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

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 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,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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