Air Pollution Control; Proposed Action on Clean Air Act Grant to the Bay Area Air Quality Management District

ENVIRONMENTAL PROTECTION AGENCY

[FRL-5837-3]

Air Pollution Control; Proposed Action on Clean Air Act Grant to

the Bay Area Air Quality Management District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed determination with request for comments and notice of

opportunity for public hearing.

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SUMMARY: The EPA has made two proposed determinations that reductions

in expenditures of non-Federal funds for the Bay Area Air Quality

Management District (BAAQMD) in San Francisco, California are a result

of non-selective reductions in expenditures. These determinations, when

final, will permit the BAAQMD to keep the financial assistance awarded

to it by EPA for FY-96 and to be awarded financial assistance for FY-97

by EPA under section 105(c) of the Clean Air Act (CAA).

DATES: Comments and/or requests for a public hearing must be received

by EPA at the address stated below by July 7, 1997.

ADDRESSES: All comments and/or requests for a public hearing should be

mailed to: Valerie Cooper, Grants and Program Integration Office AIR-8,

Air Division, U.S. EPA Region IX, 75 Hawthorne Street, San Francisco,

California 94105-3901; FAX (415) 744-1076.

FOR FURTHER INFORMATION CONTACT: Valerie Cooper, Grants and Program

Integration Office AIR-8, Air Division, U.S. EPA Region IX, 75

Hawthorne Street, San Francisco, California 94105-3901 at (415) 744-

1237.

SUPPLEMENTARY INFORMATION: Under the authority of Section 105 of the

CAA, EPA provides financial assistance to the BAAQMD, whose

jurisdiction includes Alameda, Contra Costa, Marin, Napa, San

Francisco, San Mateo, Santa Clara, and part of Solano and Sonoma

Counties in California, to aid in the operation of its air pollution

control programs. In FY-95, EPA awarded the BAAQMD $1,320,885 which

represented approximately 5% of the BAAQMD's budget, and in FY-96

$1,768,617 which represented approximately 7% of the BAAQMD's budget.

Section 105(c)(1) of the CAA, 42 U.S.C. 7405(c)(1), provides that

``[n]o agency shall receive any grant under this section during any

fiscal year when its expenditures of non-Federal funds for recurrent

expenditures for air pollution control programs will be less than its

expenditures were for such programs during the preceding fiscal year.

In order for [EPA] to award grants under this section in a timely

manner each fiscal year, [EPA] shall compare an agency's prospective

expenditure level to that of its second preceding year.'' EPA may still

award financial assistance to an agency not meeting this requirement,

however, if EPA, ``after notice and opportunity for public hearing,

determines that a reduction in expenditures is attributable to a non-

selective reduction in the expenditures in the programs of all

Executive branch agencies of the applicable unit of Government.'' CAA

Section 105(c)(2). These statutory requirements are repeated in EPA's

implementing regulations at 40 CFR 35.210(a).

In its FY-96 section 105 application, which EPA reviewed in August

1995, the BAAQMD projected expenditures of non-Federal funds for

recurrent expenditures (or its maintenance of effort (MOE)) of

$24,778,132 which included fees collected by BAAQMD for permits it

issues under Title V of the CAA.1 In January of 1997,

however, the BAAQMD submitted to EPA documentation which shows that its

actual FY-96 MOE was $23,273,665, which is exclusive of Title V. This

amount represents a shortfall of $489,518 from the MOE of the preceding

fiscal year. In addition, the projected FY-97 MOE of $21,555,635

represents a shortfall of $1,718,030 from the FY-96 MOE of $23,273,665.

In order for the BAAQMD to be eligible to keep its FY-96 grant and to

be awarded an FY-97 grant, EPA must make a determination under section

105(c)(2).

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\1\ A CAA section 105 grantee's MOE may be reduced to reflect

the transfer of activities to an EPA approved Title V program

previously funded through section 105 grants. See 60 FR 366, 368

(January 4, 1995) and 40 CFR 35.205(b).

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In FY-96, the BAAQMD determined that its MOE would decrease because

revenues from property taxes and permit fees decreased. For FY-97 the

BAAQMD once again determined that there would be continued reductions

in these revenue sources and, in addition, the State of California

Retirement System (PERS) mandated that the District use the credit in

their account in lieu of payment to PERS. Therefore, the usual

contribution to PERS for 105 programs (which is a ``recurrent

expenditure'') was not made and could not be counted towards the MOE.

The reductions resulted in the loss of 12.5 full time permanent

positions. In addition to the reduction in revenues, a general reserve

and fund balance account were no longer available (because they had

been depleted) to make up for shortages as they had in previous years.

These were the contributing factors to a reduction in BAAQMD's FY-96

and FY-97 MOE level.

The BAAQMD's MOE reductions resulted from a loss of revenue from

property taxes and permit fees. This loss of revenue and MOE reduction

resulted from circumstances beyond the District's control. EPA proposes

to determine that the BAAQMD's lower FY-96 and FY-97 MOE level meets

the section 105(c)(2) criteria as resulting from a non-selective

reduction of expenditures. Pursuant to 40 CFR 35.210, this

determination will allow the BAAQMD to keep the funds received from EPA

for FY-96 and to be eligible for an FY-97 award.

This notice constitutes a request for public comment and an

opportunity for public hearing as required by the Clean Air Act. All

written comments received by July 7, 1997 on this proposal will be

considered. EPA will conduct a public hearing on this proposal only if

a written request for such is received by EPA at the address above by

July 7, 1997. If no written request for a hearing is received, EPA will

proceed to a final determination.

Dated: May 21, 1997.

David P. Howekamp,

Director, Air Division.

[FR Doc. 97-14854 Filed 6-5-97; 8:45 am]

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