Regulatory Reinvention (XL) Pilot Projects

SUMMARY: EPA is announcing the publication of the Project XL Final

Project Agreement (FPA) for Vandenberg Air Force Base in Santa Barbara

County, California. The FPA is a voluntary agreement developed

collaboratively by the Department of Defense, Vanderberg Air Force

Base, the Santa Barbara Air Pollution Control District, local community

members and EPA. Project XL, announced in the Federal Register on May

23, 1995 (FRL-5197-9), gives regulated sources the flexibility to

develop alternative strategies that will replace or modify specific

regulatory requirements on the condition that they produce greater

environmental benefits. EPA has set a goal of implementing a total of

fifty projects undertaken in full partnership with the states.

FOR FURTHER INFORMATION: To obtain a copy of the Proposed Final Project

Agreement or Supporting Documents contact: John Walser (415) 744-1257;

US EPA Region IX; Vandenberg Project XL Lead, AIR-3; 75 Hawthorne

Street, San Francisco, Ca. These documents are also available via the

internet at the following location: ``http://www.epa.gov/ProjectXL''.

To be included on the Vandenberg Project XL mailing list to receive

information about future public meetings, XL progress reports, and

other mailings from Vandenberg on the XL project, or for questions

about the Proposed FPA contact John Walser at (415) 744-1257.

DATES: Comments. All public comments must be received on or before

October 8, 1997.

ADDRESSES: Comments. Written comments should be submitted in duplicate

to: John Walser; US EPA; Vandenberg Project XL Lead, AIR-3; 75

Hawthorne Street, San Francisco, Ca.

Docket. A docket containing supporting information used in

developing this rulemaking, including the draft FPA and supporting

materials, is available for public inspection and copying at U.S. EPA,

Region IX, AIR-3; 75 Hawthorne Street, San Francisco, Ca., during

normal business hours, and at EPA's Water Docket (Docket name ``XL/

Envest-Vandenberg AFB''); Mailcode 4101, 401 M Street, SW, Washington,

DC 20460. For access to the Water docket materials, call (202) 260-

3027.

For information on all other aspects of Project XL contact

Christopher Knopes at the following address: Emerging Sectors and

Strategies Division; United States Environmental Protection Agency;

3202 Mall; 401 M Street, S.W.; Mail Code 2129; Washington, DC 20460.

The telephone number for the Division is (202) 260-5754. The facsimile

number is (202) 401-6637. Additional information on Project XL,

including documents referenced in this notice, other EPA policy

documents related to Project XL, regional XL contacts, application

information, and descriptions of existing XL projects and proposals, is

available via the internet at ``http://www.epa.gov/ProjectXL'' and via

an automated fax-on-demand menu at (202) 260-8590.

Dated: September 2, 1997.

Christopher Knopes,

Acting Director, Emerging Sectors and Strategies Division.

FINAL PROJECT AGREEMENT

VANDENBERG AIR FORCE BASE

AIR QUALITY PROJECT XL/ENVVEST INITIATIVE

Table of Contents

PREAMBLE

I. OVERVIEW--PURPOSE OF THIS AGREEMENT

II. DESCRIPTION OF THE PROJECT

A. GENERAL PROJECT DESCRIPTION

B. CONFORMITY TO THE MEMORANDUM OF AGREEMENT

1. Regulatory Flexibility

2. Cost Savings And Paperwork Reduction

3. Description Of Stakeholder Involvement

4. Environmental Results: Innovation/Pollution Prevention

a. Background

b. Investigation And Application Of Innovative Control

Strategies

c. Pollution Prevention

d. Emission Reductions

5. Transferability, Feasibility, Monitoring, Reporting, And

Evaluation

a. Transferability

b. Feasibility

c. Monitoring And Reporting

d. Evaluation

6. Worker Safety And Environmental Justice

III. IMPLEMENTATION OF THE VANDENBERG INITIATIVE

A. VANDENBERG RESPONSIBILITIES; EMISSION REDUCTIONS

B. DISTRICT RESPONSIBILITIES

1. Rule Submission To EPA

2. Technical Assistance/Plan Review And Submission To EPA

C. EPA RESPONSIBILITIES

D. EPA APPROVAL OF RULE 1301

IV. ADMINISTRATION OF THE AGREEMENT

A. DURATION AND TERMINATION/RENEWAL OF AGREEMENT

B. TERMINATION

1. Parties' Termination Rights

2. Termination of Plan

3. Stationary Source Redesignation

4. Achieved Emission Reductions

C. FUNDING

D. EVENTS PREVENTING IMPLEMENTATION OF AGREEMENT

E. DISPUTE RESOLUTION

F. PUBLIC RECORDS AND THE ADMINISTRATIVE RECORD

G. ENFORCEMENT

H. PERIODIC REVIEW AND EVALUATION ACTIVITIES

I. MEANS OF GIVING NOTICE

J. EFFECTIVE DATE

LIST OF ATTACHMENTS

Preamble

This Final Project Agreement (FPA or ``Agreement'') is part of

President Clinton's Reinventing Environmental Regulation Initiative to

test innovative approaches to environmental protection. Under this

Agreement, Vandenberg Air Force Base will go beyond what is required by

regulation and achieve superior environmental performance at a lower

cost. By 30 November, 2002, the Base will reduce its annual emissions

of ozone precursors into the air by 10 tons or more. As a result of

this initiative, Vandenberg will no longer be a potential major source

of air pollution under Title V of the Clean Air Act.

This Agreement states the intention of the United States

Environmental Protection Agency (``EPA''), the 30th Space Wing at

Vandenberg Air Force Base, California (``Vandenberg''), and the Santa

Barbara County Air Pollution Control District (``District'')

(collectively hereinafter referred to as ``the parties'') to carry out

a pilot project pursuant to the 1995 Memorandum of Agreement between

the Department of Defense (``DOD'') and EPA on Regulatory Reinvention

Projects 1 testing innovative approaches to environmental

protection. The program resulting from the MOA is called Project XL/

ENVVEST and represents an initiative to develop new approaches for

meeting DOD and EPA responsibilities while achieving better overall

environmental performance at lower cost than expected under existing

regulatory approaches. The ENVVEST program mirrors and supports EPA's

regulatory relief efforts under Project XL.

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\1\ See Attachment 1, ``Memorandum of Agreement between the

Department of Defense and the U.S. Environmental Protection Agency

on Regulatory Reinvention Pilot Project,'' November 2, 1995.

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The Vandenberg proposal follows President Clinton's mandate that

regulatory reinvention under Project

[[Page 47337]]

XL/ENVVEST put the focus on progress rather than process. Vandenberg

proposes a phased emissions reduction program. In the short-term, the

focus will be on emission reductions from boilers, furnaces, and

process heaters. In the long-term, the focus will be on opportunities

for emission reductions from internal combustion engines, solvent and

surface coating applications or other suitable sources of ozone

precursors.

The District and EPA, in return for the effort by Vandenberg, will

allow Vandenberg to use innovative ways to comply with District Rule

370 2 and the District's Title V Federal Operating Permit

Program.

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\2\ Rule 370 is based on a model Title V prohibitory rule that

was developed cooperatively between EPA Region IX and the California

Air Resources Board. Pursuant to the applicability section of Rule

370, only sources with actual emissions less than 50% of a major

source threshold are eligible for coverage (See Rule 370 at

Attachment 2).

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The commitment by Vandenberg to achieve significant and superior

environmental benefits, as detailed in this Agreement, will be formally

submitted by the District to EPA for approval into the Santa Barbara

County portion of the California State Implementation Plan (``SIP'').

The District will also oversee the execution of the plan and provide

technical assistance.

I. Overview--Purpose of This Agreement

This Agreement is a joint statement of the parties' intentions with

regard to the Vandenberg Air Quality Project XL/ENVVEST Initiative.

This Agreement is not intended to create legal rights or to be a

contract or a regulatory action, such as a permit or rule. While it

does not give rise to any rights enforceable in a legal action either

to compel performance of the Agreement or for damages, it is intended

to clearly state the plans of the parties and to represent the firm

commitment of each party to carry out the project.

II. Description of the Project

A. General Project Description

The 30th Space Wing at Vandenberg Air Force Base is located on the

central coast of California about 150 miles northwest of Los Angeles.

Covering more than 98,000 acres, it is the third largest Air Force

installation, and is the only point in the United States from which

unmanned government and commercial satellites are launched into polar

orbit and from which intercontinental ballistic missiles are launched

to verify weapon system performance.

The mission of the 30th Space Wing is to: (1) Conduct and support

space and missile launches; (2) operate the Western Test Range; (3)

respond to world-wide military contingencies; and (4) host the

Vandenberg community. Vandenberg, like other military installations,

differs from civilian stationary sources in that the base hosts and

supports a unique and wide variety of functions and activities. These

activities include residential housing, schools, recreational parks,

wildlife reserves, shopping centers, industrial maintenance, airfield

operations, and various other mission related activities. As such, base

activities create criteria pollutants normally associated with

residential, commercial, and light industrial operations. Most of the

stationary source ozone precursor emissions at the base are generated

by boilers, furnaces, process heaters, and internal combustion engines.

Vandenberg views environmental compliance as integral to its

mission and, therefore, directs significant resources to ensure

compliance with all environmental laws and regulations. With the advent

of regulatory reinvention and the creation of Project XL/ENVVEST,

Vandenberg saw the opportunity to test alternative ways of achieving

environmental compliance. Vandenberg evaluated its environmental

compliance obligations and identified areas where regulatory relief

would likely result in greater environmental benefits. As a result of

this evaluation, Vandenberg submitted a Project XL/ENVVEST proposal

requesting relief from District Regulation XIII, Part 70 Operating

Permit Program. Under this proposal, Vandenberg proposed to use

resources allocated for environmental compliance purposes to implement

pollution prevention activities that would ultimately have a greater

environmental benefit than compliance with District Regulation XIII.

Regulation XIII is an EPA approved and federally enforceable

stationary source operating permit program, implementing Title V of the

Clean Air Act (``Title V'') and 40 CFR Part 70 (``Part 70''), Title V

supporting regulations. Regulation XIII requires major stationary

sources 3 to apply for and obtain a Part 70 operating

permit. The objective of such permits is to create a comprehensive

document clearly spelling out all of a source's Clean Air Act

obligations. While Regulation XIII generally does not impose new

substantive requirements on sources, it does enhance environmental

compliance with existing requirements.

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\3\ To be classified as a ``major stationary source'' in Santa

Barbara County, a source must emit, or have the potential to emit,

100 tons per year of any regulated air pollutant or 10 tons per year

of any hazardous air pollutant (as defined in section 112 (b) of the

Clean Air Act) , or 25 tons per year of a combination of any

hazardous air pollutants. Ozone nonattainment areas were classified

according to the severity of the nonattainment based on the design

value of a particular Air Quality Control Region at the time of the

passage of the Clean Air Act Amendments of 1990 (Pub. L. 101-549).

In the case of the Santa Maria-Santa Barbara-Lompoc area, that area

was classified as a ``Moderate'' nonattainment area for ozone under

the provisions of 42 U.S.C.A. section 7511(a) [Clean Air Act

Sec. 181(a)]. All moderate areas were required to meet the ozone

National Ambient Air Quality Standards by 15 November 1996.

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Under the District Rules in effect in 1996, Vandenberg was a

``major stationary source'' for purposes of Part 70 and subject to the

permitting requirements of Regulation XIII. This classification was

based on Vandenberg's potential to emit at least 100 tons per year of

oxides of nitrogen (``NOX''). Actual emissions of

NOX at Vandenberg, however, are approximately 50 tons per

year. Vandenberg, in cooperation with the District and Region IX,

realized that if actual emissions used to make a Title V applicability

determination could be reduced and if the District exercised its

regulatory discretion, then the facility would be eligible to comply

with District Rule 370, Potential to Emit--Limitations for Part 70

Sources, a rule that exempts a source from Title V if the actual

emissions from the source are less than half of the potential to emit

threshold for Regulation XIII. A source that complies with Rule 370 by

not exceeding actual emissions of 50 tons per year is not subject to

Regulation XIII and, therefore, is not required to obtain a Part 70

permit.

The District is currently classified as a ``moderate''

nonattainment area for the federal one-hour ozone standard. For such

areas, a ``major stationary source'' subject to the permitting

requirements of Title V is one whose potential to emit equals or

exceeds 100 tons per year of any regulated pollutant. In 1996, however,

the District experienced a number of federal ozone standard violations

that may require EPA to reclassify the District as a ``serious''

nonattainment area. If this occurs, the applicable definition of major

stationary source for Part 70 purposes under Regulation XIII and Rule

370 will be lowered to 50 tons potential to emit or 25 tons actual

emissions of an ozone precursor.

The Parties acknowledge that EPA has adopted new federal standards

for ozone and particulate matter. It is unclear how these new standards

will affect Santa

[[Page 47338]]

Barbara County's nonattainment status. In light of the above, the

parties recognize the likelihood that the applicable thresholds for the

District's Regulation XIII and Rule 370 may be lowered to meet the

requirements for serious ozone nonattainment areas. Therefore, this

Agreement has been structured to allow the Vandenberg Project XL/

ENVVEST Initiative to proceed while meeting the new more stringent

definition of major stationary source.

Together, Region IX, the District, and Vandenberg identified areas

of regulatory flexibility that allow the District to determine that

Vandenberg may be classified as a non-major or minor source pursuant to

Rule 370.4 First, the District amended Rule 1301

5 to allow Vandenberg to exclude from its Title V major

source applicability determination, emissions from tactical support

equipment, infrastructure maintenance equipment, and building

maintenance equipment that meet the EPA definition of ``nonroad

engine.''

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\4\ See Attachment 3, ``Interim Agreement On Implementation Of

The ENVVEST Title V Initiative.

\5\ See Attachment 4, Santa Barbara County Air Pollution Control

District Rule 1301, PART 70 OPERATING PERMITS--GENERAL INFORMATION.

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Second, the District will use its discretion to modify Rule 1301 to

allow Vandenberg to group certain sources at the base for the purposes

of Title V applicability by the methods set forth in the EPA 2 August

1996 policy entitled ``Major Source Determinations for Military

Installations under the Air Toxics, New Source Review, and Title V

Operating Permit Programs of the Clean Air Act'' (``Act'').

The rule changes are contingent upon Vandenberg obtaining approval

of and implementing a plan that achieves a reduction in annual

emissions of ozone precursors by at least 10 tons by 30 November 2002.

The rule changes and this Agreement will not affect Vandenberg's major

stationary source designation for programs other than Title V, (e.g.,

Prevention of Significant Deterioration/New Source Review (PSD/NSR)).

B. Conformity to the Memorandum of Agreement

The following section addresses criteria for consideration under

the DOD/EPA Memorandum of Agreement.

1. Regulatory Flexibility

Information pertaining to conformance with this criterion is

contained in the preceding section.

2. Cost Savings and Paperwork Reduction

Vandenberg expects to realize cost savings and paperwork reduction

by being able to comply with Rule 370 in lieu of Regulation XIII and

complying with the obligations to obtain a Title V permit.

Administrative and enforcement costs incurred by the District, for

the development and implementation of this initiative, will be

documented and made available to the public. Costs that qualify as

``reimbursable costs'' under District Rule 210.I.C. will be accounted

for separately and will be reimbursed by Vandenberg from DOD ENVVEST

funds. In consultation with Vandenberg, the District will establish an

operating budget to ensure maximum availability of funds for emission

reduction projects.

3. Description of Stakeholder Involvement

The base has consulted with the Vandenberg Community Advisory Board

(``CAB''), and the District Community Advisory Council (``CAC'') in

formulating this Agreement. The mission of the CAB is to promote

community awareness and to review the remedial cleanup process at

Vandenberg. This mission has now been expanded to address the

Vandenberg Project XL/ENVVEST initiative. The CAC provides advice

regarding air quality issues to the Air Pollution Control District

Board of Directors. Pursuant to guidance from the Board, a subcommittee

was created to participate in this initiative. Each body has met twice

to receive briefings, discuss the initiative, and provide input.

The parties have and will continue to issue press releases, run

informational notices in the newspaper and sponsor public meetings,

beginning with the initial meeting in October 1996, and every 6 months

after execution of this Agreement, to advise interested members of the

public on the progress being made toward meeting the FPA goals. The

meetings shall inform the public of the steps taken to reduce

pollution, include information on proposed steps to meet the goals of

the FPA and solicit comment from the public on the progress made

towards meeting the goals of the Agreement, or any other matter

relevant to the execution of the Agreement. These meetings will be held

in locations in Santa Barbara County that are accessible to the public

and at a time and place agreed to by the parties to this Agreement.

6

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\6\ See Attachment 5, ``Project XL/ENVVEST PUBLIC PARTICIPATION

PROCESS

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4. Environmental Results: Innovation/ Pollution Prevention

a. Background. Through the process outlined in this FPA, Vandenberg

proposes to implement innovative strategies in the selection and

application of advanced emission reduction technologies to reduce

emissions below levels they would have been at if the project were not

being undertaken. Additionally, Vandenberg proposes to categorize the

emission reduction potential of the available equipment to apply the

most efficient and cost-effective technologies appropriate to the

pollution generating equipment.

During the initial phase of this initiative, Vandenberg will focus

on boilers, which are the single largest stationary source of ozone

precursor emissions. Vandenberg operates over 200 boilers rated between

100,000 Btu/hr and 5 MMBtu/hr. These units are operated for spatial

heating and heated water applications throughout the base and are

typically fired on natural gas. Vandenberg has recently researched the

feasibility of modifying boilers rated between 2 MMBtu/hr and 5 MMBtu/

hr in order to obtain emission reductions. Throughout the course of

this initiative, Vandenberg will assess the emission reduction

potential from a variety of sources, including but not limited to

internal combustion engines and solvent and surface coating

applications.

b. Investigation And Application Of Innovative Control Strategies.

In order to apply the most appropriate and cost effective emission

control technologies to boilers, Vandenberg is in the process of

categorizing these emission units by process type and by annual

operating capacity. Once segregated, Vandenberg proposes to apply

advanced emission control technologies (X @ 3%

O2) to those units capable of providing the greatest

emission reduction. Also, Vandenberg proposes to apply somewhat less

advanced emission control technologies (X @ 3%

O2) to those units which provide fewer potential emission

reductions. Finally, the units that operate the least are proposed to

be tuned and/or modified to meet or exceed an emission standard of >30

ppmvd NOX @3% O2.

Advanced boiler emission control technologies available for these

applications include lean pre-mix combustion techniques, integral flue

gas recirculation burners, spark-ignited pulse combustion boilers, and

oscillating gas control valves. Through the implementation of these

technologies, Vandenberg will be

[[Page 47339]]

demonstrating advanced emission reduction methods emerging into the

marketplace for these sized units. Through the demonstration of these

emerging technologies, Vandenberg will be advancing the technologies

beyond the research and development phases and into the

commercialization stages of burner development.

c. Pollution Prevention. Through the investigation and

implementation of the advanced emission reduction technologies,

Vandenberg will be demonstrating the effectiveness of pollution

prevention methods for control of environmental pollution. Classic

emission control strategies focus on the ability to capture and destroy

pollution, once generated from industrial processes. These control

techniques often relied on the use of scrubbing media or catalytic

exhaust treatment (including ammonia injection) to achieve ultra-low

emissions thresholds (X @ 3% O2).

Through the initiatives outlined in this FPA, Vandenberg is

proposing to apply innovative pollution prevention techniques in

reducing emissions from their facilities. Advanced burner development

provides for the reduction of NOX through alterations in the

burner configuration, eliminating the need for post exhaust controls.

By working directly with technology vendors, Vandenberg has the ability

to apply advanced ultra-low emission technologies.

d. Emission Reductions. Vandenberg is committed to achieving

through this initiative a reduction in annual emissions of ozone

precursors by at least 10 tpy by 30 November 2002. These reductions,

attained by the use of innovative technology, will be permanent and

will not be used as bankable emission credits for further growth at

Vandenberg or any other facility. Sources selected for the Vandenberg

Air Quality Project XL/ENVVEST Initiative will not affect the

calculation of the Vandenberg Net Emission Increase. This does not

prohibit future Net Emission Increases at Vandenberg. However, if

Vandenberg is required to undergo a mission change or additional

missions are added to the facility and growth offsets are required to

accommodate these mission changes, then such offsets must be obtained

through projects which are not part of the air initiative, or must be

acquired by the Air Force from qualified areas of sources outside

Vandenberg.

5. Transferability, Feasibility, Monitoring, Reporting, and Evaluation

These criteria are addressed further in section III of this FPA.

a. Transferability. Transferability is envisioned in both a

procedural and technical context. Procedurally, reallocating funding

for pollution prevention rather than for compliance can result in

regulatory requirements no longer being applicable. This funding trade

off is a transferable mechanism. The technical transferability

encompasses boiler demonstration projects testing new burner

technologies that can be replicated at industrial and military

facilities.

b. Feasibility. Feasibility, which is achievement of technical

objectives within applicable cost constraints, is inherent within this

process.

c. Monitoring And Reporting. Monitoring and Reporting relates to

the collection of data necessary to proceed on to the next step which

will validate the achievement of defined objectives. In this instance,

adequate data regarding emissions reductions related to selected

technology applications will be collected to allow for a meaningful

evaluation of the progress being made to achieve specified milestones.

d. Evaluation. Evaluation will interpret the data gathered in the

previous phase and make possible a determination of whether the

appropriate milestone has been accomplished. This will involve a public

participation component and should take place within 30 days of the

completion date of any milestone.

6. Worker Safety and Environmental Justice

The base is committed to implementing Project XL/ENVVEST, complying

with Executive Order 12898 and, pursuant to Executive Order 12196,

complying with Air Force Office of Safety and Health standards. The

Vandenberg Project XL/ENVVEST initiative will not create worker safety

hazards or any disproportionately high and adverse human health or

environmental effects on minority populations and low-income

populations.

III. Implementation of the Vandenberg Initiative

A. Vandenberg Responsibilities; Emission Reductions

Vandenberg will implement a phased program to reduce annual

emissions of ozone precursors by at least 10 tons by 30 November 2002.

The initial effort will be accomplished through emission reductions

from boilers, furnaces, or process heaters. Details of the program will

be specified and made enforceable in the Rule 1301 Plan. The Plan shall

consist of source selection criteria, technology options, baseline

emission protocols, emission measurement protocols, and emission

reduction reporting protocols. Vandenberg will work in conjunction with

the District Innovative Technology Group. This Plan will be submitted

to the Air Pollution Control Officer (``Control Officer'') no later

than 30 November, 1997, to include and execute the following agreed

upon milestones. Other emission reduction efforts, supporting the

attainment of the 10 ton reduction goal, will be initiated for other

sources, such as internal combustion engines and solvent and surface

coating applications. Details of potential additional emission

reduction efforts will be in the Plan. The Control Officer will

approve, conditionally approve, or disapprove the Plan within 60 days

of submittal.

The agreed upon milestones are as follows:

1. Within 30 days of execution of this Agreement, Vandenberg

shall complete the initial assessment and cost feasibility study.

2. By 30 April 1999, 30 percent of candidate boilers identified

in milestone #1 are being retrofitted. 7

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\7\ The term ``being retrofitted'' encompasses construction,

testing, and monitoring of emission reductions.

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3. By 30 April 2000, 2 tons per year of emission reductions

shall have been accomplished.

4. By 30 April 2001, 70 percent of candidate boilers identified

in milestone #1 are being retrofitted.

5. By 30 November 2002, Vandenberg shall achieve a reduction in

annual emissions of ozone precursors by 10 tons or more.

If any of the milestones are not met, this Agreement will terminate

as provided in Section IV and Vandenberg will be required to comply

with the requirements of Title V of the 1990 Clean Air Act Amendments,

consistent with applicable rules and statutes. Compliance with

milestones will be determined by the Control Officer and will be based

upon data submitted by Vandenberg pursuant to agreed upon protocols. At

the time of the execution of the FPA, the governing federal rule

8 requires a source to submit a compliant permit application

within one year of the time at which the source becomes subject to the

permit program.

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\8\ 40 CFR Part 70, Sec. 70.5 (a)(1)(i).

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B. District Responsibilities

1. Rule Submission to EPA

The District will submit to Region IX, for inclusion into the

California State Implementation Plan (``SIP''), the relevant portions

of District Rule 1301 which allow for the implementation of the Project

XL/ENVVEST program.

[[Page 47340]]

2. Technical Assistance/Plan Review and Submission to EPA

The District will provide technical assistance to Vandenberg

regarding opportunities for emission reductions at Vandenberg.

Vandenberg may use such assistance when preparing the emission

reduction Plan. The District will formally review the Plan that

Vandenberg submits pursuant to Rule 1301 and approve the Plan if it

meets the requirements of District rules. The District will submit to

EPA for inclusion into the SIP the Vandenberg emission reduction Plan

the Control Officer approves pursuant to Rule 1301.

C. EPA Responsibilities

EPA will review District Rule 370 and portions of Rule 1301 that

allow for implementation of the Vandenberg Project XL/ENVVEST

initiative for inclusion in the SIP, and approve those rules if the

applicable statutory and regulatory criteria are met. EPA will also

approve incorporation of amended District Rule 1301 into the District's

Part 70 program if statutory and regulatory criteria are met.

D. EPA Approval of Rule 1301

All parties recognize and agree that until such time as District

Rule 1301, as amended to implement this Agreement, is approved by EPA,

the basis upon which the Control Officer intends to exercise his

discretion to find Vandenberg a non-major source is not complete and

Vandenberg is still subject to regulation under Title V. If EPA does

not approve 9 the amended Rule 1301 as part of the

District's Part 70 program by 1 January 1998 then this Agreement will

terminate.

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\9\ Approval for this paragraph means a letter signed by EPA.

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IV. Administration of the Agreement

A. Duration and Termination/Renewal of Agreement

This Agreement is effective until 30 November 2002. If, prior to

expiration on 30 November, 2002, additional emission reduction

opportunities are identified, the parties may elect to revise the

reduction goals and extend the Agreement.

B. Termination

1. Parties' Termination Rights

Any party may terminate this Agreement any time prior to Control

Officer's approval of the emission reduction Plan submitted to the

District pursuant to Rule 1301. Such notice will be in writing and sent

to the other parties. After such approval any party may terminate its

participation in the Agreement by providing 30 days notice to the other

parties. Termination of this Agreement will not terminate Vandenberg's

obligations under District Rules 1301 and 370 as discussed in

subsections IV.B.2 and IV.B.4 below.

2. Termination of Plan

If this Agreement is terminated, achieved emission reductions will

remain in place in accordance with applicable rules. There will be no

obligation to perform any unachieved reductions that have not been

completed if any of the following events occur, and Vandenberg's status

vis-a-vis Regulation XIII will be reassessed as set forth in Section

IV-B above.

Vandenberg may withdraw from the approved plan if any of the

following occur:

(a) It becomes subject to permit under Title V of the CAA as

applied by federal, state, or local regulation.

(b) It does not achieve the emissions reductions required by

Rule 1301 pursuant to the schedule of milestones included in the

Plan approved by the District.

(c) USEPA does not approve the Plan for inclusion in the SIP

within one year of approval by the District.

3. Stationary Source Redesignation

If the Plan is terminated in whole or in part for any reason, the

Title V stationary source designation for Vandenberg will be

reevaluated by EPA and the District consistent with applicable federal

and state laws, rules, and regulations at the time of such termination

or withdrawal of the plan. Such reevaluation will include all equipment

on the facility. If such inclusion subjects Vandenberg to the

permitting requirements of Regulation XIII, Vandenberg will apply for

and obtain a permit in accordance with Regulation XIII and applicable

federal regulations.

4. Achieved Emission Reductions

Notwithstanding any other provision in this Agreement, the portion

of a Plan approved pursuant to Rule 1301 will not expire for any

emission reductions that have been implemented or any equipment that

has been or is being retrofitted. Such emission reductions will remain

in effect and will be enforceable as part of the SIP and District Rules

and Regulations.

C. Funding

Upon execution of the interim Agreement in June 1996, Vandenberg

redirected all remaining Fiscal Year 1996 Title V compliance funds

($163,000) to implement program emission reduction projects. The Fiscal

Year 1997 commitment is $465,000 for follow-on projects. At this time

Vandenberg has requested, through the normal DOD budgeting process,

funds for the following periods for Title V compliance purposes:

FY '98..................................................... $550,000

FY '99..................................................... 500,000

FY '00..................................................... 450,000

FY '01..................................................... 400,000

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Total.................................................. 2,528,000

All funding commitments by Vandenberg will be in accordance with

the Anti Deficiency Act (31 U.S.C. 1341).

Emission reduction projects will be funded from the funds estimated

to be available in the totals identified above. Failure to achieve the

milestones will result in these funds being withdrawn from this

initiative and their utilization to comply with the requirements of

Title V of the 1990 Clean Air Act Amendments. Costs attributable to

complying with District Rule 370 will not be supported from those

funds. All parties agree that administrative costs should be minimized

to enhance the benefits of pursuing this initiative.

D. Events Preventing Implementation of Agreement

If at any time during implementation of this FPA, Vandenberg

reasonably determines and EPA and the District concur that any

requirement of such Agreement cannot be met due to circumstances beyond

the control of Vandenberg (including, but not limited to, materially

changed site conditions that could not reasonably have been

anticipated, insufficient availability of appropriated funds or the

significant failure of an innovative technology) EPA, District, and

Vandenberg will attempt to negotiate mutually acceptable changes to the

FPA.

E. Dispute Resolution

Any dispute that arises with respect to the meaning, application,

implementation, interpretation, amendment, termination, or modification

of the FPA, or with respect to the Vandenberg implementation of the

FPA, the resolution of which is not expressly provided for in the FPA,

will in the first instance, be the subject of informal negotiations,

except with respect to Section IV.G. (Enforcement). To initiate

informal negotiations, any signatory which believes it has a dispute

with any other party will simultaneously notify all of the parties, in

writing, setting forth the matter(s) in dispute. If the dispute cannot

be resolved by the parties within 35 days

[[Page 47341]]

of receipt of such notice, then one or both parties may invoke non-

binding mediation by setting forth the nature of the dispute, with a

proposal for its resolution, in a letter and submit it to a three

person dispute resolution committee consisting of one member designated

by each party.

F. Public Records and the Administrative Record

Vandenberg will issue, within 30 days of execution of this

Agreement, and every 6 months thereafter until completion of the Air

Quality initiative, progress reports which document progress toward

goals established by this Agreement. The reports will document

equipment changes and replacements, process changes, and other relevant

facts which support any assertions of actual emission reductions or the

progress thereof. The reports will be provided to District, Region IX,

and any interested party that requests such reports. In addition,

Vandenberg shall maintain the reports in local public libraries.

Vandenberg will also develop and maintain an Administrative Record of

all formal documents, records, and correspondence necessary as a basis

for decision making regarding this initiative.

G. Enforcement

While this Agreement is not legally binding, the requirements of

District Rule 370, Potential to Emit--Limitations for Part 70 Sources;

District Rule 1301, Part 70 Operating Permits, definition of

``Stationary Source''; and the Vandenberg emission reduction Plan

approved by the Control Officer,10 are binding and legally

enforceable by the District, after all rule changes are final. Upon EPA

approval of these requirements into the SIP, they will also be

enforceable by EPA and citizens under the Clean Air Act. District and

federal enforceability of the above provisions will remain in effect

until such provisions are modified or rescinded by the District and

approved by EPA.

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\10\ Upon approval by the Control Officer, the Plan will be

appended to this Agreement as Attachment 6.

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These enforcement measures make Vandenberg accountable for

achieving the milestones set out in this FPA and the Plan submitted

pursuant to Rule 1301.

H. Periodic Review and Evaluation Activities

Each party will review this Agreement, pursuant to the above

mentioned milestones in Section III.A. The review will be an evaluation

of the progress towards achieving the objectives of this Agreement.

I. Means of Giving Notice

When giving notice with regard to FPA modification or termination,

the parties will contact the FPA signatories in writing. Informal

communication may be given by phone or in writing to the following

contact offices:

Environmental Management Office, (805) 734-8232 (x-61921),

Vandenberg Air Force Base

Office of Strategic Planning and Emerging Issues, (415) 744-2390,

U.S. Environmental Protection Agency, Region IX

Manager of Major Source Division, (805) 961-8800, Santa Barbara

County Air Pollution Control District

J. Effective Date

This Agreement is effective upon the date of the last signature by

the parties.

Felicia Marcus,

Regional Administrator, United States Environmental Protection Agency,

Region IX.

C. Robert Kehler,

Colonel, USAF, Commander, 30th Space Wing, Vandenberg Air Force Base.

Douglas W. Allard,

Air Pollution Control Officer, Santa Barbara County Air Pollution

Control District.

List of Attachments

1. Memorandum Of Agreement Between The Department Of Defense And

The U.S. Environmental Protection Agency On Regulatory Reinvention

Pilot Projects.

2. Santa Barbara County Air Pollution Control District Rule 370,

Potential To Emit, Limitations For Part 70 Sources.

3. Interim Agreement On The Implementation Of The Project XL/

Envvest ``Title V'' Initiative.

4. Santa Barbara County Air Pollution Control District Rule

1301, Part 70 Operating Permits--General Information.

5. Public Participation Process.

6. Rule 1301 Plan (Will Be Appended To FPA Upon Approval By The

Control Officer).

[FR Doc. 97-23692 Filed 9-5-97; 8:45 am]

BILLING CODE 6560-50-U