COMMONWEALTH OF PUERTO RICO OFFICE OF THE GOVERNOR ENVIRONMENTAL QUALITY BOARD

RESOLUTION AND NOTIFICATION
In an ordinary meeting held on December 12, 2012 it was submitted for the consideration of the Governing Board (GB) of the Environmental Quality Board (EQB) the Report prepared by the E xamining O fficial, Attorney Fernando Oliveras Barreto, related to the public hearing held on January 31, 2012 regarding the Adoption of the State Infras tructure Implementation Plan (S IP) for Ozone and PM 2.5.

I. RESOLUTION:

After reviewing all the merits of the case, and as per the powers and faculties conferred to the EQB by State Law No. 416 of September 22, 200 4 , better known as the Environmental Public Policy Act and its Regulations, this Board hereby DETERMINES :

 To approve t he Examining Official’s Report in all its parts, a copy of which is included in
this Resolution.

 To approve t he Infrastructure SIP for Ozone and PM 2.5, as per Section 110(a)(2) of the Clean Air Act with the changes and modifications recommended in the Examining Official’s Report.

II. RIGHT OF REVIEW :

The party that is adversely affected by a resolution, partial or final order, may file a motion for reconsideration of the resolution or order within the term of twenty (20) days from
the date of the filing of the resolution or order. The agency shall consider the motion within fifteen (15) days of its filing. Should it reject it forthright or fail to act upon it within (15) days, the term to request review shall recommence from the date of notice of such denial, or from the expiration of the fifteen (15)

- day term, as the case may be. If a determination is made in its consideration, the term to petition for review shall commence from the date a copy of the notice of the agency's resolution definitively resolving the motion to reconsider is filed in the record of the case. Such resolution shall be issued and filed in the record of the case within ninety (90) days after the motion to reconsider has been filed. If the agency accepts the motion to reconside r but fails to take any action with respect to such motion within ninety (90) days of its filing, it shall lose jurisdiction on [of] the same and the term to file judicial review shall commence upon the expiration of said ninety (90)

- day term, unless the a gency, for just cause and within those ninety (90) days, extends the term to resolve for a period that shall not exceed thirty (30) days. IN RE:

STATE INFRASTRUCTURE IMPLEMENTATION PLAN (SIP) FOR OZONE AND PM 2.5 SEC TION 110( a )(2) OF THE CLEAN AIR ACT RES. NÚM .: R

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RE : PUBLIC HEARING FOR

THE ADOPTION OF THE SIIP2 The adversely affected party that decides not to file a motion for reconsideration as described above may if so desire d, within the thirty (30) day period from the date of the filing of this Resolution, file a motion for judicial review at the Court of Appeals. This as per Section 3.15 of State Law No. 170 of August 12, of 1988, known as the Administrative Procedures Act, as amended, 3 L.P.R.A. §2165.

NOTIF Y by way of certified mail with return receipt the following:
EPA, Region 2, 290 Broadway, New York, NY 10007

- 1866; and personally, the following officials of the EQB: Attorney Blanche González, Associate Member; Mrs . María de los A. Ortiz, Alternate Member; Attorney Anibal Hernández, Chief of the Legal Affairs Office; the Air Quality Area; and the Public Hearings Division.

Given in San Juan, Puerto Rico, on December 12, 2012

.

REYNALDO MATOS JIMÉN EZ VICE

- PRESIDENT

I CERTIFY : That I have notified a true and exact copy of Resolution R

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- 12 to: EPA at the above mentioned address, and all of EQB’s officials by way of internal messenger, having filed the original on the file.

In San Juan, Pu erto Rico on December 21, 2012.

SECRETAR

Y GOVERNING BOARD3 COMMONWEALTH OF PUERTO RICO OFFICE OF THE GOVERNOR ENVIRONMENTAL QUALITY BOARD

EXAMINING OFFICIAL’S REPORT

TO THE HONORABLE GOV ERNING BOARD:
Appearing is the Examining Official, Attorney Fernando Oliveras Barreto , who respectfully submits for your consideration the following REPORT:

I. INTRODUCTION

According to sections 110(a)( 1) and 1 10(a)(2) of the Federal Clean Air Act, it is required that each State submits a plan that provides for the implementation, maintenance, and compliance
of a new NAAQS issued, or a revision of a NAAQS . Such document, known as State Infrastructure Implementat ion Plan (Infrastructure SIP) shall demonstrate the capacity and authority of the State to enforce the specific air quality standards.

The Environmental Quality Board, pursuant to the powers granted by its Organic Law, Law Number 416 of September 22, 200 4, as amended, known as the Environmental Public Policy Act, and under the applicable provisions of Law Number 170 of August 12, 1988, as amended, known as The Uniform Administrative Procedures Act, Law Number 454 of December 28, 2000, better known as the Small Business Administrative and Regulatory Flexibility Act, as amended, has the intention to submit to the EPA the Infrastructure Demonstration for the NAAQS of 2008 for Ozone and PM 2.5.

The main objective of the proposed action is to demonstrate the capacity of Puerto Rico to implement, maintain, and enforce the NAAQS for Ozone and PM 2.5.

II. Summary of the Infrastructure SIP

Sections (a)(1) and (2) of the Clean Air Act (CAA), hereinafter referred as State Infrastructure Implementation Plan (SIP), req uires the States to present an implementation plan to the Administrator of the Environmental Protection Agency (EPA) that demonstrates its capacity to implement, maintain, and enforce each of the National Ambient Air Quality Standards IN RE:

Infrastructure SIP for ozone and Pm 2.5 as per Section 110(a)(20 of the Federal Clean Air Act
Air Quality Area of the Environmental Quality Board
Proponent RE : A doption of the Infrastructure SIP4

(NAAQS). Section 110( a)(1) of the Clean Air Act details the required time to submit the
revisions of the Infrastructure SIP . At the same time, Section 110(a)(2) details the elements the State needs to demonstrate its authority to implement the plan. Some elements of Section 110(a)(2) specifically establish the states’ obligation to demonstrate the capacity to implement,
mainta in, and enforce the air quality standards. These elements are compiled and presented in
what is known as the Infrastructure SIP and are, but are not limited to the air quality monitoring, data analysis and report presentation, resources, consultations, eme rgency procedures, and transport related situations. Such section provides the following:

(2) Each implementation plan submitted by a State under this Act shall be adopted by the State after reasonable notice and public hearing. Each such plan shall/

- "( A) include enforceable emission limitations and other control measures, means, or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for co mpliance, as may be n ecessary and appropriate to meet the applicable requirements of this Act; (B) Provide far establishment and operation o f appropriate devices, methods, system s, and procedures necessary to (i) monitor, compile, and analyze da ta on ambient air quality, and ( ii) upon request, make such data available to the Administrator; (C) I n elude a program to provide far the enforc ement of the measures described in subparagraph (A), and regulation of the modif ication and construction of any stationary source within the ar

eas covered by the p lan as necessary to assure that national ambient air qualit y standards are achieved, including a permit program as required in parts C and D; ( D)Contain adequate provisions

- (i) prohibiting, consistent with the provisions of this title, any source or other type of emissions activity within the State from emitti ng any air pollutant in amounts which will

- {l)C ontribute significantly to nona ttainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary

a mbient air quality standard, or (II) interfere with measures required t o be included in the applicable implementation plan for any other State unde r part C to prevent significant deterioration of air qua l

ity or to protect visibility, (ii) i

nsuring compliance with the appl icable requirements of sections 126 and 115 (relating to interstate and inte rnational pollution abatement); (E) P rovide (i) necessary assurances that the State (or, except w here the Administrator d

eems inappropriate, the gene ral purpose local government or governments, or a regional agency designated by the State or general purpose local governments for such purpose) will have a dequate personnel, funding, and authority under State (and, as

a ppropria te, local) law to carry out such implementation plan (and is not prohibited by any provision of Federal or State law from carrying out such implementation plan or portion thereof}, (ii) requirements that the State comply w ith the requirements respecting St ate boards under section 128, and (iii) necessary a ssurances that, where the State has rel ied on a local or regional government, age ncy, or instrumentality for the implementation of any plan provision, the State has responsibility for ensuring adequate imp leme ntation of such plan provision; {F) R equire, as may be p rescribed by the Administrator

- (i) the installation, maintenance, and

re placement of equipment, and the implementation of other necessary steps, by ow ners or operators of stationary sourc

es to mon itor emissions from such sources, (ii) periodic reports on the natu re and amounts of emissions and emissions

- rela ted data from such sources, and (iii) correlation of such reports by the State agency with any em1ss10n limitations or standards establ ished pu rsuant to t

his Act, which reports shall be available at reasonable times for public inspection; "(G) Provide for authority comparable to t hat in section 303 and adequate con tingency plans to implement such authority; (H) P ro vide for revision of such plan

- (i) from time to time as may be necessary to take account of revisions of such national primary or secondary ambient air quality standard or the availability of improved or more expe ditious methods of attaining such standard, and (ii) except as provided in paragraph (3} (C), whenever the Administrator finds on the basis of information available to the Administrator that the plan is s ubstantially inadequate to atta in the national ambient air qua l ity standard which it implements or to otherwise comply with any addi tional requirements established under this Act; ( I ) in the case of a plan or plan revis ion for an area designated as a no nattainment a rea, meet the appl icable requ irements of part D (relating to nonattainment areas); 0) Meet the appl icable requirement

s of section 121 (relating to consultation}, section 127 (relating to publ ic notification), and5

part C (relating to preven tion of signi ficant deterioration of air quality and visibility protection); {K) provide for

- (i) the performance of such air qual ity mo deling as the Administrator may prescribe for the purpose of predictin g the effect on ambient air quality of any emissions of any air pollutant for wh ich the Administrator has established a national ambient air quality standard, and (ii) the submission, up on request, of data related to such air quality modeling to the Administrator; (L) R equire the owner or operato r of ea ch maj or stationary source to pay to the permitting authority, as a condition of any permit required under this Act, a fee sufficient to co ver

- (i) the reasonable costs of reviewing and acting upon any application for such a permit, and (ii) if the owner o r operator receives a permit for such source, the reasonable costs of implementing and enforcing the terms and conditions of any such permit (not including any court costs o r other costs associated with an y enforcement action}, until such fee requirement is superseded with respect to such sources by the Administrator's approval of a fee program under tit le V; and {M) provide for consultation and participation by local political subdivisions affected by the plan."
Summary of the Compliance Demonstration of the EQB with the Elements provided in Section 110(a)(2)
As it may be observed from reading the aforementioned quote, Section 110(a)(2), as amended, contains a detailed list of the different requirements to be included in the Infrastructure SIP for Puerto Rico in relation to the NAAQS. Next, is a summary of the content of the proposed Plan discussing the authority and resources of Puerto Rico to implement the
Infrastructure SIP as per the described provisions in EPA’s guidelines with respect to the NAAQS for Ozone and PM 2.5, and conforming to the elements contained in the mentioned
Section.

1. Applica ble Emissions Limits and Other Control Measures [110(a)(2)(A)]

The EQB has issued standards and rules to apply and enforce the NAAQS and other air quality standards . These rules include permit programs and permit fees. The following parts of the Regulation for the Control of Atmospheric Contamination (RCAC) contain the pertinent standards of these federal requirements:

Part I: General Provisions Part II: Approval and Pe rmits
Part IV: Prohibitions
Part V: Fees Part VI: Rules for Operation Permits covered under Title V

2. Air Quality Monitoring, Compilation, Data Analysis, and Report Presentation [110(a)(2)(B)]

Since 1959, Puerto Rico has monitored air contaminants. Previous to the CAA of 1970, the Puerto Rico Aqueduct and Sewer Authority (PRASA) conducted air sampling. In 1978, the EQB assumed the responsibilities of air ambient monitoring to facilitate the iden tification and control of air contaminants in Puerto Rico. Annually, the EQB prepares the monitoring plan as per 40 CFR 40 Part 58.10. The air sampling network has a double purpose. First, the plan confirms that the network continues to comply with the est ablished requirements by the federal6

surveillance regulations (SLAMS), and that the information obtained from the sampling stations allow to adequately classify each of the sampling stations. Second, the plan serves as a directory
of the actual air monitor ing stations in PR (SLAMS), special sampling stations (SPM), and of the meteorological parameters.

The EQB is comm itted to continue to maintain the atmospheric monitoring network in compliance with EPA requirements, and to present quarterly reports on the recollection and analysis of such to the EPA.

The last plan for the monitoring network approved by the EPA is the Annual Ambient Monitoring P lan of 2010. EQB also presented the Environmental Network Monitoring Plan of 2011, on June 28, 2011, which currently is under review by the EPA for their approval.

The legal authority is found on Article 9(a) Section ( 4) et seq

. of Law 416 of September

22 , 2004. Contractual agreements between EPA and EQB establish the obligation to operate a sampling network that meets the applicable federal regulations. There is no need for any legal authority to authorize the data analysis, or the presentation of such da ta to the EPA. Only the cost subsidies (GRANT) establish the obligation to provide the data to the EPA. The EQB reports and will continue to report the air quality data through its air quality system (AQS) of
the EPA.

3. Compliance and Air Emission Permits [110(a)(2)(C)]

The EQB has established standards that govern the application of control measures, including compliance plans, and programs that regulate the construction and modification of fixed emission sources. The sources affected by the PSD program a re subject to the requirements of the Federal Implementation Plan for PSD, as disposed on 40 CFR Section
52.21.

The following parts of the RCAC contain the pertinent provisions for the federal requirements:

Part I: General Provisions Rule 103: Emission Sources Monitoring, Logs, Reports, Sampling, and Test

Methods; Rule 105: Malfunction Rule 106: Test Methods Rule 107: Emergency due to Air Contamination Rule 108: Equipment for the Control of Air Contamination Rule 109: Notice of Violation Rule 111: Petitions, Hearings, Public Notice Rule 112: Certifications/Compliance Determinations Rule 115: Sanctions Rule 119: Derogation Rule 120: Separability Clause7 Part II: Permit Approval

Rule 201: Site Location Approval Rule 202: Ai r Quality Impact Analysis Rule 203: Construction Permit for an Emission Source Rule 204: Operation Permit for an Emission Source Rule 205: Compliance Plans for Existing Emission Sources Rule 207: Continued Compliance Responsibility Rule 208: Agricultu ral Burn Permit

Part IV: Prohibitions
Part V: Fees
Rule 501: Permit Fees Rule 502: Excess Emissions Fees Rule 503: Test Fees Rule 504: Modifications
Part VI: Rules for the Operation Permits for Sources Covered under Title V

4. Interstate Transport [110(a)(2)(D)]

The EQB certifies that emissions in PR do not contribute to the nonattainment of Ozone and PM 2.5 in other states, and does not interfere with the maintenance of the NAAQS
in other states. Puerto Rico is not within the continental United States; there are no adjacent states or territories that have nonattainment areas for Ozone and PM 2.5. However, the RCAC establishes that in compliance with its duties, the Air Quality Area shall have and may exercise the faculty to: “Establish, r evise, or modify the emission limits, the emission control standards,
or the control measures of fixed sources or facilities in areas of PR in which such sources or facilities significantly contribute to the non

- compliance of an air quality standard, or si gnificantly contribute to a significant deterioration of the air quality in PR or another State. However, it is not required by virtue of the current regulation, to be less restrictive with the source or facility as per the current article, or by the enact ed rules and regulations”.

5. Resources, Conflict of Interests, and Emergency Episodes [110(a)(2)(E)]

The EQB has sufficient personnel, funds, and the authority under state law to conduct an implementation plan. The funds are obtained by way of the Federal Grant through Article 105 of the Clean Air Act. Likewise, the local government has its own responsibilities and privileges with respect to the protection of the air quality established by the Puerto Rico Legislat ure. The EQB rests in the complete legal an d regulatory authority as indicated in this document. The EQB is the only agency responsible for the adequate implementation of the plan.

6. Reports and Sampling of Fixed Emissions Sources

The EQB requires monitoring of the air contaminants as part of its construction permit program. Some emission sources are required to present the periodic inventories and annual emissions. The data is used in the air dispersion models that help PR to prepare the revisions of8

the SIP. All the emissions information is available for review during a reasonable period of time. The following parts of the RCAC contain the pertinent standards for the federal requirements:

Part I: General Pro visions
Rule 103: Emission Sources Moni toring, Logs, Reports, Sampling, and Test

Methods; Rule 104: Available Emissions Data for Public Participation Rule 106: Test Methods Rule 108: Equipment for the Control of Air Contamination Rule 109: Notice of Violation Rule 111: Petitions, Hearings, Pub lic Notice Rule 112: Certification / Compliance Determinations
Part II: Permit Approvals Rule 201: Site Location Approval Rule 202: Air Quality Impact Analysis Rule 203: Construction Permit for an Emission Source

7. Faculties and Emergency Contingency Plans [110(a)(2)(G)]

The EQB has the faculty to dictate an emergency order to persons that are causing or contributing to atmospheric contamination
, to reduce its emissions with the purpose o f eliminating the condition, or immediately suspend the contamin ating emissions. Also, the EQB maintains the information on air contamination in a site readily accessible for the public on EQB’s website (

http://www.jca.gobierno.pr ). O n a regular basis, newsletters on weather a lerts and air quality are publicized to warn the public of bad air quality days, including alerts on particulate material. The following parts of the RCAC contain provisions applicable to this federal requirement: Part I: Rule 107: Emergency due to Air Con tamination.

8. SIP Revision due to Revisions of the National Air Ambient Quality Standards, or due to New Compliance Methods [110(a)(2)(H)]

The EQB is committed to present revisions of the SIP when the air quality standards are revised or provided by EPA. The Work Subvention Plan as per Section 105 of the CAA, elaborated annually by the EQB, includes specific agreements to implement and revise the SIP when necessary. The EQB presents its revised SIP, which responds to the new revised air quality standards for 8 hours of ozone, as well as for PM 2.5.

9. SIP Revisions for New Nonattainment Areas [110(a)(2)(I)]

The EQB is committed to present SIP revisions when an area in PR is designated as a nonattainment for an air quality standard. The EPA Region 2 is responsible for the construction permit program of new nonattainment sources. This program contains the requirements to obtain an approval permit for air contaminating sources in Puerto Rico before the construction of a facility, and before modifying an existing facility.9

10. Consultation and Public Notice [110(a)(2)(I)]

The EQB, as part of the SIP revision process, consults local and state agencie s, and establishes the necessary memorandum of agreement. The EQB consults other state agencies, local agencies, and non

- governmental organizations, as well as environmental organisms of other States with respect to air quality.

The EQB informs the publi c daily on particulate levels by way of e

- mails, press releases, and the media. Every day, the air quality level is publicized on the EQB website. Also, the EQB website maintains information on the quality, graphics, and summaries on the air quality of
Pue rto Rico from previous years. This tool allows the public to learn about the air quality in the long term and how it compares to previous years. The EQB is committed to maintaining the public information and education programs that satisfy the requirements of Section 127.

11. Dispersion Models and Report Presentation [110(a)(2))L)]

The EQB is the authority in PR to conduct air dispersion modeling as per indicated in the LAL, to demonstrate compliance with such and meet the NAAQS. All the information related to mathematical modeling or air quality is presented and reported to the EPA as part of the federal subsidy compromise.

12. Fees for Mayor Source Permits [110(a)(2)(L)]

The EQB annually evaluates the fees in o rder for them to suffice and to be the main source of income to cover the permit program’s costs in Puerto Rico. The EQB will oversee that any payment made under this chapter is used only for the permit program’s costs. When a source requests a modificatio n, an administrative change, or a minor modification to the Title V permit, the source is paid per tonnage. The Governing Board of the EQB has issued various resolutions that provide for the annual payment of the actual emissions based on a fixed rate

per tonnage. (R

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- 1 and R

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- 23; ri

- 0602, R

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- 8). The following parts of the RCAC contain the related standards as per the federal requirements: Part VI: Rules for the Operation
Permits of Sources Covered under Title V.

Rule 610: Determination of Fees and Certifications

13. Consulting Other Local Agencies [110(a)(2)(M)]

The EQB has various cooperation agreements and memorandums of agreement with other agencies and local organizations. Consulting different organizations is a normal part of the

process conducted by the EQB to develop SIP revisions.10 III. Procedural Tra ct

After the Infrastructure SIP draft for Ozone and PM 2.5 was prepared by the Air Quality Area, the EQB determined on a preliminary basis that the document as was describe d previously, satisfies the principal objective of demonstrating Puerto Rico’s capacity to implement, maintain, and enforce the NAAQS for Ozone and PM 2.5.

In consequence the public participation process and final analysis was initiated with the

purpose o f obtaining the final approval of the Plan in compliance with the Environmental Public Policy Act , Law 9 of June 18, 1970, as amended, and in compliance with the standards provided in the Uniform Administrative Procedures Act , 3 L.P.R.A. 2181, and Rule 26 of the Administrative Hearings Process Regulations of the Environmental Quality Board

.

In response to the aforementioned legal and regulatory provisions, two (2) public notices were publicized in two (2) general circulation newspapers announcing the intention of the EQB to approve the amendments of the RCAC. The public notice included a desc ription of the proposed amendments, and expressed the intention of approving them, and established the date and time of the public hearing for the public participation, and interested or affected parties. Likewise, it established the place and form in whic h the relevant documents may be examined physically as well as through the Internet, prior request.

The Public Hearing of the case was held on January 31, 2012 in the Public Hearings Room of the Environmental Quality Board, as disposed in the public noti ces. It was presided by the undersigned, Attorney Fernando Olivero Barreto, who was previously appointed by the Governing Board to receive the comments from the general public, the proponents, the EPA, the Air Quality Program, and any other interested pers on, with the purpose of filing a report containing the findings of the process and the appropriate recommendations of the executed

process.

No deponents appeared at the hearing. However, the Environmental Protection Agency submitted afterwards an analyti c document containing their commentaries and recommendations to the proposed Plan, and with such the matter was submitted for analysis and final disposition.

IV. Commentaries and Recommendations of the Deponents

Environmental Protection Agency (EPA)

The commentaries and suggestions of the Environmental Protection Agency were annotated outside the projected SIP, and are summarized in the following: (so they refer to the English version of the proposed SIP, they are kept in the submitted language):
1. Chan ge the word "New" in the title for the word "Revised".

2. EQB should discuss the revised Ozone and PM2.5 NAAQS

- i.e., the dates the standards were revised (1997 ozone and PM, 2006 PM and 2008 Ozone).11

3. EQB should state that this document also supplements EQB 's previous 110 submittal of November 29, 2006 for the 1997 ozone and PM standards.
Note: Although EQB previously submitted a 110 SIP certification for the 1997 standards EPA has since provided guidance that requires a more detailed discussion of the 110 elements as is discussed herein.

4. Change the first paragraph of section 5 to include the following provisions:
Resources, Conflict of lnterest, and Emergency Backstop 110(a)(2)(E))
States are to provide assurances that (i) adequate personnel, funding, and legal authority will be available to carry out the SIP; and (ii) the State has responsibility for ensuring adequate implementation of plan provisions to be carried out by local dist ricts.

In accordance with sub

- element (ii), the infrastructure SIP should include requirements that the state comply with CAA 128, "State Boards." Section 128 of the CAA states:
Sec. 128. (a) Not later than the date one year after th e date of the enactment of this section, ea ch applicable implementation plan shall contain requirements that

– (1) any board or body which approves permits or en forcement orders under this Act shall have at least a majority of members who represent the public interest and do not derive any significant portio n of their income fro m persons subject to permits or enforce ment orders under this Act, and
(2) any potential conflicts of interest by members of su ch board or body or the head of an executive agency with similar powers be adequately disclosed.
A State may adopt any requirements respecting conflicts of interest for such boards or bodies or heads of executive agencies, or any other en tities which are more stringent than the requirements of paragraphs (1) and (2), and the Administrator shall approve any such more stringent requirements submitted as part of an implementation plan.

Mr. Waldemar Natalio Flores Flores

Mr. Flores formulated written commentaries that are united and form part of the administrative file of the public participation process. However, his observations were mainly of a general character, based in his opinion that the EQB lacks an effective Qual ity System and Quality Assurance. This brings him to the conclusion that the Plan under consideration does not meet the requirements of sections 110 (a)(1) and 110 (a)(2) of the Clean Air Act and the interpretative standards established by EPA.

V. Legal Ana lysis, Conclusions, and Recommendations

Due to the urgent need to conserve our environment, the Constitution of Puerto Rico established as public policy “the most efficient conservation of our natural resources, and the
best use of them for the benefit of the general community. Art. VI, Sec. 19|Const. E.L.A.,
L.P.R.A. Volume 1. See, Misión Ind. P.R. v. J.P. 142 D.P.R. 656, 676 (1997); Paoli Méndez v. Rodríguez 138 D.P.R. 449, 460 (1995)

. On repeated occasions, the Supreme Court has affirmed that the
cited constitutional disposition does not constitute solely “the expression of a famous quest”, nor it is reduced “to a mere postulate of principles”. Misión Ind. P.R. v. J.C.A. D.P.R. 908, 919

- 20 (1998) ; Paoli Méndez v. Rodríguez, supra, pg. 460, citing J. Tría s Monge, Historia Constitucional de12

Puerto Rico, San juan Ed. U.P.R., 1982 Vol. Ill, pg. 235. “It is, more so, a mandate that obliges a ll the components of the State and prevails over any other statute, regulation, or order that is contrary to it”. Misión Ind. P.R. v. J.C.A, supra, pg. 919.

More so, it has affirmed the established environmental public policy in the Con stitution
of Puerto Rico “fixes in an unquestionable manner the main judicial criteria to judge the validity or interpret the meaning of any standard or decision relative to the use or protection of the natural resources formulated by the Legislative Conference or by any other agency, department, municipality, or government instrumentality”. Id. , pg. 919

- 20.

After almost two decades of having established the referred mandate, it was reaffirmed by the Legislative Conference by adopting the Environmental Public Policy Act, Law Number 9 of June 18, 1970 (Law No. 9) 1

. 12 L.P.R.A. 1121 et seq. (ed.2003). Municipio de Loíza v. Sucesión Marcial Suárez. 154 D.P.R. 333. 348 (2001).

Also, Law No. 9 demanded that the departments, agencies, public corporations, municipalities, and state instrumentalities to interpret, implement, and administer all the laws and regulatory bodies of the country “in strict conformity” with the aforementioned public policy. Article 4 of Law No. 9, 12 L.P.R.A. sec. 1124 (ed 2003) 2

. See also, Misión Ind. P.R. v. ].C.A., supra, pág. 921. Municipio de Loíza v. Sucesión Marcial Suárez, supra, pág. 348.

In accordance with Law 416 about the Environmental Public Policy, the Environmental Quality Board has the main function to protect and conserve the environment, using wisely and judiciously the necessary resources to impede or eliminate harm that can affec t it, maintaining a balance between economic development and the environment. To obtain such objective, the EQB has a wide faculty to issue regulations with the main purpose of establishing standards that minimize environmental damage, and that establish t he controls for contaminating activities.

B.

The administrative agencies hold the faculty that, in its case, the Legislative Conference delegates to them to adopt rules of legislative character whose effect transcend the general community. Caribe Comms ., !ne. v. P. RT.Co., 157 D.P.R. 203, 211 (2002). Véanse además, Asoc. Fcias. Com. v. Depto. de Salud, 156 D.P.R. 105, 130

- 32 (2002); f. P. v. Frente Unido Pro Defensa del Valle de Lajas, 165 D.P.R. 445, 469

- 70 (2005). In Administrative Law, “[a] legislativ e rule is one that creates rights, imposes obligations, and establishes a pattern of conduct with a force of law”. Asoc. Fcias. Com. v. Depto. De Salud, supra, pág. 146, citing Mun. de San juan v. ].C.A., 152 D.P.R. 673, 692 (2000).

1 Law No. 9 was substituted y Law No. 416 of September 22, 2004. 12 L.P.R.A. 8001 et seq. However, at the time of adoption of Regulation 4860, Law No. 9 was in place. Law No. 416 maintained essentially the dispositions of Law No. 9 to which are being referred.
2 Idem.13 The regulatory action of the agency is directed precisely to delimit the outreach of the delegated power, and defines the scope of the administrative action. This way, when the enacting law contains wide and general provisions, the publication of the regul ation defines the reach of its powers. Torres Arzola v. Policía de Puerto Rico, 117 D.P.R. 204, 211 (1986).

When enacting a regulation, the agencies have to comply strictly with the requirements established by law to allow for public participation in the administrative decisional process, and give way as such to the expression of those whose interests may be affected by way of the administrative action. It is required for the procedural validity of a regulatory standard that it is issued in compliance with the procedures set forth in the organic law of the agency, or by the special laws. Asoc.de Fcias. Com. v. Depto. de Salud, supra, págs. 131

- 32. The validity of a regulation is subject, in substantive terms, to the following : (1) that the agency has the de legated power to regulate; (2) that the administrative action is authorized by law ; (3) that the regulation promulgated is within the wide delegated powers; and (4) that the regulation is not arbitrary or capricious. M. & B.S., !ne. v. Depto. Agricultura, 118 D.P.R. 319, 326 (1987). See also, Asoc. de Fcias Com. v. Depto. de Salud, supra, pág. 130; Carrero v. Depto. De Educación, 141D.P.R.830, 837 (1996); Luan Investment Corp. v. Román, 125 D.P.R. 533, 550 (1990).

As per the outlined criteria, first, when determining the validity of a legislative rule it is indispensable to examine if in its adoption the agency exceeded the powers and faculties that were delegated. For such analysis it is necessary to recur to the h abilitating law as “a legal mechanism [whereby] it delegates to the agency the necessary powers to act in conformity with the legislative purpose”. Amieiro González v. Pinnacle Real Estate Group, res. March 26, 2008, 2008
T.S.P.R. 52. pg. 8

- 9, 173 D.P.R. _ (2008). Véase además, Caribe Comms., !ne. v. P. RT.Co., supra, pg.
211. In other words, it is required to precise if the agency’s action conforms to the delegated power and to the public policy established by the Legislative Conference. See, Comisionado d e Seguros de P.R. v. P.R.I.A., 168 D.P.R. 659, 667 (2006). In that tenor, in order for the regulation to be valid, it shall be in accordance with the statutory provisions under which it was promulgated.

As a last criteria to determine the substantive validity of a regulatory standard, it shall be considered if it is arbitrary or irrational. Franco Dominicci v. Depto. de Educación. 148 D.P.R. 703. 712 (1999). The Supreme Court has reiterated that it is con sidered invalid a rule that is determined to be arbitrary or capricious for lacking a rational connection with the statute that
authorizes its creation.

It is important to point out that the exercise to regulate presupposes the previous
consideration and interpretation from the administrative organism of the statute, or the public policy whose implementation has been commended. The irrationality or arbitrariness as elements to deem the substantive validity of a regulatory standard implies certain deferenc e towards the construction of a standard that, by way of regulation the administrative organisms conducts by means of the legislation whose implementation has been mandated. This rests in the notion that14

the administrative agencies, due to the specialty th at is attributed to them, are in position to adopt rules that adequately adjust to the public policy, or the law commended to apply.

Law No. 170 of August 12, 1988 of the Commonwealth of Puerto Rico, as amended, 3 L.P.R.A. sec. 2101 et seq. (LPAU) define s the administrative process as the formulation of rules and regulations, the formal adjudication of controversies upon its consideration, the granting of licenses and any other investigative process within the scope of its legal authority. 3 L.P.R.A.
2102 (k) . With the approval of LPAU, supra, the Legislative Conference was looking to create a uniform body of minimum rules that all agencies shall observe when formulating its rules and regulations, and when conducting its adjudicative process; aside from est ablishing a judicial review process that applied uniformly to any action taken by the agency, that being
, issuing a regulation or adjudicating a controversy. This way, the administrative process is systemized and guarantees that the proceedings are executed in a just, rapid, and economic manner. 3 L.P.R.A.
sec. 2101.

In terms of the regulation process, LPAU
, supra , establishes what is required to develop rules and regulations of general application that is interpreted, promulgated, or prescribed from the law or public policy of the concerned agency. 3 L.P.R.A. sec. 2102(m). As per section 1.3 of LPAU, supra, a rule or regulation is defined as:

Any standard or set of standards of an agency of general application that executes or interprets the public policy or a law, or that regulates the requirements of procedures or practices of an agency. The term include s the amendment, revocation, or suspension of an existing rule. 3 L.P.R.A. 2102(D).

According to the latter, the power of regulation, contrary to that of adjudication, creates declarations of general application that define or interpret the public polic y , or prescribe a general standard. Being the power of regulation one of general application and not that of particular application, rights and obligations of specific persons are not adjudicated. At the procedural level, the LPAU, supra, recognizes two (2 ) categories of rules: 1) legislative or quasi

legislative rules; and 2) non

- legislative rules. 3 L.P.R.A. 2102(I) . Legislative rules are those that formulate public policy and “create rights, impose obligations, and establish a conduct pattern
with a forc e of law”. Asoc. de Maestros de P.R v. Com. Relaciones del Trabajo del Servicio Público, 159 D.P.R. 81 (2003); Municipio de San juan v. ].C.A., 152 D.P.R. 673 (2000). This type of regulation impacts the general population and obliges the agency to its compliance because it has no discretion to reject it. At the time of formulation and approving a legislative regulation, the agency concerned shall have the obligation to comply with the formal process established in LPAU, supra, which requires the following a guarantee of the following requirements: 1) public notice; 2) opportunity for public participation; 3) Submittal of the regulation in the State Department for its ap proval; 4) Publication of the regulation. (3 L.P.R.A. sec. 2121

- 2135); Centro Unido de Detallistas v. Com. Serv. Púb., 2008 T.S.P.R. 116, 17 4 D.P.R. ______;_Municipio de San juan v. ].C.A., supra. When15

promulgating this type of regulation, the agency shal l comply strictly with the requirements set
forth. Asoc. de Fcias. Com. v. Depto. de Salud, 156 D.P.R. 105 (2002).

Non

- legislative rules, on the other hand, clarify and interpret the obligations and duties established in the organic law. The jurisprudence has recognized that this type of regulation includes interpretative rules and procedural rules. Interpretative rule s are those that clarify the law and legislative regulations set forth by the agency, also they establish the guidelines to guide the public in the interpretation of the law and delimit the administrative discretion. Asoc. De Maestros v. Comisión, 159 D.P. R. 81, 93 (2003); Agosto Serrano v. F.S.E., 132 D.P.R. 866 (1993). This way, the agency approves its directives and informal regulations with the purpose of having uniformity in their processes. If the interpretative rule is irreconcilable with any existin g legislative rule, the new rule shall be considered as an amendment to the latter. Municipio de San juan v. ].C.A., supra. That being so, interpretative and procedural rules, different from legislative rules, do not require to be notified to the public, n or demand the public participation process during the adoption process because they don’t affect rights of the people outside the agency.

In procedural matters it is important to point out that as long as the agency pretends to adopt, amend, or derogate a rule or regulation, a public notice in English and Spanish shall be publicized in no less than one newspaper of general circulation in Puerto Rico, and in English and Spanish in the Internet. Provided that, if the adoption, amendment, or derogation of th e rule or regulation affects a specific community of residents, the agency shall also publish the same notice in a regional newspaper that circulates in the area where the community is sited. The notice shall contain a brief summary or explanation of the p urpose of the proposed action, a citation of the legal adoption that authorizes such action, and the form, place, days, and hours in which public commentaries may be submitted in writing or by way of electronic mail, or to request a public hearing about th e proposed action with the fundamentals that in their judgement the petitioner establishes to make necessary the concession of such public hearing, and shall indicate the physical and electronic address where the complete text of the proposed regulation to be adopted will be available for public review. When receiving commentaries by way of electronic mail, the agency will acknowledge receipt by of electronic mail within two (20 work days of having received the commentaries. The public notice in the newspap er shall also contain the electronic address of the page where the agency has elected to publish the notice in the Internet, and the complete text of the regulation. 3 L.P.R.A. sec. 2121.

The legal provisions previously cited not only establish the requirements that the notice of a proposed regulations needs to comply with, but also the scope of public participation. It also recognizes the opportunity to submit written commentaries and requ est an administrative hearing, having to concede a term of no less than thirty (30) days, counted from the publication
date of the notice to submit them. 3. L.P.R.A. 2122.

However, the participation granted to the public is not similar, nor it converts t he process to one with an adjudicative character. Thus, in terms of the public hearing petition,16

although Section 2.1 of LPAU, supra , confers the opportunity to petition it, the celebration of the hearing will depend if the agency discretionally grants it, if the organic law prescribes it, or any other law makes it celebration meritorio us. 3 L.P.R.A. 2123. As per these principles, the agency complies with the public participation process if it concedes the opportunity to submit written commentaries, without the strict need of celebrating a hearing.

Likewise, the formal regulatory process demands the agency that the rule or regulation that is to be adopted or amended, aside from its text, shall contain: 1) the legal provision that authorizes its adoption or amendment; 2) a brief and concise explanation of the purpose of its adoption; 3) a reference to all the rules and regulation that are amended, derogated, or suspended with the approval of the new regulation; and 4) the date of approval and enforcement. 3 L.P.R.A.
sec. 2125

. In harmony with the aforementioned, a legislative regulation that has not been approved conformed to the formal process established in LPAU lacks legal authority. Hernández v. Colegio de Optómetras. 157 D.P.R. 332 (2002). As such, the agencies covered under LPAU, supra, cannot adopt regulations contrary to the minimum provisions set forth by said law. Comisionado de Seguros v. A.E.E.L.A., 2007 T.S.P.R. 112, 171 D.P.R._.

C.

After carefully considering the document under our review , we reckon that all aspects of form, process, content, and legal requirements described in the preceding section are fully complied with in the process followed in relation to the Infrastructure SIP for Ozone and PM 2.5 of Puerto Rico. The proposed docume nt complies with the substantive provisions, meaning: (1) the EQB has the delegated power to regulate the matter at hand; (2) it is evident that the administrative action is authorized by law; (3) the promulgated regulation is within the ample powers deleg ated to the EQB; (4) the regulation is not arbitrary nor capricious either in the procedural, nor the substantive process. M. & B.S., Inc. v. Depto. Agrirnltura, 118 D.P.R. 319, 326 (1987). Véanse además, Asoc. de Fcias Com. v. Depto. De Salud, supra, pg. 130; Carrero v. Depto. de Educación, 141 D

. P

. R. 830, 837 (1996); Luan Investment Corp. v. Román, 125 D.P

. R. 533, 550 (1990)

.

It is clearly established that Law 41 6, supra, concedes the EQB the full legal authority to establish and enforce the required infrastructure implementation plan required by the Federal
Clean Air Act.

Regarding the commentaries presented by the Federal Environmental Protection Agency
in rel ation to the content of the draft document, we completely coincide with each and every one them. In consequence, we recommend the following changes to the original English version
of the document:

4. Change the word “New” in the document’s title with “Revis ed”.
5. Discuss in the document the revised NAAQS for Ozone and PM 2.5.17

6. Establish that the document supplements the November 29, 2006 submittal for the 1997
standards for Ozone and PM 2.5.
4. Change the first paragraph of Section 5 so it reads as follows:
Re s ources, Conflict of lnterest, and Emergency Backstop 110(a)(2)(E))
States are to provide assurances that (i) adequate personnel, funding, and legal authority will be available to carry out the SIP; and (ii) the State has responsibility for ensuring adequate implementation of plan provisions to be carried out by local districts

.
In accordance with sub

- element (ii), the infrastructure SIP should include requirements that the state comply with CAA 128, "State Boards ." Section 128 of the CAA states:

Sec

. 128. (a) Not later than the date one year after the date of the enactment of this section, each applicable implementation plan shall con ta in requirements that

– (3) any board or body which approves permits or enforcement orders under this Act shall have at least a majority of members who represent the public interest and do not derive any significant portion of their income from persons subject to permits or enforcement orders under this Act and
(4) any potential conf

licts of interest by members of such board or body or the head of an executive agency with similar powers be adequately disclosed. A State may adopt any requirements respecting conflicts of interest for such boards or bodies or heads of executive agencies, or any other entities which a re more stringent than the requirements of paragraphs (1) and (2), and the Administrator shall approve any such more stringent requirements submitted as part of an implementation plan.

On the other hand, we do not coincide with the commentaries presented by deponent Waldemar Flores for we reckon that his principal argument does not affect the validity of the proposed action. So much so
, that the EPA has not included in its commentaries s imilar arguments that could affect the validity of the proposed document.

In response to our analysis, we recommend that the Infrastructure SIP for Ozone and PM 2.5, as per Section 110(a)(2) of the Federal Clean Air Act be approved according to its

conte nt, only varying those elements of content and form contained in EPA’s commentaries with which we plainly coincide.

VI. FINAL RECOMMENDATION

We respectfully recommend the Honorable Governing Board to avail as their own the recommendations herein formulated. Consequently, that it imparts its approval to the
Infrastructure SIP for Ozone and PM 2.5 project as per Section 110(a)(2) of the Federal
Clean Air Act , with the ch anges and modifications herein recommended. As modified and approved, proceed to its final edition, and be remitted to the Federal Environmental Protection Agency for their approval.

Given in San Juan, Puerto Rico, today October 30, 2012.

Attorney Fer nando Olivero Barreto Examining Official