues from 100-110 ppb), 12 monitors with 2nd 

### High 

### values equal orgreaterthan 

### 90ppb, and 

### 12monitors with 3rd 

### Highs 

### greaterthan 

### 84 ppb. With this many exceedances ofthe standard atmanymonitors itis easyto see how the combination ofhigheremissions and less favorable meteorology couldresult in

### the areanotmonitoring attainment. Chapter 5 oftheproposal did notinclude any discussion ofemissions trends and howthey correlate with therecent ozone monitoring trends analysis. EPA's modeling and 

### attainment guidance indicates thatmonitoring and emissiontrends should be 

### included as one ofthe three areas that 

### shouldbe

### covered in WOE (includingpages 99, 101-103 oftbe 2007 modeling 

### and attainmentguidance). In 

### additionto emissiontrends analyses and comparisons/correlations of emissions trends and ozone trends, expected future emissiontrends (including the major categories stich as pointarea, 

### nonroad, onroad, etc.) 

### should be 

### included iri 

### this analysis to help correlate that future emissionreductions will resultin lowerozonevalues in

### thefuture. Since TCEQ and others have concluded that

### the values setting the DV atmonitors in 

### the southwest, southernand southeastemregions ofHouston are heavily impacted by emissions from the HSC industrial 

### emissions, a focuS on future 

### changes expected inHSC industrial emissions seems central to the argumentthatthe HGB areawill be 

### in attainmentin the future. This specific analysis ofrecenthistorical emissions and monitoring trends and future 

### emission trends that 

### impactthe area's DV withexpected impacts on ozone levels is avery key WOE element

### that allowed us to moveforward with approval ofthe DFW 1997 8-hour Ozone SIP. Includingthese analyses in yourWOEwouldhelp to make sure that

### you coverthethree main areas discussedin the WOE guidance. Summary Fromthe informationthatTCEQ included in the SIP proposal, itis obvioUs thata lotofhard workhas gone intothe modeling, WOE and other analyses to betterunderstandthe phenomena that

### result in ozone exceedances in Houston. We appreciate the hard 

### workofthe many TCEQ people andresearchersthathave contributedto the development ofthe draftHouston SIP. Otherthan 

### the fleetturnover and otherfederal measures between 2009 and 2018, TCEQ has not proposedin

### this SIP emissionreduction requirements 

### thatwill loweremissions below current actual levels. Withoutfurtherreductions in 

### theHSC areaitis difficultto see how the DeerPark monitorand othermonitors will remain 

### in 

### attainmentwhen economic conditions improveand less favorable meteorology occurs. EPA encourages TCEQ to 

### consider**additio~** 

### controls to insurethe areawill 

### continue to be 

### in 

### attainmentofthe 1997 eighthour standard. i I 

## I 

# I
I --I!

[

### RACM TCEQ and others have shownthat the HOB Nonattainment areais heavily influenced by the emissions from industry in 

### the SoutheastquadrantofHouston (including industry aroWld the Houston Ship Channel). Thereforereductions in industry 

### emissions would be most effective 

### in advancing attainment. Additional monitoring andrequirements forflares would aid in 

### improving the 

### emission inventory and also could leadto real atmospheric reductions ofozone pre-cursors. We support TCEQ's Flare TaskForce initiative and

### hope that 

### itresults in 

### better flare 

### operations andreduced emissions in 

### the future. 

### Theproposedreduction andreallocation ofthe 

### Harris COWltyHRVOC cap does notrequire HRVOC levels to bereducedbelow currently reported levels. The cmrent25% reduction in 

### the HECT Cap would still behigherthan reported emissions and would allow for growth 

### and

. allowances for upsetconditions. In 

### essence, theproposed 25% HECT Cap reduction would

allow 

### HR VOC emission increase at 

### HECT applicable facilities comparedto the highest annual actual HECTemissions. As part 

### ofit's RACM analysis, TCEQ shouldconsiderwhetherreductions in 

### "actual" 

### HRVOC emissions could accelerate attainment. Furthermore, TCEQ should explain why the reductions can 

### not 

### be implemented soonerthan 

### theproposed 2015-2017 timeframe. Mid-Course Review We recommend thatthe attainment demonstration include a TCEQ commitmentto a 

### mid-course review ofthe attainment demonstration. Because ofthe uncertaintyin long term

### projections, we believe a viable attainment demonstration thatrelies on weight ofevidence should contain provisions for periodic review ofmonitoring, emissions, andmodeling data. Clearly, current monitoringtrends would indicate significantprogress is being made. Undoubtedly, control measures implementedby the Texas and Federal government havecontributedto this progress. Other

### factors, however, have played arole such as 

### the economic downturn and favorable meteorology. The currentmodeling show several monitors exceedingthe 1997 standard. The**differen~** 

### betweenthe modeling and monitoring accentuate the overall uncertainty in 

### long term 

### projections. The mid-comse review would show whetherthe adopted controlmeasures 

### are sufficientto reach attainmentbythe area's. attainment date (based 

### onphotochemical modeling), orthat additional control measures are 

### neceSsary. We recommend thatthe 

### review be 

### completed by December2013. We also anticipatethat SIPs for arevised ozone standardwouldbe due in December2013, so thatthe 

### review could be done 

### in conjunctionwith 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 confirmthat all 

### NOx point sources in the HOB 

### area withthepotential to emit 25 tons/year ormore have been included in 

### the list

### ofsources that the State has 

### included in 

### its evaluationfor RACT purposes.

# As control technology is dynamic and could change withtime, 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 

### appropriateto use aNew SourceReviewpennitcondition for a glass manufacturing facility in 

### the affected area to 

### implementRACT. Pleaseprovide 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 withrespectto 

### the Clean

### AirAct (CAA) and the Control Techniques Guidelines (CTGs) issued by EPA in 2006,2007, and 2008, andhave the following comments. 

### WorkPractice Requirements: For anumber ofCTGcategories, TCEQ has 

### chosennotto 

### adopt the recommendedworkpractices. For all 

### applicable CTGs, EPA continues to 

### believe work practice requirements providereasonable, costeffective ways to 

### reduce emissions and thatthese control requirements should be met In 

### orderto meet RACTrequirements, the state should· either adoptrules implementingtheworkpractice requirements, orprovide analysis demonstrating that the requirements are satisfiedby existing federally enforceable rules. 

### CTG categories: Industrial CleaningSolvents, Miscellaneous IndustrialAdhesives, Large Appliance Coatings, Metal Furniture Coatings andMiscellaneousMetal andPlasticParts Coatings (section4.4.3.3, and Appendix D). Forthese five CTGs, Texas has 

### neither adopted rules norprovided a negative declaration. In 

### orderfor the HGB areato 

### 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 

### considerapproval ofthe VOC RACT

update only for those CTGs that 

### havebeenthoroughly addressed. We recognize thatEPA has 

### not yet

### respondedto the TCEQ letter ofDecember 8, 2008 concerningthe eTG documents for Large Appliance Coatings, Metal Furniture Coatings; and Miscellaneous Metal and Plastic Parts Coatings (section4.4.3.3, and**App~** 

### D). While the new CTG documents forthese source categories recommend more stringentlimitsfor general use coatings, there are some specialty categories for which the new CTGs recommend limits that 

### are less stringentthan

### the general use limits establishedin

### the guidance fromthe 1970s. For some ofthe subcategories withinthese CTGs, the limits in

### the new CTGs are less stringentthan 

### the approved Texas SIP so it is possiblethe new limits will result in increased emissions. In 

### general, EPA expects the limits in 

### the CTGto 

### resultin

### reductions inVOCs butitis unclear for specific states orareas whetheroverall reductions 

### will occur. We believe that 

### Texas has 

### at 

### least two 

### options for moving forward withthe 

### specialty coating types discussed above. The state 

### could leave the limits in 

### place forthe specialty categories where the existing limits are more stringentthan

### the limits inthe CTGs orthe state could relax the limits consistent withthe new CTG 

### in which case the state would have to 

### provide additional

### analysis to show compliance with 110(1) ofthe CAA. We note thatTexas is notrequired to 

### adoptthe less stringent limits in the CTG. The CTGprovides recommendations, butdoes not bind states to 

### adopt specific limits orrequirements 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 couldchoose to 

### submitthem as meetingthe RACT requirement, and, assuming all other requirements are met, we anticipate thatwe would be able to 

### approve them as meeting RACT for the source categories addressedby the CTGs. The state would still need to evaluatethe more stringentrecommendations for general use categories and adoptthem as appropriate. ffTexas chooses to relax 

### limits for specialty coatings that are in the approved SIPconsistent withthe 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 oforreasonable furtherprogress toward attainmentoftheNational Ambient

### Air Quality Standard (NAAQS) orinterfere with any other applicable requirement ofthe CAA. 

## In general, 

### ifa submittedrevision achieves the same or greater emissionreductions as the approved'SIP within 

### the sametimeframe as provided tmder the existing planJ 

### we have been able to 

### approve the revision as meeting section 110(1). Flat WoodPaneling Coatings 

### (section 4.4.3.1 and Appendix D). Regarding workpractice requirements, please see the comment above. Fiberglass BoatManufacturingMaterials 

### (section 4.4.3.2 and 

### Appendix D). Forthe Fiberglass BoatManufacturing Materials source category TCEQ 

### has identifiedno facilities in HGB subject 

### to this 

### CTG (pages 4-8, D8 and D-9). HoweverTCEQ is notmaking definitive negative decl8:I'ation for this source category.**Inste~** 

### the TCEQ 

### "has determinedthat implementing the recommended controls in 

### the Fiberglass BoatManufacturing Materials CTG documentwould neitherresult 

### in substantive VOC reductions nor 

### be economically feasible." The proposal relies in 

### parton EPA's prior guidance, "Issues Relating to 

### VOC Regulation Cutpoints, Deficiencies, and Deviations, Clarificationto 

### Appendix D ofNovember24,1987 Federal Register", issued May 25, 1988. 

## Inparticular, please see Attachment2 ofthe guidance, for anExample 5% Rule Calculation. This calculation should be based specifically on sources in 

### the Houston 

### area Wedo not,believethe TCEQ's interpretationofthis 1988 guidance is correct. EPA continues 

### to believe thatthese are costeffective controls. To meetVOC RAeT requirements this category needs to 

### be addressed. Flexible PackagingPrintingMaterials 

### (section4.4.3.2 and Appendix D). Regarding work practicerequirements, please see the commentabove. Paper, Film, andFoil Coatings 

### (section4.4.3.2 and Appendix D). Regarding workpractice requirements, please see the comment above. LithographicPrintingMaterials and

### LetterpressPrintingMaterials 

### (section4.4.3.4 and Appendix D). Detailed comments regarding this 

### are included in a separate letteraddressing these rule revisions. (Rule ProjectNo. 2008-019-115-EN). Automobile 

### andLight-Duty TruckAssembly Coatings 

### (section4.4.3.1, 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 inthe SIP, the Houston areais legally boundto 

### implementeach ofthese control measures in 

### atimely manner. Please include estimatedtimeframes for initiation and completion ofthe 

### candidate TCMs listed 

### inTable 1 ofAppendix O.

HGH Reasonable Further Progress SIP Revision for the 1997 Eight-Hour Ozone Standard (projectN.o. 2009-o18-SIP-NR) 

### The discussion ofthe updatedpoint source 2002 base yearinventory states 

### thatVOC emissions were adjustedto 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 adopttransportation

.control measmes (TCMs) that

### would offsetany growthin emissions from growthinvehicle

.

. miles traveled (VMT) 

### ornumbers ofvehicle trips (CAA section 182(d)(I)(A». The analysis providedinthe Reasonable FurtherProgress SIP indicates that

### the predicted growth in VMT in the areais not .expectedto 

### resultin agrowthin motorvehicle emissions (tables 2-14 and 2-16). Please confirmthatthe predicted growthinVMT inthe areais not expected to 

### result in 

### agrowth

. in 

### motorvehicle emissions and that 

### TCMs are not needed to offset growthin VMT.

Highly-Reactive Volatile Organic Compound Emissions Cap and Trade Program (project No.2009-o06-101-EN) 

### Please confirmthatthe 

### non.,.reportable emissionevents that exceedthe emissionevent set-aside in section 101.396(c) will be deducted from the individual site's compliance account no later than

### March31 ofthe yearfollowing the applicable calendar-yearcontrolperiod. This approach

.is consistentwiththe approach outlined at 

### section 101.396(d) for reportable emission events that 

### exceedthe set-aside. Therules shouldberevisedto 

### clearlyreflectthis approach as well. Mass Emissions Cap and Trade Program (projectNo. 2009-o19-101-EN) 

### Please explainwhy the revisedroles at section 101.353(b) do notrequire minor sources that 

### submitlate ECT-3 forms to 

### obtain allowances from existing sources. This 

### exemption for minor sources couldincreasethe overall cap andjeopardizethe 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 

### october28, 2009, 2:00

## p.m. Houston-Galveston Area Council, 3655llmmon8 Lane, HoUtJlDn Rule Project No.: 2009-017-8IP-NR (AD SIP Revisions), 2009-018-SIP-NR (RFP SIP Revisions),**2O~101-EN** (HECl), 2009-019-101-EN (MECT), 2008-019-115-EN (Offlet Utho)

.**~dIIl11** ltv

........ praJecIiI JOU

..... 1Il» ONI 

# T........,., COInmentan (CInlIeOne) Y. AD" UP IIECT IBCI' c... 

# .. ue- 

# @ 

# R. ./**~Ne**
Y. 

# (i;YNo 

# V @R. /

... REPREBENJ1NGPage2



## TEXAS COMMISSION ON ENVIRONMENTAL QUALITY PUBUC HEARING REGlS'mAnON OCtober

### 28, 2009, 2:00

### p.m. HouBt0n-G8IvestonArea Council, 3555llmmons 

### Lane, HOU8ton 

### Rul. Project No.: 2009-017-8IP·NR (AD SIP Revisions), 2009-018-8IP.NR (RFP SIP Revisions), 2009-0Q8..101-EN (HECT),**2009-01&-101~N** 

### (MECT), 20Q8.01&-11s.EN (otr&etUtho)

...........111 NAIIE IfY

.. check

........ JOU

..... ("-MIlt REPREIEN11NG CbI 0liInIIIIIIIton Teet1manr7 (CInIIe One) 

# £d 

# 1:=,E' 51

## NG"~ 

# Ze.p**~~** 

# f"""\J.**C~** 

# a 

# yQ) ADIIP 11II' IIBCT IftC[ O&et lIP IMD

# ~U~Qt4r - \ 

# y.® 

# e'o**~d'e~/**

# ~,J 

# fl..,**~~rv~ "~**  

# y.® "KoHrr S/IAWIA L'IoNt8LJ3ASefL 

# . Y. 

# SJ

..,

# L,'~~t--fOD 

# + @N. 

# /

10,.,...**B~~l""-** 

## J

# [1Vf\rA~~ f-pt==- 

# @ N.

# ~Y'/&-**T~~**

# T~s**?eWJcA~~"** Y. 

# £)

## TEXAS COMMISSION ON ENVIRONMENTAL QUALITY PUBUC HEARING REGISTRATION October28, 2009, 2:00 p.m. Houston-GalveBton Area Council, 3555llmmons Lane, Houston Rule Project No.: 2009-017-SIP-NR (AD SIP RevIsIons), 2009-018-SIP-NR (RFP SIP Revisions),**2~101-EN** (HEC1), 2009-019-101-EN (MEC1), 2008-019-115-EN (Offsetlitho)

NAME 

# ............. IfV-.IheckaI projectaJDII

..... tit Oral (PIeue PIfnQ REPRESENTING T

.....onr? CCIIIIIIl8I1tan (CI_One) 

# !J,1d..**P1,n~-'~d** Y. 

## <i&?S AD" IUP IIECI' ao.cr 

# .... (lsi.

## ;;~'oA lIP (Me

-,,- 

# &x.oN!ltiJlL.- 

# JLtOY 

# BlworJ**Y.~**

## <5~**~n-I..:I L¥o~~-;EU-**  

# y·e**G~IeA-A** 

# L U

## ~IZ tTl' I'JO

### J.-1-b~ Y. 

# (Q e/lML£S L. Nc..Jl\JeJ 

# Ii(,t£.iMSN7 I'f1.,4te lUC T.s L.C- 

### <.... Y. 

# €0**~d../** 

# 1$(<J..L1c.blA-r'1

# ~~~ [b..r

.. 

# .r d'S) 

# -**~suf :t.'~**  

# cYq,vc'd**~t::J** (-ey 

# ,/J**mcerh+~** Y. 

## l!S"**e:-/e.~U't** 

### 1-Page 4



## TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

. PUBUC HEARING REol8TRA1l0N October28, 2009, 2:00 p.m. 

### Houston-GaIvesto

### Area Council, 3555 Tinmons 

### Lane, Houston Rule Project

### No.: 2009-017-8IP-NR (AD SIP Revisions), 2009-018-8IP-NR (RFP SIP RevIsIons), 2oo9-006-101-EN (HECT), 2009-019-101-EN (MECT). 2008-019-116-EN (Offset utho)

NAIll! 

# ............ ltv

.. chIck.O proJecIs

### roo_III (PIMMPIfnII REPRESENTING ChI -.menton TedmonJ? (c:II'c* One)

# ~HA-6tlJN**~Jt1**

# '~~'~.' Y. 

# eJ ADIIP III!' BIlCl' ImCl'

. 0IIlIIt 

# IaNVI 

# fl,.oN 

# ... UIM 

# /

# ~\**0t~~ C·~** 

# ~L**~Ife** 

# "

.r'"

. 'I L 

# Y. @ 

# B lak**b:tp(J~** 

# 111<5 C• 

# .,.p 

# ck"'

....(e;p

# A~'-;.~j~ Tv 1)

### ~'\ 

# Y. lie

. 

### )

# (}~~~ 

# ff1/] tf ,.,-",)**C,J~~ (R'~** 

# ~~e.,-r>r 

# t9**\f~** 

# Y• 

# ..,**C~\~** N\OOf(. 

# Koch**S~T,** 

# Lf' Y. 

# ®

.. Y.<;)

# ~(l\~.**CPJ-.~l.~**

## )r,/~PageS



## TEXAS COMMISSION ON ENVIRONMENTAL QUALITY PUBUC HEARING REGISTRAnON October 28, 2009, 2:00 

### porr,. Houston-Galveston Area Council, 35551lmmons Lane, Houston Rule Project No.: 2009-017-8IP-NR (AD SIP Revisions), 2009-018-8IP-NR (RFP SIP Revisions), 2009-006-101-EN (HEC1), 2009-019-101-EN (MEC1), 2008-019-115-EN (Offset litho)

NAME sa-ntI"III IfV_, checkall projectll you planto (Please Print) REPREBEN11NG Onil camm8llton T

.......ony? (Cln:leOne)

# M\\~D~~ 

# G

# uPP£!tM.d:JA- v. No AD SIP JUIP IIBCT MBCT 0Ibet SIP Utllo

# /iI,'e~1 

# -r:ytr C(**'t!~'h.-I ~-h**  v.

# ~lIk'I 4'u/d.,

.._ 

# LvJ V-

# ~4r---**~o**
v.· No



### v. No



### v. No



### v. NoPagel

### TEXA~ 

## COMMISSION ON ENVIRONMENTAL QUALITY PUBUC HEARING REGI81RAnON 

### October28, 2009, 8:00 

### p.m. Houston-Galveston Ante Council, 3555 llmmona

### Lane, Houston Rule Project No.: 2009-017-SIP-NR (AD SIP Revisions), 2009-018-8IP-NR (RFP SIP Revisions), 2009-008-101-EN (H,?Cl), 2009:Q19-101-EN (MECl); 2008-019-115-EN (0fI'8etUtho)

PNeenlllII NAME Oral ' If

### ve.,oheck.n prajeIDJOU pi

.. .., (PIHHPrlnQ REPRESENTING Teatmany? CDIIlmmlon

,0 (CInIIe One)



# ,**('~(C**

# ~MnH Y. 

# B> BlIP lOP IIECI' amci' 08'Iet

## -r7:-~ 

# .., Uftoi



# - I '

0,

# '<:::::::A.l~l rd

# G~~~~ 'SvNoc...Q ,

## Y~~ Y. 1'fe

,.

" Y. He

Y. 1'fe

, 0 Y. 1'fe

Y. Me 0'

### . Page 1

..

. ' 

### . . 

## TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
..... 

# . .. PuBUC HEARING REGI8TRAnoN

. . October29, 2009, 3:00

### p.m. Texal CommlaBlon on**E~nmentaIQuBllty.** 12100 Park35 Circle, AUltin Rule Project No.: 2009-017-8IP-NR (AD SIP Revillons), 2oo9-018-SIP-NR (RFP SIP Revisions), 2009-008-101-EN (HECl), 2009-019-101·EN (MECn. 2008-019-115-EN (0Ir8et Utho)



# .......... NAME 

### •v ••check.n projectII JOU planto (

...... PrInIt ' . REPRESEIfllNG o..J CCIIIUMnlon ' T

....manr?

. (CIrcleOne)



# ..**,Ke;~** .. 

# "·8 ... 

# S 0IIid

# Co~,**Wv~4c..J** IlII' 

# AD_ m JBC'l' 

# ...

" 

## J " , . Y. 

# ,t!!J ',MIKf 

# MtM"LUrJ 'tec-

. .. Y. 1Ite

: Y. 1Ite

Y. N.

Y. l'fe

Y. l'fe

# EVALUATION OF TESTIMONY.....



### To:**Commissione~** JiiliEKbPJiitEMEMORANDUM


### Date: February 19,2010 Thru: LaDonnaCastafiuela, ChiefClerk Mark

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

### From: S

..... M. Hildebrand, 

### P.E.,

# Cbief~ DocketNo.: 2009-0867-RUL Subject: CommissionApproval for RulemakingAdoption Chapter 101, General

### Air Quality Rules Mass Emissions Cap andTrade (MEeT) 

### Program. Cap 

### Integrity forthe HoustonGalveston-Brazoria (HGB) 1997**Eight~Hour** 

### OzoneNonattainmentArea Rule ProjectNo;**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 ofnitrogen oxides (N0x) compliance flexibility for the emission specifications under 30 Texas Administrative Code (TAC) ChaPter 117, while establishing amandatory 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). TheMEeTprogramNOx cap is aproduct ofthe emission specifications of Chapter 117 andthe 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 ofactivity from their applicable facilities by 

### June 30, 2001, in order to receive an allocation ofallowances (one allowance equals one ton ofNOx'). However, the rule did not address late submittals ofECT-3 forms. Therefore, a site that 

### has never compliedwith the MEeTprogram could submit a late 

### ECT-3 form in accordance with §101360(a) and receive an allocation ofallowances, 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 ofNOx. 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 afacility to 

### emitNOx 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 equipmentthat is not considered post-combustion control equipment, such as low-NOx burners, will be consideredwhen 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 ofa backUp, Q 

### Commissioners Page 2 February 19, 2010 Re: DocketNo. 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 emitfrom applicable diesel engines operating less than 100 hours peryear

### 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 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 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 ofNOx in Chapter 117 before determining the applicability ofthe MECTprogram to 

### theirfacilities. Along withthe 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 subjectto the MEeT program until the site is 

### permanently shutdown. Scope ofthe adopted rulemaking: A) Summary ofwhat 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 orbefore December 31, 2000, as major sources ofNOx. The adopted rulemaking will amendthe 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 andfacility applicability inthe 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 

### adoptrules 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 ofpublic 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 commissionto 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 ofRecords, 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: DocketNo. 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 ofNOx 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 if

### the minor source ofNOx is not subjectto 

### 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 ofNOx will benefit from the additional flexibility provided by the rule when determining the site's collective uncontrolled design. capacityto emit. B) Public: The public will benefitfrom the availability ofenergy during emergencies due to 

### the additional Chapter 117 compliance flexibility for minor sources ofNOx 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) becausethe diesel engines do notmeetthe applicableEPA Tier standards. C) 

### Agency programs: None. Stakeholdermeetings: 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 

### ofthe written comments were submitted by the EPA, the National Aeronautics and Space Administration (NASA), and the Houston Regional Group and the Lone Star Chapter ofthe Sierra Club (HSC). The fourth written comment 

### was**~bmitted** 

### on behalfofthe Kids for Clean

### Air, the Sustainable Energy andEconomic DevelopmentCoalition, the Clean

### AirInstitute 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 ofECT-3 forms from major sources ofNOx 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 specificrules regarding emergency stationarydiesel engines at

### municipal utility districts and otherfreshwater providers. The Kids for Clean Air, the Sustainable Energy and Economic Development Coalition, the Clean Air Institute ofTexas, and oneindividual expressed**supp~rt** 

### forthe comments submittedbythe HSC. Significantchauges from proposal: No changes were made inresponseto comments. Potential controversialconcerns and legislative interestremaining after proposal and 

### public comment: None.

# ----------

Commissioners Page 4 Febnwy 19, 2010 Re: DocketNo. 2009-0867-RUL Does this rulemaking affect any currentpolicies or require**d~velopment** 

### ofnew 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 orbeforeDecember31, 2000, 

### as major sources ofNOx. What are the consequences if 

### this rulemaking does not go forward? Are there alternatives to 

### rulemaking?

. The consequences ofnot approving this rulemaking are potential increases to the NOx cap, affecting the HOB attainment demonstration forthe one-hour and eight-hourNAAQS 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 effectivedate: April 1,2010 Six-month Texas Register

### filing deadline: Apri19, 2010 Agency contacts: Jay Tonne, Rule ProjectManager, 239-1453, Air Quality 

### Division Brandon Greulich, Rule ProjectLead, 239-4904, AirQuality Division Amy Browning, StaffAttorney, 239-0891

. Devon Ryan, Texas 

### Register Coordinator, 239-6090

cc: ChiefClerk, 5 copies ExecutiveDirector's Office Susana M. 

### Hildebrand, P.E. Kevin Patteson Curtis Seaton DanielWomack 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 

### withoutchanges 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) afterMarch 30, 2010, from sites defmed on or before December 31,2000, as major sources ofNOx, as defmed 

### in 30 TAC § 117.10. Also, the adoptedrulemaking 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 ofactivity from applicable facilities. The adopted rulemaking will not affectthe submittal ofECT-3 fonns from minor sources ofNOx.



### In accordance with §101.360(a), to receive an allocation ofallowances (one allowance equals

one ton ofNOx), sites were required to submit an ECT-3 fonn with the levels ofactivity from their applicable facilities by June 30, 2001. Applicable facilities with historical actual emission data were allocated allowances based on actual levels ofactivity 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
converttheir permit-based allocation to a historical level ofactivity 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 ofallowances, 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 ofallowances.

Infonnal comments from industry were received regarding clarification on "airpollution 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 ofa facility to emitNOx 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 equipmentthat can be removed withoutpreventing the facility from operating. NOx control equipmentthat is not considered post-combustion control equipment, such as low-NOxburners, will be considered when calculatingthe uncontrolled design capacityto emit.

In 

### 2008, Hurricane Ike increased awareness ofthe need for backup generators during extended
power outages for activities such as maintaining waterpressure at watertreatmentplants. To provide additional flexibility to sites that would potentially become subjectto the MECT
program because ofabackup generator, the adopted new sentenceto §101.350(14) will provide

a new option for calculatingthe uncontrolled design capacityto emitfrom applicable diesel engines operating less than 

### 100 hours peryearin non-emergency situations and notmeeting the applicable EPA Tier standards. The adopted rulemaking will allow aminor source ofNOx with

an applicable diesel engine, depending on the site's collective uncontrolled design capacity to emit, to meetthe emission specification listed in §117.2010 eitherby participating in the MECT
program and acquiring allowances ornotparticipating in the MECTprogram 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 oftheirfacilities 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' EMISSIONSBANKINGAND TRADING DIVISION

### 3: MASSEMISSIONS CAPAND TRADEPROGRAM 

### 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 ofacronyms, 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 ofa facility to emitNOx without consideration for post-combustion controlequipment (e.g., a selective catalytic reduction system), enforceable limitations (e.g., permit restrictions, such as a restriction on operating hours peryear), 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 equipmentthat can be removed withoutpreventing the facility from operating. NO

### x 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§10 1.351 (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 of876 hours or a federally enforceable limitation on tot8l hours ofoperation. 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 waterpressure 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 priorto the installation ofthis engine. The diesel engine is rated
at 150 horsepower, has an emission factor of7.0 grams ofNOx perhorsepower-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 emitto determine applicability in the MECT program. Adopted § 101.350(14) will allow using 876 hours when calculatingthe uncontrolled design capacity to emit for the diesel engine, therefore equaling



### 51.01 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 subjectto the MECT program ifthe collective uncontrolled design capacity to emit is ten tons or more peryear ofNOx. Since the MUD has the option ofhaving a collective uncontrolled design capacity to emit above or below ten tons peryear, 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 meetthe emission specifications listed in § 117.2010. Under adopted § 101.351(c), if this MUD participates in the MECT program, then this site will remain subjectto 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 ofNOx in Chapter 117. 

### Ifthe site is a major source ofNOx, 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 peryear 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 subjectto the MECT program until permanently shut down. Adopted subsection (c) will clarify that a site's collective uncontrolled design capacity to emit will not affectthe 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 subjectto the MECT program



### 6

### until the site is permanently shut down.



### §JOJ.353, Allocation of Allowances
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 Registerformatting 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. Underthe current rule, ECT-3 forms were considered late ifsubmitted in accordance with §101.360(a) afterJune 30, 2001; however, the forms were accepted. Underthe 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 ofallowances based on historical actual emission data or an allocation ofallowances 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 thatthe action is not subject to §2001.0225 because it does not meetthe defmition ofa "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 orreduce 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, orthe public health and safety ofthe state or a sector ofthe
state. The amendments to Chapter 101 are not specifically intended to protectthe environment

or reduce risks to human health from environmental exposure to airpollutants; 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 otherpurpose of this adopted rulemaking is to provide additional flexibility to sites that would enterthe 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 peryear 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 widerrange 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, orthe 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 ofa delegation agreement or contract between the
state and an agency or representative ofthe federal government to implement a state and federal
program; or adopt arule solely underthe general powers ofthe agency instead ofunder a specific state law. This rulemaking action does not meet any ofthese four applicability requirements ofa "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 ofa delegation agreement, was not developed solely underthe 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 NO

### x cap. Promulgation and enforcement ofthe amendments will not burden private real property. The adopted amendments do not affect private property in a mannerthat restricts or limits an owner's rightto the property that would otherwise exist in the absence ofa governmental action. Additionally, the credits and allowances that will be affected by these adopted amendments are notproperty rights. Consequently, this rulemaking action does not meet the definition ofa taking under Texas Government Code, §2007.002(5). Although the adopted amendments do not directly prevent a nuisance or prevent an immediate threatto 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 orderto meet the one-hour ozone NAAQS setby 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 bythe EPA under 42 USC, §7409. Consequently, the exemption that applies to these adopted amendments is that ofan 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 subjectto 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 Chapter281, 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 Subjectto the Coastal Management Program, commission rules governing 

### airpollutant 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 ofair 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 CFRPart 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 notrequire any changes to outstanding federal operating permits.

PUBLIC COMMENT Public hearings were held in Houston on October28,2009, 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 amendmentto 

### §101.353(b) and why it does notrequire minor sources ofNO

### x submitting late ECT-3 forms to obtain allowances from the market. The
EPA expressedthat these minor sources ofNOx could increase the overall cap andjeopardize 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 ofactivity 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 ofan administratively complete permit application received on or after January 2, 2001) that is subjectto the MECT program cannot receive an allocation ofallowances, and the site must obtain allowances to coverthe new facility's total emission ofNOx.

12

### Minor sources ofNOx with applicable facilities that are not in the MECT program must
meet the emission specifications ofChapter 117 on a unit-by-unit basis. A minor source of NOxwith facilities subjectto the emission specifications ofChapter 117 must comply by installing controls, the use ofemission credits, or the use ofdiscrete emission credits. A minor source ofNOxis subject to the MECT program once the site has a collective uncontrolled design capacity to emit greaterthan or equal to ten tons peryear ofNOx• 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 ofChapter 117. Ha minor source ofNOx submits a late ECT-3 form but installed controls on an existing facility to comply with Chapter 117 priorto entering the MECT program, the site would undergo both the cost ofinstalling the controls and the
cost ofpurchasing the entire amountofallowances 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 ofan existing facility's emissions at a minor source ofNOx thatwere 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 compliancewith the emission specifications to compliancewith the MECT program, there is no actual growth in real emissions because the allowance is based on actual level ofactivity 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 ofNOx 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. If

### the 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.

If

### an existing facility at a minor source ofNOx 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 ofallowances per site, 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 inventoryNOx 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 whetherthe proposed rule would continue to allow major sources ofNOx with eligible facilities that have losttheirexemption 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 ofallowances that lose their exemption status under Chapter 117 iftheir exemption status was lost on orafterApril 1, 2001. No changes were made in response to this comment.

The HSC commented thatthe 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 ofemission reductions through market forces. The commission maintains thatthe MECT program is the most costeffective means ofachieving emissions reductions ofNOx•Individual sources ofNOx emissions also must meet permitlimits 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 thatthe 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 ofapplicable stationary diesel engines. Instead ofadopting 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 otherwatertreatment 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 peryear 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 ifa 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 ofthis 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 ofpublic 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 ofair contaminant emissions. The amendments are also adopted under Federal Clean AirAct (FCAA), 42 United States Code (USC), §§7401 

### etseq., 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 

### etseq.

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 ofoperation ofa 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 ofa 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 ofallocation, butthat 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 underthis 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 eitherhas 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 ofactivity--The amount ofactivity at a facility measured in tenns ofproduction, fuel
use, raw materials input, orother similar units.

(12) Person--Forthe purpose ofissuance ofallowances underthis division (relating to Mass Emissions Cap and Trade Program), a person includes an individual, a partnership oftwo ormore persons having ajoint 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 ofa 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 of876 hours

or a federally enforceable limitation on total hours ofoperation to calculate uncontrolled design capacity to emit if

### the engine would otherwise be exemptfrom Chapter 117, SubchapterD, Division 1 ofthis title (relating to Houston-Galveston-Brazoria Ozone NonattainmentArea Minor Sources) under §I 

### 17.2003(a)(2)(l) ofthis title (relating to Exemptions) exceptthatthe engine does notmeetthe emission standardrequirements 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 areathat:

(l) 

### meet the definition ofa major source ofnitrogen oxides (NOx), 

### as defined in 

### §11 7.10 ofthis title (relating to Definitions), with facilities subjectto §117.31 0 or §117.1210 ofthis title (relating
to Emission Specifications for Attainment Demonstration); or 3

### (2) do not meet the defmition ofa major source ofNOx, as defmed in 

### § 117.1 0 ofthis title,
and have facilities subjectto 

### § 117.201 0 ofthis title (relatingto Emission Specifications) with a collective
uncontrolled design capacity to emit from these facilities often tons ormore peryear 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 meetthe 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 subjectto the requirements ofthis division, the site will remain subjectto 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 *EF 

# FINALJ]: 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 priorto January 1, 1997: 

# B= (LA91*EF97)+

# (LA9s*EF98)+(lAJ9*EF99)**3(200~**
Where: LA97 = 

### the facility's level ofactivity, as certified by the executive director for 1997; LA98 = 

### the facility's level ofactivity, as certified by the executive director for 1998; LA99 = 

### the facility's level ofactivity, 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 ofactivity, (notto exceed any applicable federal or state regulation, rule, orpennit 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 ofactivity, (notto exceed any applicable federal or state regulation, rule, orpennit limit), as certified by the executive director. (B) 

### For existing facilities not 

### in operation priorto January 1, 1997 and that have

been in operation less than five complete consecutive calendar years beginning afterthe end ofthe adjustment period and have not established two years ofbaseline data: 

# B = LAALLOJJ'ABLE

# *EF ALLOlJ'.ABLE 

# 2000

Where: LAAllowable = 

### The level ofactivity authorized by the executive director until such time two consecutive calendar years ofactual level ofactivity data is available; 

### 5EFAllowable = The emission factor or the emission specifications under ESAD, whichever is higher, authorized by the executive directoruntil such time two consecutive calendaryears ofactual emission data is available. 

### (C) For existing facilities not in operation priorto January I, 1997, and that have

established two consecutive calendar years ofbaseline data out ofthe first five years ofoperation following the end ofthe adjustmentperiod: 

# B= (LAYK.4R-l

# *EFYlWl-l)+(LAYEAR-2*EFYEAR-2) 2(2000)

Where: LAYear

_ 1 = the facility's level ofactivity, as certified by the executive director, for the first ofany two consecutive years within the first five years ofoperation; LAYear -2 = the facility's level ofactivity, as certified by the executive director, for the second ofany two consecutive years within the first five years ofoperation; EFYear-1 = the facility's emission factor orthe emission specifications under ESAD, whichever is higher, in pounds per unit ofactivity, (notto exceed any applicable federal or state regulation, rule, orpermit limit), as certified by the executive director, for the first ofany two consecutive years within the first five years ofoperation; EFYear -2 = the facility's emission factor or the emission specifications under ESAD, whichever is higher, in pounds per unit ofactivity, (notto exceed any applicable federal or state regulation, rule, orpermit limit), as certified by the executive director, for the second ofany 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 laterthan April 1, 2003. 

### (F) For calendaryears 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 orbefore 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 afterJanuary 1, 1997, LAHA is:

(i) the level ofactivity authorized by the executive director until such time two consecutive calendaryears ofactual level ofactivity data is available, beginning after the end ofthe adjustment period; or 

### (ii) when two complete consecutive calendaryears ofactual level ofactivity data is available, beginning afterthe end ofthe adjustment period, the level ofactivity becomes the average ofthe facility's actual level of activity overthose two consecutive calendaryears ofactual 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 ofactivity for any formula will be the lowest ofthe level ofactivity as calculated in variables (2)(A), (2)(B), orthe level ofactivity limited by an enforceable limit or commitment necessaryto 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 orthe annual allocation rights from facilities already participating underthis 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 permitby 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 ofnitrogen 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 orbefore 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 directorto 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 ofafacility 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 operatorofthe facility to the executive
director:



### (1) no laterthan June 30, 2001, 

### to request an alternative three consecutive calendaryear period for facilities in operation priorto January 1, 1997;

(2) 

### no laterthan 90 days after completion ofthe baseline period to request up to two additional calendaryears 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 ofactivity data, then allowances will not continue to be allocated ifthe facility ceases operation or is
not built.

10This agency herebycertifies

# tha~he adoption has been reviewed by legal counsel and found to 

### bf:j avalid exercise ofthe agency's legal authority. 

# !
Filed with the Office ofthe Secr$aryof 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 Forfurther 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 October9, 2009, issue ofthe Texas Register (34 TexReg 7009). Section 101.350 and §101.351 are adopted withoutchangestothe 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 stationarysources of NO. compliance flexibility for the emission specifications under30 TAC Chapter 117, while establishing a mandatory cap for total NO. emissions from affected source categories in the HGB ozone nonattainmentarea. The MECT program was adopted as a primary control measure ofthe HGB attainment demonstration for the one-hour ozone National Ambient Air Quality Standard (NMQS). The MECT program NO. cap is a product ofthe 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 accordancewith §101.360(b)(1). The rule did notaddress-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. ifsubmitted 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 ofallowances. 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 amendingthis definition to "Uncontrolled design capacityto 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 equipmentthat 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 poweroutages 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 meetthe 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 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 TRADINGDIVISION3: MASS EMISSIONS CAPAND TRADEPROGRAM In addition to the adopted amendments to §§101.350, 101.351, and 101.353 discussed elsewhere in this preamble, the com**missi~n** also adopts various stylistic non-substantive changes updating .rule language to current Texas Registerstyle 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 numberlowerthan 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 capacitytoemitforstationary 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 subjectto the MECT program the option to calculate the uncontrolled design capacity to emit foran applicable stationary diese!**e~gi~e** using the lowerof876 hours ora federally enforceable limItatIon on total hours ofoperation. 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 ofthe site's collective uncontrolled design capacity to emit to determine applicability in the MECT program. Adopted §101.350(14) will allow using 876 hourswhen calculating the un**contr~lIed** design capacity to emitforthe diesel engine, therefore equaling 1.01 tons of NO. peryear. The MUD in this example can also usethe 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 peryear of NO•. Since the MUD hasthe 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 forthe diesel engine to meetthe 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 amendmentto §101 :351(a) will require a site firstto determine**i~ s~tus**  as.a minor or majorsource of NO. in Chapter 117. Ifthe 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 of Allowances The commission adopts the amendment to §101.353(b) with**chan~es** from the proposal to correct non-substantive typo**grap~lcal** errors and to comply with Texas Registerformatting 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. Underthe 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 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, orthe 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 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 ofthis 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 enterthe MECT program because ofa backup generator, by proposing a new option for calculating the uncontrolled design capacityto 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 ofsources 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 ofthe 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 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 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 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 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 pollutantemissions 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 thatthe 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 naturalresource areas (31 TAC §501.12(1». The adopted amendments will update a definition and maintain the integrity ofthe 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 SUBJECTTO 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 October28, 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 forthe 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 forthe 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 coverthe 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 costofinstallingthe controls and the cost of purchasing the entire amount ofallowances 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 SUbjectto the MECT program. Therefore, the commission is continuing to grant allowances forthe portion ofan existing facility's emissions at a minorsource of NO. thatwere 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 attainmentdemonstration modeling forthe 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 newfacilities 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. Ifan existing facility ata minorsource 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 NOxcap 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. Thetotal 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



### ADOPTEDRULES March 26, 

### 2010 35 

### TexReg 2577such an inconsequential decrease is impractical and provides no benefit. Therefore, the commission has chosen to model such changes conservatively and only includethe increase in the point source MECT NO. cap. Thus, the continued acceptance of late ECT-3 forms from existing facilities at minorsources 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 majorsources 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. forfacilities eligible under§1 o1.36o(c) to receive an allocation of allowances that lose their exemption status underChapter 117 iftheirexemption statuswas loston orafterApril 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 MECTprogram 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 supportstheadoption of§1o1.353(b)(3)

- (5). -rhe HSC commented thatthe commission should change the deadline for an applicable majorsource of NO. tosubmit 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 ofthe 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" istoo 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 howto calculate the uncontrolled design capacity to emitfrom 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 otherwater treatment plants. The definition "Uncontrolled design capacity to emit" does not grantan increase in operation forapplicable stationary diesel engines operating less than 100 hours per year in non-emergency situations that do not meetthe applicable EPATierstandard. No changes were made in response to this comment. The definition "Uncontrolled design capacityto emir' is only used to determine ifa 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 underTexas 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 forthe measuring and monitoring of aircontaminant 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 mannerthe 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 of Allowances. (a) Allowances willbe deposited intocompliance 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 orthe 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 thathave submitted, under Chapter 116 ofthis title (relating to Control ofAir Pollution by Permits for New Construction orModification), an application thatthe executive director has not determined to be administratively complete before January 2, 2001; (2) new and/ormodified facilities thatqualified for apermit 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), thathave not submitted anECT-3 Form, Level of Activity Certification, in accordance with §101.360(a)(1) ofthis title (relating to Level ofActivity 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 ofthis title, that submitted a permit application that was determined administratively complete beforeJanuary2, 200I, buthave 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 onorbeforeDecember31,2000, as amajorsource ofN0x' as definedin §117.10 ofthis title, that qualified for a permitby rule and commenced construction before January 2, 2001, but have not submitted an ECT3 Form in accordance with §101.360(a)(2) ofthis title by March 30, 2010. (c) Ifactual emissions ofNOxduring 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 accountplus 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 ofeach following year. (e) The annual deposit for any control period may be adjusted by theexecutive directortoreflectnew orexisting state implementation plan requirements. (f) Allowances may be added ordeducted by the executive director from compliance accounts following the review ofreports required under §101.359 ofthis title (relating to Reporting). (g) The owneroroperatorofa facility may, due to extenuating circumstances, requesta baseline period morerepresentative ofnormal operation as determined by the executive director. Applications for extenuating circumstances mustbe submitted by the owneror operator ofthe facility to the executive director: (I) no later than June 30, 2001, to request an alternative three consecutive calendaryear period for facilities in operation prior to January I, 1997; (2) no later than 90 days after completion ofthe baseline period to requestupto two additionalcalendaryearsto establisha baseline period for facilities whose baseline as described by variable (2)(C) listed inthefigure containedin subsection (a) ofthis section is notcomplete 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 basedonallowablesandthe facility does notachievetwo complete consecutive calendaryears ofactual level ofactivity data, then allowances will not continueto be allocated ifthe facility ceases operationoris not built This agency hereby certifiesthatthe adoption has been reviewed by legal counsel and found to be a valid exercise ofthe agency's legal authority. Filed with the Office ofthe 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 ofthe Texas Register(34 TexReg 7015). The amendments and newsectjLn 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 Register53761, September 17, 1979). For ntattainment areas classified as moderate and above, FCAA, 

# I 182(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 ofamendments 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 ofthe Texas Clean Air Act, Chapter 382 ofthe Tex. Health & Safety Code. Notice ofthe 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 ofthe 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 ofthe 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 oftestimony incorporated by reference to this Order. The Commission fmds that the analysis oftestimony includes the names ofall 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 ofEPA 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. Ifany portion ofthis Order is for any reason held to be invalid by a court ofcompetent jurisdiction, the invalidity ofany portion shall not affect the validity ofthe remaining portions.

Date issued: 

# MAR 12 Z 010 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY