[Federal Register Volume 60, Number 103 (Tuesday, May 30, 1995)]
[Rules and Regulations]
[Pages 28055-28060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13118]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[CO9-3-5603; FRL-5201-9]


Approval and Promulgation of Air Quality Implementation Plans; 
Colorado; Regulation 7

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving revisions to the Colorado Ozone State 
Implementation Plan (SIP) submitted by the Governor on September 27, 
1989, and August 30, 1990. The revisions consisted of amendments to 
Regulation No. 7, ``Regulation To Control Emissions of Volatile Organic 
Compounds.'' In its review of the September 27, 1989 State submittal, 
EPA identified several areas where the regulation still did not meet 
EPA requirements. On August 30, 1990, the State submitted additional 
revisions to Regulation No. 7 to address these deficiencies. This 
Federal Register action applies to both of these submittals. The 
amendments were made to conform Regulation No. 7 to federal 
requirements, and to improve the clarity and enforceability of the 
regulation. EPA's approval will serve to make the revisions federally 
enforceable and was requested by the State of Colorado.

EFFECTIVE DATE: This action will be effective on June 29, 1995.

ADDRESSES: Copies of the documents relevant to this action are 
available for public inspection between 8 a.m. and 4 p.m., Monday 
through Friday at the following office:
    United States Environmental Protection Agency, Region VIII, Air 
Programs Branch, 999 18th Street, Suite 500, Denver, Colorado 80202-
2466.

FOR FURTHER INFORMATION CONTACT: Tim Russ, Air Programs Branch (8ART-
AP), United States Environmental Protection Agency, Region VIII, 999 
18th Street, Suite 500, Denver, Colorado 80202-2466, (303) 293-1814.

SUPPLEMENTARY INFORMATION: Section 110(a)(2)(H)(i) of the Clean Air Act 
(CAA), as amended in 1990, provides the State the opportunity to amend 
its SIP from time to time as may be necessary. The State is utilizing 
this authority of the CAA to update and revise existing regulations 
which were promulgated pursuant to section 172 of the pre-amendment Act 
and are a part of the current SIP. In addition, these submittals are in 
fulfillment of the RACT requirement of amended section 172.

I. Background

    On March 3, 1978, EPA designated the Denver-Boulder metropolitan 
area as nonattainment for the National Ambient Air Quality Standards 
(NAAQS) for ozone (43 FR 8976). This designation was reaffirmed by EPA 
on November 6, 1991 (56 FR 56694) pursuant to section 107(d)(1) of the 
CAA, as amended in 1990. Furthermore, since the Denver-Boulder area had 
not shown a violation of the ozone standard during the three-year 
period from January 1, 1987 to December 31, 1989, the Denver-Boulder 
area was classified as a ``transitional'' ozone nonattainment area 
under section 185A of the amended Act. In order to meet the Reasonably 
Available Control Technology (RACT) requirements of the CAA, 
transitional areas must correct any RACT deficiencies regarding 
enforceability.
    The current Colorado Ozone SIP was approved by EPA in the Federal 
Register on December 12, 1983 (48 FR 55284). The SIP contains 
Regulation No. 7 (Reg. 7), which applies RACT to stationary sources of 
Volatile Organic Compounds (VOC). Reg. 7 was adopted to meet the 
requirements of section 172(b) (2) and (3) of the 1977 CAA (concerning 
the application of RACT to stationary sources <SUP>1.) However, the 
approved Ozone SIP did not rely on the emissions reduction credit that 
Reg. 7 would produce in order to demonstrate attainment; rather, the 
SIP relied only on mobile source controls in order to demonstrate 
attainment.

    \1\ The requirement to apply RACT to existing stationary sources 
of VOC emissions was carried forth under the amended Act in section 
172(c)(1).
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    During 1987 and 1988, EPA Region VIII conducted a review of Reg. 7 
for consistency with the Control Techniques Guidelines documents (CTGs) 
and regulatory guidance, for enforceability and for clarity. The CTGs, 
which are guidance documents issued by EPA, set forth measures that are 
presumptively RACT for specific categories of sources that emit VOCs. A 
substantial number of deficiencies were identified in Reg. 7. In 1987, 
EPA published a proposed policy document that included, among other 
things, an interpretation of the RACT requirements as they applied to 
VOC nonattainment areas (52 FR 45044, November 24, 1987, Post-87 
Policy). On May 25, 1988, EPA published a guidance document entitled 
``Issues Relating to VOC Regulation Cutpoints, Deficiencies, and 
Deviations, Clarification to Appendix D of the November 24, 1987 
Federal Register Notice'' (the ``Blue Book''). A review of Reg. 7 
against these documents uncovered additional deficiencies in the 
regulation.
    On May 26, 1988, EPA notified the Governor of Colorado that the 
Carbon Monoxide (CO) SIPs for Colorado Springs and Fort Collins were 
inadequate to achieve the CO NAAQS. In that letter, EPA also notified 
the Governor that the Ozone SIP had significant deficiencies in design 
and implementation, and requested that these deficiencies be remedied. 
EPA did not make a formal call for a revised Ozone SIP in the May 1988 
letter,<SUP>2 even though the Denver-Boulder area was, 
[[Page 28056]] and continues to be, designated nonattainment for ozone. 
The reason for this decision was that no violations of the ozone NAAQS 
had been recorded in the nonattainment area for the previous three 
years. However, EPA indicated that the deficiencies, if uncorrected, 
could jeopardize the area's ability to obtain eventual redesignation as 
an attainment area for ozone.

    \2\ Under the pre-amended Act, EPA had the authority under 
section 110(a)(2)(H) to issue a ``SIP Call'' requiring a State to 
correct deficiencies in an existing SIP. Section 110(a)(2)(H) was 
not modified by the 1990 Amendments. In addition, the amended Act 
contains new section 110(k)(5) which also provides authority for a 
SIP Call.
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1. 1989 SIP Revision Submittal

    In a letter dated September 27, 1989, the Governor of Colorado 
submitted revisions to Reg. 7 to partially address EPA's concerns with 
the Ozone SIP. A detailed description of the specific revisions to the 
regulation is contained in the Docket for this Federal Register 
document. Revisions were made to the following sections of Reg. 7:

7.I  Applicability
7.II  General Provisions
7.III  General Requirements for Storage and Transfer of Volatile 
Organic Compounds
7.IV  Storage of Highly Volatile Organic Compounds
7.V  Disposal of Volatile Organic Compounds
7.VI  Storage and Transfer of Petroleum Liquid
7.VIII  Petroleum Processing and Refining
7.IX  Surface Coating Operations
7.X  Use of Solvents for Degreasing and Cleaning
7.XI  Use of Cutback Asphalt
7.XII  Control of VOC Emissions from Dry Cleaning Facilities Using 
Perchloroethylene As a Solvent
7.XIII  Graphic Arts
7.XIV  Pharmaceutical Synthesis
7.XV  Control of Volatile Organic Compound Leaks from Vapor 
Collection Systems Located At Gasoline Terminals, Bulk Plants, and 
Gasoline Dispensing Facilities
Appendix A  Criteria for Control of Vapors from Gasoline Transfer to 
Storage Tanks
Appendix B  Criteria for Control of Vapors from Gasoline Transfer at 
Bulk Plants (Vapor Balance System)
Appendix D  Test Procedures for Annual Pressure/Vacuum Testing of 
Gasoline Transport Trucks

    In addition, the following new emission sources and appendices were 
added to Reg. 7:

7.IX.A.7  Fugitive Emission Control
7.IX.N.  Flat Wood Paneling Coating
7.IX.O.  Manufacture of Pneumatic Rubber Tires
7.XI.D.  Coal Tar
Appendix E  Emission Limit Conversion Procedure

    In a letter dated September 27, 1989, the Governor of Colorado 
submitted revisions to Reg. 7 to address EPA's concerns with how the 
State was addressing RACT for major non-CTG sources of VOC. A detailed 
description of the specific revisions to the regulation is contained in 
the Docket for this Federal Register document. In summary, Section 
7.II.C. of Reg. 7 applies this new non-CTG RACT requirement to sources 
not specifically covered by the regulation as follows:
    (a) Sources with actual emissions of 100 tons per year or more of 
VOCs must apply RACT.
    (b) Sources with potential emissions of 100 tons per year or more 
of VOCs, but with actual emissions of less than 100 tons per year, may 
avoid having to apply RACT by obtaining a federally enforceable permit 
to limit production or hours of operation to keep actual emissions 
below 100 tons per year.
    (c) Sources with potential emissions of 100 tons per year or more 
of VOCs, but with actual emissions of less than 50 tons per year on a 
12-month rolling average, may avoid RACT and permit requirements by: 
(1) Submitting a report each year demonstrating that the 50 tons per 
year threshold has not been exceeded and (2) maintaining monthly 
records of VOC usage and emissions to enable the State to verify these 
reports.
    EPA is approving section 7.II.C. of the State's rules for its 
strengthening effect on the SIP.

2. 1990 SIP Revision Submittal

    In general, the revised Reg. 7 ( as submitted by the Governor on 
September 27, 1989) met the CAA requirements, which were interpreted in 
the CTGs, the Blue Book, and the Post-87 Policy. However, in its 
review, EPA identified two remaining issues where the regulation was 
not consistent with EPA guidance: A. The compliance schedule, and B. 
Clarification of the Graphic Arts definition for potential to emit. 
These remaining two issues were addressed by the State in its August 
30, 1990 submittal.
    In a letter dated August 30, 1990, the Governor of Colorado 
submitted revisions to Reg. 7 to address EPA's remaining concerns with 
the September 27, 1989 Ozone SIP revision. A detailed description of 
the additional specific revisions to Reg. 7 is contained in the Docket 
for this Federal Register document. Revisions were made to the 
following sections of Reg. 7:

7.I  Applicability
7.XI  Use of Cutback Asphalt
7.XIII  Graphic Arts

    A. Compliance Schedule: Reg. 7 did not contain an explicit deadline 
for compliance with the revised regulation. In response to EPA 
comments, the State adopted additional revisions (Section 7.I.B. and 
7.I.C.) to Section 7.I. (Applicability) of Reg. 7, requiring all 
sources to come into compliance with the revised Reg. 7 by October 30, 
1991.
    B. Graphic Arts definition: The Graphic Arts definition of 
potential to emit, contained in Section 7.XIII.A.2. of Reg. 7, was 
somewhat unclear. The definition referenced the EPA requirement that 
potential to emit be determined at maximum capacity before control (per 
the Appendix D Clarification document), but also included a requirement 
that potential emissions be based on historical records of solvent and 
ink consumption (per the previous regulatory guidance document, 
Guidance to State and Local Agencies in Preparing Regulations to 
Control Volatile Organic Compounds from Ten Stationary Source 
Categories, September, 1979). As a result, the definition could have 
been interpreted to require potential to emit to be calculated at both 
maximum and historical operating rates, which in most cases will be 
different. The Reg. 7 revisions, submitted by the Governor on August 
30, 1990, addressed this concern by not including a reference to the 
historical records.
    C. Capture Efficiency: As a final issue, on January 13, 1992, EPA 
notified the State that, prior to proposing this action, it was 
necessary to document the State's position with regard to capture 
efficiency (CE) determination. The CE provision adopted by the State in 
Section IX.A.5.e of Reg. 7 does address the requirement that testing 
for CE be performed on a case-by-case basis, and that this testing be 
consistent with EPA guidance. In a letter dated February 5, 1992, from 
John Leary, Acting Director, Colorado Air Pollution Control Division, 
to Douglas Skie, Chief, Air Programs Branch, EPA Region VIII, the State 
committed to adopt and use all new CE methods as they are developed and 
promulgated by EPA's rule-making process. In that same letter, the 
State indicated that until changes are promulgated, the Air Pollution 
Control Division will use the CE protocols that were published by EPA 
on June 29, 1990 (55 FR 26814, codified at 40 CFR 52.741(a)(4)(iii) and 
Appendix B).
    Due to additional information received after the adoption of 
revisions to Reg. 7 in September, 1989, the State reconsidered its 
regulation of coal tar under Section 7.XI. (Use of Cutback Asphalt). In 
revisions submitted on August 30, 1990, Section 7.XI.D., covering coal 
tar, was deleted. Regulation of coal tar is not covered by the CTG for 
cutback asphalt use; EPA believes that it is not needed to meet the 
RACT requirement of the CAA.
    In this action, EPA is also approving the State's VOC definition as 
submitted in the 1989 and 1990 revisions to Reg. 7. However, on 
February 3, 1992, EPA [[Page 28057]] published a revised definition of 
volatile organic compounds (57 FR 3941). This definition was further 
revised on October 5, 1994, (59 FR 50693) and became effective on 
December 5, 1994. EPA's definition excludes a number of organic 
compounds from the definition of VOC on the basis that they are of 
negligible reactivity and do not contribute to tropospheric ozone 
formation. The State's definition excludes some, but not all, of these 
compounds. Therefore, the State's definition of VOC provides for the 
regulation of some compounds which are no longer considered VOCs by 
EPA. In light of EPA's most recent definition of VOC, EPA will not 
enforce against sources for failure to control the emission of 
compounds that are exempt from the federal VOC definition. EPA has 
informed the Region VIII States of the revised definition of VOC and 
has requested that future SIP revisions reflect the most recent federal 
VOC definition.
    This action was previously published as a Direct Final Rule on June 
26, 1992 (57 FR 28614). This Direct Final Rule was withdrawn on August 
12, 1992 (57 FR 36004) as EPA Region VIII received a letter, dated July 
16, 1992, from William Owens, Executive Director of the Colorado 
Petroleum Association (CPA), to Jeff Houk of EPA Region VIII, 
expressing adverse comments. EPA published a Proposed Rule on November 
16, 1994 (59 FR 59189) proposing approval of these revisions to Reg. 7. 
Comments regarding the November 16, 1994, Proposed Rule were received 
from Stanley Dempsey Jr. on behalf of the Colorado Association of 
Commerce and Industry (CACI). These comments, in addition to those 
received earlier, are hereby addressed in this Final Rule as follows:
    CPA Comment 1: In its first comment, CPA states that ``EPA was 
required by the amended Clean Air Act to determine by June 30, 1992, 
whether the transitional area had attained the NAAQS. EPA failed to 
issue this determination by the required date. This determination will 
re-establish the purpose of the SIP and, therefore, should be 
considered prior to any SIP approval. At a minimum, the SIP approval 
should be proposed to allow the opportunity for comment based on the 
required determination of current attainment status.''
    Response to CPA Comment 1: As indicated in the proposed rule for 
this action (59 FR 59189, dated November 16, 1994), EPA had previously 
reviewed the available ambient air quality data. In a letter dated 
October 22, 1992, from Jack McGraw, EPA Region VIII Acting Regional 
Administrator, to Governor Roy Romer, EPA advised the State that the 
Agency had reviewed the ambient air quality data which had been entered 
by the State into the Aerometric Information and Retrieval System 
(AIRS) national database. EPA further advised that these data indicated 
that the Denver-Boulder metropolitan transitional ozone nonattainment 
area had not violated the ozone NAAQS during the period beginning 
January 1, 1987, and ending December 31, 1991. EPA's October 22, 1992, 
letter was not a determination that the Denver-Boulder nonattainment 
area had met the CAA's section 107(d)(3)(E) criteria for redesignation 
to attainment, but rather served as an affirmation that no violation of 
the ozone standard for this area was found. EPA cannot make a 
determination under section 107(d)(3)(E) until the State submits a 
complete redesignation request and maintenance plan. One criterion for 
redesignation to attainment for transitional ozone nonattainment areas, 
is that to satisfy section 172(c)(1), transitional areas must ensure 
that any deficiencies regarding enforceability of an existing RACT rule 
are corrected (refer to 57 FR 13525 dated April 16, 1992).
    CPA Comment 2: In its second comment, CPA states ``In addition, the 
basis for the EPA's determination of deficiencies in Regulation No. 7 
is based on the ``Post-87'' policy which includes the proposed policy 
regarding the application of RACT in non-attainment areas. CPA 
questions the application of this policy to areas designated 
transitional under the amended Clean Air Act.''
    Response to CPA Comment 2: The Denver-Boulder area, while 
classified as transitional, continues to be a designated ozone 
nonattainment area. Therefore, the Post-87 policy retains its validity 
for the Denver-Boulder area. Although the Denver-Boulder transitional 
ozone nonattainment area was not subject to the RACT fix-up 
requirement, section 182(a)(2)(A), of the amended CAA, the RACT 
requirement of section 172(c)(1) is applicable. Pursuant to that 
provision, EPA has determined that it is necessary for the State to 
correct previously identified significant deficiencies in design, 
implementation and enforcement in the provisions of Reg. 7.
    In a letter dated May 26, 1988, from James Scherer, Regional 
Administrator for EPA Region VIII, to Governor Roy Romer, EPA notified 
the State that the Carbon Monoxide SIPs for Colorado Springs and Fort 
Collins were inadequate to achieve the CO NAAQS. In that same letter, 
EPA also notified the Governor that the Ozone SIP for the Denver-
Boulder metropolitan area had significant deficiencies in design and 
implementation and requested that those deficiencies be remedied. These 
specific deficiencies were subsequently documented to the State in a 
letter, dated June 17, 1988, from Irwin L. Dickstein, Director of the 
Air and Toxics Division for EPA Region VIII, to Thomas M. Vernon Jr. 
M.D., the Executive Director of the Colorado Department of Health. The 
General Preamble to Title I of the 1990 amended CAA (57 FR 13525, dated 
April 16, 1992) reaffirmed EPA's RACT policy. It provides that to 
satisfy requirements in section 172(c)(1) of the CAA (``NONATTAINMENT 
PLAN PROVISIONS IN GENERAL''), transitional ozone nonattainment areas 
must ensure that any deficiencies regarding enforceability of an 
existing rule are corrected. The General Preamble to Title I continues 
by stating that States should be aware that in order to be redesignated 
to attainment, such transitional ozone nonattainment areas need to 
correct any RACT deficiencies regarding enforceability prior to 
redesignation. For the reasons stated above, EPA believes that the 1989 
and 1990 revisions to Reg. 7 that have been adopted by the State, are 
necessary in order to ensure that the RACT requirements of the CAA are 
met.
    CPA Comment 3: In its third comment, CPA states ``The provisions 
for application of RACT under the revisions to Regulation No. 7 will 
have a direct impact on CPA's membership. Such revisions may not be 
needed to demonstrate maintenance of the ozone NAAQS and may result in 
unreasonable requirements in light of current regulatory 
developments.''
    Response to CPA Comment 3: EPA is convinced that the revisions to 
Reg. 7 strengthen the Ozone SIP and are necessary for the Denver-
Boulder metropolitan area to continue to achieve the ozone NAAQS as the 
area continues to experience the significant growth which has occurred 
in the past few years. EPA believes the benefits from the 1989 and 1990 
revisions to Reg. 7 are likely contributing to the improvement in ozone 
levels that have been observed when compared to prior years. However, 
the ambient air quality data in AIRS indicates there were still ozone 
NAAQS exceedences in 1989 (0.130 ppm) and 1993 (0.128 ppm) with near-
exceedence values in 1990 (0.120 ppm) and 1992 (0.123 ppm). The above 
values do appear to be improving, however, when compared to the 28 
ozone NAAQS exceedences that were observed from 1980 through 1988. 
[[Page 28058]] 
    CACI Comment 1: In its first comment, CACI states ``The Denver-
Boulder area has not exceeded the ozone National Ambient Air Quality 
Standards since 1987. The current SIP has, therefore, appropriately 
allowed the area to attain the NAAQS. Therefore, there is no need for 
more stringent control of stationary source emissions of volatile 
organic compounds (VOC).''
    Response to CACI Comment 1: CACI's comment is not correct. Based on 
data archived in the AIRS national database, the Denver-Boulder ozone 
nonattainment area has exceeded the ozone NAAQS as follows: 1988 
(twice, 0.125 ppm and 0.136 ppm), 1989 (0.130 ppm), and 1993 (0.128 
ppm). Although exceedences of the ozone standard have been recorded, 
EPA believes that the 1989 and 1990 revisions to Reg. 7 likely 
contributed to the decreased frequency of exceedences after 1990 and 
the fact that the Denver-Boulder nonattainment area has not violated 
the ozone standard.
    CACI Comment 2: In its second comment, CACI provides an ozone 
emission inventory, whose source is not referenced, of ``Mobile 
sources, Minor stationary sources, Consumer products, and Major point 
sources.'' CACI then states ``Major stationary sources contribute only 
ten percent to an approximate daily inventory of 200 tons per day. 
Attachment 4 shows the Denver VOC emissions contributions. We question 
why Reg 7 is a SIP requirement for stationary sources, whose daily 
contribution is minor compared to mobile sources, while mobile sources 
have little or no control.''
    Response to CACI Comment 2: Under both the pre-amended Act and the 
Act as amended in 1990, certain stationary sources are required to 
implement RACT. The purpose of the 1989 and 1990 revisions to Reg. 7 
was that EPA required the State to correct identified concerns within 
Reg. 7, which was already part of Colorado's SIP, that involved 
significant design, implementation, and enforceability problems. With 
regard to the CACI provided emissions inventory, EPA cannot validate 
this emissions inventory as, to date, no current ozone emissions 
inventory has been submitted by the State. Correspondence in EPA's 
files indicates the State prepared a preliminary ozone emission 
inventory in 1987-1988, which was submitted to EPA in 1989. This 
inventory was not finalized. CACI's comment implies that mobile sources 
have little or no control of emissions. EPA disagrees as Colorado has 
had an inspection and maintenance program, for on-road vehicles, since 
1983. This program was replaced with an enhanced inspection and 
maintenance program which began implementation on January 1, 1995. 
Also, mobile source emission reductions have been realized with the 
implementation of Federal Motor Vehicle Control Programs (FMVCP).
    CACI Comment 3: CACI's third comment states ``The current Colorado 
Ozone SIP was approved by EPA in 1983 (48 FR 55284). The SIP contains a 
1981 version of Reg 7 which applies RACT to stationary sources of VOC. 
The approved Ozone SIP did not rely on the emissions reduction credit 
that Reg 7 would produce in order to demonstrate attainment; rather, 
the SIP relied only on mobile source controls in order to demonstrate 
attainment. There is no ozone attainment demonstration which requires 
any Reg 7 emission reductions from stationary sources, based on our 
information and belief. Therefore, there is no demonstrated need for a 
more stringent revision to the Ozone SIP.''
    Response to CACI Comment 3: The reader is referred to EPA's 
response to CPA Comment 2 above as it is directly applicable to CACI's 
Comment 3. It should be noted that the Denver-Boulder ozone 
nonattainment area exceeded the ozone NAAQS 25 times during the years 
1981 through 1988. This fact was also considered when EPA sent the 
Governor the May 16, 1988, letter referenced above. Therefore, although 
the 1981 attainment demonstration relied solely on the mobile source 
controls, the Denver-Boulder area failed to attain the ozone standard 
in accordance with that demonstration. In addition, the Denver-Boulder 
area retained its nonattainment designation under the amended CAA and 
EPA believes the continued applicability of the RACT requirement makes 
it necessary for the State to correct existing deficiencies in its RACT 
rules.
    CACI Comment 4: CACI's fourth comment states ``The current Ozone 
SIP contains a definition of VOC that was based on a threshold vapor 
pressure of 0.1 mm Hg vapor cutoff. EPA modified this definition of VOC 
(40 CFR 51.100(s)) in 1988. The current Ozone SIP approval of Reg 7 was 
written with the 0.1 mm Hg vapor cutoff in mind as de minimis 
threshold. In 1991 the AQCC modified the VOC definition in Colorado 
Regulations, which inadvertently removed the Reg 7 de minimis 
threshold. A comparison of other state's de minimis voc thresholds is 
shown in Attachment 1. A comparison of other state's de minimis size 
cutoffs and vapor pressure cutoffs is shown in Attachment 2. An example 
of the extreme cost and minimal air quality benefit of Reg 7 without 
correcting the inadvertent error of eliminating the de minimis cutoffs 
is shown in Attachment 3. Therefore, revising the Ozone SIP by adopting 
the 1989 and 1990 Reg 7 submittal is without legal basis and is more 
stringent than EPA requires or the AQCC intended.''
    Response to CACI Comment 4: As an initial matter, EPA cannot 
disapprove a SIP revision merely because it may be more stringent than 
required by the CAA. See CAA section 116. Similarly, EPA cannot 
unilaterally determine that a rule will have a more stringent effect 
than the State intended and rely on such a determination for 
disapproval. With respect to the comment that there is no legal basis, 
EPA notes that EPA's approved definition of a Volatile Organic Compound 
(VOC) is found in 40 CFR Part 51, Subpart F--Procedural Requirements, 
at 51.100 Definitions, (s) Volatile organic compounds (VOC). In 
51.100(s), a VOC is defined as ``. . . any compound of carbon, 
excluding . . . which participates in atmospheric photochemical 
reactions.'' As stated in 40 CFR 51.100(s), a VOC is defined based upon 
atmospheric photochemical reactivity. There is no provision for a VOC 
to be defined, or exempted, based upon vapor pressure. This vapor 
cutoff provision was rescinded by EPA in 1988, as such a definition for 
VOCs would exempt compounds of low volatility, which, under certain 
processes, could volatilize and, therefore, participate in atmospheric 
photochemical reactions (refer to EPA's ``ISSUES RELATING TO VOC 
REGULATION CUTPOINTS, DEFICIENCIES, AND DEVIATIONS, Clarification to 
Appendix D of [the] November 24, 1987 Federal Register'', dated May 25, 
1988 and revised November 11, 1990. This document is more commonly 
referred to as the ``Blue Book''). The only acceptable method to exempt 
a carbon compound from being classified as a VOC is that it must be 
determined that the compound has negligible photochemical reactivity 
(refer to 40 CFR 51.100(s)(1), (2), (3), and (4)).
    As stated above and in the proposed rule (59 FR 59189) for this 
action, EPA is approving the State's VOC definition as submitted in the 
1989 and 1990 revisions to Reg. 7. However, on February 3, 1992, EPA 
published a revised definition of volatile organic compounds (57 FR 
3941) with a further revision on October 5, 1994 (59 FR 50693, 
effective December 5, 1994). The definition excludes a number of 
organic compounds from the definition of VOC on the basis that they are 
of negligible [[Page 28059]] reactivity and do not contribute to 
tropospheric ozone formation. The State's definition excludes some, but 
not all, of these compounds. Therefore, the State's definition of VOC 
provides for the regulation of some compounds which are no longer 
considered VOCs by EPA. In light of EPA's most recent definition of 
VOC, EPA will not enforce against sources for failure to control the 
emission of compounds that are exempt from the federal VOC definition.
    CACI Comment 5: CACI's fifth comment states ``The 1989 Reg 7 
rulemaking which took place over five years ago did not anticipate the 
lack of de minimis thresholds for a federally enforceable condition. 
Upon information and belief, since 1988 there has been no ozone 
attainment demonstration to examine the impact of this revised Reg 7 on 
our area, i.e., do not know the need for or the impact of Reg 7. 
However, now that the program is largely self-administering, if Reg 7 
becomes a federally enforceable condition, CACI believes many sources 
in the Denver-Boulder area will be out of compliance with their Title V 
permits. Therefore, without knowing the impacts of revised Reg 7, we 
are putting Denver-Boulder industry at risk of enforcement action. To 
prevent this result, we propose the submittal be delayed until the AQCC 
can address this issue through rulemaking.''
    Response to CACI Comment 5: EPA does not understand CACI's comment 
that the 1989 rulemaking did not anticipate the lack of de minimis 
thresholds. EPA believes that the 1989 and 1990 revisions to Reg. 7 
contain ``de minimis thresholds'' in that exemptions and/or 
applicability thresholds do appear in Sections II., III., IV., VI., 
VII., VIII., IX., X., XI., XII., XIII., XIV., and XV. of Reg. 7. These 
exemptions and applicability thresholds were developed by the State and 
determined appropriate in consideration of the RACT requirement of the 
CAA and EPA policy and guidance. With respect to enforcement, EPA notes 
the 1989 and 1990 revisions to Reg. 7 were legally adopted by the 
State. Therefore, as stated in Section I. ``APPLICABILITY, B., 2. 
Existing Sources, c.'' of the revised Reg. 7, all applicable existing 
sources were required to be in compliance with Reg. 7 on or after 
October 30, 1991. Additionally, Section I. ``APPLICABILITY, B., 1. New 
Sources'' provides that ``New sources, defined as any sources which * * 
* commence operation on or after October 30, 1989, must comply with the 
provisions of this regulation upon commencement of operation.'' Based 
on the above, the 1989 and 1990 revisions have been State-enforceable 
since November 1, 1991, for existing sources, and November 1, 1989, for 
new sources. Therefore, the impacts from the enforcement of the 1989 
and 1990 revisions to Reg. 7 have already been realized by applicable 
sources in the Denver-Boulder area.
    It is unclear to EPA the intent of CACI's statement that sources 
would be out of compliance with their Title V permits when EPA fully 
approves the 1989 and 1990 revisions to Reg. 7. The Title V permits 
will not include any new VOC control requirements, but they will 
include all federally enforceable requirements and State enforceable 
requirements. As stated above, compliance with Reg. 7 should have 
already occurred as existing sources and new sources were required to 
comply with the applicable provisions of Reg. 7 since November 1, 1991, 
and November 1, 1989, respectively. Moreover, to the extent that these 
new requirements are not included in a Title V permit that has been 
issued prior to the effective date of this final action, the approval 
of these requirements into the SIP will not in and of itself render 
such a source out of compliance with its Title V permit. However, 
consistent with 40 CFR 70.7(f)(1)(i), a source with three or more years 
remaining on the term of its permit would need to reopen the permit to 
incorporate these requirements, while a Title V source with less than 
three years remaining on the permit could incorporate them at renewal. 
Finally, EPA does note, however, that sources which are subsequently 
discovered, during the process of applying for a Title V permit, that 
are not complying with the applicable provisions of Reg. 7, may receive 
an enforcement action by either the State or EPA depending upon the 
situation.
    Also, approval by EPA of the 1989 and 1990 revisions to Reg. 7 
additionally make these revisions federally enforceable and officially 
revises and updates the State's SIP.
    CACI Comment 6: In its sixth comment, CACI states ``Finally, EPA's 
approval of Reg 7 without de minimis thresholds does not meet the 
spirit of President Clinton's Common Sense Initiative, and it is 
inconsistent with the Economic Incentive Program (EIP) Rule. CACI urges 
the AQCC and EPA to review Reg 7 to determine proper de minimis 
threshold provisions prior to adopting Reg 7 into the SIP.''
    Response to CACI Comment 6: As stated above in EPA's response to 
CACI's Comment 5, the 1989 and 1990 revisions to Reg. 7 contain ``de 
minimis thresholds'' in that exemptions and/or applicability thresholds 
appear in Sections II., III., IV., VI., VII., VIII., IX., X., XI., 
XII., XIII., XIV., and XV. of Reg. 7. These exemptions and 
applicability thresholds were developed by the State and determined 
appropriate in consideration of the RACT requirement of the CAA and EPA 
policy and guidance. EPA also participated in the development and 
review of these revisions to Reg. 7 and has determined the 1989 and 
1990 Reg. 7 revisions to the SIP to be fully federally approvable.
    EPA disagrees with the CACI statement that approval of the 1989 and 
1990 revisions to Reg. 7 is inconsistent with the EIP rules. The 1989 
and 1990 Reg. 7 revisions were required by EPA to address design, 
implementation, and enforceability problems with Reg. 7. The EIP rules, 
promulgated on April 7, 1994 (59 FR 16710), and codified at 40 CFR Part 
51, ``Subpart U-Economic Incentive Programs'', do not determine source 
specific or category specific RACT requirements. Instead, the EIP rules 
set forth an alternative program, in this particular reference, for 
implementing new and/or previously existing RACT requirements through 
emissions trading (reference 40 CFR 51.493). EIPs were required as a 
SIP revision for certain ozone and carbon monoxide nonattainment areas 
as indicated in sections 182(g)(3), 182(g)(5), 187(d)(3), and 187(g) of 
the CAA. The Denver-Boulder transitional ozone nonattainment area was 
not required to submit an EIP. EPA notes, however; as provided in 40 
CFR 51.490(b), the Denver-Boulder area may elect to submit a 
discretionary EIP revision to the Colorado SIP.
    CACI Comment 7: In its seventh comment CACI states ``The Denver-
Boulder area, as indicated above, has had no exceedences of the ozone 
standard since 1987. The area is designated transitional and it is 
subject to redesignation as attainment. In the `Background' statements 
to the proposed rule (59 FR 59191) EPA states: `For a maintenance plan 
to be approved and the Denver-Boulder metropolitan area to be 
redesignated as attainment pursuant to section 107(d)(3)(E), the State, 
may have to develop specific RACT regulations for major non-CTG 
sources. Information available to EPA suggests that there has been 
growth in emissions from some non-CTG sources in the area; RACT 
regulations for these sources may be necessary to ensure maintenance of 
the NAAQS for the initial 10-year redesignation attainment period, as 
is required by section 175A of the ACT.' CACI asks that EPA not act on 
the Governor's 1989 and 1990 proposal until after a request for 
redesignation is submitted so that [the] current Reg 7 can 
[[Page 28060]] be reviewed and modified as part of the maintenance 
plan.''
    Response to CACI Comment 7: The reader is referred to EPA's 
responses to CACI's Comment 1 and CPA's Comment 2. In addition, EPA 
notes that it does not have the discretion to unilaterally withhold 
action on the submittals of the 1989 and 1990 Reg. 7 revisions until 
the State submits its redesignation request and maintenance plan. EPA 
will work with the State in developing its redesignation request and 
maintenance plan, if so requested, to determine if any modifications to 
Reg. 7 are legally supported.

Final Action

    EPA is approving Colorado's Ozone SIP revisions, submitted by the 
Governor on September 27, 1989, and August 30, 1990. These revisions 
consist of amendments to Reg. 7.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any State Implementation Plan. Each request for revision to 
any State Implementation Plan shall be considered separately in light 
of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    SIP approvals under section 110 and Subchapter I, Part D of the CAA 
do not create any new requirements, but simply approve requirements 
that the State is already imposing. Therefore, because the federal SIP-
approval does not impose any new requirements, I certify that it does 
not have significant impact on any small entities affected. Moreover, 
due to the nature of the federal-state relationship under the CAA, 
preparation of a regulatory flexibility analysis would constitute 
federal inquiry into the economic reasonableness of state action. The 
CAA forbids EPA to base its actions concerning SIPs on such grounds. 
Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct. 1976); 
42 U.S.C. 7410(a)(2).
    This action has been classified as a Table 2 action by the Regional 
Administrator under the procedures published in the Federal Register on 
January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993, 
memorandum from Michael H. Shapiro, Acting Assistant Administrator for 
Air and Radiation. The Office of Management and Budget has exempted 
this regulatory action from Executive Order 12866 review.
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by July 31, 1995. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements (see section 307(b)(2)).
    Approval of this specific revision to the SIP does not indicate EPA 
approval of the SIP in its entirety.
Executive Order 12866

    The Office of Management and Budget has exempted this rule from the 
requirements of Section 6 of Executive Order 12866.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Incorporation by reference, Intergovernmental relations, Ozone, 
Reporting and recordkeeping requirements, Volatile organic compounds.

    Note: Incorporation by reference of the State Implementation 
Plan for the State of Colorado was approved by the Director of the 
Federal Register on July 1, 1980.

    Authority: 42 U.S.C. 7401-7671q.

    Dated: April 19, 1995.
William P. Yellowtail,
Regional Administrator.

    40 CFR part 52, subpart G, is amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart G--Colorado

    2. Section 52.320 is amended by adding paragraph (c)(70) to read as 
follows:


Sec. 52.320  Identification of plan.

* * * * *
    (c) * * *
    (70) Revisions to the Colorado State Implementation Plan were 
submitted by the Governor on September 27, 1989, and August 30, 1990. 
The revisions consist of amendments to the Ozone provisions in 
Regulation No. 7, ``Regulation To Control Emissions of Volatile Organic 
Compounds.''
    (i) Incorporation by reference.
    (A) Revisions to Regulation No. 7, Sections 7.I (Applicability), 
7.II (General Provisions), 7.III (General Requirements for Storage and 
Transfer of Volatile Organic Compounds), 7.IV (Storage of Highly 
Volatile Organic Compounds), 7.V (Disposal of Volatile Organic 
Compounds), 7.VI (Storage and Transfer of Petroleum Liquid), 7.VIII 
(Petroleum Processing and Refining), 7.IX (Surface Coating Operations), 
7.X (Use of Solvents for Degreasing and Cleaning), 7.XI (Use of Cutback 
Asphalt), 7.XII (Control of VOC Emissions from Dry Cleaning Facilities 
Using Perchloroethylene as a Solvent), 7.XIII (Graphic Arts), 7.XIV 
(Pharmaceutical Synthesis), 7.XV (Control of Volatile Organic Compound 
Leaks from Vapor Collection Systems Located at Gasoline Terminals, Bulk 
Plants, and Gasoline Dispensing Facilities), and Appendices A (Criteria 
for Control of Vapors from Gasoline Transfer to Storage Tanks), B 
(Criteria for Control of Vapors from Gasoline Transfer at Bulk Plants-
Vapor Balance System), and D (Test Procedures for Annual Pressure/
Vacuum Testing of Gasoline Transport Trucks). The following new 
emission sources and appendices were added to Regulation No. 7: 
7.IX.A.7 (Fugitive Emission Control), 7.IX.N. (Flat Wood Paneling 
Coating), 7.IX.O. (Manufacture of Pneumatic Rubber Tires), and Appendix 
E (Emission Limit Conversion Procedure). These revisions became 
effective on October 30, 1989, and August 30, 1990.
    (ii) Additional material.
    (A) February 5, 1992, letter from John Leary, Acting Director, 
Colorado Air Pollution Control Division, to Douglas Skie, EPA. This 
letter contained the State's commitment to conduct capture efficiency 
testing using the most recent EPA capture efficiency protocols, and the 
commitment to adopt federal capture efficiency test methods after they 
are officially promulgated by EPA.

[FR Doc. 95-13118 Filed 5-26-95; 8:45 am]
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