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SIP Section 185 Fees

Information regarding rulemaking and implementation related to Section 185 of the Federal Clean Air Act (FCAA).

Background

The Federal Clean Air Act Amendments (FCAA) Section 185 require each state implementation plan (SIP) for severe or extreme ozone nonattainment areas to include a penalty fee on major stationary sources of VOC located in the area. The fee is imposed if the area fails to attain the ozone National Ambient Air Quality Standard (NAAQS) by the applicable attainment date. FCAA §182(f) extends this fee to emissions of NOx.

The FCAA requires imposition of the fee each calendar year after the attainment date until the area is redesignated as an attainment area for ozone.

The TCEQ proposed rules under 30 Texas Administrative Code, Chapter 101, Subchapter B, to implement the FCAA fee requirement in 2009 but did not adopt them. Instead, the commission requested a Section 185 Termination Determination of the fee program in May 2010. In July 2011, the United States Environmental Protection Agency (EPA) issued a letter to the TCEQ stating they would not process the termination determination.

A final notice of finding of failure to attain the NAAQS was signed by the EPA on June 7, 2012, for the HGB one-hour nonattainment area.

The TCEQ re-initiated the proposed rules under 30 Texas Administrative Code Chapter 101, Subchapter B to implement the FCAA fee requirement. The commission approved publication of the proposed rules on November 14, 2012 and published the rules in the Texas Register on November 30, 2012. Comments were received from the United States Environmental Protection Agency and other interested parties and are posted below. These rules were adopted by the TCEQ on May 22, 2013.

 

Fee Abeyance

On March 7, 2014, the TCEQ submitted a “clean data” notice to the United States Environmental Protection Agency (EPA). This notice stated that three consecutive years of quality-assured data with a design value for 2011-2013 did not exceed the one-hour ozone National Ambient Air Quality Standards (NAAQS) for the Houston-Galveston-Brazoria (HGB) one-hour ozone nonattainment area. As a result, the Section 185 fee collection is placed in abeyance and will not be due until further notice by the TCEQ. At this time, the Section 185 fee will not be invoiced by the agency. All other Section 185 Program requirements remain in effect.

Update on 2012 Penalty Fee Obligation and Equivalent Alternative Revenue

The estimated Section 185 obligation for the HGB one-hour ozone nonattainment Failure to Attain Fee for the 2012 emissions is $11 million dollars. To fulfill this obligation, the TCEQ Penalty Fee Rule (30 Texas Administrative Code, Chapter 101, Subchapter B, Failure to Attain Fee), requires that the overall obligation is first credited with revenue from equivalent alternative fees and any remaining obligation is due from major stationary sources in the HGB area. Revenue collected for the Texas Emissions Reduction Program (TERP) and Low Income Vehicle Repair, Retrofit, and Accelerated Vehicle Retirement Program (LIRAP) may be used as credit to offset the area’s obligation if funding is expended in the same calendar year. Revenue collected in 2012 for the TERP and LIRAP programs was $59.2 million dollars. Expended revenue in 2012 for these programs was $22.9 million dollars. Because the obligation is less than the available credit from the TERP and LIRAP programs, no additional Section 185 Penalty fee for 2012 emissions is anticipated at this time from major stationary sources in the HGB area.

Baseline Amount Forms and Instructions

Baseline amounts were due by September 19, 2013, from major stationary sources of volatile organic compounds (VOC) and/or nitrogen oxides (NOx) in the Houston-Galveston-Brazoria (HGB) nonattainment area per 30 Texas Administrative Code, Chapter 101, Subchapter B. Instructions. Forms for submitting the Section 185 baseline amount for new sources and new construction at existing major stationary sources are posted below. Also available is a presentation given on July 18, 2013 on calculating baseline amounts for the Federal Clean Air Act Section 185 Failure to Attain Fee and Frequently Asked Questions.

 

Mail signed forms to:

Section 185 Baseline Amount, MC 166
Texas Commission on Environmental Quality
P. O. Box 13087
Austin, Texas 78711-3087

Historically Reported VOC and NOx Data

The Excel spreadsheet below lists VOC and NOx emissions reported to the TCEQ point source emissions inventory for all sites in the HGB nonattainment area, regardless of a regulated entity’s major source classification. Determination of Section 185 applicability is the responsibility of the regulated entity. Inclusion in this data set does not constitute a determination of Section 185 applicability by the TCEQ.

This VOC and NOx data, spanning the years 1998 to 2007, is at the emissions unit level. Please note that emissions unit level scheduled maintenance, start-up, and shutdown (SMSS) emissions were reported and stored differently during this time period. For calendar years 1998 to 2003, SMSS emissions and emissions event (EE) emissions were stored as one total, EE+SMSS emissions, in the point source emissions inventory database. Since calendar year 2004, SMSS emissions have been stored separately from EE emissions in the point source emissions inventory database.

Houston Galveston Brazoria VOC and NOx Reported Emissions 1998-2007 (xlsx)

Comments received on the 2012 Proposed Failure to Attain Fee (Section 185) Rule

Comments were solicited on the 2012 proposed rule language to implement the FCAA Section 185 rule. The deadline for receipt of written comments was January 14, 2013.

Section 185 Termination Determination Request

US EPA Guidance on Section 185 Fee Program, January 5, 2010 (PDF)

The EPA issued a memorandum on January 5, 2010, entitled “Guidance on Developing Fee Programs Required by Clean Air Act Section 185 for the 1-hour Ozone NAAQS.” This guidance stated that if the EPA determined that the one-hour nonattainment area is attaining either the one-hour or the 1997 eight-hour ozone NAAQS, based on permanent and enforceable emissions reductions, the area would no longer be obligated to submit a fee. The eight-hour ozone design value in 2009 for the HGB area, based on 2007 through 2009 monitoring data, met this requirement.

In May 2010, the TCEQ submitted a Section 185 Termination Determination submittal to EPA for consideration. The submittal requested a determination that a Section 185 fee program was not required for the HGB one-hour ozone nonattainment area because the area met the requirements in the EPA memo.

On July 25, 2011, the EPA issued a letter to TCEQ stating they were unable to propose approving the Section 185 fee termination determination request. The EPA stated that its January 5, 2010, guidance was vacated by the District of Columbia Circuit Court of Appeals on July 1, 2011. Also, the area had not attained the one-hour standard.

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Meeting on Section 185 Termination Determination Request

Staff presented material on the Termination Determination request on April 28, 2010 in Houston.

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Public Hearings

The commission held two public hearings on 2009 proposed rule language to implement the FCAA Failure to Attain (Section 185) rule:

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Public Meetings

Two public meetings were held (March 4 and June 12) in 2009 in Houston, Texas. Issues and possible options for Section 185 fee alternatives were discussed in March and an overview of proposed language was presented at the June 12 meeting. Minutes and written comments received from these public meetings are listed below.

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Minutes of Past Public Meetings

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Comments on Section 185 Termination Determination Request

Comments on the TCEQ's request to terminate the Section 185 fee requirement for the HGB one-hour ozone standard.

Comments received on the 2009 Proposed Failure to Attain Fee (Section 185) Rule

Comments were solicited on the 2009 proposed rule language to implement the FCAA Section 185 rule. The deadline for receipt of written comments was January 25.2010.

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Comments Received on Section 185 Issues from Public Meetings

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Documents

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Contact Information

For more information or to suggest topics for future meetings, please e-mail 185rule@tceq.texas.gov referencing Section 185 Fees in the subject line.

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