## 10 t.PR -9 

## p;:j I: 5S Bryan W. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G., ExecutiveDirector - ' . • \ "'. '
..' •• 'I "**~.,** i . !'



### TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas byReducing andPreventingPollution April 6, 2010

Docket No. 2009-0802-SIP, ProjectNo. 2009-017-SIP-NR Docket No. 2009-0932-RUL, Rule ProjectNo. 2009-006-101-EN Docket No. 2009;.0867-RUL, Rule Project No. 2009-019-101-EN
Al Armendariz, Ph.D, Regional Administrator U.S. Environmental ProtectionAgency

- Region 6 1445 Ross Avenue Dallas, Texas 75202-2733 DearDr. Armendariz: 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 SubchapterH, 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

- 101.401:1 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 anHGB AttainmentDemonstration 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 lookforward to your expeditious approval ofthese SIP revisions. Sincerely,

# B~~**B~haW,** Ph.D. 

### Chairman BWS/jmm Enclosures
cc: The HonorableRickPerry, Governor ofTexas 

### Mr. Toby Baker, Office ofBudget, Planning and Policy, Office ofthe Governor 

### Mr. MarkR. Vickery, P.G., Executive Director, Texas Commission onEnvironmental Quality

P.O. Box 13087 Austin, Texas 78711-3087 512-239-1000 Internet address: www.tceq.state.tx.lls

## 10 APR -9 Pr;1 I: 55 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY BryanW. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner MarkR. Vickery, P.G., ExecutiveDirector

Protecting Texas byReducingandPreventingPollution 

### April 6, 2010

Docket No. 2009-0802-SIP, Project No. 2009-017-SIP-NR DocketNo. 2009-0932-RUL, Rule ProjectNo. 2009-006-101-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 DearDr. Armendariz: 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 Ru1es, 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,/kzw-**Bry~haW'** Ph.D. Chairman BWS/jrnm Enclosures
cc: The Honorable RickPerry, Governor ofTexas Mr. Toby Baker, Office ofBudget, Planning and Policy, Office ofthe Governor Mr. MarkR. 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 on recycled paper using soy-based inkTexas Commission on Environmental Quality Public Hearings October28 and 29, 2009 Conceming Revisions to 30 TAC Chapter 101 HECT Program Cap Reduction and Allowance Reallocation Rule Project No. 2009-006-101-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 AirQuality Rules, SUbchapterA, General Rules, §1 01.1; and SUbchapterH, Emissions Banking and Trading, Division 6, Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program, §§101.390 - 101.394, 101.396, and 101.399 - 101.401; and corresponding revisions to the state implementation plan.

The adoption reduces the total cap amount of Highly Reactive Volatile Organic Compounds (HRVOC) allowances and revises the allocation methodology of allowances for participants ofthe HRVOC Emissions Cap and Trade Program. The adopted rulemaking also updatesthe definition of volatile organic compound to linkthe 30 TAC definition with the current definition in Title 40 Code of Federal Regulations, and corrects the reportable quantity for 1,1,1 ,2,3,3,3-heptafluoropropane.

The comment period closed on November 9, 2009. All testimony and comments have been reviewed and seriously considered. This hearing record contains a complete record ofthe public hearings and is divided into the following four sections:

o Public Notification and Proposal


### o Written and Oral Testimony o Evaluation ofTestimony 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 contactJayTonne at (512) 239-1453.

# EVALUATION OF TESTIMONY

### To: Commissioners lNTEROFFICEMEMORANDUM


### Date: February 19, 2010 Thru: 

### LaDonnaCastaiiuela, ChiefClerk MarkR. Vickery, P.G., ExecutiveDirector 

### From:

# ~susana M. 

### Hildebrand, P.E., ChiefEngineer DocketNo.: 2009-Q932-RUL r' 

### Subject: CommissionApprqvaJ. forRulemalcingAdoption Chapter 

### 101, GeneralAirRules HighlyReactiveVolatile Organic ComPounds (HRVOC) Emissions Cap andTrade Program(HECT) Cap Reduction

### andAllowanceReallocation RuleProjectNo.**2009-Q06~101-EN** 

### Background andreason(s) for the**rulem~kiDg:r.** 

### Thepmpose oftms rulemakingis to adopt a 25 percentreductioninthe total HECTprogram allowance cap and revise the BRVOC allocation methodology. The HECT program was initially adopted as a control measUre for the Houston-Galveston-Brazoria (HGB) one-nour ozone attainmentdemonstration state implementationplan (SIP) revision and 

### continues tobe 

### a conq-ol measure for the 1997 eight-hour ozone 

### standard. The HECT program is currently only applicable inHarris County. The HGB metropolitan area was 

### originally designatednonattaimIientforthe 1997 eight-hour ozone National Ambient Air Quality Standard (NAAQS) and classified as a moderate area effective June 15, 2004. The 

### United States 

### Environmental Protection Agency 

### (EPA) reclassified the HGB area as a severe ozone nonattainment area effective October 31, 2008. The HGB area 

### is required to attain the 

### 1997 eight-hour ozone standard of0.08 parts per million as expeditiously as practicable, but no later 

### than June 15,2019. The EPArequires submittal ofthe HGB Attainment Demonstration SIP Revision for the 

### 1997 Eight-Hour Ozone Standardby

### April 15, 2010. Followingthe initial allocation'ofallowances in 2006, companies participating in the 

### HECT program commentedthatthe allocation 

### was not equitably distnbuted. Information from the 

### :first three 

### years of monitoring data, 

### 2006 through 2Q08, supports the 

### assertion of an inequitable distribution of allowances. Photochemical modeling analysis has 

### also' demonstrated a 25 percentreduction ofthe HRVOC cap in Harris County wouldcontnbute to attainment ofthe 

### 1997 eight-hour ozone NAAQS by reducing the future 

### 2018 ozone design values at 

### all HGB monitors. The 

### largest reductions are projected at the 

### Deer Park ' J 

### monitoring site. Revisions to the 

### rule are anticipated to resultin 

### a more equitable approach while contnbuting to the 

### area's attainment ofthe 

### NAAQS as expeditioUsly as practicable. This rulemaking will be submitted as part of the HGB Attainment !?emonstration SIP Revision for the 1997 Eight-HomOzone Standard.

### Commissioners Page 2 February 19, 2010 Re: DocketNo. 2009-0932-RUL \ 

### Scope ofthe**rolem8kjDg~** 

### A) Summary ofwhatthe rolemakingwill 

### do: The adopted rulemaking revises 30 Texas Administrative Code (TAC) Chapter 101, Subchapter A and Subchapter H, Division 6, to reduce the 

### total cap amount ofBRVOC allowances by 

### 25 percent and revise the allocation· methodology for participants of the 

### BECT program. The adopted rulemaking updates the definition of volatile organic compound to link the Chapter 101 definition with the current definition in the 40 

### Code of· Federal Regulations. Theradopted rulemak:ing will also correct §101.1(88)(A)(i)(III)(y) to include the reportable quantity of 5,000 pounds for l,l,l,2,3,3,3-heptafluoropropane that was inadvertently OImtted in the adopted rule filed with the Secretary 

### of State's Office in December, 2005. B) Scoperequired by

### federal regulations or state statutes: None. C) 

### Additional staff

### recommendations that are Dotrequired by

### federal rule or state statute:

• Amend the definition of''Volatile organic 

### compound" to linkthe Chapter 101 definition withthe currentdefinition

### ih the 40 

### Code ofFedera1 Regulations.
• Correct the definition of i,l,l.2,3,3,3-heptafluoropropane to include the 5,000 pound reportable quantitythat

### was previouslyomitted.
• Addthe definitions of''Baselineemissions period," "Industry Sector," and "Uncontrolled emissions."
• Revise the 

### allocation·methodology of the 

### BECT program based on actual monitored emissions data 

### with the goals offairly and equitably distributing the compliance burden for HECT program participants, applying credit for controlling and reducing HRVOC emissions, andnotrewarding orencouragingemissionsfrom emissions events. • Reduce the tOtal 

### cap amount of HRVOC allowances using gradual 

### annual percent reductions in 

### the total cap ofallowances. The first step 

### is a ten 

### percentreduction in 

### the total cap in 

### calendar-year control period 2014, followed by 

### successive five percent· reductions per calendar-year control period until 

### the 25 percenttotal reduction in 

### the cap is

### reached in 

### calendaryearcontrolperiod2017. Statutory authority: TexasWaterCode,
• §5.102;
• §5.103; and
• §5J05. Texas Healthand Safety Code (1HSC),
• §382.002;
• §382.011;
• §382.012;
• §382.017;
• §382.016; and'Commissioners Page 3 February 19, 2010 Re: DocketNo. 2009-0932-RUL

• §382.021. 42 United States Code, §7410(a)(2)(A). Effect

### onthe: A) Regulated community: Sites with an BRVOC potential to emit greater than ten tons peryear from flares, vents, and cooling towers subjectto Chapter 115 may have 

### their existing HRVOC allowances reduced, and other facilities could b,enefit from an :increase in HRVOC allowances. This rulemaking is intended to**al1e~atc** the disparity ofallocations that occurred as a result ofthe original inequitable HECT aIlowance allocation. 

### In addition, qualifying participants in the HECI' program that 

### had acquired future allowance streams, depending on uncontrolled emissions during the baseline emissions period at the site, may apply a portion or the entire acquired allowance stream toward 

### their allocations. This provision therefore allows these sites to receive an equitable allowancereflecting the site's acquired potential to emit tbrough use of the allowance stream. 

### B) Public: The general public in HGB 

### and SUII'ounding areas will benefit from reduced ground level ozone concentrations due to the impact ofthe proposed HRVOC cap reduction. There 

### will be no fiscal impactstothepublic. ' C) 

### Agencyprograms: The Emissions BllIlking and Trading Program 

### will be responsible for the reallocation and oversight ofthe program. The Office of Compliance and Enforcement may benefit from improved clarity and enforceability ofthe rules. 

### Stakeholdermeetings: Stakeholder meetings were held on June 10, 2009, and July 2, 2009, at the 'HoustonGalveston Area Council (H-GAC) in Houston, Texas. The BRVOC Stakeholder Group includes participants from: industry' representatives, environmental groups, 

### brokers, consultants, and the general public. 

### There 

### was overall support for the HECT program and for the equitable reallocation ofHRVOC allowances. There was little support for delaying the reallocation until more representative data 

### was collected and using a reallocation methodologybasedonhistorical emissions. Most oft1?-eregulated communityrequestedthat the reallocation ocCUTseparate1y from the step down (25 percent cap reduction) in order to' allow businesses to plan for these reductions. 

### In response to stakeholder comments, the adopted rule package separates the reallocation :in 2011 from the cap reduction and postpones the first step down often percent unti12014, followed by five**~ent** reductions eachyear

### therea.fteruntil atotal step down of25 percentisreached 

### in 2017.Commissioners Page4 February 19,2010 Re: DocketNo. 2009-Q932-RUL Public comment: Public hearings for the proposed SIP revision and associated rulemakings were held on October 28. 2009, at 2:00 p.m and 6:00 p.m., at the H-GAC offices in Houston; and on October**29~** 2009, at 3:00 p.m., atthe Texas Commission onEnvironm.ental Quality (TCEQ) headquarters in Austin. Question and answer sessions were held 30 minutes prior to the hearings. Neitherthe October 28, 2009, hearing scheduled for 6:00p.m. northe October29, 2009, hearingwas officially openedbecause no party indicated a desire to provide comment. Fivepersonspresented oral comments concerning this SIPrevision atthe public hearingheld at 2:00p.m on October28

### r2009, in Houston. The public commentperiod opened on pctober 9,2009, and closed on November 9, 2009. Written comments were accepted via

### mail, fax, and through the eComments system. There were 26 written comments received. Oral comments regarding the' BEeT rulemaking and HGB attainment demonstration SIP revision were provided by Kaneka Texas Corporation (Kaneka), Bigler, L.P. (Bigler), Environmental Defense Fund (EDF), and GalvestonHouston Association for Smog Prevention (GRASP). Written comments regarding the BECT rulemaking and Reasonably Available Con11"ol Measures (RACM) were provided by EPA, EDF, GRASP, 

### and Kaneka. Written comments regarding the HECT rulemaking and HGB attainment demonstration SIP .revision were provided by BCCA Appeal Group
. (BCCA), 8-HourOzone SIP Coalition (Coalition), Texas Oil and Gas Association (TxOGA), andTexas Association ofBusiness (TAB).
. Written comments regarding the HECT rulemaking were provided by Texas Chemical Council (TCC), LyondellBasell (Lyondell), Texas Petrochemicals (TPC), Coalition of 

### Manufacturers for 

### Air Quality (COMAQ), 

### DuPont Packaging and Industrial Polymers (DuPont), Albemarle CoIporation (Albemarle), Sunoco Chemicals Inc. (Sunoco), INEOS Olefin & Polymers: USA (lNEOS), PetroLogistics/PL Propylene L.L.C. (pL Propylene),' Coalition, BCCA,. TxOGA, TAB,' Total Petrochemicals (Total), Kaneka, Bigler, AmericanAcryl, Arkema Inc. (Arkema), EPA, and the Houston Regional Group and the Lone StarChapter ofthe SierraClub (lISC). Kids for CleanAir, the Sustainable

### Energy and Economic Development (SEED) Coalition, Clean Air Institute ofTexas, and one individual expressed supportfor any comments submittedbyEDF andHSC. Comments 

### were received on the allocation methodologies discussed 

### in the proposal preamble. Comments were also received regarding tl;1e alternative baseline provision qualifying 

### factors. In addition, the TCEQreceived comments regarding allowance creditfor flare and vent gas recovery, the application of actual monitored con11"ol efficiencies for thermal oxidizers and other combustion con11"ols, and appropriate methodologies for honoring stream**~s** or applying acquired allowance streams to the allocation\ methodology. Finally, a majority of commenters requested the commission exclude the proposed emission event set-asidepool. SignUieantchanges fromproposal: Due to numerous public comments. the 250 tons set-aside to cover emission events has been**remo~** and the 250 tons ofallowances retumed to the pool ofallowances available for allocation. .J

### Commissioners Page 5 February 19,2010 Re: 

### DocketNo. 2009-0932-RUL 

### Albemarle, Bigler, KTC, Lyondell, TCC, and TPC all expressed 

### their opposition to nullifying orvoidingpurchased streamtrades. Inresponse, acquired allowance s1reams may be applied to the 

### calculation of''uncontrolled emissions" 

### as actual emissions for qualifying sites.
. Albemarle, AmericanAcryl, Lyonc1el!, and TCC all expressed concern with increasing the 

### minimum allocation for applicable sites from five to ten tons. 

### The commission is 

### therefore revisingthe minimumallocationto five tons for sites thatwouldhavereceived less than 

### five tons based on the revised(ailocation method and a minimum 

### ,oftentons for sites that would

.have received between five and ten 

### tons based on the 

### revised allocation method. The minimum 

### illocations to these sites 

### will notbe subjectto the 

### stepdownprovisions ofthe 

### rule and 

### will maintain 

## the original 

### reallocated amount**~ugh** 

### the 2017 

### calendar-year control period andbeyond.
. Potential controversialconcerns and,leglslative interestremaining after

### proposal andpublic comment: 

### Stakeholders have commented that the reallocation ofBECT allowances is not explicitly required to model attainment ofthe 1997 

### eight-hour attainment**~nstra.tion** 

### HGB SIP revision. However, the commission has 

### been committed to a reallOcation ofthe 

### HECT allowances as soon as a sufficientamount ofactual monitored emissions data was 

### available. A 

### more equitable allocation ofallowances 

### will stimulate 

### the market, 

### creating incentives for furtherreductions in the 

### industryregulatedbytheprogram. . Stakeholders have commented that monitoring data indicates that reductions in 

### the cap beyond the 

### adopted 25 percent reduction could be realized 

### before any HECT participating sites would.be required to make 

### actual HRVOC emissions reductions. The total actual emissions from 

### sources in 

### the HECT 

### program have been approximately 50 

### percent ofthe total cUlTentHRVOC cap. However, becapse the 

### BRVOC rules in Chapter 115, 

### Subchapter 

## ,n, Divisions 1 

### and 2, 

### require emissions from scheduled

### maiIitenance, startup, 

### and shutdown activities and 

### emissions events be includedin

### theHECT

### program, the 

### total surplus observed 

### in the 

### two years 

### thatthe

### program has 

### been active cannotbe 

### removed. Therefore, a

### bufferin the 

### cap is still needed

### to accountfor the 

### inherentvariabilityofHRVOC emissions associated with these activities. The 

### 2S 

### percentreduction in the

### Harris CountyHRVOC cap allows for

.a sufficient buffer to protect against the inherent 

### variability in HRVOC emissions while contn.'buting to the attainment of

### the 1997 

### eight-hour ozone standardby 

### reducing the 

### future 2018 

### designvalues atall HGB monitors.
.

. Doesthis rulemaking affect any 

### currentpolicles orrequire**develop~ent** 

### ofnewpolicles? 

### No. "Whatare the consequences

# «this rulemaking does notgo forward? 

### Potential consequences includehampering ofthe

### HGB area's abilityto attainthe 1997 

### ozone NAAQS as**~ll** 

### asjeopardizingEPA approval ofthe SIP. Are there alterna1ives to rulemakjng? J

### Commissioners Page 6 February 19,2010 Re: DocketNo. 2009-o932-RUL The commission could retain the 

### existing HRVOC allocation methodology and lower the 

### HRVOC cap. This 

### option would further exacerbate the 

### inequities in the HRVOe allocation methodology withpossible severe consequences to 

### regulated entities in HGB, including the inability to 

### operate units or entire p1ai:lts. Another option would be to 

### change the 

### HRVOe allocationmethodology withoutreducing the existing HRVOe cap. This option couldlimit the HGB area's 

### efforts to 

### attain the 1997 ozoneNAAQS as well asjeopardize EPA approval. ofthe 

### SIP. The commission could also choose to 

### repeal the 

### HEeT program and replace it with 

### speciated HRVOC permit allowable limits. This option could involve the 25 percent cap reduction orretainingthe existing

### HRVOe cap. A final 

### option wouldbe 

### forthe commissionto 

### leave the 

### rule as is. This 

### optionwouldlikely have severe consequences to the 

### regulated entities in HGB who do not currently have sufficient allowances 

### to operate 

## as well 

### asjeopardize the 

### approval ofthe HGB attainment demonstration SIPrevision. To alleviate the 

### inequities in the 

### current system, 

### one HRVOe allowance owner has 

### voluntarily "donated" allowances,. which the executive director has subsequently redistnbuted to 

### prevent non-compliance resulting 

### from inequities in the 

### allocation methodology. If

### the rules 

### were not revised, the agency would have 

### to depend on the 

### same "donations" indefinitely. Key points in adoption ruIemaJdng schedule: 

### TextlShgisterproposalpublication date: Anticipated 

### Texas Registerpublication 

### date: Anticipated effective date:**Slx-mo~th** 

### Texas hgisterming deadline: 

### October9, 2009 

### March26,2010 April 1, 2010 April 9, 2010 Agency contacts: 

### JayTonne, Rule ProjectManager, 

### 239-1453, Air 

### QualityDivision Amy

### Browning, StaffAttorney, 239-0891 DevonRyan, Texas RegisterCoordinator, 239-6090 Attaebments
cc: ChiefClerk, 5 copies Executive Director's Office 

### SusanaM. Hildebrand, 

### P.E. KevinPatteson Curtis Seaton DanielWomack



### . Office ofGeneral 

### ColmSel

JayTonne DevonRyan

### EVALUAnON OF TESTIMONY
The Texas Commission on Environmental Quality (TCEQ or commission) adopts amendments to §§101.1, 101.390

- 101.394, 101.396, and 101.399

- 101.401.

Sections 101.390

- 101.392, 101.394, 101.396, 101.399, and 101.401 are adopted with changes to the proposed text as published in the October 9,2009, issue ofthe Texas Register (34 TexReg 6989). Sections 101.1, 101.393, and 101.400 are adopted withoutchanges and will not be republished.

These amendments will be submittedto 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 Houston-Galveston-Brazoria (HGB) metropolitan area was designated nonattainment for the 1997 eight-hour ozone National AmbientAir Quality Standard (NAAQS) as a moderate
area effective June 15, 2004. In October 2008, the HGB area was reclassified as a severe ozone nonattainment area by the EPA as requested by the governor ofTexas. The HGB area is required to attain the 1997 eight-hour ozone standard of0.08 parts per million as expeditiously
as practicable, but no laterthan by June 15, 2019. The EPA requires submittal ofthe HGB AttainmentDemonstration SIP Revision for the 1997 Eight-Hour Ozone Standard by April 15, 2010. This rulemaking will be submitted as part ofthe HGB Attainment Demonstration SIP Revision for the 1997 Eight-Hour Ozone Standard.

Photochemical modeling analysis demonstrates that a 25% reduction ofthe highly reactive

1volatile organic compound (HRVOC) cap in Harris County would contribute to attainment of the 1997 eight-hour ozone NAAQS by reducing the future 2018 ozone design values for all HGB area monitors. The largestreductions are projected atthe DeerParkmonitoring site, which is the area's driving design value monitor.



### In addition, some regulated entities participating in the HRVOC Emissions Cap and Trade (HECT) program have commented that the initial allocation ofHRVOC allowances was not equitably distributed. The existing allocation methodology is based on the total amount, in pounds, ofHRVOC produced as an intermediate, byproduct, orfmal product, orused by a process unit at each participating site. Subsequent analysis ofthe HRVOC emissions data reported underthe HECT program forthe 2007 and 2008 calendar- year control periods supports the assertion that some industry sectors may have been over-allocated while others may have received an insufficient allocation. Although reallocation is notrequired to model attainment ofthe 1997 eight-hour attainment demonstration HGB SIP revision, the adopted reallocation methodology is designed to result in a more equitable allocation ofallowances while establishing an enforceable cap in HRVOC allowances in Harris County in support of HGB's attainment ofthe NAAQS as expeditiously as practicable.

As part ofthe December 2004 HGB SIP revisions ofthe mid-course review for the one-hour
ozone standard, the commission developed a dual approach to achieve the necessary HRVOC reductions: address variable short-term emissions through a not-to-exceed hourly emission limit and address steady-state and routine emissions through an annual cap. The annual HRVOC cap reduced the overall reactivity in the airshed by removing the compounds that are most prevalent and most likely to reactrapidly enough to cause one-hour ozone exceedances.

ForHarris County, the annual HRVOC cap was distributed and enforced through the HECT


### 2program under Chapter 101, SubchaptetH, Division 6. This program established a mandatory annual HRVOC emissions cap on all sites subjecttothe HRVOC control requirements of30 TAC Chapter 115, SubchapterH, Division 1 orDivision 2, and having a potential to emit (PTE) greaterthan ten tons peryear (tpy). The cap is enforced through the allocation, trading, and banking ofallowances. An allowance is the equivalent ofone ton ofHRVOC emissions. This HRVOC cap, initially implemented on January 1,2007, was established at a level demonstrated
as necessary to allowthe HGB areato attain the one-hour ozone standard along with a 5% reduction to safeguard againstpotential emissions variations. The HECT program also requires subject sites with new ormodified HRVOC sources to obtain unused allowances from other sites already participating in the program for any increased HRVOC emissions. For sites that have a PTE often tpy or less ofHRVOC from sources subjectto the HRVOC control requirements ofChapter 115, SubchapterH, Divisions 1 or 2, the total, aggregate HRVOC emissions from those sources is limited to ten tpy. Sites exempt from the HECT program were extended an opportunity to opt-in, receive an HRVOC allocation, and thereby notbe restricted to theten tpy limit.

Revisions to the HECT program under this rulemaking will reduce the total HECT capby 25% priorto the attainmentyear and revise the HRVOC allocation methodology to address inequities from the initial allocation. Photochemical modeling analysis demonstrates that a 25% reduction ofthe total HRVOC cap in Harris County will advance attainmentofthe 1997 eight-hourozone NAAQS by reducing the future 2018 ozone design values at all HGB monitors. The largest decrease inthe projected design value was atthe DeerParkmonitor. The average decrease for all sites was 0.13 parts perbillion (ppb).

HRVOC monitoring datareported for 2006

- 2008 indicates that the total actual emissions from
sources in the HECT program have been approximately 50% ofthe total currentHRVOC cap. 

### 3Because the HRVOC rules in Chapter 115, Subchapter 

### H, Divisions 1 and 2, require emissions from maintenance, startup, and shutdown activities and emissions events be included in the HECT program, the total surplus observed in the two years thatthe program has been active cannotbe removed. Therefore, abufferinthe cap is still needed to account for the inherent variability ofHRVOC emissions associated with these activities.

The adopted rules will implement an initial 10% reduction ofthe existing available cap of 3,451.5 tons beginning with the 2014 calendar-year control period. The available cap will then be reduced in a "stepdown" fashion, similarto the existing Mass Emissions Cap and Trade Program (MECT) for nitrogen oxides (NOx), in 5% increments at the start ofeach calendar-year control period for 2015,2016, and 2017. Therefore, the full 25% cap reduction will have been in effect for one full calendar-year control period by January 1,2018. While historical data demonstrates an overall surplus inthe HRVOC cap, the cap reduction and reallocation may require some individual sites to install additional controls. The commission is therefore adopting this stepdown approach to allow companies time to install controls ifnecessary.
Followingthe initial allocation ofallowances, companies participating 

### in the HECT program commentedthatthe allocation was not equitably distributed. Emissions reported by industry based on their HRVOC monitoring data supports the assertion ofan inequitable distribution of allowances. 

### In addition, BECT program participants commented that certain HRVOC-emitting industry sectors were more adversely affected under the existing allocation methodology due to differentHRVOC emission rates associated with production throughput. Facilities thatuse HRVOC as araw material in the production ofolefms have higher HRVOC emissions associated with theirprocess as compared to other chemical manufactures and refineries. Therefore, underthe existing BECT program, sites in the refmery and non-polymer chemical sectors generally have the largestexcess HRVOC allowances as comparedto actual emissions.
4HECT program participants also commented on the reluctance ofsites to trade due to the inclusion ofemissions events in determining compliance with the program andthe risk of trading away allowances that may 

### be needed for compliance due to an emissions event later in the calendar-year control period. The commission will reallocate HRVOC allowances underthe HECT program based on actual emissions data and implement significant program changes to encourage market activity through trading.

The existing HECT allocation methodology is a level ofactivity production-based calculation of the total amount ofHRVOC, in pounds, produced orused by a process unit. This productionbased methodology was developed priorto the implementation ofmonitoring requirements for applicable sources ofHRVOC in Harris County. HECT program participants have been reporting actual monitored emissions data to the HECT program since 2006 as required under Chapter 115.

The adoption ofthis rulemaking creates a new allocation methodology based on actual emissions data with the goals offairly and equitably distributing the compliance burden for HECT program participants, applying credit for controlling and reducing HRVOC emissions, and notrewarding or encouraging emissions from emissions events. Cap and tradeprograms aim to provide economic incentives for reducing emissions through controls by allowing excess allowances to be sold to otherprogram participants. However, an allocation methodology based solely on actual emissions has the potential ofpenalizing sites that are well controlled and/or rewarding sites that are not well controlled. To allow for applicable sites to establish a representative baseline emission period, the rules allow sites to use theirtwo highest consecutive calendar-year control periods out ofthe four years from 2006

- 2009.

Allocations will be distributed based on the new allocation methodology beginning with the
52011 calendar-yearcontrol period. Baseline emissions for the purpose ofcalculating the site allocations would be the average ofthe actual emissions for the two highest consecutive calendar-yearcontrol periods as submitted in the Form ECT-6H, Highly-Reactive Volatile Organic CompoundEmissions Cap and Trade Baseline Emissions Certification Form. The deadline forECT-6H submission is July 1, 2010.

The adopted rulemaking includes a provision for HECT participants that qualify to have the ability to request from the executive directorthe use ofan alternate baseline period from 2004 and 2005 for the purpose ofestablishing baseline emissions. The owner or operatorofa site must submit a requestto the executive director byJuly 1, 2010, demonstrating thatthey were performing speciatedtesting and continuous flow monitoring ofHRVOC emissions during the requested alternative baseline period. This provision is available for participants with substantial HRVOC reductions. 

### In addition, the emissionreductions mustbe permanent, voluntary, and quantifiable ofan amount equal to or greaterthan 25% ofthe site's total annual HRVOC emissions and a site-wide reduction in HRVOC emissions subjectto the HECT program of25 tons or greater. The adopted rulemaking also provides an alternative to the use ofan alternative baseline for qualifying sites that made early permitted HRVOC emissions reductions through the installation offlare gas recovery, vent gas recovery, orflare gas minimization control strategies. This alternative includes a provision in which quantified and monitored HRVOC emissions reductions from flare orvent gas recovery orflare minimization is added to the calculation of"Uncontrolled emissions" using the flare's average control efficiency. The average actual HRVOC emissions used for quantifying reductions from flare orvent gas recovery orflare minimization control strategies mustbe determined through the use of continuous flow rate monitoring and HRVOC speciation testing in orderto be applied towards a site's "Uncontrolled emissions." The emissions reductions must have been made enforceable underapermit action submittedto the executive director no laterthan April 1, 2010.


### 6Additionally, qualifying sites not in operation orwith HRVOC emissions that are not representative ofpermitted normal routine operation, due to an authorized modificationthat resulted in an HRVOC emissionreduction during the baseline emissions period, may request from the executive directorthe use ofany allowance stream acquired from facilities previously participating in the HECT program in lieu ofreallocation until an alternative consecutive 24- month baseline emissions period can be established from nonnal permitted operation from 2010

- 2012. Sites approved by the executive directorto use this alternative will receive an allocation in accordance with the adopted allocation methodology inthe 2014 calendar-yearcontrol period.

Recent economic conditions have prompted concerns from industry that the 2006

- 2009 years adopted for establishing baseline emissions activity may notbe representative ofgeneral production and emission rates due to the recent economic downturn. However, the reallocation methodology is based on the percentage ofindividual site emissions contributingto the total industry sectoremissions and the fraction that each industry sector's emissions make up toward the total ofall HRVOC emissions in the county. Therefore, the allocation ofallowances for any individual site would not 

### be significantly affected by general changes in economic conditions. An individual site's allocations would onlybe significantly altered iftheiruncontrolled emissions changed as a proportion ofthe total industry sector emissions. The adoptedreallocation methodology is based on calculating "Uncontrolled emissions" or precontrolled emissions for facilities using reported control efficiencies based on the specifications for flares in §115.725(d). Heaters, boilers, furnaces, thermal and catalytic oxidizers, and other combustion control devices combusting HRVOC streams would calculate "Uncontrolled emissions" using control efficiencies up to 99.9% with actual monitored control efficiency data derived from stacktesting. In the eventthat actual stacktesting data is not available for
7combustion control devices otherthan flares, the commission will assign a default control efficiency of99% due to their closed combustion design and higher flame temperatures. Dividing actual emissions by one minus the percentcontrol efficiency calculates the amount of emissions before controls, therefore allowing sites to receive credit for these reductions in the allocation. HRVOC emissions from other facilities subjectto Chapter 115, SubchapterH, Divisions 1 and 2, and the HECT program, such as vents and coolingtowers, will be included in the equation for calculating uncontrolled emissions, howeverbecause they do not have combustion control efficiencies, uncontrolled emissions from these facility types will be equal to their actual emissions. Only HRVOC emissions from routine, permitted, normal activity will be counted as actual emissions in the calculation ofuncontrolled emissions. Emissions from emission events subjectto 

### § 101.20I will not be included in the determination ofuncontrolled emissions and will not be applied towards site allocations. As discussed elsewhere inthis preamble, the adopted rules contain a provision for applying credittowards a site's uncontrolled emissions for quantified and monitored BRVOC emission reductions from flare minimization programs and flare and vent gas recovery systems. 

### In addition, sites that have purchased allowance streams underthe existing HECT allocationwill be allowed to receive allowance credit for an amount equal to the difference between each site's allowance stream plus its current existing allocation and the amount ofits two highest average actual emission years during the baseline period. The amount ofthe difference may be applied to a site's "Uncontrolled emissions" as actual emissions for the calculation ofallowances. Sites with emissions from theirtwo highest average actual emission years during the baseline periodthat
are greaterthan their existing allocation plus any acquired allowance stream will receive an allocation based on their "Uncontrolled emissions" withoutthe benefit ofthe allowance stream.

The adopted rules define four industry-type sectorpools to account for different BRVOC emission rates associated with the processes ofthe industry sectors with BRVOC emissions in


### 8Harris County. The industry sector definition reflects those used in existing regulations and are readily defmed by process type and product. The existing application ofBest Available Control Technology (BACT) and other federal standards within industry sectors would assure a comparable cost ofcontrol within the industry sector, and the division ofthe cap into industry sector share will therefore reflect a more equitable allocation methodology. 

### In addition, the amount ofHRVOC productthat is recycled and recovered for sites within the same industry sector shouldbe comparable due to market forces and competition within the sector. Sites within common industry sectors with HRVOC as product share the economic incentive to reduce emissions using similarrecovery techniques.

The four industry sectors are petroleum refming, nonpolymer chemical producers, polymer producers, and storage/loading/other. The reallocation methodology then calculates each sector's share ofthe available cap by dividing the total amount ofactual average emissions over the emissions baseline period for the sectorby the total available cap. The resulting fraction expressed as a percentage becomes the industry sector share. Applying this sector share to the individual site allocation equation creates a methodology in which only facilities within the individual industry sectors compete with one anotherfor allowances. Sites containing facilities from two ormore industry sectors will be included inthe industry sectorfor which the majority oftheirbaseline activity is generated, with emissions and allocations for the industry sector and site calculated accordingly.

The existing rules' "opt-in" clause specifies that any site wishing to opt-in musthave requested to participate by April 30, 2005. The adopted rule revision will notprovide an additional opt-in provision. All sites with an HRVOC PTE that is greaterthan ten tons are required to participate in the HECT program. Sites with a calculated allocation ofless than five tons based on the revised allocation methodology will be eligible to receive a minimum allocation offive tons.
9Sites with a calculated allocation greaterthan or equal to five but less than ten tons based on the revised allocation methodology will be eligible to receive a minimum allocation oftentons. Sites receiving a minimum allocation underthe adopted rulemaking will nothave their allocations "steppeddown" and will continue to receive the minimum allocation.
According to the reallocation principals above, including a methodology based on average actual emissions during the emissions baseline period and calculating "Uncontrolled emissions"
orpre-controlled emissions using reported control efficiencies, the commission adopts arevised reallocation methodology for HRVOC allowances beginning with the 2011 calendar-year control period. The total modeled (future base) cap on HRVOC emissions in Harris County is currently 3,633.1 tons. After deducting the required 5% EPA environmental contribution of 181.65 tons, the total HRVOC cap is 3,451.5 tons. The first 10% cap stepdown will occur atthe beginning ofthe 2014 calendar-yearcontrol period. The total amount ofHRVOC allowances available in 2014 will therefore be 3,106.3 tons. Atthe request ofstakeholders, the proposed rule initially included an emissions event set-aside pool, however in response to comment, the 250-ton set-aside has been returned to the available cap for allocation.

The adopted rulemaking will then continue to reduce the cap to a total of25% in annual 5% reductions from 2015 to 2017. Therefore, the fmal available cap beginning with the 2017 calendar-yearcontrol period will be the 2,588.6-ton value representing the amountmodeled in the 2018 future case 25% HECT Cap Reduction sensitivity run. The allocation methodology for each calendar-yearcontrol period will be identical to the adopted methodology for 2011.

Sites thathave made investments on HRVOC stream trades may receive credit for the allowance stream as actual emissions in the calculation of"Uncontrolled emissions." However, in orderto preventthe double counting ofthe stream and the emissions during the baseline
10emissions period thatthe stream allowed them to achieve, the "Uncontrolled emissions" for sites owning a stream ofallowances will be consideredthe greater oftheir actual emissions during the baseline emissions period orthe amount ofthe original allocation plus the allowance stream. Therefore, ifa site's highestemissions during thebaseline period were less than its original allocation plus the allowance stream, the difference would be applied toward its "Uncontrolled emissions." Although some qualifying sites may receive credit for acquired allowance streams afterreallocation, HECT allowances are not a property right and site allocations are maintained atthe executive director's discretion under §101.394(h).

SECTION BY SECTION DISCUSSION 

### In additionto the adopted amendments to §§ 101.1, 101.390

- 101.394, 101.396, and 101.399

- 10lAO1 discussed elsewhere inthis preamble, the commission is also making various stylistic non-substantive changes to update rule languageto current 

### Texas Register style and format requirements, as well as establish more consistency in the rules. Such changes include appropriate and consistentuse 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.


### §JOJ.J, Definitions Adopted changes to § 101.1 amend the defmition ofreportable quantity for 1,1, 1,2,3,3,3- heptafluoropropane (HFC-227ea) in §101.l(88)(A)(i)(III)(-y-). The commission adopted a reportable quantity of5,000 pounds for HFC-227ea in 2005 and the adopted rule was published in the December 30,2005, issue ofthe 

### TexasRegister (30 TexReg 8886). However, the reportable quantity value of5,000 pounds was inadvertently omitted inthe version filed with the Secretary ofState's Office. The commission is only adopting the corrected omission in §101.1 (88)(A)(i)(lII)(-y-) and no otherchanges to the defmition ofreportable quantity will be
11addressed in this rulemaking. Additionally, the commission adopts the updated defmition of volatile organic compound in §I01.1(115) to be consistentwith the current definition in the 40 Code ofFederal Regulations, §57.l00(s) amended on January 21,2009 (74 Federal Register 3441).
§101.390, Definitions The commission adopts revised § 101.390(4) and adds §101.390(9) to include the defmitions of "Baseline emissions period," "Industry sectors," and "Uncontrolled emissions." "Baseline emissions period" is defined as consecutive calendar-yearcontrol periods designated bythe site for the purpose ofestablishing baseline emissions for the allocation ofallowances. In response to comment, "Uncontrolled emissions" is defmed as taking the total emissions from each applicable facility calculated as pre-controlled using the applicable control efficiency for the purpose ofdetermining site allocations under §101.394(a)(l)(B). In response to comment, the defmition of"Industry sectors" for the purpose ofgeneratingthe industry sector share for the allocation ofHRVOC allowances is included in the adopted rules for clarity. The commission also adopts renumbering the subsequent paragraphs of§101.390.
§101.391, Applicability The commission adopts deleting the term "covered" and replacing it with "applicable" in describing sites and facilities subjectto the rulemaking for rule consistency and clarity.


### §101.392, Exemptions The commission adopts deleting the term "covered" and replacing itwith "applicable" in describing sites and facilities subjecttothe rulemaking for consistency and clarity. In response to comment, the commission adopts language clarifyingthe applicability ofsubsection (b) to only Harris County.
12

### §lOl.393, GeneralProvisions The commission adopts deleting the term "covered" and replacing itwith "applicable" in describing sites and facilities subjectto the rulemaking for rule consistency and clarity.


### §lO1.394. Allocation of Allowances In response to comment, the commission adopts the deletion ofthe reference to January 1,2007, from § 101.394(a). The commission also adopts the removal ofthe figure located at § 101.394(aXl) and adding a new figure to be located at §101.394(aXIXA). In addition, the commission adopts § 101.394(aX 1XB) to revise the reallocation methodology for allowances beginning in the calendar-yearcontrol period 2011. The adopted figure located at §101.394(aXl)(B) provides the equation for calculating the new allocation methodology and for
a stepped down reduction in the total cap ofallowances. The 

### rustreduction is a 10% reduction ofthe total cap in calendar-yearcontrol period 2014, followed by successive 5% reductions per calendar-year control period until the 25% total reduction in the cap is reached in calendar-year control period 2017.

In response to comment, the commission also adopts the addition of§101.394(aXIXC) to allow qualifying sites not in operation orwith HRVOC emissions that are notrepresentative of permitted nonnal routine operation due to an authorized modification thatresulted 

### in an HRVOC emission reduction during the baseline emissions period to request from the executive directorthe use ofany allowance stream acquired from facilities previously participating in the HECT program in lieu ofreallocation until the alternate baseline emissions are established where the site has made HRVOC reductions. The owneror operator ofapplicable qualifying sites shouldnote thatbeginning with the 2014 calendar-yearcontrol period, all sites will receive
an allocation in accordance with the proposed methodology under 

### §101.394(a)(1

### XB).
13The commission also adopts the addition of§101.394(a)(1)(D) for HECT participants that implemented pennanent, voluntary, and quantifiable HRVOC emissionreductions and monitoring programs before the beginning ofthe 2006 calendar-yearcontrol period. The adopted subparagraph (D) provides the ability to request from the executive directorthe use of
an alternative baseline period from 2004 and 2005 for the purpose ofestablishing baseline emissions. To qualify for this provision, owners or operators ofsites mustbe ableto demonstrate to the executive directorthat they were perfonning speciatedtesting and continuous flow rate monitoring ofHRVOC emissions during the requested alternative baseline period. In addition, the emission reductions must be permanent, voluntary, and quantifiable of
an amount equal to or greaterthan 25 tons resulting in a site-wide reduction in HRVOC emissions ofat least 25%. The emissions reductions must also have been made enforceable under an action submittedto the executive director no laterthan April I, 2010. This provision will ensure that sites that made early reductions before the adopted baseline emissions period of 2006

- 2009 would receive adequate credit for those early reductions.

In response to comment, the commission adopts §I01.394(a)(3) detailing the calculation methodology for uncontrolled emissions for various applicable facility types.

The commission adopts the deletion of§I 01.394(c) because it is no longer applicable. The existing §I 01.394(d) will be relettered as subsection (c). Adopted §101.394(d) will ensure that sites with a calculated allocation ofless than five tons based on the revised allocation methodologies will be eligible to receive a minimum allocation offive tons. Sites to be allocated greater than or equal to five tons but less than ten tons ofallowances would be eligible to receive a minimum allocation oftentons ofallowances per calendar-year control period.

14

### §lOl.396, 

### AllowanceDeductions In response to comment, the commission adopts the deletion ofproposed subsections (c) and (d) in orderto remove the emissions event set-aside and the application forthe use ofthe emissions event set-aside allowances. The commission also adopts non-substantive changes for clarity and consistency. The commission also adopts relettering subsequent subsections in §101.396.


### §lOl.399, 

### AllowanceBankingandTrading In response to comment, the commission adds clarifying language to subsection (a). The commission adopts amended §101.399(i)(5)to delete the referenceto §101.394(c) because it is
no longer applicable. 

### In addition, the commission adopts §101.399(e) to prohibitthe transfer of allowances allocatedto sites under §101.394(a)(I)(C) thathave yetto establish a baseline emissions period. Therefore, sites allowed to maintain an acquired allowance stream derived from the original allocation methodology under §101.394(a)(l)(A) may notbenefit from the transfer ofthese allowances. The commission also adopts relettering the remaining subsections in §101.399.


### §lOl.400, 

### Reporting The commission adopts §101.400(a)(4) to require sites to reportthe total amount and respective dates ofHRVOC emissions from emissions events.


### §lOl.401, 

### Levelof Activity Certification The commission adopts §101.401(f) and (g). Adopted §101.401(f) will require the Fonn ECT6H, Highly-Reactive Volatile Organic CompoundEmissions Cap and Trade Baseline Emissions Certification Fonn, to be submitted no laterthan July 1,2010. Adopted §101.401(g) will require sites to selecttwo consecutive caleridar-yearcontrol periods to establish a baseline emissions period.
15FINAL REGULATORY IMPACT ANALYSIS DETERMINATION The commissionreviewed this adopted rulemaking in light ofthe regulatory impact analysis requirements ofTexas Government Code, §2001.0225, and determined thatthe adopted rulemaking action meets the definition ofa "majorenvironmental rule" as defmed in that statute. A "majorenvironmental rule" is a rule, the specific intent ofwhich is to protectthe environment orreduce risks to human health from environmental exposure and thatmay adversely affect in a material way the economy, productivity, competition,jobs, the environment, orthe public health and safety ofthe state or a sector ofthe state.

The adopted amendments to Chapter 101 and revisions to the SIP would reduce the total cap amount ofHRVOC allowances for the BECT program by 25% and revise the allocation methodology for allowances for participants ofthe BECT program. The BECT program was adopted as a control measure for the HGB one-hourattainment demonstration SIP revision, and it is currently only applicable in Harris County. Photochemical modeling analysis demonstrates that a 25% reduction ofthe cap on thetotal Harris CountyHRVOC allocation would contribute to attainment ofthe 1997 eight-hour ozone NAAQS by reducing future ozone design values at all HGB monitors.
Followingthe initial allocation ofallowances, stakeholder comments indicatedthat the allocation was not equitably distributed. Information from the first three years ofmonitoring data supports the assertion ofan inequitable distribution ofallowances. The adopted revisions
are necessary to implement a more equitable allocation methodology, while contributing to HGB's attainment ofthe 1997 eight-hour ozone NAAQS as expeditiously as practicable. The adopted change in allocation methodology will result in allowance reductions for certain facilities, and itis possible facilities that have made significant investments on future HRVOC
16streamtrades may seethe value ofthese investments reduced ornullified. Facilities thathave their HRVOC allowances reduced, eitherthroughthe reallocation orreduction ofthe total HRVOC cap, may incur costs from the installation ofadditional controls orhaving to purchase allowances from other sources ifnecessary to comply with their lower allowances. 

### Ifthe cap is reduced, the price ofHRVOC allowances available in the market may increase.

This rulemaking does notmeet any ofthe four applicability criteria ofa "majorenvironmental rule" as defmed in the Texas Government Code. Texas Government Code, §2001.0225 applies only to a major environmental rule, the result ofwhich is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement ofa delegation agreement orcontractbetweenthe state and an agency orrepresentative ofthe federal governmentto implement a state and federal program; or4) adopt a rule solelyunder the general powers ofthe agency instead ofunder a specific state law. Specifically, the proposed amendments will result in a decrease in the HECT program cap, and will adjustthe allocation methodology for allowances underthe program. The HECT program was adopted as a control
measure for the HGB one-hour attainment demonstration SIP, and the proposed changes to the program will contribute to HGB's attainment ofthe 1997 eight-hour ozone NAAQS as expeditiously as practicable. The rulemaking does not exceed an express requirement offederal
or state law ora requirement ofa delegation agreement, and was not developed solely under the general powers ofthe agency, but was specifically developed underfederal law and authorized underthe Texas Health and Safety Code (THSC).

The rulemaking implements requirements of42 United States Code (USC), §7410, which requires states to adopt a SIP that provides for "implementation, maintenance, and enforcement" ofthe NAAQS 

### in each airquality control region ofthe state. While 42 USC, §7410 does not
17

### require specific programs, methods, orreductions to meetthe standard, SIPs must include "enforceable emission limitations and othercontrol measures, means, ortechniques (including economic incentives, such as fees, marketable permits, and auctions ofemissions rights), as well as schedules andtimetables for compliance as may be 

### necessary or appropriate to meetthe applicable requirements ofthis chapter," (meaning 42 USC, Chapter 85, AirPollution Prevention and Control). It is truethatthe Federal CleanAirAct (FCAA) does require some specific measures for SIP purposes, such as the inspection and maintenance program, butthose programs arethe exception. notthe rule, in the SIP structure of42 USC, §741O. Theprovisions ofthe FCAA recognize that states are inthe bestposition to determine whatprograms and controls are necessary or appropriate in orderto meetthe NAAQS. This flexibility allows states, affected industry, andthe public to collaborate onthe bestmethods to attaintheNAAQS forthe specific regions in the state. Even though the FCAA allows states to developtheir own programs, this flexibility does notrelieve a state from developing aprogramthatmeets the requirements of42 USC, §7410. Thus, while specific measures are not generally required, the emission reductions are required. States are not free to ignore the requirements of42 USC, §7410, andmust develop programs to assure thatthe nonattainment areas ofthe state would be brought into attainment on schedule. The adopted amendments will help the HBG area attain the 1997 eight-hourozone NAAQS as expeditiously as practicable.

The requirementto provide a fiscal analysis ofadopted regulations in the Texas Government Code was amended by Senate Bill (SB) 633 during the 75thLegislature, 1997. The intent ofSB 633 was to require agencies to conduct aregulatory impact analysis ofextraordinary rules. These are identified inthe statutory language as majorenvironmental rules thatwould have a material adverse impactand would exceed arequirementofstate law, federal law, ora delegated federal program, orare adopted solely underthe generalpowers ofthe agency. With the understanding thatthis requirementwould seldom apply, the commission provided a cost
18estimate for SB 633 that concluded "based on an assessment ofrules adopted bythe agency in the past, it is not anticipatedthat the bill would have significantfiscal implications for the agency due to its limited application." The commission also noted that the number ofrules that would require assessment underthe provisions ofthe bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exemptedproposed rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law. As discussed previously in this preamble, 42 USC, §7410 does notrequire specific programs, methods, or reductions in orderto meetthe NAAQS; thus, states must develop programs for each nonattainment area to ensure that area would meetthe attainment deadlines. Because ofthe ongoing need to address nonattainment issues, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. 

### Ifeach rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached bythe commission in its cost estimate and by the Legislative BudgetBoard in its fiscal notes. Because the legislature is presumed to understandthe fiscal impacts ofthe bills itpasses, and thatpresumption is based on information provided by state agencies andthe Legislative BudgetBoard, the commission contends that the intent ofSB 633 was only to require the full regulatory impact analysis for rules that are extraordinary in nature. While the SIP rules would have a broad impact, that impact is no greaterthan is necessary orappropriate to meetthe requirements of42 USC, §7410. Forthese reasons, rules adopted for inclusion in the SIP fall underthe exception in Texas Government Code, §2001.0225(a), because they are specifically required by federal law.

In addition, 42 USC, §7502(aX2) requires attainment as expeditiously as practicable, and 42 USC, §7511(a), requires states to submit ozone attainment demonstration SIPs for ozone nonattainment areas, such as the HGB eight-hourozone nonattainment area. As discussed
19previously in this preamble, the adopted amendments will help the HBG

## area attain the 1997 eight-hour ozone NAAQS as expeditiously as practicable.

The commission has consistently applied this construction to its rules since this statute was enacted in 1997. Since thattime, the legislature has revisedthe Texas Government Code but left this provision substantially un-amended. The commission presumes that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." CentralPower & Light Co. v. Sharp, 919 S.W.2d 485, 489 (Tex. App. Austin 1995), writ deniedwithper curiam opinion respecting anotherissue, 960 S.W.2d 617 (Tex. 1997); Bullock
v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. Austin 1990), no writ; CfHumble Oil & Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Sharp v. House of Lloyd, Inc., 815 S.W.2d 245 (Tex. 1991); Southwestern LifeIns. Co. v. Montemayor, 24 S.W.3d 581 (Tex. App. Austin 2000),pet. denied; and CoastalIndust. WaterAutk v. Trinity PortlandCementDiv., 563 S.W.2d 916 (Tex. 1978).

As discussed, this rulemaking action implements requirements of42 USC, §7410. There is no contractor delegation agreementthatcovers the topic that is the subjectofthis action. Therefore, the rulemaking does not exceed a standard set by federal law, exceed an express requirement ofstate law, exceed a requirement ofa delegation agreement, nor is it adopted solely underthe general powers ofthe agency. Finally, this rulemaking action was not developed solely under the general powers ofthe agency, but is authorized by specific sections ofTHSC, Chapter 382, Texas Clean Air Act (TCAA), and the Texas Water Code that are cited in the STATUTORY AUTHORITY section ofthis rulemaking, including THSC, §§382.002, 382.011,382.012,382.016, and 382.017. Therefore, this rulemaking action is not subjectto the regulatory analysis provisions ofTexas Government Code, §2001.0225(b), because the
20rulemaking does not meet any ofthe four applicability requirements.

The commission invited public commentregarding the draft regulatory impact analysis determination during the public commentperiod. No comments were received on the draft regulatory impact analysis determination.

TAKINGS IMPACT ASSESSMENT The commission completed atakings impact assessment forthis rulemaking action underTexas Government Code, §2007.043. The adopted amendments would reduce the total cap amount of HRVOC allowances forthe HECT program by 25% and revise the allocation methodology for allowances for participants ofthe HECT program. Photochemical modeling analysis demonstrates that a 25% reduction ofthe cap on the total Harris County HRVOC allocation would contribute to attainment ofthe 1997 eight-hour ozoneNAAQS by reducing future ozone design values at all HGB monitors. The adopted changes to the HECT program will result in allowance reductions for certain facilities and it is possible facilities thathave made significant investments on future HRVOC stream trades may see the value ofthese investments reduced or nullified. Facilities that have their HRVOC allowances reduced, eitherthrough the reallocation
orreducing the total HRVOC cap, may incur costs from the installation ofadditional controls or having to purchase allowances from other sources ifnecessary to comply with their lower allowances. 

### Ifthe cap is reduced, the price ofHRVOC allowances available in the market may increase. However, the allowances that will be affectedby these rules arenot property rights (§101.393(e», and therefore reductions or changes in the allowances do not constitute a taking. Consequently, this rulemaking action does not meet the defmition ofa takings under Texas Government Code, §2007.002(5).
Additionally, Texas Government Code, §2007.003(b)(4) provides that Chapter 2007 does not
21apply to this rulemaking action because it is reasonably taken to fulfill an obligation mandated by federal law. The adopted changes to the HECT program within the HGB areathat would be implemented by these adopted rules were developed to advance attainment ofthe 1997 eighthour ozone NAAQS in the HGB ozone nonattainment area. States are primarily responsible for ensuring attainment and maintenance ofNAAQS once the EPA has establishedthem. Under42 USC, §7410, and related provisions, states must submit, for approval by the EPA, SIPs that provide for the attainment and maintenance ofNAAQS through control programs directed to
sources ofthe pollutants involved. Therefore, one purpose ofthis adopted rulemaking action is to meet the air quality standards established underfederal law as NAAQS. However, this rulemaking is only one step among many necessary for attaining the ozone NAAQS.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM The commissionreviewed the adopted rulemaking and found that the adoption is subjectto the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act, Texas Natural Resources Code, §§33.201 

### etseq., and therefore, must be consistentwith all applicable CMP goals and policies. The commission conducted a consistency determination for the adopted rules in accordance with Coastal Coordination ActImplementation Rules, 31 TAC §505.22 and found the adopted rulemaking is consistentwith the applicable CMP goals and policies. CMP goals applicable to the adopted amendments are the goals to protect, preserve, restore, and enhance the diversity, quality, quantity, functions, and values ofcoastal natural
resource areas (31 TAC §501.12(1». This rulemaking will advance these goals through updating
a definition, reallocating allowances, and lowering the HRVOC cap. No new sources ofair contaminants will be authorized and the revisions will maintain the same level ofemissions control as previous rules. CMP policies applicable to the proposed amendments arethe policy thatthe commission's rules comply with federal regulations in 40 Code ofFederal Regulations, to protect and enhance air quality inthe coastal areas (31 TAC §501.32). Promulgation and
22enforcementofthese rules will not violate orexceed any standards identified in the applicable CMP goals and policies because the proposedrules are consistentwith these CMP goals and policies because these rules do not create orhave a direct or significant adverse effecton any coastal natural resource areas. The commission invited public comment regarding the consistency with the coastal management program duringthe public commentperiod. No comments were received regarding consistency withthe CMP.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM Chapter 101, Subchapter H is an applicable requirement under 30 TAC Chapter 122, Federal Operating Permits Program. Owners or operators subjectto the Federal OperatingPermits Program must, consistent with the revision process in Chapter 122, upon the effective date of therulemaking, revise theiroperatingpermitto include the new Chapter 10I, Subchapter H requirements.

PUBLIC COMMENT Public hearings forthe proposed SIP revision and associated rulemakings were held on October 28, 2009, at 2:00 p.m. and 6:00 p.m., at the Houston-Galveston Area Council (H-GAC) offices in Houston, Texas; and on October 29,2009, at 3:00 p.m., at the Texas Commission on Environmental Quality (TCEQ) headquarters in Austin, Texas. Question and answer sessions
were held 30 minutes priorto the hearings. Neitherthe October 28, 2009, hearing scheduled for 6:00 p.m., northe October 29, 2009, hearing was officially opened because no party indicated a desire to provide comment. Five persons presented oral comments concerning this SIP revision atthe public hearing held at 2:00 p.m. on October 28,2009, in Houston. The public comment period opened on October 9,2009, and closed on November 9,2009. Written comments were accepted via**mai~** fax, and through the eComments system. There were 26 written comments received. Oral comments were provided by Kaneka Texas Corporation (Kaneka), Bigler, L.P.
23(Bigler), Environmental Defense Fund (EDF), and Galveston-Houston Association for Smog Prevention (GRASP). Written comments regarding the HECT rulemaking and Reasonably Available Control Measure (RACM) were provided bythe EPA, EDF, GRASP, and Kaneka. Written comments regarding the HECT rulemaking and SIP revision were provided by BCCA Appeal Group (BCCA), 8-HourOzone SIP Coalition (Coaltion), Texas Oil and Gas Association (TxOGA), and Texas Association ofBusiness (TAB).

Written comments regarding the HECT rulemaking were providedby Texas Chemical Council (TCC), LyondellBasell (Lyondell), Texas Petrochemicals (TPC), Coalition ofManufacturers for Air Quality (COMAQ), DuPontPackaging and Industrial Polymers (DuPont), Albemarle Corporation (Albemarle), Sunoco Chemicals Inc. (Sunoco), INEOS Olefin & Polymers USA (INEOS), PetroLogisticslPL Propylene L.L.C. (PL Propylene), Coalition, BCCA, TxOGA, TAB, Total Petrochemicals (Total), Kaneka, Bigler, AmericanAcryl, Arkema Inc. (Arkema), EPA, andthe Houston Regional Group and the Lone StarChapter ofthe Sierra Club (HSC). Kids for Clean 

### Air, the Sustainable Energy and Economic Development (SEED) Coalition, Clean Air Institute ofTexas, and one individual expressed support for any comments submitted by EDF and HSC.

RESPONSE TO COMMENTS 

### HECTRULE, HGB 

### 1997EIGm-HOUR OZONEAITAINMENTDEMONSTRATIONSIP REVISION, ANDRACMCOMMENTS BCCA andthe Coalition commented**th~t** the reallocation ofHRVOC allowances in the HECT program rulemaking included in the proposed attainment demonstration SIP revision is not required for purposes ofproviding ozone precursorreductions for the 1997 eight-hour ozone attainment demonstration HGB SIP revision package. TxOGA and TAB commentedthat the proposed attainment demonstration SIP revision does notrely on the reallocation rulemaking.
24

### PL Propylene commented that the reallocation ofHECT allowances is fair and necessary to protectthe integrity ofthe SIP.

The commission agrees with BCCA, the Coalition, TxOGA, and TAB that the reallocation ofHECT allowances is not required to model attainmentofthe 1997 eight-hour attainment demonstration HGB SIP revision. The reallocation ofHRVOC allowances does notin itselfinclude a mandatory reduction in the BRVOC cap in 

### Harris County. However, following the initial allocation ofallowances, TCEQ received comments that the allocation was not equitably distributed. Information from the first two years of monitoring data supports the assertion ofan inequitable distribution ofallowances. A
more equitable allocation ofallowances will stimulate the market, creating incentives for further reductions by industry regulated underthe program. The commission therefore agrees with PL Propylene that revisions to the rule are anticipated to result in a more equitable approach. Because the change in allowance allocation methodology will create incentives for further reductions, itwill contribute to the area's attainment ofthe NAAQS
as expeditiously as practicable. No changes were made in response to this comment.



### EPA commentedthatthe proposedreduction and reallocation ofthe Harris County HRVOC cap does notrequire HRVOC levels to be reduced below currently reported levels. EPA statedthat the current 25% reduction in 

### the HECT cap would still be higherthanreported emissions and would allow for growth and allowances for upset conditions. EPA added thatthe 25% cap reduction would allow HRVOC emission increases atHECT applicable facilities compared to the highestannual actual HECT emissions. EPA suggested thatthe commission consideras part ofthe RACM analysis whetherreductions in actual HRVOC emissions could accelerate attainment.

25EDF and GRASP statedthat they see no reason to delay additional cap reductions beyond the proposed 25% atthis time. The commenters statedthatto ensure thatthe area is meeting the FCAA requirementto implement all RACM as expeditiously as practicable, the commission must lowerthe cap to a meaningful level thatwill produce actual emissions reductions in the
nearterm, orprovide a logical, reasoned explanation as to why doing so itnotfeasible. EDF and GRASP statedthat since this HECT cap reduction is based on the fact that emissions from capped sources during the first two years ofthe program only averaged approximately 56% of the total allocated allowances, the commission should not claim that a 25% reduction in the cap would result in any actual emissions reductions. They added that since the reduction is only in allowable emissions there will notbe any improvement in actual air quality. EDF and GRASP commented that a HECT cap reduction closerto 50% is necessary in orderto achieve any actual reductions and air quality improvement.



### The commission agrees thatthe BECT reallocation does not require mandatory reductions ofHRVOC emissions from program participants. The purpose ofthe reaJJocation is to achieve a more equitable distribution ofallowances based on actual monitoring data. A more equitable allocation ofallowances will stimulatethe market, creating incentives for further reductions by industry regulated under the program.

The commission acknowledges thatHRVOC monitoring data reported for 2006

- 2008 indicates that the total actual emissions from sources in the BECT program have been approximately 50% ofthe total currentHRVOC cap. The HRVOC cap and trade rules require emissions from scheduled maintenance, startup, and shutdown activities and emissions events be included in determining compliance with the BECT program. Therefore, a bufferin the cap is needed to accountfor the variability ofHRVOC emissions associated with these activities.
26

### Photochemical modeling analysis demonstrates an average ozone decrease of0.13 ppb for the three monitoring sites with 2018 projected eight-hour ozone design values greaterthan the 1997 eight-hour ozone NAAQS, DeerPark, Dayland Park, and Wallisville. The Deer Parkmonitor's design value was the highest inthe BECT sensitivity modeling, which showed a decrease in the DeerParkmonitor design value from 86.49 ppb to 86.36 ppb
ozone. The 25% reduction in the Harris County BRVOC cap allows for a sufficientbuffer to protect againstthe inherent variability in BRVOC emissions while modeling an average 2018 future cap design value within EPA's range for weightofevidence discussion.
During this period, BECT regulated sources have experienced the same economic downturn that otherindustrial sectors across the country have experienced resulting in lower than normal emissions. The commission contends that in a bettereconomic environmentBECT sources operating at normal production levels would have average emissions at levels closerto the currentBRVOC cap. No changes were made in response to this comment.

EPA requested thatthe commission explain whythe reductions cannotbe implemented sooner than the proposed 2015

- 2017 time frame. EDF and GHASP expressed support for reducing the HECT cap for Harris County 

### in stepwise fashion by 10% 

### in 2014, followed by annual 5% reductions through 2017.



### The adopted rule revisions will 

### reallocate the program in 2011 and implement an initial 10% reduction ofthe existing available BECT cap of3,451.5 tons beginning with the 2014 calendar-yearcontrol period. The available cap will then be reduced in 5% increments at the start ofeach calendar-yearcontrol period for 2015, 2016, and 2017. The full 25% cap
27

### reduction will have been in effectfor one full calendar-yearcontrol period byJanuary 1, 2018. While historical data demonstrate an overall surplus in the BRVOC cap, many
sources were operating neartheirindividual cap limits and thus, may see a significant change in theirBRVOC emissions. The cap reduction and reallocation may require some individual sites to install additional controls or otherwisemodify their operations to reduce theirBRVOC emissions. The step-down approach allows companies time to install controls ifnecessary. No changes were made in response to this comment.

Kaneka cited a portion ofthe RACM analysis in Appendix E ofthe 1997 eight-hourozone attainment demonstration HGB SIP revision proposed on September23,2009, describing the practicality issues identified with revising NOx allowances underthe MECT program because allowance streams have been traded and relied upon for compliance with the program. Kaneka concluded that ifit is impractical to nullify MECT trades, then itis also impractical to nullify HECTtrades thathave also been relied upon for compliance with the program.



### The commission maintains that reducing the Harris County BECT program cap is RACM. The commission acknowledges that practicality is one ofthe EPA's evaluation criterion considered during the state's RACM analysis. In 

### the portion ofthe RACM analysis referenced by the commenter, the commission also acknowledges practicality issues associated with revising MECT program NOx allocations. However, as discussed at length in Appendix E, 1997 eight-hour ozone attainmentdemonstration HGB SIP revision, Section 4.2.1: Mass Emission Cap and Trade (MECT) Program and 30 TAC Chapter 117 NOxRules RACM ofthis 1997 eight-hour ozone attainment demonstration HGB SIP revision, the commission concluded that further NOx reductions through the MECT program did not constitute RACM on the basis ofeconomic and technological feasibility, ratherthan practicality. Therefore, the commission respectfully disagrees with the 

### 28

### commenter's conclusion that revising the BECT program should not be considered RACM because itis impractical.

The commission agrees that the nullification issue should be addressed, and the rules have been revised to allow sites that purchased allowance streams the potential to apply allowances from the stream to the calculation of"Uncontrolled emissions" as actual emissions. Revised §101.394(a)(1) allows sites holding stream trades to calculate their "Uncontrolled emissions" as the greateroftheiractual average emissions oftheirtwo highest emission years from 2006

- 2009 orthe sum oftheiroriginal existingBECT HRVOC allowance and the amount ofthe allowance stream in tons. In the eventthat a site's actual two highestyear emissions is less than the sum ofits original existing BECT HRVOC allowance and the amount ofthe allowance stream in tons, the difference shall be added to the "Uncontrolled emissions" as actual emissions. The purchase ofan allowance stream also allowed some sites to operate with higher emissions during the baseline emissions period. Sites that tookadvantage ofallowance streams would therefore realize the benefitofthe higheremissions through the uncontrolled emissions-based reallocation methodology.

HECT RULE COMMENTS 25% Cap Reduction TCC, Lyondell, TPC, the Coalition, BCCA, TxOGA, and TAB expressed support forthe 25% reduction in the Harris County HRVOC Cap. TCC and TPC stated their agreement with the "stepdown" approach, beginning with a 10% reduction in the cap in 2014, with 5% annual reductions to reach a total 25% cap reduction in 2017. COMAQ statedtheir strong support for the "stepdown" approach outlined in the defmition of"AC" located in the figure in 

### §101.394(aXI)(B) and believes that it is critical to the rulemaking. 

### 29

### The commission appreciates the comments.

Reallocation Methodology Lyondell and TPC expressed their opposition to the HECT program uncontrolled emissionsbasedreallocation methodology and their support for the alternative flat percent allocation methodology discussed in the rule proposal preamble. TPC statedthat the proposed uncontrolled emissions-based realIocation methodology does notreward well-controlled facilities and may actually have the opposite effect ofproviding insufficient alIowances for well-controlled facilities, such as TPC. LyondeIl stated that some well-controlled facilities receive some ofthe lowest estimated allocations while some ofthe least controlled facilities appear

### to receive the largest allocations and well-controlled facilities that are under-allocated have no optionthan to purchase allowances, thereby potentialIy affecting the viability ofthe company. TPC commentedthat its Houston Plant is bettercontrolled than most or all other HECT participating facilities as a result ofa Voluntary Emissions Reduction Agreement (VERA) entered into with the commission in 2005. This agreementresulted in HRVOC emissions reductions ofmore than 120tpy when comparing 2002 to 2008 HECT emissions. TPC achieved these emissions reductions through the implementation offlare gas recovery, advanced technology for fence-line monitoring, and other operational changes. TPC statedthat despite these reductions, the initial estimated potential HECT allocation posted bythe agency awarded TPC with an insufficient allocation to cover its high 2007/2008 HRVOC emissions. TPC further commented that although the flat allocation method does notpenalize poorly controlled facilities, the proposed uncontrolled emissions-based reallocation methodology does notreward well-controlled facilities. TPC stated thatthe proposed methodology falls short because it does notreward flare gas recovery, one ofthe most effective HRVOC emissions controls and does not consider actual control efficiencies where this information is available.


### 30TPC recommendedthatthe commission correctthe proposed allocation methodology by accounting for flare gas recovery, addressing control mechanisms on vent gas streams, and using actual measured control efficiencies where available. Lyondell statedthat it strongly supportsthe flat percentreallocation methodology as itis the most equitable for all participants, is based on actual data, and is a much simplerand transparent methodology. Lyondell commentedthatthe estimated allocations using the proposed methodology demonstrate that significantly more sites will be under-allocated as comparedto theirhistoric highest emissions from 2007 and 2008 than the current allocation, and up to 11 sites may have allocations ofmore than 200% oftheirhighest emissions. Lyondell also statedthat approximately 20% ofHECT sites are owned and operated by Lyondell; 30% ofthe highest emissions from 2007 and 2008
are from Lyondell sites, butunderthe initial'estimated allocation derived fromthe proposed methodology less than 25% ofthe allocations go to Lyondell sites. In addition, Lyondell stated that sites that are under-allocated will 

### be further disadvantaged when the HECT cap is further reduced during the stepdown, while over-allocated sites will benefit from an arbitrary business advantage. Albemarle, COMAQ, DuPont, INEOS, PL Propylene, and Sunoco expressed their supportfor the proposed uncontrolled emissions-based reallocation methodology and their oppositionto the flat percent reallocation. Total statedthat although they believe the original allocation was fair and equitable, it supports the concept ofan uncontrolled emissions-based reallocation methodology. COMAQ stated that ithas maintained a consistent position that the existing HRVOC allowance allocation methodology is inequitable and is pleasedthatthe commissionhas proposed an allocation methodology thatwill result in the equitable allocation ofallowances. COMAQ and Albemarle commented thatfor a fair and equitable HECT program, it is critical thatthe reallocation methodology recognize demonstrated controls throughthe rewarding ofhigh levels ofcontrol and notrewarding low levels ofcontrol and that the program must be reallocated inthe most immediate fashion possible.

31The proposed alternative flat percent allocation methodology discussed in the proposal preamble, by allocating allowances as a direct percentage ofeach site's highest actual emissions, ignores reductions from controls, such as flares, heaters, boilers, furnaces, and thermal and catalytic oxidizers, and rewards poorly controlled facilities with high actual emissions while penalizing well-controlled facilities. This results in an inherently inequitable allocation. The adopted uncontrolled emissions based reallocation provides credit for controls through the use ofcontrol efficiencies in the calculation ofuncontrolled emissions. In orderto account for reductions from flare and vent gas recovery and flare minimization programs, the adopted reallocation methodology will allow qualifying sites that achieved early reductions through the implementation ofthese controls to utilize either an alternative baseline emissions period reflecting these emissions or apply the quantified reductions toward the calculation ofthe site's uncontrolled emissions. In addition, the elimination ofthe opt-in provision in combination with the adoption ofa twotier minimum allocation offive and ten tons addresses overallocation to sites with actual emissions substantially below ten tons. The uncontrolled emissions based allocation methodology, with the addition ofthese special provisions, will therefore resultin an equitable, accurate, representative, and comprehensive allocation ofthe Harris County HRVOCcap.

Coalition and BCCA do not support reallocation as it wouldpenalize facilities that made early and substantial HRVOC emissions reductions and the reallocation is notrequired forthe 1997 eight-hour attainment demonstration HGB SIP revision.

The commission respectfully disagrees with the comment. As discussed previously in this response to comments, the commission has adopted an alternative baseline provision and flare and vent gas minimization credits to account for early substantial emissions
32

### reductions.

TxOGA and TAB statedtheir opposition to reallocation atthis time. TxOGA statedthat it believes additional data is necessary before reallocation because all sites did nothave reliable monitoring and 2007 and 2008 control periods reflect active hurricane seasons and a slower economy. TxOGA statedthat well-controlled facilities needto be defined before an equitable allocation can be implemented.



### The commission respectfully disagrees with the comment. HRVOC stream monitoring under Chapter 115 was required by December31, 2005. As discussed elsewhere in this preamble, the reallocation methodology is based on a comparison ofeach individual site's HRVOC emissions relative to the total BRVOC emissions from all sites within the same industry sector. Therefore, the commission contends thatthe allocation ofallowances for any individual sitewould not be significantly affected by general changes in economic conditions. An individual site's allocations would only be changed if

### their uncontrolled emissions significantly increased as a proportion ofthe total industry sectoremissions. No changes were made in response to this comment. 

## Tee expressed its support forthe definition of"Baseline emissions period" under §101.390(4).



### Thecommission appreciates the comment.
COMAQ requested thatthe commission revise §101.394(a) and (a)(l)(A) relatingto the allocation methodology such that the January 1,2007, allowance deposit date be clarifiedto only refer to the calendar-year control periods 2007

- 2010.

33

### The commission agrees with the comment. As 

### the allowance deposit date for the existing program has passed and will not be revised, the reference to January 1,2007, has been deleted.
Lyondell commented that sites included in the chemical sector include a mix ofprocesses that
are difficult to compare with one another andtherefore, the commission should reallocate the program without using industry sectors. TPC commented thatthe chemical sectorincludes widely varying operations with varying HRVOC uses and throughput. COMAQ supports including a definition of"Industry sector" in the HECT definitions. COMAQ and Albemarle commented that the use ofindustry sectors is importantinthe reallocation methodology because sites in the same industry sectoruse similarHRVOC recovery and recycle activities that significantly affect HRVOC emissions, and prevent sites with significantly different industrial processes from competing for the same allowance pools.



### While the commission acknowledges that there will be some varying ofoperations within industry sectors, it contends that the use ofindustry sectors is important to establishing an equitable aUocation. The existing application ofBACT and otherfederal standards within industry sectors would assure a comparable cost ofcontrolwithin the industry sector, and the division ofthe cap into industry sector sharewould therefore reflect a more equitable allocation methodology. 

### In addition, the amount ofHRVOC productthatis recycled and recovered for sites within the same industry sector should be comparable due to market forces and competition within the sector. Sites within industry sectors that produce HRVOC as product share the economic incentive to reduce emissions using similar recovery techniques. The rules have been revised to include definitions ofthe industry sectors under §101.390.

34COMAQ supported revising the definition of"Uncontrolled emissions" to clarify the term "averagepercent control efficiency" for flares.



### Tbe commission appreciates tbe comment. Revisions to tbe definition of"Uncontrolled emissions" bave been made in response to comment and are discussed elsewbere in tbis preamble.
Lyondell and TPC expressed their concern regarding the proposed use offlare control efficiencies of99% for ethylene and propylene while allowing only 98% for all otherHRVOCs forthe detennination of"Uncontrolled emissions." Lyondell and TPC assertedthatthis would result in an inadequate allocation for sites with high butadiene and butane emissions as comparedto sites emitting primarily ethylene and propylene.



### Tbe commission respectfully disagrees witb tbe comment. Tbe control efficiencies specified in tbe rules for tbe determination of"Uncontrolled emissions" from flares are consistentwitb tbe Cbapter 115 specifications fortbe reporting ofHRVOC emissions from flares for sites subjectto tbeBECT program. Allowing sites to use control efficiencies differentfrom tbose specified for calculating actual emissions in Cbapter 115 would result in an allocation metbodology tbat is fundamentally inconsistentwitb HECT emissions reporting. BECT allocations undertbe rule are to be used to coveractual emissions reported in accordance witb Cbapter 115 requirements, and tberefore mustbe calculated using consistentmetbodologies. No cbanges were made in response to tbis comment.
Albemarle, TCC, and TPC commentedthat only HRVOC emissions from normal, routine, and pennitted operations be attributable to the calculation of"Uncontrolled emissions," and all emissions from emissions events subjectto the requirements of

### §lOl.201 are disallowed from
35being used for the determination ofHECT allowances.

The commission agrees and §101.394(a)(3) has been revised in response to this comment. Only emissions from routine permitted operations shall be applied to the calculation of "Uncontrolled emissions" and all emission subjectto §lO1.201 will not be applied for the determination ofallocations.

Alternative Baseline Provisions andEarly/AdditionalReduction Credit Lyondell and TCC strongly recommended thatthe commission expandthe defmition of "Uncontrolled emissions" to include the pre-control emissions that are routed to emission control devices, such as thermal oxidizers and other generally recognized HRVOC emissions control devices. TPC and TCC also recommended thatthe rule allow the use ofactual control efficiencies up to 99.9% when demonstrated and recorded during monitored stack performance testing. Total recommended the determination ofuncontrolled emissions should allow for the actual control efficiencies derived from performance or stacktesting orfrom the device manufacturer's specifications. Total statedthat allowing for control efficiencies greaterthan 99% when actual testing data is available would provide consistency between what sites report to the HECT program and the allocation methodology and will not penalize sites that have invested in over-control ofHRVOC emissions. Albemarle expressedtheir support for the provision in §101.390(9) applying control efficiencies for heaters, boilers, and furnaces as HRVOC control devices in the defmition ofuncontrolled emissions and recommends allowing control efficiencies forthermal oxidizers as well.

The commission agrees with the commenters and has revised §lOl.394(a)(3) to allow credit for control efficiencies for combustion devices used in HRVOC control, such as thermal, catalytic, and regenerative oxidizers. The rulemaking has also been revised to
36

### allow for control efficiencies up to 99.9% for applicable units. The commission will allow for the use ofcontrol efficiencies greaterthan 99% and up to 99.9% only for applicable units for which stackperformance testing data has been submitted by the owneror operatoras part oftheForm ECT-6H, Level ofActivity. Allocating allowances based on uncontrolled emissions using control efficiencies greaterthan 99.9% is impractical as it leads to large variations in allocations on an order ofmagnitude largerthan the highest allocations. The commission will therefore assign a 99.9% control efficiencyto any combustion unit that demonstrates an actual measured control efficiency greaterthan 99.9%.

TPC recommended thatthe commission correct the proposed allocation methodology by accounting for flare gas recovery, addressing control mechanisms on vent gas streams. TPC strongly recommended allowance allocation credit for flare gas recovery and similarcontrol strategies. Total statedthat allowance credit should be included for VaporRecovery Units (VRU) thatrecovers HRVOC emissions previously sentto a process flare. Total statedthat quantified HRVOC emission reductions achieved through the implementation ofa VRU should be added to a site's "Uncontrolled emissions" inthe equation under §I01.394(a)(1)(B) for the calculation ofthe site's allowance allocation.



### The commission actively solicited commenton accurate and effective methods for calculating allowance creditfor flare gas recovery, ventgas recovery, flare minimization, and other recovery and recycle mechanisms. The commission agrees with the commenters and has added §101.394(a)(3) to allow sites thatdo not request the use ofan alternative emissions baseline period to apply the actual quantified amountofHRVOC emissions reduced through the implementation offlare orventgas recovery to the site's uncontrolled emissions for the calculation oftheir allowance allocation.
37TCC and TPC expressedtheir supportfor the alternate baseline emissions period but recommended the deadline for the alternate baseline request be extended to 150 days afterthe rule effective date in orderto allow regulated entities ample time to prepare and submitthe request for review.



### The commission agrees with the commentand has revised the alternative baseline request submittal deadline to July 1,2010.
Lyondell expressed its supportfor the alternative baseline provision, butrequested thatthe potential alternative baseline period be expanded to include 2002

- 2005 and the qualifying reductions in HRVOC be revised from 50% or 50 tons to 25% or 25 tons. Total expressed support forthe alternative baseline provision, but statedthat the qualifications for use are too restrictive. Total requested that the commission allow for engineering calculations in lieu of continuous flow monitoring, as speciated flow monitoring was not required priorto 2006. Total also requested that the 50 tons or 50% reduction qualification provision be revised to 20 tons or 20% reductions. In addition, Total believes thatreductions driven by permit conditions, regulatory requirements, or consent decrees be included 

### in the provision.



### The commission has revised the qualifying reduction amount under §101.394(a)(I)(D)(ii) to anow sites that implemented permanent, voluntary, and quantifiable BRVOC emissions reductions in an amount equal to or greaterthan 25 tons ofsite-wide HRVOC emissions resulting in at least a 25% reduction ofthe site's total annual HRVOC emissions for sites

. that used continuous speciated flow rate monitoring ofHRVOC. The commission has

implemented these revisions in response to comment, howeverit maintains that the 25-ton reduction resulting in at least a 25% site-wide reduction in BRVOC qualification is


### 38

### necessary to ensurethat only sites implementing reductions that are significantto both the site and the total Barris County HRVOC cap be 

### considered for the provision. In addition, the qualification ofcontinuous speciated monitoring is critical to ensure thatthese reductions are quantified using monitoring techniques consistentwith those used under the currentBECT program. The consideration oflimiting the alternative baseline emissions period to two consecutive calendar-yearcontrol periods immediately preceding 2006

- 2009 baseline emissions period is necessary to ensure thatthe reductions considered occurred directly before the 2006 baseline period for the 1997 eight-hour attainment demonstration HGB SIP revision.

Albemarle and COMAQ expressed their opposition to any revisions to the defmition of "Baseline emissions period" and stated that it is critical thatthe restrictions on the qualifications for exceptions to the use ofthe baseline period be sufficiently restrictive to impose at leastthe
use ofcontinuous monitoring, voluntary and pennanent reductions. 

### In addition, Albemarle statedthat "site-by-site" evaluations shouldbe avoided to the extentpossible to avoid inequitable allocations and the potential for unwarranted advantages to sites given special consideration.



### The commission agrees with the commenters. The revisions to the alternative baseline emissions period qualifications, from a 50-ton total or 50% site-wide reduction to a 25-ton reduction that results in at leasta 25% site-wide reduction, is still consistentwith the commission's goal ofconsidering only the reductions that are significantto the site's overall emissions while having an impactin the total cap. In conjunction with this revision, the commission has retained the continuous monitoring qualifications and will 

### only considervoluntary and permanent reductions in HRVOC emissions.

39PL Propylene strongly supports the provision in §101.394(a)(1)(C) that allows the use ofan alternate baseline for sites not in operation from 2006

- 2009. PL Propylene requested that §101.394(a)(I)(C)(i) be revisedto state "this allocation is less than the HRVOC permit allowable limit in effect at the time the facility commences operation." In addition, PL Propylene requested that the alternative baseline emissions period be revised from any two consecutive calendar-year control periods from 2010

- 2012 to be any consecutive 24 months from 2010

- 2012.



### The commission agrees with the comments and the adopted rules have been revised in accordance with the requests.
TCC, TPC, and Albemarle statedthat they recommend emissions from emission events be removed from the calculation for reallocation and each site's "Uncontrolled emissions" should be based solely on actual emissions from routine operation. Albemarle statedthatthe inclusion ofemissions from emission events in the baseline emissions calculation unduly rewards emission events.



### The commission agrees with the comment and the definition of"Uncontrolled emissions" has been modified accordingly.

Emission EventSet-Aside TCC recommended thatproposed §101.396(c) and (d) be deleted from the rule in orderto eliminatethe proposed 250-ton emissions event set-aside. TCC stated thatthe elimination ofthe set-aside would maximize program flexibility and the benefits ofcap-and-trade. Albemarle, COMAQ, Lyondell, TCC, Total, and TPC also requested eliminatingthe 250-ton set-aside for emissions events. The commenters believe that emissions from emission events can best be
40handled through each site's allocation orthe purchase ofyearly allowances and the allocation of the additional 250 tons would provide for more flexibility. Albemarle requested the commission retain the emission eventreporting requirement under §101.396(c) and (d) due to the value of determining the impact ofemissions events on the HECT program. AmericanAcryl expressed its support forthe proposed 250-ton emissions event set aside orthe elimination ofemissions events from applicability to the program.



### In response to comment, the rule has been revised based on this commentto eliminate the 250-ton emissions event set-aside pool from §lOl.396(c). Emissions from emissions events will be 

### treated in the same manner as they are currently addressed in theBECT program. All emissions during emissions events from BECT subjectfacilities up to the short-term limits under §1l5.722(c) and §1l5.761(c) must be 

### covered by an equivalent amountof HRVOC allowances in each site's respective BECT account by March 1 afterthe end of the control period.

EPA requested clarification that emissions events that exceed the 250-ton set aside will be deducted from each site's account.



### The commission has revised the rulemaking to omitthe proposed emissions event setaside. All emissions from emissions events will be addressed in the same manneras they
are addressed currently under the BECT program.

EPA 5% Set-Aside TCC, Lyondell, TPC, andCOMAQ expressed theirpositions thatthe 5% set-aside to safeguard againstpotential emission variations is no longer necessary. TCC understood that industry originally agreed to this set-aside as a provisionto address new actual HRVOC emissions under
41the HECT program.



### The reduction in the overall HRVOC cap by an initial 5% was implemented as a compliance margin and not a provision for new HRVOC emissions. This compliance margin was a negotiated agreementwith EPA to address geographical emissionvariations,
orthe potential (oremissions "spiking," and will remain necessary after allowance reallocation. No changes were made in response to this comment.

Stream Trades andReallocation TCC expressed theirconcern with the nullification ofpurchased stream trades due to reallocation ofthe program. TCC.stated that the nullification ofpurchased allowance streams may adversely impactthe integrity ofemissions trading in Texas and may result in encouraging emissions. TCC stated the commission musttherefore honorpast streamtrades. Albemarle, Bigler, Kaneka, Lyondell, and TPC stated their opposition to the automatic voidance ofexisting HECT allowance stream trades due to reallocation. Albemarle proposed two alternatives to stream trade voidance, a set-aside pool, or incorporating stream trades into a site's "Uncontrolled emissions" calculation. ArnericanAcryl stated that any revised allocation methodology should not reduce a site's allocation below the amountfor which a site has traded
an allowance stream.



### The rules have been revised in response to these comments to allow sites that purchased allowance streams the potential to apply allowances (rom the stream to the calculation o( "Uncontrolled emissions" as actual emissions. Revised §101.394(a)(3)(E) allows sites holding stream trades to calculatetheir "Uncontrolled emissions" as the greateroftheir actual average emissions oftheir two highest emission years from 2006

- 2009 orthe sum oftheir original existingBECT HRVOC allowance and the amount ofthe allowance 

### 42

### stream in tons. In the event that a site's actual two highestyear emissions is less than the
sum oftheir original existing BECT HRVOC allowance and the amount ofthe allowance stream in tons, the difference shall be added to the "Uncontrolled emissions" as actual emissions. In addition, qualifying sites not in operation orwith HRVOC emissions that are not representative ofpermitted normal routine operation, due to an authorized modification that resulted in an HRVOC emission reduction during the baseline emissions period, may request from the executive director the use ofany allowance stream from facilities previously participating in theBECT program in lieu ofreaUocation until the alternate baseline emissions are established. Although the revised rule contains provisions allowing qualified sites to apply for credit for acquired allowance streams towards their allocation in 2011, BECT allowances allocated or acquired do not constitute property rights.

MinimumAllocation andOpt-In Provision TCC recommended that 

### § 101.394 be modified such that only sites with a PTE greaterthan or equal to ten tons and required to participate in the program receive a minimum allocation often tons. TCC stated that the "opt-in" provision should be eliminatedto allow for more allowances to be available for sites thatare required to participate in the program. TPC recommended sites that opted-in to the program receive a five-ton allocation and these sites with a PTE less than ten tons should be afforded the opportunity to opt-out. Lyondell commented thatthe opt-in provision from the existingrule be eliminated and opposes the use ofthe ten ton PTE minimum Lyondell requested that facilities that have reported less than five tons ofactual emissions should not be rewarded with additional allowances. Albemarle recommended increasing the minimum allowance allocation to ten tons and allowing sites with a PTE less than ten tons be allowed to "opt-out" ofthe program in a manner that allows any allowances that may have been allocated to these sites to be available to the remaining sites required to participate.


### 43AmericanAcryl expressed their support forthe ten-ton minimum allocation orto "freeze" all allocations below ten tons at the current allocation amount.

The rules have been revised in response to the comments. Sites with a PTE, as defined in §116.12, less than ten tons ofHRVOC are exempt from the BECT program and will not be given an allowance allocation. The existing opt-in deadline ofApril 30, 2005, has passed, no extension or additional opt-in provision has been adopted, and no sites took advantage ofthe 2005 provision. Therefore, no sites in Harris County with a PTE less than ten tons will participate in the BECT program and be assigned an HRVOC allocation. Participating sites with a calculated allocation ofless than five tons based on the revised allocation methodology wiD be allocated a minimum offive tons. Sites with a calculated allocation ofgreater than orequal to five tons but less than ten tons will receive a minimum allocation often tons. Sites provided the minimum allocation will not be subject to the stepdown provisions ofthe rules and will retain the minimum allocation in 2017 and beyond.
COMAQ, Lyondell, TCC, and TPC recommended that the submittal deadline ofthe Level of Activity Certification, FormECT-6H, be revised to Julyl, 2010, in orderto allow regulated entities sufficienttime to compile and submitthe necessary information.

The commission agrees with the comment and §101.401(t) has been revised accordingly.

GeneralRule Comments TCC requested that the rule language 

### in §101.392(b) be clarified to exclude the seven perimeter counties from the requirements ofthis division exceptfor §101.401(a)

- (e), as the submittal of the ECT-6H form is not required from sites 

### in these counties.
44

### The commission agrees with the commentand §101.392(b) has been revised as requested to clarifythe applicability of§101.392(b) exclusively to Harris County.
Albemarle, COMAQ, DuPont, and Sunoco expressed their supportfor a provision preventing HECT allowances being used in lieu ofFCCA, §185 fees.



### The commission appreciates the comment; however, this commentis outside the scope of this rulemaking.
COMAQ requested that §101.399(a)

- (c) be revised such thatthat vintage allowances allocated under §101.394(a)(1)(A) using the existing allocation methodology cannotbe banked ortraded afterthe 2010 calendar-year control period.



### The commission respectfully disagrees with the request. The commission does not intend to restrict the banking and trading ofallowances based on allocation methodology. The
use ofvintage 2010 allowances in the 2011 calendar-yearcontrol period will be 

### necessary to provide compliance flexibility during the first year underthe revised allocation methodology. All requests for allowance trades underForm ECT-2, Application for TransferofAllowances, mustbe approved by the executive director. No change has been made in response to this comment.
Albemarle, COMAQ, DuPont, and Sunoco strongly opposed any delay to the reallocation beyond the beginning ofthe 2011 calendar-year control period. Dupont stated that any delay to the reallocation would exacerbate the issues ofan already inequitable program and continue to provide a significant economic advantage to companies that were over-allocated under the
45existing program.



### The commission agrees with the comment and allowances will 

### be reallocated forthe calendar-yearcontrol period 2011. No changes have been made in response to this comment.

INEOS expressed its support forthe inclusion ofthe 2006 calendar-yearcontrol period in the baseline emissions period. INEOS pointed to the compliance requirements in Chapter 115 requiring the implementation ofHRVOC stream monitoring by December 31,2005, as justification that 2006 emissions data shouldbe as reliable as 2007

- 2009 data.



### The commission appreciates the comment. No changes were made in response to this comment. The baselineemissions period will continue to include the 2006 calendar-year control period.
Lyondell commentedthat errors in the 2006 Special Inventory, differentiation in facilities covered under each sector, and potential differences in reporting methodologies or assumptions will impactthe allocation ofallowances underthe proposed methodology. Lyondell provided the example ofvarious industry assumptions inthereporting ofHRVOC concentrations in fuel streams andwhetheremissions should be reportedwhen HRVOC concentrations are belowthe detection limit 

### in stack gas or whenthe concentration 

### in the fuel stream is less than 0.5%.



### The commission appreciates the comment. BECT participants will 

### have an opportunity to provide accurate emissions, control efficiencies, and otherrelevant data through the submission ofthe Form ECT-6H, Level ofActivity Certification. BRVOC stream monitoring for all applicable BECT sources has been required since December31,2005. 

### 46

### Allocations forthe 2011 calendar-year control period will be calculated using the most accurate monitoring and testing data available for emissions and control efficiencies during the baseline emission period.

HSC stated its preference for command and control regulation for HRVOC emissions 

### in Harris County, increasing the reductions 

### in the cap to 30%,35%, or40%, and speeding up the implementation ofthe rulemaking.



### Voidance ofthe BECT program and the implementation ofcommand and control emission specifications were not considered during proposal and are outside the scope of this rulemaking. The commission maintains that the BECT program is the most cost effective means ofachieving HRVOC emissions reductions while providing compliance flexibility and maximizing the efficiency ofemission reductions through market forces. Individual sources ofHRVOC emissions are subjectto permitlimits and any applicable limit as established by rule. The BECT program provides for additional decreases in HRVOC emissions limits above and beyond these basic requirements. This rulemaking is 

### part ofthe 1997 eight-hour attainment demonstration HGB 2010 SIP revision.**Reallo~ation** 

### ofthe program will take place in 2011, the first full calendar-yearcontrol period following adoption ofthe rules, and the 25% cap reduction will be fully realized at the beginning ofthe 2017 calendar-yearcontrol period, one full year before the 2018 attainmentyear. No changes were made in response to this comment.

STATUTORY AUTHORITY The amendment is adopted under Texas WaterCode (TWC), §5.102, concerning General Powers, thatprovides the commission with the general powers to carry out its duties underthe Texas Water Code; TWC, §5.103, concerning Rules, that authorizes the commission to adopt 

### 47rules necessary to carry out its powers and duties underthe Texas Water Code; TWC, §S.lOS, concerning General Policy, that authorizes the commission by rule to establish and approve all general policy ofthe commission; and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, that authorizes the commission to adoptrules consistentwith the policy and purposes ofthe Texas Clean AirAct. The amendment is also adopted underTHSC, §382.002, concerning Policy and Purpose, that establishes the commission's purposeto safeguard the state's airresources, consistentwith 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 propercontrol ofthe state's air. The amendment is also adopted underTHSC, §382.016, concerning Monitoring Requirements; Examination ofRecords, that authorizes the commission to prescribe reasonable requirements for the measuring and monitoring ofair contaminant emissions. The amendmentis also adopted underFederal Clean AirAct (FCAA), 42 United States Code (USC), §§7401, 

### etseq., which requires states to submit state implementationplan revisions that specify the manner in whichthe National AmbientAir Quality Standard will be achieved and maintained within each air quality control region ofthe state.

The adopted amendment implements THSC, §§382.002, 382.011, 382.012, 382.016, and 382.017, FCAA, 42 USC, §§7401 

### etseq.

48