![[logo] US EPA](http://www.epa.gov/epafiles/images/logo_epaseal.gif){kind=logo}
Section 126 Rule: Withdrawal Provision
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: April 4, 2003 (Volume 68, Number 65)]
[Proposed Rules]
[Page 16643-16650]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ap03-24]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[FRL-7476-3]
RIN 2060-AK41
Section 126 Rule: Withdrawal Provision
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In today's action, EPA is proposing to revise one narrow
aspect of a final rule published on January 18, 2000, known as the
Section 126 Rule. The EPA promulgated the rule in response to petitions
submitted by four Northeastern States under section 126 of the Clean
Air Act (CAA) for the purpose of mitigating interstate transport of
nitrogen oxides (NOX) and ozone. Nitrogen oxides are one of
the main precursors of ground-level ozone pollution. The Section 126
Rule requires electric generating units (EGUs) and non-electric
generating units (non-EGUs) located in 12 eastern States and the
District of Columbia to reduce their NOX emissions through a
NOX cap-and-trade program.
Originally, EPA harmonized the Section 126 Rule with a related
ozone transport rule, known as the NOX State implementation
plan call (NOX SIP Call), which also addresses
NOX and ozone transport in the eastern United States. The
EPA established the same compliance date for both rules, May 1, 2003.
Where States adopted, and EPA approved, SIPs meeting the NOX
SIP Call, and with a May 1, 2003 compliance date, EPA would withdraw
the Section 126 requirements for sources in that State. This was a
practical way to address the overlap between the two rules. As a result
of court actions, the compliance dates for the Section 126 Rule and the
NOX SIP Call have now been delayed until May 31, 2004. In
addition, the NOX SIP Call has been divided into two phases.
Therefore, EPA is proposing to revise the Section 126 withdrawal
provision so that it will operate under these new circumstances. In
today's action, EPA is proposing to withdraw the Section 126 Rule if a
State adopts, and EPA approves, a SIP with a May 31, 2004 compliance
date that meets either the full NOX SIP Call or Phase 1
where the State is regulating the Section 126 sources to the same
stringency as the Section 126 Rule.
DATES: The comment period on this proposal ends on May 24, 2003.
Comments must be postmarked by the last day of the comment period and
sent directly to the Docket Office listed in ADDRESSES (in duplicate
form if possible). A public hearing will be held on April 24, 2003 in
Washington, DC, if one is requested by April 10, 2003. Please refer to
SUPPLEMENTARY INFORMATION for additional information on the comment
period and hearing.
ADDRESSES: Comments may be submitted through the U.S. Postal Service to
the following address: U.S. Environmental Protection Agency, EPA West
(Air Docket), 1200 Pennsylvania Avenue, NW., Room B108, Mail Code
6102T, Washington, DC 20460, Attention: Docket No. A-97-43. To mail
comments or documents through Federal Express, UPS, or other courier
services, the mailing address is: U.S. Environmental Protection Agency,
EPA Docket Center (Air Docket), 1301 Constitution Avenue, NW., Room
B108, Mail Code 6102T, Washington, DC 20004. The telephone number for
the Air Docket is (202) 566-1742 and the fax number is 202-566-1741.
The EPA encourages electronic submission of comments and data following
the instructions under SUPPLEMENTARY INFORMATION of this document. No
confidential business information should be submitted through e-mail.
Documents relevant to this action are available for public
inspection at the EPA Docket Center, located at 1301 Constitution
Avenue, NW., Room B102, Washington, DC between 8:30 a.m. and 4:30 p.m.,
Monday through Friday, excluding legal holidays. A reasonable fee may
be charged for copying.
The public hearing, if requested, will be held at Ariel Rios North,
Room 1332, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.
FOR FURTHER INFORMATION CONTACT: Questions concerning today's action
should be addressed to Carla Oldham, EPA, Office of Air Quality
Planning and Standards, Air Quality Strategies and Standards Division,
C539-02, Research Triangle Park, NC 27711, telephone (919) 541-3347, e-
mail at oldham.carla@epa.gov.
SUPPLEMENTARY INFORMATION:
Public Hearing
The EPA will conduct a public hearing on this proposal on April 24,
2003 beginning at 9 a.m., if requested on or before April 10, 2003. The
EPA will not hold a hearing if one is not requested. Please check EPA's
Web page at http://www.epa.gov/ttn/naaqs/ozone/rto/rto_whatsnew.html
on April 11, 2003 for the announcement of whether the hearing will be
held. If there is a public hearing, it will be held at Ariel Rios
North, Room 1332, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.
The Metro stop is Federal Triangle. If you want to request a hearing
and present oral testimony at the hearing, you should notify, on or
before April 10, 2003, JoAnn Allman, EPA, Office of Air Quality
Planning and Standards, Air Quality Strategies and Standards Division,
C539-02, Research Triangle Park, NC 27711, telephone (919) 541-1815, e-
mail allman.joann@epa.gov. Oral testimony will be limited to 5 minutes
each. The hearing will be strictly limited to the subject matter of the
proposal, the scope of which is discussed below. Any member of the
public may file a written statement by the close of the comment period.
Written statements (duplicate copies preferred) should be submitted to
Docket No. A-97-43 at the addresses given above for submittal of
comments. The hearing schedule, including the list of speakers, will be
posted on EPA's Web page at http://www.epa.gov/ttn/naaqs/ozone/rto/
rto_whatsnew.html. A verbatim transcript of the hearing, if held, and
written statements will be made available for copying during normal
working hours at the EPA Docket Center address given above for
inspection of documents.
Availability of Related Information
The official record for this rulemaking, as well as the public
version, has been established under docket number A-97-43 (including
comments and data submitted electronically as described below). A
public version of this record, including printed, paper versions of
electronic comments, which does not include any information claimed as
confidential business information, is available for inspection from
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The official rulemaking record is located at the address in
ADDRESSES at the beginning of this document. In addition, the Federal
Register rulemaking actions and associated documents are located at
http://www.epa.gov/ttn/naaqs/ozone/rto/126/index.html.
The EPA has issued a separate rule on NOX transport
entitled, ``Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone.'' The rulemaking
docket for that rule (Docket No. A-96-56), hereafter referred to as the
NOX SIP Call, contains information and analyses that EPA has
relied upon
[[Page 16645]]
in the section 126 rulemaking, and hence documents in that docket are
part of the rulemaking record for this rule. Documents related to the
NOX SIP Call rulemaking are available for inspection in
docket number A-96-56 at the address and times given above.
Submitting Electronic Comments
Electronic comments are encouraged and can be sent directly to EPA
at A-and-R-Docket@epa.gov. Electronic comments must be submitted as an
ASCII file avoiding the use of special characters and any form of
encryption. Comments and data will also be accepted on disks in
WordPerfect 8.0 or ASCII file format. All comments and data in
electronic form must be identified by the docket number A-97-43.
Electronic comments may be filed online at many Federal Depository
Libraries.
Outline
I. What is the Relationship Between the Section 126 Rule and the
NOX SIP Call?
II. What is the History of the Section 126 Rule Withdrawal
Provision?
III. Why Does the Section 126 Rule Withdrawal Provision Need to be
Revised?
A. Under What Circumstances Does the Section 126 Rule Withdrawal
Provision Currently Operate?
B. How Have Court Actions Affected the Circumstances Upon Which
the Section 126 Rule Withdrawal Provision Was Based?
1. Court Actions on the NOX SIP Call.
2. Court Actions on the Section 126 Rule.
IV. What is EPA's Proposal to Revise the Section 126 Rule Withdrawal
Provision?
A. What is EPA's Proposal Related to the SIP Compliance Date?
B. What is EPA's Proposal Related to Withdrawing the Section 126
Rule Based on a Phase 1 SIP?
V. What is the Current Status of the NOX SIPs Under the
NOX SIP Call and EPA's Proposed Action to Withdraw the
Section 126 Rule in a State?
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
I. What Is the Relationship Between the Section 126 Rule and the
NOX SIP Call?
In the past several years, EPA has been engaged in two separate
rulemakings to address the interstate ozone transport problem in the
eastern half of the United States. These rules, known as the
NOX SIP Call and the Section 126 Rule, both require
reductions in NOX emissions, which are precursors to ground-
level ozone formation.
On October 27, 1998 (63 FR 57356), EPA promulgated the
NOX SIP Call thereby requiring 22 Eastern States and the
District of Columbia to reduce statewide NOX emissions to a
specified level (NOX budget).\1\ The States have the
flexibility to choose the particular mix of control measures necessary
to meet the NOX budget. The primary statutory provision for
the NOX SIP Call is CAA section 110(a)(2)(D)(i), under
which, in general, each SIP is required to include provisions to assure
that sources within the State do not emit pollutants in amounts that
significantly contribute to nonattainment or interfere with maintenance
problems downwind.
------------------------------------------------------------------------
\1\ As a result of a court decision, EPA will now only be
including 21 States and the District of Columbia in the SIP Call.
------------------------------------------------------------------------
In 1997, while EPA was in the process of developing the
NOX SIP Call, eight Northeastern States submitted petitions
under section 126 of the CAA seeking to mitigate significant interstate
transport of NOX and ozone. Section 126 refers to State
obligations under CAA section 110(a)(2)(D)(i) as does the
NOX SIP Call. Section 126 authorizes a State to petition EPA
to make a finding that any major source or group of stationary sources
in upwind States are significantly contributing to nonattainment, or
interfering with maintenance, in the petitioning State. If EPA makes
such a finding, EPA is authorized to establish Federal emission limits
for the affected sources. The petitions requested that EPA make such
findings and establish control requirements for certain sources in
about 30 States.
The EPA took action on the Section 126 petitions in final rules
issued on May 25, 1999 and January 18, 2000 (together known as the
Section 126 Rule) (64 FR 28250 and 65 FR 2674). In acting on the
section 126 petitions, EPA relied on analyses and information used in
the NOX SIP Call rulemaking, including the linkages it drew
between specific upwind States and nonattainment and maintenance
problems in specific downwind States. The EPA determined that large
EGUs and large industrial boilers and turbines (non-EGUs) in 12 States
and the District of Columbia were significantly contributing to
nonattainment problems in four of the petitioning States under the 1-
hour ozone national ambient air quality standard.\2\ The EPA required
these sources to reduce their NOX emissions through a
Federal NOX cap-and-trade program.
------------------------------------------------------------------------
\2\ Several of the petitions also requested that EPA also make
findings under the 8-hour ozone standard. The EPA made technical
determinations under the 8-hour standard in the May 25, 1999 rule
but later stayed that portion of the rule in light of litigation on
the 8-hour standard (65 FR 2674; January 18, 2000).
------------------------------------------------------------------------
The Section 126 Rule overlaps considerably with the NOX
SIP Call. Both the Section 126 Rule and the NOX SIP Call are
based on much the same set of facts regarding the same pollutants. Both
rely on section 110(a)(2)(D)(i) of the CAA. All of the sources affected
by the Section 126 Rule are located in States that are covered by the
NOX SIP Call. Therefore, as discussed below, EPA coordinated
its actions under the two transport rules. (See the May 25, 1999 and
January 18, 2000 Section 126 Rules for a detailed history of the
relationship between the NOX SIP Call and the Section 126
Rule.)
II. What Is the History of the Section 126 Rule Withdrawal Provision?
When EPA issued the May 25, 1999 Section 126 Rule, there was an
existing requirement under the NOX SIP Call for States to
reduce their NOX emissions and an explicit and expeditious
schedule to do so. Therefore, EPA was able to coordinate, or harmonize,
the Section 126 Rule with the NOX SIP Call. The EPA
established the same compliance date, May 1, 2003 for both rules. Then,
EPA structured its action on the section 126 petitions to give a State
the opportunity to address its NOX transport first under the
NOX SIP Call before EPA would directly regulate sources in
the State under the Section 126 Rule. Thus, in the May 25, 1999 Section
126 Rule, EPA made technical determinations as to which sources were
significantly contributing to the petitioning States but deferred
making the Section 126 findings, which would trigger the control
requirements, as long as States and EPA stayed on track to meet the
NOX SIP Call obligations. The EPA included a withdrawal
provision in the Section 126 Rule under which the Section 126 Rule for
sources in a State would be automatically withdrawn if that State
submitted and EPA approved a NOX SIP fully meeting the
NOX SIP Call (see 64 FR 28271-28274; May 25, 1999). Thus,
the section 126 control requirements would not go into place if
[[Page 16646]]
a State took timely action under the NOX SIP Call. This gave
upwind States the flexibility to address the ozone transport problem
themselves, but would not delay implementation of the NOX
transport remedy beyond the May 1, 2003 Section 126 Rule compliance
date.\3\ This was a practical way to address the overlap between the
actions that would be required under the NOX SIP Call and
under the rulemaking on the section 126 petitions. (The basis for the
withdrawal provision is discussed below in section III.A. For a more
detailed discussion of the basis for harmonizing the two rules and the
interplay of the underlying statutory provisions, see the May 25, 1999
final rule.)
------------------------------------------------------------------------
\3\ This approach of ``harmonizing'' the Section 126 Rule and
the NOX SIP Call was provided as a rulemaking option in a
consent decree developed by the petitioning States and EPA.
------------------------------------------------------------------------
The NOX SIP Call originally required States to submit
their NOX SIPs to EPA by September 30, 1999. On May 25,
1999, in response to a request by States challenging the NOX
SIP Call, the U.S. Court of Appeals for the District of Columbia
Circuit (D.C. Circuit or the court) issued a stay of the SIP submission
deadline pending further order of the court. Michigan v. EPA, 213 F.3d
663 (D.C. Cir., 2000), cert. denied, 121 S. Ct. 1225 (2001) (order
granting stay in part). Inasmuch as the compliance date is linked with
the SIP submission date, the stay created uncertainty regarding the
compliance date. Because there was no longer a schedule for the
NOX SIP Call, and therefore, no assurance that transport
would be addressed by May 1, 2003, EPA no longer had a basis for
deferring action under the Section 126 Rule. Therefore, in a final rule
published on January 18, 2000, EPA moved forward to make the findings
with respect to the 1-hour ozone standard and activate the control
requirements under the Section 126 Rule (65 FR 2674).\4\ However, the
Section 126 Rule continued to contain a provision (Sec. 53.34(i))
whereby the section 126 requirements would be automatically withdrawn
for sources in a State if EPA approved a State's SIP that provided for
the NOX SIP Call emission reduction requirements by May 1,
2003.
------------------------------------------------------------------------
\4\ Because of the stay on the Section 126 Rule with respect to
the 8-hour standard, EPA did not make findings under the 8-hour
standard at that time. EPA plans to complete it's actions on the 8-
hour petitions in a future rulemaking.
------------------------------------------------------------------------
III. Why Does the Section 126 Rule Withdrawal Provision Need To Be
Revised?
A. Under What Circumstances Does the Section 126 Rule Withdrawal
Provision Currently Operate?
Section 52.34(i) of the Section 126 Rule currently provides that:
* * * a finding [under the Section 126 Rule]
as to a particular
major source or group of stationary sources in a particular State
will be deemed to be withdrawn, and the corresponding part of the
relevant petition(s) denied, if the Administrator issues a final
action putting in place implementation plans that comply with the
requirements of Sec. Sec. 51.121 and 51.122 [the NOX SIP
Call]
of this chapter for such State.
As discussed in the Section 126 Rule (65 FR 2682-2684), the premise
for the automatic withdrawal provision was that once a SIP (or Federal
implementation plan (FIP)) controls the full amount of significant
contribution from a State, the section 126 sources in that State could
no longer be significantly contributing to downwind nonattainment, and
hence the basis for the section 126 findings would no longer be
present. Further, the provision would ensure that the downwind
petitioning States receive the emission reduction benefits they are
entitled to under section 126 by May 1, 2003, which was then the
compliance date, either under the Section 126 Rule or under a Federally
enforceable SIP or FIP (65 FR 2684). Thus, EPA's rationale for adopting
the automatic withdrawal provision depended upon a May 1, 2003
compliance date for sources under the SIP that would substitute for the
control remedy under the Section 126 Rule. Accordingly, EPA interpreted
section 52.34(i) to apply only where EPA approves a SIP revision (or
promulgates a FIP) meeting the full requirements of the NOX
SIP Call and including a May 1, 2003 compliance date for sources (See
65 FR 2683). The automatic withdrawal provision does not address any
other circumstances.
B. How Have Court Actions Affected the Circumstances Upon Which the
Section 126 Rule Withdrawal Provision Was Based?
Both the NOX SIP Call and the Section 126 Rule were
challenged in court. As a result of court actions, certain
circumstances upon which the Section 126 withdrawal provision was based
have changed--the deadlines for the NOX SIP Call and the
Section 126 Rule have been delayed and the SIP Call has been divided
into 2 phases (known as Phase 1 and Phase 2).
1. Court Actions on the NOX SIP Call
On March 3, 2000, a panel of the D.C. Circuit largely upheld the
NOX SIP Call but remanded a few issues to EPA for further
consideration. (See Michigan v. EPA, 213 F.3d 663 (D.C. Cir., 2000),
cert. denied, 121 S. Ct. 1225 (2001).) As discussed in section II
above, during the litigation, the court issued a stay of the SIP
submission deadline. On June 22, 2000, in response to a motion by EPA,
the court lifted the stay and established a new SIP submission date of
October 30, 2000. On August 30, 2000, the D.C. Circuit ordered that the
deadline for implementation of the NOX SIP Call be extended
from May 1, 2003 to May 31, 2004. The NOX SIP Call then had
a later compliance date and was no longer harmonized with the Section
126 Rule.
As a result of the court decision, EPA divided the NOX
SIP Call into two phases. Phase 1 represents the portion of the rule
that was upheld by the court and accounts for approximately 90 percent
of the total emissions reductions called for by the original
NOX SIP Call. The court-established SIP submission date and
compliance date apply to Phase 1. Phase 2 of the NOX SIP
Call is addressing issues remanded by the court. The EPA proposed the
Phase 2 requirements on February 22, 2002 (67 FR 8396). The SIP
submission date and compliance date for the Phase 2 will be established
through that rulemaking action.
The EPA promulgated the January 2000 Section 126 Rule at the time
when the NOX SIP Call stay was in place. In the preamble to
the rule, EPA noted that if EPA prevailed in the NOX SIP
Call litigation, the court or EPA would need to establish a new
deadline for SIP submission and the delay from the original September
1999 SIP deadline could require a shift in the date for achieving the
NOX SIP Call emissions reductions beyond May 1, 2003 (65 FR
2683). The EPA indicated that when and if such a situation were to
arise, EPA would address through rulemaking the effects of the new
NOX SIP Call deadline on the Section 126 withdrawal
provision.
2. Court Actions on the Section 126 Rule
On May 15, 2001, the court ruled on a number of challenges to EPA's
Section 126 Rule. See Appalachian Power v. EPA, 249 F.3d 1032 (D.C.
Cir. 2001). The court largely upheld the Section 126 Rule, but remanded
two issues to EPA. The court directed EPA to: (1) Properly justify
either the current or a new set of EGU heat input growth rates to be
used in estimating State heat input
[[Page 16647]]
in 2007, and (2) either properly justify or alter its categorization of
cogenerators that sell electricity to the electric grid as EGUs.\5\
------------------------------------------------------------------------
\5\ The EPA is responding to the remand related to the
categorization of cogenerators in a rulemaking that was proposed on
February 22, 2002 (67 FR 8396).
------------------------------------------------------------------------
On August 24, 2001, the D.C. Circuit Court tolled (suspended) the
compliance period for EGUs under the Section 126 Rule as of the May 15,
2001 decision pending EPA's response to the remand related to EGU
growth rates. Appalachian Power v. EPA, 249 F.3d 1052 (D.C. Cir 2001),
Order (August 24, 2001). The EPA issued its response in a notice
published on May 1, 2002 (67 FR 21868). Because of the time needed to
fully respond to the growth factor remand, the tolling of the
compliance period resulted in a delay in the implementation of the
Section 126 Rule until the 2004 ozone season. This created a need for
EPA to once again harmonize the Section 126 Rule with the
NOX SIP Call. Therefore, on April 30, 2002, EPA issued a
final rulemaking to revise the Section 126 Rule compliance date and
other related dates (67 FR 21522). The new compliance date is May 31,
2004, which is the same compliance date for Phase 1 of the
NOX SIP Call, but slightly more than a year later than the
compliance date upon which the Section 126 Rule withdrawal provision
was based.
IV. What Is EPA's Proposal To Revise the Section 126 Rule Withdrawal
Provision?
A number of reasons supported structuring the May 25, 1999 Section
126 Rule to provide for an automatic withdrawal of the section 126
findings upon approval of a SIP revision complying with the
NOX SIP Call. As discussed above, EPA believes it is
appropriate, when consistent with the relevant statutory provisions, to
structure the Section 126 Rule to allow for State rather than Federal
regulation when either would be equally effective in implementing the
statutory goal of producing timely emissions reductions. The withdrawal
provision also avoids the overlap of the Federal requirements under
section 126 and State measures in response to the NOX SIP
Call. However, due to the changes that have occurred to the Section 126
Rule and the NOX SIP Call as a result of court actions, the
Section 126 Rule withdrawal provision is now out of date. Therefore, it
is necessary to revise and update the withdrawal provision so that it
will function as originally intended.
A. What Is EPA's Proposal Related to the SIP Compliance Date?
As discussed in Section III.A. above, EPA interprets the current
Section 126 Rule withdrawal provision to operate only when the SIP has
a May 1, 2003 compliance date. Because the Section 126 Rule compliance
deadline is now May 31, 2004, a NOX SIP to pre-empt or
replace the Section 126 Rule requirements would not need to be
implemented until May 31, 2004. Therefore, in today's action, EPA is
proposing that the section 126 findings for sources in a State will be
deemed to be withdrawn, and the corresponding portion of the relevant
petition will be denied, if EPA approves a NOX SIP that
meets the NOX SIP Call requirements of 40 CFR 51.121 and
51.122 (or Phase 1 requirements under the circumstances discussed
below) by May 31, 2004 rather than by May 1, 2003.
B. What Is EPA's Proposal Related to Withdrawing the Section 126 Rule
Based on a Phase 1 SIP?
The current withdrawal provision requires a State to meet the full
NOX SIP Call. If a State controls its statewide significant
contribution under the NOX SIP Call, it necessarily must
have addressed the significant contribution from the section 126
sources in that State. This provided the basis for EPA to revoke the
section 126 findings and requirements as to those sources.
At the time EPA promulgated the Section 126 Rule, the
NOX SIP Call had not yet been divided into two phases.
Therefore, EPA did not address the question of whether something less
than a full NOX SIP, that is, a Phase 1 SIP, could
adequately substitute for the section 126 requirements. Phase 1 of the
NOX SIP Call provides around 90 percent of the SIP Call
reductions. States are required to achieve the Phase 1 reductions by
May 31, 2004, the same compliance date as the Section 126 Rule. In
February of this year, EPA proposed the Phase 2 requirements. The Phase
2 compliance date will be established in a future final rule. Because
EPA expects that the Phase 2 compliance date will be later than the
2004 ozone season, States will be required to achieve only the Phase 1
reductions in 2004 and not the full NOX SIP Call reductions.
Therefore, in order to avoid having sources be subject to two different
sets of transport requirements in 2004 under the NOX SIP
Call and the Section 126 Rule, EPA is proposing criteria for
withdrawing the Section 126 Rule based on a Phase 1 SIP.
Although the Phase 1 SIP would achieve the vast majority of the SIP
Call reductions, there is no guarantee that a Phase 1 SIP would, in all
cases, control at least the same amount of emissions as the Section 126
Rule in a State or that the State would choose to regulate all the
identified Section 126 sources. Therefore, EPA is not proposing that
simply meeting the Phase 1 reductions would provide a basis for
automatic withdrawal of the Section 126 requirements. Instead, EPA is
proposing that the Section 126 Rule be withdrawn in a State under the
more limited circumstances where EPA determines that an approved Phase
1 SIP is requiring at least the same total quantity of emissions
reductions from the same group of sources as controlled under the
Section 126 Rule by May 31, 2004. In this situation, the SIP would
retain the environmental benefits that section 126 would have provided
and the section 126 sources would no longer be significantly
contributing to downwind nonattainment problems.
The process for withdrawing the Section 126 Rule based on a Phase 1
SIP would differ slightly from the situation where a State adopts a SIP
meeting the full NOX SIP Call requirements in that a second
step would be involved. In the latter case, the Section 126 Rule would
be automatically withdrawn upon SIP approval. In the case of the Phase
1 SIP, the Section 126 Rule would be withdrawn upon EPA's determination
that the approved Phase 1 SIP regulates the group of section 126
sources to the same or greater stringency as the Section 126 Rule.
Based on the review of SIPs to date, EPA believes it is likely that
all of the Phase 1 SIPs from States affected by the Section 126 Rule
will regulate all of the section 126 sources to the same stringency as
the Section 126 Rule. However, not all of the Phase 1 SIPs have been
fully approved yet and one affected State has not yet submitted its
SIP. Therefore, EPA is still considering whether there are other
circumstances under which it would be appropriate to withdraw the
Section 126 Rule. The EPA is soliciting comments on alternative
approaches for withdrawing the Section 126 Rule based on an approved
Phase 1 SIP.
V. What Is the Current Status of the NOX SIPs Under the
NOX SIP Call and EPA's Proposed Action To Withdraw the
Section 126 Rule in a State?
The January 2000 Section 126 Rule affected sources located in the
District of Columbia and the following 12 States: Delaware, Indiana,
Kentucky, Maryland, Michigan, New Jersey, New York, North
[[Page 16648]]
Carolina, Pennsylvania, Ohio, Virginia, and West Virginia.\6\ All of
these States are required to submit Phase 1 SIPs under the
NOX SIP Call. To date, EPA has given final approval to
NOX SIPs from ten of the thirteen jurisdictions (all but
Michigan, Ohio, and Virginia).
------------------------------------------------------------------------
\6\ Indiana, Kentucky, Michigan, and New York were only
partially covered by the Section 126 Rule.
------------------------------------------------------------------------
The District of Columbia, Maryland, New Jersey, and New York
voluntarily adopted SIPs that meet the original full NOX SIP
Call budgets (65 FR 11222; March 2, 2000) and include a May 1, 2003
compliance date. Therefore, these SIPs meet the criteria for the
current Section 126 withdrawal provision and the Section 126 Rule
already has been automatically withdrawn for sources in those four
jurisdictions.\7\
------------------------------------------------------------------------
\7\ The EPA is currently revising certain portions of the
NOX SIP Call in response to a March 3, 2000 decision by
the U.S. Court of Appeals for the D.C. Circuit. See Michigan v. EPA,
213 F.3d 663 (D.C. Cir. 2000). In this decision, the court upheld
the NOX SIP Call on all major issues, but remanded four
narrow issues to EPA for further rulemaking. The EPA expects to
complete the rulemaking by the end of the year, which will slightly
modify the NOX SIP budgets based on the court's holding.
In light of the changes necessary to respond to the court decision,
EPA anticipates that the final NOX SIP budgets would be
no more stringent than the original SIP budgets as modified by the
March 2, 2000 technical amendment (65 FR 11222). Therefore, a SIP
meeting the March 2, 2000 budgets and providing for reductions by
May 1, 2003, should fully address the significant NOX
transport from that State, and the current section 52.34(i)
withdrawal provision applies to automatically withdraw the section
126 requirements for sources in that State.
------------------------------------------------------------------------
North Carolina adopted a SIP meeting the original full
NOX SIP Call budget with a May 31, 2004 compliance date. If
EPA finalizes today's action as proposed, the Section 126 Rule under
the 1-hour standard will be automatically withdrawn for sources in that
State upon the effective date of the final rule.
The EPA is today proposing that the approved Phase 1 SIPs from
Delaware, Indiana, Kentucky, Pennsylvania, and West Virginia regulate
the total group of section 126 sources in the respective States to the
same stringency as the Section 126 Rule and include a compliance date
no later than May 31, 2004. If EPA finalizes today's rule revision as
proposed, the Section 126 Rule under the 1-hour standard will be
withdrawn for sources in those States upon the effective date of the
final rule.
The EPA proposed to conditionally approve the Virginia and Ohio
SIPs. In today's action, EPA is proposing that once Virginia and Ohio
satisfy the conditions identified in their respective SIP proposal
actions and EPA fully approves the SIPs, each SIP would regulate the
total group of section 126 sources in the respective State to the same
stringency as the Section 126 Rule. If EPA finalizes today's rule
revision as proposed and fully approves the Virginia and Ohio SIPs, the
Section 126 Rule under the 1-hour standard will be withdrawn for
sources in those States upon the later of the effective date for the
final rule based on today's proposal and the effective date for final
SIP approval.
We expect Michigan to submit a Phase 1 SIP shortly. The EPA will
address the removal of the Section 126 Rule in Michigan in a separate
rulemaking action once EPA receives and proposes action on the Michigan
SIP.
The EPA notes that this proposal to withdraw the Section 126 Rule
only affects the portion of the Section 126 Rule based on the 1-hour
ozone standard. In evaluating the section 126 petitions, EPA made
separate determinations under the 1-hour and 8-hour standards. In light
of the litigation on the 8-hour standard, EPA previously stayed the 8-
hour portion of the Section 126 Rule. Recently, EPA issued its final
response to a U.S. Court of Appeals for the D.C. Circuit remand of the
8-hour standard. After a careful review, EPA has reaffirmed the 8-hour
ozone standard and is moving forward to implement the standard.
Therefore, EPA will be initiating a rulemaking to lift the 8-hour stay
on the Section 126 Rule. In that rulemaking, EPA will complete its
action on the 8-hour petitions.
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant''
and, therefore, subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
3. Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Under Executive Order 12866, this proposed action is not a
``significant regulatory action'' and is therefore not subject to
review by OMB. The January 2000 Section 126 Rule (65 FR 2674)
establishes control requirements for certain sources in 12 States and
the District of Columbia. The Section 126 Rule contains a provision
under which EPA would withdraw the control requirements in a State if
EPA approves a State plan to control the NOX transport in
response to the NOX SIP Call. As the result of court
actions, the compliance dates for the Section 126 Rule and the
NOX SIP Call have now been delayed until May 31, 2004. In
addition, the NOX SIP Call has been divided into two phases.
Therefore, EPA is proposing to revise and update the Section 126
withdrawal provision so that it will operate under these new
circumstances.
This proposed action would not create any additional impacts beyond
what was promulgated in the January 2000 Rule. This proposed rule also
does not raise novel legal or policy issues. Therefore, EPA believes
that this action is not a ``significant regulatory action.''
B. Paperwork Reduction Act
Today's action does not propose any new information collection
request requirements. Therefore, an information collection request
document is not required.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
For purposes of assessing the impacts of the proposed rule on small
entities, small entity is defined as: (1) A small business according to
the U.S. Small Business Administration size standards for the NAICS
codes listed in the following table; (2) a small governmental
jurisdiction that is a government of a city, county, town, school
district or special district with a population of less than 50,000; and
(3) a small organization that is any not-for-
[[Page 16649]]
profit enterprise which is independently owned and operated and is not
dominant in its field.
------------------------------------------------------------------------
Size
standard
in number
of
NAICS code Economic activity or employees,
industry millions of
dollars of
revenues,
or output
------------------------------------------------------------------------
322121............................. Pulp mills............ 750
322122.............................
325211............................. Plastics materials, 750
synthetic resins, and
nonvulcanized
elastomers.
325188............................. Industrial organic 1,000
325199............................. chemicals.
324110............................. Petroleum refining.... 1,500
331111............................. Steel works, blast 1,000
furnaces, and rolling
mills.
333611............................. Steam, gas, and 1,000
hydraulic turbines.
333618............................. Stationary internal 1,000
combustion engines.
333415............................. Air-conditioning and 750
warm-air heating
equipment and
commercial and
industrial
refrigeration
equipment.
222111............................. Electric utilities.... \1\ 4
222112.............................
486210............................. Natural gas $6.0
transmission.
221330............................. Steam and air $10.5
conditioning supply.
------------------------------------------------------------------------
\1\ Million megawatt hrs.
After considering the economic impacts of today's proposed rule on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. Today's
proposal, if promulgated, would not create new requirements for small
entities or other sources. Instead, this action is proposing to revise
the Section 126 Rule to withdraw the section 126 requirements under
specified circumstances. We continue to be interested in the potential
impacts of the proposed rule on small entities and welcome comments on
issues related to such impacts.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, 2
U.S.C. 1532, EPA generally must prepare a written statement, including
a cost-benefit analysis, for any proposed or final rules with ``Federal
mandates'' that may result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any 1 year. A ``Federal mandate'' is defined to
include a ``Federal intergovernmental mandate'' and a ``Federal private
sector mandate'' (2 U.S.C. 658(6)). A ``Federal intergovernmental
mandate,'' in turn, is defined to include a regulation that ``would
impose an enforceable duty upon State, local, or tribal governments,''
(2 U.S.C. 658(5)(A)(i)), except for, among other things, a duty that is
``a condition of Federal assistance'' (2 U.S.C. 658(5)(A)(I)). A
``Federal private sector mandate'' includes a regulation that ``would
impose an enforceable duty upon the private sector,'' with certain
exceptions (2 U.S.C. 658(7)(A)).
The EPA has determined that this proposed action does not include a
Federal mandate that may result in estimated costs of $100 million or
more for either State, local, or tribal governments in the aggregate,
or for the private sector. This Federal action does not propose any new
requirements, as discussed above. Accordingly, no additional costs to
State, local, or tribal governments, or to the private sector, would
result from this action.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
Under section 6 of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. The EPA also may not issue a
regulation that has federalism implications and that preempts State
law, unless the Agency consults with State and local officials early in
the process of developing the proposed regulation.
This proposed action does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. Today's proposed action would
not impose any additional burdens beyond those imposed by the January
2000 Rule. Thus, the requirements of section 6 of the Executive Order
do not apply to this rulemaking action.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, November 6, 2000),
requires EPA
[[Page 16650]]
to develop an accountable process to ensure ``meaningful and timely
input by tribal officials in the development of regulatory policies
that have tribal implications.'' ``Policies that have tribal
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects on one or more Indian tribes, on
the relationship between the Federal government and the Indian tribes,
or on the distribution of power and responsibilities between the
Federal government and Indian tribes.''
This proposed rule does not have tribal implications. If
promulgated, it will not have substantial direct effects on tribal
governments, on the relationship between the Federal government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal government and Indian tribes, as specified in
Executive Order 13175. Today's action does not significantly or
uniquely affect the communities of Indian tribal governments. As
discussed above, today's proposed action would not impose any new
requirements that would impose compliance burdens beyond those that
would already apply under the January 2000 rule. Accordingly, the
requirements of Executive Order 13175 do not apply to this rule.
In the spirit of Executive Order 13175, and consistent with EPA
policy to promote communications between EPA and tribal governments,
EPA specifically solicits additional comment on this proposed rule from
tribal officials.
G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
Executive Order 13045: ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that (1) is determined to be ``economically significant''
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children. If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the agency.
The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that are based on health or safety risks, such that
the analysis required under section 5-501 of the Order has the
potential to influence the regulation. This rule is not subject to
Executive Order 13045, because this action is not ``economically
significant'' as defined under Executive Order 12866 and the Agency
does not have reason to believe the environmental health risks or
safety risks addressed by this action present a disproportionate risk
to children.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This rule is not subject to Executive Order 13211, ``Actions That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR
28355; May 22, 2001) because it is not a significant regulatory action
under Executive Order 12866. Today's action does not propose any new
regulatory requirements.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Transfer and Advancement Act of 1995
(``NTTAA,'' Pub. L. 104-113 section 12(d) 15 U.S.C. 272 note) directs
EPA to use voluntary consensus standards in its regulatory activities
unless to do so would be inconsistent with applicable law or otherwise
impractical. Voluntary consensus standards are technical standards
(e.g., materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary
consensus standards bodies. The NTTAA directs EPA to provide Congress,
through OMB, explanations when the Agency decides not to use available
and applicable voluntary consensus standards.
The National Technology Transfer and Advancement Act of 1997 does
not apply because today's action does not propose any new technical
standards. This action is proposing to amend the January 2000 Rule by
specifying circumstances under which the Section 126 requirements would
be withdrawn.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, trading,
Intergovernmental Relations, Nitrogen dioxide, Ozone, Reporting and
recordkeeping requirements.
Dated: March 27, 2003.
Christine Todd Whitman,
Administrator.
For the reasons set forth in the preamble, chapter I of title 40 of
the Code of Federal Regulations is proposed to be amended as follows:
PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart A--General Provisions
2. Section 52.34 is amended by revising paragraph (i) to read as
follows:
Sec. 52.34 Action on petitions submitted under section 126 relating
to emissions of nitrogen oxides.
* * * * *
(i) Withdrawal of section 126 findings. Notwithstanding any other
provision of this subpart, a finding under paragraphs (c), (e)(1) and
(e)(2), (g), and (h)(1) and (h)(2) of this section as to a particular
major source or group of stationary sources in a particular State will
be deemed to be withdrawn, and the corresponding part of the relevant
petition denied, if the Administrator issues a final action approving
implementation plan provisions that:
(1) Comply with the applicable requirements of Sec. Sec. 51.121
and 51.122 of this chapter for such State, modified to require
achievement of the emission reductions under Sec. 51.121 of this
chapter starting no later than May 31, 2004; or
(2)(i) Comply with the applicable requirements of Sec. Sec. 51.121
and 51.122 of this chapter, except for Sec. 51.121(e) of this chapter,
for such State, modified to require achievement of the emission
reductions under Sec. 51.121 of this chapter starting no later than
May 31, 2004, and
(ii) Achieve emissions reductions, from the large EGUs and large
non-EGUs subject to paragraph (j) of this section in such State, that
equal or exceed the emissions reductions otherwise required under Part
97 of this chapter for such State.
* * * * *
[FR Doc. 03-8152 Filed 4-3-03; 8:45 am]
BILLING CODE 6560-50-P