The commission proposes amendments to §114.1, concerning Definitions; and new §§114.301, 114.302, 114.305-114.307, and 114.309, concerning Requirements for Gasoline Volatility and Sulfur Content. The commission proposes these revisions to Chapter 114, concerning Control of Air Pollution from Motor Vehicles, and to the State Implementation Plan (SIP) in order to control ground-level ozone in attainment and near-nonattainment areas and ozone nonattainment areas.

The proposed revisions are one element of the new Texas Clean Air Strategy (TCAS), which includes a variety of options in order to meet the national ambient air quality standards (NAAQS) for ground-level ozone. The purpose of the strategy is to help keep attainment and near-nonattainment areas, such as Austin, Corpus Christi, Longview/Tyler/Marshall, San Antonio, and Victoria in compliance with the federal eight-hour ozone standard of 80 parts per billion (ppb). The new strategy is also designed to help the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas reach attainment. The TCAS takes into account recent science which shows that regional approaches may provide improved control of ozone air pollution. In particular, staff has conducted photochemical grid modeling which indicates that implementation of cleaner burning gasoline, Stage I vapor recovery, and national low-emitting vehicles (NLEV) will result in ozone reductions (peak 8-hour average) of 1 to 4 ppb in much of east and southeast Texas. Additional details concerning the need for a regional strategy are given in the Background section of this preamble.

The proposed revisions would implement the cleaner burning gasoline option of the TCAS. The proposed cleaner burning gasoline will lower the evaporative emissions of volatile organic compounds (VOC), as well as improve the catalytic converter performance through reductions in gasoline sulfur which in turn results in reduced emissions of VOC and oxides of nitrogen (NO _x ) from fuel combustion. Because NO _x and VOC are precursors to ground-level ozone formation, reduced emissions of NOx and VOC will result in ground-level ozone reductions. To comply with the proposed state cleaner burning gasoline regulations, refiners will need to ensure gasoline distributed to the cleaner burning gasoline zone meets the specifications set forth in these rules. The proposed rules require that gasoline produced for delivery and ultimate sale to the consumer in the affected area does not exceed 7.8 pounds per square inch absolute (psia) Reid vapor pressure (RVP) for the seasonal control period of May 1 through October 31 of each year, beginning May 1, 2000. The commission specifically seeks comment on the length of the seasonal control period. The proposed rules further require that gasoline sulfur levels do not exceed 150 parts per million (ppm) year-round, beginning May 1, 2003. The rules would further provide for counties or large cities to opt into these regulations earlier than proposed here provided certain conditions are met.

The proposed new rules will require cleaner gasoline in the following 95 counties in the eastern half of Texas: Anderson, Angelina, Aransas, Atascosa, Austin, Bastrop, Bee, Bell, Bexar, Bosque, Bowie, Brazos, Burleson, Caldwell, Calhoun, Camp, Cass, Cherokee, Colorado, Comal, Cooke, Coryell, De Witt, Delta, Ellis, Falls, Fannin, Fayette, Franklin, Freestone, Goliad, Gonzales, Grayson, Gregg, Grimes, Guadalupe, Harrison, Hays, Henderson, Hill, Hood, Hopkins, Houston, Hunt, Jackson, Jasper, Johnson, Karnes, Kaufman, Lamar, Lavaca, Lee, Leon, Limestone, Live Oak, Madison, Marion, Matagorda, McLennan, Milam, Morris, Nacogdoches, Navarro, Newton, Nueces, Panola, Parker, Polk, Rains, Red River, Refugio, Robertson, Rockwall, Rusk, Sabine, San Jacinto, San Patricio, San Augustine, Shelby, Smith, Somervell, Titus, Travis, Trinity, Tyler, Upshur, Van Zandt, Victoria, Walker, Washington, Wharton, Williamson, Wilson, Wise, and Wood.

The proposed new rules would also apply in the 15 counties of the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas: Brazoria, Chambers, Collin, Dallas, Denton, Fort Bend, Galveston, Hardin, Harris, Jefferson, Liberty, Montgomery, Orange, Tarrant, and Waller Counties. Currently, the Houston/Galveston and Dallas/Fort Worth ozone nonattainment areas have their own cleaner burning gasoline, federal reformulated gasoline (RFG). In these areas, federal rules prohibit the sale of gasoline which is not certified by the U.S. Environmental Protection Agency (EPA) as federal RFG. Consequently, gasoline in these areas will have to continue to meet the federal RFG requirements in addition to the proposed cleaner gasoline rules.

The commission solicits comments regarding possible city, county, or state incentives for the early implementation of the RVP and/or sulfur requirements proposed by this rule. The commission further solicits comments on the feasibility and benefit of requiring a 150 part per million sulfur average instead of the proposed 150 ppm cap, and input on an appropriate level to set a corresponding sulfur cap to ensure a 150 ppm average sulfur level.

The commission is also soliciting comment on the timing and level of the federal gasoline sulfur regulations and their impact on these rules. Specifically: 1) if the EPA promulgates by May 1, 2001, regulations to limit sulfur in gasoline, and 2) these federal regulations are for a sulfur level equal to or below what is proposed by this rule, and 3) the federal rules are finalized to require implementation within one year of the implementation date proposed in these rules today, and 4) the federal rules cover an area equal to or greater than the coverage area proposed in today's rules; then should the commission modify, withdraw, or repeal these sulfur rules or should the rules be revised upon adoption to automatically expire.

The commission solicits comments on the separation of the RVP and sulfur requirements of this rule proposal into two separate rule packages for adoption. The advantage of separation is the commission's ability to have the two elements, RVP and sulfur, move forward at different speed if necessary. The disadvantage of separation would be the need to request separate waivers under the Federal Clean Air Act (FCAA) §211(c)(4)(C) for each rule thus losing the ability to claim the combined air quality benefits in the waiver request.

The commission's proposed rules do not address the use of the controversial gasoline additive methyl tertiary butyl ether (MTBE). MTBE has beneficial gasoline blending characteristics which allow some gasoline refiners to meet these requirements more readily, however, it also has some negative water quality impacts if gasoline with MTBE is spilled and contaminates the groundwater. Therefore, the commission solicits comments on the prohibition of the use of MTBE in gasoline for the 110 counties affected by these rules.

BACKGROUND At the time the 1990 FCAA Amendments were enacted, the focus on controlling ozone pollution was centered on local controls. However, for many years an ever increasing number of air quality professionals have felt that ozone is a regional problem requiring regional strategies in addition to local control programs. As nonattainment areas across the United States prepared attainment demonstration SIPs in response to the 1990 FCAA Amendments, several areas found that modeling attainment was made much more difficult, if not impossible, because of high ozone and ozone precursor levels entering from the boundaries of their respective modeling domains, commonly called transport.

The commission has conducted air quality modeling and upper air monitoring that found regional air pollution should be considered when studying air quality in Texas' ozone nonattainment areas. This work is supported by research conducted by the Ozone Transport Assessment Group (OTAG), the most comprehensive attempt ever undertaken to understand and quantify the transport of ozone. Both the commission and OTAG study results point to the need to take a regional approach, such as that proposed in the TCAS, to controlling air pollutants.

As part of the Coastal Oxidant Assessment for Southeast Texas (COAST) project, the commission and its contractor Environ, Inc., conducted regional-scale modeling to develop future-year boundary conditions for the COAST modeling domain. The emissions inventory used in this modeling was based on the OTAG emission inventory and the modeling was conducted for a domain covering most of Texas as well as several southern states.

During the OTAG process, the commission's modeling staff ran several sensitivity analyses using this regional modeling setup to assess the impact of potential OTAG reductions on Texas. Applying the OTAG reductions across the domain (clean gasoline (federal reformulated gasoline) stationary source controls, the NLEV program, ozone action days, and a series of national rules to be promulgated by the EPA among others), compared to the case of no reductions, indicated that modeled reductions would significantly reduce ozone throughout most of the eastern half of Texas. Overall the modeling indicated that a regional reduction strategy would be beneficial across the wide area of the state.

During modeling for the Houston/Galveston attainment demonstration SIP, the commission's modeling staff conducted sensitivity analyses to determine the benefits regional reductions might have on Houston/Galveston, when applied simultaneously with local reductions. Unlike the commission's regional modeling exercises discussed above, these model runs offer an opportunity to assess separately the benefits of reductions made within and outside a region, since model runs with and without the regional reductions scenarios in Houston/Galveston were run. Modeling runs were completed to evaluate the 8-hour average ozone concentrations in the COAST modeling domain for September 8, 1993 with 2007 projected emissions and assuming a reduction of 70% NO _x and 15% VOC in the 8-county Houston/Galveston area. Even with the large reductions in Houston/Galveston much of the upper Texas Coast is well above the 8-hour standard. Also, Austin, Victoria, and Corpus Christi show 8-hour average concentrations above 80 ppb. The benefit of applying OTAG reductions outside the Houston/Galveston 8-county area clearly showed additional ozone benefits of between 5 and 10 ppb in Houston/Galveston.

Additional modeling has been completed by commission staff assessing the potential benefits of the TCAS. This modeling indicates that mobile source reductions (cleaner gasoline, NLEVs, and Stage I vapor recovery) have a potential to reduce peak 8-hour ozone averages of between 1 and 4 ppb in much of east and southeast Texas, with the greatest reductions seen in the Austin and San Antonio areas. Modeling of the combined point source and mobile source strategies shows a large area, including near-nonattainment and attainment areas, of reductions in peak 8-hour average ozone above 3 ppb.

This modeling provides part of the evidence of the benefit of regional reductions on Texas' nonattainment areas and further provides justification that a regional strategy will help maintain air quality in attainment and near-nonattainment areas. Conclusions from the commission's work are supported by OTAG studies that also illustrate the importance of implementing a regional air quality control strategy.

EXPLANATION OF PROPOSED RULES The proposed changes to §114.1, concerning Definitions, add a new definition of reformulated gasoline.

The proposed new §114.301, concerning Control Requirements for Reid Vapor Pressure, limits gasoline to an RVP of 7.8 psia in 95 counties in the eastern half of Texas and in the 15 counties of the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas. This proposed RVP limit is seasonal (May 1 through September 16 of each year), beginning May 1, 2000. In addition, the proposed new §114.301 specifies that requirements such as federal RFG will also continue to apply in the 4-county Dallas/Fort Worth ozone nonattainment area (Collin, Dallas, Denton, and Tarrant Counties) and the 8-county Houston/Galveston ozone nonattainment area (Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties).

The proposed new §114.302, concerning Control Requirements for Sulfur, limits gasoline to a sulfur content of 150 ppm in 95 counties in the eastern half of Texas and in the 15 counties of the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas. This sulfur limit would apply year-round, beginning on May 1, 2003. In addition, the proposed new §114.302 specifies that requirements such as federal RFG will also continue to apply in the 4- county Dallas/Fort Worth ozone nonattainment area and the 8-county Houston/Galveston ozone nonattainment area.

The proposed new §114.305, concerning Approved Test Methods, establishes American Society for Testing and Materials (ASTM) Test Method D5191, 40 Code of Federal Regulations (CFR) Part 80, Appendix D (Sampling Procedures for Fuel Volatility), and 40 CFR Part 80, Appendix E (Test For Determining Reid Vapor Pressure of Gasoline and Gasoline-Oxygenate Blends) as the approved test methods for determining gasoline volatility, and establishes ASTM Test Methods D2622 and D5453 as the approved test methods for determining sulfur content. The proposed new §114.305 also includes a paragraph which authorizes the use of test methods other than those specifically listed in §114.305, provided that any new test method is validated using the procedures in 40 CFR 63, Appendix A, Test Method 301, with the executive director acting as the administrator. This new paragraph is being proposed because in some unique situations the listed test methods may be inappropriate. The new paragraph increases flexibility by allowing the use of additional test methods which may be more cost-effective and more appropriate in certain unique situations.

The proposed new §114.306, concerning Recordkeeping Requirements, requires the owner or operator of any gasoline storage vessel, gasoline terminal, or gasoline bulk plant subject to the provisions of §114.301 and §114.302 to maintain records of the RVP and sulfur content of gasoline.

The proposed new §114.307, concerning Exemptions, establishes exemptions for gasoline used in agriculture, aviation, and any tank, reservoir, storage vessel, or other stationary container with a nominal capacity of 500 gallons (1,893 liters) or less. The exemption for aviation gasoline ("av- gas") is proposed because aircraft have fuel performance requirements which can not be met by gasoline for land-based motor vehicles. The exemptions for agricultural and small capacity gasoline storage tanks are proposed because these tanks often have such a low throughput that they might still contain higher RVP gasoline at the start of the seasonal control period. In addition, the proposed new §114.307 establishes an exemption from the recordkeeping requirements for the owner or operator of motor vehicle fuel dispensing facilities.

The proposed new §114.308, concerning Alternative Early Implementation, allows a county, or a city with a population of 200,000 or more, according to the most recent federal census, in a covered county to request the early implementation of RVP and/or sulfur controls for the area under their jurisdiction. The commission has proposed to limit this ability to cities of 200,000 or more due to gasoline distribution concerns. Early controls, or phased in controls, for RVP and/or sulfur are available to these areas as long as the levels are not more stringent than those proposed by this rule. The proposed new §114.308 further provides that the commission may enter an order adopting some or all of the provisions of an area's request for accelerated RVP and/or sulfur controls upon a finding that the requested controls are practicable and needed to improve air quality.

The commission has received final resolutions from the cities of San Antonio and Austin, and the Alamo Area Council of Governments requesting RVP and/or sulfur controls early. The commission is soliciting comments on these requests. If additional final resolutions are received prior to the close of comments (February 1, 1999, 5 p.m.), the commission will act on these requests concurrent with the final adoption of this rulemaking and SIP revision. If the commission adopts some or all of the timely requests, the commission order would become effective upon the effective date of the rules, and would be codified in the adopted rule language.

The proposed new §114.309, concerning Affected Counties, specifies the counties which are subject to the new requirements.

FISCAL NOTE Jeff Grymkoski, Director, Strategic Planning and Appropriations Division, has determined that for the first five-year period the sections are in effect there will be insignificant fiscal implications for state and local governments as a result of enforcing or administering the proposed rules. Enforcement of the proposed rules would primarily occur through inspection of on-site records at gasoline distribution facilities which are currently routinely inspected. Specifically, local air pollution control programs and the Field Operations and Enforcement Divisions of the Office of Compliance and Enforcement are responsible for enforcing the Chapter 115 gasoline terminal rules in the regional affected area. (These rules are anticipated to be proposed in concurrent rulemaking.) Most of the gasoline terminals which will have to comply with the Chapter 115 gasoline terminal rules are currently subject to air permits and/or to similar requirements under 40 CFR 63, Subpart R (the Gasoline Distribution National Emission Standard for Hazardous Air Pollutants), and therefore are already being inspected for compliance. The remainder will be inspected for compliance as a result of the proposed Chapter 115 gasoline terminal rules. Consequently, no additional gasoline terminals in the affected area will need to be inspected for compliance as a result of the proposed cleaner gasoline rules. Therefore, if the field inspectors enforce the gasoline requirements when conducting their routine inspections at gasoline terminals, the fiscal implications for state and local governments as a result of enforcing or administering the proposed cleaner gasoline rules will be insignificant.

PUBLIC BENEFIT Mr. Grymkoski has also determined that for each year of the first five years the proposed revisions are in effect, the public benefit anticipated as a result of implementing the sections will be satisfaction of requirements of the FCAA, and reductions of ground-level ozone in the 110 counties for which the cleaner gasoline rules are proposed. The costs to small businesses, persons, or businesses who are required to comply with the rules as proposed are as follows.

EPA has estimated the cost of limiting the sulfur content in gasoline to 150 ppm to be approximately 1.1 to 1.8 cents per gallon for Gulf Coast and East Coast refiners. (See EPA Staff Paper on Gasoline Sulfur Issues, EPA420-R-98-005 (May 1, 1998), Tables E2 and 6.) EPA's cost estimates include the cost of potential decreases in fuel economy due to the use of oxygenates for reducing sulfur content for those refiners who may choose to use oxygenates to reduce sulfur. The costs are based upon estimates of summer production costs, since the summer season is a refiner's most severe sulfur control period. Since the proposed sulfur limitations are year-round requirements, the costs were projected over the entire year. A separate cost estimate performed by MathPro, a contractor for the American Petroleum Institute, estimated the cost of limiting the sulfur content in gasoline to 150 ppm to be approximately 2.7 cents per gallon. (See EPA Staff Paper on Gasoline Sulfur Issues, EPA420-R-98-005 (May 1, 1998), Tables E2 and 7.) The MathPro study resulted in higher estimated costs due to different inputs. For example, the MathPro study included the cost of sulfur control at refiners in the Upper Midwest, which are expected to be higher than those of the Gulf Coast and East Coast refiners. According to the calculations for EPA's Final Regulatory Impact Analysis for Reformulated Gasoline (December 13, 1993) found in Table VI-A5: Cost-Effectiveness Analysis for VOC Control Region 1, the estimated cost-effectiveness of limiting the sulfur content in gasoline to 150 ppm is approximately $1297 per ton of VOC and NO _x reduced. (The area identified as VOC Control Region 1 includes Texas.) OTAG estimated the costs and effectiveness of 150 ppm sulfur. OTAG estimated the cost to be between 1.2 and 3.0 cents per gallon and the cost-effectiveness to range between $2,200 - $8,500 per ton of VOC and NO _x reduced. (See: Mobile Source Assessment: NO _x and VOC Reduction Technologies for Application by the Ozone Transport Assessment Group.)

A number of cost estimates for limiting the RVP of gasoline to 7.8 psia were completed by EPA and other groups in the late 1980's and early 1990's. Since that time, most low RVP fuel cost estimates have been analyzed for lowering RVP from 9.0 to around 7.0 psia. Up-to-date cost estimates for 7.8 psia fuel are therefore unavailable. However, there are several recent cost estimates for 7.2 to 6.5 psia fuels. It is logical to assume that cost estimates for 7.2 to 6.5 psia fuel will be overestimated for 7.8 psia fuel. Therefore, the following OTAG and EPA cost estimates for low RVP gasoline are likely to be higher than for the 7.8 psia gasoline proposed. OTAG estimated that lowering the RVP of gasoline from 9.0 psia to 7.1 psia would cost between 0.7 and 1.6 cents per gallon and have a cost- effectiveness of between $710 and $1,600 dollars per ton of VOC reduced. (See: Mobile Source Assessment: NO _x and VOC Reduction Technologies for Application by the Ozone Transport Assessment Group) . According to the calculations for EPA's Final Regulatory Impact Analysis for Reformulated Gasoline (December 13, 1993) found in Table VI- A5, the incremental cost increase for 7.2 psia RVP fuel was 0.12 cents per gallon. EPA estimated the cost-effectiveness for VOC Control Region 1 to be approximately $270 per ton of VOC reduced. By comparison, the EPA estimated the cost-effectiveness of recently promulgated motor vehicle control programs in EPA's Tier 2 Study, EPA420-R-98-008 (July 31, 1998) as follows: 1) $6000 per ton of VOC reduced and $1380 to $1800 per ton of NO _x reduced for Tier 1 standards for light-duty vehicles and light-duty trucks; 2) $457 to $552 per ton of VOC reduced and $150 to $172 per ton of NO _x reduced for supplemental federal test procedure (SFTP) standards for aggressive driving; 3) $2050 to $2574 per ton of NO _x reduced for SFTP standards for emissions with the air conditioner on; and 4) $1974 per ton of VOC reduced and $1974 per ton of NO _x reduced for on-board diagnostics requirements.

The commission's analysis revealed that the smallest refiner affected by the proposed sulfur and RVP limits has well over $1 million in annual gross receipts. Consequently, the refiners which would have to comply with the proposed sulfur and RVP limits do not meet the definition of "small business" as defined in Texas Government Code, §2006.001, concerning Definitions. Using EPA cost estimates and assuming a retail gasoline price of $1.00 per gallon and a throughput of 5000 gallons per month, the smallest gasoline stations affected by the proposed sulfur limits would incur a cost of approximately $1.10 to $1.80 per $100 of annual gasoline sales. By comparison, the largest gasoline station affected by the proposed sulfur limits (those with a throughput of at least 200,000 gallons per month) would likewise incur a cost of approximately $1.10 to $1.80 per $100 of annual gasoline sales. Using EPA cost estimates and assuming a retail gasoline price of $1.00 per gallon and a throughput of 5000 gallons per month, the smallest gasoline stations affected by the proposed RVP limits would incur a cost of approximately $.12 per $100 of annual gasoline sales. By comparison, the largest gasoline station affected by the proposed RVP limits (those with a throughput of at least 200,000 gallons per month) would also incur a cost of approximately $.12 per $100 of annual gasoline sales. In fact, the cost of the proposed sulfur and RVP limits per $100 of annual gasoline sales for all gasoline stations will be the same, regardless of the estimated increase in the price of gasoline. A similar analysis for other businesses in the gasoline distribution network, such as gasoline bulk plants and gasoline terminals, and businesses which must purchase retail gasoline as part of their operations likewise revealed that the cost per $100 of annual sales for large and small businesses will be the same, again regardless of the estimated increase in the price of gasoline.

DRAFT REGULATORY IMPACT ANALYSIS The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the rulemaking is not subject to §2001.0225 because although it meets the definition of a "major environmental rule" as defined in the act, it does not meet any of the four applicability requirements listed in §2001.0225(a). Specifically, the emission limitations and control requirements within this proposal were developed in order to meet the NAAQS for ozone set by EPA under §109 of the 1990 FCAA, and therefore meet a federal requirement. States are primarily responsible for ensuring attainment and maintenance of NAAQS once EPA has established them. Under §110 of the FCAA and related provisions, states must submit, for approval by EPA, SIPs that provide for the attainment and maintenance of NAAQS through control programs directed to sources of the pollutants involved. This proposal is not an express requirement of state law, but was developed specifically in order to meet the air quality standards established under federal law as NAAQS. Specifically, this proposal is intended to help bring ozone nonattainment areas into compliance, and help keep attainment and near-nonattainment areas from going into nonattainment. This proposal does not involve an agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program, and was not developed solely under the general powers of the agency. The commission invites public comment on the draft regulatory impact analysis.

TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated, §2007.043. The following is a summary of that assessment. The specific purpose of the rulemaking is to establish gasoline RVP and sulfur content limits in 95 counties in the eastern half of Texas and in the 15 counties of the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas. This rulemaking is part of the new TCAS which includes a variety of options to control ground-level ozone to achieve the NAAQS for ozone. The purpose is to help keep ozone attainment and near-nonattainment areas, such as Austin, Corpus Christi, Longview/Tyler/Marshall, San Antonio, and Victoria in compliance with the federal ozone standard, and to help the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas reach attainment. Promulgation and enforcement of the rules may possibly burden private real property because this rulemaking action may result in investment in the permanent installation of new refinery processing equipment. Although the rule revisions do not directly prevent a nuisance, prevent an immediate threat to life or property, or prevent a real and substantial threat to public health and safety, the rule revisions fulfill a federal mandate under §110 of the 1990 Amendments to the FCAA. Specifically, the emission limitations and control requirements within this proposal were developed in order to meet the NAAQS for ozone set by EPA under §109 of the FCAA. States are primarily responsible for ensuring attainment and maintenance of the NAAQS once EPA has established them. Under §110 of the FCAA and related provisions, states must submit, for approval by EPA, SIPs that provide for the attainment and maintenance of the NAAQS through control programs directed to sources of the pollutants involved. Therefore, the purpose of the rule proposal is to implement cleaner burning gasoline which is necessary for the state to meet the air quality standards established under federal law as NAAQS. Consequently, the following exemption applies to these rules: an action reasonably taken to fulfill an obligation mandated by federal law.

COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW The commission has determined that this rulemaking action is 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.), the rules of the Coastal Coordination Council (31 TAC Chapters 501-506), and the commission's rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the Texas Coastal Management Program. As required by 31 TAC §505.11(b)(2) and 30 TAC §281.45(a)(3) relating to actions and rules subject to the CMP, agency rules governing air pollutant emissions must be consistent with the applicable goals and policies of the CMP. The commission has reviewed this action for consistency, and has determined that this rulemaking is consistent with the applicable CMP goals and policies. The primary CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations at 40 CFR, to protect and enhance air quality in the coastal area. No new sources of air contaminants will be authorized by the rule amendments, and the amendments are expected to result in a reduction in VOC and NOx emissions by reducing emissions resulting from the fueling and operation of motor vehicles. Therefore, in compliance with 31 TAC §505.22(e), the commission affirms that this rulemaking 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.

PUBLIC HEARINGS Public hearings on this proposal will be held in Austin on January 25, 1999 at 11:00 a.m. in Building F, Room 2210 at the Texas Natural Resource Conservation Commission Complex, located at 12100 Park 35 Circle; in San Antonio on January 25, 1999 at 7:00 p.m. at the San Antonio City Council Chambers located at 103 Main Plaza; in Lufkin on January 26, 1999 at 2:00 p.m. at the Lufkin City Council Chambers located at 300 East Shepherd, Room 102; and in Tyler on January 26, 1999 at 7:00 p.m. at the Tyler Junior College Regional Training and Development Complex located at 1530 South Southwest Loop 323, Room 104. Individuals may present oral statements when called upon in order of registration. Open discussion within the audience will not occur during the hearings; however, an agency staff member will be available to discuss the proposal 30 minutes before each hearing and will answer questions before and after the hearings.

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

SUBMITTAL OF COMMENTS Written comments may be mailed to Heather Evans, Office of Policy and Regulatory Development, MC 205, P.O. Box 13087, Austin, Texas 78711-3087 or faxed to (512) 239-4808. All comments should reference Rule Log Number 98058-114-AI. Comments must be received by 5:00 p.m., February 1, 1999. For further information, please contact Bill Jordan, Air Policy and Regulations Division, at (512) 239-2583, or Eddie Mack, Air Policy and Regulations Division, at (512) 239-1488.

Subchapter A. Definitions

The commission proposes amendments to §115.10, concerning Definitions; §§115.211- 115.217 and 115.219, concerning Loading and Unloading of Volatile Organic Compounds (VOC); §§115.221-115.227, and 115.229, concerning Filling of Gasoline Storage Vessels (Stage I) for Motor Vehicle Fuel Dispensing Facilities; and §§115.234-115.237 and 115.239, concerning Control of VOC Leaks from Transport Vessels. The commission proposes these revisions to Chapter 115, concerning Control of Air Pollution from VOCs, and to the State Implementation Plan (SIP) in order to control ground-level ozone in ozone near-nonattainment areas and ozone nonattainment areas.

The proposed revisions are one element of the new Texas Clean Air Strategy (TCAS), which includes a variety of options in order to meet the National Ambient Air Quality Standard (NAAQS) for ground-level ozone. The purpose of the strategy is to help keep ozone attainment areas and near- nonattainment areas, such as Austin, Corpus Christi, Longview/Tyler/Marshall, and San Antonio, in compliance with the federal 8-hour ozone standard of 80 parts per billion (ppb). The new strategy also is designed to help the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas reach attainment. The TCAS takes into account recent science which shows that regional approaches may provide improved control of air pollution. In particular, staff has conducted photochemical grid modeling which indicates that implementation of Stage I vapor recovery, cleaner burning gasoline, and national low-emitting vehicles (NLEV) will result in ozone reductions (peak 8- hour average) of 1 to 4 ppb in much of east and southeast Texas. Additional details concerning the need for a regional strategy are as follows.

BACKGROUND At the time the 1990 Federal Clean Air Act (FCAA) Amendments were enacted, the focus on controlling ozone pollution was centered on local controls. However, for many years an ever increasing number of air quality professionals have felt that ozone is a regional problem requiring regional strategies in addition to local control programs. As nonattainment areas across the United States prepared attainment demonstration SIPs in response to the 1990 FCAA Amendments, several areas found that modeling attainment was made much more difficult, if not impossible, because of high ozone and ozone precursor levels entering from the boundaries of their respective modeling domains, commonly called transport.

The commission has conducted air quality modeling and upper air monitoring that found regional air pollution should be considered when studying air quality in Texas' ozone nonattainment areas. This work is supported by research conducted by the Ozone Transport Assessment Group (OTAG), the most comprehensive attempt ever undertaken to understand and quantify the transport of ozone. Both the commission and OTAG study results point to the need to take a regional approach, such as that proposed in the TCAS, to controlling air pollutants.

As part of the Coastal Oxidant Assessment for Southeast Texas (COAST) project, the commission and its contractor Environ, Inc., conducted regional-scale modeling to develop future-year boundary conditions for the COAST modeling domain. The emissions inventory used in this modeling was based on the OTAG emission inventory and the modeling was conducted for a domain covering most of Texas as well as several southern states.

During the OTAG process, the commission's modeling staff ran several sensitivity analyses using this regional modeling setup to assess the impact of potential OTAG reductions on Texas. Applying the OTAG reductions across the domain (clean gasoline (federal reformulated gasoline) stationary source controls, the NLEV program, ozone action days, and a series of national rules to be promulgated by the EPA among others), compared to the case of no reductions, indicated that modeled reductions would significantly reduce ozone throughout most of the eastern half of Texas. Overall the modeling indicated that a regional reduction strategy would be beneficial across the wide area of the state.

During modeling for the Houston/Galveston attainment demonstration SIP, the commission's modeling staff conducted sensitivity analyses to determine the benefits regional reductions might have on Houston/Galveston, when applied simultaneously with local reductions. Unlike the commission's regional modeling exercises discussed above, these model runs offer an opportunity to assess separately the benefits of reductions made within and outside a region, since model runs with and without the regional reductions scenarios in Houston/Galveston were run. Modeling runs were completed to evaluate the 8-hour average ozone concentrations in the COAST modeling domain for September 8, 1993 with 2007 projected emissions and assuming a 70% reduction of oxides of nitrogen (NOx ) and a 15% reduction of VOC in the 8-county Houston/Galveston area. Even with the large reductions in Houston/Galveston much of the upper Texas Coast is well above the 8- hour standard. Also, Austin, Victoria, and Corpus Christi show 8-hour average concentrations above 80 ppb. The benefit of applying OTAG reductions outside the Houston/Galveston 8-county area clearly showed additional ozone benefits of between 5 and 10 ppb in Houston/Galveston.

Additional modeling has been completed by commission staff assessing the potential benefits of the TCAS. This modeling indicates that mobile source reductions (cleaner gasoline, NLEVs, and Stage I vapor recovery) have a potential to reduce peak 8-hour ozone averages of between 1 and 4 ppb in much of east and southeast Texas, with the greatest reductions seen in the Austin and San Antonio areas. Modeling of the combined point source and mobile source strategies shows a large area, including near-nonattainment and attainment areas, of reductions in peak 8-hour average ozone above 3 ppb.

This modeling provides part of the evidence of the benefit of regional reductions on Texas' nonattainment areas and further provides justification that a regional strategy will help maintain air quality in near-nonattainment and attainment areas. Conclusions from the commission's work are supported by OTAG studies that also illustrate the importance of implementing a regional air quality control strategy.

The proposed revisions would implement the Stage I vapor recovery option of the Texas Clean Air Strategy. The Stage I vapor recovery rules currently apply to approximately 7000 gasoline stations in the Beaumont/Port Arthur, El Paso, Houston/Galveston, and Dallas/Fort Worth ozone nonattainment areas (Brazoria, Chambers, Collin, Dallas, Denton, El Paso, Fort Bend, Galveston, Hardin, Harris, Jefferson, Liberty, Montgomery, Orange, Tarrant, and Waller Counties). These rules regulate the filling of gasoline storage tanks at gasoline stations by tank-trucks. To comply with Stage I requirements, a vapor balance system is typically used to capture the vapors from the gasoline storage tanks which would otherwise be displaced to the atmosphere as these tanks are filled with gasoline. The captured vapors are routed to the gasoline tank-truck, and the vapors are processed by a vapor control system when the tank-truck is subsequently refilled at a gasoline terminal or gasoline bulk plant. The proposed rules will reduce VOC emissions which are precursors to ground-level ozone formation, resulting in ground-level ozone reductions.

The effectiveness of Stage I vapor recovery rules depends on the captured vapors being: (1) effectively contained within the gasoline tank-truck during transit; and (2) controlled when the transport vessel is refilled at a gasoline terminal or gasoline bulk plant. Otherwise, the emissions captured at the gasoline station will simply be emitted at a location other than the gasoline station, resulting in no reduction in VOC emissions despite the Stage I requirements.

Chapter 115 includes specific requirements for gasoline terminals in 16 ozone nonattainment counties (Brazoria, Chambers, Collin, Dallas, Denton, El Paso, Fort Bend, Galveston, Hardin, Harris, Jefferson, Liberty, Montgomery, Orange, Tarrant, and Waller). A gasoline terminal is a gasoline transfer facility, excluding marine terminals, with a gasoline throughput of at least 20,000 gallons per day, averaged over any consecutive 30-day period. Less restrictive Chapter 115 gasoline terminal rules apply in Gregg, Nueces, and Victoria Counties. Chapter 115 regulates gasoline terminals in Aransas, Bexar, Calhoun, Matagorda, San Patricio, and Travis Counties under general VOC transfer rules.

On December 14, 1994, EPA promulgated Title 40 Code of Federal Regulations (CFR) 63, Subpart R, pursuant to §112(d) of the 1990 Amendments to the FCAA. Subpart R is the National Emission Standards for Hazardous Air Pollutants (NESHAP) for Gasoline Distribution. Subpart R requires gasoline terminals nationwide to control emissions from the refilling of gasoline tank-trucks if emissions of hazardous air pollutants (HAPs) reach a threshold of 10 tons per year of any one HAP or 25 tons per year of total HAPs.

Gasoline tank-trucks may also be refilled at a gasoline bulk plant, which is a gasoline transfer facility, excluding marine terminals, with a gasoline throughput less than 20,000 gallons per day, averaged over any consecutive 30-day period. Sections 115.211-115.219 require gasoline bulk plants in ozone nonattainment counties to control gasoline transfer emissions using a vapor balance (similar to that used at gasoline stations meeting Stage I requirements). Outside of the ozone nonattainment counties, however, there is currently no Chapter 115 requirement for control of emissions from gasoline bulk plants. Likewise, there is no Chapter 115 requirement for control of emissions from gasoline tank-truck leaks outside of the ozone nonattainment counties.

The rule changes propose extension of the existing Chapter 115 Stage I vapor recovery, gasoline terminal, gasoline bulk plant, and gasoline tank-truck leak testing requirements (§§115.211- 115.217, 115.221-115.227, and 115.234-115.237) to 95 counties in the eastern half of Texas. These counties are: Anderson, Angelina, Aransas, Atascosa, Austin, Bastrop, Bee, Bell, Bexar, Bosque, Bowie, Brazos, Burleson, Caldwell, Calhoun, Camp, Cass, Cherokee, Colorado, Comal, Cooke, Coryell, De Witt, Delta, Ellis, Falls, Fannin, Fayette, Franklin, Freestone, Goliad, Gonzales, Grayson, Gregg, Grimes, Guadalupe, Harrison, Hays, Henderson, Hill, Hood, Hopkins, Houston, Hunt, Jackson, Jasper, Johnson, Karnes, Kaufman, Lamar, Lavaca, Lee, Leon, Limestone, Live Oak, Madison, Marion, Matagorda, McLennan, Milam, Morris, Nacogdoches, Navarro, Newton, Nueces, Panola, Parker, Polk, Rains, Red River, Refugio, Robertson, Rockwall, Rusk, Sabine, San Jacinto, San Patricio, San Augustine, Shelby, Smith, Somervell, Titus, Travis, Trinity, Tyler, Upshur, Van Zandt, Victoria, Walker, Washington, Wharton, Williamson, Wilson, Wise, and Wood.

Concurrently, the commission is proposing revisions which reorganize and clarify the rules, including incorporation of a variety of interpretations made by the agency's Rule Interpretation Team. These clarifying/reorganizing revisions include, where possible, consolidation or elimination of redundant language or requirements, the use of the active (rather than passive) voice, and relocation of rule language to more logical locations. In general, the commission's goal is to make the rules easier to read and more explicit concerning which requirements apply.

EXPLANATION OF PROPOSED RULES The proposed changes to §115.10, concerning Definitions, add a new definition of regional VOC zone which specifies the 95 counties for which Stage I, gasoline tank-truck testing, gasoline terminal, and gasoline bulk plant controls are being proposed; and add new definitions of flare, vapor combustor, and vapor control system. The proposed definition of vapor control system is identical to the existing definition of vapor recovery system, and will facilitate a transition in the Chapter 115 rules to this term from the misleading term "vapor recovery system," which is defined to include both recovery and combustion control devices. In addition, the definitions of consumer-solvent products, municipal solid waste landfill emissions, and hand-held lawn and garden and utility equipment are being deleted because these three definitions are no longer used in the Chapter 115 rules.

The proposed changes to §115.10 also delete the definitions of alcohol, alcohol substitutes, batch, cleaning solution, fountain solution, heatset, lithography, non-heatset, and offset lithography. These terms are used within the Chapter 115 offset printing rules (§§115.442, 115.443, 115.445, 115.446, and 115.449). In separate rulemaking, the commission is proposing to relocate the definitions of these terms to a new §115.440, concerning Offset Printing Definitions. (See the November 6, 1998 issue of the Texas Register (23 TexReg 11277)).

Finally, the following redundant definitions are being deleted from §115.10 because these terms are already defined in §101.1, concerning Definitions, and are used in multiple chapters of the commission's rules: capture system, carbon adsorber, cold solvent cleaning, condensate, control device, control system, conveyorized degreasing, custody transfer, exempt solvent, gasoline, industrial solid waste, leak, liquid-mounted seal, marine vessel, mechanical shoe seal, motor vehicle fuel dispensing facility, municipal solid waste facility, municipal solid waste landfill, open-top vapor degreasing, process or processes, property, remote reservoir cold solvent cleaning, sludge, solid waste, source, submerged fill pipe, system or device, true vapor pressure, vapor-mounted seal, vent, and VOC water separator. Definitions which remain in §115.10 are being numbered in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998).

The proposed changes to §115.211, concerning Emission Specifications, establish an emission limit for gasoline bulk plants in the regional VOC zone which is equivalent to the current emission limit for gasoline bulk plants in ozone nonattainment counties. Likewise, the proposed changes also establish an emission limit for gasoline terminals in the regional VOC zone. A 1990 rule effectiveness study, in which all gasoline terminals in the Dallas/Fort Worth area (other than those equipped with flares) were stack tested, found these gasoline terminals to be capable of meeting an emission limit of 10.8 milligram per liter (mg/l) of gasoline loaded. In order to gather more current data, the commission surveyed the test results for gasoline terminals in the regional VOC zone and the current ozone nonattainment counties and determined that the vast majority (94%) meet the 10.0 mg/l emission limit in 40 CFR 63, Subpart R (Gasoline Distribution NESHAP). The remaining 6% of the test results show compliance with a 20.0 mg/l emission limit. Consequently, the commission proposes a 20.0 mg/l emission limit for gasoline terminals in the regional VOC zone. Based on the test results, the commission believes that properly-maintained control devices at gasoline terminals can consistently meet the 20.0 mg/l emission limit. The commission solicits information regarding specific gasoline terminals in the regional VOC zone which cannot meet this emission limit when properly maintained. In addition, the proposed changes establish an expiration date for the less-stringent emission limit (80 mg/l) which currently applies to gasoline terminals in Gregg, Nueces, and Victoria Counties, and relocate the emission limit for gasoline terminals in these three counties from the existing §115.211(b) to the proposed §115.211(1)(B). The less stringent limit will expire when the proposed new limits are to be imposed. Finally, the proposed changes delete the emission limit of the existing §115.211(a)(3) for marine terminals in the Houston/Galveston ozone nonattainment area because this limit is already included in the existing §115.212(a)(8)(A).

The proposed changes to §115.212, concerning Control Requirements, extend to the regional VOC zone the requirement that vapors from gasoline transfers at gasoline bulk plants be controlled rather than vented to the atmosphere. Likewise, the proposed changes extend to the regional VOC zone the requirement that vapors from gasoline loading at gasoline terminals be controlled rather than vented to the atmosphere. Also, the proposed changes establish requirements designed to minimize emissions during gasoline transfer at gasoline terminals and gasoline bulk plants in the regional VOC zone. In addition, the proposed changes also extend to the regional VOC zone the requirement that VOC vapors remaining in transport vessels after unloading be kept in vapor-tight transport vessels until the vapors are returned to a loading, cleaning, or degassing operation and discharged in accordance with the control requirements of that operation; and update references to definitions which are currently in §115.10 but are proposed for inclusion only in §101.1.

The proposed changes to §115.212 further add an allowance for draining VOC from a liquid line after transfer into a portable container, which is then closed and disposed of properly. This is proposed for addition to the existing §115.212(a)(3)-(4) and (b)(3)-(4). The requirements of the existing §115.212(a)(4) and (b)(4) are concurrently being relocated to the proposed §115.212(a)(3)(E) and (b)(3)(E), respectively. The gasoline terminal loading lockout provision of existing §115.212(a)(9), which currently applies in the Dallas/Fort Worth, El Paso, and Houston/ Galveston ozone nonattainment areas, is being relocated to the proposed §115.212(a)(4)(C) and (b)(4)(C). This rule requires instrumentation which locks out the gasoline transfer pumps if the vapor control system is not connected or operating properly, thus preventing uncontrolled gasoline loading at the loading rack. The gasoline terminal loading lockout provision is proposed for extension to the Beaumont/Port Arthur ozone nonattainment area and the regional VOC zone.

Also, the proposed changes to §115.212 consolidate the gasoline bulk plant loading and unloading requirements of existing §115.212(a)(6)-(7) into the proposed §115.212(a)(5), and add an option for gasoline bulk plants to control emissions using a vapor control system rather than a vapor balance system between the storage tank and the storage vessel. The existing §115.212(a)(6)(B), which concerns permissible pressure-vacuum relief valve emissions from gasoline transfer at gasoline bulk plants during emergency situations, is proposed for deletion because upset conditions are already addressed in §101.6, Upset Reporting and Recordkeeping Requirements.

In addition, the proposed changes to §115.212(b)(1), concerning general land-based VOC loading (i.e., non-gasoline, non-marine), require that at VOC loading operations in Aransas, Bexar, Calhoun, Gregg, Matagorda, Nueces, San Patricio, Travis, and Victoria Counties, the vapors from the transport vessel must be controlled by a vapor control system which maintains a control efficiency of at least 90%, or by a vapor balance system. Under the current §115.212(b)(1) and (c)(1), VOC emissions from loading operations in these nine counties must be controlled such that the aggregate true vapor pressure of all VOC does not exceed 1.5 psia. When the Texas Air Control Board first adopted this requirement on April 10, 1973, the intent and expectation was that the 1.5 psia control level represented a 90% control efficiency. However, the use of an aggregate true vapor pressure as a surrogate control efficiency has resulted in some confusion over the past 25 years. To eliminate this confusion, the commission proposes to revise the control efficiency to reflect the rule's original intent by using more commonly understood terminology. Most control devices can readily achieve and maintain a control efficiency of at least 90%. For example, flares which meet the standard design and operating criteria of 40 CFR 60.18(b) have been shown to operate with a control efficiency of at least 98%. However, some existing control devices, such as condensers, may be unable to consistently meet a 90% control level. The commission believes that the 90% overall control option for general land-based VOC loading, which is available in the proposed §115.213(c), will allow many general VOC loading operations in Aransas, Bexar, Calhoun, Gregg, Matagorda, Nueces, San Patricio, Travis, and Victoria Counties the flexibility to offset the increased emissions from existing lower-efficiency (less than 90%) control devices with reduced emissions from higher-efficiency (greater than 90%) control devices at the same account number. The commission solicits information regarding specific situations in these nine counties for which the 90% overall control option for general land-based VOC loading will not be a viable method for addressing existing lower-efficiency control devices.

For marine terminals in the Houston/Galveston ozone nonattainment area, the proposed changes to §115.212 also relocate the vapor balance option and the non-dedicated loading lines control requirement from the existing §115.217(a)(7)(C)-(D) to the proposed §115.212(a)(6)(A) and (D), respectively. Finally, the annual marine vessel vapor-tightness test in the existing §115.212(a)(8)(B) is being relocated to the proposed §115.214(a)(3)(A).

The proposed changes to §115.213, concerning Alternate Control Requirements, revise the term "section" (which should have been "undesignated head") to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998); extend the availability of alternate means of control to the entire regional VOC zone; and condense the three existing subsections into a single subsection. In addition, the 90% overall control options for marine terminals and general land-based VOC loading (i.e., non-gasoline, non-marine) in the existing §115.217(a)(6), (a)(8), (b)(4), and (c)(4) are being relocated to the proposed §115.213(b)-(d), with the addition of a requirement that loading of VOC with a vapor pressure of 11 psia or more must be controlled by either pressurized loading, a vapor control system, or a vapor balance system.

The proposed changes to §115.214, concerning Inspection Requirements, establish inspection requirements for gasoline terminals and gasoline bulk plants in the regional VOC zone; require annual vapor-tightness testing of gasoline tank-truck tanks in the regional VOC zone; and update references to definitions which are currently in §115.10 but are proposed for inclusion only in §101.1.

The monthly gasoline terminal leak inspection requirement of the existing §115.214(a)(5), which currently applies in the Dallas/Fort Worth, El Paso, and Houston/Galveston ozone nonattainment areas, is being relocated to the proposed §115.214(a)(2). This monthly gasoline terminal leak inspection requirement is proposed for extension to the Beaumont/Port Arthur ozone nonattainment area and the regional VOC zone.

For marine terminals in the Houston/Galveston ozone nonattainment area, the annual marine vessel vapor-tightness testing requirements in the existing §115.212(a)(8)(B) are being relocated to the proposed §115.214(a)(3)(A). The proposed §115.214(a)(3)(D) (currently §115.214(a)(4)(C)) is being updated to reference an additional vapor-tightness test available under 40 CFR 63.565(c). The inclusion of this second test method for determining marine vessel vapor- tightness will provide additional flexibility.

The proposed §115.214(a)(1)(D), (a)(3)(G), and (b)(1)(D) add exclusions from the leak inspection requirements for fumes from hatches or vents resulting from VOC transfer for which control of the transfer emissions is not required. The proposed §115.214(b)(1)(C) adds a requirement to gasoline terminals and gasoline bulk plants in the regional VOC zone that gasoline tank-truck tanks pass an annual leak-tightness test.

The proposed changes to §115.215, concerning Approved Test Methods, extend the existing test methods to the regional VOC zone and consolidate the existing §115.215(a) and (b) into a single subsection. Because it is not reasonably possible to measure the mass emission rate from an elevated flare (an elevated flare's flame is open to the atmosphere, such that the emissions can not be routed through a stack), the test methods for flow rate and VOC concentration in §115.215(1)-(2) do not apply to flares. In order to specify performance requirements for flares, the proposed §115.215(3) establishes the test requirements of 40 CFR 60.18(b). Because flares can not be stack-tested, the proposed §115.215(3) also specifies that compliance with the requirements of 40 CFR 60.18(b) represents compliance with the emission specifications of §115.211 and the control efficiency requirements of §115.212. The proposed changes to §115.215 also add a new paragraph (10), which authorizes the use of test methods other than those specifically listed in §115.215, provided that any new test method is validated using the procedures in 40 CFR 63, Appendix A, Test Method 301, with the executive director acting as the administrator. This revision is necessary because in some specific unique situations the listed test methods may be inappropriate. The new paragraph (10) increases flexibility by allowing the use of additional test methods which may be more cost-effective and more appropriate in certain unique situations.

The proposed changes to §115.216, concerning Monitoring and Recordkeeping Requirements, extend the recordkeeping requirements to gasoline terminals and gasoline bulk plants in the regional VOC zone; update references to definitions which are currently in §115.10 but are proposed for inclusion only in §101.1; revise a reference to the EPA for consistency with the commission's style guidelines; consolidate the existing §115.216(a) and (b) into a single subsection; add a requirement that records must include information on how the design standard and operation of equipment meets the emission specifications and control requirements; specify that flares must meet the requirements of 40 CFR 60.18(b) and Chapter 111; and state that records of appropriate operating parameters must be kept for types of vapor control systems not specifically listed in §115.216(1)(A) and (B). The proposed §115.216(1)(A)(iv) and (1)(B) specify exhaust gas temperature monitoring of vapor combustors, with an option that the owner/operator of an existing vapor combustor may consider it to be a flare and monitor the unit under the flare requirements specified in 40 CFR 60.18(b) and Chapter 111. These revisions are necessary to ensure that control devices are functioning properly, and to clarify how vapor combustors are to be monitored. Based upon information from the New Source Review Permits Division, most existing flares at gasoline terminals and land-based general VOC (non-gasoline) loading facilities meet the design and operating criteria of 40 CFR 60.18(b). The commission solicits information regarding gasoline terminals and land-based general VOC loading facilities which are equipped with flares that do not meet the requirements of 40 CFR 60.18(b).

The existing §115.216(a)(3)-(5), (b)(3), and (b)(5), which specify the daily recordkeeping for land-based VOC transfer operations, have been consolidated and relocated to the proposed §115.216(3), with the only records required being those which are necessary to establish compliance with, or exemption from, the rule requirements. The existing §115.216(a)(1) and (b)(1), which require a daily record of the total quantity of VOC loaded at the plant, have been consolidated and relocated to the proposed §115.216(3)(D), and the applicability reduced. Specifically, this record of daily VOC loaded will only be required when needed to establish the exemption eligibility of loading operations and gasoline bulk plants below the 20,000 and 4,000 gallons per day thresholds, respectively. Similarly, for general VOC (non-gasoline) transfer operations in which all VOC handled has a low vapor pressure, the proposed §115.216(3)(C) will allow these operations to simply keep records of the type and vapor pressure of each VOC transferred, and any appropriate test results.

Previously, §115.216 did not include specific recordkeeping requirements for land-based VOC transfer operations in Aransas, Bexar, Calhoun, Matagorda, San Patricio, and Travis Counties. The proposed revisions to §115.216 add recordkeeping requirements for land-based general VOC (i.e., non-gasoline) transfer operations in these counties which are sufficient to document compliance with the control requirements, inspection requirements, and exemptions.

The existing §115.216(a)(2)(D) and (b)(2)(D), which concern records associated with control device maintenance activities, are proposed for deletion because maintenance activities are already addressed in §101.7, Maintenance, Start-up and Shutdown Reporting, Recordkeeping, and Operational Requirements.

The proposed changes to §115.217, concerning Exemptions, establish an exemption for small (less than 4000 gallons per day) gasoline bulk plants in the regional VOC zone; update references to definitions which are currently in §115.10 but are proposed for inclusion only in §101.1; revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998); and consolidate the existing §115.217(b) and (c) into a single subsection.

In addition, the 90% overall control options for marine terminals and general land-based VOC loading (i.e., non-gasoline, non-marine) in the existing §115.217(a)(6), (a)(8), (b)(4), and (c)(4) are being relocated to the proposed §115.213(b)-(d). The marine vessel exemptions in the existing §115.217(a)(4) and (7) are being relocated to the proposed §115.217(a)(5), and the proposed §115.217(a)(5)(A)(ii) is being added to clarify that transfer of VOC from one marine vessel to another marine vessel ("lightering") is exempt, as long as the VOC transfer does not use loading arm(s), pump(s), meter(s), valve(s), or piping that are part of a marine terminal. Any lightering which uses a marine terminal's loading arm(s), pump(s), meter(s), valve(s), or piping is treated as though the VOC was loaded directly from the marine terminal into the marine vessel, and is required to be controlled the same as any other marine vessel loading which occurs at the terminal.

Further, the existing exemptions for low vapor pressure VOC loading, low throughput of land- based VOC loaded, crude oil, condensate, liquefied petroleum gas (LPG), and small gasoline bulk plants are proposed for revision to make clear which requirements these operations must meet. In the existing §115.217(a)(1)-(3), (b)(1)-(3), and (c)(1)-(3), low vapor pressure VOC loading, low throughput of land-based VOC loaded, and LPG are exempt from the requirements of §115.212 only. Similarly, the existing §115.217(b)(3) and (c)(3) exempt the transfer of crude oil and condensate in Aransas, Bexar, Calhoun, Gregg, Matagorda, Nueces, San Patricio, Travis and Victoria Counties from the requirements of §115.212 only. The proposed revisions will require that after unloading, the transport vessel must be kept vapor-tight until the vapors in the transport vessel are returned to a loading, cleaning, or degassing operation and are discharged in accordance with the control requirements of that operation.

The proposed revisions will broaden the existing exemptions for crude oil and condensate (applicable only in Aransas, Bexar, Calhoun, Gregg, Matagorda, Nueces, San Patricio, Travis and Victoria Counties), LPG, low vapor pressure VOC loading, low throughput of land-based VOC loading, and small gasoline bulk plants to exempt most inspection, testing, and recordkeeping requirements. However, these operations will continue to be required to conduct inspections for visible liquid leaks, cease VOC transfer when a liquid leak is observed, and repair the leak before transferring additional VOC. General land-based (i.e., non-gasoline) transfer of low vapor pressure VOC and small general land-based VOC loading plants which handle both exempt and non-exempt VOC will be required to maintain records of test results (e.g., vapor pressure testing) and the vapor pressure and type of each VOC transferred (excluding gasoline). As noted previously, under the proposed §115.216(3)(D), the requirement of the current §115.216(a)(1) and (b)(1) to maintain records of total VOC loaded will continue to apply to low throughput gasoline bulk plants and low throughput general VOC loading operations.

The proposed changes to §115.219, concerning Counties and Compliance Schedules, specify the compliance schedule for the new requirements; delete language which is obsolete due to the passing of a November 15, 1996 compliance date; and revise references to the TNRCC and the EPA for consistency with the commission's style guidelines.

The proposed changes to §115.221, concerning Emission Specifications, add an emission limit for filling of gasoline storage tanks at motor vehicle fuel dispensing facilities in the regional VOC zone, and change a reference from "vapor recovery system" to "vapor control system" for clarification. This emission limit is the same one already required in ozone nonattainment counties.

The proposed changes to §115.222, concerning Control Requirements, extend to the regional VOC zone the requirements designed to minimize emissions during these gasoline transfer operations, as well as the requirement that filling of gasoline storage tanks at motor vehicle fuel dispensing facilities be controlled through a vapor balance system rather than vented to the atmosphere. The proposed changes to §115.222 also require non-coaxial Stage I connections for the installation of new storage tanks or modification of existing storage tanks in the regional VOC zone after December 22, 1998. In addition, the proposed changes to §115.222 extend to the regional VOC zone the requirement that VOC vapors remaining in tank-truck tanks after unloading be kept in vapor- tight tank-truck tanks until the vapors are returned to a loading, cleaning, or degassing operation and discharged in accordance with the control requirements of that operation. Finally, the proposed changes to §115.222 update references to definitions which are currently in §115.10 but are proposed for inclusion only in §101.1; and delete language which is obsolete upon the passing of the final Stage II compliance deadline on December 22, 1998.

The proposed changes to §115.223, concerning Alternate Control Requirements, revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998); and establish the availability of alternate means of control in the regional VOC zone.

The proposed changes to §115.224, concerning Inspection Requirements, extend to the regional VOC zone the inspection requirements for gasoline transfers at motor vehicle fuel dispensing facilities and the annual vapor-tightness testing requirement for gasoline tank-truck tanks; revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998); and update the title of the division subsequent to a previous name change.

The proposed changes to §115.225, concerning Approved Test Methods, extend the existing test methods to the regional VOC zone.

The proposed changes to §115.226, concerning Recordkeeping Requirements, establish recordkeeping requirements for motor vehicle fuel dispensing facilities in the regional VOC zone; add recordkeeping requirements for exempt facilities in the regional VOC zone to ensure compliance with the gasoline tank-truck leak testing requirements; and correct the title of a division.

The proposed changes to §115.227, concerning Exemptions, establish exemptions for gasoline storage tanks in the regional VOC zone; add an exemption from gasoline throughput recordkeeping for small gasoline storage tanks (no more than 1,000 gallons capacity); clarify that the requirements are applicable to motor vehicle fuel dispensing facilities; revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998); and correct the title of a division. The proposal includes an exemption for gasoline stations in the regional VOC zone with a throughput less than 125,000 gallons per month.

The proposed changes to §115.229, concerning Counties and Compliance Schedules, specify the compliance schedules for the new requirements in the regional VOC zone; revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998); and correct the title of a division. The proposed changes to §115.229 specify that larger gasoline stations (those with a throughput of at least 125,000 gallons per month) are required to comply by December 31, 1999. The intent of the phrase "as soon as practicable, but no later than..." in §115.229(d) is that before the applicable compliance date, gasoline stations which are equipped for Stage I vapor recovery must utilize Stage I for each gasoline delivery by a gasoline tank-truck which is likewise equipped for Stage I vapor recovery. The commission solicits comments regarding possible city, county, or state incentives to encourage early implementation of the Stage I requirements.

The proposed changes to §115.234, concerning Inspection Requirements, establish annual vapor-tightness testing requirements for gasoline tank-truck tanks in the regional VOC zone; and revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998).

The proposed changes to §115.235, concerning Inspection Requirements, specify the testing requirements and approved test methods for gasoline tank-truck tanks in the regional VOC zone. The proposed changes to §115.235 also clarify that the alternative testing option of the existing §115.235(4) applies to tank-truck tanks not required to be equipped with vapor collection equipment (e.g., pressure tanks), and more specifically references the leakage test method of 49 CFR 180.407(h).

The proposed changes to §115.236, concerning Inspection Requirements, add recordkeeping requirements for gasoline tank-truck leak testing in the regional VOC zone; clarify that records of leakage tests conducted under 49 CFR 180.407(h) should be kept as specified in 49 CFR 180.417 instead of Method 27 records; and revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998); and revise references to the TNRCC and the EPA for consistency with the commission's style guidelines.

The proposed changes to §115.237, concerning Exemptions, add an exemption in the regional VOC zone for transport vessels other than tank-trucks (e.g., railcars); delete language which is obsolete due to the passing of a May 31, 1995 compliance date; and revise the term "undesignated head" to "division" in response to recently revised Texas Register rules (23 TexReg 1289, February 13, 1998).

The proposed changes to §115.239, concerning Counties and Compliance Schedules, specify the compliance schedule for the gasoline tank-truck leak testing in the regional VOC zone; and delete language which is obsolete due to the passing of January 31, 1994 and May 31, 1995 compliance dates. The intent of the phrase "as soon as practicable, but no later than..." in §115.239(b) is that before the applicable compliance date, gasoline tank-trucks which are equipped for Stage I vapor recovery must utilize Stage I for each gasoline delivery at a gasoline station which is likewise equipped for Stage I vapor recovery.

FISCAL NOTE Jeff Grymkoski, Director, Strategic Planning and Appropriations Division, has determined that for the first five-year period the sections are in effect there will be no significant fiscal implications for state and local governments to administer or enforce the proposed amendments. Specifically, the Field Operations Division and the Enforcement Division of the Office of Compliance and Enforcement are responsible for enforcing the Chapter 115 rules, with the Air Program responsible for the gasoline bulk plant, gasoline terminal, and tank-truck leak testing rules, and the Waste Program responsible for the petroleum storage tank (PST) rules at gasoline stations. The Waste Program's inspectors could enforce the Stage I vapor recovery rules at gasoline stations when conducting their routine PST inspections.

Most of the gasoline terminals which will have to comply with the proposed rules are currently subject to air permits and/or to similar requirements under 40 CFR 63, Subpart R (the Gasoline Distribution NESHAP), and therefore are already being inspected for compliance. Consequently, only a limited number of additional gasoline terminals will need to be inspected for compliance with the proposed Chapter 115 rules. Based on a survey of throughput at gasoline bulk plants, an estimated 75% are expected to be exempt from the vapor balance requirement because their gasoline throughput is less than 4000 gallons per day (averaged over each consecutive 30-day period). Therefore, only a relatively small number of gasoline bulk plants will need to be inspected for compliance with the substantive requirements of the proposed rules. The Air Program's inspectors could enforce the gasoline tank-truck leak testing requirements when conducting their routine inspections at gasoline terminals and gasoline bulk plants. In conclusion, enforcement of these rules will not significantly increase the number of facilities currently inspected by the state and local governments. However, these rules will cause a minor increase in workload when inspecting the affected facilities.

PUBLIC BENEFIT Mr. Grymkoski has also determined that for each year of the first five years the proposed revisions are in effect, the public benefit anticipated as a result of implementing the sections will be satisfaction of requirements of the FCAA, and reductions of ground-level ozone in ozone near-nonattainment areas, ozone nonattainment areas, and surrounding counties, as well as reduced public exposure to air toxics such as benzene. The costs to small businesses, persons, or businesses who are required to comply with the rules as proposed are as follows.

For gasoline stations not currently equipped to meet the Stage I vapor recovery requirements, the commission estimates capital costs to be $1500 to $1750 per gasoline storage tank, based upon current vendor cost estimates. Since the typical gasoline station has two or three gasoline storage tanks, the total capital costs are estimated to be approximately $3000 to $5250 per gasoline station. The annual cost of maintenance, taxes, and insurance is estimated to be $210 to $368 per gasoline station, based upon methodology in the EPA's Evaluation of Air Pollution Regulatory Strategies for Gasoline Marketing Industry (July 1984). The number of gasoline storage tanks does not vary considerably with gasoline throughput and averages 2.45 gasoline tanks per gasoline station, based upon underground storage tank registration data submitted to the Petroleum Storage Tank Division. Consequently, the capital cost estimates are independent of gasoline throughput. Assuming a retail gasoline price of $1.00 per gallon and a throughput of 125,000 gallons per month, the smallest gasoline stations affected by the Stage I rules would incur a cost of approximately $.04 to $.07 per $100 of annual gasoline sales. By comparison, the largest gasoline stations affected by the Stage I rules (those with a throughput of at least 200,000 gallons per month) would incur a cost of approximately $.03 to $.04 per $100 of annual gasoline sales. The cost-effectiveness for the gasoline stations affected by the Stage I rules is approximately $165 to $193 per ton of VOC reduced. By comparison, the EPA estimated the cost-effectiveness of recently promulgated motor vehicle control programs in EPA's Tier 2 Study, EPA420-R-98-008 (July 31, 1998) as follows: 1) $6000 per ton of VOC reduced and $1380 to $1800 per ton of NO _x reduced for Tier 1 standards for light-duty vehicles and light-duty trucks; 2) $457 to $552 per ton of VOC reduced and $150 to $172 per ton of NO _x reduced for supplemental federal test procedure (SFTP) standards for aggressive driving; 3) $2050 to $2574 per ton of NO _x reduced for SFTP standards for emissions with the air conditioner on; and 4) $1974 per ton of VOC reduced and $1974 per ton of NO _x reduced for on-board diagnostics requirements.

In order to estimate the Stage I emission reductions, the commission obtained statewide gasoline throughput data from gasoline tax records. The statewide gasoline throughput was allocated to each county by the estimated vehicle miles traveled. The gasoline throughput for each county was then allocated among the various gasoline station throughput categories according to the gasoline station throughput distribution for Harris County and six surrounding less-urbanized counties (Brazoria, Fort Bend, Galveston, Liberty, Montgomery, and Waller) found in the EPA's Technical Guidance - Stage II Vapor Recovery Systems for Control of Vehicle Refueling at Gasoline Dispensing Facilities ( November 1991). The number of gasoline stations and associated gasoline tanks for each county, based upon the PST Division's underground storage tank registration data, was then allocated based upon the gasoline station throughput distribution for Harris County and six surrounding counties from the EPA's Technical Guidance - Stage II Vapor Recovery Systems for Control of Vehicle Refueling at Gasoline Dispensing Facilities ( November 1991). The four most populated counties in the regional VOC zone (Bexar, Nueces, McLennan, and Travis) were assumed to be similar to Harris County in throughput distribution, and the remaining counties in the regional VOC zone were assumed to be similar to the weighted average of the distributions for Brazoria, Fort Bend, Galveston, Liberty, Montgomery, and Waller Counties. A summary of the approximate number of gasoline stations in each size category, annualized cost of Stage I controls, VOC reductions, and average cost effectiveness is as follows:

Figure: 30 TAC Chapter 115 preamble

For gasoline tank-trucks not currently equipped to meet the vapor recovery requirements, the commission estimates the capital cost to be approximately $1700 to $2700 per gasoline tank-truck. The commission estimates the annual Method 27 vapor tightness testing for gasoline tank-trucks to cost approximately $360 to $650 per gasoline tank-truck. These cost estimates are based on current vendor quotations. Assuming a one-person operation with one gasoline tank-truck, the smallest gasoline transport companies affected by the proposed rules would incur a first-year cost of approximately $2060 to $3350 per employee. By comparison, the largest gasoline transport companies affected by the proposed rules (with about 425 trucks and 575 total employees) would incur a first-year cost of approximately $1523 to $2476 per employee.

For gasoline bulk plants not currently equipped to conduct gasoline transfer using a vapor balance, the commission estimates the capital cost to be approximately $71,350 with the annual cost of maintenance, taxes, and insurance estimated to be $4995 per gasoline bulk plant, based upon estimates in the EPA's Evaluation of Air Pollution Regulatory Strategies for Gasoline Marketing Industry (July 1984), adjusted for inflation. According to this guidance document, the number of gasoline storage tanks, distance to the loading rack, and number of loading arms does not vary considerably with gasoline throughput. Consequently, the capital cost estimates are independent of gasoline throughput. Assuming a wholesale gasoline price of $0.87 per gallon and a throughput of 4,000 gallons per day, the smallest gasoline bulk plants affected by the proposed rules would incur a cost of approximately $1.02 per $100 of annual gasoline sales. By comparison, the largest gasoline bulk plants affected by the gasoline bulk plant rules (those with a throughput of 19,999 gallons per day) would incur a cost of approximately $0.10 per $100 of annual gasoline sales.

For gasoline terminals not currently equipped with loading lockout instrumentation, the commission estimates the installation of this instrumentation to cost approximately $3000, based on current vendor estimates. The annual cost of maintenance, taxes, and insurance is estimated to be $210 per gasoline terminal, based upon methodology in the EPA's Evaluation of Air Pollution Regulatory Strategies for Gasoline Marketing Industry (July 1984). These cost estimates are independent of gasoline throughput. Assuming a wholesale gasoline price of $0.87 per gallon and a throughput of 20,000 gallons per day, the smallest gasoline terminals affected by the proposed rules would incur a cost of approximately $0.01 per $100 of annual gasoline sales. By comparison, the largest gasoline terminals affected by the loading lockout requirement (those with a throughput of 500,000 gallons per day) would incur a cost of approximately $0.0004 per $100 of annual gasoline sales.

For gasoline terminals and land-based general VOC (non-gasoline) loading facilities equipped with flares that do not meet the requirements of 40 CFR 60.18(b), the commission estimates that installing a heat-sensing device, such as an ultraviolet beam sensor or thermocouple, at the pilot light to indicate the continuous presence of a flame would cost approximately $19,300 to $22,300, based upon vendor estimates. The commission estimates the cost of testing to determine the exit velocity and the net heating value of the vapors being combusted to be approximately $6000, based upon vendor estimates. These cost estimates are independent of gasoline throughput. Assuming a wholesale gasoline price of $0.87 per gallon and a throughput of 20,000 gallons per day, the smallest gasoline terminals affected by the proposed rules would incur a cost of approximately $0.10 per $100 of annual gasoline sales. By comparison, the largest gasoline terminals affected by the 40 CFR 60.18(b) requirement (those with a throughput of 500,000 gallons per day) would incur a cost of approximately $0.004 per $100 of annual gasoline sales. For land-based general VOC (non-gasoline) loading facilities, the ratio of costs between small and large facilities is expected to be approximately the same as for gasoline terminals. In order to address the disparity in cost to small businesses, the commission has included exemptions to cover as many small businesses as possible while allowing the rule to accomplish its emission reduction purpose. For example, the proposal includes exemptions for gasoline stations with less than 125,000 gallons per month gasoline throughput; stationary gasoline tanks with a nominal storage capacity no more than 1000 gallons; and gasoline bulk plants which load less than 4000 gallons per month into transport vessels per day.

DRAFT REGULATORY IMPACT ANALYSIS The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the rulemaking is not subject to §2001.0225 because although it meets the definition of a "major environmental rule" as defined in the act, it does not meet any of the four applicability requirements listed in §2001.0225(a). Specifically, the emission limitations and control requirements within this proposal were developed in order to meet the National Ambient Air Quality Standards (NAAQS) for ozone set by the EPA under §109 of the 1990 FCAA. States are primarily responsible for ensuring attainment and maintenance of NAAQS once the EPA has established them. Under §110 of the FCAA 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. This proposal is not an express requirement of state law, but was developed specifically in order to meet the air quality standards established under federal law as NAAQS. Specifically, this proposal is intended to help bring ozone nonattainment areas into compliance, and help keep attainment and near- nonattainment areas from going into nonattainment. There is no contract or delegation agreement that covers the topic that is the subject of this rulemaking. Therefore, this proposal does not involve an agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program, and was not developed solely under the general powers of the agency. The commission invites public comment on the draft regulatory impact analysis.

TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated, §2007.043. The following is a summary of that assessment. The specific purpose of the rulemaking is to extend to the 95-county regional VOC control zone the Chapter 115 rules for Stage I vapor recovery, gasoline terminals, gasoline bulk plants, and gasoline tank-truck leak testing which currently apply in the Beaumont/Port Arthur, El Paso, Houston/ Galveston, and Dallas/Fort Worth ozone nonattainment areas. This rulemaking is part of the new Texas Clean Air Strategy which includes a variety of options to control ground-level ozone. The purpose is to help keep ozone attainment and near-nonattainment areas, such as Austin, Corpus Christi, Longview/Tyler/Marshall, and San Antonio, in compliance with the federal ozone standard, and to help the Beaumont/Port Arthur, Dallas/Fort Worth, and Houston/Galveston ozone nonattainment areas reach attainment. Promulgation and enforcement of the rule amendments may possibly burden private real property because this rulemaking action requires the installation of Stage I vapor recovery systems at gasoline stations, which includes the permanent installation of subsurface piping. In addition, this rulemaking action requires the installation of a vapor balance system at gasoline bulk plants, which also requires the permanent installation of piping. Finally, this rulemaking action requires the permanent installation of a heat-sensing device, such as an ultraviolet beam sensor or thermocouple, at the pilot light to indicate the continuous presence of a flame. Although the rule revisions do not directly prevent a nuisance, prevent an immediate threat to life or property, or prevent a real and substantial threat to public health and safety, the rule revisions fulfill a federal mandate under §110 of the 1990 Amendments to the FCAA. Specifically, the emission limitations and control requirements within this proposal were developed in order to meet the NAAQS for ozone set by the EPA under §109 of the FCAA. States are primarily responsible for ensuring attainment and maintenance of NAAQS once the EPA has established them. Under §110 of the FCAA 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. Therefore, the purpose of the rule proposal is to meet the air quality standards established under federal law as NAAQS. Consequently, the following exemption applies to these rules: an action reasonably taken to fulfill an obligation mandated by federal law.

COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW The commission has determined that this rulemaking action is 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.), the rules of the Coastal Coordination Council (31 TAC Chapters 501-506), and the commission's rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the Texas Coastal Management Program. As required by 31 TAC §505.11(b)(2) and 30 TAC §281.45(a)(3) relating to actions and rules subject to the CMP, agency rules governing air pollutant emissions must be consistent with the applicable goals and policies of the CMP. The commission has reviewed this action for consistency, and has determined that this rulemaking is consistent with the applicable CMP goals and policies. The primary CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations at 40 CFR, to protect and enhance air quality in the coastal area. No new sources of air contaminants will be authorized by the rule revisions, and the revisions will result in a reduction in VOC emissions due to the new control requirements on gasoline stations, gasoline terminals, gasoline bulk plants, and gasoline tank-trucks in the 95-county regional VOC control zone. Therefore, in compliance with 31 TAC §505.22(e), the commission affirms that this rulemaking 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.

PUBLIC HEARINGS Public hearings on this proposal will be held in Austin on January 25, 1999 at 11:00 a.m. in Building F, Room 2210 at the Texas Natural Resource Conservation Commission Complex, located at 12100 Park 35 Circle; in San Antonio on January 25, 1999 at 7:00 p.m. at the San Antonio City Council Chambers located at 103 Main Plaza; in Lufkin on January 26, 1999 at 2:00 p.m. at the Lufkin City Council Chambers located at 300 East Shepherd, Room 102; and in Tyler on January 26, 1999 at 7:00 p.m. at the Tyler Junior College Regional Training and Development Complex located at 1530 South Southwest Loop 323, Room 104. Individuals may present oral statements when called upon in order of registration. Open discussion within the audience will not occur during the hearings; however, an agency staff member will be available to discuss the proposal 30 minutes before each hearing and will answer questions before and after the hearings.

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

SUBMITTAL OF COMMENTS Written comments may be mailed to Heather Evans, Office of Policy and Regulatory Development, MC 205, P.O. Box 13087, Austin, Texas 78711-3087 or faxed to (512) 239-4808. All comments should reference Rule Log Number 98028-115-AI. Comments must be received by 5:00 p.m., February 1, 1999. For further information, please contact Bill Jordan, Air Policy and Regulations Division, at (512) 239-2583, or Eddie Mack, Air Policy and Regulations Division, at (512) 239-1488.

Subchapter A. Definitions

Subchapter C. Application for Permit

Subchapter A. General Provisions