TITLE 30.ENVIRONMENTAL QUALITY

Part 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Chapter 114. CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES

The Texas Commission on Environmental Quality (commission) proposes amendments to §§114.1, 114.2, 114.50, 114.52, and 114.53; and corresponding revisions to the Texas Inspection and Maintenance State Implementation Plan (SIP).

The amendments and revised SIP narrative will be submitted to the United States Environmental Protection Agency (EPA) as proposed revisions to the SIP.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The Houston/Galveston (HGA) ozone nonattainment area is classified as Severe-17 under the Federal Clean Air Act Amendments of 1990 (as codified in 42 United States Code (USC), §§7401 et seq .), and therefore, is required to attain the one-hour ozone standard of 0.12 parts per million (125 parts per billion) by November 15, 2007. The HGA area is defined as Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties, and has been working to develop a demonstration of attainment in accordance with 42 USC, §7410. The most relevant HGA SIP revisions to date are the December 2000 one-hour ozone standard attainment demonstration, the September 2001 follow-up revision, and the December 2002 nitrogen oxides (NO x )/highly-reactive volatile organic compound (HRVOC) revision.

The emission reduction requirements included as part of the December 2000 SIP revision represent substantial, intensive efforts on the part of stakeholder coalitions in the HGA area, in partnership with the commission, to address ozone. These coalitions include local governmental entities, elected officials, environmental groups, industry, consultants, and the public, as well as EPA and the commission, and worked diligently to identify and quantify control strategy measures for the HGA attainment demonstration area.

Recent photochemical modeling indicates that a combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area. As a result, the commission evaluated a number of the existing control strategies that were put in place in the December 2000 revision. The photochemical modeling shows that some of these strategies are no longer necessary to attain the one-hour ozone standard.

On December 6, 2000, the commission adopted both the HGA Attainment Demonstration SIP and the associated amendments to Chapter 114 to assist with demonstrating attainment and maintenance of the one-hour ozone standard in the HGA area. The amendments to Chapter 114 included an air control strategy for NOx reductions which requires emissions testing of motor vehicles that are registered and primarily operated in the HGA ozone nonattainment area. In addition, the commission provided flexibility for Chambers, Liberty, and Waller Counties, individually or collectively, to submit a resolution approved by the commission and EPA for alternative air control strategies other than an inspection and maintenance (I/M) program to meet or exceed the NO x emission reductions that are anticipated from the I/M program. The counties individually submitted their resolutions in May 2002.

In a prior I/M rulemaking that was effective October 30, 2003, the commission delayed the implementation of the I/M program in Chambers, Liberty, and Waller Counties from May 1, 2004 to May 1, 2005 in order to have sufficient time for needed additional assessment of the alternative plans.

Based on the most recent photochemical modeling for the HGA area that indicates the I/M program, scheduled to begin in these three counties on May 1, 2005, will have little effect on ozone concentration in the HGA area, and that attainment of the one-hour ozone standard can be reached without this control measure, the commission is proposing amendments to the I/M rules to remove the vehicle emissions testing requirements from Chambers, Liberty, and Waller Counties.

SECTION BY SECTION DISCUSSION

Revisions to Subchapters A and C incorporate editorial changes to ensure the language is consistent with the guiding principles and policies of the commission and the language is consistent in format, style, and tone per commission guidelines; to correct the name of the commission; and to correct citations to other laws, codes, and rules. Revisions to specific sections are discussed in the following paragraphs.

SUBCHAPTER A, DEFINITIONS

Section 114.1, Definitions

The proposed amendment to the opening paragraph would change the citation to Texas Health and Safety Code, Chapter 382; state that Chapter 382 is known as the Texas Clean Air Act; and delete "shall" in the last sentence.

The proposed amendment to the definition of "First safety inspection certificate" would add "Texas" to correctly reference the Texas Department of Public Safety. The proposed amendment to the definition of "Gross vehicle weight rating (GVWR)" would delete the acronym GVWR because it is not used again in the definition. The proposed amendment to the definitions of "Heavy-duty vehicle" and "Light-duty vehicle" would spell out the acronyms "GVWR," "lbs.," and "MERC;" delete "the" in front of Texas Transportation Code; and lowercase "mobile emission reduction credit." The proposed amendment to the definition of "Inherently low emission vehicle" would delete the acronym "CFR" because it is not used again in the definition. The proposed amendment to the definition of "Loaded mode inspection and maintenance (I/M) test" would delete the acronym "I/M" because it is not used again in the definition; lowercase "acceleration simulation mode"; and spell out the acronym "EPA" because it is not used again in the definition. The proposed amendment to the definition of "Low emission vehicle (LEV)" would spell out the acronym "EPA" because it is not used again in the definition, and correct the citations to 42 USC and 40 Code of Federal Regulations, Part 88. The proposed amendment to the definition of "Mass transit authority" would add a comma and correct the title of Chapter 453 of the Texas Transportation Code to "Municipal Transit Departments." The proposed amendment to the definition of "Reformulated gasoline" would correct the citation to 42 USC. The proposed amendment to the definition of "Revised Texas I/M State Implementation Plan (SIP)" would change the title to "Texas Inspection and Maintenance State Implementation Plan" to correspond with the correct title of the SIP document; delete the acronym "SIP"; spell out the acronym "EPA" because it is not used again in the definition; and change the name of the commission to "Texas Commission on Environmental Quality." The proposed amendment to the definition of "Tier I federal emission standards" would correct the citation to 42 USC and spell out the acronym "CFR." The proposed amendment to the definitions of "Ultra low emission vehicle" and "Zero emission vehicle" would spell out the acronym "CFR."

Section 114.2, Inspection and Maintenance Definitions

The proposed amendment to the opening paragraph would change the citation to the Texas Health and Safety Code, Chapter 382; state that Chapter 382 is known as the Texas Clean Air Act; correct the title of Subchapter C by adding "and Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program"; and delete the word "shall" in the last sentence.

The proposed amendment to the definition of "Acceleration simulation mode (ASM-2 test)" would remove the word "test" from the acronym. The proposed amendment to the definition of "Consumer Price Index" would lowercase the term in all places because it is not a proper noun. The definition of "Program areas" specifies the county or counties in which the Texas Department of Public Safety, in coordination with the commission, administers the vehicle emissions inspection and maintenance program contained in the Texas Inspection and Maintenance State Implementation Plan.

The proposed amendment to the definition of "Program area" would delete Chambers, Liberty, and Waller Counties from the HGA program area.

SUBCHAPTER C, VEHICLE INSPECTION AND MAINTENANCE AND LOW INCOME VEHICLE REPAIR ASSISTANCE, RETROFIT, AND ACCELERATED VEHICLE RETIREMENT PROGRAM

Section 114.50, Vehicle Emissions Inspection Requirements

The proposed amendment to §114.50 would revise program requirements for the state I/M program for vehicle emissions testing and inspection. The proposed amendment to the program concerns the applicability requirements of §114.50.

The proposed amendment to subsection (a)(2)(A) would spell out the acronym for "EPA."

Subsection (a)(4)(F) and (G) currently define model year vehicles to be tested using on-board diagnostics (OBD) and acceleration simulation mode (ASM-2) in Chambers, Liberty, and Waller Counties beginning May 1, 2005. Subsection (a)(4)(H) allows Chambers, Liberty, and Waller Counties, and their respective largest municipality to submit by May 1, 2002, individually or collectively, resolutions to implement an alternative control strategy. The proposed amendment to subsection (a)(4)(F) - (H) would repeal the vehicle emissions testing program scheduled to begin in Chambers, Liberty, and Waller Counties on May 1, 2005, by deleting §114.50(a)(4)(F) - (H).

The proposed amendment to subsection (b)(2) would correct the citation to 42 USC, §§7401 et seq .

The proposed amendment to subsection (b)(7) would correct the citation to Texas Occupations Code, §2301.002.

Section 114.52, Early Participation Incentive Program

Section 114.52 established the Early Participation Incentive Program (EPIP). This program encouraged owners and operators of emissions inspection stations in Chambers, Liberty, and Waller Counties, to participate in the early purchase of ASM-2 equipment to ensure an adequate number of emissions inspection stations are available by the program start date of May 1, 2005. The proposed amendment would repeal the implementation of the state's EPIP program in Chambers, Liberty, and Waller Counties, and thus, eliminate the incentive for stations in these counties, by deleting §114.52(f). The proposed amendment would also reletter subsection (g) to (f) and change the corresponding reference in §114.52(b) from subsection (g) to subsection (f).

The proposed editorial amendment to subsection (b)(4) would delete the acronym "DPS" because it is not used again in the section; add the word "the" before the word "program" in subsection (b)(5) and (6); and change the word "which" to "that" in relettered subsection (f).

Section 114.53, Inspection and Maintenance Fees

Section 114.53 currently establishes a fee schedule for the different counties. This fee must be paid to the inspection station at the time of the vehicle emissions inspection. Subsection (a)(4) explains that among other counties in the HGA program area, beginning May 1, 2005, in Chambers, Liberty, and Waller Counties any emissions inspection station conducting an ASM-2 or OBD emissions test shall collect a test fee not to exceed $27. The proposed amendment to subsection (a)(4) would remove the fee requirement in Chambers, Liberty, and Waller Counties by deleting the clause "and beginning May 1, 2005, any emissions inspection station in chambers, Liberty, and Waller Counties required to conduct an emissions test in accordance with §114.50(a)(4)(E) and (F) of this title."

The proposed editorial amendment to §114.53 would lowercase the words "Vehicle Repair Form" in subsection (a); delete the acronym "TSI"; and add the word "Texas" to the term "Department of Public Safety" in subsection (a)(1). The proposed editorial amendment in subsection (a)(2) would delete the phrase "(relating to Vehicle Emissions Inspection Requirements)" because it is unnecessary; delete the hyphen from the term "low-income"; and delete the acronym "LIRAP" because it in not used again in the section. The proposed editorial amendment in subsection (a)(3) would delete the acronyms "DFW," "EDFW," "ASM- 2," and "OBD"; add the words "of this title" after the reference to §114.50(a)(2)(A) or (B); and spell out the acronym "DFW." Finally, the proposed editorial amendment in subsection (a)(4) would add the word "and" after the first "of this title, and spell out the acronyms "ASM-2" and "OBD."

SIP narrative changes

In addition to the proposed changes, the proposed revisions to the SIP narrative change the title to "Texas Inspection and Maintenance State Implementation Plan," and clarify the revised program elements such as commonly used terms; applicability changes; emissions testing network type; emissions testing; affected vehicle populations; test procedures, standards, and test equipment; waivers and time extensions; motorist enforcement; on- road vehicle emissions testing; and the implementation schedule.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Analyst, Strategic Planning and Grants Management Section, determined that for the first five-year period the proposed amendments are in effect, no significant fiscal implications are expected for the commission or other units of state and local government as a result of administration or enforcement of the proposed amendments. The commission determined that the amount of pollution coming from vehicles in Chambers, Liberty, and Waller Counties is not sufficient to warrant the implementation of an I/M vehicle emissions testing program in these counties.

This rulemaking action would remove the requirement for Chambers, Liberty, and Waller Counties to implement an I/M vehicle emissions testing program that was due to begin on May 1, 2005. Currently, vehicles in these counties are only required to pass an annual safety inspection. The I/M requirement would have added an emissions inspection for all gasoline-powered motor vehicles that are two to 24 years old.

The removal of the I/M program requirements in these three counties will likely result in cost savings for units of state and local government that operate vehicles that would have received an emissions inspection. Additionally, units of government in the affected counties that currently conduct their own safety inspections would have had to purchase vehicle emissions test analyzers in order to continue testing vehicles. For those units of government that rely on outside businesses to test their vehicles, the annual savings would be $27 per vehicle. The cost for vehicle emissions testing analyzers range from $8,000 for OBD-only analyzers, to $40,000 for ASM-2 test analyzers. There are a total of approximately 84,700 vehicles in the affected counties that would have been subject to the vehicle emissions test, a small percentage of which are owned and operated by units of state or local government. There are 64 identified testing stations in the three counties, all of which would have had to purchase vehicle emissions test analyzers in order to continue performing vehicle inspections. The commission estimates that very few of these stations, if any, are owned and operated by units of state or local government.

Although the proposed amendments would decrease revenues collected, the commission does not anticipate that the loss of revenue will be significant. The commission would have received $.50 for each vehicle emissions test conducted in the three affected counties. Assuming 84,700 tests per year, the revenues to the commission would have been approximately $14,000 in Fiscal Year 2005 (May - August 2005), and approximately $42,000 for Fiscal Year 2006 and each year thereafter.

PUBLIC BENEFITS AND COSTS

Mr. Davis determined that for each year of the first five years the proposed amendments are in effect, the anticipated public benefit from the enforcement of and compliance with the proposed amendments would be the deletion of the requirement for vehicles operating in the affected counties to undergo vehicle emissions tests. The commission determined that an I/M program in these counties would have had little effect on the overall ozone concentration in the HGA ozone nonattainment area. Vehicles in these counties will still have to undergo an annual safety check, which incorporates visual checks to ensure that vehicle emissions controls are not removed or tampered with.

The removal of the I/M program requirements in these three counties will likely result in cost savings for individuals and businesses that operate vehicles that would have received an emissions inspection. Additionally, businesses in the affected counties that currently conduct safety inspections would have had to purchase vehicle emissions test analyzers in order to continue testing vehicles. Individuals and businesses that would have had to have their vehicles undergo an emissions test would have had to pay an additional $27 per vehicle per year. The cost for vehicle emissions testing analyzers range from $8,000 for OBD only analyzers to $40,000 for ASM-2 test analyzers.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

The commission anticipates no adverse fiscal implications as a result of implementation of the proposed amendments for small or micro-businesses. There are 64 identified testing stations in the three counties, all of which would have had to purchase vehicle emissions test analyzers in order to continue performing vehicle inspections. The majority of these businesses are probably small and micro-businesses. The removal of the I/M program requirements for vehicles operating in Chambers, Liberty, and Waller Counties would result in cost savings for small and micro-businesses as discussed in the PUBLIC BENEFITS AND COSTS section of this preamble. These businesses would be able to continue performing annual safety inspections without having to purchase vehicle test analyzers that would have been required to conduct vehicle emissions tests.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission reviewed this proposed rulemaking action and determined that a local employment impact statement is not required because the proposed amendments do not adversely affect a local economy in a material way for the first five years that the proposed amendments are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the proposed rulemaking action in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the action does not meet the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" is a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

While the I/M program taken as a whole is intended to protect the environment and reduce risks to human health from environmental exposure, the proposed amendments are intended to rescind the requirements for emissions testing during annual state inspections of motor vehicles registered in Chambers, Liberty, and Waller Counties. The most recent photochemical modeling for the HGA area indicates that the I/M program scheduled to begin in these three counties on May 1, 2005 will have little effect on ozone concentration in the HGA area, and that attainment of the one-hour ozone standard can be modeled without this control measure. Therefore, these proposed amendments to Chapter 114 are not specifically intended to protect the environment or reduce risks to human health from environmental exposure. Additionally, rescinding the I/M program for Chambers, Liberty, and Waller Counties will not adversely affect in a material way the economy, a sector of the economy, productivity, competition, or jobs.

Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of the four applicability requirements.

The amendments implement requirements of 42 USC. Under 42 USC, §7410, states are required to adopt a SIP which provides for "implementation, maintenance, and enforcement" of the primary national ambient air quality standard in each air quality control region of the state. While §7410, does not require specific programs, methods, or reductions in order to meet the standard, SIPs must include "enforceable emission limitations and other control measures, means or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this chapter," (meaning Chapter 85, Air Pollution Prevention and Control). It is true that 42 USC does require some specific measures for SIP purposes, such as the I/M program, but those programs are the exception, not the rule, in the SIP structure of 42 USC. The provisions of 42 USC recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the ozone standard. This flexibility allows states, affected industry, and the public to collaborate on the best methods for attaining the ozone standard for the specific regions in the state. Even though 42 USC allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of §7410. Thus, while specific measures are not generally required, the emission reductions are required. States are not free to ignore the requirements of §7410, and must develop programs to assure that the nonattainment areas of the state will be brought into attainment on schedule.

The requirement to provide a fiscal analysis of proposed regulations in the Texas Government Code was amended by Senate Bill (SB) 633 during the 75th Legislature, 1997. The intent of SB 633 was to require agencies to conduct an regulatory impact analysis of extraordinary rules. These are identified in the statutory language as major environmental rules that will have a material adverse impact and will exceed a requirement of state law, federal law, or a delegated federal program, or are adopted solely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 that concluded "based on an assessment of rules adopted by the agency in the past, it is not anticipated that the bill would not have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted proposed rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law. As discussed earlier in this preamble, 42 USC does not require specific programs, methods, or reductions in order to meet the ozone standard; thus, states must develop programs for each nonattainment area to ensure that area will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Board in its fiscal notes. Because the legislature is presumed to understand the fiscal impacts of the bills it passes, and that presumption is based on information provided by state agencies and the Legislative Budget Board, the commission believes that the intent of SB 633 was only to require the full regulatory impact analysis for rules that are extraordinary in nature. While the SIP rules will have a broad impact, that impact is no greater than is necessary or appropriate to meet the requirements of 42 USC. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), because they are specifically required by federal law.

In addition, 42 USC, §7502(a)(2), requires attainment as expeditiously as practicable, and §7511a(d), requires states to submit ozone attainment demonstration SIPs for severe ozone nonattainment areas such as HGA area. While the I/M program taken as a whole is intended to protect the environment and reduce risks to human health from environmental exposure, the proposed amendments to rescind the requirements for emissions testing during annual state inspections of motor vehicles registered in Chambers, Liberty, and Waller Counties will not adversely impact the I/M program for the HGA area. Therefore, the proposed amendments are necessary components of and consistent with the ozone attainment demonstration SIP for HGA area, required by 42 USC, §7410.

The commission has consistently applied this construction to its rules since this statute was enacted in 1997. Since that time, the legislature has revised the Texas Government Code but left this provision substantially unamended. The commission presumes that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp , 919 S.W.2d 485. 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue , 960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co. , 798 S.W.2d 353, 357 (Tex. App. Austin 1990, no writ). Cf. Humble Oil & Refining Co. v. Calvert , 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co. , 9 S.W.3d 884 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor , 24 S.W.3d 581 (Tex. App. Austin 2000, pet. denied ); and Coastal Indust. Water Auth. v. Trinity Portland Cement Div. , 563 S.W.2d 916 (Tex. 1978).

As discussed earlier in this preamble, this rulemaking implements requirements of 42 USC. There is no contract or delegation agreement that covers the topic that is the subject of this rulemaking action. Therefore, the proposed amendments do not exceed a standard set by federal law, exceed an express requirement of state law, exceed a requirement of a delegation agreement, nor are adopted solely under the general powers of the agency. In addition, the amendments are proposed under Texas Health and Safety Code, §§382.002, 382.011, 382.012, 382.019, 382.037, and 382.201 - 382.216. The commission invites public comment on the draft regulatory impact analysis determination.

TAKINGS IMPACT ASSESSMENT

The commission completed a takings impact assessment for the proposed rulemaking action under Texas Government Code, §2007.043. Texas Government Code, §2007.003(b)(4), provides that Chapter 2007 does not apply to this proposed rulemaking action, because it is reasonably taken to fulfill an obligation mandated by federal law. States are primarily responsible for ensuring attainment and maintenance of the national ambient air quality standards once the EPA has established them. Under 42 USC, §7410, and related provisions, states must submit for EPA approval, SIPs that provide for the attainment and maintenance of the ozone standard through control programs directed to sources of ozone. Therefore, one purpose of this rulemaking action is to meet the ozone standard established under federal law. Therefore, the proposed amendments are necessary components of and consistent with the ozone attainment demonstration SIP for the HGA area, required by 42 USC, §7410.

In addition, Texas Government Code, §2007.003(b)(13), states that Chapter 2007 does not apply to an action that: 1) is taken in response to a real and substantial threat to public health and safety; 2) is designed to significantly advance the health and safety purpose; and 3) does not impose a greater burden than is necessary to achieve the health and safety purpose. Although the proposed amendments do not directly prevent a nuisance or prevent an immediate threat to life or property, they do prevent a real and substantial threat to public health and safety and significantly advance the health and safety purpose. This action is taken in response to the HGA area exceeding the federal ozone standard, and that exceedance adversely affects public health, primarily through irritation of the lungs. While the I/M program taken as a whole is intended to protect the environment and reduce risks to human health from environmental exposure, the proposed amendments to rescind the requirements for emissions testing during annual state inspections of motor vehicles registered in Chambers, Liberty, and Waller Counties will not adversely impact the I/M program for the HGA area. The action significantly advances the health and safety purpose by reducing ozone levels in the HGA nonattainment area. Consequently, these proposed rules meet the exemption in §2007.003(b)(13). This rulemaking action therefore meets the requirements of Texas Government Code, §2007.003(b)(4) and (13). Additionally, the proposed amendments would be neither a statutory nor a constitutional taking because they do not impact private real property. Specifically, the proposed amendments do not affect private property in a manner which restricts or limits an owner's right to the property that would otherwise exist in the absence of a governmental action. For all these reasons, the proposed amendments do not constitute a takings under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission determined that the proposed rulemaking relates to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code, §§33.201 et seq .), and the commission rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the Texas Coastal Management Program. As required by 30 TAC §281.45(a)(3) and 31 TAC §505.11(b)(2), relating to actions and rules subject to the CMP, commission rules governing air pollutant emissions must be consistent with the applicable goals and policies of the CMP. The commission reviewed this action for consistency with the CMP goals and policies in accordance with the regulations of the Coastal Coordination Council and determined that the proposed amendments are consistent with the applicable CMP goal expressed in 31 TAC §501.12(1) of protecting and preserving the quality and values of coastal natural resource areas, and the policy in 31 TAC §501.14(q), which requires that the commission protect air quality in coastal areas. If adopted, the amendments will rescind the requirements for emissions testing during annual state inspections of motor vehicles registered in Chambers, Liberty, and Waller Counties. While the I/M program taken as a whole is intended to protect the environment and reduce risks to human health from environmental exposure, the proposed amendments to rescind the requirements for emissions testing during annual state inspections of motor vehicles registered in Chambers, Liberty, and Waller Counties will not adversely impact the I/M program for the HGA area. No new contaminants will be authorized by these proposed amendments. Interested persons may submit comments on the consistency of the proposed amendments with the CMP during the public comment period.

ANNOUNCEMENT OF HEARINGS

Public hearings for this proposed rulemaking have been scheduled for: August 2, 2004, 1:30 p.m. and 5:30 p.m., City of Houston, City Council Chambers, 2nd Floor, 901 Bagby, Houston; August 3, 2004, 10:30 a.m., John Gray Institute, 855 Florida Avenue, Beaumont; and August 5, 2004, 9:30 a.m., Texas Commission on Environmental Quality, 12100 North I-35, Building F, Room 2210, Austin. The hearings will be structured for the receipt of oral or written comments by interested persons. Registration will begin 30 minutes prior to the hearings. Individuals may present oral statements when called upon in order of registration. A time limit may be established at the hearings to assure that enough time is allowed for every interested person to speak. There will be no open discussion during the hearings; however, commission staff members will be available to discuss the proposal 30 minutes before the hearings and will answer questions before and after the hearings.

Persons planning to attend the hearings who have special communication or other accommodation needs, should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Written comments may be submitted to Patricia Durón, MC 205, Office of Environmental Policy, Analysis, and Assessment, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087; faxed to (512) 239-4808; or emailed to siprules@tceq.state.tx.us . All comments should reference Rule Project Number 2004-035-114-AI. Comments must be received by 5:00 p.m. on August 9, 2004. For further information, please contact Ray Schubert, Technical Analysis Division, at (512) 239-6615 or Alan Henderson, Policy and Regulations Division, at (512) 239-1510.

Subchapter A. DEFINITIONS

30 TAC §114.1, §114.2

STATUTORY AUTHORITY

The amendments are proposed under Texas Water Code, §5.102, concerning General Powers, §5.103, concerning Rules, and §5.105, concerning General Policy, which provide the commission with the general powers to carry out its duties and authorize the commission to adopt rules necessary to carry out its powers and duties under the Texas Water Code; and under Texas Health and Safety Code, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of Texas Health and Safety Code, Chapter 382 (also known as the Texas Clean Air Act). The amendments are also proposed under Texas Health and Safety Code, §382.002, concerning Policy and Purpose, which establishes the commission purpose to safeguard the state air resources, consistent with the protection of public health, general welfare, and physical property; §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.012, concerning State Air Control Plan, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; §382.019, which authorizes the commission to adopt rules to control and reduce emissions from engines used to propel land vehicles; and Texas Health and Safety Code, Subchapter G, §§382.201 - 382.216, which authorizes the commission by rule to establish, implement, and administer a program requiring emissions-related inspections of motor vehicles to be performed at inspection facilities consistent with the requirements of 42 USC, §§7401 et seq .

The proposed amendments implement Texas Health and Safety Code, §§382.002, 382.011, 382.012, 382.019, and 382.201 - 382.216.

§114.1.Definitions.

Unless specifically defined in Texas Health and Safety Code, Chapter 382, also known as the Texas Clean Air Act (TCAA) [ TCAA ] or in the rules of the commission, the terms used by the commission have the meanings commonly ascribed to them in the field of air pollution control. In addition to the terms which are defined by the TCAA, the following words and terms, when used in this chapter, [ shall ] have the following meanings, unless the context clearly indicates otherwise.

(1) - (3) (No change.)

(4) First safety inspection certificate--Initial Texas Department of Public Safety (DPS) certificates issued through DPS certified inspection stations for every new vehicle found to be in compliance with the rules and regulations governing safety inspections.

(5) Gross vehicle weight rating [ (GVWR) ]--The value specified by the manufacturer as the maximum design loaded weight of a vehicle. This is the weight as expressed on the vehicle's registration, and includes the weight the vehicle can carry or draw.

(6) Heavy-duty vehicle--Any passenger vehicle or truck capable of transporting people, equipment, or cargo, that has a gross vehicle weight rating (GVWR) [ GVWR ] greater than 8,500 pounds [ lbs. ], and is required to be registered under [ the ] Texas Transportation Code, §502.002. For purposes of the mobile emission reduction credit [ Mobile Emission Reduction Credit (MERC) ] trading program the heavy-duty class is divided into the following subclasses:

(A) Light heavy-duty vehicle--Any passenger vehicle or truck capable of transporting people, equipment, or cargo that has a GVWR greater than 8,500 pounds [ lbs. ], but less than or equal to 10,000 pounds [ lbs ].

(B) Medium heavy-duty vehicle--Any passenger vehicle or truck capable of transporting people, equipment, or cargo that has a GVWR greater than 10,000 pounds, [ lbs. ] but less than or equal to 19,500 pounds [ lbs ].

(C) Heavy heavy-duty vehicle--Any passenger vehicle or truck capable of transporting people, equipment, or cargo that has a GVWR greater than 19,500 pounds [ lbs ].

(7) Inherently low emission vehicle--A vehicle as defined by 40 [ Title 40, ] Code of Federal Regulations [ (40 CFR) ], Part 88.

(8) (No change.)

(9) Light-duty vehicle--Any passenger vehicle or truck capable of transporting people, equipment, or cargo, that has a gross vehicle weight rating (GVWR) [ GVWR ] less than or equal to 8,500 pounds [ lbs. ], and registered or required to be registered under Texas Transportation Code, §502.002. For purposes of the mobile emission reduction credit [ MERC ] trading program the light-duty class is divided into the following subclasses:

(A) Light-duty vehicle--Any passenger vehicle capable of seating 12 or fewer passengers that has a GVWR less than or equal to 6,000 pounds [ lbs ].

(B) Light-duty truck 1--Any passenger truck capable of transporting people, equipment, or cargo, that has a GVWR less than or equal to 6,000 pounds [ lbs ].

(C) Light-duty truck 2--Any passenger truck capable of transporting people, equipment, or cargo, that has a GVWR greater than 6,000 pounds, [ lbs. ] but less than 8,500 pounds [ lbs ].

(10) Loaded mode inspection and maintenance [ (I/M) ] test--A measurement of the tailpipe exhaust emissions of a vehicle while the drive wheel rotates on a dynamometer, which simulates the full weight of the vehicle driving down a level roadway. Loaded test equipment specifications shall meet United States Environmental Protection Agency [ EPA ] requirements for acceleration simulation mode [ Acceleration Simulation Mode ] equipment.

(11) Low emission vehicle (LEV)--A vehicle in a class or category of vehicles that has been certified by the United States Environmental Protection Agency [ EPA ] for any model year to meet:

(A) the LEV standards applicable under 42 United States Code, [ the Federal Clean Air Act as amended ] Part C, Subchapter II, §§7581 et seq. [ (U.S.C. 42 Section 7581 et seq.) ]; or

(B) emission limits at least as stringent as the applicable LEV standards for the Federal Clean Fuel Fleet program under 40 Code of Federal Regulations §§88.104-94, 88.105-94, and 88.311-93, [ 40 CFR, Parts 88.104-94, 88.105-94, and 88.311-93 ] as published in the Federal Register on September 30, 1994 (59 FR 50042).

(12) Mass transit authority--A transportation or transit authority or department established under Chapter 141, 63rd Legislature, 1973 , as defined in [ the ] Texas Transportation Code, Chapters 451- 453 (relating to Metropolitan Rapid Transit Authorities, Regional Transportation Authorities, and Municipal Transit Departments [ Transportation Authorities ]), that operates a mass transit system under any of those laws.

(13) (No change.)

(14) Reformulated gasoline--Gasoline that has been certified as a reformulated gasoline under the federal certification regulations adopted in accordance with 42 United States Code, §7545(k) [ the Federal Clean Air Act, §211(k)(42 United States Code, §7545(k)) ].

(15) [ Revised ] Texas Inspection and Maintenance [ I/M ] State Implementation Plan [ (SIP) ]--The portion of the Texas state implementation plan that [ SIP which ] includes the procedures and requirements of the vehicle emissions inspection and maintenance program as adopted by the commission May 29, 1996, in accordance with [ the ] 40 Code of Federal Regulations [ CFR ] Part 51, Subpart S, issued November 5, 1992; the United States Environmental Protection Agency [ EPA ] flexibility amendments dated September 18, 1995; and the National Highway Systems Designation Act of 1995. A copy of the [ revised ] Texas Inspection and Maintenance State Implementation Plan [ I/M SIP ] is available at the Texas Commission on Environmental Quality [ Texas Natural Resource Conservation Commission ], 12100 Park 35 Circle, Austin, Texas, 78753; mailing address: P.O. Box 13087, MC 166, Austin, Texas 78711-3087.

(16) Tier I federal emission standards--The standards are defined in 42 United States Code, §7521 [ the FCAA as amended in §202, USC Title 42 §7521 ], and in 40 Code of Federal Regulations [ CFR ], Part 86. The phase-in of these standards began in model year 1994.

(17) Ultra low emission vehicle--A vehicle as defined by 40 Code of Federal Regulations [ CFR ], Part 88.

(18) Zero emission vehicle--A vehicle as defined by 40 Code of Federal Regulations [ CFR ], Part 88.

§114.2.Inspection and Maintenance [ (I/M) ] Definitions.

Unless specifically defined in Texas Health and Safety Code, Chapter 382, also known as the Texas Clean Air Act (TCAA), [ TCAA ] or in the rules of the commission, the terms used by the commission have the meanings commonly ascribed to them in the field of air pollution control. In addition to the terms which are defined by the TCAA, the following words and terms, when used in Subchapter C of this chapter (relating to Vehicle Inspection and Maintenance and Low Income Vehicle Repair Assistance, Retrofit, and Accelerated Vehicle Retirement Program ), [ shall ] have the following meanings, unless the context clearly indicates otherwise.

(1) Acceleration simulation mode (ASM-2 [ test ]) test --An emissions test using a dynamometer (a set of rollers on which a test vehicle's tires rest) which applies an increasing load or resistance to the drive train of a vehicle, thereby simulating actual tailpipe emissions of a vehicle as it is moving and accelerating. The ASM-2 vehicle emissions test is comprised of two phases:

(A) - (B) (No change.)

(2) Consumer price index [ Price Index ]--The consumer price index [ Consumer Price Index ] for any calendar year is the average of the consumer price index [ Consumer Price Index ] for all-urban consumers published by the Department of Labor, as of the close of the 12-month period ending on August 31 of the calendar year.

(3) - (8) (No change.)

(9) Program area--County or counties in which the Texas Department of Public Safety, in coordination with the commission, administers the vehicle emissions inspection and maintenance program contained in the [ revised ] Texas Inspection and Maintenance [ (I/M) ] State Implementation Plan. These program areas include:

(A) the Dallas/Fort Worth [ (DFW) ] program area , consisting of [ which consists of ] the following counties: Dallas, Denton, Collin, and Tarrant;

(B) the El Paso program area , consisting of [ which consists of ] El Paso County;

(C) the Houston/Galveston program area , consisting of [ which consists of ] Brazoria, [ Chambers, ] Fort Bend, Galveston, Harris, [ Liberty, Montgomery, ] and Montgomery [ Waller ] Counties; and

(D) the extended Dallas/Fort Worth [ DFW (EDFW) ] program area , consisting of [ which consists of ] Ellis, Johnson, Kaufman, Parker, and Rockwall Counties. These counties will become part of the program area as of May 1, 2003.

(10) - (13) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 28, 2004.

TRD-200403610

Stephanie Bergeron

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: July 11, 2004

For further information, please call: (512) 239-6087


Subchapter C. VEHICLE INSPECTION AND MAINTENANCE AND LOW INCOME VEHICLE REPAIR ASSISTANCE, RETROFIT, AND ACCELERATED VEHICLE RETIREMENT PROGRAM

1. VEHICLE INSPECTION AND MAINTENANCE

30 TAC §§114.50, 114.52, 114.53

STATUTORY AUTHORITY

The amendments are proposed under Texas Water Code, §5.102, concerning General Powers, §5.103, concerning Rules, and §5.105, concerning General Policy, which provide the commission with the general powers to carry out its duties and authorize the commission to adopt rules necessary to carry out its powers and duties under the Texas Water Code; and under Texas Health and Safety Code, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of Texas Health and Safety Code, Chapter 382 (also known as the Texas Clean Air Act). The amendments are also proposed under Texas Health and Safety Code, §382.002, concerning Policy and Purpose, which establishes the commission purpose to safeguard the state air resources, consistent with the protection of public health, general welfare, and physical property; §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.012, concerning State Air Control Plan, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; §382.019, which authorizes the commission to adopt rules to control and reduce emissions from engines used to propel land vehicles; and Texas Health and Safety Code, Subchapter G, §§382.201 - 382.216, which authorizes the commission by rule to establish, implement, and administer a program requiring emissions-related inspections of motor vehicles to be performed at inspection facilities consistent with the requirements of 42 USC, §§7401 et seq .

The proposed amendments implement Texas Health and Safety Code, §§382.002, 382.011, 382.012, 382.019, and 382.201 - 382.216.

§114.50.Vehicle Emissions Inspection Requirements.

(a) Applicability. The requirements of this section and those contained in the revised Texas Inspection and Maintenance (I/M) State Implementation Plan (SIP) shall be applied to all gasoline- powered motor vehicles two [ 2 ] - 24 years old and subject to an annual emissions inspection, beginning with the first safety inspection. Currently, military tactical vehicles, motorcycles, diesel-powered vehicles, dual-fueled vehicles which cannot operate using gasoline, and antique vehicles registered with the Texas Department of Transportation are excluded from the program. Safety inspection facilities and inspectors certified by the Texas Department of Public Safety (DPS) shall inspect all subject vehicles, in the following program areas, as defined in §114.2 of this title (relating to Inspection and Maintenance (I/M) Definitions), in accordance with the following schedule.

(1) (No change.)

(2) This paragraph applies to all vehicles registered and primarily operated in the Dallas/Fort Worth (DFW) program area.

(A) Beginning May 1, 2002, all 1996 and newer model year vehicles registered and primarily operated in Collin, Dallas, Denton, and Tarrant Counties equipped with on-board diagnostic (OBD) systems shall be tested using United States Environmental Protection Agency (EPA)-approved [ EPA-approved ] OBD test procedures.

(B) - (C) (No change.)

(3) (No change.)

(4) This paragraph applies to all vehicles registered and primarily operated in the Houston/Galveston (HGA) program area.

(A) - (E) (No change.)

[ (F) Beginning May 1, 2005, all 1996 and newer model year vehicles equipped with OBD systems and registered and primarily operated in Chambers, Liberty, and Waller Counties shall be tested using EPA-approved OBD test procedures. ]

[ (G) Beginning May 1, 2005, all pre-1996 model year vehicles registered and primarily operated in Chambers, Liberty, and Waller Counties shall be tested using an ASM-2 test, or a vehicle emissions test that meets SIP emissions reduction requirements and is approved by the EPA. ]

[ (H) If Chambers, Liberty, and Waller Counties and their respective largest municipality submit by May 1, 2002, individually or collectively, a resolution that is approved by the commission and EPA as an alternative air control plan, then subparagraphs (F) and (G) of this paragraph are not required. The resolution should provide a control plan that will provide modeled reductions of volatile organic compounds and nitrogen oxides equivalent to the reductions that have been modeled for these counties through the implementation of the I/M program. In determining approvability of a plan, the commission will consider federal I/M program requirements. ]

(5) (No change.)

(b) Control requirements.

(1) (No change.)

(2) All federal government agencies shall require a motor vehicle operated by any federal government agency employee on any property or facility under the jurisdiction of the agency and located in a program area to comply with all vehicle emissions I/M requirements contained in the revised Texas I/M SIP. Commanding officers or directors of federal facilities shall certify annually to the executive director, or appointed designee, that all subject vehicles have been tested and are in compliance with the Federal Clean Air Act [ FCAA ] (42 United States Code, §§7401 et seq .). This requirement shall not apply to visiting agency, employee, or military personnel vehicles as long as such visits do not exceed 60 calendar days per year.

(3) Any motorist in the DFW, EDFW, HGA, or El Paso program areas who has received a notice from an emissions inspection station that there are recall items unresolved on his or her [ their ] motor vehicle, should furnish proof of compliance with the recall notice prior to the next vehicle emissions inspection. The motorist may present a written statement from the dealership or leasing agency indicating that emissions repairs have been completed as proof of compliance.

(4) - (6) (No change.)

(7) A subject vehicle registered in a county without an I/M program which meets the applicability criteria of subsection (a) of this section and the ownership of which has changed through a retail sale as defined by [ Texas Motor Vehicle Commission Code, Article 4413(36), §1.03, (moved to ] Texas Occupations Code, §2301.002, [ effective June 1, 2003) ] is not eligible for title receipt or registration in a county with an I/M program unless proof is presented that the vehicle has passed an approved vehicle emissions inspection within 90 days before the title transfer. The evidence of proof required may be in the form of the vehicle inspection report (VIR) or another proof of the program compliance as authorized by DPS. All 1996 and newer model year vehicles with less than 50,000 miles are exempt from the test-on-resale requirements of this paragraph.

(8) (No change.)

(c) - (d) (No change.)

§114.52.Early Participation Incentive Program.

(a) (No change.)

(b) Eligibility. In order to be eligible to receive the incentive described in subsection (f) [ (g) ] of this section, an emissions inspection station owner or operator must meet the following requirements.

(1) - (3) (No change.)

(4) The emissions inspection station must be a Texas Department of Public Safety [ (DPS) ] certified official vehicle inspection station from the program start date and must continue ASM-2 emissions testing for five years following the program start date or until ASM-2 testing is terminated by the state.

(5) The ASM-2 testing equipment at the emissions inspection station must be operational by the program start date in order to be covered by this incentive program.

(6) The ASM-2 equipment must be certified for use in the Texas Inspection/Maintenance Program by the program start date in accordance with §114.51 of this title (relating to Equipment Evaluation Procedures for Vehicle Exhaust Gas Analyzers).

(c) - (e) (No change.)

[ (f) Program areas beginning May 2005. For program areas that begin ASM-2 testing in May 2005 (Chambers, Liberty, and Waller Counties), the same incentive is offered subject to the requirements listed in this section. The enrollment period for these counties is October 15, 2004 through December 31, 2004. The executive director will accept the first 30 eligible emissions inspection stations into the program. At the discretion of the executive director, additional stations may be accepted into the program to ensure adequate distribution of stations throughout the program area. ]

(f) [ (g) ] Incentive payment plan. Emissions inspection station owners or operators who are accepted into the program and who maintain their eligibility are eligible to receive a payment of $675 per month to cover the remainder of the five-year period following the program start date if the ASM-2 testing requirement is terminated by state rule or statute during the first five years following the program start date. Participating emissions inspection stations that [ which ] have conducted more than 12,000 emissions tests at program termination are not eligible for payment.

§114.53.Inspection and Maintenance Fees.

(a) The following fees must be paid for an emissions inspection of a vehicle at an inspection station. This fee shall include one free retest should the vehicle fail the emissions inspection, provided that the motorist has the retest performed at the same station where the vehicle originally failed and submits, prior to the retest, a properly completed vehicle repair form [ Vehicle Repair Form ] showing that emissions-related repairs were performed and the retest is conducted within 15 days of the initial emissions test.

(1) Through April 30, 2002, any emissions inspection station required to conduct a two-speed idle [ (TSI) ] test in accordance with §114.50(a)(1) of this title (relating to Vehicle Emissions Inspection Requirements) shall collect a fee of $13 and shall remit $1.75 to the Texas Department of Public Safety (DPS).

(2) In El Paso County beginning May 1, 2002, any emissions inspection station required to conduct an emissions test in accordance with §114.50(a)(1) or (5)(A), (B), or (C) of this title [ (relating to Vehicle Emissions Inspection Requirements) ] shall collect a fee of $14 and shall remit $2.50 to the DPS. If the El Paso County Commissioners Court adopts a resolution that is approved by the commission to participate in the " Low Income [ Low-Income ] Repair Assistance Program [ (LIRAP) ]," the emissions inspection station shall collect a fee of $17 and shall remit to DPS $5.50 beginning upon the date specified by the commission upon approval of the resolution.

(3) In the Dallas/Fort Worth [ (DFW) ] program area beginning May 1, 2002, any emissions inspection station required to conduct an emissions test in accordance with §114.50(a)(2)(A) or (B) of this title , and in the extended Dallas/Fort Worth [ DFW (EDFW) ] program area beginning May 1, 2003, any emissions inspection station required to conduct an emissions test in accordance with §114.50(a)(3)(A) or (B) of this title shall collect a fee not to exceed $27. The emissions inspection station shall remit to the DPS $2.50 for each acceleration simulation mode [ (ASM-2) ] test and $8.50 for each on-board diagnostics [ (OBD) ] test.

(4) In the Houston/Galveston program area beginning May 1, 2002, any emissions inspection station in Harris County required to conduct an emissions test in accordance with §114.50(a)(4)(A) or (B) of this title; and beginning May 1, 2003, any emissions inspection station in Brazoria, Fort Bend, Galveston, and Montgomery Counties required to conduct an emissions test in accordance with §114.50(a)(4)(C) or (D) of this title; [ and beginning May 1, 2005, any emissions inspection station in Chambers, Liberty, and Waller Counties required to conduct an emissions test in accordance with §114.50(a)(4)(E) or (F) of this title ] shall collect a fee not to exceed $27. The emissions inspection station shall remit to the DPS $2.50 for each acceleration simulation mode [ ASM-2 ] test and $8.50 for each on-board diagnostics [ OBD ] test.

(b) - (c) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 28, 2004.

TRD-200403611

Stephanie Bergeron

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: July 11, 2004

For further information, please call: (512) 239-6087


Subchapter I. NON-ROAD ENGINES

2. LAWN SERVICE EQUIPMENT OPERATING RESTRICTIONS

30 TAC §114.452, §114.459

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Commission on Environmental Quality or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Commission on Environmental Quality (commission) proposes the repeal of §114.452 and §114.459; and corresponding revisions to the state implementation plan (SIP).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED REPEALS

The Houston/Galveston (HGA) ozone nonattainment area is classified as Severe-17 under the Federal Clean Air Act Amendments of 1990 (as codified in 42 United States Code (USC), §§7401 et seq .), and therefore, is required to attain the one-hour ozone standard of 0.12 parts per million (125 parts per billion) by November 15, 2007. The HGA area consists of Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties, and has been working to develop a demonstration of attainment in accordance with 42 USC, §7410 et seq . The most relevant HGA SIP revisions to date are the December 2000 one-hour ozone standard attainment demonstration, the September 2001 follow-up revision, and the December 2002 nitrogen oxides (NO x )/highly-reactive volatile organic compound (HRVOC) revision.

This process has proven to be extremely challenging due to the magnitude of reductions needed for attainment. The emission reduction requirements included as part of the December 2000 SIP revision represent substantial, intensive efforts on the part of stakeholder coalitions in the HGA area, in partnership with the commission, to address ozone. These coalitions, which include local governmental entities, elected officials, environmental groups, industry, consultants, and the public, as well as the United States Environmental Protection Agency (EPA) and the commission, worked diligently to identify and quantify control strategy measures for the HGA attainment demonstration area.

December 2000

The December 2000 SIP revision contained rules and photochemical modeling analyses in support of the HGA ozone attainment demonstration area. The majority of the emissions reductions identified in this revision were from a 90% reduction in point source NO x . The modeling analysis also indicated a shortfall in necessary NO x emission reductions, such that an additional 91 tons per day (tpd) of NO x reductions were necessary for an approvable attainment demonstration. In addition, the revision contained post-1999 rate-of-progress (ROP) plans for the milestone years 2002 and 2005 and for the attainment year 2007, and transportation conformity motor vehicle emissions budgets (MVEB) for NOx and volatile organic compound (VOC) emissions. The SIP also contained enforceable commitments to implement further measures in support of the HGA attainment demonstration area, as well as a commitment to perform and submit a midcourse review.

September 2001

The September 2001 SIP revision for the HGA ozone nonattainment area included the following elements: 1) corrections to the ROP table/budget for the years 2002, 2005, and 2007 due to a mathematical inconsistency; 2) incorporation of a change to the idling restriction control strategy to clarify that the operator of a rented or leased vehicle is responsible for compliance with the requirements in situations where the operator of a leased or rented vehicle is not employed by the owner of the vehicle (The commission committed to making this change when the rule was adopted in December 2000.); 3) incorporation of revisions to the clean diesel fuel rules to provide greater flexibility for compliance with the requirements of the rule while preserving the emission reductions necessary to demonstrate attainment in the HGA area; 4) incorporation of a stationary diesel engine rule that was developed as a result of the state's analysis of EPA's reasonably available control measures; 5) incorporation of revisions to the point source NO x rules; 6) incorporation of revisions to the emissions cap and trade rules; 7) the removal of the construction equipment operating restriction and the accelerated purchase requirement for Tier 2/3 heavy-duty equipment; 8) the replacement of these rules with the Texas Emission Reduction Plan (TERP) program; 9) the layout of the midcourse review process that details how the state will fulfill the commitment to obtain the additional emission reductions necessary to demonstrate attainment of the one-hour ozone standard in the HGA area; and 10) replacement of 2007 ROP MVEBs to be consistent with the attainment MVEBs.

As was discussed in the December 2000 revision, the modeling resulted in a 141 parts per billion peak ozone level which correlated to a shortfall calculation of 91 tpd NO x equivalent. An additional five tpd was added to the shortfall, because the state could not take credit for the NO x reductions associated with the diesel pull-ahead strategy. The excess emissions from this strategy were not included in the original emissions inventory. The gap control measures adopted in December 2000, along with the stationary diesel engine rules included in the September 2001 revision, resulted in NO x reductions of 40 tpd, which left a total remaining shortfall of 56 tpd. The state committed to address this shortfall through the midcourse review process.

December 2002

In January 2001, the Business Coalition for Clean Air - Appeal Group (BCCA-AG) and several regulated companies challenged the December 2000 HGA SIP and some of the associated rules. Specifically, the BCCA-AG challenged the 90% NOx reduction requirement from stationary sources in the HGA area. In May 2001, the parties agreed to a stay in the case, and Judge Margaret Cooper, Travis County District Court, signed a consent order, effective June 8, 2001, requiring the commission to perform an independent, thorough analysis of the causes of rapid ozone formation events and identify potential mitigating measures not yet identified in the HGA attainment demonstration area, according to the milestones and procedures in Exhibit C (Scientific Evaluation) of the order.

In compliance with the consent order, the commission conducted a scientific evaluation based in large part on aircraft data collected by the Texas 2000 Air Quality Study (TexAQS). The TexAQS, a comprehensive research project conducted in August and September 2000 involving more than 40 research organizations and over 200 scientists, studied ground-level ozone air pollution in the HGA area and East Texas regions. The study revealed that while industrial source NO x emissions were generally correctly accounted for, industrial source VOC emissions were likely significantly understated in earlier emissions inventories. The study also showed that surface monitors were insufficient to capture the phenomenon of ozone plumes downwind of industrial facilities. On four separate days, aircraft instruments recorded ozone levels exceeding 125 parts per billion that were missed by surface monitoring equipment. The findings from the study are constantly evolving and have raised questions about the formation of high ozone levels in the HGA area.

To address these findings and to fulfill obligations in the consent order, the commission adopted a SIP revision in December 2002 that focused on replacing the most stringent 10% industrial NO x reductions with VOC controls. In light of the TexAQS study, the commission conducted further modeling analysis of ambient VOC data. The results of photochemical grid modeling and analysis indicated that the same level of air quality benefits achieved with a 90% industrial NO x emissions reduction could be achieved with an overall 80% industrial NO x emissions reduction when combined with an industrial VOC emissions reduction. This conclusion was based on results from several studies, including photochemical grid modeling of the August - September 2000 episode using a top-down emissions inventory adjustment to point source HRVOC emissions, and analyses of ambient HRVOC measurements made by commission automated gas chromatographs and airborne canisters using the maximum incremental reactivity and hydroxyl reactivity scales. Four HRVOCs (ethylene, propylene, 1,3-butadiene, and butenes) clearly play important roles in the HGA ozone formation area, and these four seemed to be the best candidates for the first round of HRVOC controls.

In order to address these scientific findings, the commission adopted revisions to the industrial source control requirements, one of the control strategies within the existing federally approved SIP. The December 2002 revision contains new rules to reduce HRVOC emissions from four key industrial sources: fugitives, flares, process vents, and cooling towers. The adopted rules target HRVOCs while maintaining the integrity of the SIP. Analysis showed that limiting emissions of ethylene, propylene, 1,3-butadiene, and butenes in conjunction with an 80% reduction in NO x is equivalent in terms of air quality benefit to that resulting from a 90% point source NOx reduction requirement. As such, the HRVOC rules are performance-based, emphasizing monitoring, recordkeeping, reporting, and enforcement, rather than establishing individual unit emission rates.

The technical support documentation accompanying the revision contains the supporting analysis for early results from ongoing analysis examining whether reductions in HRVOC emissions could replace the last 10% of industrial NO x controls with a reduction of approximately 64% in industrial HRVOC emissions, while ensuring that the air quality specified in the approved December 2000 HGA SIP is met.

Current SIP Revision

As mentioned previously, the commission committed to perform a midcourse review to ensure attainment of the one-hour ozone standard. The midcourse review process provides the ability to update emissions inventory data, utilize current modeling tools, such as MOBILE6, and enhance the photochemical grid modeling. The data gathered from the TexAQS continues to improve photochemical modeling of the HGA area. The collection of these technical improvements give a more comprehensive understanding of the ozone challenge in the HGA area that is necessary to develop an attainment plan. In the early part of 2003, the commission was preparing to move forward with the midcourse review; however, during the same time period EPA announced its plans to begin implementation of the eight-hour ozone standard. The EPA published proposed rules for implementation of the eight-hour ozone standard in the June 2, 2003 issue of the Federal Register (68 FR 32802). In the same time frame, EPA also formalized its intentions to designate areas for the eight-hour ozone standard by April 15, 2004, meaning states would need to reassess their efforts and control strategies to address this new standard by 2007. Recognizing that existing one-hour nonattainment areas would soon be subject to the eight-hour ozone standard, and in an effort to efficiently manage the state's limited resources, the commission decided to develop an approach that addresses the outstanding obligations under the one-hour ozone standard while beginning to analyze eight-hour ozone issues.

The commission's one-hour ozone SIP commitments include: 1) completing a one-hour ozone midcourse review; 2) performing modeling; 3) adopting measures sufficient to fill the NO x shortfall; 4) adopting measures sufficient to demonstrate attainment; and 5) revising the MVEB using MOBILE6.

Results from the TexAQS and recent photochemical modeling indicate that additional HRVOC reductions will be the most beneficial measure in reducing ozone in the HGA area. The commission is proposing to reduce HRVOC emissions to reach attainment of the one-hour ozone standard. The photochemical modeling of the August - September 2000 episode coupled with a weight-of-evidence argument demonstrates attainment of the one-hour ozone standard. To achieve the necessary HRVOC reductions, the commission is proposing a two-pronged approach that would address short-term emission events through a not-to-exceed limit, and would address steady state and routine emissions through an annual cap. The annual HRVOC cap would be reduced from the existing HRVOC cap in order to support the attainment demonstration modeling.

The HGA SIP no longer relies as heavily on NO x based strategies. A combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area, and there is no longer a NO x shortfall in the HGA SIP. The commission also evaluated a number of the existing control strategies that were put in place in the December 2000 revision. The photochemical modeling shows that some of these strategies are no longer necessary to attain the one-hour ozone standard. This SIP revision is proposing the repeal of the commercial lawn and garden equipment operating restrictions, the repeal of the heavy-duty vehicle idling restrictions, and the removal of the motor vehicle inspection and maintenance (I/M) program requirements from Chambers, Liberty, and Waller Counties. In addition, this SIP proposal includes revisions to the environmental speed limit strategy. In September 2002, the commission revised the existing speed limit strategy to suspend the 55 mile per hour (mph) speed limit until May 1, 2005, and, where posted speeds were 65 mph or higher before May 1, 2002, to increase speeds to five mph below what was posted. The 78th Legislature, 2003, removed the commission's authority to determine speed limits for environmental purposes; therefore, this proposal would remove the reinstatement of the 55 mph speed limit on May 1, 2005, and would maintain the currently posted speed limits at five mph below the posted limit before May 1, 2002. Also, as part of this SIP revision, the commission is proposing new statewide portable fuel container rules. Historically, the commission has expressed a preference to implement technology-based strategies over behavior-altering strategies, and these proposed changes embody that philosophy.

Through this revision, the commission is fulfilling its outstanding one-hour ozone SIP obligations and beginning to plan for the upcoming eight-hour ozone standard. This proposal demonstrates attainment of the one-hour ozone standard in HGA in 2007 and provides a preliminary analysis of the HGA area in terms of the eight-hour ozone standard in 2007 and 2010. EPA's proposed eight-hour implementation rules provide flexibility to the states in transitioning from the one-hour to the eight-hour ozone standard, and the commission believes the steps taken in this proposal and the technical work performed to date will be invaluable through the transition period. Upon EPA's finalization of the eight-hour implementation and the transportation conformity rules, the commission expects to begin developing eight-hour ozone SIPs.

Sections 114.452 and 114.459 were originally adopted on December 6, 2000, as part of the SIP control strategy for the HGA ozone nonattainment area to achieve attainment with the national ambient air quality standard (NAAQS) for ozone. The purpose of the rules was to establish a restriction on the use of commercial lawn and garden equipment (non-road, spark-ignition equipment rated at 25 horsepower (hp) and less) as an air pollution control strategy to delay the emissions of nitrogen oxides (NO x ), a key ozone precursor, until later in the day, thus limiting ozone formation. By delaying the hours of operation during the effective time period, the NOx emissions will not mix in the atmosphere with other ozone-causing compounds until later in the day. The critical time for the mixing (chemical reactions) of NO x and volatile organic compounds (VOC) is early in the day, thus higher ozone levels occur most frequently on hot summer afternoons. By delaying the operation of the affected equipment, the NO x emissions are less likely to mix in the atmosphere with other ozone-forming compounds until after the critical mixing time has passed. Therefore, production of ozone will be stalled until later in the day when optimum ozone formation conditions no longer exist, ultimately minimizing the peak level of ozone produced.

Historically, the commission expressed a preference to implement technology-based strategies over behavior-altering strategies such as the lawn and garden equipment operating restrictions. The commission delayed the implementation of these rules until 2005 in order to research other methods of achieving the same amount of NO x and VOC reductions. The commission reevaluated a number of the existing control strategies, including lawn and garden equipment operating restrictions, that were put in place in the December 2000 revision. Results from the Texas 2000 AQS and recent photochemical modeling indicate that additional HRVOC reductions will be the most beneficial measure in reducing ozone in the HGA area and that this strategy is no longer necessary to attain the one-hour ozone standard. Therefore, the commission is proposing the repeal of Chapter 114, Subchapter I, Division 6.

SECTION BY SECTION DISCUSSION

Sections 114.452 and 114.459 are proposed to be repealed because the commission determined that this strategy is no longer necessary to attain the one-hour ozone standard.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Analyst, Strategic Planning and Appropriations Section, determined that for the first five-year period the proposed repeals are in effect, no fiscal implications are expected for the agency or other units of state and local government as a result of administration or enforcement of the proposed repeals.

This proposed rulemaking would repeal the commission rules in Subchapter I, Non-Road Engines; Division 6, Lawn Service Equipment Operating Restrictions, and make corresponding changes to the SIP. The lawn service equipment operating restriction rules were intended to establish a restriction on the use of commercial lawn and garden equipment as an air pollution control strategy. However, implementation of the rules was delayed until 2005 in order to research alternative pollution reduction methods. Implementation of the proposed repeals is not expected to result in any fiscal implications for units of state and local government because the original rules were never implemented.

PUBLIC BENEFITS AND COSTS

Mr. Davis also determined that for each year of the first five years the proposed repeals are in effect, the public benefit anticipated from the enforcement of and compliance with the proposed repeals would be the elimination of a pollution control strategy that the agency determined is no longer necessary to attain the one-hour ozone standard.

The proposed repeals are not expected to result in any fiscal implications for individuals or businesses because the original rules were never implemented.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated as a result of implementation of the proposed repeals for small or micro-businesses. The proposed repeals are not expected to result in any fiscal implications for small or micro-businesses because the original rules were never implemented.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed repeals do not adversely affect a local economy in a material way for the first five years that the proposed repeals are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the proposed rulemaking action in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking action does not meet the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" is a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The proposed amendments to Chapter 114 and revisions to the SIP would repeal operating restrictions on commercial lawn and garden equipment operators. The amendments are not expected to adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The proposed amendments do not meet any of the four applicability criteria of a "major environmental rule" as defined in the Texas Government Code. Section 2001.0225 applies only to a major environmental rule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.

The amendments implement requirements of 42 USC. Under 42 USC, §7410, et seq ., states are required to adopt a SIP which provides for "implementation, maintenance, and enforcement" of the primary NAAQS in each air quality control region of the state. While 42 USC, §7410, et seq ., does not require specific programs, methods, or reductions in order to meet the standard, SIPs must include "enforceable emission limitations and other control measures, means or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this chapter," (meaning Chapter 85, Air Pollution Prevention and Control). It is true that 42 USC does require some specific measures for SIP purposes, such as the I/M program, but those programs are the exception, not the rule, in the SIP structure of 42 USC. The provisions of 42 USC recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the NAAQS. This flexibility allows states, affected industry, and the public, to collaborate on the best methods for attaining the NAAQS for the specific regions in the state. Even though 42 USC allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of §7410, et seq . Thus, while specific measures are not generally required, the emission reductions are required. States are not free to ignore the requirements of §7410, et seq ., and must develop programs to assure that the nonattainment areas of the state will be brought into attainment on schedule.

The requirement to provide a fiscal analysis of proposed regulations in the Texas Government Code were amended by Senate Bill 633 during the 75th legislative session. The intent of Senate Bill 633 was to require agencies to conduct an regulatory impact analysis (RIA) of extraordinary rules. These are identified in the statutory language as major environmental rules that will have a material adverse impact and will exceed a requirement of state law, federal law, or a delegated federal program, or are adopted solely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for Senate Bill 633 that concluded "based on an assessment of rules adopted by the agency in the past, it is not anticipated that the bill will have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted proposed rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law. As discussed earlier in this preamble, 42 USC does not require specific programs, methods, or reductions in order to meet the NAAQS; thus, states must develop programs for each nonattainment area to ensure that the area will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full RIA contemplated by Senate Bill 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Board (LBB) in its fiscal notes. Because the legislature is presumed to understand the fiscal impacts of the bills it passes, and that presumption is based on information provided by state agencies and the LBB, the commission believes that the intent of Senate Bill 633 was only to require the full RIA for rules that are extraordinary in nature. While the SIP rules will have a broad impact, that impact is no greater than is necessary or appropriate to meet the requirements of 42 USC. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), because they are specifically required by federal law.

In addition, 42 USC, §7502(a)(2), requires attainment as expeditiously as practicable, and §7511(a)(d), requires states to submit ozone attainment demonstration SIPs for severe ozone nonattainment areas such as HGA area. The proposed repeal will remove operating restrictions on commercial lawn and garden equipment operators in the Houston nonattainment area. Historically, the commission expressed a preference to implement technology-based strategies over behavior-altering strategies and the proposed repeal embodies that philosophy. The commission also evaluated a number of the existing control strategies, including lawn and garden equipment operating restrictions, that were put in place in the December 2000 revision. The photochemical modeling shows that this strategy is no longer necessary to attain the one-hour ozone standard and therefore, the commission is proposing repeal the of Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter I, Non-road Engines, Division 6, Lawn Service Equipment Operating Restrictions Lawn Service Equipment. Therefore, the proposed repeal is consistent with the ozone attainment demonstration SIP for HGA area, required by 42 USC, §7410, et seq .

The commission consistently applied this construction to its rules since this statute was enacted in 1997. Since that time, the legislature revised the Texas Government Code but left this provision substantially unamended. It is presumed that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp, 919 S.W.2d 485. 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue, 960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. Austin 1990, no writ). Cf. Humble Oil & Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. App.--Austin 2000, pet. denied) ; and Coastal Indust. Water Auth. v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978).

As discussed earlier in this preamble, this rulemaking implements requirements of 42 USC. There is no contract or delegation agreement that covers the topic that is the subject of this rulemaking. Therefore, the proposed rules do not exceed a standard set by federal law, exceed an express requirement of state law, exceed a requirement of a delegation agreement, nor are adopted solely under the general powers of the agency. In addition, the rules are proposed under Texas Health and Safety Code (also known as the Texas Clean Air Act), §§382.011, 382.012, 382.017, 382.019, and 382.208. The commission invites public comment on the draft RIA.

TAKINGS IMPACT ASSESSMENT

The commission completed a takings impact analysis for the proposed rulemaking action under Texas Government Code, §2007.043. The specific purposes of these amendments are to repeal operating restrictions on commercial lawn and garden equipment operators.

Texas Government Code, §2007.003(b)(4), provides that Chapter 2007 does not apply to this proposed rulemaking action, because it is reasonably taken to fulfill an obligation mandated by federal law. States are primarily responsible for ensuring attainment and maintenance of NAAQS once the EPA has established them. Under 42 USC, §7410, et seq ., and related provisions, states must submit, for approval by the EPA, SIPs that provide for the attainment and maintenance of NAAQS through control programs directed to sources of the pollutants involved. The commercial lawn and garden operating restriction was submitted in the HGA December 2000 SIP revision as a control strategy to reduce Nox in order to meet the ozone NAAQS set by the EPA under 42 USC, §7409. The commission expressed a preference for technology-based strategies over behavior-altering strategies. The commission proposes the repeal of commercial lawn and garden operating restrictions because photochemical modeling shows that this strategy is no longer necessary to attain the one-hour ozone standard and combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area. Therefore, the overall goal of this rulemaking action is to meet the air quality standards established under federal law as NAAQS.

In addition, Texas Government Code, §2007.003(b)(13), states that Chapter 2007 does not apply to an action that: 1) is taken in response to a real and substantial threat to public health and safety; 2) is designed to significantly advance the health and safety purpose; and 3) does not impose a greater burden than is necessary to achieve the health and safety purpose. Although the rule amendments do not directly prevent a nuisance or prevent an immediate threat to life or property, they do prevent a real and substantial threat to public health and safety and significantly advance the health and safety purpose. This action is taken in response to the HGA area exceeding the federal ozone NAAQS, which adversely affects public health, primarily through irritation of the lungs. The commercial lawn and garden operating restriction was submitted as a control strategy in the HGA December 2000 revision. Historically, the commission expressed a preference to implement technology-based strategies over behavior-altering strategies such as the lawn/garden operating restrictions and the proposed repeal embodies that philosophy. The commission reexamined this strategy and photochemical modeling shows that this strategy is no longer necessary to attain the one-hour ozone standard and therefore, the commission is proposing the repeal of Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter I, Non-road Engines, Division 6, Lawn Service Equipment Operating Restrictions Lawn Service Equipment. The action does not specifically advance the health and safety purpose by reducing ozone levels in the HGA nonattainment area. However, the repeal of this control strategy is part of a larger scheme to reduce ozone in the HGA area through the most effective means and strategies determined by the commission. Consequently, these proposed rules meet the exemption in §2007.003(b)(13). This rulemaking action therefore meets the requirements of Texas Government Code, §2007.003(b)(4) and (13). For these reasons, the proposed rules do not constitute a takings under Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the proposed rulemaking action and found that the proposal is an action identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, or will affect an action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, and therefore will require that applicable goals and policies of the Texas Coastal Management Program (CMP) be considered during the rulemaking process.

The commission prepared a consistency determination for the proposed rules under 31 TAC §505.22 and found that the proposed rulemaking action is consistent with the applicable CMP goals and policies. The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC §501.12(1)). The CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations in 40 Code of Federal Regulations, to protect and enhance air quality in the coastal area (31 TAC §501.14(q)). This rulemaking action complies with 40 Code of Federal Regulations. Therefore, in compliance with 31 TAC §505.22(e), this rulemaking action is consistent with CMP goals and policies. Interested persons may submit comments on the consistency of the proposed rules with the CMP during the public comment period.

ANNOUNCEMENT OF HEARINGS

Public hearings for this proposed rulemaking have been scheduled for the following times: August 2, 2004, 1:30 p.m. and 5:30 p.m., City of Houston, City Council Chambers, 2nd Floor, 901 Bagby, Houston; and August 3, 2004, 10:30 a.m., John Gray Institute, 855 Florida Avenue, Beaumont; and August 5, 2004, 9:30 a.m., Texas Commission on Environmental Quality, 12100 North I-35, Building F, Room 2210, Austin. The hearings will be structured for the receipt of oral or written comments by interested persons. Registration will begin 30 minutes prior to each hearing. Individuals may present oral statements when called upon in order of registration. A time limit may be established at the hearings to assure that enough time is allowed for every interested person to speak. There will be no open discussion during the hearings; however, commission staff members will be available to discuss the proposal 30 minutes before each hearing and will answer questions before and after each hearing.

Persons with disabilities who have special communication or other accommodation needs, who are planning to attend a hearing, should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Written comments may be submitted to Patricia Durón, MC 205, Office of Environmental Policy, Analysis, and Assessment, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087; faxed to (512) 239-4808; or emailed to siprules@tceq.state.tx.us. Comments must be received by 5:00 p.m., August 9, 2004, and should reference Rule Project Number 2004-034-114-AI. For further information, please contact Kelly Keel of the Environmental Planning and Implementation Division at (512) 239-3607 or Debra Barber, Policy and Regulations Division at (512) 239-0412.

STATUTORY AUTHORITY

The repeals are proposed under Texas Water Code (TWC), §5.102, which provides the commission with the general powers to carry out its duties under TWC; §5.103, which authorizes the commission to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state; and §5.105, which authorizes the commission by rule to establish and approve all general policy of the commission. These repeals are also proposed under Texas Health and Safety Code, Texas Clean Air Act (TCAA), §382.017, which authorizes the commission to adopt rules consistent with the policy and purposes of TCAA; §382.011, which authorizes the commission to establish the level of quality to be maintained in the state's air and to control the quality of the state's air; §382.012, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; and §382.019, which provides the commission the authority to adopt rules to control and reduce emissions from engines used to propel land vehicles.

The proposed repeals implement Texas Health and Safety Code, §§382.017, 382.011, 382.012, and 382.019.

§114.452.Control Requirements.

§114.459.Affected Counties and Compliance Dates.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 28, 2004.

TRD-200403612

Stephanie Bergeron

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: July 11, 2004

For further information, please call: (512) 239-5017


Subchapter J. OPERATIONAL CONTROLS FOR MOTOR VEHICLES

1. MOTOR VEHICLE IDLING LIMITATIONS

30 TAC §114.500, 114.502, 114.507, 114.509

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Commission on Environmental Quality or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Commission on Environmental Quality (commission) proposes the repeal of §§114.500, 114.502, 114.507, and 114.509; and corresponding revisions to the state implementation plan (SIP).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED REPEALS

The Houston/Galveston (HGA) ozone nonattainment area is classified as Severe-17 under the Federal Clean Air Act Amendments of 1990 (as codified in 42 United States Code (USC), §§7401 et seq .), and therefore, is required to attain the one-hour ozone standard of 0.12 parts per million (125 parts per billion) by November 15, 2007. The HGA area consists of Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties, and has been working to develop a demonstration of attainment in accordance with 42 USC, §7410, et seq . The most relevant HGA SIP revisions to date are the December 2000 one-hour ozone standard attainment demonstration, the September 2001 follow-up revision, and the December 2002 nitrogen oxides (NO x )/highly-reactive volatile organic compound (HRVOC) revision.

This process has proven to be extremely challenging due to the magnitude of reductions needed for attainment. The emission reduction requirements included as part of the December 2000 SIP revision represent substantial, intensive efforts on the part of stakeholder coalitions in the HGA area, in partnership with the commission, to address ozone. These coalitions, which include local governmental entities, elected officials, environmental groups, industry, consultants, and the public, as well as the United States Environmental Protection Agency (EPA) and the commission, worked diligently to identify and quantify control strategy measures for the HGA attainment demonstration area.

December 2000

The December 2000 SIP revision contained rules and photochemical modeling analyses in support of the HGA ozone attainment demonstration area. The majority of the emissions reductions identified in this revision were from a 90% reduction in point source NO x . The modeling analysis also indicated a shortfall in necessary NO x emission reductions, such that an additional 91 tons per day (tpd) of NO x reductions were necessary for an approvable attainment demonstration. In addition, the revision contained post-1999 rate-of-progress (ROP) plans for the milestone years 2002 and 2005 and for the attainment year 2007, and transportation conformity motor vehicle emissions budgets (MVEB) for NOx and volatile organic compound (VOC) emissions. The SIP also contained enforceable commitments to implement further measures in support of the HGA attainment demonstration area, as well as a commitment to perform and submit a midcourse review.

September 2001

The September 2001 SIP revision for the HGA ozone nonattainment area included the following elements: 1) corrections to the ROP table/budget for the years 2002, 2005, and 2007 due to a mathematical inconsistency; 2) incorporation of a change to the idling restriction control strategy to clarify that the operator of a rented or leased vehicle is responsible for compliance with the requirements in situations where the operator of a leased or rented vehicle is not employed by the owner of the vehicle (The commission committed to making this change when the rule was adopted in December 2000.); 3) incorporation of revisions to the clean diesel fuel rules to provide greater flexibility for compliance with the requirements of the rule while preserving the emission reductions necessary to demonstrate attainment in the HGA area; 4) incorporation of a stationary diesel engine rule that was developed as a result of the state's analysis of EPA's reasonably available control measures; 5) incorporation of revisions to the point source NO x rules; 6) incorporation of revisions to the emissions cap and trade rules; 7) the removal of the construction equipment operating restriction and the accelerated purchase requirement for Tier 2/3 heavy-duty equipment; 8) the replacement of these rules with the Texas Emission Reduction Plan (TERP) program; 9) the layout of the midcourse review process that details how the state will fulfill the commitment to obtain the additional emission reductions necessary to demonstrate attainment of the one-hour ozone standard in the HGA area; and 10) replacement of 2007 ROP MVEBs to be consistent with the attainment MVEBs.

As was discussed in the December 2000 revision, the modeling resulted in a 141 parts per billion peak ozone level which correlated to a shortfall calculation of 91 tpd NO x equivalent. An additional five tpd was added to the shortfall, because the state could not take credit for the NO x reductions associated with the diesel pull-ahead strategy. The excess emissions from this strategy were not included in the original emissions inventory. The gap control measures adopted in December 2000, along with the stationary diesel engine rules included in the September 2001 revision, resulted in NO x reductions of 40 tpd, which left a total remaining shortfall of 56 tpd. The state committed to address this shortfall through the midcourse review process.

December 2002

In January 2001, the Business Coalition for Clean Air - Appeal Group (BCCA-AG) and several regulated companies challenged the December 2000 HGA SIP and some of the associated rules. Specifically, the BCCA-AG challenged the 90% NOx reduction requirement from stationary sources in the HGA area. In May 2001, the parties agreed to a stay in the case, and Judge Margaret Cooper, Travis County District Court, signed a consent order, effective June 8, 2001, requiring the commission to perform an independent, thorough analysis of the causes of rapid ozone formation events and identify potential mitigating measures not yet identified in the HGA attainment demonstration area, according to the milestones and procedures in Exhibit C (Scientific Evaluation) of the order.

In compliance with the consent order, the commission conducted a scientific evaluation based in large part on aircraft data collected by the Texas 2000 Air Quality Study (TexAQS). The TexAQS, a comprehensive research project conducted in August and September 2000 involving more than 40 research organizations and over 200 scientists, studied ground-level ozone air pollution in the HGA area and East Texas regions. The study revealed that while industrial source NO x emissions were generally correctly accounted for, industrial source VOC emissions were likely significantly understated in earlier emissions inventories. The study also showed that surface monitors were insufficient to capture the phenomenon of ozone plumes downwind of industrial facilities. On four separate days, aircraft instruments recorded ozone levels exceeding 125 parts per billion that were missed by surface monitoring equipment. The findings from the study are constantly evolving and have raised questions about the formation of high ozone levels in the HGA area.

To address these findings and to fulfill obligations in the consent order, the commission adopted a SIP revision in December 2002 that focused on replacing the most stringent 10% industrial NO x reductions with VOC controls. In light of the TexAQS study, the commission conducted further modeling analysis of ambient VOC data. The results of photochemical grid modeling and analysis indicated that the same level of air quality benefits achieved with a 90% industrial NO x emissions reduction could be achieved with an overall 80% industrial NO x emissions reduction when combined with an industrial VOC emissions reduction. This conclusion was based on results from several studies, including photochemical grid modeling of the August - September 2000 episode using a top-down emissions inventory adjustment to point source HRVOC emissions, and analyses of ambient HRVOC measurements made by commission automated gas chromatographs and airborne canisters using the maximum incremental reactivity and hydroxyl reactivity scales. Four HRVOCs (ethylene, propylene, 1,3-butadiene, and butenes) clearly play important roles in the HGA ozone formation area, and these four seemed to be the best candidates for the first round of HRVOC controls.

In order to address these scientific findings, the commission adopted revisions to the industrial source control requirements, one of the control strategies within the existing federally approved SIP. The December 2002 revision contains new rules to reduce HRVOC emissions from four key industrial sources: fugitives, flares, process vents, and cooling towers. The adopted rules target HRVOCs while maintaining the integrity of the SIP. Analysis showed that limiting emissions of ethylene, propylene, 1,3-butadiene, and butenes in conjunction with an 80% reduction in NO x is equivalent in terms of air quality benefit to that resulting from a 90% point source NOx reduction requirement. As such, the HRVOC rules are performance-based, emphasizing monitoring, recordkeeping, reporting, and enforcement, rather than establishing individual unit emission rates.

The technical support documentation accompanying the revision contains the supporting analysis for early results from ongoing analysis examining whether reductions in HRVOC emissions could replace the last 10% of industrial NO x controls with a reduction of approximately 64% in industrial HRVOC emissions, while ensuring that the air quality specified in the approved December 2000 HGA SIP is met.

Current SIP Revision

As mentioned previously, the commission committed to perform a midcourse review to ensure attainment of the one-hour ozone standard. The midcourse review process provides the ability to update emissions inventory data, utilize current modeling tools, such as MOBILE6, and enhance the photochemical grid modeling. The data gathered from the TexAQS continues to improve photochemical modeling of the HGA area. The collection of these technical improvements give a more comprehensive understanding of the ozone challenge in the HGA area that is necessary to develop an attainment plan. In the early part of 2003, the commission was preparing to move forward with the midcourse review; however, during the same time period EPA announced its plans to begin implementation of the eight-hour ozone standard. The EPA published proposed rules for implementation of the eight-hour ozone standard in the June 2, 2003 issue of the Federal Register (68 FR 32802). In the same time frame, EPA also formalized its intentions to designate areas for the eight-hour ozone standard by April 15, 2004, meaning states would need to reassess their efforts and control strategies to address this new standard by 2007. Recognizing that existing one-hour nonattainment areas would soon be subject to the eight-hour ozone standard, and in an effort to efficiently manage the state's limited resources, the commission decided to develop an approach that addresses the outstanding obligations under the one-hour ozone standard while beginning to analyze eight-hour ozone issues.

The commission's one-hour ozone SIP commitments include: 1) completing a one-hour ozone midcourse review; 2) performing modeling; 3) adopting measures sufficient to fill the NO x shortfall; 4) adopting measures sufficient to demonstrate attainment; and 5) revising the MVEB using MOBILE6.

Results from the TexAQS and recent photochemical modeling indicate that additional HRVOC reductions will be the most beneficial measure in reducing ozone in the HGA area. The commission is proposing to reduce HRVOC emissions to reach attainment of the one-hour ozone standard. The photochemical modeling of the August - September 2000 episode coupled with a weight-of-evidence argument demonstrates attainment of the one-hour ozone standard. To achieve the necessary HRVOC reductions, the commission is proposing a two-pronged approach that would address short-term emission events through a not-to-exceed limit, and would address steady state and routine emissions through an annual cap. The annual HRVOC cap would be reduced from the existing HRVOC cap in order to support the attainment demonstration modeling.

The HGA SIP no longer relies as heavily on NO x based strategies. A combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area and there is no longer a NO x shortfall in the HGA SIP. The commission also evaluated a number of the existing control strategies that were put in place in the December 2000 revision. The photochemical modeling shows that some of these strategies are no longer necessary to attain the one-hour ozone standard. This SIP revision is proposing the repeal of the commercial lawn and garden equipment restrictions, the repeal of the heavy-duty vehicle idling restrictions, and the removal of the motor vehicle inspection and maintenance (I/M) program requirements from Chambers, Liberty, and Waller Counties. In addition, this SIP proposal includes revisions to the environmental speed limit strategy. In September 2002, the commission revised the existing speed limit strategy to suspend the 55 mile per hour (mph) speed limit until May 1, 2005, and, where posted speeds were 65 mph or higher before May 1, 2002, to increase speeds to five mph below what was posted. The 78th Legislature, 2003, removed the commission's authority to determine speed limits for environmental purposes; therefore, this proposal would remove the reinstatement of the 55 mph speed limit on May 1, 2005, and would maintain the currently posted speed limits at five mph below the posted limit before May 1, 2002. Also, as part of this SIP revision, the commission is proposing new statewide portable fuel container rules. Historically, the commission has expressed a preference to implement technology-based strategies over behavior-altering strategies, and these proposed changes embody that philosophy.

Through this revision, the commission is fulfilling its outstanding one-hour ozone SIP obligations and beginning to plan for the upcoming eight-hour ozone standard. This proposal demonstrates attainment of the one-hour ozone standard in HGA area in 2007 and provides a preliminary analysis of the HGA area in terms of the eight-hour ozone standard in 2007 and 2010. EPA's proposed eight-hour implementation rules provide flexibility to the states in transitioning from the one-hour to the eight-hour ozone standard, and the commission believes the steps taken in this proposal and the technical work performed to date will be invaluable through the transition period. Upon EPA's finalization of the eight-hour implementation and the transportation conformity rules, the commission expects to begin developing eight-hour ozone SIPs.

The commission originally adopted rules in §§114.500, 114.502, 114.507, and 114.509 on December 6, 2000 as a control strategy to reduce NOx emissions in the HGA ozone nonattainment area by limiting the engine idling time of motor vehicles with a gross vehicle weight rating of greater than 14,000 pounds to five consecutive minutes while the vehicle is operating in the affected area from April 1 to October 31 each year. These idling restriction rules went into effect on April 1, 2001. The commission also adopted revisions to the HGA Attainment SIP in December 2000 that contained provisions to claim the anticipated NO x emission reductions from the implementation of the idling restriction rules.

The idling restriction rules were expected to lower NO x emissions from both gasoline-powered and diesel-powered motor vehicles in the affected areas. Because NO x emissions are precursors to ground-level ozone formation, reduced emissions of NOx will result in ground-level ozone reductions. Emissions modeling performed for the original rulemaking indicated that, by 2007, the idling restriction rules would reduce NO x emissions in the affected areas by 0.48 tpd. In addition, the idling restriction rules were estimated to reduce VOC emissions by 0.19 tpd.

The commission has reevaluated a number of the existing control strategies, including motor vehicle idling restrictions, that were put in place in the December 2000 revision. As stated above, results from the TexAQS and recent photochemical modeling indicate that additional HRVOC reductions will be the most beneficial measure in reducing ozone in the HGA area and that this strategy is no longer necessary to attain the one-hour ozone standard. Therefore, the commission is proposing the repeal of Chapter 114, Subchapter J, Division 1, concerning Motor Vehicle Idling Limitations. Historically, the commission has expressed a preference to implement technology-based strategies over behavior-altering strategies such as the lawn and garden equipment operating restrictions. The repeal of this rule is consistent with that philosophy.

Additionally, this repeal will allow for funding under TERP for idling projects to reduce NO x emissions. The 77th Legislature, 2001, passed Senate Bill 5 establishing the TERP to provide financial incentives for the voluntary reduction of NO x emissions from diesel vehicles and equipment in 38 counties, which included the HGA ozone nonattainment area counties affected by the idling restriction rules. The 78th Legislature, 2003, passed House Bill 1365 to revise the TERP and expand the coverage area to 41 counties.

Projects for on-vehicle idle reduction technologies and truck stop electrification infrastructure may be considered by the commission for incentive grant funding through the TERP. However, the commission is prohibited under Texas Health and Safety Code, §386.102 from using TERP funding for technology and projects that are required by federal or state regulations. Since the current idling restriction rules limit the engine idling time of motor vehicles with a gross vehicle weight rating of greater than 14,000 pounds to five consecutive minutes while the vehicle is operating in the HGA ozone nonattainment area counties, the commission cannot use TERP funds for any idle reduction projects in these areas. Therefore, the repeals will allow the commission to make TERP grant funding available for idle reduction projects within the HGA nonattainment area counties.

SECTION-BY-SECTION DISCUSSION

The proposed repeal of §§114.500, 114.502, 114.507, and 114.509 allow the commission to achieve NO x emission reductions more effectively through the use of TERP grant funding made available for idle reduction projects within the HGA nonattainment area counties.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Analyst, Strategic Planning and Appropriations Section, determined that for the first five-year period the proposed repeals are in effect, no significant fiscal implications are expected for the agency or other units of state and local government as a result of administration or enforcement of the proposed repeals.

This rulemaking would repeal the rules in Subchapter J, which were implemented on April 1, 2001. The current rules imposed idling limits for gasoline and diesel powered engines in heavy-duty motor vehicles with a gross vehicle weight rating greater than 14,000 pounds in the HGA ozone nonattainment area. To comply with the idling regulations, an affected vehicle could not idle for more than five consecutive minutes when the vehicle was not in motion during the period of April 1 through October 31 of each calendar year.

The commission has reevaluated a number of the existing control strategies, including motor vehicle idling restriction, that were put in the December 2000 SIP Revision, and it has been determined that this control strategy is no longer necessary for one-hour ozone attainment. Additionally, this repeal will allow for funding under TERP for idling projects to reduce NO x emissions. Currently, TERP funding is prohibited from being used for projects or technologies that are already required by local, state, or federal rules.

PUBLIC BENEFITS AND COSTS

Mr. Davis also determined that for each year of the first five years the proposed repeals are in effect, the public benefit anticipated from the enforcement of and compliance with the proposed repeals would be the potential for documented emission reductions from idle reduction initiatives. The repeal of the existing idle regulations would allow the commission to utilize other regulatory options, including TERP program funding, to fund idle reduction technology and strategies. In order to qualify for TERP funding, any initiative would have to demonstrate and quantify actual emission reductions prior to being approved.

This rulemaking would repeal commission motor vehicle idling limitation rules. The commission does not anticipate significant fiscal implications for individuals and businesses due to the implementation of the proposed repeals.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated for small or micro-businesses as a result of implementation of the proposed repeals.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed repeals do not adversely affect a local economy in a material way for the first five years that the proposed repeals are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the proposed rulemaking action in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking action does not meet the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" is a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The proposed amendments to Chapter 114 and revisions to the SIP repeal idling restrictions within the HGA nonattainment area counties. The amendments are not expected to adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The proposed amendments do not meet any of the four applicability criteria of a "major environmental rule" as defined in the Texas Government Code. Section 2001.0225 applies only to a major environmental rule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.

The amendments implement requirements of 42 USC. Under 42 USC, §7410, et seq ., states are required to adopt a SIP which provides for "implementation, maintenance, and enforcement" of the primary national ambient air quality standard (NAAQS) in each air quality control region of the state. While 42 USC, §7410, et seq . does not require specific programs, methods, or reductions in order to meet the standard, SIPs must include "enforceable emission limitations and other control measures, means or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this chapter," (meaning Chapter 85, Air Pollution Prevention and Control). It is true that 42 USC does require some specific measures for SIP purposes, such as the I/M program, but those programs are the exception, not the rule, in the SIP structure of 42 USC. The provisions of 42 USC recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the NAAQS. This flexibility allows states, affected industry, and the public, to collaborate on the best methods for attaining the NAAQS for the specific regions in the state. Even though 42 USC allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of §7410, et seq . Thus, while specific measures are not generally required, the emission reductions are required. States are not free to ignore the requirements of §7410, et seq . and must develop programs to assure that the nonattainment areas of the state will be brought into attainment on schedule.

The requirement to provide a fiscal analysis of proposed regulations in the Texas Government Code were amended by Senate Bill 633 during the 75th legislative session. The intent of Senate Bill 633 was to require agencies to conduct an regulatory impact analysis (RIA) of extraordinary rules. These are identified in the statutory language as major environmental rules that will have a material adverse impact and will exceed a requirement of state law, federal law, or a delegated federal program, or are adopted solely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for Senate Bill 633 that concluded "based on an assessment of rules adopted by the agency in the past, it is not anticipated that the bill will have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted proposed rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law. As discussed earlier in this preamble, 42 USC does not require specific programs, methods, or reductions in order to meet the NAAQS; thus, states must develop programs for each nonattainment area to ensure that the area will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full RIA contemplated by Senate Bill 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Board (LBB) in its fiscal notes. Because the legislature is presumed to understand the fiscal impacts of the bills it passes, and that presumption is based on information provided by state agencies and the LBB, the commission believes that the intent of Senate Bill 633 was only to require the full RIA for rules that are extraordinary in nature. While the SIP rules will have a broad impact, that impact is no greater than is necessary or appropriate to meet the requirements of 42 USC. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), because they are specifically required by federal law.

In addition, 42 USC, §7502(a)(2), requires attainment as expeditiously as practicable, and §7511(a)(d), requires states to submit ozone attainment demonstration SIPs for severe ozone nonattainment areas such as HGA area. The proposed repeal will remove Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter J, Operational Controls for Motor Vehicles, Division 1, Motor Vehicle Idling Limitations, which imposes idling restrictions on certain vehicles in the HGA ozone nonattainment area. Historically, the commission expressed a preference to implement technology- based strategies over behavior-altering strategies and the proposed repeal embodies that philosophy. A combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area. Consequently, the commission reevaluated a number of the existing control strategies, including motor vehicle idling restrictions, that were put in place in the December 2000 revision. The photochemical modeling shows that this strategy is no longer necessary to attain the one-hour ozone standard and therefore, the commission is proposing repeal of this control strategy. Therefore, the proposed repeal is consistent with the ozone attainment demonstration SIP for HGA area, required by 42 USC, §7410, et seq .

The commission consistently applied this construction to its rules since this statute was enacted in 1997. Since that time, the legislature revised the Texas Government Code but left this provision substantially unamended. It is presumed that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp, 919 S.W.2d 485. 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue, 960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. Austin 1990, no writ). Cf. Humble Oil & Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. App.--Austin 2000, pet. denied) ; and Coastal Indust. Water Auth. v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978).

As discussed earlier in this preamble, this rulemaking implements requirements of 42 USC. There is no contract or delegation agreement that covers the topic that is the subject of this rulemaking. Therefore, the proposed rules do not exceed a standard set by federal law, exceed an express requirement of state law, exceed a requirement of a delegation agreement, nor are adopted solely under the general powers of the agency. In addition, the rules are proposed under Texas Health and Safety Code (also known as the Texas Clean Air Act), §§382.011, 382.012, 382.017, 382.019, and 382.208. The commission invites public comment on the draft RIA.

TAKINGS IMPACT ASSESSMENT

The commission completed a takings impact analysis for the proposed rulemaking action under Texas Government Code, §2007.043. The specific purpose of these amendments is to repeal idling restrictions in the HGA nonattainment counties.

Texas Government Code, §2007.003(b)(4), provides that Chapter 2007 does not apply to this proposed rulemaking action because it is reasonably taken to fulfill an obligation mandated by federal law. States are primarily responsible for ensuring attainment and maintenance of NAAQS once the EPA has established them. Under 42 USC, §7410, et seq . and related provisions, states must submit, for approval by the EPA, SIPs that provide for the attainment and maintenance of NAAQS through control programs directed to sources of the pollutants involved. The motor vehicle idling restriction was submitted in the HGA December 2000 SIP revision as a control strategy to reduce NO x in order to meet the ozone NAAQS set by the EPA under 42 USC, §7409. The commission has expressed a preference for technology-based strategies over behavior-altering strategies such as the idling restriction. The commission proposes the repeal of the motor vehicle idling restriction because photochemical modeling shows that this strategy is no longer necessary to attain the one-hour ozone standard and combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area. Therefore, the overall goal of this rulemaking action is to meet the air quality standards established under federal law as NAAQS.

In addition, Texas Government Code, §2007.003(b)(13), states that Chapter 2007 does not apply to an action that: 1) is taken in response to a real and substantial threat to public health and safety; 2) is designed to significantly advance the health and safety purpose; and 3) does not impose a greater burden than is necessary to achieve the health and safety purpose. Although the rule amendments do not directly prevent a nuisance or prevent an immediate threat to life or property, they do prevent a real and substantial threat to public health and safety and significantly advance the health and safety purpose. This action is taken in response to the HGA area exceeding the federal ozone NAAQS, which adversely affects public health, primarily through irritation of the lungs. The motor vehicle idling restriction was submitted as a control strategy in the HGA December 2000 revision. A combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area. Consequently, the commission reexamined this strategy and photochemical modeling shows that this strategy is no longer necessary to attain the one-hour ozone standard and therefore, the commission is proposing the repeal of Chapter 114, Control of Air Pollution from Motor Vehicles, Subchapter J, Operational Controls for Motor Vehicles, Division 1, Motor Vehicle Idling Limitations. The action does not specifically advance the health and safety purpose by reducing ozone levels in the HGA nonattainment area. However, the repeal of this control strategy is part of a larger scheme to reduce ozone in the HGA area through the most effective means and strategies determined by the commission. Consequently, these proposed rules meet the exemption in §2007.003(b)(13). This rulemaking action therefore meets the requirements of Texas Government Code, §2007.003(b)(4) and (13). For these reasons, the proposed rules do not constitute a takings under Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the proposed rulemaking action and found that the proposal is an action identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, or will affect an action/authorization identified in §505.11, and therefore will require that applicable goals and policies of the Texas Coastal Management Program (CMP) be considered during the rulemaking process.

The commission prepared a consistency determination for the proposed repeals under 31 TAC §505.22 and found that the proposed rulemaking action is consistent with the applicable CMP goals and policies. The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC §501.12(1)). The CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations in 40 Code of Federal Regulations, adopted in accordance with the Federal Clean Air Act, 42 USC, §7401, et seq ., to protect and enhance air quality in the coastal area so as to protect coastal natural resource areas and promote public health, safety, and welfare (31 TAC §501.14(q)). This rulemaking action complies with 40 Code of Federal Regulations, adopted in accordance with the Federal Clean Air Act. Therefore, in compliance with 31 TAC §505.22(e), this rulemaking action is consistent with CMP goals and policies. Interested persons may submit comments on the consistency of the proposed rules with the CMP during the public comment period.

ANNOUNCEMENT OF HEARINGS

Public hearings for this proposed rulemaking have been scheduled for the following times: August 2, 2004, 1:30 p.m. and 5:30 p.m., City of Houston, City Council Chambers, 2nd Floor, 901 Bagby, Houston; and August 3, 2004, 10:30 a.m., John Gray Institute, 855 Florida Avenue, Beaumont; and August 5, 2004, 9:30 a.m., Texas Commission on Environmental Quality, 12100 North I-35, Building F, Room 2210, Austin. The hearings will be structured for the receipt of oral or written comments by interested persons. Registration will begin 30 minutes prior to each hearing. Individuals may present oral statements when called upon in order of registration. A time limit may be established at the hearings to assure that enough time is allowed for every interested person to speak. There will be no open discussion during the hearings; however, commission staff members will be available to discuss the proposal 30 minutes before each hearing and will answer questions before and after each hearing.

Persons with disabilities who have special communication or other accommodation needs, who are planning to attend a hearing, should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Patricia Durón, Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087; faxed to (512) 239-4808; or e- mailed to siprules@tceq.state.tx.us . Comments must be received by 5:00 p.m., August 9, 2004, and should reference Rule Project Number 2004-043-114-AI. For further information, please contact Debra Barber, Policy and Regulations Division at (512) 239-0412.

STATUTORY AUTHORITY

The repeals are proposed under Texas Water Code, §5.102, concerning General Powers, §5.103, concerning Rules, and §5.105, concerning General Policy, which provide the commission with the general powers to carry out its duties and authorize the commission to adopt rules necessary to carry out its powers and duties under the Texas Water Code; and under Texas Health and Safety Code, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of Texas Health and Safety Code, Chapter 382 (also known as the Texas Clean Air Act). The repeals are also proposed under Texas Health and Safety Code, §382.002, concerning Policy and Purpose, which establishes the commission purpose to safeguard the state air resources, consistent with the protection of public health, general welfare, and physical property; §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; §382.012, concerning State Air Control Plan, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; §382.019, which authorizes the commission to adopt rules to control and reduce emissions from engines used to propel land vehicles; §382.037, which authorizes the commission by rule to establish, implement, and administer a program requiring emissions-related inspections of motor vehicles to be performed at inspection facilities consistent with the requirements of the 42 United States Code, §§7401 et seq..

The proposed repeals implement Texas Health and Safety Code, §§382.002, 382.011, 382.012, and 382.019.

§114.500.Definitions.

§114.502.Control Requirements for Motor Vehicle Idling.

§114.507.Exemptions.

§114.509.Affected Counties and Compliance Dates.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 28, 2004.

TRD-200403613

Stephanie Bergeron

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: July 11, 2004

For further information, please call: (512) 239-5017


Chapter 115. CONTROL OF AIR POLLUTION FROM VOLATILE ORGANIC COMPOUNDS

Subchapter G. CONSUMER-RELATED SOURCES

2. PORTABLE FUEL CONTAINERS

30 TAC §§115.620 - 115.622, 115.626, 115.627, 115.629

The Texas Commission on Environmental Quality (commission) proposes new §§115.620 - 115.622, 115.626, 115.627, and 115.629; and corresponding revisions to the state implementation plan (SIP).

The new rules and revised SIP narrative will be submitted to the United States Environmental Protection Agency (EPA) as proposed revisions to the SIP.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The Houston/Galveston (HGA) ozone nonattainment area is classified as Severe-17 under the Federal Clean Air Act Amendments of 1990 (as codified in 42 United States Code (USC), §§7401 et seq .), and therefore, is required to attain the one-hour ozone standard of 0.12 parts per million (125 parts per billion) by November 15, 2007. The HGA area consists of Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties, and has been working to develop a demonstration of attainment in accordance with 42 USC, §7410. The most relevant HGA SIP revisions to date are the December 2000 one-hour ozone standard attainment demonstration, the September 2001 follow-up revision, and the December 2002 nitrogen oxides (NO x )/highly-reactive volatile organic compound (HRVOC) revision.

This process has proven to be extremely challenging due to the magnitude of reductions needed for attainment. The emission reduction requirements included as part of the December 2000 SIP revision represent substantial, intensive efforts on the part of stakeholder coalitions in the HGA area, in partnership with the commission, to address ozone. These coalitions include local governmental entities, elected officials, environmental groups, industry, consultants, and the public, as well as EPA and the commission. Each of these groups has worked diligently to identify and quantify control strategy measures for the HGA attainment demonstration.

December 2000

The December 2000 SIP revision contained rules and photochemical modeling analyses in support of the HGA ozone attainment demonstration. The majority of the emissions reductions identified in this revision were from a 90% reduction in point source NO x . The modeling analysis also indicated a shortfall in necessary NO x emissions, such that an additional 91 tons per day (tpd) of NO x reductions were necessary for an approvable attainment demonstration. In addition, the revision contained post-1999 rate-of-progress (ROP) plans for the milestone years 2002 and 2005 and for the attainment year 2007, and transportation conformity motor vehicle emissions budgets (MVEB) for NOx and volatile organic compound (VOC) emissions. The SIP also contained enforceable commitments to implement further measures in support of the HGA attainment demonstration, as well as a commitment to perform and submit a midcourse review.

September 2001

The September 2001 SIP revision for the HGA ozone nonattainment area included the following elements: 1) corrections to the ROP table/budget for the years 2002, 2005, and 2007 due to a mathematical inconsistency; 2) incorporation of a change to the idling restriction control strategy to clarify that the operator of a rented or leased vehicle is responsible for compliance with the requirements in situations where the operator of a leased or rented vehicle is not employed by the owner of the vehicle (the commission committed to making this change when the rule was adopted in December 2000); 3) incorporation of revisions to the clean diesel fuel rules to provide greater flexibility for compliance with the requirements of the rule while preserving the emission reductions necessary to demonstrate attainment in the HGA area; 4) incorporation of a stationary diesel engine rule that was developed as a result of the state's analysis of EPA's reasonably available control measures; 5) incorporation of revisions to the point source NO x rules; 6) incorporation of revisions to the emissions cap and trade rules; 7) the removal of the construction equipment operating restriction and the accelerated purchase requirement for Tier 2/3 heavy-duty equipment; 8) the replacement of these rules with the Texas Emission Reduction Plan program; 9) the layout of the midcourse review process which details how the state will fulfill the commitment to obtain the additional emission reductions necessary to demonstrate attainment of the one-hour ozone standard in the HGA area; and 10) replacement of 2007 ROP MVEBs to be consistent with the attainment MVEBs.

As was discussed in the December 2000 revision, the modeling resulted in a 141 parts per billion peak ozone level which correlated to a shortfall calculation of 91 tpd NO x equivalent. An additional five tpd was added to the shortfall, because the state could not take credit for the NO x reductions associated with the diesel pull-ahead strategy. The excess emissions from this strategy were not included in the original emissions inventory. The gap control measures adopted in December 2000, along with the stationary diesel engine rules included in the September 2001 revision, resulted in NO x reductions of 40 tpd, which left a total remaining shortfall of 56 tpd. The state committed to address this shortfall through the midcourse review process.

December 2002

In January 2001, the Business Coalition for Clean Air - Appeal Group (BCCA-AG) and several regulated companies challenged the December 2000 HGA SIP and some of the associated rules. Specifically, the BCCA-AG challenged the 90% NOx reduction requirement from stationary sources in the HGA. In May 2001, the parties agreed to a stay in the case, and Judge Margaret Cooper, Travis County District Court, signed a consent order, effective June 8, 2001, requiring the commission to perform an independent, thorough analysis of the causes of rapid ozone formation events and identify potential mitigating measures not yet identified in the HGA attainment demonstration, according to the milestones and procedures in Exhibit C (Scientific Evaluation) of the order.

In compliance with the consent order, the commission conducted a scientific evaluation based in large part on aircraft data collected by the Texas 2000 Air Quality Study (TexAQS). The TexAQS, a comprehensive research project conducted in August and September 2000 involving more than 40 research organizations and over 200 scientists, studied ground-level ozone air pollution in the HGA and east Texas regions. The study revealed that while industrial source NOx emissions were generally correctly accounted for, industrial source VOC emissions were likely significantly understated in earlier emissions inventories. The study also showed that surface monitors were insufficient to capture the phenomenon of ozone plumes downwind of industrial facilities. On four separate days, aircraft instruments recorded ozone levels exceeding 125 parts per billion that were missed by surface monitoring equipment. The findings from the study are constantly evolving and have raised questions about the formation of high ozone levels in the HGA.

To address these findings and to fulfill obligations in the consent order, the commission adopted a SIP revision in December 2002 that focused on replacing the most stringent 10% industrial NO x reductions with VOC controls. In light of the TexAQS, the commission conducted further modeling analysis of ambient VOC data. The results of photochemical grid modeling and analysis indicated that the same level of air quality benefits achieved with a 90% industrial NO x emissions reduction could be achieved with an overall 80% industrial NO x emissions reduction when combined with an industrial VOC emissions reduction. This conclusion was based on results from several studies, including photochemical grid modeling of the August-September 2000 episode using a top-down emissions inventory adjustment to point source HRVOC emissions, and analyses of ambient HRVOC measurements made by commission automated gas chromatographs and airborne canisters using the maximum incremental reactivity and hydroxyl reactivity scales. Four HRVOCs (ethylene, propylene, 1,3-butadiene, and butenes) clearly play important roles in the HGA ozone formation, and these four seemed to be the best candidates for the first round of HRVOC controls.

In order to address these scientific findings, the commission adopted revisions to the industrial source control requirements, one of the control strategies within the existing federally approved SIP. The December 2002 revision contains new rules to reduce HRVOC emissions from four key industrial sources: fugitives, flares, process vents, and cooling towers. The adopted rules target HRVOCs while maintaining the integrity of the SIP. Analysis showed that limiting emissions of ethylene, propylene, 1,3-butadiene, and butenes in conjunction with an 80% reduction in NO x is equivalent in terms of air quality benefit to that resulting from a 90% point source NOx reduction requirement. As such, the HRVOC rules are performance-based, emphasizing monitoring, recordkeeping, reporting, and enforcement, rather than establishing individual unit emission rates.

The technical support documentation accompanying the revision contains the supporting analysis for early results from ongoing analysis examining whether reductions in HRVOC emissions could replace the last 10% of industrial NO x controls with a reduction of approximately 36% in industrial HRVOC emissions, while ensuring that the air quality specified in the approved December 2000 HGA SIP is met.

Current SIP Revision

As mentioned previously, the commission committed to perform a midcourse review to ensure attainment of the one-hour ozone standard. The midcourse review process provides the ability to update emissions inventory data, utilize current modeling tools, such as MOBILE6, and enhance the photochemical grid modeling. The data gathered from the TexAQS continues to improve photochemical modeling of the HGA area. The collection of these technical improvements give a more comprehensive understanding of the ozone challenge in the HGA that is necessary to develop an attainment plan. In the early part of 2003, the commission was preparing to move forward with the midcourse review; however, during the same time period EPA announced its plans to begin implementation of the eight-hour ozone standard. The EPA published proposed rules for implementation of the eight-hour ozone standard in the June 2, 2003 issue of the Federal Register (68 FR 32802). In the same time frame, EPA also formalized its intentions to designate areas for the eight-hour ozone standard by April 15, 2004, meaning states would need to reassess their efforts and control strategies to address this new standard by 2007. Recognizing that existing one-hour nonattainment areas would soon be subject to the eight-hour ozone standard, and in an effort to efficiently manage the state's limited resources, the commission decided to develop an approach that addresses the outstanding obligations under the one-hour ozone standard while beginning to analyze eight-hour ozone issues.

The commission's one-hour ozone SIP commitments include: 1) completing a one-hour ozone midcourse review, 2) performing modeling, 3) adopting measures sufficient to fill the NO x shortfall, 4) adopting measures sufficient to demonstrate attainment, and 5) revising the MVEB using MOBILE6.

Results from the TexAQS and recent photochemical modeling indicate that additional HRVOC reductions will be the most beneficial measure in reducing ozone in the HGA area. The commission is proposing to reduce HRVOC emissions to reach attainment of the one-hour ozone standard. The photochemical modeling of the August-September 2000 episode coupled with a weight-of-evidence argument demonstrates attainment of the one-hour ozone standard. To achieve the necessary HRVOC reductions, the commission is proposing a two-pronged approach that would address short-term emission events through a not-to- exceed limit, and would address steady state and routine emissions through an annual cap. The annual HRVOC cap would be reduced from the existing HRVOC cap in order to support the attainment demonstration modeling.

The HGA SIP no longer relies solely on NO x based strategies. A combination of point source HRVOC controls and NO x reductions appear to be the most effective means of reducing ozone in the HGA area and there is no longer a NO x shortfall in the HGA SIP. As a result, the commission also evaluated a number of the existing control strategies that were put in place in the December 2000 revision. The photochemical modeling shows that some of these strategies are no longer necessary to attain the one-hour ozone standard. This SIP revision is proposing the repeal of the commercial lawn and garden equipment restrictions, the repeal of the heavy-duty vehicle idling restrictions, and the removal of the motor vehicle inspection and maintenance program requirements from Chambers, Liberty, and Waller Counties. In addition, this SIP proposal includes revisions to the environmental speed limit strategy. In September 2002, the commission revised the existing speed limit strategy to suspend the 55 mile per hour (mph) speed limit until May 1, 2005, and, where posted speeds were 65 mph or higher before May 1, 2002, to increase speeds to five mph below what was posted. The 78th Legislature, 2003, removed the commission's authority to determine speed limits for environmental purposes; therefore, this proposal would remove the reinstatement of the 55 mph speed limit on May 1, 2005, and would maintain the currently posted speed limits at five mph below the posted limit before May 1, 2002. Also, as part of this SIP revision, the commission is proposing new statewide portable fuel container rules. Historically, the commission has expressed a preference to implement technology-based strategies over behavior-altering strategies, and these proposed changes embody that philosophy.

Through this revision, the commission is fulfilling its outstanding one-hour ozone SIP obligations and beginning to plan for the upcoming eight-hour ozone standard. This proposal demonstrates attainment of the one-hour ozone standard in HGA in 2007 and provides a preliminary analysis of the HGA area in terms of the eight-hour ozone standard in 2007 and 2010. EPA's proposed eight-hour implementation rules provide flexibility to the states in transitioning from the one-hour to the eight-hour ozone standard, and the commission believes the steps taken in this proposal and the technical work performed to date will be invaluable through the transition period. Upon EPA's finalization of the eight-hour implementation and the transportation conformity rules, the commission expects to begin developing eight-hour ozone SIPs.

Proposed new Division 2 establishes new requirements relating to the design criteria for portable fuel containers and portable fuel container spouts. The proposal is made in response to an October 13, 2001 petition for rulemaking from Fluoro-Seal and to the directive from the commission on December 5, 2001, to initiate rulemaking on these issues. The proposed new rules will establish design criteria for "no-spill" portable gas cans based in large part on the California Air Resources Board (CARB) standards. The most significant difference with the CARB standards is that these regulations do not require the control of permeations rates through the walls of portable fuel containers. This provision is not included in the Texas regulations because the cost of compliance is expected to be large and the reduction in emissions small, relative to other provisions.

Effective January 1, 2006, these new rules will limit the type of portable fuel containers and portable fuel container spouts sold, offered for sale, manufactured, and/or distributed in the State of Texas. Fuel released into the environment leads to the contamination of both the state's air and water. These rules will ensure that portable fuel containers manufactured under these standards will release fewer amounts of fuel as the result of spillage and evaporation. According to the most conservative estimates by commission staff, the reduction in spills and evaporation will reduce emissions from portable fuel containers by 45%. Staff estimates that the reductions statewide will amount to at least 12.5 tpd. The great majority of these reductions would be to air emissions, but contamination of surface water and groundwater is also expected to be reduced. Staff does not have adequate studies to estimate the reduction to water contamination. Factors such as distance from surface water in which spills occur and the time after a spill before rain occurs would impact the spread of contamination of surface water. One situation that will directly reduce releases to surface water will be the reduction of spills when refueling powered water craft with portable fuel containers. Contamination reaching groundwater would be affected by the type of surface or soil on which a spill occurs, the depth to groundwater, and annual average rainfall amounts in the area. The small size of spills that could occur from a portable fuel container would generally lead to greater evaporation of the fuel rather than transport to water.

SECTION BY SECTION DISCUSSION

Proposed new §115.620, Definitions, establishes the meaning of the terms "Nominal capacity," "Portable fuel container," "Portable fuel container spout," and "Target fuel tank."

Proposed new §115.621, Applicability, establishes the persons that this rule applies to. That is, unless exempted under §115.627, anyone who sells, offers for sale, supplies, distributes, or manufactures portable fuel containers and portable fuel container spouts in Texas is subject to these rules.

Proposed new §115.622, Performance Standards and Testing Requirements, establishes that, notwithstanding the exemptions provided in §115.627, no person shall sell, supply, offer for sale, distribute, or manufacture in Texas any portable fuel container or portable fuel container spout that was manufactured after January 1, 2006, unless it complies with the standards described in this section.

Proposed new §115.622(1) explains that each portable fuel container may only have one hole in the vessel. This standard has been included in the rule as a means of reducing emissions that occur when vent holes (a small second hole in the vessel that is used to expedite the flow of fuel out of the portable fuel container) are left open, leading to evaporative emissions and possibly spillage of fuel.

Proposed new §115.622(2) describes the standards required for portable fuel container spouts. Each portable fuel container spout will be required to have an automatic shutoff device to prevent over filling in accordance with CARB Test Method 510; automatically close and seal when removed from the fuel tank in accordance with CARB Test Method 511; seal without leakage when affixed to the portable fuel container vessel; and meet fuel flow rate and cut off level standards. The portable fuel container spout must provide a fuel flow rate in accordance with CARB Test Method 512, which specifies a flow rate of not less than 1/2 gallon per minute when attached to a portable fuel container that holds 1.5 gallons or less; one gallon per minute when attached to a portable fuel container that holds more than 1.5 gallons but less than or equal to 2.5 gallons; or two gallons per minute when attached to a portable fuel container that holds more than 2.5 gallons. Cut off fuel flow levels are set so as to eliminate the overfilling of a target fuel tank. Cut off fuel flow levels are one inch from the top of the target fuel tank for tanks that have a nominal capacity of 1.5 gallons or less. If the target fuel tank can hold more than 1.5 gallons, the cut off level is 1.25 inches from the top of the fuel tank.

Proposed new §115.626, Labeling, states that portable fuel containers and portable fuel container spouts subject to this rule must display a label indicating that the system was designed in accordance with the rule specified herein. Labels must also list the date when the device was manufactured and show prominently the word "spill-proof." Finally, the label must specify with which portable fuel containers the portable fuel container spout must be used. This final requirement will ensure that consumers match the proper spout to their vessel (or vice versa) in those cases when the devices are purchased separately.

Proposed new §115.627, Exemptions, states that all portable fuel containers and portable fuel container spouts manufactured prior to January 1, 2006, and all portable fuel containers with a nominal capacity of less than or equal to one quart, or greater than ten gallons are exempted from the requirements of this proposed new rule. The exemption allowing persons to sell, supply, offer for sale, or distribute portable fuel containers and portable fuel container spouts manufactured prior to January 1, 2006 has been added so as to allow companies to liquidize any stock of noncompliant portable fuel containers that otherwise would have become unsaleable in the state after the implementation date of this proposed new rule. This proposed section exempts from the rule any portable fuel container or portable fuel container spout that is sold, supplied, or offered for sale outside of Texas. This proposed section also exempts portable fuel containers and portable fuel container spouts used in officially sanctioned racing competitions if the spill-proof spouts would cause problems with the race by increasing time needed to refuel during the race and if the spout and receiving tank are equipped with a spill-proof mechanism.

Proposed new §115.629, Affected Counties and Compliance Schedules, states that all affected persons in all counties within the State of Texas must comply with this rulemaking action as soon as practicable, but not later than January 1, 2006.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Analyst, Strategic Planning and Appropriations Section, determined that for the first five-year period that the proposed new rules are in effect, there will be no significant fiscal implications for the commission or other units of state and local government as a result of administration or enforcement of the proposed new rules. Units of government that purchase portable fuel containers and portable fuel container spouts after January 1, 2006 will likely pay between $6.00 and $11 more per container and $2.00 to $4.00 more per individual spout due to implementation of the proposed new rules.

This rulemaking would establish new requirements relating to the design criteria for all portable fuel containers sold, offered for sale, manufactured, and/or distributed throughout Texas. Effective January 1, 2006, except as exempted in §115.627, all portable fuel containers bought by units of state and local government will have to meet the updated design criteria proposed by this rulemaking. Portable fuel containers with a nominal capacity of less than or equal to one quart, or greater than ten gallons would be exempted from the new requirements. Additionally, the new requirements would not affect portable fuel containers manufactured prior to January 1, 2006. This was included in the rules to allow companies to liquidize any stock of noncompliant portable fuel containers. A third exemption specifies that noncompliant portable fuel containers and portable fuel container spouts which were intended for transport and use outside of Texas are not subject to the requirements of the proposed rulemaking. The overall fiscal impact to units of state and local government would depend on the number of new portable fuel containers purchased after the effective date of the proposed new rules. The commission does not anticipate significant fiscal implications due to implementation of the proposed new rules.

PUBLIC BENEFITS AND COSTS

Mr. Davis determined that for each year of the first five years the proposed new rules are in effect, the public benefit anticipated from the enforcement of and compliance with the proposed new rules would be a reduction in evaporative emissions from poorly sealed gas cans and/or spillage during refueling operations, resulting in a decrease in VOCs released into the air. Reductions in VOCs will help to reduce smog, increase air quality, and help the nonattainment areas meet federal clean air requirements. Water quality will also likely improve by the reduction of fuel spillage during refueling.

This rulemaking would establish new requirements relating to the design criteria for all portable fuel containers sold, offered for sale, manufactured, and/or distributed in Texas. Effective January 1, 2006, except as exempted by §115.627, all portable fuel containers bought by individuals and businesses will have to meet the updated design criteria proposed by this rulemaking. Individuals and businesses would not have to immediately replace existing portable fuel containers following the effective date of this rulemaking action. This fiscal note assumes replacement of existing portable fuel containers due to attrition based on an average useful life of five years for each portable fuel container.

The analysis in this fiscal note is based on a CARB report (CARB, Hearing Notice and Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Public Hearing to Consider the Adoption of Portable Fuel Container Spillage Control Regulations, August 6, 1999). Additionally, data was taken from a report developed by ERG, Inc. (Emissions from Portable Gasoline Containers in Texas, Draft Final Report, August 30, 2002).

The commission does not anticipate significant fiscal implications for manufacturers of portable fuel containers due to implementation of the proposed new rules. There are no known manufacturers in Texas that would be directly affected by the new requirements. CARB estimated that any manufacturing costs required to produce the upgraded portable fuel containers would likely be passed along to consumers buying and businesses selling the new portable fuel containers.

Retailers who sell portable fuel containers may be impacted if the potential increase in costs of the products reduces demand; however, the commission does not anticipate this will occur. The price increase, estimated at between $6.00 to $11 per portable fuel container, is not anticipated to drastically alter consumer/business purchases of these products.

The total fiscal impact to consumers and businesses in Texas that purchase affected portable fuel containers after January 1, 2006 is based on the model developed by CARB in 1999. The study estimated that 94% of portable fuel containers purchased annually were bought by individuals for residential use. The commission estimates the remaining 6% are purchased for commercial use by businesses, such as lawn and garden, tree-trimming, agricultural, forestry, construction, automotive service, and gasoline service stations. According to the Texas State Data Center, there were 7,392,054 households in Texas in 2000. Based on surveys conducted for ERG, Inc., 72% of households in Texas have at least one portable fuel container, with the average being 1.35 gas cans per household. Based on the CARB model, the commission estimates there are approximately 7.1 million portable fuel containers (Residential/94%) owned by individuals, and an additional 460,000 portable fuel containers (Commercial/6%) owned by businesses. The total portable fuel container population in Texas is estimated at approximately 7.6 million. Assuming an average useful life of five years for each portable fuel container, the commission estimates that approximately 1.5 million containers will be replaced annually following the January 1, 2006 effective date of the new regulations.

Table 1 provides the estimated cost of compliance for both individuals and businesses that purchase portable fuel containers after January 1, 2006. The total annual incremental compliance cost increase is estimated at $12.8 million statewide. A 2% annual rate of inflation was applied to estimated compliance costs for 2004 to arrive at the 2006 compliance costs listed in Table 1. Based on staff's conservative estimate of a reduction of 12.5 tpd, the annual reduction is estimated to be at least 4,500 tons per year. Therefore, the cost of each ton per year of emission reductions will be approximately $2,800.

Figure: 30 TAC Chapter 115--Preamble

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

No significant adverse fiscal implications are anticipated as a result of implementation of the proposed new rules for small or micro-businesses. The majority of businesses in Texas affected by the proposed new rules are anticipated to be small and micro-businesses, including lawn and garden, tree-trimming, agricultural, forestry, construction, automotive service, and gasoline service stations. Based on the ERG, Inc. report, larger small and micro-businesses would replace up to approximately ten portable fuel containers annually following implementation of the proposed rules on January 1, 2006. The cost to replace these portable fuel containers would be approximately $60 to $110 more per business due to implementation of the proposed new rules. The increased cost could be higher or lower, depending on the number of portable fuel containers purchased following implementation of the proposed new rules.

The following is an analysis of the costs per employee for small and micro-businesses that replace ten portable fuel containers annually over the five-year period following implementation of the proposed new rules. Small and micro-businesses are defined as having fewer than 100 or 20 employees, respectively. A small business would have to pay up to an additional $1.10 per employee to comply with the proposed new rules. A micro- business would have to pay up to an additional $5.50 per employee to comply with the proposed new rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed new rules do not adversely affect a local economy in a material way for the first five years that the proposed new rules are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the proposed rulemaking action in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking action does not meet the definition of a "major environmental rule" as defined in that statute. A "major environmental rule" is a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The proposed new rules to Chapter 115 and revisions to the SIP would reduce emissions of VOCs throughout Texas by regulating the type of portable fuel containers that can be manufactured or imported for sale in Texas after January 1, 2006. Specifically, the proposed new rules will require that new portable fuel containers have devices to prevent spills and overfilling of the receiving tanks. The proposed new rules are not expected to adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The proposed new rules do not meet any of the four applicability criteria of a "major environmental rule" as defined in the Texas Government Code. Section 2001.0225 applies only to a major environmental rule the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.

The proposed new rules implement requirements of 42 USC. Under 42 USC, §7410, states are required to adopt a SIP which provides for "implementation, maintenance, and enforcement" of the primary national ambient air quality standards (NAAQS) in each air quality control region of the state. While §7410 does not require specific programs, methods, or reductions in order to meet the standard, SIPs must include "enforceable emission limitations and other control measures, means or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this chapter," (meaning Chapter 85, Air Pollution Prevention and Control). It is true that 42 USC does require some specific measures for SIP purposes, such as the inspection and maintenance program, but those programs are the exception, not the rule, in the SIP structure of 42 USC. The provisions of 42 USC recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the ozone standard. This flexibility allows states, affected industry, and the public to collaborate on the best methods for attaining the NAAQS for the specific regions in the state. Even though 42 USC allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of §7410. Thus, while specific measures are not generally required, the emission reductions are required. States are not free to ignore the requirements of §7410, and must develop programs to assure that the nonattainment areas of the state will be brought into attainment on schedule.

The requirement to provide a fiscal analysis of proposed regulations in the Texas Government Code was amended by Senate Bill (SB) 633 during the 75th Legislature, 1997. The intent of SB 633 was to require agencies to conduct a regulatory impact analysis (RIA) of extraordinary rules. These are identified in the statutory language as major environmental rules that will have a material adverse impact and will exceed a requirement of state law, federal law, or a delegated federal program, or are adopted solely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 that concluded "based on an assessment of rules adopted by the commission in the past, it is not anticipated that the bill would not have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted proposed rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law. As discussed earlier in this preamble, 42 USC does not require specific programs, methods, or reductions in order to meet the NAAQs for ozone; thus, states must develop programs for each nonattainment area to ensure that each area will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule proposed for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full RIA contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Board in its fiscal notes. Because the legislature is presumed to understand the fiscal impacts of the bills it passes, and that presumption is based on information provided by state agencies and the Legislative Budget Board, the commission believes that the intent of SB 633 was only to require the full regulatory impact analysis for rules that are extraordinary in nature. While the SIP rules will have a broad impact, that impact is no greater than is necessary or appropriate to meet the requirements of 42 USC. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, §2001.0225(a), because they are specifically required by federal law.

In addition, 42 USC, §7502(a)(2), requires attainment as expeditiously as practicable, and §7511a(d) requires states to submit ozone attainment demonstration SIPs for severe ozone nonattainment areas such as HGA. The proposed rules will reduce VOC emissions statewide, including in the HGA. The control of VOCs in the HGA will assist with achieving attainment of the NAAQS for ozone for that area. Therefore, the proposed new rules are necessary components of and consistent with the ozone attainment demonstration SIP for HGA, required by 42 USC, §7410.

The commission has consistently applied this construction to its rules since this statute was enacted in 1997. Since that time, the legislature has revised the Texas Government Code, but left this provision substantially unamended. The commission presumes that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp , 919 S.W.2d 485, 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue , 960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co. , 798 S.W.2d 353, 357 (Tex. App. Austin 1990, no writ). Cf. Humble Oil & Refining Co. v. Calvert , 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co. , 9 S.W.3d 884, 893 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor , 24 S.W.3d 581 (Tex. App. Austin 2000, pet. denied ); and Coastal Indust. Water Auth. v. Trinity Portland Cement Div. , 563 S.W.2d 916 (Tex. 1978).

As discussed earlier in this preamble, this rulemaking implements requirements of 42 USC. There is no contract or delegation agreement that covers the topic that is the subject of this rulemaking action. Therefore, the proposed new rules do not exceed a standard set by federal law, exceed an express requirement of state law, exceed a requirement of a delegation agreement, or are adopted solely under the general powers of the agency. In addition, the rules are proposed under Texas Health and Safety Code, §§382.002, 382.011, 382.012, and 382.017. The commission invites public comment on the draft regulatory impact analysis determination.

TAKINGS IMPACT ASSESSMENT

The commission completed a takings impact analysis for the proposed rulemaking action under Texas Government Code, §2007.043. The specific purpose of these proposed new rules is to reduce the emissions of VOCs caused by leaks and spills from portable fuel containers.

Texas Government Code, §2007.003(b)(4), provides that Chapter 2007 does not apply to this proposed rulemaking action, because it is reasonably taken to fulfill an obligation mandated by federal law. The control requirements within this rulemaking action were developed in order to meet the ozone NAAQS set by the EPA under 42 USC, §7409. States are primarily responsible for ensuring attainment and maintenance of NAAQS once the EPA has established them. Under 42 USC, §7410, and related provisions, states must submit for EPA approval SIPs that provide for the attainment and maintenance of the applicable ozone standard through control programs directed to sources of the ozone. Therefore, one purpose of this rulemaking action is to meet the air quality standards established under federal law, identifiable as the NAAQS. Any VOC reductions resulting from the current rulemaking are no greater than what scientific research indicates is necessary to achieve the desired ozone levels. However, this rulemaking is only one step among many necessary for attaining the ozone standard.

In addition, Texas Government Code, §2007.003(b)(13), states that Chapter 2007 does not apply to an action that: 1) is taken in response to a real and substantial threat to public health and safety; 2) is designed to significantly advance the health and safety purpose; and 3) does not impose a greater burden than is necessary to achieve the health and safety purpose. Although the proposed new rules do not directly prevent a nuisance or prevent an immediate threat to life or property, they do prevent a real and substantial threat to public health and safety and significantly advance the health and safety purpose. This action is taken in response to the finding that the HGA area exceeds the federal ozone standard, and may consequently affect public health in an adverse manner, primarily through irritation of the lungs. The action significantly advances the health and safety purpose by reducing ozone levels in the HGA nonattainment area. Consequently, these proposed rules meet the exemption in §2007.003(b)(13). This rulemaking action therefore meets the requirements of Texas Government Code, §2007.003(b)(4) and (13). For these reasons, the proposed new rules do not constitute a takings under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the proposed rulemaking action and found that the proposal is an action identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, or will affect an action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, and therefore will require that applicable goals and policies of the Coastal Management Program be considered during the rulemaking process.

The commission prepared a preliminary consistency determination for the proposed rules under 31 TAC §505.22 and found that the proposed rulemaking action is consistent with the applicable CMP goals and policies. The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC §501.12(1)). No new sources of air contaminants will be authorized and ozone levels will be reduced as a result of these proposed new rules. The CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations in 40 CFR, to protect and enhance air quality in the coastal area (31 TAC §501.14(q)). This rulemaking action complies with 40 CFR. Therefore, in compliance with 31 TAC §505.22(e), this rulemaking action is consistent with CMP goals and policies. Interested persons may submit comments on the consistency of the proposed rules with the CMP during the public comment period.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMIT PROGRAM

Chapter 115 is an applicable requirement under 30 TAC Chapter 122; therefore, owners or operators subject to the federal operating permit program must, consistent with the revision process in Chapter 122, revise their operating permits to include the revised Chapter 115 requirements for each emission unit affected by the revisions to Chapter 115 at their sites.

ANNOUNCEMENT OF HEARINGS

Public hearings for this proposed rulemaking have been scheduled for the following times: August 2, 2004, 1:30 p.m. and 5:30 p.m., City of Houston, City Council Chambers, 2nd Floor, 901 Bagby, Houston; and August 3, 2004, 10:30 a.m., John Gray Institute, 855 Florida Avenue, Beaumont; and August 5, 2004, 9:30 a.m., Texas Commission on Environmental Quality, 12100 North I-35, Building F, Room 2210, Austin. The hearings will be structured for the receipt of oral or written comments by interested persons. Registration will begin 30 minutes prior to each hearing. Individuals may present oral statements when called upon in order of registration. A time limit may be established at the hearings to assure that enough time is allowed for every interested person to speak. There will be no open discussion during the hearings; however, commission staff members will be available to discuss the proposal 30 minutes before each hearing and will answer questions before and after each hearing.

Persons with disabilities who have special communication or other accommodation needs, who are planning to attend a hearing, should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Written comments may be submitted to Patricia Durón, MC 205, Office of Environmental Policy, Analysis, and Assessment, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087; faxed to (512) 239-4808; or emailed to siprules@tceq.state.tx.us . All comments should reference Rule Project Number 2004-033-115-AI. Comments must be received by 5:00 p.m., August 9, 2004. For further information, please contact Roland Castañeda of the Environmental Planning and Implementation Division at (512) 239-0774 or Joe Thomas, of the Policy and Regulations Division, at (512) 239-4580.

Persons with disabilities who have special communication or other accommodation needs, who are planning to attend the hearing, should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

STATUTORY AUTHORITY

The new rules are proposed under Texas Water Code, §5.102, concerning General Powers, §5.103, concerning Rules, and §5.105, concerning General Policy, which provide the commission with the general powers to carry out its duties and authorize the commission to adopt rules necessary to carry out its powers and duties under the Texas Water Code; §26.003, concerning Policy; §26.011, concerning In General, which provide the commission with authority to maintain and control the quality of water in the state; and under Texas Health and Safety Code, §382.017, concerning Rules, which authorizes the commission to adopt rules consistent with the policy and purposes of Texas Health and Safety Code, Chapter 382 (also known as the Texas Clean Air Act). The new rules are also proposed under Texas Health and Safety Code, §382.002, concerning Policy and Purpose, which establishes the commission purpose to safeguard the state air resources, consistent with the protection of public health, general welfare, and physical property; §382.011, concerning General Powers and Duties, which authorizes the commission to control the quality of the state's air; and §382.012, concerning State Air Control Plan, which authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air. The new rules are proposed under federal mandates contained in 42 United States Code, §7410, that requires states to introduce pollution control measures in order to reach specific air quality standards in particular areas of the state.

The proposed new rules implement Texas Health and Safety Code, §§382.002, 382.011, and 382.012.

§115.620.Definitions.

The following words and terms, when used in this division, have the following meanings, unless the context clearly indicates otherwise. Additional definitions for terms used in this division are found in §§3.2, 101.1, and 115.10 of this title (relating to Definitions).

(1) Nominal capacity--The volume indicated by a portable fuel container manufacturer that represents the maximum recommended filling level.

(2) Portable fuel container--Any vessel that is designed to be used in combination with a portable fuel container spout and that is designed or used primarily to receive, transport, store, or dispense fuel for use in internal combustion engines, and that is subject to 16 Code of Federal Regulations, §1500.83(a)(14).

(3) Portable fuel container spout--Any device that is designed or manufactured to be attached to a portable fuel container for the purpose of dispensing fuel into a target fuel tank leading to an internal combustion engine.

(4) Target fuel tank--Any receptacle that receives fuel from a portable fuel container.

§115.621.Applicability.

Except as provided in §115.627 of this title (relating to Exemptions), this division shall apply to any person who sells, offers for sale, supplies, distributes, or manufactures portable fuel containers and portable fuel container spouts in the State of Texas.

§115.622.Performance Standards and Testing Requirements.

Except as provided in §115.627 of this title (relating to Exemptions), no person shall sell, supply, offer for sale, distribute, or manufacture any portable fuel container or portable fuel container spout which was manufactured after January 1, 2006, that does not comply with the following performance standards.

(1) Portable fuel containers must have only one opening in the vessel.

(2) Portable fuel container spouts must:

(A) contain an automatic shutoff device that stops the flow of fuel before the target fuel tank overflows, in accordance with California Air Resources Board (CARB) Test Method 510 (July 6, 2000);

(B) automatically close and seal when removed from the target fuel tank, and remain completely closed when not dispensing fuel, in accordance with CARB Test Method 511 (July 6, 2000);

(C) seal without leakage to the portable fuel container to which it is affixed;

(D) provide a fuel flow rate, in accordance with CARB Test Method 512 (July 6, 2000), of not less than:

(i) 1/2 gallon per minute when attached to a portable fuel container with a nominal capacity of 1.5 gallons or less;

(ii) one gallon per minute when attached to a portable fuel container with a nominal capacity greater than 1.5 gallons but less than or equal to 2.5 gallons; or

(iii) two gallons per minute when attached to a portable fuel container with a nominal capacity of greater than 2.5 gallons; and

(E) cut off fuel flow when the fuel level in the target fuel tank reaches:

(i) one inch from the top of a target fuel tank with a nominal capacity of 1.5 gallons or less; or

(ii) 1.25 inches from the top of a target fuel tank with a nominal capacity greater than 1.5 gallons.

§115.626.Labeling.

Portable fuel containers and portable fuel container spouts subject to the requirements of §115.622 of this title (relating to Performance Standards and Testing Requirements) must be labeled so as to indicate compliance with the requirements of §115.622 of this title. The label must also list the date the device was manufactured and must prominently include the word "spill-proof." The label must also specify with which portable fuel containers the portable fuel container spout must be used.

§115.627.Exemptions.

This division (relating to Portable Fuel Containers) does not apply to:

(1) portable fuel containers or portable fuel container spouts manufactured prior to January 1, 2006;

(2) portable fuel containers with a nominal capacity less than or equal to one quart, or greater than ten gallons;

(3) portable fuel containers or portable fuel container spouts that are sold, supplied, or offered for sale outside of Texas; and

(4) portable fuel containers and portable fuel container spouts used in officially sanctioned racing competitions when the minimum flow rates provided in §115.622(2)(D) of this title (relating to Performance Standards and Testing Requirements) would interfere with the competition by requiring too long to refuel vehicles during the race, if both the portable fuel container spout and the receiving tank have compatible spill-proof mechanisms to avoid spills when transferring fuel.

§115.629.Affected Counties and Compliance Schedules.

All affected persons in all counties within the State of Texas shall be in compliance with the provisions of this division as soon as practicable, but no later than January 1, 2006.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 28, 2004.

TRD-200403609

Stephanie Bergeron

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: July 11, 2004

For further information, please call: (512) 239-6087