Approval and Promulgation of Federal Implementation Plans; CaliforniaSacramento and Ventura Ozone; South Coast Ozone and Carbon Monoxide; Sacramento Ozone Area Reclassification

SUMMARY: EPA is making technical corrections to proposed federal

implementation plans (FIPs) to attain the national ambient air quality

standards (NAAQS) for ozone in the Sacramento and Ventura nonattainment

areas, and for ozone and carbon monoxide in the South Coast

nonattainment area. The corrections relate to the proposed ``cap

rules'' for stationary and area sources and the Parking Cash Out

program. EPA is also establishing FIP public hearing dates and

locations in the three affected areas.

DATES: The deadline for written comments is August 31, 1994.

Public hearings will be held on July 18, July 20, and July 25,

1994, at 10 a.m. The Supplementary Information portion of this notice

provides additional information on the public hearing.

ADDRESSES: Public hearings will be held in the South Coast, Ventura,

and Sacramento, CA. See Supplementary Information.

Written comments on the proposed FIP and SIP promulgations must be

received by EPA at the address below on or before the close of the

public comment period. Comments should be submitted (in duplicate, if

possible) to: EPA Air Docket Section, Attn: Docket No. A-94-09,

Environmental Protection Agency (Mail Code--6102), Waterside Mall, Room

M-1500, 401 M Street, S.W., Washington, DC 20460, (phone 202-260-7549).

Docket No. A-94-09, containing material relevant to this NPRM, is

located at the above address. The docket is available for public

inspection between 8:30 a.m. and 12 noon, and between 1:30 p.m. and

3:30 p.m. EPA may charge a reasonable fee for copying.

A copy of the docket is also available for review at: Regional

Administrator, Attention: Office of Federal Planning (A-1-2), Air and

Toxics Division, Environmental Protection Agency, Region, IX, 75

Hawthorne Street, San Francisco, CA 94105-3901.

Interested persons may make an appointment with Ms. Virginia

Petersen at (415) 774-1265, to inspect the docket of EPA's San

Francisco office on weekdays between 9 a.m. and 4 p.m.

Copies of this NPRM, the technical support document, and the

regulatory impact analysis, are also available for review at the

addresses listed below:

California Air Resources Board, 2020 L Street, Sacramento, California

Sacramento Metropolitan Air Quality Management District, 8411 Jackson

Road, Sacramento, California

Sacramento Area Council of Governments, 3000 S Street, Suite 300,

Sacramento, California

El Dorado County Air Pollution Control District, 2850 Fair Lane Court,

Bldg. C, Placerville, California

Feather River Air Quality Management District, 463 Palora Avenue, Yuba

City, California

Placer County Air Pollution Control District, 11464 B Avenue, Auburn,

California

Yolo-Solano County Air Pollution Control District, 1947 Galileo Court,

Suite 103, Davis, California

South Coast Air Quality Management District, 21865 E. Copley Drive,

Diamond Bar, California

South Coast Air Quality Management District, Colton Office, 851 S. Mt.

Vernon Avenue, Colton, California

Southern California Association of Governments, 818 W. 7th Street, Los

Angeles, California

Southern California Association of Governments, Inland Empire Office,

3600 Lime Street, Riverside, California

Ventura County Air Pollution Control District, 702 County Square Drive,

Ventura, California

Electronic Availability

This document is available May 10, 1994 as an electronic file on

EPA's Technology Transfer Network (TTN). For 1200 bps or 2400 bps

modems, use 919-541-5742; for 9600 bps use 919-541-1447. The FIP NPRM

is under the Clean Air Act Amendments (CAAA) board, in a section for

``Recently Signed Rules.'' users should check the initial CAAA

announcement screen for updates on file availability. Because of its

size, the FIP NPRM is divided into several pieces, and stored in the

compressed ``ZIP'' archive format. The file name for this notice is

``CALFIP12.ZIP''. If you need help in accessing the system, call the

systems operator by phone at (919) 541-5384 in Durham, North Carolina.

FOR FURTHER INFORMATION CONTACT:

For information on the California FIPs generally, the public hearing,

and the ``cap rules,'' call EPA's FIP Hotline (415) 744-1151, or Julia

Barrow (415) 744-2434, at the Office of Federal Planning (A-1-2), Air

and Toxics Division, U.S. EPA, Region IX, 75 Hawthorne Street, San

Francisco, California, 94105-3901

For information on the Parking Cash Out program, call Jon Kessler, (202

260-3761, at the Office of Policy, Planning and Evaluation, U.S. EPA,

401 M Street, SW, Washington, DC 20460, EPA's FIP Hotline (313) 668-

4361, or Jane Armstrong (313) 668-4471, at the EPA Office of Mobile

Sources, Motor Vehicle and Fuels Emissions Laboratory 2565 Plymouth

Road, Ann Arbor, Michigan, 48105

SUPPLEMENTARY INFORMATION:

I. Public Meetings

EPA will hold a public hearing in the South Coast at 10 a.m. on

July 18, 1994, at the auditorium of the South Coast Air Quality

Management District, 21865 E. Copley Drive, Diamond Bar, California; in

Ventura at 10:00 a.m. on July 20, 1994, at the Ventura County Hall of

Administration Building, Lower Plaza Assembly Room, 800 S. Victoria

Avenue, Ventura, California; and in Sacramento at 10 a.m. on July 25,

1994, at the PERS Building, 400 P Street, Sacramento, California. In

order to be considered for the final promulgation, public comments must

be submitted orally at the public hearing or in writing to the Agency

on or before August 31, 1994. Commenters may provide testimony on any

part of the FIPs at any one of the hearing locations. Commenters need

only testify at one of the hearing locations (e.g., it is sufficient to

testify on the Sacramento FIP at the South Coast location).

Each of the three public hearing days will be conducted in three

sessions beginning at 10:00 a.m., 2:00 p.m., and 7:00 p.m., with a

lunch recess before the 2:00 p.m. and a dinner recess before the 7:00

p.m. sessions. Depending on the number of requests to testify, the

hearing officer may impose a time limit of 5 to 10 minutes per

commenter. Commenters are urged to bring a copy (multiple copies, if

possible) of their full testimony for the hearing officer.

II. ``Cap Rules''

EPA's proposed ozone FIPs for the Sacramento, Ventura, and South

Coast areas of California include ``cap rules'' for certain stationary

and area source categories. Cap rules to achieve reductions in volatile

organic compounds (VOCs) are proposed for each area, and a cap rule for

nitrogen oxides (NOx) is proposed for Ventura. See proposed rules

40 CFR 52.2952 (Sacramento VOC cap rule), 40 CFR 52.2953 (Ventura VOC

cap rule), 40 CFR 52.2954 (South Coast VOC cap rule), and 40 CFR

52.2955 (Ventura NOx cap rule).

The preamble discussion of these rules, in section III.C.5. of the

NPRM, indicates that facilities with emissions equal to or greater than

2 tons per year will be subject to the exemption verification reporting

requirements of the proposed rule, while facilities with emissions

equal to or greater than 4 tons per year would be subject to the annual

emission reduction requirements.

The proposed rules, however, mistakenly indicate that the reporting

requirements apply to facilities with emissions greater than or equal

to 4.5 kg (10 lbs) per day, and that the reduction requirements apply

to facilities with emissions greater than or equal to 6.8 kg (15 lbs)

per day.

Accordingly, in this notice EPA proposes to correct the

applicability levels throughout the proposed VOC and NOx cap

rules, to make the rules consistent with EPA's intention, as reflected

in the preamble to the NPRM. EPA proposes the following emendations to

proposed 40 CFR 52.2952, 40 CFR 52.2953, 40 CFR 52.2954, and 40 CFR

52.2955:

The phrase ``greater than or equal to 6.8 kg (15 lbs) during any

one day'' is revised to read as follows: ``greater than or equal to 4

tons during any one year.''

The phrase ``less than 6.8 kg (15 lbs) during any one day, but

greater than or equal to 4.5 kg (10 lbs) during any one day'' is

revised to read as follows: ``less than 4 tons during any one year, but

greater than or equal to 2 tons during any one year.''

The phrase ``greater than or equal to 4.5 kg (10 lbs) during any

one day'' is revised to read as follows: ``greater than or equal to 2

tons during any one year.''

In addition, the proposed NOx cap rule for Ventura includes an

incorrect reference to applicable quality assurance and quality control

requirements for continuous emissions monitoring systems (CEMS). The

first sentence of Sec. 52.2955(a)(4)(i) is revised to read as follows:

``Major sources as defined under the Clear Air Act shall install CEMS

that meet the quality assurance and quality control requirements of

appendix B of part 75 of this chapter.''

III. Parking Cash Out

The proposed California FIPs also include a Parking Cash Out

program, which is discussed in section III.D.2.g. of the preamble to

the proposed rulemaking. The discussion below provides a corrected

description of, and supplementary information on, the proposed Parking

Cash Out program.

Parking Cash Out aims to reduce the incentive to drive to work via

single-occupant mode that results when employers offer their employees

free parking without other commute benefit options. A Parking Cash Out

program gives employees the power to choose the form of their commute

benefits. Under such a program, an employer who offers parking benefits

would also offer the option of a cash allowance equal in value to the

cost of the parking. Employers who offer Parking Cash Out give

employees who rideshire or leave the car at home a powerful financial

reward. By shifting dollars from parking to paychecks, a well designed

Parking Cash Out program can produce emissions reductions without

significant employer costs or new administrative burdens. And Parking

Cash Out will assist employers in complying with the Employee Commute

Option (ECO) programs in each of the FIP areas.

As part of his Climate Change Action Plan, President Clinton is

proposing a change in the tax law to encourage employers who offer tax-

exempt parking subsidies to their employees to offer a Parking Cash Out

alternative. The goal of the FIP language is to incorporate Parking

Cash Out for the FIP areas in a manner consistent with EPA authority.

The FIP does not include a modification of the tax code, but merely

aims to take credit for expected implementation of the President's

proposal. It is expected that the President's Parking Cash Out

legislative proposal will be acted on in the current session of

Congress, that implementation will begin with the 1995 tax year.

Under the President's proposal, employers will for the first time

be allowed to offer compensation and financial incentives such as cash

and transit passes (Cash Out programs) as an option to tax-exempt

parking benefits. Current law does not allow employers to offer Cash

Out programs in lieu of tax-exempt parking benefits. This new

flexibility will apply to all employers, regardless of the type of

value of parking benefits offered.

Also, under the President's proposal, employers in certain

circumstances will be required to offer a Cash Out program as an option

to tax-exempt parking subsidies. As described in the Climate Change

Action Plan, this Cash Out requirement will apply to employers who

offer tax-exempt parking subsidies to their employees in the following

circumstances.

It will apply to parking spaces currently leased by employers from

a third party for which the lease allows a reduction in the number of

spaces without penalty. It will also apply to all parking subject to

new lease agreements made after the date of implementation.

The program will not apply to employer-owned parking, parking

provided by firms with fewer than 25 employees, or parking spaces

valued below a de minimis threshold. These exemptions ensure that the

Cash Out requirement apples only where employers can easily shift

expenditures from parking to paychecks. However, all employers will for

the first time be allowed to offer Parking Cash Out options to tax-

exempt parking benefits without incurring tax penalties. EPA will

actively encourage employers in the FIP areas, even those exempt from

the Cash Out requirement, to begin offering Cash Out programs.

The President's proposal also clarifies the tax status of parking

and other commute benefits under a Cash Out program. Employees who opt

for parking spaces will be unaffected by the change. Their parking will

remain tax-exempt. Those employees who opt for cash may receive it as

additional income, which is taxable, or as a transit pass, which is

tax-free up to $60 per month.\1\ Employers may withhold from the Cash

Out offer a percentage sufficient to cover payroll taxes on cash taken

and may deduct from corporate taxes the cost of parking and of a Cash

Out program.

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\1\Cash taken as part of a Parking Cash Out program is subject

to federal taxes calculated on the basis of gross income, such as

FICA. However, California state law exempts Cash Out payments from

State income tax.

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In the FIP areas, the President's proposal builds on and in many

ways enhances the State of California's Cash Out program (referred to

as AB 2109), which is administered by the California Air Resources

Board. Begun in 1992, the California program requires a limited number

of employers to offer a Parking Cash Out alternative to subsidized

employee parking. AB 2109 also encourages local agencies to remove

zoning requirements that force developers to build more parking than is

necessary. The President's proposal eliminates a major impediment to

the timely implementation of AB 2109--the federal tax penalties

incurred by employers who implement Parking Cash Out programs under

current tax law. Current law does not allow employers to offer Cash Out

programs in lieu of tax-exempt parking benefits. As such, parking

accompanied by Cash Out is disqualified from the existing income tax

exemption for employer-provided parking. California employers surveyed

by EPA and by other organizations cite this as a barrier to low cost

implementation of Parking Cash Out. The President's proposal would

eliminate the tax penalties incurred by employers who offer Cash Out by

allowing Cash Out as an option to tax-exempt parking subsidies.

Questions on the President's Parking Cash Out proposal should be

directed to Jon Kessler of EPA's Office of Policy, Planning and

Evaluation at (202) 260-3761.

List of Subjects in 40 CFR Parts 52 and 81

Environmental protection, Air pollution control, Carbon monoxide,

Hydrocarbons, Incorporation by reference, Intergovernmental relations,

Oxides of nitrogen, Ozone, Reporting and recordkeeping requirements.

Dated: May 4, 1994.

Carol M. Browner,

Administrator.

Accordingly, part 52 of title 40 of the Code of Federal Regulations

as proposed in the Federal Register ext 59 FR 23264 is proposed to be

further amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart GG--California Federal Implementation Plans

2. In Secs. 52.2952, 52.2953, 52.2954, and 52.2955, the phrase

``greater than or equal to 6.8 kg (15 lbs) during any one day'' is

revised to read ``greater than or equal to 4 tons during any one year''

everywhere it appears.

3. In Secs. 52.2952, 52.2953, 52.2954, and 52.2955, the phrase

``less than 6.8 kg (15 lbs) during any one day, but greater than or

equal to 4.5 kg (10 lbs) during any one day'' is revised to read ``less

than 4 tons during any one year, but greater than or equal to 2 tons

during any one year'' everywhere it appears.

4. In Secs. 52.2952, 52.2953, 52.2954, and 52.2955, the phrase

``greater than or equal to 4.5 kg (10 lbs) during any one day'' is

revised to read ``greater than or equal to 2 tons during any one year''

everywhere it appears.

5. The first sentence of paragraph 52.2955(a)(4)(i) is revised to

read ``Major sources as defined under the Clean Air Act shall install

CEMS that meet the quality assurance and quality control requirements

of appendix B of part 75 of this chapter.''

[FR Doc. 94-11399 Filed 5-9-94; 8:45 am]

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