In an interim rule effective and published in the Federal Register on January 5, 2001 (66 FR 1015-1016, Docket No. 00-085-1), we established regulations in 7 CFR part 302 concerning the application for and issuance of certificates for the interstate movement of plants and plant products from the District of Columbia. The interim rule was necessary to facilitate the interstate movement of plants and plant products from the District of Columbia.

We solicited comments concerning the interim rule for 60 days ending March 6, 2001. We did not receive any comments.

However, in this document, we are revising the contact information for persons seeking certification. In the interim rule, we designated the Plant Protection and Quarantine (PPQ) office at the Port of Baltimore, MD, as the point of contact for persons interested in obtaining District of Columbia Plant Health Certificates. We have determined that the PPQ State Plant Health Director's office in Annapolis, MD, is in a better position to serve the needs of persons requiring the inspection and certification provided for by the regulations. Accordingly, in this final rule we are revising § 302.2 to designate the Annapolis, MD, PPQ office as the point of contact for persons seeking certification.

Therefore, for the reasons given in the interim rule and in this document, we are adopting the interim rule as a final rule, with the change discussed in this document.

This final rule also affirms the information contained in the interim rule concerning Executive Orders 12372 and 12988 and the economic analysis under Executive Order 12866 and the Regulatory Flexibility Act.

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived the review process required by Executive Order 12866.

Pursuant to the administrative procedure provisions in 5 U.S.C. 553, we find good cause for making this rule effective less than 30 days after publication in the Federal Register. The interim rule adopted as final by this rule was effective on January 5, 2001. This final rule revises the point of contact for obtaining inspection or documentation of the plant health status of plants or plant products to be moved interstate from the District of Columbia. Immediate action is necessary to revise the contact information in order to facilitate the application for certificates for the interstate movement of plants and plant products from the District of Columbia. Therefore, the Administrator of the Animal and Plant Health Inspection Service has determined that this rule should be effective upon publication in the Federal Register.

In accordance with section 3507 (j) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the information collection and recordkeeping requirements included in the interim rule were granted emergency approval by the Office of Management and Budget (OMB) under control number 0579-0166. OMB has approved the continuation of that approval for 3 years.

The regulations in 9 CFR parts 93, 94, 95, and 96 (referred to below as the regulations) govern the importation of certain animals, birds, poultry, meat, other animal products and byproducts, hay, and straw into the United States in order to prevent the introduction of various animal diseases, including bovine spongiform encephalopathy (BSE).

BSE is a neurological disease of cattle and is not known to exist in the United States. It appears that BSE is primarily spread through the use of ruminant feed containing protein and other products from ruminants infected with BSE. Therefore, BSE could become established in the United States if materials carrying the BSE agent, such as certain meat, animal products, and animal byproducts from ruminants, are imported into the United States and are fed to ruminants in the United States. BSE could also become established in the United States if ruminants with BSE are imported into the United States.

Sections 94.18, 95.4, and 96.2 of the regulations prohibit or restrict the importation of certain meat and other animal products and byproducts from ruminants that have been in regions in which BSE exists or in which there is an undue risk of introducing BSE into the United States. Paragraph (a)(1) of § 94.18 lists the regions in which BSE exists. Paragraph (a)(2) lists the regions that present an undue risk of introducing BSE into the United States because their import requirements are less restrictive than those that would be acceptable for import into the United States and/or because the regions have inadequate surveillance. Paragraph (b) of § 94.18 prohibits the importation of fresh, frozen, and chilled meat, meat products, and most other edible products of ruminants that have been in any region listed in paragraphs (a)(1) or (a)(2). Paragraph (c) of § 94.18 restricts the importation of gelatin derived from ruminants that have been in any of these regions. Section 95.4 prohibits or restricts the importation of certain byproducts from ruminants that have been in any of those regions, and § 96.2 prohibits the importation of casings, except stomach casings, from ruminants that have been in any of these regions. Additionally, the regulations in 9 CFR part 93 pertaining to the importation of live animals provide that the Animal and Plant Health Inspection Service may deny the importation of ruminants from regions where a communicable disease such as BSE exists and from regions that present risks of introducing communicable diseases into the United States (see § 93.404(a)(3)).

Currently, Greece is among the regions listed in § 94.18(a)(2), which are regions that present an undue risk of introducing BSE into the United States. However, on July 2, 2001, a case of BSE was confirmed in a native-born animal in Greece. Therefore, in order to update the disease status of this region regarding BSE, we are amending the regulations by removing Greece from the list in § 94.18(a)(2) of regions that present an undue risk of introducing BSE into the United States and adding Greece to the list in § 94.18(a)(1) of regions where BSE is known to exist. The effect of this action is a continued restriction on the importation of ruminants that have been in Greece and on the importation of meat, meat products, and certain other products and byproducts of ruminants that have been in Greece. We are making these amendments effective retroactively to July 2, 2001, which is the date that BSE was confirmed in a native-born animal in that region.

This rulemaking is necessary on an emergency basis to update the disease status of Greece regarding BSE. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the Federal Register .

We will consider comments that are received within 60 days of publication of this rule in the Federal Register . After the comment period closes, we will publish another document in the Federal Register . The document will include a discussion of any comments we receive and any amendments we are making to the rule as a result of the comments.

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review process required by Executive Order 12866.

We are amending the regulations by adding Greece to the list of regions where BSE exists because the disease has been detected in native-born animals in that region. Greece is currently listed among the regions that present an undue risk of introducing BSE into the United States. Regardless of which of the two lists a region is on, the same restrictions apply to the importation of ruminants and meat, meat products, and most other products and byproducts of ruminants that have been in the region. Therefore, this action, which is necessary in order to update the disease status of Greece regarding BSE, will not result in any change in the restrictions that apply to the importation of ruminants and meat, meat products, and certain other products and byproducts of ruminants that have been in Greece.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has retroactive effect to July 2, 2001; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

This interim rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

On January 18, 2001, DOE published an interim final rule in the Federal Register (66 FR 4639). The interim final rule added a new part 1044 to title 10 of the Code of Federal Regulations to establish security requirements for the disclosure of classified and other controlled information under section 3164 of the National Defense Authorization Act for Fiscal Year 2000 (NDAA for FY 2000) (42 U.S.C. 7239). Section 3164 directed the Secretary of Energy to establish a program to ensure that DOE employees or DOE contractor employees engaged in defense activities may not be discharged, demoted, or otherwise discriminated against as a reprisal for making protected disclosures. The Secretary was required by section 3164(g) to prescribe regulations to ensure the security of any information disclosed under the program (42 U.S.C. 7239(g)). To qualify as a “protected disclosure” of classified or other controlled information, a covered employee must take appropriate steps to protect the security of the information in accordance with guidance provided by the DOE Inspector General, and reveal the information only to a person or entity specified in the statute (42 U.S.C. 7239(c)).

DOE provided a 30-day public comment period for the interim final rule, and the rule was to become effective on February 20, 2001. In accordance with the memorandum of January 20, 2001, from the Assistant to the President and Chief of Staff, entitled “Regulatory Review Plan,” published in the Federal Register on January 24, 2001, (66 FR 7702) DOE temporarily delayed for 60 days the effective date of the interim final rule (66 FR 8747, February 2, 2001). Upon completion of its review of the regulation, DOE published a notice in the Federal Register on May 10, 2001, (66 FR 23833) confirming the effective date of the interim final rule as April 23, 2001.

DOE received one comment during the public comment period provided for the interim final rule. The Special Counsel of the U.S. Office of Special Counsel stated her concern that the interim final rule failed to include any reference to section 3164(l) of the NDAA for FY 2000, which provides that the protections of section 3164 are independent of, and not subject to any limitations that may be provided in, the Whistleblower Protection Act of 1989 (Pub. L. 101-12) or any other law that may provide protection for disclosures of information by an employee of DOE or of a DOE contractor. The Special Counsel requested DOE to clarify this issue in the final rule by making clear that whistleblower disclosures of classified or controlled information by DOE employees, including disclosures to the Special Counsel or to the DOE Inspector General, are also protected under the Whistleblower Protection Act of 1989.

DOE agrees that the scope of the section 3164 whistleblower protection program should be addressed in the final rule to avoid confusion by employees of DOE and its contractors. Therefore, DOE is amending section 1044.01 to include a new paragraph (b) that tracks the language of section 3164(l) of the NDAA for FY 2000.

Today's regulatory action has been determined not to be “a significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” (58 FR 51735, October 4, 1993). Accordingly, this action was not subject to review under that Executive Order by the Office of Information and Regulatory Affairs of the Office of Management and Budget (OMB).

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq. ) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule will not have a “significant economic impact on a substantial number of small entities.” This final rule prescribes the security procedures that a DOE or DOE contractor employee engaged in defense activities must follow when making a protected disclosure of classified or other controlled information under section 3164 of the NDAA for FY 2000. DOE is not required by the Administrative Procedure Act (5 U.S.C. 553) or any other law to propose this rule for public comment. Accordingly, the Regulatory Flexibility Act requirements do not apply to this rulemaking, and no regulatory flexibility analysis has been prepared.

No additional information or record keeping requirements are imposed by this rulemaking. Accordingly, no OMB clearance is required under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ).

Today's rule describes the security requirements a DOE or DOE contractor employee engaged in defense activities must follow when making a protected disclosure of classified or other controlled information under section 3164 of the NDAA for FY 2000. Implementation of this rule will not affect whether such information might cause or otherwise be associated with an environmental impact. The Department has, therefore, determined that this rule is covered under the Categorical Exclusion found at paragraph A.6. of Appendix A to subpart D, 10 CFR part 1021, which applies to rulemakings that are strictly procedural. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” (61 FR 4729, February 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this final rule meets the relevant standards of Executive Order 12988.

Executive Order 13132, “Federalism,” (64 FR 43255, August 10, 1999) requires agencies 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. DOE published its intergovernmental consultation policy and procedures on March 14, 2000, (65 FR 13735). “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. DOE has examined this final rule and has determined that it would not have a substantial direct effect 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. No further action is required by Executive Order 13132.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written assessment of the effects of any Federal mandate in a proposed or final agency rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million in any one year. The Act also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity to timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. DOE's intergovernmental consultation process under the Unfunded Mandates Reform Act of 1995 is described in a statement of policy published by DOE on March 18, 1997, (62 FR 12820). The final rule published today does not contain any Federal mandate, so these requirements do not apply.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” (66 FR 28355, May 22, 2001) requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to the promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposed action be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

Today's final rule is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

As required by 5 U.S.C. 801, DOE will report to Congress promulgation of the final rule prior to its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).

The FDIC is authorized to approve or disapprove applications by depository institutions for federal deposit insurance. See 12 U.S.C. 1815. In determining whether to approve deposit insurance applications, the FDIC considers the seven factors set forth in section 6 of the Federal Deposit Insurance Act (FDI Act). These factors are (1) the financial history and condition of the depository institution; (2) the adequacy of the institution's capital structure; (3) the future earnings prospects of the institution; (4) the general character and fitness of the management of the institution; (5) the risk presented by the institution to the Bank Insurance Fund or the Savings Association Insurance Fund; (6) the convenience and needs of the community to be served by the institution; and (7) whether the institution's corporate powers are consistent with the purposes of the FDI Act. 12 U.S.C. 1816. Also, under the FDI Act, the FDIC must determine as a threshold matter that an applicant is a “depository institution which is engaged in the business of receiving deposits other than trust funds * * *” 12 U.S.C. 1815(a)(1). Applicants that do not satisfy this threshold statutory requirement are ineligible for deposit insurance.

The FDIC applies the seven statutory factors in accordance with its “Statement of Policy on Applications for Deposit Insurance”. See 63 FR 44752 (August 20, 1998). The Statement of Policy discusses each of the factors at length; however, it does not address the threshold requirement that an applicant be “engaged in the business of receiving deposits other than trust funds”.

The threshold requirement for obtaining federal deposit insurance is set forth in section 5 of the FDI Act. See 12 U.S.C. 1815(a)(1). The language used by section 5 (“engaged in the business of receiving deposits other than trust funds”) also appears in section 8 and section 3 of the FDI Act. Under section 8, the FDIC is obligated to terminate the insured status of any depository institution “not engaged in the business of receiving deposits, other than trust funds * * *” 12 U.S.C. 1818(p). In section 3, the term “State bank” is defined in such a way as to include only those State banking institutions “engaged in the business of receiving deposits, other than trust funds * * *” 12 U.S.C. 1813(a)(2).

The phrase “engaged in the business of receiving deposits other than trust funds” as used in the FDI Act is ambiguous. For example, the statute does not specify whether a depository institution must hold a particular dollar amount of deposits in order to be “engaged in the business of receiving deposits other than trust funds.” Similarly, it does not specify whether a depository institution must accept a particular number of deposits within a particular period in order to be “engaged in the business of receiving deposits other than trust funds.” In addition, it does not specify whether a depository institution must accept non-trust deposits from the general public as opposed to accepting deposits only from one or more members of a particular group (such as the institution's trust customers, its employees or affiliates).

In applying this statutory requirement (“engaged in the business of receiving deposits other than trust funds”) for over thirty years, the FDIC has approved applications from many institutions that did not intend to accept non-trust deposits from the general public. Also, the FDIC has approved applications from institutions that only intended to hold one type of deposit account ( e.g., certificates of deposit) or that did not intend to hold more than one or a few non-trust deposit accounts. However, the FDIC's long-standing practice of approving applications from such non-traditional depository institutions has not been formally codified in such a way as to remove public uncertainty as to the meaning of the phrase “engaged in the business of receiving deposits other than trust funds.”

In order to clarify this ambiguity in the statute, the FDIC published General Counsel Opinion No. 12. See 65 FR 14568 (March 17, 2000). In that opinion, the FDIC's General Counsel stated that the statutory requirement of being “engaged in the business of receiving deposits other than trust funds” can be satisfied by the continuous maintenance of one or more non-trust deposit accounts in the aggregate amount of $500,000.

The purpose of General Counsel Opinion No. 12 was to remove uncertainty as to the meaning of being “engaged in the business of receiving deposits other than trust funds.” However, as indicated by a recent court ruling, issuance of the General Counsel's opinion did not achieve that purpose. In Heaton v. Monogram Credit Card Bank of Georgia, 2001 WL 15635 (E.D. La. January 5, 2001) the statutory interpretation set forth in General Counsel Opinion No. 12 was rejected by a federal district court. As a result of the court's ruling, uncertainty continues to exist as to the meaning of being “engaged in the business of receiving deposits other than trust funds.”

The phrase “engaged in the business of receiving deposits other than trust funds” should not be subject to differing and, perhaps, inconsistent judicial interpretations. Uniformity is needed. Both banks and the public need to know that the applicable Federal banking laws will be applied consistently throughout the United States. Moreover, they need assurance that once the FDIC grants insurance to a bank or thrift, the deposits at that bank or thrift will remain insured so long as it satisfies the legal requirement of being “engaged in the business of receiving deposits other than trust funds,” and the FDIC has not terminated its insurance.

The Conference of State Bank Supervisors (CSBS), an organization representing state officials responsible for chartering, regulating and supervising state-chartered banks, petitioned the FDIC's Board of Directors to promulgate a regulation to clarify the meaning of the phrase “engaged in the business of receiving deposits other than trust funds” as used in the FDI Act.

An opposing letter submitted by the plaintiff in the Heaton v. Monogram litigation questioned the timing of the regulation. In this opposing letter, the plaintiff argued that the promulgation of a regulation while litigation relating to this issue is pending would represent an “abuse of discretion” and a “conflict of interest.” The plaintiff believes that no regulation should be promulgated until the litigation is completed.

The FDIC does not agree that rulemaking would constitute an “abuse of discretion.” On the contrary, the FDIC believes that rulemaking is necessary in order to remove the existing uncertainty, confusion and the potential for inconsistent interpretations. See Smiley v. Citibank, N.A., 517 U.S. 735, 116 S. Ct. 1730 (1996).

When the FDIC's Board of Directors (Board) published its notice of proposed rulemaking, Being Engaged in the Business of Receiving Deposits Other Than Trust Funds, 66 FR 20102, (April 19, 2001) it sought comments from the public on all aspects of the rule and also sought responses on nine specific questions. The FDIC received twenty-one timely comment letters and two comment letters submitted after the end of the comment period. Also, one letter objected to the FDIC's consideration of comment letters thought to be filed late. Overall, eighteen timely comment letters were in favor of the regulation and three were opposed.

The nine questions and a summary of the comments/responses to those questions are detailed below.

Eighteen comment letters were in favor of the FDIC's adoption of a regulatory standard: eight depository institutions or depository institution holding companies, three financial institution trade associations, three law firms, two state banking supervisors, the Office of Thrift Supervision, and VISA U.S.A., Inc. Three commenters objected to the adoption of any regulatory standard by the FDIC. These objections are addressed in detail in the following section.

Three commenters responded on this question. One thought that the standard could be based on a particular number and amount of non-trust deposits. Another thought that the standard should not be based on any particular number of non-trust deposits as long as the institution had the capacity to accept even one non-trust deposit. The third commenter thought that an institution only needs to have the legal authority to receive non-trust deposits in order to be engaged in the business of receiving deposits other than trust funds.

The FDIC has considered the suggestions that legal authority or capacity to accept non-trust deposits alone is sufficient, but believes that its standard is the better approach. Bare legal authority or capacity to receive non-trust deposits without the actual receipt or holding of any deposits evidences only a potential ability to receive deposits, and this potential may never be realized. If an institution can be engaged in the business of receiving deposits other than trust funds simply by having the legal authority or capacity to receive deposits, it would be able to enjoy all of the benefits of being an insured institution e.g., the ability to export interest rates, without ever actually providing any deposit services. We do not believe that such a standard would be consistent with the purposes of federal deposit insurance. Consequently, the FDIC has declined to adopt that standard.

Of the thirteen commenters responding on this question, none thought that an institution should be required to maintain more than one deposit account.

Of the eleven commenters responding on this question, ten thought the minimum amount of non-trust deposits should be $500,000; the other commenter thought it should be a “modest amount.”

Of the eleven commenters responding on this question, all thought that a depository institution should not be required to accept deposits from the public at large (as opposed to accepting deposits from a particular group such as the institution's trust customers, employees or affiliates).

Of the eleven commenters responding on this question, all thought that a depository institution should not be required to offer a selection of different types of deposits (e.g., demand deposits, savings deposits, certificates of deposit).

Of the eight commenters responding on this question, all thought that the FDIC should permit exceptions for special circumstances. Four commenters specifically mentioned permitting an exception for newly insured depository institutions; two also thought that there should be an exception for institutions (other than the newly insured institutions) that fall below the minimum to regain sufficient deposits; and one thought the FDIC should allow some time for banks, particularly in small communities, to meet the minimum deposit standard.

The FDIC believes that these suggestions raise significant issues. At the time they apply for deposit insurance some newly chartered institutions, for example, those organized by individuals, may not have received $500,000 in non-trust deposits. Indeed, potential depositors may not want to put their money in an institution that is not yet insured. Absent some modification to the rule, this disincentive could prolong the time it takes an institution to reach the minimum deposit standard or possibly even prevent it from reaching the minimum deposit standard. Consequently, the FDIC has decided to modify the rule to provide that an applicant for deposit insurance would be deemed to be “engaged in the business of receiving deposits other than trust funds” for one year from the date it opens for business. If such an institution does not meet the minimum deposit standard at the end of that period, it would be subject to a determination by the FDIC that the institution is not “engaged in the business of receiving deposits other than trust funds” and to termination of its insured status under section 8(p) of the FDI Act, 12 U.S.C. 1818(p).

However, certain other newly chartered depository institutions should be able to meet the $500,000 minimum deposit standard from the outset. In particular, a newly chartered depository institution that is organized by, or intended to be owned by, an existing company (whether or not a bank holding company), typically does not need a grace period to reach the $500,000 minimum deposit standard. Therefore, the FDIC intends to include a condition in any order granting deposit insurance to such a depository institution that the depository institution have the $500,000 minimum deposit before deposit insurance becomes effective.

Similarly, several commenters suggested a grace period for operating insured depository institutions that are not newly insured. The rationale for such a grace period is that any insured depository institution may, on occasion, fall below the minimum deposit standard, and it would be extremely disruptive and harmful if the institution's status were to immediately and automatically change as a result. For example, an institution's insured status might be called into doubt if it fell below the minimum deposit standard even for an instant. Furthermore, an institution that qualified as a “State bank” might abruptly lose that status if its total non-trust deposits fell below the minimum deposit standard. Of course, an institution's deposit insurance continues until terminated by the FDIC.

The FDIC believes, however, that any perception that an institution might abruptly lose its insured status or its status as a “State bank” may cause uncertainty and disruption. Consequently, the FDIC has decided to modify the proposed rule to avoid such a result. The final rule provides that an insured depository institution (other than a newly insured institution) will be subject to a determination by the FDIC that the institution is not “engaged in the business of receiving deposits other than trust funds” and to termination of its insured status through administrative proceedings under section 8(p) of the FDI Act if the institution is below the minimum deposit standard on two consecutive call report dates. The term “call report” is used herein to refer collectively to the Consolidated Reports of Condition and Income, the Thrift Financial Report, and the Report of Assets and Liabilities of US Branches and Agencies of Foreign Banks. The call report dates are March 31st, June 30th, September 30th, and December 31st.

A brief discussion about section 8(p) as it relates to the institution's depositors is warranted. Under section 8(p) of the FDI Act, the FDIC is obligated to terminate the insured status of a depository institution that is not “engaged in the business of receiving deposits other than trust funds.” 12 U.S.C. 1818(p). A finding by the FDIC's Board of Directors that a depository institution is not “engaged in the business of receiving deposits other than trust funds” is conclusive. Id. Such a finding, however, does not result in the immediate loss of deposit insurance. On the contrary, the institution remains insured for a period of time during which depositors are provided with notification of the date on which the institution's deposits will cease to be insured. See 12 CFR 308.124.

Of the five commenters responding on this question, all thought that operating insured depository institutions should be held to the same standard as applicants for deposit insurance. As noted above, two commenters thought that operating insured institutions should be given a period of time to regain the $500,000 minimum deposit standard after falling below it.

The FDIC agrees that operating insured depository institutions should be held to the same standard as applicants for deposit insurance, and the final rule is consistent with that principle. With regard to the grace period suggestion, the FDIC has modified the rule, as discussed above, to provide a period of time for an institution to regain the minimum deposit standard if the institution should fall below it.

Of the seven commenters responding on this question, all thought that the same standard should apply to the definition of “State bank” under section 3 of the FDI Act, and four of the seven thought that the same standard should apply throughout the FDI Act.

In addition to the responses to the nine questions, one commenter suggested that the rule should be a “safe harbor” as opposed to a minimum standard. The FDIC intends a minimum standard. The FDIC does not believe that a safe harbor approach will adequately clarify the meaning of the phrase “engaged in the business of receiving deposits other than trust funds.” Under a safe harbor approach uncertainty would exist as to the status of an institution that did not satisfy the $500,000 standard. A primary purpose of the rule is to remove ambiguity and uncertainty in this area, and the safe harbor approach does not achieve that purpose. Consequently, the FDIC has modified the rule to make it clear that the rule's requirements are a minimum standard, not a safe harbor. However, the rule is also structured so that a failure to satisfy the $500,000 standard will not result in an automatic termination of an institution's status as an insured institution or as a “State bank.” Rather, such a failure would make the institution subject to termination proceedings under section 8(p).

As noted above three commenters opposed the regulation. One opponent simply disagreed with the FDIC's interpretation of section 5 of the FDI Act. Another opponent, U.S. Senator Mary L. Landrieu, was opposed to the FDIC's adoption of the regulation and thought it inappropriate to promulgate a regulation while the Heaton v. Monogram litigation was pending.

The FDIC believes that it has acted properly in formalizing its interpretation of the FDI Act at this time. Because of the FDIC's statutory responsibility as a federal banking regulator, the FDIC has a strong interest in interpreting the FDI Act and in providing courts and private parties with guidance concerning its interpretation. Agencies often interpret their governing statutes during the course of litigation in order to provide courts and private litigants with needed guidance. Indeed, it is often litigation that discloses the need for such guidance. The Supreme Court cited this practice with approval in Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735 (1996), when it gave deference under the Chevron doctrine to a regulation interpreting the statutory term “interest” that was promulgated by the Comptroller of the Currency during the course of litigation. Additionally, it is appropriate for the FDIC to promulgate its statutory interpretation in the form of a formal regulation, in view of recent Supreme Court decisions restricting judicial deference in situations involving less formal interpretations of a statute. See Christensen v. Harris County, 529 U.S. 576 (2000); U.S. v. Mead Corp., 121 S. Ct. 2164 (2001).

Indeed, this regulation presents a classic example of a federal agency acting appropriately in furtherance of its statutory responsibility. The FDIC decided many years ago, in the course of approving applications for deposit insurance, to interpret the statutory phrase “engaged in the business of receiving deposits” to include banking institutions with limited deposit-taking activity. Accordingly, the FDIC approved numerous applications for deposit insurance from such institutions over a period of more than thirty years. Because the ongoing litigation has disclosed a need for a more formal interpretation, the FDIC is adopting this rule interpreting the statutory phrase consistent with both the FDIC's longstanding interpretation and other federal and state banking law.

As noted above, the regulation is being issued to eliminate the current uncertainty and provide for consistency in the interpretation of the FDI Act. Consequently, the FDIC believes that it is not only appropriate but essential for the FDIC to issue a regulation clarifying the meaning of the phrase “engaged in the business of receiving deposits other than trust funds.”

The third opposition letter was submitted by a law firm on behalf of five consumer advocacy groups. These consumer groups are the National Consumer Law Center, the Consumer Federation of America, Consumers Union, U.S. Public Interest Research Group and the National Association of Consumer Advocates. In their letter, the consumer groups presented three arguments against the adoption of the proposed regulation. Each of these arguments is addressed in turn below.

First, the consumer groups argued that the integrity of the regulatory process will be undermined by asserting a position that supports the defendant in the Heaton v. Monogram litigation. This argument ignores the nature and extent of the FDIC's statutory duties under the FDI Act. The FDIC cannot discharge its duties, for example, under section 5 of the FDI Act (involving applications for deposit insurance) and section 8 of the Act (involving terminations of insurance) without interpreting the statutory phrase. For this reason, the FDIC cannot be neutral. The FDIC must interpret the phrase “engaged in the business of receiving deposits other than trust funds” in order to carry out its duties. Otherwise, the FDIC would be unable to make any decisions on any applications for deposit insurance. As pointed out above, it is important to note that the FDIC's interpretation has existed for many years prior to this litigation. It was not established with the purpose of either helping or hurting any party; rather, it was established with the purpose of fairly and consistently administering the statute.

Second, the consumer groups argued that the FDIC's interpretation as codified in the proposed regulation conflicts with the FDI Act. This argument is based upon the statute's use of the word “business” and the words “receiving deposits.” According to the consumer groups, these words mean that a depository institution must receive an “ongoing” stream of deposits in order to be “engaged in the business of receiving deposits other than trust funds.”

The FDIC does not believe that the interpretation offered by the consumer groups is correct. The statute refers to “business,” not “primary business.” See Royal Foods Co. Inc. v. RJR Holdings Inc., 252 F.3d 1102 (9th Cir. 2001). The statute also recognizes that a single deposit can be accepted or “received” many times through rollovers. See 12 U.S.C. 1831f(b). Thus, the word “receiving” in the statute is consistent with the holding—and periodic renewal or rollover—of a single certificate of deposit. Similarly, the plural word “deposits” is not inconsistent with the holding of a single deposit account because multiple deposits of funds can be made into a single account. In addition, the periodic accrual of interest represents the “receiving” of “deposits.” Moreover, the statute defines “deposit” in such a way as to treat “receiving” and “holding” with equal significance for purposes of the definition of “deposit.” See 12 U.S.C. 1813(l)(1).

In short, the proposed regulation is consistent with the FDI Act. This conclusion is confirmed by Meriden Trust and Safe Deposit Company v. FDIC, 62 F.3d 449 (2d Cir. 1995). In that case, the court found that a bank was “engaged in the business of receiving deposits other than trust funds” even though the bank held only two accounts with a combined balance of only $200,000. Both of those accounts were from affiliates: one from the bank's parent company and one from its sister bank.

In presenting their second argument, the consumer groups asserted that the Meriden case is distinguishable from the Heaton case. They noted that the two cases involved separate sections of the FDI Act (though both cases involved the same definition of “State bank”). However, the meaning of being “engaged in the business of receiving deposits other than trust funds” should not vary depending upon which section of the FDI Act is under consideration and the consumer groups have presented no argument justifying such variation. Such an approach would lead to inconsistencies, uncertainties and confusion and would be contrary to the main purpose of the regulation which is to clarify the law for the benefit of depository institutions as well as the general public.

Third, the consumer groups argued that the regulation will harm the public. This argument is based upon the proposition that an out-of-state bank should not be able to avoid the host state's consumer protection laws. This argument is inconsistent with the express language of section 27 of the FDI Act, 12 U.S.C. 1831d. Through section 27, Congress has specifically provided that an out-of-state “State bank” may export interest rates into a host state notwithstanding the host state's laws. This section was enacted to provide state banks competitive equality with national banks.

Finally, the law firm representing the plaintiff in the Heaton v. Monogram litigation submitted a letter objecting to the FDIC's consideration of two other letters (both supporting the proposed regulation). The law firm argued that the two letters in question had been received by the FDIC after the expiration of the comment period.

In fact, one of the two letters was received by the FDIC on the last day of the comment period (July 18, 2001). This letter was timely. The second letter supported the proposed regulation but in broad, general terms. Substantively, it was similar to a number of other letters. The FDIC did not rely upon this letter or another late-filed letter in its consideration of the final rule.

The FDIC has carefully considered all of the timely comments received; most of the comments received are consistent with the FDIC's views and suggest no changes to the rule. However, as noted above, the FDIC has modified the proposed rule to incorporate certain grace periods suggested in the comments received in response to questions 7 and 8, and has clarified the fact that the rule is not a safe harbor.

There are a number of substantial reasons for adopting the final rule. First, the statute is ambiguous (as discussed above). The FDIC in General Counsel Opinion 12 (GC12) discussed the statutory language at length. See 65 FR 14568, 14569 (March 17, 2000). The statute recognizes that a single deposit can be accepted or “received” many times through rollovers. See 12 U.S.C. 1831f(b) (dealing with the acceptance of brokered deposits). Thus, the word “receiving” in the statute can be reconciled with the holding—and periodic renewal or rollover—of a single deposit. Similarly, the plural word “deposits” is not inconsistent with the holding of a single deposit account because multiple deposits of funds can be made into a single account. A depositor might, for example, make a deposit of funds every month into the same account. The accrual of interest would represent an additional deposit into the same account. In the case of a certificate of deposit, the deposit would be replaced with a new deposit at maturity. Moreover, the statute defines “deposit” in such a way as to treat “receiving” and “holding” with equal significance for purposes of the definition of “deposit.” See 12 U.S.C. 1813(l)(1).

Second, as discussed at length in General Counsel Opinion No. 12, the legislative history is inconclusive. See H.R. Rep. No. 2564, reprinted in 1950 U.S.C.C.A.N. 3765, 3768. Third, the FDIC has approved applications from many non-traditional depository institutions that intended to maintain only one or a very limited number of non-trust deposit accounts. This practice began at least as early as 1969 with Bessemer Trust Company (Bessemer) located in Newark, New Jersey. Bessemer offered checking accounts to its own trust customers but did not offer checking accounts or any other type of non-trust accounts to the general public. Despite this limitation on Bessemer's deposit-taking activities, the FDIC approved Bessemer's application for deposit insurance. The FDIC continued to approve such applications ( i.e., applications from institutions with very limited deposit-taking activities) from the 1970s to the present. These non-traditional depository institutions have included trust companies, credit card banks and other specialized institutions. For example, one depository institution planned to hold no accounts except escrow accounts relating to mortgage loans. Another depository institution planned to offer deposits only to its affiliate's customers.

Fourth, the Bank Holding Company Act (BHCA) contemplates the existence of depository institutions that are insured by the FDIC even though they do not accept a continuing stream of non-trust deposits from the general public. See 12 U.S.C. 1841(c). In the BHCA, the definition of “bank” includes banks insured by the FDIC. See 12 U.S.C. 1841(c)(1). A list of exceptions includes institutions functioning solely in a trust or fiduciary capacity if several conditions are satisfied. The conditions related to deposit-taking are: (1) All or substantially all of the deposits of the institution must be trust funds; (2) insured deposits of the institution must not be offered through an affiliate; and (3) the institution must not accept demand deposits or deposits that the depositor may withdraw by check or similar means. See 12 U.S.C. 1841(c)(2)(D)(i)-(iii). The significant conditions are (1) and (2). The first condition provides that all or substantially all of the deposits of the institution must be trust funds; the second condition involves “insured deposits.” Thus, the statute contemplates that a trust company—functioning solely as a trust company and holding no deposits (or substantially no deposits) except trust deposits—could hold “insured deposits.” In other words, the BHCA contemplates (without requiring) that an institution could be insured by the FDIC even though the institution does not accept non-trust deposits from the general public.

Fifth, the leading case indicates that a depository institution may be “engaged in the business of receiving deposits other than trust funds” even though the institution holds a very small amount of non-trust deposits. See Meriden Trust and Safe Deposit Company v. FDIC, 62 F.3d 449 (2d Cir. 1995). Indeed, this case indicates that an amount as small as $200,000 is a sufficient amount of non-trust deposits.

Sixth, some state banking statutes contemplate the existence of FDIC-insured depository institutions that are severely restricted in their ability to accept non-trust deposits from the general public. For example, a Virginia statute provides that a general business corporation may acquire the voting shares of a “credit card bank” only if certain conditions are satisfied. See Va. Code 6.1-392.1.A. These conditions comprise the definition of a “credit card bank.” See Va. Code 6.1-391. These conditions include the following: (1) The bank may not accept demand deposits; and (2) the bank may not accept savings or time deposits of less than $100,000. Indeed, the statute provides that a “credit card bank” may accept savings or time deposits (in amounts in excess of $100,000) only from affiliates of the bank having their principal place of business outside the state. See Va. Code 6.1-392.1.A.3-4. In other words, the Virginia statute prohibits the acceptance of any deposits from the general public. At the same time, the statute requires the deposits of the bank to be federally insured. See Va. Code 6.1-392.1.A.4.

The figure of $500,000 is being utilized for several reasons. First, it is more than a nominal sum. Indeed, it is greater than the amount involved in the leading case of Meriden Trust and Safe Deposit Company v. FDIC , 62 F.3d 449 (2d Cir. 1995). In that case, the court found that only $200,000 of non-trust deposits was a sufficient amount. Second, the figure of $500,000 is not so great that it would prevent non-traditional depository institutions from obtaining FDIC insurance. As previously mentioned, the Bank Holding Company Act contemplates the existence of depository institutions that are insured by the FDIC even though they do not accept a continuing stream of non-trust deposits from the general public. See 12 U.S.C. 1841(c). Also, some state banking statutes contemplate the existence of FDIC-insured depository institutions that are severely restricted in their ability to accept non-trust deposits from the general public. See, e.g., Va. Code 6.1-392.1.A.4. Third, $500,000 is the amount of non-trust deposits allowed by the FDIC in recent years in connection with a number of applications for deposit insurance. Applications involving the precise amount of $500,000 can be traced as far back as 1991.

As previously explained, the purpose of the regulation is to create uniformity and certainty. The choice of any specific dollar figure would serve this purpose. For the reasons set forth above, the FDIC has chosen $500,000.

The final rule does not involve any collections of information under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ). Consequently, no information has been submitted to the Office of Management and Budget for review.

Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) the FDIC hereby certifies that the final rule will not have a significant economic impact on a substantial number of small entities. The final rule will apply to all FDIC-insured depository institutions and will impose no new reporting, recordkeeping or other compliance requirements. Although the final rule specifies that depository institutions must hold non-trust deposits in the amount of $500,000 or more in order to be “engaged in the business of receiving deposits other than trust funds,” the rule does not create a new requirement. Rather, the final rule clarifies an existing requirement. Moreover, the final rule is consistent with the standard already applied to depository institutions by the FDIC. Accordingly, the Act's requirements relating to an initial and final regulatory flexibility analysis are not applicable.

The FDIC has determined that this final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681).

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121) provides generally for agencies to report rules to Congress for review. The reporting requirement is triggered when the FDIC issues a final rule as defined by the Administrative Procedure Act (APA) at 5 U.S.C. 551. Because the FDIC is issuing a final rule as defined by the APA, the FDIC will file the reports required by SBREFA. The Office of Management and Budget has determined that this final rule does not constitute a “major rule” as defined by SBREFA.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Short Brothers Model SD3 series airplanes was published in the Federal Register on August 17, 2001 (66 FR 43126). That action proposed to require an inspection to find discrepancies of the hydraulic pipelines to the 7P panel and adjacent electrical wiring harnesses, and corrective action, if necessary.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were submitted in response to the proposal or the FAA's determination of the cost to the public.

The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

The FAA estimates that 75 airplanes of U.S. registry will be affected by this AD, that it will take approximately 1 work hour per airplane to accomplish the required inspection, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $4,500, or $60 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations adopted herein will not have a substantial direct effect 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. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding AD 98-16-19, amendment 39-10695 (63 FR 42210, August 7, 1998), which is applicable to all Boeing Model 747 series airplanes, was published in the Federal Register on February 15, 2000 (66 FR 10393). The action proposed to continue to require, for certain airplanes, revising the Airplane Flight Manual, and, for all airplanes, performing repetitive inspections for wear or damage of the inlet check valves and inlet adapters of the override/jettison pumps, and corrective actions, if necessary. The action also proposed to apply to fewer airplanes than the existing AD and require rework of certain components, which would end the repetitive inspection requirement.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

Several commenters ask that the compliance time of 18 months after the effective date of the AD, as specified in paragraph (d) of the proposed rule, be extended as follows:

Three commenters state that the compliance time should be extended to within 60 months after the effective date of the AD. One of the commenters asks for an extension to 10,000 flight cycles if a 6-year compliance time is too long. The commenters note that the current repetitive inspections are adequate to address the described unsafe condition by ensuring the integrity of the inlet check valves and override/jettison pump inlet adapters. One commenter adds that the wear limits established and contained in Boeing Alert Service Bulletins 747-28A2212, Revision 1, dated April 23, 1998, and Revision 2, dated May 14, 1998 (referenced in the proposed rule as two of the correct sources of service information for doing the specified actions), are conservative and provide an adequate margin to prevent contact between the inlet check valve and the override/jettison pump inlet inducer/impeller until the modification is accomplished.

Additionally, one commenter (the airplane manufacturer) states that it is not aware of any reports since the issuance of AD 98-16-19, of loosening of the inlet check valve, which is the more significant failure mode per the referenced service bulletin, because it could lead to steel-on-steel contact. AD 98-16-19 requires, among other things, repetitive inspections for wear or damage of the inlet check valves and inlet adapters of the override/jettison pumps. The commenters state that because the unsafe condition in the proposed rule is adequately addressed by the repetitive inspection requirements in that AD, the requested 60-month compliance time is reasonable. This would allow operators to complete the rework of the override/jettison pump housing (installation of the new check valve), which requires fuel tank entry, during a regular maintenance visit when a tank entry is included as part of the maintenance program for most operators. This would minimize the need for multiple tank entries and collateral fuel tank component damage that could result from the entries. An 18-month compliance period would result in unscheduled maintenance visits and increased costs associated with airplane out-of-service time.

The airplane manufacturer also is working with the parts manufacturer to develop an improved override/jettison pump electrical connector that will be proposed as an alternative method of compliance to AD 97-03-17, amendment 39-9922 (62 FR 5748, February 7, 1997). That AD requires an inspection of fuel boost pumps and fuel override/jettison pumps for leakage and checking the electrical resistance of the override/jettison pump wiring insulation. The improved pump electrical connector should be available for retrofit early in the fourth quarter of 2001. A 60-month compliance time would allow the override/jettison pump motor impeller assembly to be reworked during a maintenance visit, at which time both the new inlet adapter and new electrical connector could be installed.

A fourth commenter asks that the compliance time be extended to 54 months after the effective date of the AD to allow for the incorporation of new check valves and inlet adapters in the other airplane fuel tanks, an action not specifically required by this AD, but recommended by the airplane manufacturer. The commenter states that, in the long term, this will prevent the inadvertent installation of an unmodified override/jettison pump in a center wing tank pump housing with a modified inlet check valve, leading to a more rapid failure than is currently occurring. The commenter also states that enhanced endurance testing should be allowed to validate the 30,000 hour wear rate claims and extend that rate to 60,000 hours for the original equipment manufacturer's specified design life limit of the override/jettison pump.

A fifth commenter, the parts manufacturer, states that it is the sole manufacturer of the subject override/jettison pumps, housings, and repair kits and has some constraints on providing the kits, as well as performing the repair and override/jettison pump modification at its overhaul facility. The commenter notes that the maximum monthly production capacity for each kit type is approximately 500 kits per month. All kits are subject to a 12-week lead time following customer order placement. The override/jettison pump overhaul and repair facility can accommodate approximately 200 pump upgrades per month over and above existing pump repair activities. The commenter adds that, in prior discussions with operators, it was noted that the upgrade of the override/jettison pumps on the affected 747 fleet would take up to six years to accomplish. The commenter questions the viability of accomplishing such an upgrade within the proposed 18 months. The commenter states that, although it could deliver the parts required in the time specified, the extensive maintenance tasks necessary to assess and modify the override/jettison pump housings would impose a massive logistics and scheduling burden on the operators.

A sixth commenter states that, due to the spares shortage and possible additional changes in AD 97-03-17, until a final decision is made, it prefers to continue with the repetitive inspections and replacement of any defective override/jettison pumps as required by AD 98-16-19. The commenter notes that after a final decision is made it will comply with all the requirements at one time. The commenter adds that complying with all the requirements at one time will resolve the problems related to spares shortage, long turnaround time for modification by the manufacturer, pump interchangeability, flight schedule interruptions, and extensive ground time.

A seventh commenter asks that the compliance time be extended to 6 years after the effective date of the AD, on the condition that the repetitive inspection interval is reduced to 5,000 flight hours or 1 year. The commenter gives 3 reasons for this extension:

(1) Replacing the housing inlet check valve necessitates entering the center wing fuel tank, which requires a minimum of 2 days of airplane immobilization, and partially prevents concurrent routine maintenance on the airplane.

(2) The parts manufacturer has proposed that operators extend the modification to 6 years so the inside tank modification can be implemented during heavy maintenance. Thus the parts manufacturer can have more time to supply parts for the world fleet.

(3) The parts manufacturer is working with the airplane manufacturer to develop an improved fuel pump electrical connector that will be proposed as an alternative method of compliance to the insulation resistance check required by AD 97-03-17. The commenter asks to be allowed to wait and do all the terminating actions at one time.

The FAA agrees with the commenters that the compliance time required by paragraph (d) of the final rule should be extended somewhat to ensure that enough parts are available to do the required actions within the specified compliance time. In developing an appropriate compliance time for the terminating action required by the final rule, we considered not only the degree of urgency associated with addressing the unsafe condition, but the practical aspect of incorporating the required rework of the existing override/jettison pump housing and impeller motor assembly on the Model 747 fleet in a timely manner. It is our intent in this final rule to have the terminating action done within the time frame of a regular maintenance interval. We took the commenters' recommendations into account, as well as the time necessary to do the specified actions, and we find that a 3-year compliance time should correspond with the regular maintenance schedules of the majority of affected operators. An extension of the compliance time to 3 years will not adversely affect safety because the inspections required by paragraph (b) of the final rule will provide an acceptable level of safety until the terminating action required by paragraph (d) is done. Paragraph (d) of the final rule has been changed accordingly.

The FAA does not agree that the terminating action in this final rule can be delayed in order to do the actions concurrently with AD 97-03-17. These two ADs address different unsafe conditions of the same fuel override/jettison pump, and the associated modifications differ as well. Although the override/jettison pumps for the center wing fuel tank are removed to do the modifications associated with both ADs, the functional tests after installation of the modified pump should identify any problems with the override/jettison pump before the airplane is released for revenue service. Therefore, removing those pumps twice to accomplish the terminating actions for AD 97-03-17 and this AD separately, does not have an adverse effect on the safety of the 747 fleet.

One commenter asks that paragraphs (d) and (e) of the proposed rule be changed to clarify that the actions are applicable to the center wing tanks only, as specified in the referenced service bulletin. We agree and have changed the wording in paragraphs (d) and (e) of this final rule for clarification.

Two commenters ask that paragraph (e) of the proposed rule; which specifies that, as of the effective date of the AD, no unmodified override/jettison pump housings or impeller motor assemblies may be installed; be changed. The commenter notes that this would require replacement of the override/jettison pump inlet check valve on airplanes not scheduled for maintenance. This would ground airplanes and necessitate a fuel tank entry. The commenter adds that unscheduled fuel tank entries present potential problems with collateral damage and additional out-of-service time for the airplanes. The commenter asks that paragraph (e) be changed to state, “No part number listed in the Existing Part Number column of the table in Paragraph 2.E. of Boeing Service Bulletin 747-28A2212, Revision 3, shall be installed after the effective date of the AD. An existing part number motor impeller assembly can be used on aircraft that have existing part number housings installed, until the sunset date of the AD.”

Another commenter asks that it be allowed to use “Existing Part Numbers” for the center wing tank positions, and for the main 2, main 3, and horizontal stabilizer tank positions during the compliance time specified in the proposed rule. The commenter states that the paragraph (e) of the proposed rule requires a tank entry to modify the override/jettison pump housing each time an unmodified impeller motor assembly has to be replaced.

One commenter, the airplane manufacturer, asks that paragraph (e) of the proposed rule be deleted. The commenter states that the described unsafe condition has been adequately mitigated and that the old parts (with a part number listed in the Existing Part Number column of the table in Paragraph 2.E), should be allowed for installation until the compliance period ends, subject to the limitations described in paragraph 2.E., Existing Parts Accountability, of the referenced service bulletin. The commenter adds that this is necessary for motor impeller assemblies because an operator would install a new inlet check valve in the event a check valve had to be replaced. Installation of a new valve would necessitate installation of a new motor impeller assembly, if not already installed. The commenter notes that once a new part is installed, the replacement part must be of the new configuration.

After careful review of the comments provided, specifically the comment from the airplane manufacturer, the FAA has concluded that paragraph (e) of this final rule should be deleted. We have determined that paragraph (e) can be removed without adversely affecting safety, in that the terminating action specified in Part 5 of the Accomplishment Instructions of Boeing Service Bulletin 747-28A2212, Revision 3, cautions that operators should not install reworked components with non-reworked components because rapid wear of those components will occur. Paragraph (e) of this final rule has been deleted accordingly.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule with the changes previously described. The FAA has determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 1,100 airplanes of the affected design in the worldwide fleet. The FAA estimates that 250 airplanes of U.S. registry will be affected by this AD.

For affected airplanes, the AFM revision currently required by AD 98-16-19 takes approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the FAA estimates that the cost impact of this action is $60 per airplane.

The inspections currently required by AD 98-16-19 take approximately 12 work hours per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the FAA estimates that the cost impact of this action on U.S. operators is $180,000, or $720 per airplane, per inspection cycle.

The rework required in this AD action will take approximately 6 work hours per airplane to accomplish, at an average labor rate of $60 per work hour. Required parts will cost approximately $1,978 per airplane. Based on these figures, the FAA estimates that the cost impact of the required replacement on U.S. operators is $584,500, or $2,338 per airplane. The FAA has been advised that manufacturer warranty remedies may be available for labor costs and parts associated with accomplishing the required rework. Therefore, the future economic cost impact of this action on U.S. operators may be less than the cost impact figure indicated above.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations adopted herein will not have a substantial direct effect 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. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to all Fokker Model F.28 Mark 0070 and 0100 series airplanes was published in the Federal Register on October 13, 2000 (65 FR 60897). That action proposed to require revising the Airworthiness Limitations Section of the Instructions for Continued Airworthiness to incorporate life limits for certain items and inspections to detect fatigue cracking in certain structures.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the two comments received.

On behalf of one of its members, the Air Transport Association (ATA) of America states that it considers that the inspections require access to multiple areas of the airplane and are scheduled at different time intervals. Therefore, the 1-hour time estimate in the proposed AD is not valid and needs to be adjusted. The member airline also made that same statement.

The FAA does not concur that the proposed cost estimate should be revised. We based our estimate on the fact that the action in paragraph (a) of the proposed AD requires only a revision to the Airworthiness Limitations Section (ALS) of the Instructions for Continued Airworthiness by incorporating certain instructions into the ALS. This action should take no longer than 1 hour to accomplish. Although this AD requires only a revision to the ALS, we point out that the inspections included in the ALS will then be required by 14 CFR parts 43 and 91. Because operators must comply with the inspections included in the ALS to maintain the airplane properly, it is unnecessary for our cost estimate to include the time required for such inspections. Of course, operators that have previously incorporated the ALS revision into their maintenance programs are given credit for having previously accomplished the requirements of this AD, as allowed by the phrase, “unless accomplished previously.” No change to the cost estimate in the final rule is necessary in this regard.

The ATA and the same member airline state that the proposed AD must include provisions for airplanes that have exceeded the limits specified in Report SE-623, “Airworthiness Limitation Items and Safe Life Items,” of Appendix 1 of the Fokker 70/100 Maintenance Review Board Document. The provisions should be such that the tests can be accomplished during a normally scheduled out-of-service maintenance.

The FAA does not concur that a grace period needs to be included in the proposed AD for compliance with the Fokker report. Although we agree that some airplanes may have exceeded certain inspection thresholds in the report, the 30-day compliance time for revising the ALS of the Instructions for Continued Airworthiness allows operators sufficient time to accomplish the revision to the ALS. However, if scheduling conflicts occur and adjustments must be made for airplanes that exceed certain thresholds, operators may request an alternative method of compliance, as specified in paragraph (c) of this AD. No change to the final rule is necessary in this regard.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule.

The FAA estimates that 131 Model F.28 Mark 0070 and 0100 series airplanes of U.S. registry will be affected by this AD, that it will take approximately 1 work hour per airplane to accomplish the required actions, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of the AD on U.S. operators is estimated to be $7,860, or $60 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations adopted herein will not have a substantial direct effect 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. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Bombardier Model CL-600-2B19 series airplanes was published as a supplemental notice of proposed rulemaking (NPRM) in the Federal Register on March 23, 2001 (66 FR 16156). That action proposed to require repetitive eddy current inspections for cracking of the main landing gear (MLG) main fittings, and replacement with a new or serviceable MLG, if necessary. That action also proposed to require servicing the MLG shock struts; inspecting the MLG shock struts for nitrogen pressure, visible chrome dimension, and oil leakage; and performing corrective actions, if necessary.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the comments received.

One commenter points out that the inspection specified in paragraph (a) of the NPRM requires compliance with Part “B” of Bombardier Alert Service Bulletin A601R-32-079, dated December 1, 2000; however, Appendix 1 of that alert service bulletin states that the inspection is necessary only for MLG main fittings having part numbers (P/Ns) 17064-101, 17064-102, 17064-103, and 17064-104, not to all airplanes having serial numbers 7003 and subsequent. The commenter explains that airplanes currently being delivered have MLG main fittings having P/Ns 17064-105 and 17064-106. The FAA infers that the commenter is requesting that we revise the applicability of the final rule.

The FAA agrees with the commenter. We have verified with Transport Canada Civil Aviation (TCCA), which is the airworthiness authority for Canada, that airplanes having MLG main fittings having P/Ns 17064-105 and 17064-106 are not subject to the requirements of this final rule. Therefore, we have revised the applicability of the final rule to clarify that the final rule applies to Bombardier Model CL-600-2B19 series airplanes, certificated in any category, having serial number 7003 and subsequent, and equipped with a MLG main fitting having P/N 17064-101, 17064-102, 17064-103, or 17064-104.

1. One commenter requests that the NPRM be withdrawn. The commenter states that, since the reason for the NPRM was one event of a misserviced strut by a foreign air carrier, it is not necessary to issue an AD. In addition, the commenter suggests that requiring repetitive strut servicing could be done by mandating that the strut inspection be added to the operators' inspection programs. The commenter contends that incorporating such inspection requirements into the inspection program is preferred by operators.

2. Another commenter states that it has conducted 1,496 eddy current inspections in accordance with the alert service bulletin referenced in the NPRM and has found no discrepancies. This same commenter also states that it has been servicing the shock struts beyond the requirements specified in paragraph (b) of the NPRM by performing a complete reservicing of the shock strut with oil and nitrogen every 12 months. The FAA infers that the commenter is requesting that the NPRM be withdrawn.

3. Another commenter suggests that an annual complete reservicing of the MLG shock strut performed in conjunction with an annual eddy current inspection is an equivalent or better level of safety than the actions proposed in the NPRM. The commenter notes that the brake lines are clamped to the MLG main fittings and must be moved or removed to gain access to the inspection area. Therefore, the commenter asserts that its proposed actions would have the benefit of reducing the adverse affects on reliability and safety impact caused by frequent disturbance of the brake lines.

The FAA does not concur that the NPRM should be withdrawn for the following reasons:

1. TCCA, has advised us that three cases of premature failures of the MLG have been reported. Because implementation and quality of various existing maintenance programs may differ, we have determined that by issuing an AD to require eddy current inspections for cracks and replacement, if necessary, with a new or serviceable fitting, (and, as required by paragraph (b) of this AD, servicing and inspecting the MLG shock struts to determine the nitrogen pressure, visible chrome dimension and any oil leakage), the identified unsafe condition will be addressed appropriately.

2. In requiring the actions specified in this final rule, the FAA has not precluded an operator's prerogative to perform additional actions to further increase the safety level that an operator may wish to take. As stated previously, we acknowledge that some operators' maintenance programs may be of a higher quality than others. However, our obligation remains to issue an AD to address the identified unsafe condition; and the rule must apply to everyone to ensure that all affected airplanes are covered, regardless of who operates them. However, under the provisions of paragraph (g) of the final rule, we may approve requests for an alternate method of compliance if data are submitted to substantiate that such a method would provide an acceptable level of safety.

3. The FAA does not agree that an annual complete reservicing of the MLG shock strut performed in conjunction with an annual eddy current inspection is equivalent to or a better level of safety than the actions required by this final rule. Since the airplane model accumulates an average of approximately 2,500 flight cycles per year, that would require the eddy current inspection only every 2,500 flight cycles. However, according to the investigation that was conducted by the original equipment manufacturer (OEM), it took only 2,000 flight cycles for the cracking to develop from initiation to critical size. Therefore, we have determined that it is necessary to require inspections at intervals not to exceed 500 flight cycles.

As to the adverse affects on the reliability and safety impact caused by frequent disturbance of the brake lines, we point out that the inspection and its repetitive interval are not only consistent with the OEM service bulletin, but also include specific procedures for handling the brake lines with minimal disturbance. No change is necessary to the final rule regarding these requests.

Two commenters state that the requirements of paragraphs (c) and (d) of the NPRM are unnecessary. One commenter states that paragraphs (c) and (d) of the NPRM, which require “inspection of shock strut servicing,” per Bombardier Alert Service Bulletin A601R-32-079, are already incorporated into the Maintenance Review Board (MRB) document, Task 32-00-00-09 (100 flight hours/routine check) and Task 32-00-00-11 (400 flight hours/A check). The FAA infers that the commenters are requesting that paragraphs (c) and (d) of the NPRM be removed.

The FAA does not agree. Although the inspection and servicing of the shock struts required by paragraphs (c) and (d) of the final rule may be the same as the MRB document, our obligation remains to issue an AD to address the identified unsafe condition. However, under the provisions of paragraph (g) of the final rule, we may approve requests for an alternate method of compliance if data are submitted to substantiate that such a method would provide an acceptable level of safety.

One of those commenters also notes that paragraph (e) of the NPRM “requires extension of repetitive inspection.” The commenter states that, based on the results of 1,496 negative eddy current inspections, and the fact that the inspections are incorporated into the MRB document, paragraph (e) of the NPRM is not necessary.

The FAA does not concur that paragraph (e) of the NPRM is unnecessary. We point out that in paragraph (e) of this final rule, the extension of the inspection interval from every 500 flight cycles to every 1,000 flight cycles is not “required,” but “may” be extended if the conditions specified in paragraph (e) of the final rule are met. In accordance with the provisions of that paragraph, if an operator does not wish to extend the repetitive inspection interval, there is no requirement to do so.

One commenter requests that paragraph (a) of the NPRM be revised to add the visual inspection that is specified in the alert service bulletin, which is referenced as the source of service information in the NPRM. The commenter notes that the alert service bulletin only specifies an eddy current inspection if cracking is detected during the visual inspection. This same commenter also requests that paragraph (a) of the NPRM be revised to reflect a compliance threshold of 1,000 hours with escalation to a “C” check (currently 4,000 flight hours for that operator's operations).

The FAA does not agree with either of the commenter's requests. The three instances of premature failures of the MLG main fittings indicates that the crack propagation is rapid in high-strength steel material. In fact, investigation into those three failure cases revealed that the crack growth from initiation to critical crack size was about 2,000 flight cycles. Since eddy current inspections are more reliable in detecting such rapid crack growth, we find that the repetitive inspection interval of 500 flight cycles required by paragraph (a) of the final rule to be appropriate.

Two commenters request that the repetitive inspection interval of 500 flight cycles specified in paragraph (a) of the NPRM be extended. One commenter asks that the repetitive inspection interval be revised to require the inspection every “C” check. This commenter justifies an extension of the repetitive inspections based on the fact that it has already accomplished three consecutive inspections (500 flight cycles) per the Bombardier alert service bulletin specified in the NPRM, and has found no defects. The commenter states that the current maintenance program effectively prevents improper servicing. The other commenter requests that the repetitive inspection interval be extended to every “C” check after a reasonable number of non-destructive testing (NDT) inspections (perhaps two) are done at the 1,000 flight cycle interval. Both commenters state that, since they are aware of only one cracking occurrence, there is no proof that there is an inherent flaw in the MLG main fitting.

The FAA does not concur that the repetitive inspection interval may be extended. We stated previously that TCCA has advised us that three cases of premature failures of the MLG have been reported. In addition, we also stated previously that the repetitive inspection interval was based on the findings of the investigation into the rapid crack growth that occurred on the MLG main fittings. No change to the final rule in this regard is necessary. However, under the provisions of paragraph (g) of the final rule, we may approve requests for adjustments to the compliance time if data are submitted to substantiate that such an adjustment would provide an acceptable level of safety.

This is considered to be interim action until final action is identified, at which time the FAA may consider additional rulemaking.

After careful review of the available data, including the comments noted above, the FAA has determined that air safety and the public interest require the adoption of the rule with the change described previously. The FAA has determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD.

There are approximately 339 Bombardier Model CL-600-2B19 series airplanes of the affected design in the worldwide fleet. The FAA estimates that 236 airplanes of U.S. registry will be affected by this proposed AD, that it will take approximately 3 work hours per airplane to accomplish an eddy current inspection, and the servicing actions, and inspections specified in paragraphs (a), (b), and (c) of this AD. We estimate that the average labor rate is $60 per work hour. Based on these figures, the cost impact of this AD on U.S. operators is estimated to be $42,480, or $180 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations adopted herein will not have a substantial direct effect 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. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to all Fokker Model F.28 series airplanes was published in the Federal Register on August 17, 2001 (66 FR 43124). That action proposed to require replacing the main landing gear (MLG) torque link dampers with modified and reidentified dampers.

Interested persons have been afforded an opportunity to participate in the making of this amendment. Due consideration has been given to the single comment received.

The commenter requests that the FAA revise paragraph (a) of the proposed rule to allow an operator to install a torque link damper with a dash number higher than (23700)-5. The commenter states that it has already modified its entire inventory of torque link dampers to the configuration of part number 23700-7. The commenter states that revising the proposed AD to allow installation of parts modified to a configuration subsequent to that of part number 23700-5 would relieve it and other operators of the need to request approval of alternative methods of compliance (AMOCs).

The FAA partially concurs with the commenter's request. Because we cannot approve installation of dampers that do not exist, we do not concur to revise paragraph (a) of the proposed AD in the specific way the commenter suggests.

However, since the issuance of the proposed rule, we have reviewed Fokker Service Bulletins SBF28/32-159, dated October 1, 1999 (for Models F.28 Mark 1000 through 4000 series airplanes), and SBF100-32-116, dated February 1, 2000 (for Model F.28 Mark 0070/0100 series airplanes). Those service bulletins specify replacement of existing torque link dampers with modified dampers, and refer to Menasco Aerospace Service Bulletin 23700-32-15, dated September 3, 1999, as an appropriate source of service information for modifying torque link dampers with part number 23700-1, -3, or -5, to part number 23700-7. In consideration of these service bulletins, we have added a new Note 2 to this final rule to state that installation of torque link dampers with part number 23700-7 in accordance with Fokker Service Bulletin SBF28/32-159 or SBF100-32-116, as applicable, is acceptable for compliance with paragraph (a) of this AD.

Operators should note that, for installation of dampers with part numbers other than 23700-5 or -7, they must submit a request for approval of an AMOC in accordance with paragraph (c) of this AD.

After careful review of the available data, including the comment noted above, the FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

The FAA estimates that 147 Model F.28 series airplanes of U.S. registry will be affected by this AD, that it will take approximately 6 work hours per airplane to accomplish the required replacement, and that the average labor rate is $60 per work hour. Required parts will cost approximately $1,910 per airplane. Based on these figures, the cost impact of this AD on U.S. operators is estimated to be $333,690, or $2,270 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations adopted herein will not have a substantial direct effect 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. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained from the Rules Docket at the location provided under the caption ADDRESSES.

On July 20, 2001 (66 FR 37939), a proposed rule was published in the Federal Register with an invitation to comment. No comments were received.

This order relates to individuals rather than small business entities. Nevertheless, pursuant to the requirements of the Regulatory Flexibility Act, 5 U.S.C. 601-612, this order will not have a significant economic impact on a substantial number of small entities.

As authorized by 5 U.S.C. 553, we did not publish a notice of proposed rulemaking (NPRM) for this regulation. In keeping with the requirements of 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM, and that under 5 U.S.C. 553 (d)(3), good cause exists for making this regulation effective less than 30 days after publication in the Federal Register .

On September 11, 2001, two commercial aircraft were hijacked from Logan Airport in Boston, Massachusetts and flown into the World Trade Center in New York, New York inflicting catastrophic human casualties and property damage. On the same day, a similar attack was conducted on the Pentagon in Arlington, Virginia. Also, on the same date, a fourth commercial passenger airplane was hijacked, this one from Newark, New Jersey, and later crashed in Pennsylvania. National security officials warn that future terrorist attacks against civilian targets may be anticipated. A heightened level of security has been established concerning all vessels transiting in the San Francisco Bay, and particularly in waters adjacent to San Francisco International Airport and Oakland International Airport. These security zones are needed to protect the United States and more specifically the people, ports, waterways, and properties of the San Francisco Bay area.

The delay inherent in the NPRM process, and any delay in the effective date of this rule, is contrary to the public interest insofar as it may render individuals and facilities within and adjacent to the San Francisco and Oakland airports vulnerable to subversive activity, sabotage or terrorist attack. The measures contemplated by this rule are intended to prevent future terrorist attacks against individuals and facilities within or adjacent to these west coast airports. Immediate action is required to accomplish these objectives. Any delay in the effective date of this rule is impracticable and contrary to the public interest.

Although the Coast Guard has good cause in implementing this regulation, we want to afford the maritime community the opportunity to participate in this rulemaking by submitting comments and related material regarding the size and boundaries of these security zones in order to minimize unnecessary burdens. If you do so, please include your name and address, identify the docket number for this rulemaking, COTP San Francisco Bay 01-009, indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this temporary final rule in view of them.

We do not plan to hold a public meeting. However, you may submit a request for a meeting by writing to the person identified in the FOR FURTHER INFORMATION CONTACT section, or to the address under ADDRESSES explaining why a public meeting would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register .

On September 11, 2001, terrorists launched attacks on civilian and military targets within the United States killing large numbers of people and damaging properties of national significance. Vessels operating near the airports adjacent to the San Francisco Bay present possible platforms from which individuals may gain unauthorized access to the airports. As part of the Diplomatic Security and Antiterrorism Act of 1986 (Pub. L. 99-399), Congress amended the Ports and Waterways Safety Act (PWSA) to allow the Coast Guard to take actions, including the establishment of security and safety zones, to prevent or respond to acts of terrorism against individuals, vessels, or public or commercial structures. 33 U.S.C. 1226. The terrorist acts against the United States on September 11, 2001 have increased the need for safety and security measures on U.S. ports and waterways. In response to these terrorist acts, and in order to prevent similar occurrences, the Coast Guard is establishing two temporary security zones in the navigable waters of the United States surrounding San Francisco International Airport and Oakland International Airport.

This security zone will extend 2000 yards seaward from the shoreline of the San Francisco International Airport. This distance from the shoreline is estimated to be an adequate zone size to provide increased security for San Francisco International Airport.

This security zone will extend 1800 yards seaward from the shoreline of the Oakland International Airport. This distance from the shoreline is estimated to be an adequate zone size to provide increased security for Oakland International Airport.

The size of each security zone is tailored to each airport and their specific navigational limitations, and therefore, are not the same exact size. The two security zones are uniform, however, in their purpose—to provide increased security for the airports, while minimizing the impact to vessel traffic on the San Francisco Bay.

These temporary security zones are necessary to provide for the safety and security of the United States of America and the people, ports, waterways and properties within the San Francisco Bay area. These security zones will be enforced by Coast Guard patrol craft or any patrol craft enlisted by the COTP. Persons and vessels are prohibited from entering into or remaining in these security zones without permission of the Captain of the Port, or his designated representative. Each person and vessel in a security zone shall obey any direction or order of the COTP. The COTP may remove any person, vessel, article, or thing from a security zone. No person may board, or take or place any article or thing on board, any vessel in a security zone without the permission of the COTP.

Pursuant to 33 U.S.C. 1232, any violation of the security zone described herein, is punishable by civil penalties (not to exceed $27,500 per violation, where each day of a continuing violation is a separate violation), criminal penalties (imprisonment for not more than 6 years and a fine of not more than $250,000), in rem liability against the offending vessel, and license sanctions. Any person who violates this regulation, using a dangerous weapon, or who engages in conduct that causes bodily injury or fear of imminent bodily injury to any officer authorized to enforce this regulation, also faces imprisonment up to 12 years (class C felony).

This temporary final rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, 1979).

Due to the recent terrorist actions against the United States the implementation of these security zones are necessary for the protection of the United States and its people. Because these security zones are established in an area of the San Francisco Bay that is seldom used, the Coast Guard expects the economic impact of this rule to be so minimal that full regulatory evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), the Coast Guard considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “Small entities” include small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations less than 50,000.

These security zones will not have a significant impact on a substantial number of small entities because these security zones will not occupy an area of the San Francisco Bay that is frequently transited. Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this temporary final rule will not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), the Coast Guard offers to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. If your small business or organization is affected by this rule and you have questions concerning its provisions or options for compliance, please contact Lieutenant Andrew B. Cheney, U.S. Coast Guard Marine Office San Francisco Bay at (510) 437-3073.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule and have determined that this rule does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, 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.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

We have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (34), of Commandant Instruction M16475.lD, this rule is categorically excluded from further environmental documentation, because we are establishing security zones. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES.

This SUPPLEMENTARY INFORMATION section is organized to address the following questions:

EPA is approving the one-hour attainment demonstration submitted by Maryland for the Baltimore area as fully meeting the requirements of CAA section 182(c)(2) and (d). The following table identifies submittal dates and amendment dates for the attainment demonstration:

In a December 16, 1999 notice of proposed rulemaking (the December 16, 1999 NPR), we proposed approval of the attainment demonstration for the Baltimore area (64 FR 70397).

On February 22, 2000 (65 FR 8703), EPA published a notice of availability on guidance memoranda relating to ten one-hour ozone attainment demonstrations (including the Baltimore area) proposed for approval or conditional approval on December 16, 1999. The guidance memoranda are entitled: “Guidance on Motor Vehicle Emissions Budgets in One-Hour Ozone Attainment Demonstrations' dated November 3, 1999, and “Guidance on the Reasonably Available Control Measures (RACM) Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas' dated November 30, 1999.

On July 28, 2000, EPA published a supplemental notice of proposed rulemaking (SNPR) on the attainment demonstration (65 FR 46383). In that supplemental notice, we clarified and expanded on two issues relating to the motor vehicle emissions budgets in the attainment demonstration SIP revisions. This supplemental notice is discussed in Section I.E.

On July 16, 2001, EPA published a SNPR on the attainment demonstration (66 FR 36964). In that supplemental notice, we proposed to approve a revision that contains revised motor vehicle emissions budgets for the attainment year of 2005 which incorporate and reflect the benefits of the Federal Tier 2/Low Sulfur rule; and enforceable commitments to: (1) Submit measures by October 31, 2001 for additional emission reductions as required in the attainment demonstration test and to revise the SIP and motor vehicle emissions budgets by October 31, 2001 if the additional measures affect the motor vehicle emissions inventory, (2) submit revised SIP and motor vehicle emissions budgets within one year after MOBILE6 is issued, and (3) perform a mid-course review. We received no comments on that SNPR.

On September 7, 2001, EPA published a SNPR on the attainment demonstration (66 FR 44760). In that supplemental notice, we proposed to approve an Maryland's RACM analysis and determination for the Baltimore area. We received no timely comments on that SNPR.

Comments received on the December 16, 1999 and July 28 , 2000 proposed notices listed in this section relevant to the Baltimore area attainment demonstration are discussed in Sections I.L. and II.

On December 16, 1999 (64 FR 70397), we proposed approval of the attainment demonstration for the Baltimore area. Our approval was contingent upon certain actions by Maryland. These actions were that Maryland:

(1) Adopt and submit adequate motor vehicle emissions budgets;

(2) Submit a list of control measures that, when implemented, would be expected to provide sufficient additional emission reductions to further reduce emissions to support the attainment test and a commitment that these measures would not involve additional limits on highway construction beyond those that could be imposed under the submitted motor vehicle emissions budget;

(3) Adopt and submit a rule for the regional NO X reductions consistent with the modeling demonstration; and

(4) Adopt and submit an enforceable commitment, or a reaffirmation of existing enforceable commitment to do the following:

(a) Submit measures by October 31, 2001 for additional emission reductions as required in the attainment demonstration test, and for additional emission reduction measures developed through the regional process, submit an enforceable commitment for the additional measures and a backstop commitment to adopt and submit intrastate measures for the emission reductions in the event the regional process does not recommend measures that produce emission reductions.

(b) Submit a revised SIP and motor vehicle emissions budget by October 31, 2001 if additional measures affect the motor vehicle emissions inventory.

(c) Submit revised SIP and motor vehicle emissions budgets one year after MOBILE6 is issued.

(d) Perform a mid-course review by December 31, 2003.

The following is a summary of such submittals which include submittal dates of revisions, the content of these submissions and other pertinent facts regarding these submissions:

(1) On December 21, 1999, Maryland submitted the “State Implementation Plan (SIP) Revision: Modification to the Phase II Attainment Plan for the Baltimore Nonattainment Area and Cecil County: Revising the Mobile Source Emission Budgets.” This submittal contained revisions to the 2005 motor vehicle emission budgets for the attainment plan for the Baltimore Area and for Cecil County, Maryland which is part of the Philadelphia-Wilmington-Trenton ozone nonattainment area.

(2) On December 28, 2000, Maryland submitted the “State Implementation Plan (SIP) Revision: Modification to the Phase II Attainment Plan for Cecil County: Revising the Mobile Source Emission Budgets, Adding Tier 2 Standards.” This submittal contained the revised 2005 motor vehicle emissions budgets for the attainment demonstration that reflect the benefits of the Tier 2/Low Sulfur-in-fuel rule benefits and revised commitments to do the following:

(a) Submit measures by October 31, 2001 for additional emission reductions as required in the attainment demonstration test, and to revise the SIP and motor vehicle emissions budgets if the additional measures affect the motor vehicle emissions inventory,

(b) Revise the SIP and motor vehicle emission budgets using MOBILE6 within one year after it is issued.

(c) Perform a mid-course review by December 31, 2003.

(3) On August 20, 2001, Maryland submitted the “State Implementation Plan (SIP) Revision: Reasonably Available Control Measures Analysis for the Baltimore Region.” This submittal supplements the attainment demonstration for the Baltimore Area by including a RACM analysis.

(1) On July 28, 2000, EPA published a supplemental notice of proposed rulemaking (SNPR) on the attainment demonstration (65 FR 46383). In that supplemental notice, we clarified and expanded on two issues relating to the motor vehicle emissions budgets in this attainment demonstration SIP revision:

(a) First, we proposed a clarification of what occurs if we finalize conditional or full approval of this and certain other attainment demonstration SIP revisions based on a state commitment to revise the SIP's motor vehicle emissions budgets in the future. Under the proposal, the motor vehicle emissions budgets in the approved SIP will apply for transportation conformity purposes only until the budgets are revised consistent with the commitment and we have found the new budgets adequate. Once we have found the newly revised budgets adequate, then they would apply instead of the previous conditionally or fully approved budgets. Normally, revisions to approved budgets cannot be used for conformity purposes until we approve the revised budgets into the SIP. Therefore, we proposed to clarify that when our approval of this and certain other one-hour ozone attainment demonstrations is based on a commitment to future revisions to the budget, our approval of the budget lasts only until revisions to satisfy those conditions are submitted and we find them adequate.

(b) Second, we proposed that states may opt to commit to revise their emissions budgets one year after the release of the MOBILE6 model, as originally proposed on December 16, 1999; or, states may commit to a new option, i.e., to revise their budgets two years following the release of the MOBILE6 model, provided that conformity is not determined without adequate MOBILE6-derived SIP budgets during the second year. This latter proposal is not germane to the Baltimore area because Maryland has submitted an enforceable commitment to revise the motor vehicle emissions budgets within one year after the official release of the MOBILE6 model.

(c) In addition, we re-opened the comment period to take comment on these two issues and to allow comment on any additional materials that were placed in the dockets for the proposed actions close to or after the initial comment period closed on February 14, 2000 (65 FR at 46383, July 28, 2000). For many of the areas, additional information had been placed in the docket close to or since the initial comment period concluded. In general, these materials were identified as consisting of motor vehicle emissions budgets, and revised or additional commitments or reaffirmations submitted by the states (65 FR at 46383, July 28, 2000).

(2) On July 16, 2001, EPA published a SNPR on the attainment demonstration (66 FR 36964). We received no comments on that SNPR. In that supplemental notice, we proposed to approve:

(a) a revision that contains revised motor vehicle emissions budgets for the attainment year of 2005 which incorporate and reflect the benefits of the Federal Tier 2/Low Sulfur rule; and

(b) enforceable commitments to submit measures by October 31, 2001 for additional emission reductions as required in the attainment demonstration test, revise the SIP and motor vehicle emissions budgets by October 31, 2001 if additional measures affect the motor vehicle emissions inventory, submit revised SIP and motor vehicle emissions budgets within one year after MOBILE6 is issued, and to perform a mid-course review.

(3) On September 7, 2001, EPA published a SNPR on the attainment demonstration (66 FR 44760). In that supplemental notice, we proposed to approve Maryland's RACM analysis and determination for the Baltimore area. We received no timely comments on that SNPR.

Maryland submitted a revision to the attainment plan SIP for the Baltimore area on December 28, 2000. This revision contained revised motor vehicle emissions budgets for the attainment year of 2005 that reflect the benefits of the Federal Tier 2/Low Sulfur rule. 1

We began our adequacy review process on the budgets in the December 28, 2000 submittal under our adequacy process by a posting on EPA's Web site ( www.epa.gov/otaq/transp/conform/adequacy.htm ) that started a public comment period on the adequacy of the motor vehicle emissions budgets in the December 28, 2000 SIP revision for the Baltimore area. We prepared a technical support document for our adequacy determination that included responses to any public comments received during the adequacy process comment period. In a July 5, 2001, Federal Register notice we announced that we had determined that the budgets contained in the December 28, 2000 submission were adequate (66 FR 35421). The proposed approval of the budgets in the December 28, 2000 submission is discussed in Section I.B., and the response to any comments received on the proposed approval are in Section II. of this document. Our findings of adequacy and responses to comments can be accessed at www.epa.gov/otaq/traq (once there, click on the “conformity” button).

In the December 16, 1999 NPR for the Baltimore attainment demonstration SIP, EPA noted in Table 4 the status of many of the control measures or part D requirements of the Act for serious and severe areas. The following provides the status of those SIP elements which are prerequisite for approval of the attainment demonstration but which were either not fully approved on December 16, 1999 or not listed in Table 4 of the December 16, 1999 NPR as fully approved:

(1) On October 29, 1999, EPA approved Maryland's enhanced vehicle inspection and maintenance SIP (64 FR 58340).

(2) On December 28, 1999, EPA approved Maryland's national low emission vehicle (NLEV) SIP (64 FR 72564).

(3) On February 3, 2000, EPA approved Maryland's, 15 percent VOC Reduction Plan (65 FR 5242).

(4) On December 15, 2000, EPA approved Maryland's NO X Budget Rule consistent with the Ozone Transport Commission's (OTC) NO X Memorandum of Understanding (MOU) Phase II controls (65 FR 78416).

(5) On January 10, 2001, EPA approved Maryland's NO X trading rule consistent with the NO X SIP Call (66 FR 1866).

(6) On, February 8, 2001, EPA approved Maryland's NO X RACT rule (66 FR 9522).

(7) On September 26, 2001, EPA approved Maryland's Post-1996 Rate-of-Progress Plans (ROP) for the Baltimore area (66 FR 49108).

To comply with the VOC RACT requirements, Maryland has developed source category rules. Sources of VOC in the Baltimore area that emit more than 25 tons per year (TPY) and that are not subject to any specific source category RACT rule are then subject to Maryland's SIP-approved regulation COMAR 26.11.06.06—Volatile Organic Compounds. Such sources may apply on a case-by case basis for an alternative RACT under COMAR 26.11.19.02G—Control of Major Stationary Sources of Volatile Organic Compounds. But until such a case-by-case RACT determination is made by the MDE and approved by EPA as a SIP revision, the source remains subject to COMAR 26.11.06.06. The following provides the status of those source category RACT rules which were either not fully approved on December 16, 1999. December 16, 1999 as fully approved:

(1) On August 19, 1999, EPA approved Maryland's Fiberglass Manufacturing Rule (64 FR 45182).

(2) On January 14, 2000, EPA approved Maryland's Flexographic Printing and Plastic Bottle Coating Rule (65 FR 2334).

(3) On May 7, 2001, EPA approved Maryland's Bread and Snack Food Drying Operations and Expandable Polystyrene Operations Rules (66 FR 22924).

(4) On September 5, 2001, EPA approved Maryland's Marine Vessel Coating Rule (66 FR 46379).

(5) On September 20, 2001, EPA approved Maryland's Synthetic Organic Chemicals Rule (66 FR 37914).

(6) On October 5, 2001, the Regional Administrator signed a final action approving the Maryland's Iron & Steel Operations rule. That action has been or soon will be published in the Federal Register .

(7) On October 9, 2001, the Regional Administrator signed a final action approving the Maryland's Aerospace Coating, Kraft Pulp Mills, and Distilled Spirits Facilities rules. That action has been or soon will be published in the Federal Register .

EPA has determined that the budgets in the 2005 attainment demonstration are adequate. The approved motor vehicle emissions budgets of the 2005 attainment demonstration SIP are listed in Table 3. Table 3 also provides the amounts by pollutant in tons per day (TPD), the year associated with the budgets, and the effective date of EPA's adequacy determination.

EPA has concluded that the 2005 attainment demonstration SIP, including its associated budgets, meets the requirements of the CAA. EPA has also determined that the Baltimore area ozone SIP contains the measures necessary to support these budgets. In this final action, EPA is approving these budgets.

Our conformity rule establishes the frequency by which transportation plans and transportation improvement programs must be found to conform to the SIP and includes trigger events tied to both submittal and approval of a SIP (40 CFR 93.104(e)). Both initial submission and initial approval trigger a redetermination of conformity. This final rule approves motor vehicle emissions budgets contained in the attainment demonstration. We are advising affected transportation planning agencies that this final approval of the budgets is listed in Table 3 will require a redetermination that existing transportation plans and TIPs conform within 18 months of the effective date listed in the DATES section of this document. See 40 CFR 93.104(e).

All states whose attainment demonstration includes the effects of the Tier 2/Low Sulfur program have committed to revise and resubmit their motor vehicle emissions budgets after EPA releases the MOBILE6 model. On December 28, 2000, Maryland submitted a commitment to revise the 2005 motor vehicle budgets in the attainment demonstration within one year of EPA's release of the MOBILE6 model. In this final rulemaking action, EPA is approving this commitment to revise the 2005 motor vehicle budgets in the attainment demonstration within one year of EPA's release of the MOBILE6 model. If Maryland fails to meet its commitment to submit revised budgets using the MOBILE6 model, EPA could make a finding of failure to implement the SIP, which would start a sanctions clock under section 179 of the Act.

As we proposed in our July 28, 2000 SNPR (65 FR 46383), today's final approval of the budgets contained in the 2005 attainment plan will be effective for conformity purposes only until such time as revised motor vehicle emissions budgets are submitted (pursuant to the commitment to submit revised budgets using the MOBILE6 model within one year of EPA's release of that model) and we have found those revised budgets adequate. We are only approving the attainment demonstration and its current budgets because Maryland has provided an enforceable commitment to revise the budgets using the MOBILE6 model within one year of EPA's release of that model. Therefore, we are limiting the duration of our approval of the current budgets only until such time as the revised budgets are found adequate. Those revised budgets will be more appropriate than the budgets we are approving for conformity purposes for the time being.

Similarly, EPA is only approving the 2005 attainment demonstration and its currents budgets because Maryland has provided an enforceable commitment to submit new budgets as a revision to the attainment SIP consistent with any new measures submitted to fill any shortfall, if the additional control measures affect on-road motor vehicle emissions. Therefore, EPA is limiting the duration of its approval of the current budgets only until such time as any such revised budgets are found adequate. Those revised budgets will be more appropriate than the budgets EPA is approving for conformity purposes for the time being.

EPA approved Maryland's NSR program on February 12, 2001 (66 FR 9766). As stated in the proposed (65 FR 62675, October 19, 2000) and final rulemaking notices, EPA granted limited approval of Maryland's NSR regulations as they apply in the Baltimore area and the Maryland portion of the Philadelphia area, and granted full approval throughout the remainder of Maryland. EPA's sole reason for granting limited approval in the Baltimore area and in Cecil County rather than full approval was that Maryland's NSR regulations do not contain certain restrictions on the use of emission reductions from the shutdown and curtailment of existing sources or units as NSR offsets. These restrictions, however, only apply in nonattainment areas without an approved attainment demonstration [See 40 CFR section 51.165(a)(ii)(C)]. As EPA today is taking final action to approve Maryland's attainment demonstration SIPs for the Baltimore and Philadelphia areas, the Maryland's SIP-approved NSR program's lack of restrictions on the use of emission reductions from the shutdown and curtailment of existing sources or units as NSR offsets, applicable only in nonattainment areas without an approved attainment demonstration, is moot. Now that we have approved Maryland's attainment demonstration SIPs for the Baltimore and Philadelphia areas, we intend to remove the limited nature of our approval of the State's NSR program in those areas of Maryland as well.

EPA received comments from the public on the Notice of Proposed Rulemaking (NPR) published on December 16, 1999 (64 FR 70397) for Maryland's ozone attainment demonstration for the Baltimore area. Comments were received from Robert E. Yuhnke on behalf of Environmental Defense and Natural Resources Defense Council; the Midwest Ozone Group; and from the University of Maryland Law School on behalf of 1000 Friends of Maryland.

EPA also received comments from the public on the supplemental notice of proposed rulemaking published on July 28, 2000 (65 FR 46383), in which EPA clarified and expanded on two issues relating to the motor vehicle emissions budgets in the attainment demonstration SIPs. Comments were received from Environmental Defense and from ELM Packaging Co.

EPA receive no timely comments on the SNPRs published on July 16, 2001 (66 FR 36964) and on September 7, 2001 (66 FR 44760) for the Baltimore area's 2005 attainment demonstration SIP.

The following discussion summarizes and responds to the comments received on the proposed actions published on December 16, 1999 (64 FR 70397) and July 28, 2000 (65 FR 46383).

Comment 1: The weight of evidence approach does not demonstrate attainment or meet CAA requirements for a modeled attainment demonstration. Commenters added several criticisms of various technical aspects of the weight of evidence approach, including certain specific applications of the approach to particular attainment demonstrations. These comments are discussed in the following response.

Response 1: Under section 182(c)(2) and (d) of the CAA, serious and severe ozone nonattainment areas were required to submit by November 15, 1994, demonstrations of how they would attain the one-hour standard. Section 182(c)(2)(A) provides that “[t]his attainment demonstration must be based on photochemical grid modeling or any other analytical method determined by the Administrator, in the Administrator's discretion, to be at least as effective.” As described in more detail below, EPA allows states to supplement their photochemical modeling results, with additional evidence designed to account for uncertainties in the photochemical modeling, to demonstrate attainment. This approach is consistent with the requirement of section 182(c)(2)(A) that the attainment demonstration “be based on photochemical grid modeling,” because the modeling results constitute the principal component of EPA's analysis, with supplemental information designed to account for uncertainties in the model. This interpretation and application of the photochemical modeling requirement of section 182(c)(2)(A) finds further justification in the broad deference Congress granted EPA to develop appropriate methods for determining attainment, as indicated in the last phrase of section 182(c)(2)(A).

The flexibility granted to EPA under section 182(c)(2)(A) is reflected in the regulations EPA promulgated for modeled attainment demonstrations. These regulations provide, “The adequacy of a control strategy shall be demonstrated by means of applicable air quality models, data bases, and other requirements specified in [40 CFR part 51 Appendix W] (Guideline on Air Quality Models).”  2 40 CFR 51.112(a)(1). However, the regulations further provide, “Where an air quality model specified in Appendix W * * * is inappropriate, the model may be modified or another model substituted [with approval by EPA, and after] notice and opportunity for public comment. * * *” Appendix W, in turn, provides that, “The Urban Airshed Model (UAM) is recommended for photochemical or reactive pollutant modeling applications involving entire urban areas,” but further refers to EPA's modeling guidance for data requirements and procedures for operating the model. See 40 CFR part 51 Appendix W section 6.2.1.a. The modeling guidance discusses the data requirements and operating procedures, as well as interpretation of model results as they relate to the attainment demonstration. This provision references guidance published in 1991, but EPA envisioned the guidance would change as we gained experience with model applications, which is why the guidance is referenced, but does not appear, in Appendix W. With updates in 1996 and 1999, the evolution of EPA's guidance has led us to use both the photochemical grid model, and additional analytical methods approved by EPA.

The modeled attainment test compares model predicted one-hour daily maximum ozone concentrations in all grid cells for the attainment year to the level of the NAAQS. The results may be interpreted through either of two modeled attainment or exceedance tests: the deterministic test or the statistical test. Under the deterministic test, a predicted concentration above 0.124 parts per million (ppm) ozone indicates that the area is expected to exceed the standard in the attainment year and a prediction at or below 0.124 ppm indicates that the area is expected to not exceed the standard. Under the statistical test, attainment is demonstrated when all predicted (i.e., modeled) one-hour ozone concentrations inside the modeling domain are at, or below, an acceptable upper limit above the NAAQS permitted under certain conditions (depending on the severity of the episode modeled). 3

In 1996, EPA issued guidance  4 to update the 1991 guidance referenced in 40 CFR part 51 Appendix W, to make the modeled attainment test more closely reflect the form of the NAAQS (i.e., the statistical test described above), to consider the area's ozone design value and the meteorological conditions accompanying observed exceedances, and to allow consideration of other evidence to address uncertainties in the modeling databases and application. When the modeling does not conclusively demonstrate attainment, EPA has concluded that additional analyses may be presented to help determine whether the area will attain the standard. As with other predictive tools, there are inherent uncertainties associated with air quality modeling and its results. The inherent imprecision of the model means that it may be inappropriate to view the specific numerical result of the model as the only determinant of whether the SIP controls are likely to lead to attainment. The EPA's guidance recognizes these limitations, and provides a means for considering other evidence to help assess whether attainment of the NAAQS is likely to be achieved. The process by which this is done is called a weight of evidence (WOE) determination. Under a WOE determination, the state can rely on, and EPA will consider in addition to the results of the modeled attainment test, other factors such as other modeled output (e.g., changes in the predicted frequency and pervasiveness of one-hour ozone NAAQS exceedances, and predicted change in the ozone design value); actual observed air quality trends (i.e. analyses of monitored air quality data); estimated emissions trends; and the responsiveness of the model predictions to further controls.

In 1999, EPA issued additional guidance  5 that makes further use of model results for base case and future emission estimates to predict a future design value. This guidance describes the use of an additional component of the WOE determination, which requires, under certain circumstances, additional emission reductions that are or will be approved into the SIP, but that were not included in the modeling analysis, that will further reduce the modeled design value. An area is considered to monitor attainment if each monitor site has air quality observed ozone design values (4th highest daily maximum ozone using the three most recent consecutive years of data) at or below the level of the standard. Therefore, it is appropriate for EPA, when making a determination that a control strategy will provide for attainment, to determine whether or not the model predicted future design value is expected to be at or below the level of the standard. Since the form of the one-hour NAAQS allows exceedances, it did not seem appropriate for EPA to require the test for attainment to be “no exceedances” in the future model predictions.

The method outlined in EPA's 1999 guidance uses the highest measured design value across all sites in the nonattainment area for each of three years. These three “design values” represent the air quality observed during the time period used to predict ozone for the base emissions. This is appropriate because the model is predicting the change in ozone from the base period to the future attainment date. The three yearly design values (highest across the area) are averaged to account for annual fluctuations in meteorology. The result is an estimate of an area's base year design value. The base year design value is multiplied by a ratio of the peak model predicted ozone concentrations in the attainment year ( i.e., average of daily maximum concentrations from all days modeled) to the peak model predicted ozone concentrations in the base year ( i.e., average of daily maximum concentrations from all days modeled). The result is an attainment year design value based on the relative change in peak model predicted ozone concentrations from the base year to the attainment year. Modeling results also show that emission control strategies designed to reduce areas of peak ozone concentrations generally result in similar ozone reductions in all core areas of the modeling domain, thereby providing some assurance of attainment at all monitors.

In the event that the attainment year design value is above the standard, the 1999 guidance provides a method for identifying additional emission reductions, not modeled, which at a minimum provide an estimated attainment year design value at the level of the standard. This step uses a locally derived factor which assumes a linear relationship between ozone and the precursors.

A commenter criticized the 1999 guidance as flawed on grounds that it allows the averaging of the three highest air quality sites across a region, whereas EPA's 1991 and 1996 modeling guidance requires that attainment be demonstrated at each site. This has the effect of allowing lower air quality concentrations to be averaged against higher concentrations thus reducing the total emission reduction needed to attain at the higher site. The commenter does not appear to have described the guidance accurately. The guidance does not recommend averaging across a region or spatial averaging of observed data. The guidance does recommend determination of the highest site in the region for each of the three-year periods, determined by the base year modeled. For example, if the base year is 1990, it is the amount of emissions in 1990 that must be adjusted or evaluated (by accounting for growth and controls) to determine whether attainment results. These 1990 emissions would contribute to three design value periods (1988-90, 1989-91 and 1990-92).

Under the approach of the guidance document, EPA determined the design value for each of those three-year periods, and then averaged those three design values, to determine the base design value. This approach is appropriate because, as just noted, the 1990 emissions contributed to each of those periods, and there is no reason to believe the 1990 (episodic) emissions resulted in the highest or lowest of the three design values. Averaging the three years is beneficial for another reason: It allows consideration of a broader range of meteorological conditions-those that occurred throughout the 1988-1992 period, rather than the meteorology that occurs in one particular year or even one particular ozone episode within that year. Furthermore, EPA relied on three-year averaging only for purposes of determining one component, i.e.—the small amount of additional emission reductions not modeled—of the WOE determination. The WOE determination, in turn, is intended to be part of a qualitative assessment of whether additional factors (including the additional emissions reductions not modeled), taken as a whole, indicate that the area is more likely than not to attain.

A commenter criticized the component of this WOE factor that estimates ambient improvement because it does not incorporate complete modeling of the additional emissions reductions. However, the regulations do not mandate, nor does EPA guidance suggest, that states must model all control measures being implemented. Moreover, a component of this technique—the estimation of future design value—should be considered a model-predicted estimate. Therefore, results from this technique are an extension of “photochemical grid” modeling and are consistent with section 182(c)(2)(A). Also, a commenter believes that EPA has not provided sufficient opportunity to evaluate the calculations used to estimate additional emission reductions. EPA provided a full 60-day period for comment on all aspects of the proposed rule. EPA has received several comments on the technical aspects of the approach and the results of its application, as discussed above and in the responses to the individual SIPs.

A commenter states that application of the method of attainment analysis used for the December 16, 1999 NPRs will yield a lower control estimate than if we relied entirely on reducing maximum predictions in every grid cell to less than or equal to 124 ppb on every modeled day. However, the commenter's approach may overestimate needed controls because the form of the standard allows up to 3 exceedances in 3 years in every grid cell. If the model over predicts observed concentrations, predicted controls may be further overestimated. EPA has considered other evidence, as described above through the weight of evidence determination.

When reviewing a SIP, EPA must make a determination that the control measures adopted are reasonably likely to lead to attainment. Reliance on the WOE factors allows EPA to make this determination based on a greater body of information presented by the states and available to EPA. This information includes model results for the majority of the control measures. Although not all measures were modeled, EPA reviewed the model's response to changes in emissions as well as observed air quality changes to evaluate the impact of a few additional measures, not modeled. EPA's decision was further strengthened by each state's commitment to check progress towards attainment in a mid-course review and to adopt additional measures, if the anticipated progress is not being made.

A commenter further criticized EPA's technique for estimating the ambient impact of additional emissions reductions not modeled on grounds that EPA employed a “rollback” modeling technique that, according to the commenter, is precluded under EPA regulations. The commenter explained that 40 CFR part 51 Appendix W section 6.2.1.e. provides, “Proportional (rollback/forward) modeling is not an acceptable procedure for evaluating ozone control strategies.” Section 14.0 of Appendix W defines “rollback” as “a simple model that assumes that if emissions from each source affecting a given receptor are decreased by the same percentage, ambient air quality concentrations decrease proportionately.” Under this approach if 20 percent improvement in ozone is needed for the area to reach attainment, it is assumed a 20 percent reduction in VOC would be required. There was no approach for identifying NO X reductions.

The “proportional rollback” approach is based on a purely empirically/mathematically derived relationship. EPA did not rely on this approach in its evaluation of the attainment demonstrations. The prohibition in Appendix W applies to the use of a rollback method which is empirically/mathematically derived and independent of model estimates or observed air quality and emissions changes as the sole method for evaluating control strategies. For the demonstrations under proposal, EPA used a locally derived (as determined by the model and/or observed changes in air quality) ratio of change in emissions to change in ozone to estimate additional emission reductions to achieve an additional increment of ambient improvement in ozone.

For example, if monitoring or modeling results indicate that ozone was reduced by 25 ppb during a particular period, and that VOC and NO X emissions fell by 20 tons per day and 10 tons per day respectively during that period, EPA developed a ratio of ozone improvement related to reductions in VOC and NO X . This formula assumes a linear relationship between the precursors and ozone for a small amount of ozone improvement, but it is not a “proportional rollback” technique. Further, EPA uses these locally derived adjustment factors as a component to estimate the extent to which additional emissions reductions—not the core control strategies—would reduce ozone levels and thereby strengthen the weight of evidence test. EPA uses the UAM to evaluate the core control strategies.

This limited use of adjustment factors is more technically sound than the unacceptable use of proportional rollback to determine the ambient impact of the entire set of emissions reductions required under the attainment SIP. The limited use of adjustment factors is acceptable for practical reasons: it obviates the need to expend more time and resources to perform additional modeling. In addition, the adjustment factor is a locally derived relationship between ozone and its precursors based on air quality observations and/or modeling which is more consistent with recommendations referenced by Appendix W and does not assume a direct proportional relationship between ozone and its precursors. Lastly, the requirement that areas perform a mid-course review (a check of progress toward attainment) provides a margin of safety.

A commenter expressed concerns that EPA used a modeling technique (proportional rollback) that was expressly prohibited by 40 CFR part 51 Appendix W, without expressly proposing to do so in a notice of proposed rulemaking. However, the commenter is mistaken. As explained above, EPA did not use or rely upon a proportional rollback technique in this rulemaking, but used UAM to evaluate the core control strategies and then applied its WOE guidance. Therefore, because EPA did not use an “alternative model” to UAM, it did not trigger an obligation to modify Appendix W. Furthermore, EPA did propose the use the November 1999 guidance “Guidance for Improving Weight of Evidence Through Identification of Additional Emission Reductions, Not Modeled” in the December 16, 1999 NPR and has responded to all comments received on that guidance elsewhere in this document.

A commenter also expressed concern that EPA applied unacceptably broad discretion in fashioning and applying the WOE determinations. For all of the attainment submittals proposed for approval in December 1999 concerning serious and severe ozone nonattainment areas, EPA first reviewed the UAM results. In all cases, the UAM results did not pass the deterministic test. In two cases—Milwaukee and Chicago—the UAM results passed the statistical test; in the rest of the cases, the UAM results failed the statistical test. The UAM has inherent limitations that, in EPA's view, were manifest in all these cases. These limitations include: (1) Only selected time periods were modeled, not the entire three-year period used as the definitive means for determining an area's attainment status; (2) inherent uncertainties in the model formulation and model inputs such as hourly emission estimates, emissions growth projections, biogenic emission estimates, and derived wind speeds and directions. As a result, for all areas, even Milwaukee and Chicago, EPA examined additional analyses to indicate whether additional SIP controls would yield meaningful reductions in ozone values. These analyses did not point to the need for additional emission reductions for Springfield, Greater Connecticut, Metropolitan Washington DC, Chicago and Milwaukee, but did point to the need for additional reductions, in varying amounts, in the other areas. As a result, the other areas submitted control requirements to provide the indicated level of emissions reductions. EPA applied the same methodology in these areas, but because of differences in the application of the model to the circumstances of each individual area, the results differed on a case-by-case basis.

As another WOE factor, for areas within the NO X SIP call domain, results from the EPA regional modeling for NO X controls as well as the Tier2/Low Sulfur program were considered. Also, for all of the areas, EPA considered recent changes in air quality and emissions. For some areas, this was helpful because there were emission reductions in the most recent years that could be related to observed changes in air quality, while for other areas there appeared to be little change in either air quality or emissions. For areas in which air quality trends, associated with changes in emissions levels, could be discerned, these observed changes were used to help decide whether or not the emission controls in the plan would provide progress towards attainment.

The commenter also complained that EPA has applied the WOE determinations to adjust modeling results only when those results indicate nonattainment, and not when they indicate attainment. First, we disagree with the premise of this comment: EPA does not apply the WOE factors to adjust model results. EPA applies the WOE factors as additional analysis to compensate for uncertainty in the air quality modeling. Second, EPA has applied WOE determinations to all of the attainment demonstrations proposed for approval in December 1999. Although for most of them, the air quality modeling results by themselves indicated nonattainment, for two metropolitan areas—Chicago and Milwaukee, including parts of the States of Illinois, Indiana, and Wisconsin, the air quality modeling did indicate attainment on the basis of the statistical test.

The commenter further criticized EPA's application of the WOE determination on grounds that EPA ignores evidence indicating that continued nonattainment is likely, such as, according to the commenter, monitoring data indicating that ozone levels in many cities during 1999 continue to exceed the NAAQS by margins as wide or wider than those predicted by the UAM. EPA has reviewed the evidence provided by the commenter. The 1999 monitor values do not constitute substantial evidence indicating that the SIPs will not provide for attainment. These values do not reflect either the local or regional control programs which are scheduled for implementation in the next several years. Once implemented, these controls are expected to lower emissions and thereby lower ozone values. Moreover, there is little evidence to support the statement that ozone levels in many cities during 1999 continue to exceed the NAAQS by margins as wide or wider than those predicted by the UAM. Since areas did not model 1999 ozone levels using 1999 meteorology and 1999 emissions which reflect reductions anticipated by control measures, that are or will be approved into the SIP, there is no way to determine how the UAM predictions for 1999 compare to the 1999 air quality. Therefore, we can not determine whether or not the monitor values exceed the NAAQS by a wider margin than the UAM predictions for 1999. In summary, there is little evidence to support the conclusion that high exceedances in 1999 will continue to occur after adopted control measures are implemented.

In addition, the commenter argued that in applying the WOE determinations, EPA ignored factors showing that the SIPs under-predict future emissions, and the commenter included as examples certain mobile source emissions sub-inventories. EPA did not ignore possible under-prediction in mobile emissions. EPA is presently evaluating mobile source emissions data as part of an effort to update the computer model for estimating mobile source emissions. EPA is considering various changes to the model, and is not prepared to conclude at this time that the net effect of all these various changes would be to increase or decrease emissions estimates. For attainment demonstration SIPs that rely on the Tier 2/Low Sulfur program for attainment or otherwise (i.e., reflect these programs in their motor vehicle emissions budgets), states have committed to revise their motor vehicle emissions budgets after the MOBILE6 model is released. EPA will work with states on a case-by-case basis if the new emission estimates raise issues about the sufficiency of the attainment demonstration. If analysis indicates additional measures are needed, EPA will take the appropriate action.

Comment 2: Comments were raised asserting that monitored air quality and air quality trends as late as 1999 do not support attainment in the Baltimore area.

Response 2: At the time of the 1999 monitored readings, the Baltimore area had not implemented certain measures that were required to be implemented as part of the attainment demonstration. Moreover, neither the Baltimore area (nor areas upwind of the Baltimore area) have yet implemented the NO X reductions required under the NO X SIP Call (63 FR 57356, October 27, 1998). (EPA has, however, approved Maryland's SIP revision which contains regulations to implement the NO X SIP Call.) Implementation of all these controls may be expected to reduce ozone levels in the Baltimore area resulting in a downward trend in ozone concentrations. Meteorology also was an important factor in the high ozone levels of 1999. In 1999 the entire Northeastern United States was gripped in a severe drought characterized by clear skies and hot temperatures leading to higher than normal ozone concentrations. For these reasons, air quality trends do not constitute a meaningful factor for the WOE analysis for the Baltimore area.

Comment 3: A comment was received that asserts that EPA has chosen to ignore unmistakable calculations that indicated violations of the one-hour standard in the Baltimore area.

Response 3: When reviewing a SIP, EPA must make a reasonable determination that the control measures identified are reasonably likely to attain. Under the WOE determination, EPA has made these determinations based on all of the information presented by the states and available to EPA. This included model results for the majority of the control measures. Though all measures were not modeled, EPA reviewed the model's response to changes in emissions as well as observed air quality changes to evaluate the impact of a few additional measures, not modeled. The State of Maryland has made a commitment to adopt the additional measures needed for attainment that were identified through the application of EPA's 1999 guidance (See footnote 4). EPA's decision to propose approval of the attainment demonstrations for the Baltimore area was further strengthened by Maryland's commitment to a mid-course review to check progress towards attainment in 2003 along with a commitment to take corrective action if the anticipated progress is not being made.

Comment 4: A comment raised the issue that the Maryland Department of the Environment (MDE) modeled only one episode while the modeling guidance requirement is three episodes. The comment also asserts that the grid resolution of the Ozone Transport Assessment Group (OTAG) modeling would preclude its use in the determination of urban attainment.

Response 4: EPA's 1991 guidance recommends modeling three different episodes representing three predominant meteorological regimes conducive to high ozone. However, due to time constraints and model performance problems, MDE only analyzed one episode with local scale modeling (July 18-20, 1991). The third day of this episode July 20, 1991 is a very severe ozone episode day with a meteorological ozone forming potential ranking of 10 (Cox and Chu 1996). The Cox and Chu analysis ranked all summer days over the past 50 years according to the severity of each day's meteorological ozone forming potential. The most severe day would receive a ranking of one. Given the severity of the July 1991 episode, it is likely to be the controlling episode in the Baltimore area in the determination of reductions needed for attainment. This episode represents one of the most frequently occurring weather patterns conducive to elevated levels of ambient ozone in the Baltimore area as described in the Maryland Department of the Environment document entitled, “Phase II Attainment Plan for the Baltimore Region and Cecil County.”

EPA shared the concerns expressed in the comment in regard to the limitations of analyses for a single episode and its associated set of meteorological conditions. Therefore, to supplement the review, EPA considered other analyses. For consideration of other meteorological conditions EPA relied on the modeling described in the Supplemental Notice of Proposed Rulemaking for the NO X SIP Call. Three NO X SIP call episodes (1991, 1993, 1995) were analyzed using methodologies very similar to the methodologies outlined in EPA's 1999 guidance (See footnote 7). EPA was able to determine that the NO X SIP call results supported the MDE analyses and that controls identified in the SIP would make progress towards attainment, and with the “additional measures” identified by EPA, would provide for attainment. In regard to the geographic resolution of the NO X SIP call modeling, EPA performed a review of the sensitivity of the estimates of future design values to reduction factors derived from 12km grid cells versus 4 km grid cells and was able to show that very little model accuracy is lost when grid size is increased from 5 kilometers (MDE grid resolution) to 12 kilometers (NO X SIP call grid resolution).

Comment 5: A commenter takes issue with EPA's conclusion that the model over-predicted by 22 percent, yet the Modeling Technical Support Document for Baltimore's Attainment SIP concluded that UAM-IV's validation performance with respect to the July 18-20 episode was within EPA recommended tolerances.

Response 5: Model performance within EPA recommended tolerances is used as a screening analysis to determine if the model is performing acceptably. If performance is unacceptable, EPA recommends selection of another episode. In this case the performance was acceptable and the results of the modeling analyses were used. However, EPA model performance criteria are such that systematic model over-prediction in peak concentrations is possible despite overall compliance with EPA model performance criteria. In EPA's view, consideration of the over-prediction is one way to assess modeling uncertainty. To further address uncertainty, EPA applied the 1999 guidance to estimate the Baltimore area future ozone design value using the same technique that was applied to all of the other attainment demonstrations received. Both the assessment of over-prediction and the estimated future design value were used in the WOE determination.

Comment 6: A commenter asserts that model over-prediction in the base case does not necessarily translate to the same model over-prediction in the future case.

Response 6: It is very probable that if the model over predicts peak ozone concentrations in the base case it will over predict peak ozone concentrations in the future or attainment year. EPA agrees that there is no scientific method for evaluating model performance in the future. However, EPA can review the possible implications of model over prediction. EPA's assessment of the impact that the over-prediction may have on future predictions was an attempt to determine if model over-prediction was not a factor would the model predict attainment. In this case, when the magnitude of possible over-prediction is considered, the modeling results indicate attainment is likely, which, therefore, supports EPA's decision to approve the SIP.

Comment 7: A comment was received that asserts it is extremely inappropriate for EPA to adjust the model results downward by 22 percent so that the peak ozone concentration in 2005 is 129 ppb rather than 147 ppb as the model predicted in the Baltimore area modeling.

Response 7: EPA believes that it is appropriate to make the adjustment in the model results as an additional WOE argument in support of attainment for the following reasons. EPA guidance recommends assessment of model performance (both over- and under-prediction) as one of the factors affecting the model results. In general performance measures that fall within EPA recommended ranges are considered as an indication that the model is performing acceptably. For the Baltimore area, EPA more closely reviewed and used this review as part of the WOE. The technique is described in Technical Support Document for the One-Hour Ozone Attainment Demonstration submitted by the State of Maryland for the Baltimore Ozone Nonattainment Area.(see footnote 5). The modeled peak ozone results ( the ozone plume) generally correlated (in geographic proximity) with the monitored peak ozone except that the peak modeled ozone levels averaged approximately 22% higher than the peak monitored levels. This led EPA to conclude that adjusting the model predicted peak concentration by 22% was a reasonable approach for accounting for model uncertainty/over-prediction. If the peak modeled and monitored ozone plumes had not occurred in the same location, EPA would not have had adequate information to reasonably judge that the model is actually over-predicting peak ozone concentration. Even if the modeled peak ozone concentration for the July 1991 episode is not adjusted for model over-prediction, the peak concentration of 147 ppb is only 7 ppb greater than the concentration that would be allowed (140 ppb) on a day with an ozone forming potential as severe as that of July 20, 1991 (Cox and Chu, 1996). Therefore, given the control measures modeled, coupled with the “additional measures” identified by EPA, and given the Court's support for the NO X SIP call, EPA feels Baltimore will attain the standard, as expeditiously as practicable.

Comment 8: A comment asserts that the Baltimore area local attainment modeling predicts ozone concentrations so far in excess of the ozone NAAQS that a weight of evidence analysis should not even be considered in the demonstration of attainment.

Response 8: As discussed in the technical support document that EPA prepared in support of its proposed action on Maryland's April 24, 1998 SIP revision (See 64 FR 70397, December 16, 1999), EPA disagrees that the Baltimore area local modeling predicts ozone concentrations so far in excess of the ozone NAAQS that a weight of evidence analysis should not even be considered in the demonstration of attainment. 6 Maryland's ozone attainment demonstration is primarily based on photochemical grid modeling of a July 1991 episode. Because of the severity of the July 1991 episode, photochemical grid modeling for the Baltimore area predicts values above the standard. However, the July 1991 episode is a very severe ozone episode with a meteorological ozone forming potential ranking of 10 (Cox and Chu 1996). The Cox and Chu analysis ranked all summer days over the past 50 years according to the severity of each day's meteorological ozone forming potential. In 1996, EPA issued additional guidance  7 to update the 1991 guidance referenced in 40 CFR 50 Appendix W by making the modeled attainment test more closely reflect the form of the NAAQS and in doing so allowing some modeled exceedances on very severe episode days in addition to allowing the consideration of other evidence to address uncertainties in the modeling databases and application. Due to the severity of the July 1991 episode, a peak modeled concentration of 140 ppb is, according to EPA's 1996 modeling guidance, consistent with attainment. While the peak modeled concentration for the July 1991 episode in the Baltimore area was 147 ppb, this was likely to be an over-prediction, and in any event, was close enough to 140 ppb for Maryland to consider other information to determine the likelihood of attainment. When the modeling does not conclusively demonstrate attainment, EPA has concluded that additional analyses may be presented to help determine whether the area will attain the standard. As with other predictive tools, there are inherent uncertainties associated with air quality modeling and its results. The inherent imprecision of the model means that it may be inappropriate to view the specific numerical result of the model as the only determinant of whether the SIP controls are likely to lead to attainment. EPA's guidance recognizes these limitations, and provides a means for considering other evidence to help assess whether attainment of the NAAQS is likely to be achieved. The process by which this is done is the WOE determination.

Maryland used WOE to show that the Baltimore area is likely to attain. Maryland's primary WOE analysis is based on EPA's 1999 guidance 8 in which an attainment year design value is predicted using relative changes in peak ozone concentration from the base year to the attainment year using local scale modeling results. An area is considered to monitor attainment if each monitor site has air quality observed ozone design values (4th highest daily maximum ozone using the three most recent consecutive years of data) at or below the level of the standard. In the case where the calculated attainment year design value is above the standard, the 1999 guidance provides a methodology for identifying additional emission reductions not modeled, that are or will be approved into the SIP, which at a minimum provide an estimated attainment year design value at the level of the standard. This step uses a locally derived factor which assumes a linear relationship between monitored ozone and precursors. The resulting attainment year design value meets the NAAQS. Even though an exceedance of the NAAQS was modeled, Maryland's WOE demonstration shows that the Baltimore area is projected to experience enough air quality improvement to demonstrate attainment in 2005, i.e., provides for a 2005 year projected design value below the standard.

Comment: Several commenters stated that given the uncertainty surrounding the NO X SIP Call at the time of EPA's proposals on the attainment demonstrations, there is no basis for the conclusion reached by EPA that states should assume implementation of the NO X SIP Call, or rely on it as a part of their demonstrations. One commenter claims that there were errors in the emissions inventories used for the NO X SIP Call Supplemental Notice (SNPR) and that these inaccuracies were carried over to the modeling analyses, estimates of air quality based on that modeling, and estimates of EPA's Tier 2 tailpipe emissions reduction program not modeled in the demonstrations. Thus, because of the inaccuracies in the inventories used for the NO X SIP Call, the attainment demonstration modeling is also flawed. Finally, one commenter suggests that modeling data demonstrates that the benefits of imposing NO X SIP Call controls are limited to areas near the sources controlled.

Response: These comments were submitted prior to several court decisions largely upholding EPA's NO X SIP Call. Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. denied, _U.S._, 121 S. Ct. 1225, 149 L.Ed. 135 (2001); Appalachian Power v. EPA, 251 F.3d 1026 (D.C. Cir. 2001) . In those cases, the court largely upheld the NO X SIP Call. Although a few issues were vacated or remanded to EPA for further consideration, these issues do not concern the accuracy of the emission inventories relied on for purposes of the NO X SIP Call. Moreover, contrary to the commenter's suggestion, the NO X SIP Call modeling data bases were not used to develop estimates of reductions from the Tier 2 program for the severe-area one-hour attainment demonstrations. Accordingly, the commenter's concerns that inaccurate inventories for the NO X SIP Call modeling lead to inaccurate results for the severe-area one-hour attainment demonstrations are inapposite.

The remanded issues do affect the ability of EPA and the states to achieve the full level of the SIP Call reductions by May 2003. First, the court vacated the rule as it applied to two states—Missouri and Georgia—and also remanded the definition of a co-generator and the assumed emission limit for internal combustion engines. EPA has informed the states that until EPA addresses the remanded issues, EPA will accept SIPs that do not include those small portions of the emission budget. However, EPA is planning to propose a rule shortly to address the remanded issues and ensure that emission reductions from these states and the emission reductions represented by the two source categories are addressed in time to benefit the severe nonattainment areas. Also, although the court in the Michigan case subsequently issued an order delaying the implementation date to no later than May 31, 2004, and the Appalachian Power case remanded an issue concerning computation of the electric generating units (EGU) growth factor, it is EPA's view that states should assume that the SIP Call reductions will occur in time to ensure attainment in the severe nonattainment areas. Both EPA and the states are moving forward to implement the NO X SIP Call.

Finally, contrary to the commenter's conclusions, EPA's modeling to determine the region-wide impacts of the NO X SIP Call clearly shows that regional transport of ozone and its precursors is impacting nonattainment areas several states away. This analysis was upheld by the court in Michigan.

Comment: Several commenters disagreed with EPA's proposal to approve states' attainment demonstrations because: (a) Not all of the emissions reductions assumed in the demonstrations have actually taken place, (b) are reflected in rules yet to be adopted and approved by a state and approved by EPA as part of the SIP, (c) are credited illegally as part of a demonstration because they are not approved by EPA as part of the SIP, or (d) the commenter maintains that EPA does not have authority to accept enforceable state commitments to adopt measures in the future in lieu of current adopted measures to fill a near-term shortfall of reductions.

Response: EPA disagrees with the comments, and believes—consistent with past practice—that the CAA allows approval of enforceable commitments that are limited in scope where circumstances exist that warrant the use of such commitments in place of adopted measures. 9 Once EPA determines that circumstances warrant consideration of an enforceable commitment, EPA believes that three factors should be considered in determining whether to approve the enforceable commitment: (1) Whether the commitment addresses a limited portion of the statutorily-required program; (2) whether the state is capable of fulfilling its commitment; and (3) whether the commitment is for a reasonable and appropriate period of time.

As an initial matter, EPA believes that present circumstances for the New York City, Philadelphia, Baltimore, and Houston nonattainment areas warrant the consideration of enforceable commitments. The Northeast states that make up the New York, Philadelphia and Baltimore nonattainment areas submitted SIPs that they reasonably believed demonstrated attainment with fully adopted measures. After EPA's initial review of the plans, EPA recommended to these areas that additional controls would be necessary to ensure attainment. Because these areas had already submitted plans with many fully adopted rules and the adoption of additional rules would take some time, EPA believed it was appropriate to allow these areas to supplement their plans with enforceable commitments to adopt and submit control measures to achieve the additional necessary reductions. For Maryland's attainment demonstration for the Baltimore area, EPA has determined that the submission of enforceable commitments in place of adopted control measures for this limited set of reductions will not interfere with the area's ability to meet its 2005 attainment obligations.

EPA's approach here of considering enforceable commitments that are limited in scope is not new. EPA has historically recognized that under certain circumstances, issuing full approval may be appropriate for a submission that consists, in part, of an enforceable commitment. See, e.g., 62 FR 1150, 1187, January 8, 1997 (ozone attainment demonstration for the South Coast Air Basin); 65 FR 18903, April. 10, 2000 (revisions to attainment demonstration for the South Coast Air Basin); 63 FR 41326, August 3, 1998 (federal implementation plan for PM-10 for Phoenix); 48 FR 51472 (state implementation plan for New Jersey). Nothing in the Act speaks directly to the approvability of enforceable commitments. 10 However, EPA believes that its interpretation is consistent with provisions of the CAA. For example, section 110(a)(2)(A) provides that each SIP “shall include enforceable emission limitations and other control measures, means or techniques* * * as well as schedules and timetables for compliance, as may be necessary or appropriate to met the applicable requirement of the Act.” (Emphasis added). Section 172(c)(6) of the Act requires, as a rule generally applicable to nonattainment SIPs, that the SIP “include enforceable emission limitations and such other control measures, means or techniques * * * as may be necessary or appropriate to provide for attainment * * * by the applicable attainment date * * * ” (Emphasis added). The emphasized terms mean that enforceable emission limitations and other control measures do not necessarily need to generate reductions in the full amount needed to attain. Rather, the emissions limitations and other control measures may be supplemented with other SIP rules—for example, the enforceable commitments EPA is approving today—as long as the entire package of measures and rules provides for attainment.

As provided previously, after concluding that the circumstances warrant consideration of an enforceable commitment—as they do for the Baltimore area—EPA would consider three factors in determining whether to approve the submitted commitments. First, EPA believes that the commitments must be limited in scope. In 1994, in considering EPA's authority under section 110(k)(4) to conditionally approve unenforceable commitments, the Court of Appeals for the District of Columbia Circuit struck down an EPA policy that would allow states to submit (under limited circumstances) commitments for entire programs. Natural Resources Defense Council v. EPA, 22 F.3d 1125 (D.C. Cir. 1994). While EPA does not believe that case is directly applicable here, EPA agrees with the Court that other provisions in the Act contemplate that a SIP submission will consist of more than a mere commitment. See NRDC, 22 F.3d at 1134.

In the present circumstances, the commitments address only a small portion of the plan. For the Baltimore area, Maryland's commitment addresses only 9.5 percent VOC and 0 percent NO X of the emission reductions necessary to attain the standard. Please see Sections I.G. and I.H. of this document for a comprehensive description of all of the adopted control measures and other components of the Maryland attainment demonstration SIP's control strategy for the Baltimore area.

As to the second factor, whether the state is capable of fulfilling the commitment, EPA considered the current or potential availability of measures capable of achieving the additional level of reductions represented by the commitment. For the New York, Philadelphia and Baltimore nonattainment areas, EPA believes that there are sufficient untapped sources of emission reductions that could achieve the minimal levels of additional reductions that the areas need. This is supported by the recent recommendation of the OTC regarding specific controls that could be adopted to achieve the level of reductions needed for each of these three nonattainment areas. Thus, EPA believes that the states will be able to find sources of reductions to meet the shortfall. The states that comprise the New York, Philadelphia and Baltimore nonattainment areas are making significant progress toward adopting the measures to fill the shortfall. The OTC has met and on March 28, 2001 recommended a set of control measures. Currently, the states are working through their adoption processes with respect to those, and in some cases other, control measures.

Although EPA has evidence that the state may not make the submission on or before the date to which it has committed, EPA believes that it is making sufficient progress to support approval of the commitment. The State of Maryland has indicated that it would submit and implement the measures within a time period fully consistent with the Baltimore area attaining the standard by its approved attainment date.

The third factor, EPA has considered in determining to approve limited commitments for the Baltimore area attainment demonstrations is whether the commitment is for a reasonable and appropriate period. EPA recognizes that both the Act and EPA have historically emphasized the need for submission of adopted control measures in order to ensure expeditious implementation and achievement of required emissions reductions. Thus, to the extent that other factors—such as the need to consider innovative control strategies—support the consideration of an enforceable commitment in place of adopted control measures, the commitment should provide for the adoption of the necessary control measures on an expeditious, yet practicable, schedule.

As provided above, for the New York, Baltimore and Philadelphia areas, EPA proposed that these areas have time to work within the framework of the OTC to develop, if appropriate, a regional control strategy to achieve the necessary reductions and then to adopt the controls on a state-by-state basis. In the proposed approval of the attainment demonstrations, EPA proposed that these areas would have approximately 22 months to complete the OTC and state-adoption processes—a fairly ambitious schedule—i.e., until October 31, 2001. As a starting point in suggesting this time frame for submission of the adopted controls, EPA first considered the CAA “SIP Call” provision of the CAA—section 110(k)(5)—which provides states with up to 18 months to submit a SIP after EPA requests a SIP revision. While EPA may have ended its inquiry there, and provided for the states to submit the measures within 18 months of its proposed approval of the attainment demonstrations, EPA further considered that these areas were all located with the Northeast Ozone Transport Region and determined that it was appropriate to provide these areas with additional time to work through the OTR process to determine if regional controls would be appropriate for addressing the shortfall. EPA believed that allowing these states until 2001 to adopt these additional measures would not undercut their attainment dates of November 2005 or 2007 or the ability of these areas to meet their ROP requirement. EPA still believes that this a reasonable schedule for the states to submit adopted control measures that will achieve the additional necessary reductions.

The enforceable commitments submitted by Maryland for the Baltimore nonattainment area, in conjunction with the other SIP measures and other sources of emissions reductions, constitute the required demonstration of attainment. EPA believes that the delay in submittal of the final rules is permissible under section 110(k)(3) because the state has obligated itself to submit the rules by specified short-term dates, and that obligation is enforceable by EPA and the public. Moreover, as discussed in the proposal and TSD, the SIP submittal approved today contains major substantive components submitted as adopted regulations and enforceable orders.

Comment: Several commenters have stated that there is no evidence in several states that they have adopted reasonably available control measures (RACM) or that the SIPs have provided for attainment as expeditiously as practicable. Specifically, the lack of Transportation Control Measures (TCMs) was cited in several comments, but commenters also raised concerns about potential stationary source controls. One commenter stated that mobile source emission budgets in the plans are by definition inadequate because the SIPs do not demonstrate timely attainment or contain the emissions reductions required for all RACM. That commenter claims that EPA may not find adequate a motor vehicle emission budget (MVEB) that is derived from a SIP that is inadequate for the purpose for which it is submitted. The commenter alleges that none of the MVEBs submitted by the states that EPA is considering for adequacy is consistent with the level of emissions achieved by implementation of all RACM; nor are they derived from SIPs that provide for attainment. Some commenters stated that for measures that are not adopted into the SIP, the states must provide a justification for why they were determined to not be RACM.

Response: EPA reviewed the initial SIP submittals for the Baltimore area and determined that they did not include sufficient documentation concerning available RACM measures. For all of the severe areas for which EPA proposed approval in December 1999, EPA consequently issued policy guidance memorandum to have these states address the RACM requirement through an additional SIP submittal. (Memorandum of December 14, 2000, from John S. Seitz, Director, Office of Air Quality Planning and Standards, re: “Additional Submission on RACM from States with Severe One-Hour Ozone Nonattainment Area SIPs”).

On August 20, 2001, the State of Maryland submitted a revision to its 2005 attainment demonstration SIP for the Baltimore area which consists of an analysis of RACM. On September 7, 2001 (66 FR 46758), EPA published a SNPR proposing to approve this supplement to the SIP as meeting the RACM requirements. We received no timely comments on that September 7, 2001 SNPR. Based on this SIP supplement, EPA has concluded that the SIP for the Baltimore area meets the requirement for adopting RACM. In this final rule, EPA is approving Maryland's 2005 attainment demonstration plan for the Baltimore area including its RACM analysis and determination. This action that EPA is taking to approve the RACM analysis and determination of Maryland's attainment demonstration SIP for the Baltimore area is consistent with similar actions EPA is taking in final rules also signed on October 15, 2001 (which have been or soon will be published in the Federal Register ) to approve attainment demonstrations and RACM analyses for other severe ozone nonattainment areas, specifically that for the Houston-Galveston area.

Section 172(c)(1) of the Act requires SIPs to contain RACM and provides for areas to attain as expeditiously as practicable. EPA has previously provided guidance interpreting the requirements of 172(c)(1). See 57 FR 13498, 13560. In that guidance, EPA indicated its interpretation that potentially available measures that would not advance the attainment date for an area would not be considered RACM. EPA also indicated in that guidance that states should consider all potentially available measures to determine whether they were reasonably available for implementation in the area, and whether they would advance the attainment date. Further, states should indicate in their SIP submittals whether measures considered were reasonably available or not, and if measures are reasonably available they must be adopted as RACM.

Finally, EPA indicated that states could reject measures as not being RACM because they would not advance the attainment date, would cause substantial widespread and long-term adverse impacts, would be economically or technologically infeasible, or would be unavailable based on local considerations, including costs. EPA also issued a recent memorandum re-confirming the principles in the earlier guidance, entitled, “Guidance on the Reasonably Available Control Measures (RACM) Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas.” John S. Seitz, Director, Office of Air Quality Planning and Standards. November 30, 1999. Web site: www.epa.gov/ttn/oarpg/t1pgm.html.

As stated previously, the analysis submitted by Maryland on August 20, 2001, as a supplement to its attainment demonstration SIP for the Baltimore area, addresses the RACM requirement. Maryland has considered a variety of potential stationary/area source controls such as limits on area source categories not covered by a control technique guideline (e.g., motor vehicle refinishing, and surface/cleaning degreasing); rule effectiveness improvements; controls on major stationary sources of NO X that are beyond that required under reasonably available control technology (RACT); and other potential measures. Maryland considered a variety of potential mobile source control measures such as alternative fuel vehicles; bicycle and pedestrian improvements; early retirement of older motor vehicles; land use and development changes; transit improvements; employer based programs; congestion pricing for low occupancy vehicles; traffic flow improvements; outreach and education; parking restrictions; market-based/economic incentive-based program; low emission vehicle standards; and other measures such as trip reduction ordinances, value pricing and highway ramp metering.

The State has implemented measures which went beyond the Federally mandated controls, which were found to be cost effective and technologically feasible. Maryland has adopted and submitted rules for the following categories of area sources which go beyond the Federally mandated controls. The State has implemented measures which went beyond the Federally mandated controls, which were found to be cost effective and technologically feasible. Maryland has adopted and submitted rules for the following categories of area sources which go beyond the Federally mandated controls. The following are examples and not an exhaustive list:

(1) Maryland has adopted, and EPA has SIP approved, a rule for motor vehicle refinishing. The rule includes volatile organic compound content limits for motor vehicle refinishing coatings, application standards and storage and house keeping work practices. This rule goes beyond the Federal rule in content limits, and sets application and work practices standards.

(2) Maryland has adopted, and EPA has approved, a rule for control of VOC emissions from screen printing on plywood used for signs, and untreated sign paper.

(3) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from screen printing, lithographic printing, drying ovens, adhesive application, and laminating equipment used to produce a credit card or similar plastic card product.

(4) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from “digital imaging”—printers that use a computer driven machine to transfer an electronically stored image onto the substrate through the use of inks, toners, or other similar color graphic materials via ink jet, electrostatic, and spray jet technologies.

(5) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from cold and vapor degreasing that includes requirements that go beyond the applicable CTG. Maryland restricts the vapor pressure of solvents used to 1 mm Hg at 20 C (0.019 psia) or less for and cold degreasing, including cold or vapor degreasing at: service stations; motor vehicle repair shops; automobile dealerships; machine shops; and any other metal refinishing, cleaning, repair, or fabrication facility.

(6) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC and NO X emissions by banning open burning activities from June 1 through August 31 of each year.

(7) Maryland has adopted, and EPA has SIP approved, a rule for control of VOC emissions from lithographic printing.

(8) Maryland has adopted, and EPA has SIP approved, a rule to implement Phase II NO X controls under the OTC's MOU. This rule established a fixed cap on ozone-season NO X emissions from specified major point sources of NO X . The rule grants each source a fixed number of NO X allowances, applies state-wide, and required compliance starting during the 2000 ozone season. It reduces NO X emissions both inside and outside the Philadelphia area.

(9) Maryland has adopted, and EPA has SIP approved, a rule to implement the NO X SIP Call. The Maryland rule requires compliance commencing with the start of the 2003 ozone season. (This measure is identified as Phase II/III control under the OTC MOU on NO X control in the attainment demonstration).

(10) Maryland has also adopted, and EPA has SIP approved, a rule requiring the sale of vehicles under the national low-emission vehicle program (NLEV).

Maryland has considered a variety of potential mobile source control measures such as alternative fuel vehicles; bicycle and pedestrian improvements; early retirement of older motor vehicles; land use and development changes; transit improvements; employer based programs; congestion pricing for low occupancy vehicles; traffic flow improvements; outreach and education; parking restrictions; market-based/economic incentive-based program; and other measures such as trip reduction ordinances, value pricing and highway ramp metering.

Maryland determined that many of the considered measures were not to be RACM due to the potential for substantial widespread and long-term adverse impacts, or for various reasons related to local conditions, such as economics or implementation concerns. A large number of the considered measures were rejected on these grounds or on the grounds that they could not be implemented by 2005 much less any earlier. Some were rejected because they would not advance attainment because the measure had benefits outside the ozone season or would be sporadically implemented (not episodically) such as the “try transit week” items. These explanations are provided in further detail in the docket for this rulemaking. On September 7, 2001, EPA published an SNPR proposing to approve the RACM analysis submitted by Maryland on August 20, 2001 as a supplement to its 2005 attainment demonstration SIP for the Baltimore area. We received no timely comments on that SNPR. In this final rule, EPA is approving Maryland's 2005 attainment demonstration plan for the Baltimore area including its RACM analysis and determination.

Although EPA does not believe that section 172(c)(1) requires implementation of additional measures for the Maryland portion of the Baltimore area, this conclusion is not necessarily valid for other areas. Thus, a determination of RACM is necessary on a case-by-case basis and will depend on the circumstances for the individual area. In addition, if in the future EPA moves forward to implement another ozone standard, this RACM analysis would not control what is RACM for these or any other areas for that other ozone standard.

Also, EPA has long advocated that states consider the kinds of control measures that the commenters have suggested, and EPA has indeed provided guidance on those measures. See, e.g., www.epa.gov/otaq/transp.htm . In order to demonstrate that they will attain the one-hour ozone NAAQS as expeditiously as practicable, some areas may need to consider and adopt a number of measures-including the kind that the Baltimore area itself evaluated in its RACM analysis—that even collectively do not result in many emission reductions. Furthermore, EPA encourages areas to implement technically available and economically feasible measures to achieve emissions reductions in the short term-even if such measures do not advance the attainment date-since such measures will likely improve air quality. Also, over time, emission control measures that may not be RACM now for an area may ultimately become feasible for the same area due to advances in control technology or more cost-effective implementation techniques. Thus, areas should continue to assess the state of control technology as they make progress toward attainment and consider new control technologies that may in fact result in more expeditious improvement in air quality.

Because EPA is finding that the SIP meets the Clean Air Act's requirement for RACM and that there are no additional reasonably available control measures that can advance the attainment date, EPA concludes that the attainment date being approved is as expeditious as practicable.

Comment 1: We received a number of comments about the process and substance of EPA's review of the adequacy of motor vehicle emissions budgets for transportation conformity purposes.

Response 1: EPA's adequacy process for these SIPs has been completed, and we have found the motor vehicle emissions budgets in all of these SIPs to be adequate. We have already responded to any comments related to adequacy when we issued our adequacy findings, and, therefore, we are not listing the individual comments or responding to them here. Our findings of adequacy and responses to comments can be accessed at www.epa.gov/otaq/traq (once there, click on the “conformity” button). At the Web site, EPA regional contacts are identified.

Comment 2: There were several comments submitted related to the revised motor vehicle emission budgets of the December 21, 1999 submittal of the revised 2005 attainment plan. We received comments which asserted that when Maryland submitted a SIP revising the motor vehicle emissions budgets on December 21, 1999, that submittal is equivalent to submitting a new attainment demonstration and would therefore require a new photochemical grid modeling demonstration. Other commenters asserted that EPA could not determine that the motor vehicle emissions budgets of the December 21, 1999 submittal were adequate and could not, therefore, approve the attainment demonstration, unless the SIP demonstrated that increasing the motor vehicle emissions budgets will not interfere with any control strategy SIP's attainment requirements. Similar comments asserted that such a demonstration can only be based upon a current inventory of emissions from all sources and the emission reductions associated with the control strategies identified in the SIP are accurate under current circumstances. Other comments asserted that when Maryland submitted revised motor vehicle emissions budgets to reflect updated fleet data to EPA on December 21, 1999, that submittal demonstrated that motor vehicle emissions, due to aggregate motor vehicle mileage and other relevant parameters, were no longer consistent with the demonstration of attainment. Another comment contended that Maryland must revise the SIP to include transportation control measures (TCMs) for the area, including but not limited to, those listed in section 108(f) of the CAA, or, alternatively Maryland could submit a new attainment demonstration accounting for the increased vehicle emissions projections. A similar comment questioned why the SIP revision submitted on December 21, 1999 did not explain why the motor vehicle emissions budgets will not require corresponding reductions in emissions from other sources, or the adoption of additional TCMs. A comment specifically asserted that the Baltimore area is subject to CAA section 182(c)(5), which requires periodic submission of a demonstration that current aggregate vehicle milage and other relevant parameters are consistent with those in the attainment demonstration.

Response 2: EPA interprets CAA section 185(c)(2)(A) to require that the attainment demonstration for a serious or worse area to be based upon photochemical grid modeling. However, EPA never interpreted this section to require a new modeling demonstration to be necessary with every revision, such as revised budgets, to an attainment SIP. EPA believes that section 110(a)(2)(I) only requires SIP revisions for nonattainment areas to comply with the applicable part D requirements and does not require each of the part D requirements to be performed anew—especially in the case of amendments to previously submitted SIP revisions. For the reasons outlined in the December 16, 1999 NPR and in response to other comments regarding the attainment demonstration and weight of evidence, EPA has concluded that the photochemical grid modeling submitted prior to December 21, 1999 for the attainment demonstration is sufficient.

The revision to the attainment demonstration plan submitted by Maryland on December 21, 1999 included, among other things, revised mobile budgets. That December 21, 1999 submittal also included an enforceable commitment by the state to adopt additional measures to reduce, ton/day for ton/day, the increases in motor vehicle emissions of NO X and VOC resulting from the use of updated vehicle registration data. Those budgets were declared adequate on February 15, 2000 (Letter from Katz to DeBiase). The effective date of that adequacy finding for those budgets was March 8, 2000. See 65 FR 8701, February 22, 2000.

Most relevant to final approval of the attainment plan is the fact that the revision to the attainment demonstration submitted by Maryland on December 28, 2000, made to reflect the benefits of the Tier2/sulfur in fuel rulemaking, included revised mobile budgets. The budgets of the December 28, 2000 submittal were found adequate June 19, 2001 (Letter from Katz to DeBiase). The effective date of that adequacy finding for those budgets was July 20, 2001 (See 66 FR 35421, published July 5, 2001). The revised budgets of the December 28, 2000 submittal are lower than all previous budgets submitted in conjunction with the attainment demonstration SIP for the Baltimore area. These budgets are based upon a current inventory of emissions from all sources and the emission reductions associated with the control strategies identified in the SIP. The revised budgets of the2005 attainment demonstration SIP for the Baltimore area, submitted on December 28, 2000, are the budgets being approved with this final rule.

EPA interprets the Act's section 182(c)(5) requirement to apply only after there is an approved attainment demonstration or a promulgated Federal implementation plan. Therefore, this requirement is not a prerequisite for approval.

EPA has concluded that the budgets that are being approved in this action are adequate, and hence approvable, because these motor vehicle emissions budgets, when considered together with all other emissions sources, are consistent with applicable requirements for attainment. See 40 CFR 93.118(e)(4)(iv). EPA is approving Maryland's attainment demonstration because it is supported by an adequate modeling demonstration and enforceable commitments, the measures upon which the modeling demonstration are based are creditable, and the motor vehicle emissions budgets are low enough in comparison to those consistent with the control strategy's emission reductions necessary for attainment.

Comment 3: We received comments that assert that EPA cannot approve Maryland's motor vehicle emissions budgets because Maryland has not submitted the latest periodic inventory which was due three years after June 30, 1997 and because there is no demonstration that Maryland is meeting rate of progress requirements.

Response 3: EPA believes that the milestone compliance demonstration requirements of CAA section 182(g) and the periodic inventory requirements under section 182(a)(3)(A) each are independent requirements from the attainment demonstration requirements under CAA sections 172(c)(1) and 182(c)(2)(A). The periodic emissions inventory and milestone compliance demonstration requirements have no bearing on whether a state has submitted a SIP that projects attainment of the ozone NAAQS. EPA acknowledges that milestone compliance demonstration and periodic emission inventory requirements are independently required actions, but does not believe that these have any bearing on whether Maryland has submitted an approvable attainment demonstration SIP. EPA certainly expects that the periodic emissions inventory for 1999 would reflect the 1999 fleet data used in the final motor vehicle emissions budgets found in the final attainment demonstration SIP.

Comment 4: Maryland should not be permitted to initiate irrevocable transportation projects when its attainment demonstration is based on questionable shortfall calculations.

Response 4: The transportation conformity process is intended to prevent irrevocable investments in transportation projects that would worsen air quality. EPA has determined that Maryland's attainment demonstration includes motor vehicle emissions budgets that are adequate for this purpose. EPA is approving Maryland's enforceable commitment to adopt additional measures, that will not limit highway construction consistent with that permitted under the budget EPA has found adequate, to strengthen the attainment demonstration.

Comment 1: One commenter generally supports a policy of requiring motor vehicle emissions budgets to be recalculated when revised MOBILE models are released.

Response 1: The attainment demonstration for the Baltimore area includes a commitment to revise the motor vehicle emissions budgets within one year after MOBILE6 is released. EPA is approving that commitment in this final rulemaking.

Comment 2: The revised budgets calculated using MOBILE6 will likely be submitted after the MOBILE5 budgets have already been approved. EPA's policy is that submitted SIPs may not replace approved SIPs.

Response 2: This is the reason that EPA proposed in the July 28, 2000, SNPR (65 FR 46383) that the approval of the MOBILE5 budgets for conformity purposes would last only until MOBILE6 budgets had been submitted and found adequate. In this way, the MOBILE6 budgets can apply for conformity purposes as soon as they are found adequate. See the discussion at Section I.J. of this document.

Comment 3: If a state submits additional control measures that affect the motor vehicle emissions budget, but does not submit a revised motor vehicle emissions budget, EPA should not approve the attainment demonstration.

Response 3: EPA agrees. The motor vehicle emissions budgets in the Baltimore attainment demonstration reflect the motor vehicle control measures in the attainment demonstration. In addition, Maryland has committed to submit new budgets as a revision to the attainment SIP consistent with any new measures submitted to fill any shortfall, if the additional control measures affect on-road motor vehicle emissions. See the discussion at Section I.J. of this document.

Comment 4: EPA should make it clear that the motor vehicle emissions budgets to be used for conformity purposes will be determined from the total motor vehicle emissions reductions required in the SIP, even if the SIP does not explicitly quantify a revised motor vehicle emissions budget.

Response 4: EPA will not approve SIPs without motor vehicle emissions budgets that are explicitly quantified for conformity purposes. The Baltimore attainment demonstration contains explicitly quantified motor vehicle emissions budgets.

Comment 5: If a state fails to follow through on its commitment to submit the revised motor vehicle emissions budgets using MOBILE6, EPA could make a finding of failure to submit a portion of a SIP, which would trigger a sanctions clock under section 179.

Response 5: If a state fails to meet its SIP-approved commitment, EPA agrees that it could make a finding of failure to implement the SIP, which would start a sanctions clock under section 179 of the Clean Air Act.

Comment 6: If the budgets recalculated using MOBILE6 are larger than the MOBILE5 budgets, then attainment should be demonstrated again.

Response 6: As EPA proposed in its December 16, 1999 notices, we will work with states on a case-by-case basis if the new emissions estimates raise issues about the sufficiency of the attainment demonstration.

Comment 7: If the MOBILE6 budgets are smaller than the MOBILE5 budgets, the difference between the budgets should not be available for reallocation to other sources unless air quality data show that the area is attaining, and a revised attainment demonstration is submitted that demonstrates that the increased emissions are consistent with attainment and maintenance. Similarly, the MOBILE5 budgets should not be retained (while MOBILE6 is being used for conformity demonstrations) unless the above conditions are met.

Response 7: EPA agrees that if recalculation using MOBILE6 shows lower motor vehicle emissions than MOBILE5, then these motor vehicle emission reductions cannot be reallocated to other sources or assigned to the motor vehicle emissions budget as a safety margin unless the area reassesses the analysis in its attainment demonstration and shows that it will still attain. In other words, the area must assess how its original attainment demonstration is impacted by using MOBILE6 versus MOBILE5 before it reallocates any apparent motor vehicle emission reductions resulting from the use of MOBILE6. In addition, Maryland will be submitting new budgets based on MOBILE6, so the MOBILE5 budgets will not be retained in the SIP indefinitely.

Comment 1: We received a comment on whether the grace period before MOBILE6 is required in conformity determinations will be consistent with the schedules for revising SIP motor vehicle emissions budgets within 1 or 2 years of MOBILE6's release.

Response 1: This comment is not germane to this rulemaking, since the MOBILE6 grace period for conformity determinations is not explicitly tied to EPA's SIP policy and approvals. However, EPA understands that a longer grace period would allow some areas to better transition to new MOBILE6 budgets. EPA is considering the maximum two-year grace period allowed by the conformity rule, and EPA will address this in the future when the final MOBILE6 emissions model and policy guidance is released.

Comment 2: One commenter asked EPA to clarify in the final rule whether MOBILE6 will be required for conformity determinations once new MOBILE6 budgets are submitted and found adequate.

Response 2: This comment is not germane to this rulemaking. However, it is important to note that EPA intends to clarify its policy for implementing MOBILE6 in conformity determinations when the final MOBILE6 model is released. EPA believes that MOBILE6 should be used in conformity determinations once new MOBILE6 budgets are found adequate.

Comment: One commenter did not prefer the additional option for a second year before the state has to revise the conformity budgets with MOBILE6, since new conformity determinations and new transportation projects could be delayed in the second year.

Response: EPA proposed the additional option to provide further flexibility in managing MOBILE6 budget revisions. The supplemental proposal did not change the original option to revise budgets within one year of MOBILE6's release. State and local governments can continue to use the one-year option, if desired, or submit a new commitment consistent with the alternative two-year option. EPA expects that state and local agencies have consulted on which option is appropriate and have considered the impact on future conformity determinations. Maryland has committed to revise its budgets using MOBILE6 within one year of its release.

Comment: Several commenters stated that the motor vehicle emissions inventory is not current, particularly with respect to the fleet mix. Commenters stated that the fleet mix does not accurately reflect the growing proportion of sport utility vehicles and gasoline trucks, which pollute more than conventional cars. Also, a commenter stated that EPA and states have not followed a consistent practice in updating SIP modeling to account for changes in vehicle fleets. For these reasons, commenters recommend disapproving the SIPs.

Response: All of the SIPs on which we are taking final action are based on the most recent vehicle registration data available at the time the SIP was submitted. The SIPs use the same vehicle fleet characteristics that were used in the most recent periodic inventory update. Maryland used 1999 vehicle registration data in the final motor vehicle emissions budgets found in the attainment demonstration SIP for the Baltimore area. EPA requires the most recent available data to be used, but we do not require it to be updated on a specific schedule. Therefore, different SIPs base their fleet mix on different years of data. Our guidance does not suggest that SIPs should be disapproved on this basis. Nevertheless, we do expect that revisions to these SIPs that are submitted using MOBILE6 (as required in those cases where the SIP is relying on emissions reductions from the Tier 2 standards) will use updated vehicle registration data appropriate for use with MOBILE6, whether it is updated local data or the updated national default data that will be part of MOBILE6.

Comment: For states that need additional VOC reductions, one commenter recommends a process to achieve these VOC emission reductions, which involves the use of HFC-152a (1,1 difluoroethane) as the blowing agent in manufacturing of polystyrene foam products such as food trays and egg cartons. The commenter states that HFC-152a could be used instead of hydrocarbons, a known pollutant, as a blowing agent. Use of HFC-152a, which is classified as VOC exempt, would eliminate nationwide the entire 25,000 tons/year of VOC emissions from this industry.

Response: EPA has met with the commenter and has discussed the technology described by the company to reduce VOC emissions from polystyrene foam blowing through the use of HFC-152a (1,1 difluoroethane), which is a VOC exempt compound, as a blowing agent. Since the HFC-152a is VOC exempt, its use would give a VOC reduction compared to the use of VOCs such as pentane or butane as a blowing agent. However, EPA has not studied this technology exhaustively. It is each state's prerogative to specify which measures it will adopt in order to achieve the additional VOC reductions it needs. In evaluating the use of HFC-152a, states may want to consider claims that products made with this blowing agent are comparable in quality to products made with other blowing agents. Also the question of the over-all long term environmental effect of encouraging emissions of fluorine compounds would be relevant to consider. This is a technology which states may want to consider, but ultimately, the decision of whether to require this particular technology to achieve the necessary VOC emissions reductions must be made by each affected state. Finally, EPA notes that under the significant new alternatives policy (SNAP) program, created under CAA section 612, EPA has identified acceptable foam blowing agents man of which are not VOCs ( www.epa.gov/ozone/title6/snap/ ).

Comment 1: States should not be given credit for measures that are not fully implemented. For example, the states are being given full credit for Federal coating, refinishing and consumer product rules that have been delayed or weakened.

Response 1: Architectural and Industrial Maintenance (AIM) Coatings: On March 22, 1995 EPA issued a memorandum  11 that provided that states could claim a 20 percent reduction in VOC emissions from the AIM coatings category in ROP and attainment plans based on the anticipated promulgation of a national AIM coatings rule. In developing the attainment and ROP SIPs for their nonattainment areas, states relied on this memorandum to estimate emission reductions from the anticipated national AIM rule. EPA promulgated the final AIM rule in September 1998, codified at 40 CFR part 59 subpart D. In the preamble to EPA's final AIM coatings regulation, EPA estimated that the regulation will result in 20 percent reduction of nationwide VOC emissions from AIM coatings categories (63 FR 48855). The estimated VOC reductions from the final AIM rule resulted in the same level as those estimated in the March 1995 EPA policy memorandum.

In accordance with EPA's final regulation, states have assumed a 20 percent reduction from AIM coatings source categories in their attainment and ROP plans. AIM coatings manufacturers were required to be in compliance with the final regulation within one year of promulgation, except for certain pesticide formulations which were given an additional year to comply. Thus all manufacturers were required to comply, at the latest, by September 2000. Industry confirmed in comments on the proposed AIM rule that 12 months between the issuance of the final rule and the compliance deadline would be sufficient to “use up existing label stock” and “adjust inventories” to conform to the rule (63 FR 48848, September 11, 1998). In addition, EPA determined that, after the compliance date, the volume of nonconforming products would be very low (less than one percent) and would be withdrawn from retail shelves anyway. Therefore, EPA believes that compliant coatings were in use by the Fall of 1999 with full reductions to be achieved by September 2000 and that it was appropriate for the states to take credit for a 20 percent emission reduction in their SIPs.

Autobody Refinish Coatings Rule: Consistent with a November 27, 1994 EPA policy  12 , many states claimed a 37 percent reduction from this source category based on a proposed rule.

However, EPA's final rule, “National Volatile Organic Compound Emission Standards for Automobile Refinish Coatings,” published on September 11, 1998 (63 FR 48806), did not regulate lacquer topcoats and will result in a smaller emission reduction of around 33 percent overall nationwide. The 37 percent emission reduction from EPA's proposed rule was an estimate of the total nationwide emission reduction. Since this number is an overall national average, the actual reduction achieved in any particular area could vary depending on the level of control which already existed in the area. For example, in California the reduction from the national rule is zero because California's rules are more stringent than the national rule. In the proposed rule, the estimated percentage reduction for areas that were unregulated before the national rule was about 40 percent. However as a result of the lacquer topcoat exemption added between proposal and final rule, the reduction is now estimated to be 36 percent for previously unregulated areas. Thus, most previously unregulated areas will need to make up the approximately 1 percent difference between the 37 percent estimate of reductions assumed by states, following EPA guidance based on the proposal, and the 36 percent reduction actually achieved by the final rule for previously unregulated areas. EPA's best estimate of the reduction potential of the final rule was spelled out in a September 19, 1996 memorandum entitled “Emissions Calculations for the Automobile Refinish Coatings Final Rule” from Mark Morris to Docket No. A-95-18.

Consumer Products Rule: Consistent with a June 22, 1995 EPA guidance  13 , states claimed a 20 percent reduction from this source category based on EPA's proposed rule. The final rule, “National Volatile Organic Compound Emission Standards for Consumer Products,” (63 FR 48819, September 11, 1998), has resulted in a 20 percent reduction after the December 10, 1998 compliance date. Moreover, these reductions largely occurred by the Fall of 1999. In the consumer products rule, EPA determined and the consumer products industry concurred, that a significant proportion of subject products have been reformulated in response to state regulations and in anticipation of the final rule (63 FR 48819). That is, industry reformulated the products covered by the consumer products rule in advance of the final rule. Therefore, EPA believes that complying products in accordance with the rule were in use by the Fall of 1999. It was appropriate for the states to take credit for a 20 percent emission reduction for the consumer products rule in their SIPs.

Comment 2: We received comments that EPA should not approve Maryland's attainment demonstration because Maryland relied upon an EPA guidance memorandum that was based upon the proposed rulemaking's estimates for reductions for architectural and industrial maintenance coatings.

Response 2: EPA's March 22, 1995 memorandum  14 allowed states to claim a 20 percent reduction in VOC emissions from the AIM coatings category in ROP and attainment plans based on the anticipated promulgation of a national AIM coatings rule. In developing the attainment and ROP SIPs for their nonattainment areas, states relied on this memorandum to estimate emission reductions from the anticipated national AIM rule. EPA promulgated the final AIM rule in September 1998, codified at 40 CFR part 59 subpart D. In the preamble to EPA's final AIM coatings regulation, EPA estimated that the regulation will result in 20 percent reduction of nationwide VOC emissions from AIM coatings categories (63 FR 48855). The estimated VOC reductions from the final AIM rule resulted in the same level as those estimated in the March 1995 EPA policy memorandum. In accordance with EPA's final regulation, states have correctly assumed a 20 percent reduction from AIM coatings source categories in its attainment and ROP plans. The basis for the 20 percent reductions achieved by the final rule is documented in the rulemaking docket for the AIM coatings final rule in a memorandum “VOC Emissions Reductions from the Final National Architectural Coatings Rule” from Chris Sarsony, ERG, to Linda Herring, U. S. EPA, dated July 27, 1998 (docket A-92-18, item number IV-B-2).

Comment: The attainment demonstrations do not clearly set out programs for enforcement of the various control strategies relied on for emission reduction credit.

Response: In general, state enforcement, personnel and funding program elements are contained in SIP revisions previously approved by EPA under obligations set forth in section 110(a)(2)(c) of the Clean Air Act. Once approved by the EPA, there is no need for states to re-adopt and resubmit these programs with each and every SIP revision generally required by other sections of the Act. Maryland had previously received approval of their section 110(a)(2) SIPs. In a final rulemaking action published on March 8, 1984 (49 FR 8610), EPA approved Maryland's financial and manpower resource commitments, after having proposed approval of these commitments on February 3, 1983 (48 FR 5048, 5052). In addition, emission control regulations will also contain specific enforcement mechanisms, such as record keeping and reporting requirements, and may also provide for periodic state inspections and reviews of the affected sources. EPA's review of these regulations includes review of the enforceability of the regulations. Rules that are not enforceable are generally not approved by EPA. To the extent that the ozone attainment demonstration and ROP plan depend on specific state emission control regulations these individual regulations have undergone review by EPA in past approval actions.

Comment: We received comments that objected to crediting the attainment plan with reductions from measures not approved into the SIP. The comments specifically mentioned the NO X RACT rule and the Phase II NO X controls under the OTC MOU. We also received comments on these programs which stated that the applicability of the NO X RACT requirement should extend down to sources with emissions of 25 tons per year or more.

Response: These comments are no longer germane to the Baltimore area. On, February 8, 2001, EPA fully approved Maryland's NO X RACT rule (66 FR 9522). On December 15, 2000, EPA fully approved Maryland's rule that implements the Phase II controls under the OTC MOU to control NO X (65 FR 78416). The comment regarding extending the applicability of RACT down to 25 ton per year sources is moot because the applicability threshold for NO X RACT in Maryland's SIP-approved rule for the Baltimore severe nonattainment area is 25 tons per year or more as required by the Act.

Comment: One commenter claims that the plans fail to demonstrate emission reductions of 3 percent per year over each 3-year period between November 1999 and November 2002; and November 2002 and November 2005; and the 2-year period between November 2005 and November 2007, as required by 42 U.S.C. section 7511a(c)(2)(B). The states have not even attempted to demonstrate compliance with these requirements, and EPA has not proposed to find that they have been met. EPA has absolutely no authority to waive the statutory mandate for 3 percent annual reductions. The statute does not allow EPA to use the NO X SIP call or 126 orders as an excuse for waiving rate-of-progress (ROP) deadlines. The statutory ROP requirement is for emission reductions—not ambient reductions. Emission reductions in upwind states do not waive the statutory requirement for 3 percent annual emission reductions within the downwind nonattainment area.

Response: Under no condition is EPA waiving the statutory requirement for 3 percent annual emission reductions. For many areas, EPA did not propose approval of the post-99 ROP demonstrations at the same time as EPA proposed action on the area's attainment demonstration.

On August 6, 2001 (66 FR 40947), EPA published a notice of proposed rulemaking (NPR) for the State of Maryland. The NPR proposed approval of the post 1996 ROP plans for milestone years 1999, 2002 and 2005 for the Baltimore ozone nonattainment area submitted by the State of Maryland on December 24, 1997, as revised on April 24, 1998, August 18, 1998, December 21, 1999 and December 28, 2000. We received no comments on that NPR. EPA has approved Maryland's rate of progress plan for this area for all years after 1996 through the attainment year of 2005. See 66 FR 49108, September 26, 2001.

As provided in EPA's final action on the Maryland's ROP plan (66 FR 49108), the state is relying on emission reductions achieved within the Baltimore area from fully promulgated Federal and fully adopted, SIP-approved NO X and VOC measures for meeting the ROP requirement.

Comment 1: We received comments in response to the December 16, 1999 NPR that asserted NO X emission reduction estimates claimed by Maryland are unreliable for Maryland's Phase II and Phase III control under the OTC NO X MOU. The comments note that in February 1999, a Maryland Court remanded the implementation schedule in Maryland's regulation and thus claim without definitive emission reduction schedules from one of the largest NO X producing utilities in the state, the SIP reduction estimates are unreliable.

Response 1: Regarding the Phase II reductions under the OTC NO X MOU, Maryland has reached settlement agreements with the pertinent utilities. The settlements indicate that the estimated NO X reductions projected for the years 2002 and 2005 will not be affected. Maryland has provided copies of those agreements to EPA. EPA fully approved the Maryland NO X Budget Rule to implement the Phase II controls as a SIP revision. See 65 FR 78416, December 15, 2000. This approval includes these agreements. By the ozone season of the year 2002, under the terms of those settlement agreements, both utilities are required to be in compliance with the Maryland's NO X Budget Program under all circumstances.

Regarding the Phase III reductions, EPA disagrees with the comments because the comments were based upon a Maryland rule has been superceded by a SIP approved rule that applies to all years after 2003 and that contains none of the alleged defects identified in the comments. On January 10, 2001, EPA approved Maryland's SIP to address EPA's NO X SIP Call rule into the Maryland SIP (66 FR 1866). This rule requires reductions of NO X from major stationary sources equivalent to EPA's NO X SIP Call regulation and requires sources to achieve compliance with the final seasonal NO X allocations commencing with the 2003 ozone season. This rule contains no provisions which allow sources to avoid compliance in the event that the NO X allowance market fails to materialize or if the price of these allowances is unreasonable. EPA has determined that this rule substantively provides for the NO X reductions that Maryland modeled in their local scale modeling submitted to EPA in support of Maryland's attainment demonstration for the Baltimore Area.

Comment 2: We received comments asserting that on December 17, 1999, EPA granted section 126 petitions filed by four states to reduce ozone through reductions in NO X emissions from other states, and that under those petitions, fifteen (15) facilities located in Maryland will have to reduce NO X emissions by a total of 19,466 tons by May 1, 2003. The comments express concerns about the accountability of these reductions as compared to those assumed in the attainment demonstration. The comments assert that EPA's decision on the 126 petitions will clearly change state and Ozone Transport Group implementation schedules and should be addressed by the state prior to SIP approval.

Response 2: As noted in the December 16, 1999 proposal, Maryland's attainment demonstration plan assumed NO X reductions consistent with those called for by EPA's NO X SIP Call. In consideration of recent court decisions on the NO X SIP Call, described herein and as explained in EPA's response to comments on “Reliance on NO X SIP Call and Tier 2 Modeling,” EPA believes it is appropriate to allow states to continue to assume the reductions from the NO X SIP Call. The fact that EPA has granted section 126 petitions does not remove the obligations of states subject to the NO X SIP Call to reduce NO X emissions as called for in that rule. Furthermore, implementation of either the section 126 rules (described in the following paragraphs) or the NO X SIP Call achieves emission reductions prior to the applicable attainment deadline, 2005. Under recent rulings by the U.S. Court of Appeals for the District of Columbia Circuit both the 126 rule and the NO X SIP Call must be implemented early in the ozone season in 2004. Therefore, EPA does not agree that there is a need for the state to address its implementation schedule in light of the section 126 petition action.

On August 14-15, 1997, we received petitions submitted individually by eight Northeastern States under section 126 of the CAA. Each petition requested us to make a finding that sources in certain categories of stationary sources in upwind states emit or would emit NO X in violation of the prohibition in section 110(a)(2)(D)(i) on emissions that contribute significantly to nonattainment, or interfere with maintenance, in the petitioning state. On May 25, 1999, we promulgated a final rule (May 1999 Rule) determining that portions of the petitions are approvable under the one-hour and/or eight-hour ozone NAAQS based on their technical merit (64 FR 28250). Based on the affirmative technical determinations for the one-hour ozone NAAQS made in the May 1999 Rule, we promulgated a final rule on January 18, 2000 (January 2000 Rule) making section 126 findings that a number of large electric generating units (EGUs) and large industrial boilers and turbines named in the petitions emit in violation of the CAA prohibition against significantly contributing to nonattainment or maintenance problems in the petitioning states (65 FR 2674). In the January 2000 Rule, we also finalized the Federal NO X Budget Trading Program as the control remedy for sources affected by the rule. This requirement replaces the default remedy in the May 1999 Rule. The January 2000 Rule establishes Federal NO X emissions limits that sources must meet through a cap-and-trade program by May 1, 2003. The January 2000 rule affects sources located in the District of Columbia, Delaware, Maryland, North Carolina, New Jersey, Ohio, Pennsylvania, Virginia, West Virginia, and parts of Indiana, Kentucky, Michigan, and New York. All of the affected sources are located in states that are subject to the NO X SIP Call.

On October 27, 1998 (63 FR 57356), EPA promulgated the “Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone,” commonly referred to as the NO X SIP Call. On March 3, 2000, the D.C. Circuit issued its decision on the NO X SIP Call regarding the one-hour ozone NAAQS ruling in favor of EPA on all the major issues. Michigan v. EPA, supra. On June 22, 2000, the Court ordered that we allow the states and the District of Columbia 128 days from June 22, 2000 to submit their SIPs. Accordingly, 19 states and the District of Columbia were required to submit SIPs in response to the NO X SIP Call by October 30, 2000. 15 On August 30, 2000, the D.C. Circuit ordered that the June 22, 2000 Order be amended to extend the deadline for implementation of the NO X SIP Call from May 1, 2003 to May 31, 2004. In a separate rulemaking, we are addressing the Court's remand of the definition of electricity generating units, the control level for large stationary internal combustion engines and the SIP submittal and compliance dates for these actions, which affect less than 10 percent of the total emission reductions called for by the NO X SIP Call.

Furthermore, as noted in this document in response to the previous comment in this document, Maryland has a state regulation in place to implement the SIP Call requirements. This State rule has been approved into the Maryland SIP and requires compliance commencing May 1, 2003.

Comment 3: We received comments in response to the December 16, 1999 NPR asserting that the NO X Phase II/III emissions reduction estimates asserted by the Maryland Department of the Environment are unreliable because the NO X trading rule may not work. The comments raise the following concerns: If a NO X allowance market “fails to materialize” or if the price of these allowances is “unreasonable” the “safe harbor provision” will allow a utility to avoid purchasing credits. Without definitive emission reduction schedules from one of the largest NO X producing utilities in the state, the SIP reduction estimates are unreliable, at best, and misleadingly optimistic at worst. There is no guarantee that the OTC NO X Budget Program will function and achieve its emissions target. The price of allowances may be prohibitively high allowing Maryland sources to avoid purchasing credits.

Response 3: EPA disagrees with the comments and maintains that cap-and-trade programs are an effective remedy for achieving emissions reductions in a cost-effective manner. Under cap-and-trade programs, total emissions are limited at the regional level. Sources are then given individual emissions limits expressed in the form of allowances, i.e., tradable permits equal to one ton of NO X . A source has the option of reducing its emissions to or beyond its initial allowance level or of reducing to less than its initial allocation level and purchasing allowances from another source. Regardless of the compliance strategy a source employs, the environmental integrity of the program and of the emissions reductions remain intact because the total number of allowances remains capped. Every allowance available on the allowance market represents a ton of NO X another plant did not emit.

The Acid Rain Program is a similar cap-and-trade program which has been in effect since 1995. Each year since 1995, emissions have been reduced beyond the required level and sources have achieved 100 percent compliance. The experience of the Acid Rain Program has been that the larger, higher emitting units reduced the most because they had the most cost-effective reductions to make.

Regarding comments that the OTC NO X Budget Program will fail to function and achieve its emissions target, EPA disagrees for the following reasons: In 1999, the initial year of the Phase II, the OTC NO X Budget Program was a success. According to EPA's OTC NO X compliance report, 99 percent of the sources achieved full compliance. Furthermore, sources in the OTC over controlled during the 1999 ozone season, reducing their emissions 20 percent beyond the required control level. These allowances may be traded on the allowances market in future years and used for compliance.

Moreover, a viable NO X allowances market was created; during the 15 months between the onset of allowance trading and 1999 reconciliation (December 30, 1999), 138,790 allowances were transferred. Of these transactions, EPA estimated that nearly 40 percent of them (53,563) were transferred between non-affiliated parties. Over 28 percent of the allowances traded were future year allowances (2000-2002 vintage years) not available for compliance in 1999; another indication that the NO X allowance market is strong.

EPA notes that the concerns about the price of allowances did not materialize. During the first year of the OTC NO X Budget Program, there was significant price volatility. Before the start of the program allowance prices generally fluctuated between $1500 and $3000 and peaked at $7500/ton in February, 1999. However, once it became apparent that there would be more than enough allowances available for compliance in 1999, allowance prices dropped steadily. Since October 1999, the prices have been more or less steady at $600-$800 a ton. As the second control period begins, there is no indication that either allowance prices or price volatility are on the rise again.

Comment 1: We received comments asserting that Maryland appears to have relied upon an EPA memorandum dated November 28, 1994 when calculating emission reduction credits for control measures for nonroad small gasoline engines (NSGE). The comments state that because the NSGE Phase II rules were not published until 1998, the accuracy of the emissions reductions anticipated in the 1994 guidance is questionable and that the memorandum upon which MDE appears to have relied suggests that states include a safety margin in their emission reduction estimates for NSGE. The comments conclude that there is no evidence in the SIP that MDE incorporated a safety margin into the reductions.

Response 1: The State of Maryland acted consistent with guidance provided by EPA. However, in a December 28, 2000 revision, Maryland updated its attainment demonstration and ROP plans to include the benefits expected to accrue from the final Federal rules and thus is no longer relying on the guidance cited by the comments when determining the benefits for the Federal NSGE rule. (The cited guidance does provide guidance based upon final rules for one category of nonroad sources.)

Comment 2: We received comments asserting that Maryland needs to produce up-to-date emissions reduction calculations for surface cleaning/degreasing and automobile refinishing. The comments claim that the MDE asserts that new state rules for these source categories will result in 70 percent and 45 percent reductions in VOC from degreasing and automobile refinishing products, respectively and that these claims are not supported with reliable data and it is impossible for the public to evaluate the reliability of these predictions.

Response 2: The Maryland degreasing regulation went beyond the draft-CTG requirements (which are estimated to be around 60 percent reduction) and so should generate deeper reductions when compared to reductions anticipated from the CTG. EPA estimates the efficiency of the automobile refinishing national rule to be around 36 percent in areas which did not previously have a rule. Maryland's autobody reductions are based upon a its state rule which has its own state limits and additional requirements such as application equipment requirements as discussed in a previous response to previous comment in Section II.K.

Comment: One commenter notes that EPA has been working toward promulgation of a revised eight-hour ozone National Ambient Air Quality Standard (NAAQS) because the Administrator deemed attaining the one-hour ozone NAAQS is not adequate to protect public health. Therefore, EPA must ensure that measures be implemented now that will be sufficient to meet the one-hour standard and that make as much progress toward implementing the eight-hour ozone standard as the requirements of the CAA and implementing regulations allow.

Response: The one-hour standard remains in effect for all of these areas and the SIPs that have been submitted are for the purpose of achieving that NAAQS. Congress has provided the states with the authority to choose the measures necessary to attain the NAAQS and EPA cannot second guess the states' choice if EPA determines that the SIP meets the requirements of the CAA. EPA believes that the SIPs for the severe areas meet the requirements for attainment demonstrations for the one-hour standard and thus, could not disapprove them even if EPA believed other control requirements might be more effective for attaining the eight-hour standard. However, EPA generally believes that emission controls implemented to attain the one-hour ozone standard will be beneficial towards attainment of the eight-hour ozone standard as well. This is particularly true regarding the implementation of NO X emission controls resulting from EPA's NO X SIP Call.

Finally, EPA notes that although the eight-hour ozone standard has been adopted by EPA, implementation of this standard has been delayed while certain aspects of the standard remain before the United States Circuit Court of Appeals. The states and EPA have yet to define the eight-hour ozone nonattainment areas and EPA has yet to issue guidance and requirements for the implementation of the eight-hour ozone standard.

EPA is fully approving Maryland's one-hour ozone attainment demonstration SIP revision for the Baltimore area which was submitted on April 29, 1998, and revised on August 18, 1998, December 21, 1999, December 28, 2000, and August 20, 2001 including its analysis and determination of RACM.

EPA is approving the enforceable commitments made to the Maryland's attainment plan for the Baltimore severe ozone nonattainment area, which were submitted on December 28, 2000. The enforceable commitments are to:

(1) Submit measures by October 31, 2001 for additional emission reductions necessary for attainment in the attainment demonstration test, and to revise the SIP and motor vehicle emissions budgets by October 31, 2001 if the additional measures affect the motor vehicle emissions inventory,

(2) Revise the SIP and motor vehicle emission budgets using MOBILE6 within one year after it is issued, and

(3) Perform a mid-course review by December 31, 2003.

EPA is approving the following mobile budgets of the Baltimore area 2005 attainment plan:

We are only approving the attainment demonstration and its current budgets because Maryland has provided an enforceable commitment to revise the budgets using the MOBILE6 model within one year of EPA's release of that model. Therefore, we are limiting the duration of our approval of the current budgets only until such time as the revised budgets are found adequate. Those revised budgets will be more appropriate than the budgets we are approving for conformity purposes for the time being.

Similarly, EPA is only approving the 2005 attainment demonstration and its currents budgets because Maryland has provided an enforceable commitment to submit new budgets as a revision to the attainment SIP consistent with any new measures submitted to fill any shortfall, if the new additional control measures affect on-road motor vehicle emissions. Therefore, EPA is limiting the duration of its approval of the current budgets only until such time as any such revised budgets are found adequate. Those revised budgets will be more appropriate than the budgets EPA is approving for conformity purposes for the time being.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning regulations That significantly Affect Energy Supply, Distribution, or Use' (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 Note ) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action to approve the ozone attainment demonstration SIP revision for the Baltimore severe nonattainment area submitted by the Maryland Department of the Environment may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

On July 13, 2000, the Governor of Texas submitted a revised Chapter 115, “Control of Air Pollution From Volatile Organic Compounds,” as a revision to the SIP. The July 13, 2000, SIP submittal concerned Solvent Using Processes, Surface Coating Processes, Aerospace Manufacturing and Rework Operations. The Governor also requested that the revised Chapter 115 replace three site-specific ARACT determinations EPA previously approved as part of the Texas SIP.

On March 27, 1998, EPA amended the National Emission Standards for Hazardous Air Pollutants (NESHAP) final rule and released the final CTG Document for Aerospace Manufacturing and Rework Facilities. See 63 FR 15006. The EPA released the draft CTG for this source category at the same time as we proposed to amend the NESHAP for Aerospace Manufacturing and Rework Facilities. See 61 FR 55842, published October 29, 1996. Earlier, we had established the final NESHAP standards for Aerospace Manufacturing and Rework Facilities. See 60 FR 45948, published on September 1, 1995.

On January 20, 1994, we approved an Alternate Reasonably Available Control Technology (ARACT) demonstration for Air Force Plant 4, operated by the Lockheed Corporation of Fort Worth, Texas. See 59 FR 2991.

On May 30, 1997, we approved an ARACT demonstration for Bell Helicopter Textron, Incorporated; Bell Plant 1 Facility of Fort Worth, Texas. See 62 FR 29297.

On February 9, 1998, we approved an ARACT demonstration for Raytheon TI Systems, Inc., (RTIS) of Dallas, Texas. See 63 FR 6491.

The final NESHAP rule revision and the CTG document for Aerospace Manufacturing and Rework Operations, as published on March 27, 1998, are more comprehensive and detailed than the existing SIP approved ARACTs for these companies.

The TNRCC has incorporated the contents of the Aerospace Manufacturing and Rework Operations' CTG into Chapter 115, and is requesting that EPA remove the existing SIP ARACTs for the three Aerospace Manufacturing and Rework companies from the approved Texas SIP, and replace them with the revised Chapter 115 rules.

The State also made non-substantive revisions to the Chapter 115 rules, e.g., substituting federal definitions. The following Table contains title of the rule, rule's log number, and a summary of the affected sections, under the proposed rule revision.

We are approving revisions to the Texas SIP concerning control of VOC emissions from Surface Coating Processes, Aerospace Manufacturing and Rework Operations. We are approving the rule revisions under sections 110(k)(3) and 183(b)(3) of the Act, as meeting the RACT requirements under section 182(b)(2) of the Act. We are of the opinion that these rule revisions will reduce the aggregate VOC emissions, and are consistent with our CTGs and other applicable RACT guidance. Therefore, we are removing from the Texas SIP, the ARACTS for Lockheed Air Force Plant 4, Bell Helicopter Textron Plant 1, and Raytheon TI Systems. These three sources will now, for purposes of federal enforcement under the Texas SIP, be subject to the requirements of the SIP-approved Chapter 115, rather than the previously approved ARACT determinations. For more information on this SIP revision and our evaluation, please refer to our Technical Support Document (TSD) dated November 2000.

You can find our guidelines on Aerospace Manufacturing and Rework Operations in 63 FR 15006, published on March 27, 1998. We have attached a copy of this document with our TSD dated July 2001.

A CTG is an EPA document that establishes a “presumptive norm” for RACT for a specific VOC source category. Under the pre-amended Act, EPA issued CTG documents for 29 categories of VOC sources. Section 183 of the amended Act requires that EPA issue 13 new CTGs. Appendix E of the General Preamble of Title I (57 FR 18077) lists the categories for which EPA plans to issue new CTGs.

We issued a CTG pursuant to section 183 to reduce VOC emissions from aerospace coatings and solvents on March 27, 1998. See 63 FR 15006. This CTG applies to aerospace coating operations with the minimum potential to emit of 50 tons per year (tpy) of VOC. This CTG addresses RACT for control of VOC emissions from aerospace and rework facilities. Emission limits for processes also addressed in the final revised NESHAP are identical to the NESHAP limits.

Oxygen in the atmosphere reacts with VOCs and Oxides of Nitrogen to form ozone, a key component of urban smog. Inhaling even low levels of ozone can trigger a variety of health problems including chest pains, coughing, nausea, throat irritation, and congestion. It also can worsen bronchitis and asthma. Exposure to ozone can also reduce lung capacity in healthy adults.

Texas adopted EPA's guidelines for the Aerospace Manufacturing and Rework Operations into its Chapter 115 rules, because (1) our guidelines are more comprehensive and detailed than the existing SIP approved ARACTs for Aerospace Manufacturing and Rework Operations, and (2) those companies with a SIP-approved ARACT determination will not have to comply with two different sets of regulations, i.e., the SIP's ARACT requirements versus the NESHAP rule, for their surface coating processes.

For detailed evaluation of the specific provisions of this rule revision, please see our TSD dated November 2000.

Yes, the new aerospace rules and the non-substantive, administrative changes will continue to meet the RACT requirements, because they will (1) delete and remove unnecessary requirements, (2) reduce confusion, (3) streamline regulations, (4) improve applicability determination, and (5) enhance compliance determination for enforcement purposes. They are consistent with EPA's CTGs and other RACT guidance. For these reasons we are approving the proposed rule revisions into the Texas SIP.

Section 110 of the Act requires States to develop air pollution regulations and control strategies to ensure that State air quality meets the National Ambient Air Quality Standards (NAAQS) that EPA has established. Under section 109 of the Act, EPA established the NAAQS to protect public health. The NAAQS address six criteria pollutants. These criteria pollutants are: carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide.

Each State may submit these regulations and control strategies to us for approval and incorporation into the federally enforceable SIP. Each State has a SIP designed to protect air quality. These SIPs can be extensive, containing State regulations or other enforceable documents and supporting information such as emission inventories, monitoring networks, and modeling demonstrations.

When a State wants to incorporate its regulations into the federally enforceable SIP, the State must formally adopt the regulations and control strategies consistent with State and Federal requirements. This process includes a public notice, a public hearing, a public comment period, and a formal adoption by a state-authorized rulemaking body.

Once a State adopts a rule, regulation, or control strategy, the State may submit the adopted provisions to us and request that we include these provisions in the federally enforceable SIP. We must then decide on an appropriate Federal action, provide public notice on this action, and seek additional public comment regarding this action. If we receive adverse comments, we must address them prior to a final action.

Under section 110 of the Act, when we approve all State regulations and supporting information, those State regulations and supporting information become a part of the federally approved SIP. You can find records of these SIP actions in the Code of Federal Regulations at Title 40, part 52, entitled “Approval and Promulgation of Implementation Plans.” The actual State regulations that we approved are not reproduced in their entirety in the CFR but are “incorporated by reference,” which means that we have approved a given State regulation with a specific effective date.

A State may enforce State regulations before and after we incorporate those regulations into a federally approved SIP. After we incorporate those regulations into a federally approved SIP, EPA has the authority to take enforcement action against violators of these regulations. Citizens have also legal recourse to address violations as described in section 304 of the Act.

These rules will affect the companies with surface coatings associated with the Aerospace Manufacturing and Rework Operations within the State of Texas that have a potential to emit at least 50 tpy of VOCs; specifically, Bell Helicopter Textron, Raytheon TI Systems, Inc., and Lockheed Corporation, which are in the Dallas/Fort Worth 1-hour ozone nonattainment area. If you are one of such companies, you need to refer to these rules to find out if and how these rules will affect you.

The EPA is publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the “Proposed Rules” section of today's Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the SIP revision if adverse comments are received. This rule will be effective on December 31, 2001 without further notice unless we receive adverse comment by November 29, 2001. If EPA receives adverse comments, we will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. We will address all public comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L 104-4). This rule also does not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it 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 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 Note ) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings' issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. section 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. section 804(2). This rule will be effective December 31, 2001 unless EPA receives adverse written comments by November 29, 2001.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2)of the Act.)

On December 7, 1998, February 2, 1999, April 20, 1999, March 23, 2001 (two separate submissions), and July 5, 2001, PADEP submitted revisions to the Pennsylvania SIP to establish and impose RACT for several sources of VOC and/or NO X . This rulemaking pertains to fourteen (14) of those sources. The remaining sources are or have been the subject of separate rulemakings. The Commonwealth's submittals consist of plan approvals and operating permits which impose VOC and/or NO X RACT requirements for each source. These sources are all located in the Philadelphia area and include Aldan Rubber Company; Arbill Industries, Inc.; Bethlehem Lukens Plate; Braceland Brothers, Inc.; Graphic Arts, Inc.; International Business Systems; McWhorter Technologies; Montenay Montgomery Ltd.; Newman and Company; Northeast Foods; Northeast Water Pollution Control Plant (Philadelphia Water Department); O'Brien (Philadelphia) Cogeneration, Inc.—Northeast Water Pollution Control Plant; O'Brien (Philadelphia) Cogeneration, Inc.—Southwest Water Pollution Control Plant; and Pearl Pressman Liberty.

On September 10, 2001 (66 FR 46953), EPA published a direct final rule and a companion notice of proposed rulemaking (66 FR 46971) to approve these SIP revisions. On October 9, 2001, we received adverse comments on our direct final rule from the Citizens for Pennsylvania's Future (PennFuture). On October 10, 2001, EPA signed a timely withdrawal for publication in the Federal Register informing the public that the direct final rule did not take effect. We indicated in our September 10, 2001 direct final rulemaking that if we received adverse comments, EPA would address all public comments in a subsequent final rule based on the proposed rule (66 FR 46971). This is that subsequent final rule. A description of the RACT determination(s) made for each source was provided in the September 10, 2001 direct final rule and will not be restated here. A summary of the comments submitted and EPA's responses are provided in Section II of this document.

On October 9, 2001, the Citizens for Pennsylvania's Future (PennFuture) submitted adverse comments on the proposed rule published by EPA in the Federal Register on September 10, 2001 to approve case-by-case RACT SIP submissions from the Commonwealth for NO X and or VOC sources located in the Philadelphia area. We also received letters of clarification from Montenay Energy Resources of Montgomery County; Pepper Hamilton LLP on behalf of its client, Bethlehem Steel Corporation; and from PADEP. A summary of those comments and EPA's responses are provided below.

A. Comment: PennFuture comments that EPA has conducted no independent technical review, and has prepared no technical support document to survey potential control technologies, determine the capital and operating costs of different options, and rank these options in total and marginal cost per ton of NO X and VOC controlled. In citing the definition of the term “RACT,” and the Strelow Memorandum [Roger Strelow, Assistant Administrator for Air and Waste Management, EPA, December 9, 1976, cited in Michigan v. Thomas, 805 F.2d 176, 180 (6th Cir. 1986) and at 62 FR 43134, 43136 (1997)], PennFuture appears to comment that in every situation, RACT must include an emission rate. PennFuture asserts that EPA should conduct its own RACT evaluation for each source, or at a minimum document a step-by-step review demonstrating the adequacy of state evaluations, to ensure that appropriate control technology is applied. The commenter also believes that EPA's failure to conduct its own independent review of control technologies has resulted in our proposing to approve some RACT determinations that fail to meet the terms of EPA's own RACT standard.

Response: On March 23, 1998 (63 FR 13789), EPA granted conditional limited approval of Pennsylvania's generic RACT regulations, 25 PA Code Chapters 121 and 129, thereby approving the definitions, provisions and procedures contained within those regulations under which the Commonwealth would require and impose RACT. Subsection 129.91, Control of major sources of NO X and VOCs, requires subject facilities to submit a RACT plan proposal to both the Pennsylvania Department of Environmental Protection (DEP) and to EPA Region III by July 15, 1994 in accordance with subsection 129.92, entitled, RACT proposal requirements. Under subsection 129.92, that proposal is to include, among other information: (1) A list each of subject source at the facility; (2) The size or capacity of each affected source, and the types of fuel combusted, and the types and amounts of materials processed or produced at each source; (3) A physical description of each source and its operating characteristics; (4) Estimates of potential and actual emissions from each affected source with supporting documentation; (5) A RACT analysis which meets the requirements of subsection 129.92(b), including technical and economic support documentation for each affected source; (6) A schedule for implementation as expeditiously as practicable but not later than May 15, 1995; (7) The testing, monitoring, recordkeeping and reporting procedures proposed to demonstrate compliance with RACT; and (8) any additional information requested by the DEP necessary to evaluate the RACT proposal. Under subsection 129.91, the DEP will approve, deny or modify each RACT proposal, and submit each RACT determination to EPA for approval as a SIP revision.

The conditional nature of EPA's March 23, 1998 conditional limited approval did not impose any conditions pertaining to the regulation's procedures for the submittal of RACT plans and analyses by subject sources and approval of case-by case RACT determinations by the DEP. Rather, EPA stated that “* * * RACT rules may not merely be procedural rules (emphasis added) that require the source and the State to later agree to the appropriate level of control; rather the rules must identify the appropriate level of control for source categories or individual sources.”

On May 3, 2001 (66 FR 22123), EPA published a rulemaking determining that Pennsylvania had satisfied the conditions imposed in its conditional limited approval. In that rulemaking, EPA removed the conditional status of its approval of the Commonwealth's generic VOC and NO X RACT regulations on a statewide basis. EPA received no public comments on its action and that final rule removing the conditional status of Pennsylvania's VOC and NO X RACT regulations became effective on June 18, 2001. As of that time, Pennsylvania's generic VOC and NO X RACT regulations retained a limited approval status. On September 6, 2001 (66 FR 46571), EPA proposed to remove the limited nature of its approval of Pennsylvania's generic RACT regulation in the Philadelphia area. EPA received no public comments on that proposal. Final action converting the limited approval to full approval shall occur once EPA has completed rulemaking to approve either (1) the case-by-case RACT proposals for all sources subject to the RACT requirements currently known in the Philadelphia area or (2) for a sufficient number of sources such that the emissions from any remaining subject sources represent a de minimis level of emissions as defined in the March 23, 1998 rulemaking (63 FR 13789).

EPA agrees that it has an obligation to review the case-by-case RACT plan approvals and/or permits submitted as individual SIP revisions by Commonwealth to verify and determine if they are consistent with the RACT requirements of the Act and any relevant EPA guidance. EPA does not agree, however, that this obligation to review the case-by-case RACT determinations submitted by Pennsylvania necessarily extends to our performing our own RACT analyses, independent of the sources' RACT plans/analyses (included as part of the case-by case RACT SIP revisions) or the Commonwealth's analyses. EPA first reviews this submission to ensure that the source and the Commonwealth followed the SIP-approved generic rule when applying for and imposing RACT for a specific source. Then EPA performs a thorough review of the technical and economic analyses conducted by the source and the state. If EPA believes additional information may further support or would undercut the RACT analyses submitted by the state, then EPA may add additional EPA-generated analyses to the record.

While RACT, as defined for an individual source or source category, often does specify an emission rate, such is not always the case. EPA has issued Control Technique Guidelines (CTGs) which states are to use as guidance in development of their RACT determinations/rules for certain sources or source categories. Not every CTG issued by EPA includes an emission rate. There are several examples of CTGs issued by EPA wherein equipment standards and/or work practice standards alone are provided as RACT guidance for all or part of the processes covered. Such examples include the CTGs issued for Bulk gasoline plants, Gasoline service stations—Stage I, Petroleum Storage in Fixed-roof tanks, Petroleum refinery processes, Solvent metal cleaning, Pharmaceutical products, External Floating roof tanks and Synthetic Organic Chemical Manufacturing (SOCMI)/polymer manufacturing. (The publication numbers for these CTG documents may be found at http://www.epa.gov/ttn/catc/dir1/ctg.txt ).

EPA disagrees with PennFuture's general comment that our failure to conduct our own independent review of control technologies for every case-by-case RACT determination conducted by the Commonwealth has resulted in our proposing to approve some RACT determinations that fail to meet the terms of our own RACT standard. PennFuture submitted comments specific to the case-by-case RACT determinations for two located in the Philadelphia area, namely for Kurz-Hastings and GATX Terminals Corporation. EPA summarizes those comments and provides responses in the final rule pertaining to those sources.

B. Comment: PennFuture comments that when EPA reviewed Pennsylvania's RACT program, it noted that Pennsylvania coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour “are some of the largest NO X emitting sources in the Commonwealth and in the Northeast United States” [63 FR 13789, 13791 (1998)] and as such should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93) to guarantee that sources would achieve quantifiable emissions reductions under the RACT program. PennFuture goes on to comment that because EPA has not conducted and documented a technical review of Pennsylvania case-by-case RACT submissions, EPA has not demonstrated that these large boilers are subject to “numeric emission limitations” under RACT. EPA must conduct a thorough RACT evaluation or review for each such source, and must document the application of numeric emission limits and quantifiable reductions for each coal-fired boiler with a rated heat input of over 100 million Btu per hour.

Response: Circumstances may exist wherein a state could justify otherwise, however, in general, EPA agrees with PennFuture that coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93).

As provided in the response found in II. A, EPA does not agree that it must conduct its own technical analysis of each of the case-by-case RACT determinations submitted for each RACT source in order to document that its RACT requirements include numeric emission limitations. That determination can be made by EPA when it reviews the plan approval, consent order, or permit issued to such a source as submitted by the Commonwealth as SIP revision. PennFuture's comment did not point to a specific instance where a RACT plan approval, consent order or permit imposing RACT on a coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour did, in fact, lack a numerical emission limitation(s). Nonetheless, pursuant to PennFuture's comment, EPA has re-examined all of the case-by-case RACT SIP submissions made by the Commonwealth for such sources located in the Philadelphia area. That re-examination, combined with information provided by the Commonwealth, indicates that each case-by-case RACT plan approval, consent order and/or permit for each coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour includes a numeric emission limitation. A listing of each source, its plan approval, consent order and/or permit number and its numerical emission limitation has been placed in the Administrative Records for the case-by-case RACT rulemakings for the Philadelphia area.

C. Comment: PennFuture asserts that the Commonwealth has not adopted and submitted category RACT rules for all VOC source categories for which federal control technique guidelines (CTGs) have been issued. The commenter refers to Appendix 1 of the Technical Support Document (dated May 14, 2001), prepared by EPA in support of its proposed rule to redesignate the Pittsburgh-Beaver Valley Ozone Nonattainment Area (66 FR 29270), to assert that EPA has failed to require the Commonwealth to submit VOC RACT rules for certain categories of sources. PennFuture specifically names source categories such as equipment leaks from natural gas/gas processing plants, coke oven batteries, iron and steel foundries, and publically owned treatment works and asserts that the Commonwealth has neglected a statutory requirement to adopt category RACT regulations for these and 14 other unnamed VOC source categories. PennFuture contends that the case-by-case approach for establishing and approving RACT is unacceptable under a statutory scheme that specifically requires category-wide RACT regulations for sources covered by CTGs. PennFuture's comment cites to Wall v. EPA, 2001 FED App. 0318P (6th Cir.)(Cincinnati ozone redesignation and RACT) and goes on the state that EPA should reject any proposed case-by-case VOC RACT for a source in a category for which there is a CTG but no Pennsylvania RACT regulation.

Response: EPA has not issued CTGs for coke oven batteries, iron and steel foundries and publically owned treatment works. The Appendix 1, referred to by the commenter, lists CTG covered categories as well as source categories taken from two STAPPA/ALAPCO documents entitled, “Meeting the 15-Percent Rate-of-Progress Requirement Under the Clean Air Act—A Menu of Options” (September 1993) and “Controlling Nitrogen Oxides Under the Clean Air Act—A Menu of Options” (July 1994). The categories referenced by PennFuture are not VOC categories for which EPA has issued CTGs, but were included in Appendix A as examples of some of the types of sources that could be subject to Pennsylvania's generic RACT regulations. The Commonwealth is under no statutory obligation to adopt RACT rules for source categories for which EPA has not issued a CTG. In fact, CTGs do not exist for all but one of the categories to which the commenter explicitly refers.

The Act requires that states adopt regulations to impose RACT for “major sources of VOC,” located within those areas of a state where RACT applies under Part D of the Act [182(b)(2)(C)]. This is referred to as the non-CTG VOC RACT requirement. Moreover, EPA disagrees that there is a statutory mandate that a state adopt a source category RACT regulation even for a source category where EPA has issued a CTG. There are two statutory provisions that address RACT for sources covered by a CTG. One provides that states must adopt RACT for “any category of VOC sources” covered by a CTG issued prior to November 15, 1990 [182(b)(2)(A)]. The other provides that states must adopt VOC RACT for all “VOC sources” covered by a CTG issued after November 15, 1990 [182(b)(2)(B)]. EPA has long interpreted the statutory RACT requirement to be met either by adoption of category-specific rules or by source-specific rules for each source within a category. When initially established, RACT was clearly defined as a case-by-case determination, but EPA provided CTG's to simplify the process for states such that they would not be required to adopt hundreds or thousands of individual rules. See Strelow Memorandum dated December 9, 1976 and 44 FR 53761, September 17, 1979. EPA does not believe that Congress' use of “source category” in one provision of section 182(b)(2) was intended to preclude the adoption of source-specific rules.

Thus, where CTG-subject sources are located within those areas of a state where RACT applies under Part D of the Act, the state is obligated to impose RACT for the same universe of sources covered by the CTG. However, that obligation is not required to be met by the adoption and submittal of a source category RACT rule. A state may, instead, opt to impose RACT for such sources in permits, plan approvals, consent orders or in any other state enforceable document and submit those documents to EPA for approval as source-specific SIP revisions. This option has been exercised by many states, and happens most commonly when only a few CTG-subject sources are located in the state. The source-specific approach is generally employed to avoid what can be a lengthy and resource-intensive state rule adoption process for only a few sources that may have different needs and considerations that must be taken into account. EPA disagrees with the commenter's citing to Wall v. EPA, 2001 FED App. 0318P (6th Cir. Sept. 11, 2001) (Cincinnati ozone redesignation and RACT) as indicative of his contentions regarding states' obligations to adopt category-wide RACT regulations for sources covered by CTGs. The opinion rendered in the cited case neither requires states to adopt category-wide RACT regulations for sources covered by CTGs, nor does it preclude states from exercising their option to impose RACT for CTG-subject sources, on a case-by-case basis. Rather, it speaks only to the Act's requirement that states must implement RACT for CTG-subject sources in ozone nonattainment areas; and not to any specific regulatory construct by which they must do so. Pennsylvania has implemented RACT for all CTG-subject sources in the Philadelphia area, and, EPA has approved all such RACT determinations as revisions to the Pennsylvania SIP. As stated earlier, there is one source category explicitly included in PennFuture's comment for which EPA has issued a CTG, namely natural gas/gas processing plants. The Commonwealth made a negative declaration to EPA on April 13, 1993, stating that as of that date there were no applicable sources in this category. Therefore, the Commonwealth did not adopt a category RACT regulation for natural gas/gas processing plants.

D. Comment: PennFuture cites EPA correspondence [letter from Marcia Spink, EPA, to James Salvaggio, DEP, December 15, 1993] to the Commonwealth which states that establishing any dollar figure in RACT guidance will not provide for the “automatic” selection or rejection of a control technology or emission limitation as RACT for a source or source category. With regard to the Pennsylvania DEP's intent to finalize a NO X RACT Guidance Document for implementation of its NO X RACT regulation, EPA's 1993 letter stated that the document could improperly be used to establish “bright line” or “cook-book” approaches, particularly for a regulation applicable to many source categories and suggested that if the guidance document must include dollar figures/ton, it provide approximate ranges by source category. PennFuture comments that DEP issued its “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions,” March 11, 1994, and on pp. 8-9 states that the acceptable threshold is $1500 per ton, and that this figure applies to “all source categories.” PennFuture notes that EPA later objected to the $1500 per ton methodology as “not generically acceptable to EPA” [letter from Thomas Maslany, EPA, to James Salvaggio, DEP, June 24, 1997] and further stated in a Federal Register notice that a “dollar per ton threshold” is “inconsistent with the definition of RACT” [62 FR 43134, 37-38 (1997)].

PennFuture comments that EPA is proposing to approve RACT determinations based on a cost per ton method that EPA had previously rejected, and according to its own clearly expressed standard, EPA must not approve RACT determinations by Pennsylvania DEP that apply this $1500 per ton threshold. PennFuture asserts EPA must reject all Pennsylvania RACT determinations applying the standard of $1500 per ton, or any other “bright line” approach, as failing to follow EPA procedures established for Pennsylvania RACT.

Response: EPA still takes the position that a single cost per ton dollar figure may not, in and of itself, form the basis for rejecting a control technology, equipment standard, or work practice standard as RACT. The Technical Support Document prepared by EPA in support of its March 23, 1998 rulemaking [63 FR 13789] clearly indicates that the Commonwealth's document, “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions.” March 11, 1994, had not been included as part of the SIP submission of the Commonwealth's generic regulation and, therefore, had not been approved by EPA. EPA further notes that the Administrative Record of the March 23, 1998 rulemaking [63 FR 13789], in addition to the correspondence cited by PennFuture, also includes correspondence from DEP to EPA [letter from James Salvaggio, DEP to David Arnold, EPA, September 10, 1997] stating that DEP's RACT guidance document does not establish a maximum dollar per ton for determining the cost effectiveness for RACT determinations and notes that the DEP's $1500 per ton cost effectiveness is a target value and not an absolute maximum. For example, in its analyses of the cost effectiveness of RACT control options submitted by DEP as part of the case-by-case SIP revision for Peoples Natural Gas (PNG) Valley Compressor Station's turbo charged lean burn IC engine (see the Administrative Record for 66 FR 43492), the Commonwealth included DEP interoffice memoranda (Thomas Joseph to Krishnan Ramamurthy, July 14, 1994 and Krishnan Ramamurthy to Thomas McGinley, Babu Patel, Ronald Davis, Richard Maxwell, and Devendra Verma, July 15, 1994) which spoke directly to the $1500/ton dollar figure as being a guideline and not an upper limit. These memoranda explain that although PNG initially proposed intermediate original equipment manufacturer (OEM) combustion controls which would have reduced NO X emissions from 254.7 tons per year to 115 tons per year (by 55 %) at a cost of $1355 per ton reduced, DEP required the installation of an OEM lean combustion modification that reduced NO X emissions from 254.7 tons per year to 76 tons per year (by 69 %) at a cost of $1684 per ton reduced. The DEP's July 15, 1994 interoffice memorandum says of the PNG RACT determination which exceeded the cost effectiveness screening level of $1500 per ton “ Tom's (Joseph) insistence for the next more stringent level of control than the company's chosen level in the case of PNG was consistent with EPA Region III's sentiment that establishing any dollar figure in RACT guidance will not provide for an “automatic” rejection of a control technology as RACT for a source.”

In no instance, has EPA proposed to approve a RACT determination submitted by the Commonwealth which was based solely on a conclusion that controls that cost more than $1500/ton were not required as RACT. As explained in the response provided in section II. A. of this document, EPA conducts its review of the entire case-by-case RACT SIP submittal including the source's proposed RACT plan and analyses, Pennsylvania's analyses and the RACT plan approval, consent order or permit itself to insure that the requirements of the SIP-approved generic RACT have been followed. These analyses not only evaluate and consider the costs of potential control options, but also evaluate their technological feasibility.

E. Comment: PennFuture comments that any emission reduction credits (ERCs) earned by sources subject to RACT must be surplus to all applicable state and federal requirements. Under Pennsylvania law, ERCs must be surplus, permanent, quantified, and Federally enforceable. 25 Pa.Code 127.207(1). As to the requirement that ERCs be surplus, the Pennsylvania Code states: ERCs shall be included in the current emission inventory, and may not be required by or be used to meet past or current SIP, attainment demonstration, RFP, emission limitation or compliance plans. Emission reductions necessary to meet NSPS, LAER, RACT, Best Available Technology, BACT and permit or plan approval emissions limitations or another emissions limitation required by the Clean Air Act or the [Air Pollution Control Act] may not be used to generate ERCs. 25 Pa.Code 127.207(1)(i). To be creditable, ERCs must surpass not only RACT requirements but a host of other possible sources of emission limits. PennFuture comments that some of the RACT evaluations at issue in the current EPA notices purport to establish RACT as a baseline for future ERCs. PennFuture does acknowledge that EPA notes in its boilerplate for the notices, that Pennsylvania and EPA have established a series of NO X -reducing rules, including the recent Chapter 145 rule, to reduce NO X at large utility and industrial sources. See, for example, 66 FR 42415, 16-17 (August 13, 2001). Because any ERCs must be surplus to the most stringent limitation applicable under State or Federal law as described in the Pennsylvania Code provision set forth above, DEP and EPA must not approve ERCs unless they surpass all such limitations in addition to any limits set by RACT.

Response: EPA agrees with this comment by PennFuture. The approval of a case-by-case RACT determination, in and of itself, does not establish the baseline from which further emission reductions may be calculated and assumed creditable under the Commonwealth's SIP-approved NSR and ERC program. Moreover, EPA's review of the Pennsylvania DEP's implementation of its approved SIP-approved NSR and ERC program indicates that the Commonwealth calculates and credits ERCs in accordance with the SIP-approved criteria for doing so as outlined in PennFuture's comment. No source for which EPA is approving a case-by-case RACT determination should assume that its RACT approval alone automatically establishes the baseline against which it may calculate creditable ERCs.

F. Comment: PennFuture comments that as in the case with Pennsylvania Power—Newcastle, EPA should compare RACT proposals to applicable acid rain program emission limits and control strategies. PennFuture contends that EPA previously disapproved a RACT proposal for the Pennsylvania Power—Newcastle plant [62 FR 43959 (1997); 63 FR 23668 (1998)] and that EPA did so on the basis that the acid rain program requires more stringent emission limits. PennFuture asserts that while EPA had originally proposed to approve this proposal, an analysis of comparable boilers and, especially, a comparison to Phase II emission limits under the acid rain program led EPA to conclude that the RACT proposal emission limits were too lenient. [62 FR at 43961]. Therefore, PennFuture contends that for sources subject to the acid rain program, EPA should consider emissions and control strategies for compliance with acid rain emission limits when evaluating proposals for compliance with RACT.

Response: Title IV of the Act, addressing the acid rain program, contains NO X emission requirements for utilities which must be met in addition to any RACT requirements (see NO X Supplement to the General Preamble at 57 FR 55625, November 25, 1992). The Act provides for a number of control programs that may affect similar sources. For example, new sources may be subject to new source performance standards (NSPS), best available control technology (BACT), and lowest achievable emission rate (LAER). Other controls, under such programs as the acid rain program or the hazardous air pollutant program may also apply to sources. However, the applicability of these other requirements, which are often more stringent than RACT, do not establish what requirements must apply under the RACT program. While these programs may provide information as to the technical and economic feasibility of reduction programs for RACT, there is no presumption that acid rain controls should be mandated as RACT.

EPA stated in the final disapproval of the NO X RACT determination for PPNC [63 FR at 23669], that the discussion concerning average emission rates for boilers with respect to the acid rain program requirements were included in order to provide a context for EPA's proposed disapproval. EPA made clear in its August 18, 1997 proposed disapproval of Pennsylvania Powers'—Newcastle (PPNC) RACT determination, that the basis for disapproval was a comparison between PPNC's boilers and other similar combustion units, not acid rain limits. In fact, EPA stated in the August 18, 1997 proposed disapproval that “Without additional knowledge or information, it would be erroneous and premature to conclude that the limits in the acid rain permit are RACT.” [62 FR at 43961]. EPA clearly stated in the final disapproval for PPNC that it did not use acid rain permit limits, or Pennsylvania's participation in any other NO X control program, to determine PPNC RACT approvability [63 FR at 23670]. Nor has EPA intended to use participation in NO X control programs including acid rain, in determining RACT for PPNC or any other subject sources. EPA also stated that the April 30, 1998, PPNC disapproval was based on the absence of pertinent information regarding a computerized combustion optimization system through an enforceable permit, not comparison of acid rain permit limits.

G. Clarification: On October 8, 2001, Montenay Energy Resources of Montgomery County, Inc. (Montenay) submitted a letter on EPA's September 10, 2001 rulemaking as it pertains to its facility. Montenay does not adversely comment on the rulemaking. Rather, its letter clarifies that the conditions imposed in operating permit (OP) OP-46-0010A which specify that air contaminant emissions from the two municipal waste combustors must be controlled through the use of individual Research-Cottrell spray dryer absorber using Sorbalit 1 reagent to control mercury and acid gases, Research-Cottrell fabric collectors and a selective non-catalytic reduction (SNCR) control system; and that NO X emissions per combustor (expressed as NO 2 ) shall not exceed a 24-hour daily arithmetic average of 205 parts per million by volume, corrected to 7 percent oxygen, dry basis and, in accordance with 40 CFR part 60 Section 60.33b(d), 109 pounds per hour, and 477.4 tons per year were imposed by PADEP pursuant to the applicable NO X requirements of 40 CFR part 60, subpart Cb (relating to Emission Guidelines and Compliance Times for large Municipal Waste Combustors that are constructed on or before September 20, 1994)—and not as RACT. Montenay agrees that it is subject to all of the provisions imposed in OP-46-0010A but calls attention to the distinction between the permit's NO X RACT provisions and its NO X provisions imposed pursuant to 40 CFR Part 60, Subpart Cb (relating to Emission Guidelines and Compliance Times for large Municipal Waste Combustors that are constructed on or before September 20, 1994). Montenay's letter also clarifies that the compliance date for 40 CFR Part 60, Subpart Cb (relating to Emission Guidelines and Compliance Times for large Municipal Waste Combustors that are constructed on or before September 20, 1994) is September of 1999 versus its RACT compliance date under the Pennsylvania approved SIP.

Response: The letter of clarification submitted by Montenay has been placed in the administrative record for this final rule. EPA agrees that OP-46-0010A issued by PADEP serves to impose on Montenay both its applicable NO X RACT requirements as determined under 25 Pa. Code 129.91-129.95 and the applicable NO X requirements of 40 CFR Part 60, Subpart Cb (relating to Emission Guidelines and Compliance Times for large Municipal Waste Combustors that are constructed on or before September 20, 1994). EPA also agrees that OP-46-0010A, which is being approved as a SIP revision, makes the distinction between Montenay's NO X RACT requirements and its applicable NO X requirements of 40 CFR Part 60, Subpart Cb (relating to Emission Guidelines and Compliance Times for large Municipal Waste Combustors that are constructed on or before September 20, 1994).

EPA notes that it is not uncommon for the same emission sources at a given facility to be subject to multiple requirements of the Act. As both the compliance deadlines for NO X RACT and the NO X requirements of 40 CFR part 60, subpart Cb (relating to Emission Guidelines and Compliance Times for large Municipal Waste Combustors that are constructed on or before September 20, 1994) have now passed and are fully effective, Montenay's distinction between the RACT requirements and those of 40 CFR Part 60, Subpart Cb as imposed in OP-46-0010A has no environmental effect. Moreover, it is important to note that in the event that a determination of eligible ERCs were to be sought for NO X reductions at the facility in the future, any emission reductions would have to surplus to all applicable requirements of the Act in order to qualify as ERCs under the Pennsylvania SIP.

H. Clarification: On October 10, 2001, EPA received a letter from Pepper Hamilton LLP on behalf of its client Bethlehem Steel regarding OP-46-0011 issued to Bethlehem Lukens Plate by PADEP on December 11, 1998. The letter states that it is not making adverse comments to EPA's September 10, 2001 rulemaking. Rather, the letter states that Pepper Hamilton LLP supports approval of the case-by-case RACT determination imposed as NO X RACT in OP-46-0011, but notes that there is an error in an emission factor cited in OP-46-0011. The comment letter explains that an amended version of OP-46-0011 was issued by PADEP on July 31, 2001 correcting the emission factor and leaving the NO X RACT limit unchanged. The letter from Pepper Hamilton LLP states that PADEP shortly intends to submit the revised version of OP-46-0011 to EPA as a SIP revision. On October 10, 2001, PADEP submitted a letter to EPA confirming the contents of the October 10, 2001 letter from Pepper Hamilton LLP. The PADEP letter requests that EPA proceed at this time to approve OP-46-0011, as proposed on September 10, 2001, but informs us that it will expeditiously prepare and submit a SIP revision for Bethlehem Lukens Plate to correct the reference to the emission factor in OP-46-0011. The PADEP confirms that the NO X RACT emission limit shall remain unchanged.

Response: The letter submitted by Pepper Hamilton LLP on behalf of its client Bethlehem Steel regarding OP-46-0011 has been placed in the administrative record for this final rule. As requested by PADEP, EPA will proceed to approve the version of OP-46-0011, as proposed on September 10, 2001, in this final rule. As also requested by PADEP, we will act upon the soon to be submitted SIP revision for Bethlehem Lukens Plate via the Federal rulemaking process for amending the SIP as expeditiously as practicable.

EPA is approving the SIP revisions to the Pennsylvania SIP submitted by PADEP to establish and require VOC and/or NO X RACT for fourteen major sources located in the Philadelphia area. EPA is approving these SIP submittals because the Philadelphia AMS and PADEP established and imposed these RACT requirements in accordance with the criteria set forth in the SIP-approved RACT regulations applicable to these sources. The AMS and PADEP have also imposed record keeping, monitoring, and/or testing requirements sufficient to determine compliance with the applicable RACT determinations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 Note ) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 804 exempts from section 801 the following types of rules: (1) Rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding today's action under section 801 because this is a rule of particular applicability establishing source-specific requirements for 14 named sources.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action approving VOC and/or NO X RACT for 14 sources located in the Philadelphia area may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

On September 6, 2001 (66 FR 46571), EPA published a notice of proposed rulemaking (NPR) for the State of Pennsylvania. The NPR proposed to remove the limited status of EPA's approval of the Commonwealth of Pennsylvania SIP revision that requires all major sources of VOC and NO X to implement reasonably available control technology (RACT) as it applies in the Philadelphia area. The rationale for EPA's action is explained in the NPR and will not be restated here. No comments were received on the NPR.

EPA is converting its limited approval of Pennsylvania's generic VOC and NO X RACT regulations, 25 Pa Code Chapter 129.91 through 129.95, to full approval as they apply in the five-county Philadelphia-Wilmington-Trenton ozone nonattainment area. EPA has approved all of the case-by-case RACT determinations submitted by PADEP for affected major sources of NO X and/or VOC sources located in Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties, the five counties that comprise the Pennsylvania portion of the Philadelphia area.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note ) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action converting EPA's limited approval of Pennsylvania's generic VOC and NO X RACT regulations, 25 Pa Code Chapter 129.91 through 129.95, to full approval as they apply in the five-county Philadelphia-Wilmington-Trenton ozone nonattainment area may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

On August 1, 1995, February 2, 1999, July 27, 2001, and August 8, 2001, PADEP submitted revisions to the Pennsylvania SIP which establish and impose RACT for several sources of VOC and/or NO X . This rulemaking pertains to seven of those sources. The remaining sources are or have been the subject of separate rulemakings. All seven sources are located in the Philadelphia area and include: G-Seven, Ltd.; Kimberly-Clark Corporation; Leonard Kunkin Associates; PECO Energy Company—Cromby Generating Station; Sunoco, Inc. (R&M)—Marcus Hook Plant; Waste Management Disposal Services of Pennsylvania, Inc. (GROWS Landfill); Waste Resource Energy, Inc. (Operator) and Shawmut Bank, Conn. National Assoc. (Owner)—Delaware County Resource Recovery Facility.

On September 11, 2001 (66 FR 47078), EPA published a direct final rule and a companion notice of proposed rulemaking (66 FR 47129) to approve these SIP revisions. On October 9, 2001, we received adverse comments on our direct final rule from the Citizens for Pennsylvania's Future (PennFuture). On October 10, 2001, EPA signed a timely withdrawal for publication in the Federal Register informing the public that the direct final rule did not take effect. We indicated in our September 11, 2001 direct final rulemaking that if we received adverse comments, EPA would address all public comments in a subsequent final rule based on the proposed rule (66 FR 47129). This is that subsequent final rule. A description of the RACT determination(s) made for each source was provided in the September 11, 2001 direct final rule and will not be restated here. A summary of the comments submitted and EPA's responses are provided in Section II.

On October 9, 2001, the Citizens for Pennsylvania's Future (PennFuture) submitted adverse comments on the proposed rule published by EPA in the Federal Register on September 11, 2001 to approve case-by-case RACT SIP submissions from the Commonwealth for NO X and or VOC sources located in the Philadelphia area. A summary of those comments and EPA's responses are provided below.

A. Comment: PennFuture comments that EPA has conducted no independent technical review, and has prepared no technical support document to survey potential control technologies, determine the capital and operating costs of different options, and rank these options in total and marginal cost per ton of NO X and VOC controlled. In citing the definition of the term “RACT,” and the Strelow Memorandum [Roger Strelow, Assistant Administrator for Air and Waste Management, EPA, December 9, 1976, cited in Michigan v. Thomas, 805 F.2d 176, 180 (6th Cir. 1986) and at 62 FR 43134, 43136 (1997)], PennFuture appears to comment that in every situation, RACT must include an emission rate. PennFuture asserts that EPA should conduct its own RACT evaluation for each source, or at a minimum document a step-by-step review demonstrating the adequacy of state evaluations, to ensure that appropriate control technology is applied. The commenter also believes that EPA's failure to conduct its own independent review of control technologies has resulted in our proposing to approve some RACT determinations that fail to meet the terms of EPA's own RACT standard.

Response: On March 23, 1998 (63 FR 13789), EPA granted conditional limited approval of Pennsylvania's generic RACT regulations, 25 PA Code Chapters 121 and 129, thereby approving the definitions, provisions and procedures contained within those regulations under which the Commonwealth would require and impose RACT. Subsection 129.91, Control of major sources of NO X and VOCs, requires subject facilities to submit a RACT plan proposal to both the Pennsylvania Department of Environmental Protection (DEP) and to EPA Region III by July 15, 1994 in accordance with subsection 129.92, entitled, RACT proposal requirements. Under subsection 129.92, that proposal is to include, among other information: (1) A list of each subject source at the facility; (2) The size or capacity of each affected source, and the types of fuel combusted, and the types and amounts of materials processed or produced at each source; (3) A physical description of each source and its operating characteristics; (4) Estimates of potential and actual emissions from each affected source with supporting documentation; (5) A RACT analysis which meets the requirements of subsection 129.92 (b), including technical and economic support documentation for each affected source; (6) A schedule for implementation as expeditiously as practicable but not later than May 15, 1995; (7) The testing, monitoring, recordkeeping and reporting procedures proposed to demonstrate compliance with RACT; and (8) any additional information requested by the DEP necessary to evaluate the RACT proposal. Under subsection 129.91, the DEP will approve, deny or modify each RACT proposal, and submit each RACT determination to EPA for approval as a SIP revision.

The conditional nature of EPA's March 23, 1998 conditional limited approval did not impose any conditions pertaining to the regulation's procedures for the submittal of RACT plans and analyses by subject sources and approval of case-by case RACT determinations by the DEP. Rather, EPA stated that “* * * RACT rules may not merely be procedural rules (emphasis added) that require the source and the State to later agree to the appropriate level of control; rather the rules must identify the appropriate level of control for source categories or individual sources.”

On May 3, 2001 (66 FR 22123), EPA published a rulemaking determining that Pennsylvania had satisfied the conditions imposed in its conditional limited approval. In that rulemaking, EPA removed the conditional status of its approval of the Commonwealth's generic VOC and NO X RACT regulations on a statewide basis. EPA received no public comments on its action and that final rule removing the conditional status of Pennsylvania's VOC and NO X RACT regulations became effective on June 18, 2001. As of that time, Pennsylvania's generic VOC and NO X RACT regulations retained a limited approval status. On September 6, 2001 (66 FR 46571), EPA proposed to remove the limited nature of its approval of Pennsylvania's generic RACT regulation in the Philadelphia area. EPA received no public comments on that proposal. Final action converting the limited approval to full approval shall occur once EPA has completed rulemaking to approve either (1) the case-by-case RACT proposals for all sources subject to the RACT requirements currently known in the Philadelphia area or (2) for a sufficient number of sources such that the emissions from any remaining subject sources represent a de minimis level of emissions as defined in the March 23, 1998 rulemaking (63 FR 13789).

EPA agrees that it has an obligation to review the case-by-case RACT plan approvals and/or permits submitted as individual SIP revisions by Commonwealth to verify and determine if they are consistent with the RACT requirements of the Act and any relevant EPA guidance. EPA does not agree, however, that this obligation to review the case-by-case RACT determinations submitted by Pennsylvania necessarily extends to our performing our own RACT analyses, independent of the sources' RACT plans/analyses (included as part of the case-by case RACT SIP revisions) or the Commonwealth's analyses. EPA first reviews this submission to ensure that the source and the Commonwealth followed the SIP-approved generic rule when applying for and imposing RACT for a specific source. Then EPA performs a thorough review of the technical and economic analyses conducted by the source and the state. If EPA believes additional information may further support or would undercut the RACT analyses submitted by the state, then EPA may add additional EPA-generated analyses to the record.

While RACT, as defined for an individual source or source category, often does specify an emission rate, such is not always the case. EPA has issued Control Technique Guidelines (CTGs) which states are to use as guidance in development of their RACT determinations/rules for certain sources or source categories. Not every CTG issued by EPA includes an emission rate. There are several examples of CTGs issued by EPA wherein equipment standards and/or work practice standards alone are provided as RACT guidance for all or part of the processes covered. Such examples include the CTGs issued for Bulk gasoline plants, Gasoline service stations—Stage I, Petroleum Storage in Fixed-roof tanks, Petroleum refinery processes, Solvent metal cleaning, Pharmaceutical products, External Floating roof tanks and Synthetic Organic Chemical Manufacturing (SOCMI)/polymer manufacturing. (The publication numbers for these CTG documents may be found at http://www.epa.gov/ttn/catc/dir1/ctg.txt).

EPA disagrees with PennFuture's general comment that our failure to conduct our own independent review of control technologies for every case-by-case RACT determination conducted by the Commonwealth has resulted in our proposing to approve some RACT determinations that fail to meet the terms of our own RACT standard. PennFuture submitted comments specific to the case-by-case RACT determinations for two located in the Philadelphia area, namely for Kurz- Hastings and GATX Terminals Corporation. EPA summarizes those comments and provides responses in the final rule pertaining to those sources.

B. Comment: PennFuture comments that when EPA reviewed Pennsylvania's RACT program, it noted that Pennsylvania coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour “are some of the largest NO X emitting sources in the Commonwealth and in the Northeast United States” [63 FR 13789, 13791 (1998)] and as such should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93) to guarantee that sources would achieve quantifiable emissions reductions under the RACT program. PennFuture goes on to comment that because EPA has not conducted and documented a technical review of Pennsylvania case-by case RACT submissions, EPA has not demonstrated that these large boilers are subject to “numeric emission limitations” under RACT. EPA must conduct a thorough RACT evaluation or review for each such source, and must document the application of numeric emission limits and quantifiable reductions for each coal-fired boiler with a rated heat input of over 100 million Btu per hour.

Response: Circumstances may exist wherein a state could justify otherwise, however, in general, EPA agrees with PennFuture that coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93).

As provided in the response found in II. A, EPA does not agree that it must conduct its own technical analysis of each of the case-by-case RACT determinations submitted for each RACT source in order to document that its RACT requirements include numeric emission limitations. That determination can be made by EPA when it reviews the plan approval, consent order, or permit issued to such a source as submitted by the Commonwealth as SIP revision. PennFuture's comment did not point to a specific instance where a RACT plan approval, consent order or permit imposing RACT on a coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour did, in fact, lack a numerical emission limitation(s). Nonetheless, pursuant to PennFuture's comment, EPA has re-examined all of the case-by-case RACT SIP submissions made by the Commonwealth for such sources located in the Philadelphia area. That re-examination, combined with information provided by the Commonwealth, indicates that each case-by-case RACT plan approval, consent order and/or permit for each coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour includes a numeric emission limitation. A listing of each source, its plan approval, consent order and/or permit number and its numerical emission limitation has been placed in the Administrative Records for the case-by-case RACT rulemakings for the Philadelphia area.

C. Comment: PennFuture asserts that the Commonwealth has not adopted and submitted category RACT rules for all VOC source categories for which federal control technique guidelines (CTGs) have been issued. The commenter refers to Appendix 1 of the Technical Support Document (dated May 14, 2001), prepared by EPA in support of its proposed rule to redesignate the Pittsburgh-Beaver Valley Ozone Nonattainment Area (66 FR 29270), to assert that EPA has failed to require the Commonwealth to submit VOC RACT rules for certain categories of sources. PennFuture specifically names source categories such as equipment leaks from natural gas/gas processing plants, coke oven batteries, iron and steel foundries, and publically owned treatment works and asserts that the Commonwealth has neglected a statutory requirement to adopt category RACT regulations for these and 14 other unnamed VOC source categories. PennFuture contends that the case-by-case approach for establishing and approving RACT is unacceptable under a statutory scheme that specifically requires category-wide RACT regulations for sources covered by CTGs. PennFuture's comment cites to Wall v. EPA, 2001 FED App. 0318P (6th Cir.)(Cincinnati ozone redesignation and RACT). EPA should reject any proposed case-by-case VOC RACT for a source in a category for which there is a CTG but no Pennsylvania RACT regulation.

Response: EPA has not issued CTGs for coke oven batteries, iron and steel foundries and publically owned treatment works. The Appendix 1, referred to by the commenter, lists CTG covered categories as well as source categories taken from two STAPPA/ALAPCO documents entitled, “Meeting the 15-Percent Rate-of-Progress Requirement Under the Clean Air Act—A Menu of Options” (September 1993) and “Controlling Nitrogen Oxides Under the Clean Air Act—A Menu of Options” (July 1994). The categories referenced by PennFuture are not VOC categories for which EPA has issued CTGs, but were included in Appendix A as examples of some of the types of sources that could be subject to Pennsylvania's generic RACT regulations.

The Commonwealth is under no statutory obligation to adopt RACT rules for source categories for which EPA has not issued a CTG. In fact, CTGs do not exist for all but one of the categories to which the commenter explicitly refers.

The Act requires that states adopt regulations to impose RACT for “major sources of VOC,” located within those areas of a state where RACT applies under Part D of the Act [182(b)(2)(C)]. This is referred to as the non-CTG VOC RACT requirement. Moreover, EPA disagrees that there is a statutory mandate that a state adopt a source category RACT regulation even for a source category where EPA has issued a CTG. There are two statutory provisions that address RACT for sources covered by a CTG. One provides that states must adopt RACT for “any category of VOC sources” covered by a CTG issued prior to November 15, 1990 [182(b)(2)(A)]. The other provides that states must adopt VOC RACT for all “VOC sources” covered by a CTG issued after November 15, 1990 [182(b)(2)(B)]. EPA has long interpreted the statutory RACT requirement to be met either by adoption of category-specific rules or by source-specific rules for each source within a category. When initially established, RACT was clearly defined as a case-by-case determination, but EPA provided CTG's to simplify the process for states such that they would not be required to adopt hundreds or thousands of individual rules. See Strelow Memorandum dated December 9, 1976 and 44 FR 53761, September 17, 1979. EPA does not believe that Congress' use of “source category” in one provision of section 182(b)(2) was intended to preclude the adoption of source-specific rules.

Thus, where CTG-subject sources are located within those areas of a state where RACT applies under Part D of the Act, the state is obligated to impose RACT for the same universe of sources covered by the CTG. However, that obligation is not required to be met by the adoption and submittal of a source category RACT rule. A state may, instead, opt to impose RACT for such sources in permits, plan approvals, consent orders or in any other state enforceable document and submit those documents to EPA for approval as source-specific SIP revisions. This option has been exercised by many states, and happens most commonly when only a few CTG-subject sources are located in the state. The source-specific approach is generally employed to avoid what can be a lengthy and resource-intensive state rule adoption process for only a few sources that may have different needs and considerations that must be taken into account. EPA disagrees with the commenter's citing to Wall v. EPA, 2001 FED App. 0318P (6th Cir. Sept.11, 2001) (Cincinnati ozone redesignation and RACT) as indicative of his contentions regarding states' obligations to adopt category-wide RACT regulations for sources covered by CTGs. The opinion rendered in the cited case neither requires states to adopt category-wide RACT regulations for sources covered by CTGs, nor does it preclude states from exercising their option to impose RACT for CTG-subject sources, on a case-by-case basis. Rather, it speaks only to the Act's requirement that states must implement RACT for CTG-subject sources in ozone nonattainment areas; and not to any specific regulatory construct by which they must do so. Pennsylvania has implemented RACT for all CTG-subject sources in the Philadelphia area, and, EPA has approved all such RACT determinations as revisions to the Pennsylvania SIP. As stated earlier, there is one source category explicitly included in PennFuture's comment for which EPA has issued a CTG, namely natural gas/gas processing plants. The Commonwealth made a negative declaration to EPA on April 13, 1993, stating that as of that date there were no applicable sources in this category. Therefore, the Commonwealth did not adopt a category RACT regulation for natural gas/gas processing plants.

D. Comment: PennFuture cites EPA correspondence [letter from Marcia Spink, EPA, to James Salvaggio, DEP, December 15, 1993] to the Commonwealth which states that establishing any dollar figure in RACT guidance will not provide for the “automatic” selection or rejection of a control technology or emission limitation as RACT for a source or source category. With regard to the Pennsylvania DEP's intent to finalize a NO X RACT Guidance Document for implementation of its NO X RACT regulation, EPA's 1993 letter stated that the document could improperly be used to establish “bright line” or “cook-book” approaches, particularly for a regulation applicable to many source categories and suggested that if the guidance document must include dollar figures/ton, it provide approximate ranges by source category. PennFuture comments that DEP issued its “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions,” March 11, 1994, and on pp. 8-9 states that the acceptable threshold is $1500 per ton, and that this figure applies to “all source categories.” PennFuture notes that EPA later objected to the $1500 per ton methodology as “not generically acceptable to EPA” [letter from Thomas Maslany, EPA, to James Salvaggio, DEP, June 24, 1997] and further stated in a Federal Register document that a “dollar per ton threshold” is “inconsistent with the definition of RACT” [62 FR 43134, 37-38 (1997)].

PennFuture comments that EPA is proposing to approve RACT determinations based on a cost per ton method that EPA had previously rejected, and according to its own clearly expressed standard, EPA must not approve RACT determinations by Pennsylvania DEP that apply this $1500 per ton threshold. PennFuture asserts EPA must reject all Pennsylvania RACT determinations applying the standard of $1500 per ton, or any other “bright line” approach, as failing to follow EPA procedures established for Pennsylvania RACT.

Response: EPA still takes the position that a single cost per ton dollar figure may not, in and of itself, form the basis for rejecting a control technology, equipment standard, or work practice standard as RACT. The Technical Support Document prepared by EPA in support of its March 23, 1998 rulemaking [63 FR 13789] clearly indicates that the Commonwealth's document, “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions.” March 11, 1994, had not been included as part of the SIP submission of the Commonwealth's generic regulation and, therefore, had not been approved by EPA. EPA further notes that the Administrative Record of the March 23, 1998 rulemaking [63 FR 13789], in addition to the correspondence cited by PennFuture, also includes correspondence from DEP to EPA [letter from James Salvaggio, DEP to David Arnold, EPA, September 10, 1997] stating that DEP's RACT guidance document does not establish a maximum dollar per ton for determining the cost effectiveness for RACT determinations and notes that the DEP's $1500 per ton cost effectiveness is a target value and not an absolute maximum. For example, in its analyses of the cost effectiveness of RACT control options submitted by DEP as part of the case-by-case SIP revision for Peoples Natural Gas (PNG) Valley Compressor Station's turbo charged lean burn IC engine (see the Administrative Record for 66 FR 43492), the Commonwealth included DEP interoffice memoranda (Thomas Joseph to Krishnan Ramamurthy, July 14, 1994 and Krishnan Ramamurthy to Thomas McGinley, Babu Patel, Ronald Davis, Richard Maxwell, and Devendra Verma, July 15, 1994) which spoke directly to the $1500/ton dollar figure as being a guideline and not an upper limit. These memoranda explain that although PNG initially proposed intermediate original equipment manufacturer (OEM) combustion controls which would have reduced NO X emissions from 254.7 tons per year to 115 tons per year (by 55 %) at a cost of $1355 per ton reduced, DEP required the installation of an OEM lean combustion modification that reduced NO X emissions from 254.7 tons per year to 76 tons per year (by 69 %) at a cost of $1684 per ton reduced. The DEP's July 15, 1994 interoffice memorandum says of the PNG RACT determination which exceeded the cost effectiveness screening level of $1500 per ton “Tom's (Joseph) insistence for the next more stringent level of control than the company's chosen level in the case of PNG was consistent with EPA Region III's sentiment that establishing any dollar figure in RACT guidance will not provide for an ‘automatic’ rejection of a control technology as RACT for a source.”

In no instance, has EPA proposed to approve a RACT determination submitted by the Commonwealth which was based solely on a conclusion that controls that cost more than $1500/ton were not required as RACT. As explained in the response provided in section II. A. of this document, EPA conducts its review of the entire case-by-case RACT SIP submittal including the source's proposed RACT plan and analyses, Pennsylvania's analyses and the RACT plan approval, consent order or permit itself to insure that the requirements of the SIP-approved generic RACT have been followed. These analyses not only evaluate and consider the costs of potential control options, but also evaluate their technological feasibility.

E. Comment: PennFuture comments that any emission reduction credits (ERCs) earned by sources subject to RACT must be surplus to all applicable state and federal requirements. Under Pennsylvania law, ERCs must be surplus, permanent, quantified, and Federally enforceable. 25 Pa.Code 127.207(1). As to the requirement that ERCs be surplus, the Pennsylvania Code states: ERCs shall be included in the current emission inventory, and may not be required by or be used to meet past or current SIP, attainment demonstration, RFP, emission limitation or compliance plans. Emission reductions necessary to meet NSPS, LAER, RACT, Best Available Technology, BACT and permit or plan approval emissions limitations or another emissions limitation required by the Clean Air Act or the [Air Pollution Control Act] may not be used to generate ERCs. 25 Pa.Code 127.207(1)(i). To be creditable, ERCs must surpass not only RACT requirements but a host of other possible sources of emission limits. PennFuture comments that some of the RACT evaluations at issue in the current EPA notices purport to establish RACT as a baseline for future ERCs. PennFuture does acknowledge that EPA notes in its boilerplate for the notices, that Pennsylvania and EPA have established a series of NO X -reducing rules, including the recent Chapter 145 rule, to reduce NO X at large utility and industrial sources. See, for example, 66 FR 42415, 16-17 (August 13, 2001). Because any ERCs must be surplus to the most stringent limitation applicable under state or federal law as described in the Pennsylvania Code provision set forth above, DEP and EPA must not approve ERCs unless they surpass all such limitations in addition to any limits set by RACT.

Response: EPA agrees with this comment by PennFuture. The approval of a case-by-case RACT determination, in and of itself, does not establish the baseline from which further emission reductions may be calculated and assumed creditable under the Commonwealth's SIP-approved NSR and ERC program. Moreover, EPA's review of the Pennsylvania DEP's implementation of its approved SIP-approved NSR and ERC program indicates that the Commonwealth calculates and credits ERCs in accordance with the SIP-approved criteria for doing so as outlined in PennFuture's comment. No source for which EPA is approving a case-by-case RACT determination should assume that its RACT approval alone automatically establishes the baseline against which it may calculate creditable ERCs.

F. Comment: PennFuture comments that as in the case with Pennsylvania Power—Newcastle, EPA should compare RACT proposals to applicable acid rain program emission limits and control strategies. PennFuture contends that EPA previously disapproved a RACT proposal for the Pennsylvania Power—Newcastle plant [62 FR 43959 (1997); 63 FR 23668 (1998)] and that EPA did so on the basis that the acid rain program requires more stringent emission limits. PennFuture asserts that while EPA had originally proposed to approve this proposal, an analysis of comparable boilers and, especially, a comparison to Phase II emission limits under the acid rain program led EPA to conclude that the RACT proposal emission limits were too lenient. [62 FR at 43961]. Therefore, PennFuture contends that for sources subject to the acid rain program, EPA should consider emissions and control strategies for compliance with acid rain emission limits when evaluating proposals for compliance with RACT.

Response: Title IV of the Act, addressing the acid rain program, contains NO X emission requirements for utilities which must be met in addition to any RACT requirements (see NO X Supplement to the General Preamble at 57 FR 55625, November 25, 1992). The Act provides for a number of control programs that may affect similar sources. For example, new sources may be subject to new source performance standards (NSPS), best available control technology (BACT), and lowest achievable emission rate (LAER). Other controls, under such programs as the acid rain program or the hazardous air pollutant program may also apply to sources. However, the applicability of these other requirements, which are often more stringent than RACT, do not establish what requirements must apply under the RACT program. While these programs may provide information as to the technical and economic feasibility of reduction programs for RACT, there is no presumption that acid rain controls should be mandated as RACT.

EPA stated in the final disapproval of the NO X RACT determination for PPNC [63 FR at 23669], that the discussion concerning average emission rates for boilers with respect to the acid rain program requirements were included in order to provide a context for EPA's proposed disapproval. EPA made clear in its August 18, 1997 proposed disapproval of Pennsylvania Powers'—Newcastle (PPNC) RACT determination, that the basis for disapproval was a comparison between PPNC's boilers and other similar combustion units, not acid rain limits. In fact, EPA stated in the August 18, 1997 proposed disapproval that “Without additional knowledge or information, it would be erroneous and premature to conclude that the limits in the acid rain permit are RACT.” [62 FR at 43961]. EPA clearly stated in the final disapproval for PPNC that it did not use acid rain permit limits, or Pennsylvania's participation in any other NO X control program, to determine PPNC RACT approvability [63 FR at 23670]. Nor has EPA intended to use participation in NO X control programs including acid rain, in determining RACT for PPNC or any other subject sources. EPA also stated that the April 30, 1998, PPNC disapproval was based on the absence of pertinent information regarding a computerized combustion optimization system through an enforceable permit, not comparison of acid rain permit limits.

EPA is approving the SIP revisions to the Pennsylvania SIP submitted by PADEP to establish and require VOC and/or NO X RACT for seven major of sources located in the Philadelphia area. EPA is approving these SIP submittals because PADEP established and imposed these RACT requirements in accordance with the criteria set forth in the SIP-approved RACT regulations applicable to these sources. The PADEP has also imposed record keeping, monitoring, and/or testing requirements sufficient to determine compliance with the applicable RACT determinations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 Note ) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 804 exempts from section 801 the following types of rules: (1) Rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding today's action under section 801 because this is a rule of particular applicability establishing source-specific requirements for seven named sources.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action approving VOC and/or NO X RACT for seven sources located in the Philadelphia area may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

On April 20, 1999, June 28, 2000, and August 8, 2001, PADEP submitted revisions to the Pennsylvania SIP which establish and impose RACT for several sources of VOC and/or NO X . This rulemaking pertains to three of those sources. These three sources are all located in the Philadelphia area and include: Exelon Generation Company—Richmond Generating Station; FPL Energy MH 50, L.P.; and Waste Management Disposal Services of Pennsylvania, Inc. (Pottstown Landfill).

On August 31, 2001, EPA published a direct final rule (66 FR 45938) and a companion notice of proposed rulemaking (66 FR 45954) to approve these SIP revisions. On October 1, 2001, we received adverse comments on our direct final rule from the Citizens for Pennsylvania's Future (PennFuture). On October 11, 2001, we published a timely withdrawal in the Federal Register informing the public that the direct final rule did not take effect. We indicated in our August 31, 2001 direct final rulemaking that if we received adverse comments, EPA would address all public comments in a subsequent final rule based on the proposed rule (66 FR 45954). This is that subsequent final rule. A description of the RACT determination(s) made for each source was provided in the August 31, 2001 direct final rule and will not be restated here. A summary of the comments submitted by PennFuture germane to this final rulemaking and EPA's responses are provided in Section II of this document.

On October 1, 2001, PennFuture submitted adverse comments on the proposed rule published by EPA in the Federal Register on August 31, 2001 to approve case-by-case RACT SIP submissions from the Commonwealth for NO X and or VOC sources located in the Philadelphia area. A summary of those comments and EPA's responses are provided below.

A. Comment: PennFuture comments that EPA has conducted no independent technical review, and has prepared no technical support document to survey potential control technologies, determine the capital and operating costs of different options, and rank these options in total and marginal cost per ton of NO X and VOC controlled. In citing the definition of the term “RACT,” and the Strelow Memorandum [Roger Strelow, Assistant Administrator for Air and Waste Management, EPA, December 9, 1976, cited in Michigan v. Thomas, 805 F.2d 176, 180 (6th Cir. 1986) and at 62 FR 43134, 43136 (1997)], PennFuture appears to comment that in every situation, RACT must include an emission rate. PennFuture asserts that EPA should conduct its own RACT evaluation for each source, or at a minimum document a step-by-step review demonstrating the adequacy of state evaluations, to ensure that appropriate control technology is applied. The commenter also believes that EPA's failure to conduct its own independent review of control technologies has resulted in our proposing to approve some RACT determinations that fail to meet the terms of EPA's own RACT standard.

Response: On March 23, 1998 (63 FR 13789), EPA granted conditional limited approval of Pennsylvania's generic RACT regulations, 25 PA Code Chapters 121 and 129, thereby approving the definitions, provisions and procedures contained within those regulations under which the Commonwealth would require and impose RACT. Subsection 129.91, Control of major sources of NO X and VOCs, requires subject facilities to submit a RACT plan proposal to both the Pennsylvania Department of Environmental Protection (DEP) and to EPA Region III by July 15, 1994 in accordance with subsection 129.92, entitled, RACT proposal requirements. Under subsection 129.92, that proposal is to include, among other information: (1) A list each of subject source at the facility; (2) The size or capacity of each affected source, and the types of fuel combusted, and the types and amounts of materials processed or produced at each source; (3) A physical description of each source and its operating characteristics; (4) Estimates of potential and actual emissions from each affected source with supporting documentation; (5) A RACT analysis which meets the requirements of subsection 129.92 (b), including technical and economic support documentation for each affected source; (6) A schedule for implementation as expeditiously as practicable but not later than May 15, 1995; (7) The testing, monitoring, recordkeeping and reporting procedures proposed to demonstrate compliance with RACT; and (8) any additional information requested by the DEP necessary to evaluate the RACT proposal. Under subsection 129.91, the DEP will approve, deny or modify each RACT proposal, and submit each RACT determination to EPA for approval as a SIP revision.

The conditional nature of EPA's March 23, 1998 conditional limited approval did not impose any conditions pertaining to the regulation's procedures for the submittal of RACT plans and analyses by subject sources and approval of case-by case RACT determinations by the DEP. Rather, EPA stated that “...RACT rules may not merely be procedural rules (emphasis added) that require the source and the State to later agree to the appropriate level of control; rather the rules must identify the appropriate level of control for source categories or individual sources.”

On May 3, 2001 (66 FR 22123), EPA published a rulemaking determining that Pennsylvania had satisfied the conditions imposed in its conditional limited approval. In that rulemaking, EPA removed the conditional status of its approval of the Commonwealth's generic VOC and NO X RACT regulations on a statewide basis. EPA received no public comments on its action and that final rule removing the conditional status of Pennsylvania's VOC and NO X RACT regulations became effective on June 18, 2001. As of that time, Pennsylvania's generic VOC and NO X RACT regulations retained a limited approval status. On September 6, 2001 (66 FR 46571), EPA proposed to remove the limited nature of its approval of Pennsylvania's generic RACT regulation in the Philadelphia area. EPA received no public comments on that proposal. Final action converting the limited approval to full approval shall occur once EPA has completed rulemaking to approve either (1) the case-by-case RACT proposals for all sources subject to the RACT requirements currently known in the Philadelphia area or (2) for a sufficient number of sources such that the emissions from any remaining subject sources represent a de minimis level of emissions as defined in the March 23, 1998 rulemaking (63 FR 13789).

EPA agrees that it has an obligation to review the case-by-case RACT plan approvals and/or permits submitted as individual SIP revisions by Commonwealth to verify and determine if they are consistent with the RACT requirements of the Act and any relevant EPA guidance. EPA does not agree, however, that this obligation to review the case-by-case RACT determinations submitted by Pennsylvania necessarily extends to our performing our own RACT analyses, independent of the sources' RACT plans/analyses (included as part of the case-by case RACT SIP revisions) or the Commonwealth's analyses. EPA first reviews this submission to ensure that the source and the Commonwealth followed the SIP-approved generic rule when applying for and imposing RACT for a specific source. Then EPA performs a thorough review of the technical and economic analyses conducted by the source and the state. If EPA believes additional information may further support or would undercut the RACT analyses submitted by the state, then EPA may add additional EPA-generated analyses to the record.

While RACT, as defined for an individual source or source category, often does specify an emission rate, such is not always the case. EPA has issued Control Technique Guidelines (CTGs) which states are to use as guidance in development of their RACT determinations/rules for certain sources or source categories. Not every CTG issued by EPA includes an emission rate. There are several examples of CTGs issued by EPA wherein equipment standards and/or work practice standards alone are provided as RACT guidance for all or part of the processes covered. Such examples include the CTGs issued for Bulk gasoline plants, Gasoline service stations—Stage I, Petroleum Storage in Fixed-roof tanks, Petroleum refinery processes, Solvent metal cleaning, Pharmaceutical products, External Floating roof tanks and Synthetic Organic Chemical Manufacturing (SOCMI)/polymer manufacturing. (The publication numbers for these CTG documents may be found at http://www.epa.gov/ttn/catc/dir1/ctg.txt).

EPA disagrees with PennFuture's general comment that our failure to conduct our own independent review of control technologies for every case-by-case RACT determination conducted by the Commonwealth has resulted in our proposing to approve some RACT determinations that fail to meet the terms of our own RACT standard. PennFuture submitted comments specific to the case-by-case RACT determinations for two located in the Philadelphia area, namely for Kurz-Hastings and GATX Terminals Corporation. EPA summarizes those comments and provides responses in the final rule pertaining to those sources.

B. Comment: PennFuture comments that when EPA reviewed Pennsylvania's RACT program, it noted that Pennsylvania coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour “are some of the largest NO X emitting sources in the Commonwealth and in the Northeast United States' [63 FR 13789, 13791 (1998)] and as such should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93) to guarantee that sources would achieve quantifiable emissions reductions under the RACT program. PennFuture goes on to comment that because EPA has not conducted and documented a technical review of Pennsylvania case-by case RACT submissions, EPA has not demonstrated that these large boilers are subject to “numeric emission limitations” under RACT. EPA must conduct a thorough RACT evaluation or review for each such source, and must document the application of numeric emission limits and quantifiable reductions for each coal-fired boiler with a rated heat input of over 100 million Btu per hour.

Response: Circumstances may exist wherein a state could justify otherwise, however, in general, EPA agrees with PennFuture that coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93).

As provided in the response found in II. A, EPA does not agree that it must conduct its own technical analysis of each of the case-by-case RACT determinations submitted for each RACT source in order to document that its RACT requirements include numeric emission limitations. That determination can be made by EPA when it reviews the plan approval, consent order, or permit issued to such a source as submitted by the Commonwealth as SIP revision. PennFuture's comment did not point to a specific instance where a RACT plan approval, consent order or permit imposing RACT on a coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour did, in fact, lack a numerical emission limitation(s). Nonetheless, pursuant to PennFuture's comment, EPA has re-examined all of the case-by-case RACT SIP submissions made by the Commonwealth for such sources located in the Philadelphia area. That re-examination, combined with information provided by the Commonwealth, indicates that each case-by-case RACT plan approval, consent order and/or permit for each coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour includes a numeric emission limitation. A listing of each source, its plan approval, consent order and/or permit number and its numerical emission limitation has been placed in the Administrative Records for the case-by-case RACT rulemakings for the Philadelphia area.

C. Comment: PennFuture asserts that the Commonwealth has not adopted and submitted category RACT rules for all VOC source categories for which federal control technique guidelines (CTGs) have been issued. The commenter refers to Appendix 1 of the Technical Support Document (dated May 14, 2001), prepared by EPA in support of its proposed rule to redesignate the Pittsburgh-Beaver Valley Ozone Nonattainment Area (66 FR 29270), to assert that EPA has failed to require the Commonwealth to submit VOC RACT rules for certain categories of sources. PennFuture specifically names source categories such as equipment leaks from natural gas/gas processing plants, coke oven batteries, iron and steel foundries, and publically owned treatment works and asserts that the Commonwealth has neglected a statutory requirement to adopt category RACT regulations for these and 14 other unnamed VOC source categories. PennFuture contends that the case-by-case approach for establishing and approving RACT is unacceptable under a statutory scheme that specifically requires category-wide RACT regulations for sources covered by CTGs. PennFuture's comment cites to Wall v. EPA, 2001 FED App. 0318P (6th Cir.)(Cincinnati ozone redesignation and RACT). EPA should reject any proposed case-by-case VOC RACT for a source in a category for which there is a CTG but no Pennsylvania RACT regulation.

Response: EPA has not issued CTGs for coke oven batteries, iron and steel foundries and publically owned treatment works. The Appendix 1, referred to by the commenter, lists CTG covered categories as well as source categories taken from two STAPPA/ALAPCO documents entitled, “Meeting the 15-Percent Rate-of-Progress Requirement Under the Clean Air Act—A Menu of Options' (September 1993) and “Controlling Nitrogen Oxides Under the Clean Air Act—A Menu of Options” (July 1994). The categories referenced by PennFuture are not VOC categories for which EPA has issued CTGs, but were included in Appendix A as examples of some of the types of sources that could be subject to Pennsylvania's generic RACT regulations.

The Commonwealth is under no statutory obligation to adopt RACT rules for source categories for which EPA has not issued a CTG. In fact, CTGs do not exist for all but one of the categories to which the commenter explicitly refers.

The Act requires that states adopt regulations to impose RACT for “major sources of VOC,” located within those areas of a state where RACT applies under Part D of the Act [182(b)(2)(C)]. This is referred to as the non-CTG VOC RACT requirement. Moreover, EPA disagrees that there is a statutory mandate that a state adopt a source category RACT regulation even for a source category where EPA has issued a CTG. There are two statutory provisions that address RACT for sources covered by a CTG. One provides that states must adopt RACT for “any category of VOC sources” covered by a CTG issued prior to November 15, 1990 [182(b)(2)(A)]. The other provides that states must adopt VOC RACT for all “VOC sources” covered by a CTG issued after November 15, 1990 [182(b)(2)(B)]. EPA has long interpreted the statutory RACT requirement to be met either by adoption of category-specific rules or by source-specific rules for each source within a category. When initially established, RACT was clearly defined as a case-by-case determination, but EPA provided CTG's to simplify the process for states such that they would not be required to adopt hundreds or thousands of individual rules. See Strelow Memorandum dated December 9, 1976 and 44 FR 53761, September 17, 1979. EPA does not believe that Congress' use of “source category” in one provision of section 182(b)(2) was intended to preclude the adoption of source-specific rules. Thus, where CTG-subject sources are located within those areas of a state where RACT applies under Part D of the Act, the state is obligated to impose RACT for the same universe of sources covered by the CTG. However, that obligation is not required to be met by the adoption and submittal of a source category RACT rule. A state may, instead, opt to impose RACT for such sources in permits, plan approvals, consent orders or in any other state enforceable document and submit those documents to EPA for approval as source-specific SIP revisions. This option has been exercised by many states, and happens most commonly when only a few CTG-subject sources are located in the state. The source-specific approach is generally employed to avoid what can be a lengthy and resource-intensive state rule adoption process for only a few sources that may have different needs and considerations that must be taken into account.

EPA disagrees with the commenter's citing to Wall v. EPA, 2001 FED App. 0318P (6th Cir. Sept. 11, 2001) (Cincinnati ozone redesignation and RACT) as indicative of his contentions regarding states' obligations to adopt category-wide RACT regulations for sources covered by CTGs. The opinion rendered in the cited case neither requires states to adopt category-wide RACT regulations for sources covered by CTGs, nor does it preclude states from exercising their option to impose RACT for CTG-subject sources, on a case-by-case basis. Rather, it speaks only to the Act's requirement that states must implement RACT for CTG-subject sources in ozone nonattainment areas; and not to any specific regulatory construct by which they must do so. Pennsylvania has implemented RACT for all CTG-subject sources in the Philadelphia area, and, EPA has approved all such RACT determinations as revisions to the Pennsylvania SIP.

As stated earlier, there is one source category explicitly included in PennFuture's comment for which EPA has issued a CTG, namely natural gas/gas processing plants. The Commonwealth made a negative declaration to EPA on April 13, 1993, stating that as of that date there were no applicable sources in this category. Therefore, the Commonwealth did not adopt a category RACT regulation for natural gas/gas processing plants.

D. Comment: PennFuture cites EPA correspondence [letter from Marcia Spink, EPA, to James Salvaggio, DEP, December 15, 1993] to the Commonwealth which states that establishing any dollar figure in RACT guidance will not provide for the “automatic” selection or rejection of a control technology or emission limitation as RACT for a source or source category. With regard to the Pennsylvania DEP's intent to finalize a NO X RACT Guidance Document for implementation of its NO X RACT regulation, EPA's 1993 letter stated that the document could improperly be used to establish “bright line” or “cook-book” approaches, particularly for a regulation applicable to many source categories and suggested that if the guidance document must include dollar figures/ton, it provide approximate ranges by source category. PennFuture comments that DEP issued its “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions,” March 11, 1994, and on pp. 8-9 states that the acceptable threshold is $1500 per ton, and that this figure applies to “all source categories.” PennFuture notes that EPA later objected to the $1500 per ton methodology as “not generically acceptable to EPA” [letter from Thomas Maslany, EPA, to James Salvaggio, DEP, June 24, 1997] and further stated in a Federal Register notice that a “dollar per ton threshold” is “inconsistent with the definition of RACT” [62 FR 43134, 37-38 (1997)].

PennFuture comments that EPA is proposing to approve RACT determinations based on a cost per ton method that EPA had previously rejected, and according to its own clearly expressed standard, EPA must not approve RACT determinations by Pennsylvania DEP that apply this $1500 per ton threshold. PennFuture asserts EPA must reject all Pennsylvania RACT determinations applying the standard of $1500 per ton, or any other “bright line” approach, as failing to follow EPA procedures established for Pennsylvania RACT.

Response: EPA still takes the position that a single cost per ton dollar figure may not, in and of itself, form the basis for rejecting a control technology, equipment standard, or work practice standard as RACT. The Technical Support Document prepared by EPA in support of its March 23, 1998 rulemaking [63 FR 13789] clearly indicates that the Commonwealth's document, “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions.” March 11, 1994, had not been included as part of the SIP submission of the Commonwealth's generic regulation and, therefore, had not been approved by EPA. EPA further notes that the Administrative Record of the March 23, 1998 rulemaking [63 FR 13789], in addition to the correspondence cited by PennFuture, also includes correspondence from DEP to EPA [letter from James Salvaggio, DEP to David Arnold, EPA, September 10, 1997] stating that DEP's RACT guidance document does not establish a maximum dollar per ton for determining the cost effectiveness for RACT determinations and notes that the DEP's $1500 per ton cost effectiveness is a target value and not an absolute maximum. For example, in its analyses of the cost effectiveness of RACT control options submitted by DEP as part of the case-by-case SIP revision for Peoples Natural Gas (PNG) Valley Compressor Station's turbo charged lean burn IC engine (see the Administrative Record for 66 FR 43492), the Commonwealth included DEP interoffice memoranda (Thomas Joseph to Krishnan Ramamurthy, July 14, 1994 and Krishnan Ramamurthy to Thomas McGinley, Babu Patel, Ronald Davis, Richard Maxwell, and Devendra Verma, July 15, 1994) which spoke directly to the $1500/ton dollar figure as being a guideline and not an upper limit. These memoranda explain that although PNG initially proposed intermediate original equipment manufacturer (OEM) combustion controls which would have reduced NO X emissions from 254.7 tons per year to 115 tons per year (by 55%) at a cost of $1355 per ton reduced, DEP required the installation of an OEM lean combustion modification that reduced NO X emissions from 254.7 tons per year to 76 tons per year (by 69 %) at a cost of $1684 per ton reduced. The DEP's July 15, 1994 interoffice memorandum says of the PNG RACT determination which exceeded the cost effectiveness screening level of $1500 per ton, “* * * Tom's (Joseph) insistence for the next more stringent level of control than the company's chosen level in the case of PNG was consistent with EPA Region III's sentiment that establishing any dollar figure in RACT guidance will not provide for an “automatic” rejection of a control technology as RACT for a source.”

In no instance, has EPA proposed to approve a RACT determination submitted by the Commonwealth which was based solely on a conclusion that controls that cost more than $1500/ton were not required as RACT. As explained in the response provided in section II. A. of this document, EPA conducts its review of the entire case-by-case RACT SIP submittal including the source's proposed RACT plan and analyses, Pennsylvania's analyses and the RACT plan approval, consent order or permit itself to insure that the requirements of the SIP-approved generic RACT have been followed. These analyses not only evaluate and consider the costs of potential control options, but also evaluate their technological feasibility.

E. Comment: PennFuture comments that any emission reduction credits (ERCs) earned by sources subject to RACT must be surplus to all applicable state and federal requirements. Under Pennsylvania law, ERCs must be surplus, permanent, quantified, and Federally enforceable. 25 Pa.Code 127.207(1). As to the requirement that ERCs be surplus, the Pennsylvania Code states: ERCs shall be included in the current emission inventory, and may not be required by or be used to meet past or current SIP, attainment demonstration, RFP, emission limitation or compliance plans. Emission reductions necessary to meet NSPS, LAER, RACT, Best Available Technology, BACT and permit or plan approval emissions limitations or another emissions limitation required by the Clean Air Act or the [Air Pollution Control Act] may not be used to generate ERCs. 25 Pa.Code 127.207(1)(i). To be creditable, ERCs must surpass not only RACT requirements but a host of other possible sources of emission limits. PennFuture comments that some of the RACT evaluations at issue in the current EPA notices purport to establish RACT as a baseline for future ERCs. PennFuture does acknowledge that EPA notes in its boilerplate for the notices, that Pennsylvania and EPA have established a series of NO X -reducing rules, including the recent Chapter 145 rule, to reduce NO X at large utility and industrial sources. See, for example, 66 FR 42415, 16-17 (August 13, 2001). Because any ERCs must be surplus to the most stringent limitation applicable under state or federal law as described in the Pennsylvania Code provision set forth above, DEP and EPA must not approve ERCs unless they surpass all such limitations in addition to any limits set by RACT.

Response: EPA agrees with this comment by PennFuture. The approval of a case-by-case RACT determination, in and of itself, does not establish the baseline from which further emission reductions may be calculated and assumed creditable under the Commonwealth's SIP-approved NSR and ERC program. Moreover, EPA's review of the Pennsylvania DEP's implementation of its approved SIP-approved NSR and ERC program indicates that the Commonwealth calculates and credits ERCs in accordance with the SIP-approved criteria for doing so as outlined in PennFuture's comment. No source for which EPA is approving a case-by-case RACT determination should assume that its RACT approval alone automatically establishes the baseline against which it may calculate creditable ERCs.

F. Comment: PennFuture comments that as in the case with Pennsylvania Power—Newcastle, EPA should compare RACT proposals to applicable acid rain program emission limits and control strategies. PennFuture contends that EPA previously disapproved a RACT proposal for the Pennsylvania Power—Newcastle plant [62 FR 43959 (1997); 63 FR 23668 (1998)] and that EPA did so on the basis that the acid rain program requires more stringent emission limits. PennFuture asserts that while EPA had originally proposed to approve this proposal, an analysis of comparable boilers and, especially, a comparison to Phase II emission limits under the acid rain program led EPA to conclude that the RACT proposal emission limits were too lenient. [62 FR at 43961]. Therefore, PennFuture contends that for sources subject to the acid rain program, EPA should consider emissions and control strategies for compliance with acid rain emission limits when evaluating proposals for compliance with RACT.

Response: Title IV of the Act, addressing the acid rain program, contains NO X emission requirements for utilities which must be met in addition to any RACT requirements (see NO X Supplement to the General Preamble at 57 FR 55625, November 25, 1992). The Act provides for a number of control programs that may affect similar sources. For example, new sources may be subject to new source performance standards (NSPS), best available control technology (BACT), and lowest achievable emission rate (LAER). Other controls, under such programs as the acid rain program or the hazardous air pollutant program may also apply to sources. However, the applicability of these other requirements, which are often more stringent than RACT, do not establish what requirements must apply under the RACT program. While these programs may provide information as to the technical and economic feasibility of reduction programs for RACT, there is no presumption that acid rain controls should be mandated as RACT.

EPA stated in the final disapproval of the NO X RACT determination for PPNC [63 FR at 23669], that the discussion concerning average emission rates for boilers with respect to the acid rain program requirements were included in order to provide a context for EPA's proposed disapproval. EPA made clear in its August 18, 1997 proposed disapproval of Pennsylvania Powers'—Newcastle (PPNC) RACT determination, that the basis for disapproval was a comparison between PPNC's boilers and other similar combustion units, not acid rain limits. In fact, EPA stated in the August 18, 1997 proposed disapproval that “Without additional knowledge or information, it would be erroneous and premature to conclude that the limits in the acid rain permit are RACT.” [62 FR at 43961]. EPA clearly stated in the final disapproval for PPNC that it did not use acid rain permit limits, or Pennsylvania's participation in any other NO X control program, to determine PPNC RACT approvability [63 FR at 23670]. Nor has EPA intended to use participation in NO X control programs including acid rain, in determining RACT for PPNC or any other subject sources. EPA also stated that the April 30, 1998, PPNC disapproval was based on the absence of pertinent information regarding a computerized combustion optimization system through an enforceable permit, not comparison of acid rain permit limits.

EPA is approving the SIP revisions to the Pennsylvania SIP submitted by PADEP to establish and require VOC and/or NO X RACT for three major of sources located in the Philadelphia area. EPA is approving these RACT SIP submittals because the Philadelphia Air Management Services (AMS) and PADEP established and imposed these RACT requirements in accordance with the criteria set forth in the SIP-approved RACT regulations applicable to these sources. The AMS and PADEP have also imposed record-keeping, monitoring, and testing requirements on these sources sufficient to determine compliance with the applicable RACT determinations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note ) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 804 exempts from section 801 the following types of rules: (1) Rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding today's action under section 801 because this is a rule of particular applicability establishing source-specific requirements for three named sources.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action approving VOC and/or NO X RACT for three sources located in the Philadelphia area may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

On May 2, 1996, June 10, 1996, January 21, 1997, April 9, 1999, August 9, 2000, and March 23, 2001, PADEP submitted revisions to the Pennsylvania SIP which establish and impose RACT for several sources of VOC and/or NO X . This rulemaking pertains to eight of those sources. The remaining sources are or have been the subject of separate rulemakings. The Commonwealth's submittals consist of plan approvals and operating permits which impose VOC and/or NO X RACT requirements for each source. These eight sources are all located in the Philadelphia area and include: Brown Printing Company, Cardone Industries (Chew Street), Cardone Industries (Rising Sun Avenue), Naval Surface Warfare Center—Carderock Division, SUN CHEMICALS—General Printing Ink Division, Sunoco Chemicals—Frankford Plant, U.S. Steel Group/USX Corporation, and Wheelabrator Falls, Incorporated.

On August 31, 2001, EPA published a direct final rule (66 FR 45933) and a companion notice of proposed rulemaking (66 FR 45954) to approve these SIP revisions. On October 1, 2001, we received adverse comments on our direct final rule from the Citizens for Pennsylvania's Future (PennFuture). On October 11, 2001, we published a timely withdrawal in the Federal Register informing the public that the direct final rule did not take effect. We indicated in our August 31, 2001 direct final rulemaking that if we received adverse comments, EPA would address all public comments in a subsequent final rule based on the proposed rule (66 FR 45954). This is that subsequent final rule. A description of the RACT determination(s) made for each source was provided in the August 31, 2001 direct final rule and will not be restated here. A summary of the comments submitted by PennFuture germane to this final rulemaking and EPA's responses are provided in Section II of this document.

On October 1, 2001, the Citizens for Pennsylvania's Future (PennFuture) submitted adverse comments on the proposed rule published by EPA in the Federal Register on August 31, 2001 to approve case-by-case RACT SIP submissions from the Commonwealth for NO X and or VOC sources located in the Philadelphia area. A summary of those comments and EPA's responses are provided below.

A. Comment: PennFuture comments that EPA has conducted no independent technical review, and has prepared no technical support document to survey potential control technologies, determine the capital and operating costs of different options, and rank these options in total and marginal cost per ton of NO X and VOC controlled. In citing the definition of the term “RACT,” and the Strelow Memorandum [Roger Strelow, Assistant Administrator for Air and Waste Management, EPA, December 9, 1976, cited in Michigan v. Thomas, 805 F.2d 176, 180 (6th Cir. 1986) and at 62 FR 43134, 43136 (1997)], PennFuture appears to comment that in every situation, RACT must include an emission rate. PennFuture asserts that EPA should conduct its own RACT evaluation for each source, or at a minimum document a step-by-step review demonstrating the adequacy of state evaluations, to ensure that appropriate control technology is applied. The commenter also believes that EPA's failure to conduct its own independent review of control technologies has resulted in our proposing to approve some RACT determinations that fail to meet the terms of EPA's own RACT standard.

Response: On March 23, 1998 (63 FR 13789), EPA granted conditional limited approval of Pennsylvania's generic RACT regulations, 25 PA Code Chapters 121 and 129, thereby approving the definitions, provisions and procedures contained within those regulations under which the Commonwealth would require and impose RACT. Subsection 129.91, Control of major sources of NO X and VOCs, requires subject facilities to submit a RACT plan proposal to both the Pennsylvania Department of Environmental Protection (DEP) and to EPA Region III by July 15, 1994 in accordance with subsection 129.92, entitled, RACT proposal requirements. Under subsection 129.92, that proposal is to include, among other information: (1) A list each of subject source at the facility; (2) The size or capacity of each affected source, and the types of fuel combusted, and the types and amounts of materials processed or produced at each source; (3) A physical description of each source and its operating characteristics; (4) Estimates of potential and actual emissions from each affected source with supporting documentation; (5) A RACT analysis which meets the requirements of subsection 129.92 (b), including technical and economic support documentation for each affected source; (6) A schedule for implementation as expeditiously as practicable but not later than May 15, 1995; (7) The testing, monitoring, recordkeeping and reporting procedures proposed to demonstrate compliance with RACT; and (8) any additional information requested by the DEP necessary to evaluate the RACT proposal. Under subsection 129.91, the DEP will approve, deny or modify each RACT proposal, and submit each RACT determination to EPA for approval as a SIP revision.

The conditional nature of EPA's March 23, 1998 conditional limited approval did not impose any conditions pertaining to the regulation's procedures for the submittal of RACT plans and analyses by subject sources and approval of case-by case RACT determinations by the DEP. Rather, EPA stated that “* * * RACT rules may not merely be procedural rules (emphasis added) that require the source and the State to later agree to the appropriate level of control; rather the rules must identify the appropriate level of control for source categories or individual sources.”

On May 3, 2001 (66 FR 22123), EPA published a rulemaking determining that Pennsylvania had satisfied the conditions imposed in its conditional limited approval. In that rulemaking, EPA removed the conditional status of its approval of the Commonwealth's generic VOC and NO X RACT regulations on a statewide basis. EPA received no public comments on its action and that final rule removing the conditional status of Pennsylvania's VOC and NO X RACT regulations became effective on June 18, 2001. As of that time, Pennsylvania's generic VOC and NO X RACT regulations retained a limited approval status. On September 6, 2001 (66 FR 46571), EPA proposed to remove the limited nature of its approval of Pennsylvania's generic RACT regulation in the Philadelphia area. EPA received no public comments on that proposal. Final action converting the limited approval to full approval shall occur once EPA has completed rulemaking to approve either (1) the case-by-case RACT proposals for all sources subject to the RACT requirements currently known in the Philadelphia area or (2) for a sufficient number of sources such that the emissions from any remaining subject sources represent a de minimis level of emissions as defined in the March 23, 1998 rulemaking (63 FR 13789).

EPA agrees that it has an obligation to review the case-by-case RACT plan approvals and/or permits submitted as individual SIP revisions by Commonwealth to verify and determine if they are consistent with the RACT requirements of the Act and any relevant EPA guidance. EPA does not agree, however, that this obligation to review the case-by-case RACT determinations submitted by Pennsylvania necessarily extends to our performing our own RACT analyses, independent of the sources' RACT plans/analyses (included as part of the case-by case RACT SIP revisions) or the Commonwealth's analyses. EPA first reviews this submission to ensure that the source and the Commonwealth followed the SIP-approved generic rule when applying for and imposing RACT for a specific source. Then EPA performs a thorough review of the technical and economic analyses conducted by the source and the state. If EPA believes additional information may further support or would undercut the RACT analyses submitted by the state, then EPA may add additional EPA-generated analyses to the record.

While RACT, as defined for an individual source or source category, often does specify an emission rate, such is not always the case. EPA has issued Control Technique Guidelines (CTGs) which states are to use as guidance in development of their RACT determinations/rules for certain sources or source categories. Not every CTG issued by EPA includes an emission rate. There are several examples of CTGs issued by EPA wherein equipment standards and/or work practice standards alone are provided as RACT guidance for all or part of the processes covered. Such examples include the CTGs issued for Bulk gasoline plants, Gasoline service stations—Stage I, Petroleum Storage in Fixed-roof tanks, Petroleum refinery processes, Solvent metal cleaning, Pharmaceutical products, External Floating roof tanks and Synthetic Organic Chemical Manufacturing (SOCMI)/polymer manufacturing. (The publication numbers for these CTG documents may be found at http://www.epa.gov/ttn/catc/dir1/ctg.txt).

EPA disagrees with PennFuture's general comment that our failure to conduct our own independent review of control technologies for every case-by-case RACT determination conducted by the Commonwealth has resulted in our proposing to approve some RACT determinations that fail to meet the terms of our own RACT standard. PennFuture submitted comments specific to the case-by-case RACT determinations for two located in the Philadelphia area, namely for Kurz-Hastings and GATX Terminals Corporation. EPA summarizes those comments and provides responses in the final rule pertaining to those sources.

B. Comment: PennFuture comments that when EPA reviewed Pennsylvania's RACT program, it noted that Pennsylvania coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour “are some of the largest NO X emitting sources in the Commonwealth and in the Northeast United States” [63 FR 13789, 13791 (1998)] and as such should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93) to guarantee that sources would achieve quantifiable emissions reductions under the RACT program. PennFuture goes on to comment that because EPA has not conducted and documented a technical review of Pennsylvania case-by case RACT submissions, EPA has not demonstrated that these large boilers are subject to “numeric emission limitations” under RACT. EPA must conduct a thorough RACT evaluation or review for each such source, and must document the application of numeric emission limits and quantifiable reductions for each coal-fired boiler with a rated heat input of over 100 million Btu per hour.

Response: Circumstances may exist wherein a state could justify otherwise, however, in general, EPA agrees with PennFuture that coal-fired boilers with a rated heat input of equal to or greater than 100 million Btu per hour should have numeric emission limitations imposed as RACT whether or not they install presumptive RACT (under 25 Pa.Code 129.93). As provided in the response found in II. A, EPA does not agree that it must conduct its own technical analysis of each of the case-by-case RACT determinations submitted for each RACT source in order to document that its RACT requirements include numeric emission limitations. That determination can be made by EPA when it reviews the plan approval, consent order, or permit issued to such a source as submitted by the Commonwealth as SIP revision. PennFuture's comment did not point to a specific instance where a RACT plan approval, consent order or permit imposing RACT on a coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour did, in fact, lack a numerical emission limitation(s). Nonetheless, pursuant to PennFuture's comment, EPA has re-examined all of the case-by-case RACT SIP submissions made by the Commonwealth for such sources located in the Philadelphia area. That re-examination, combined with information provided by the Commonwealth, indicates that each case-by-case RACT plan approval, consent order and/or permit for each coal-fired boiler with a rated heat input of equal to or greater than 100 million Btu per hour includes a numeric emission limitation. A listing of each source, its plan approval, consent order and/or permit number and its numerical emission limitation has been placed in the Administrative Records for the case-by-case RACT rulemakings for the Philadelphia area.

C. Comment: PennFuture asserts that the Commonwealth has not adopted and submitted category RACT rules for all VOC source categories for which federal control technique guidelines (CTGs) have been issued. The commenter refers to Appendix 1 of the Technical Support Document (dated May 14, 2001), prepared by EPA in support of its proposed rule to redesignate the Pittsburgh-Beaver Valley Ozone Nonattainment Area (66 FR 29270), to assert that EPA has failed to require the Commonwealth to submit VOC RACT rules for certain categories of sources. PennFuture specifically names source categories such as equipment leaks from natural gas/gas processing plants, coke oven batteries, iron and steel foundries, and publically owned treatment works and asserts that the Commonwealth has neglected a statutory requirement to adopt category RACT regulations for these and 14 other unnamed VOC source categories. PennFuture's comment cites to Wall v. EPA, 2001 FED App. 0318P (6th Cir.) (Cincinnati ozone redesignation and RACT). EPA should reject any proposed case-by-case VOC RACT for a source in a category for which there is a CTG but no Pennsylvania RACT regulation.

Response: EPA has not issued CTGs for coke oven batteries, iron and steel foundries and publically owned treatment works. The Appendix 1, referred to by the commenter, lists CTG covered categories as well as source categories taken from two STAPPA/ALAPCO documents entitled, “Meeting the 15-Percent Rate-of-Progress Requirement Under the Clean Air Act—A Menu of Options” (September 1993) and “Controlling Nitrogen Oxides Under the Clean Air Act—A Menu of Options” (July 1994). The categories referenced by PennFuture are not VOC categories for which EPA has issued CTGs, but were included in Appendix A as examples of some of the types of sources that could be subject to Pennsylvania's generic RACT regulations. The Commonwealth is under no statutory obligation to adopt RACT rules for source categories for which EPA has not issued a CTG. In fact, CTGs do not exist for all but one of the categories to which the commenter explicitly refers.

The Act requires that states adopt regulations to impose RACT for “major sources of VOC,” located within those areas of a state where RACT applies under Part D of the Act [182(b)(2)(C)]. This is referred to as the non-CTG VOC RACT requirement. Moreover, EPA disagrees that there is a statutory mandate that a state adopt a source category RACT regulation even for a source category where EPA has issued a CTG. There are two statutory provisions that address RACT for sources covered by a CTG. One provides that states must adopt RACT for “any category of VOC sources” covered by a CTG issued prior to November 15, 1990 [182(b)(2)(A)]. The other provides that states must adopt VOC RACT for all “VOC sources” covered by a CTG issued after November 15, 1990 [182(b)(2)(B)]. EPA has long interpreted the statutory RACT requirement to be met either by adoption of category-specific rules or by source-specific rules for each source within a category. When initially established, RACT was clearly defined as a case-by-case determination, but EPA provided CTG's to simplify the process for states such that they would not be required to adopt hundreds or thousands of individual rules. See Strelow Memorandum dated December 9, 1976 and 44 FR 53761, September 17, 1979. EPA does not believe that Congress' use of “source category” in one provision of section 182(b)(2) was intended to preclude the adoption of source-specific rules.

Thus, where CTG-subject sources are located within those areas of a state where RACT applies under Part D of the Act, the state is obligated to impose RACT for the same universe of sources covered by the CTG. However, that obligation is not required to be met by the adoption and submittal of a source category RACT rule. A state may, instead, opt to impose RACT for such sources in permits, plan approvals, consent orders or in any other state enforceable document and submit those documents to EPA for approval as source-specific SIP revisions. This option has been exercised by many states, and happens most commonly when only a few CTG-subject sources are located in the state. The source-specific approach is generally employed to avoid what can be a lengthy and resource-intensive state rule adoption process for only a few sources that may have different needs and considerations that must be taken into account. EPA disagrees with the commenter's citing to Wall v. EPA, 2001 FED App. 0318P (6th Cir. Sept. 11, 2001) (Cincinnati ozone redesignation and RACT) as indicative of his contentions regarding states' obligations to adopt category-wide RACT regulations for sources covered by CTGs. The opinion rendered in the cited case neither requires states to adopt category-wide RACT regulations for sources covered by CTGs, nor does it preclude states from exercising their option to impose RACT for CTG-subject sources, on a case-by-case basis. Rather, it speaks only to the Act's requirement that states must implement RACT for CTG-subject sources in ozone nonattainment areas; and not to any specific regulatory construct by which they must do so. Pennsylvania has implemented RACT for all CTG-subject sources in the Philadelphia area and EPA has approved all such RACT determinations as revisions to the Pennsylvania SIP. As stated earlier, there is one source category explicitly included in PennFuture's comment for which EPA has issued a CTG, namely natural gas/gas processing plants. The Commonwealth made a negative declaration to EPA on April 13, 1993, stating that as of that date there were no applicable sources in this category. Therefore, the Commonwealth did not adopt a category RACT regulation for natural gas/gas processing plants.

D. Comment: PennFuture cites EPA correspondence [letter from Marcia Spink, EPA, to James Salvaggio, DEP, December 15, 1993] to the Commonwealth which states that establishing any dollar figure in RACT guidance will not provide for the “automatic” selection or rejection of a control technology or emission limitation as RACT for a source or source category. With regard to the Pennsylvania DEP's intent to finalize a NO X RACT Guidance Document for implementation of its NO X RACT regulation, EPA's 1993 letter stated that the document could improperly be used to establish “bright line” or “cook-book” approaches, particularly for a regulation applicable to many source categories and suggested that if the guidance document must include dollar figures/ton, it provide approximate ranges by source category. PennFuture comments that DEP issued its “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions,” March 11, 1994, and on pp. 8-9 states that the acceptable threshold is $1500 per ton, and that this figure applies to “all source categories.” PennFuture notes that EPA later objected to the $1500 per ton methodology as “not generically acceptable to EPA” [letter from Thomas Maslany, EPA, to James Salvaggio, DEP, June 24, 1997] and further stated in a Federal Register notice that a “dollar per ton threshold” is “inconsistent with the definition of RACT” [62 FR 43134, 37-38 (1997)].

PennFuture comments that EPA is proposing to approve RACT determinations based on a cost per ton method that EPA had previously rejected, and according to its own clearly expressed standard, EPA must not approve RACT determinations by Pennsylvania DEP that apply this $1500 per ton threshold. PennFuture asserts EPA must reject all Pennsylvania RACT determinations applying the standard of $1500 per ton, or any other “bright line” approach, as failing to follow EPA procedures established for Pennsylvania RACT.

Response: EPA still takes the position that a single cost per ton dollar figure may not, in and of itself, form the basis for rejecting a control technology, equipment standard, or work practice standard as RACT. The Technical Support Document prepared by EPA in support of its March 23, 1998 rulemaking [63 FR 13789] clearly indicates that the Commonwealth's document, “Guidance Document on Reasonably Available Control Technology for Sources of NO X Emissions.” March 11, 1994, had not been included as part of the SIP submission of the Commonwealth's generic regulation and, therefore, had not been approved by EPA. EPA further notes that the Administrative Record of the March 23, 1998 rulemaking [63 FR 13789], in addition to the correspondence cited by PennFuture, also includes correspondence from DEP to EPA [letter from James Salvaggio, DEP to David Arnold, EPA, September 10, 1997] stating that DEP's RACT guidance document does not establish a maximum dollar per ton for determining the cost effectiveness for RACT determinations and notes that the DEP's $1500 per ton cost effectiveness is a target value and not an absolute maximum. For example, in its analyses of the cost effectiveness of RACT control options submitted by DEP as part of the case-by-case SIP revision for Peoples Natural Gas (PNG) Valley Compressor Station's turbo charged lean burn IC engine (see the Administrative Record for 66 FR 43492), the Commonwealth included DEP interoffice memoranda (Thomas Joseph to Krishnan Ramamurthy, July 14, 1994 and Krishnan Ramamurthy to Thomas McGinley, Babu Patel, Ronald Davis, Richard Maxwell, and Devendra Verma, July 15, 1994) which spoke directly to the $1500/ton dollar figure as being a guideline and not an upper limit. These memoranda explain that although PNG initially proposed intermediate original equipment manufacturer (OEM) combustion controls which would have reduced NO X emissions from 254.7 tons per year to 115 tons per year (by 55%) at a cost of $1355 per ton reduced, DEP required the installation of an OEM lean combustion modification that reduced NO X emissions from 254.7 tons per year to 76 tons per year (by 69%) at a cost of $1684 per ton reduced. The DEP's July 15, 1994 interoffice memorandum says of the PNG RACT determination which exceeded the cost effectiveness screening level of $1500 per ton “Tom's (Joseph) insistence for the next more stringent level of control than the company's chosen level in the case of PNG was consistent with EPA Region III's sentiment that establishing any dollar figure in RACT guidance will not provide for an “automatic” rejection of a control technology as RACT for a source.”

In no instance, has EPA proposed to approve a RACT determination submitted by the Commonwealth which was based solely on a conclusion that controls that cost more than $1500/ton were not required as RACT. As explained in the response provided in section II. A. of this document, EPA conducts its review of the entire case-by-case RACT SIP submittal including the source's proposed RACT plan and analyses, Pennsylvania's analyses and the RACT plan approval, consent order or permit itself to insure that the requirements of the SIP-approved generic RACT have been followed. These analyses not only evaluate and consider the costs of potential control options, but also evaluate their technological feasibility.

E. Comment: PennFuture comments that any emission reduction credits (ERCs) earned by sources subject to RACT must be surplus to all applicable state and federal requirements. Under Pennsylvania law, ERCs must be surplus, permanent, quantified, and Federally enforceable. 25 Pa.Code 127.207(1). As to the requirement that ERCs be surplus, the Pennsylvania Code states: ERCs shall be included in the current emission inventory, and may not be required by or be used to meet past or current SIP, attainment demonstration, RFP, emission limitation or compliance plans. Emission reductions necessary to meet NSPS, LAER, RACT, Best Available Technology, BACT and permit or plan approval emissions limitations or another emissions limitation required by the Clean Air Act or the [Air Pollution Control Act] may not be used to generate ERCs. 25 Pa.Code 127.207(1)(i). To be creditable, ERCs must surpass not only RACT requirements but a host of other possible sources of emission limits. PennFuture comments that some of the RACT evaluations at issue in the current EPA notices purport to establish RACT as a baseline for future ERCs. PennFuture does acknowledge that EPA notes in its boilerplate for the notices, that Pennsylvania and EPA have established a series of NO X -reducing rules, including the recent Chapter 145 rule, to reduce NO X at large utility and industrial sources. See, for example, 66 FR 42415, 16-17 (August 13, 2001). Because any ERCs must be surplus to the most stringent limitation applicable under state or federal law as described in the Pennsylvania Code provision set forth above, DEP and EPA must not approve ERCs unless they surpass all such limitations in addition to any limits set by RACT.

Response: EPA agrees with this comment by PennFuture. The approval of a case-by-case RACT determination, in and of itself, does not establish the baseline from which further emission reductions may be calculated and assumed creditable under the Commonwealth's SIP-approved NSR and ERC program. Moreover, EPA's review of the Pennsylvania DEP's implementation of its approved SIP-approved NSR and ERC program indicates that the Commonwealth calculates and credits ERCs in accordance with the SIP-approved criteria for doing so as outlined in PennFuture's comment. No source for which EPA is approving a case-by-case RACT determination should assume that its RACT approval alone automatically establishes the baseline against which it may calculate creditable ERCs.

F. Comment: PennFuture comments that as in the case with Pennsylvania Power—Newcastle, EPA should compare RACT proposals to applicable acid rain program emission limits and control strategies. PennFuture contends that EPA previously disapproved a RACT proposal for the Pennsylvania Power—Newcastle plant [62 FR 43959 (1997); 63 FR 23668 (1998)] and that EPA did so on the basis that the acid rain program requires more stringent emission limits. PennFuture asserts that while EPA had originally proposed to approve this proposal, an analysis of comparable boilers and, especially, a comparison to Phase II emission limits under the acid rain program led EPA to conclude that the RACT proposal emission limits were too lenient. [62 FR at 43961]. Therefore, PennFuture contends that for sources subject to the acid rain program, EPA should consider emissions and control strategies for compliance with acid rain emission limits when evaluating proposals for compliance with RACT.

Response: Title IV of the Act, addressing the acid rain program, contains NO X emission requirements for utilities which must be met in addition to any RACT requirements (see NO X Supplement to the General Preamble at 57 FR 55625, November 25, 1992). The Act provides for a number of control programs that may affect similar sources. For example, new sources may be subject to new source performance standards (NSPS), best available control technology (BACT), and lowest achievable emission rate (LAER). Other controls, under such programs as the acid rain program or the hazardous air pollutant program may also apply to sources. However, the applicability of these other requirements, which are often more stringent than RACT, do not establish what requirements must apply under the RACT program. While these programs may provide information as to the technical and economic feasibility of reduction programs for RACT, there is no presumption that acid rain controls should be mandated as RACT.

EPA stated in the final disapproval of the NO X RACT determination for PPNC [63 FR at 23669], that the discussion concerning average emission rates for boilers with respect to the acid rain program requirements were included in order to provide a context for EPA's proposed disapproval. EPA made clear in its August 18, 1997 proposed disapproval of Pennsylvania Powers'—Newcastle (PPNC) RACT determination, that the basis for disapproval was a comparison between PPNC's boilers and other similar combustion units, not acid rain limits. In fact, EPA stated in the August 18, 1997 proposed disapproval that “Without additional knowledge or information, it would be erroneous and premature to conclude that the limits in the acid rain permit are RACT.” [62 FR at 43961]. EPA clearly stated in the final disapproval for PPNC that it did not use acid rain permit limits, or Pennsylvania's participation in any other NO X control program, to determine PPNC RACT approvability [63 FR at 23670]. Nor has EPA intended to use participation in NO X control programs including acid rain, in determining RACT for PPNC or any other subject sources. EPA also stated that the April 30, 1998, PPNC disapproval was based on the absence of pertinent information regarding a computerized combustion optimization system through an enforceable permit, not comparison of acid rain permit limits.

EPA is approving the SIP revisions to the Pennsylvania SIP submitted by PADEP to establish and require VOC and/or NO X RACT for eight major sources located in the Philadelphia area. EPA is approving these RACT SIP submittals because the Philadelphia Air Management Services (AMS) and PADEP established and imposed these RACT requirements in accordance with the criteria set forth in the SIP-approved RACT regulations applicable to these sources. The AMS and PADEP have also imposed record-keeping, monitoring, and testing requirements on these sources sufficient to determine compliance with the applicable RACT determinations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 Note ) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 804 exempts from section 801 the following types of rules: (1) Rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3). EPA is not required to submit a rule report regarding today's action under section 801 because this is a rule of particular applicability establishing source-specific requirements for eight named sources.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action approving VOC and/or NO X RACT for eight sources located in the Philadelphia area may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The following table of contents describes the format for the SUPPLEMENTARY INFORMATION section:

The Environmental Protection Agency (EPA) is approving a negative declaration submitted by the Commonwealth of Puerto Rico dated August 2, 2001. This negative declaration concerns existing small municipal waste combustors throughout the Commonwealth of Puerto Rico. The negative declaration satisfies the federal Emission Guidelines (EG) requirements of EPA's promulgated regulation entitled “Emission Guidelines for Existing Small Municipal Waste Combustion Units” (65 FR 76378, December 6, 2000). The negative declaration officially certifies to EPA that, to the best of the Commonwealth's knowledge, there are no small MWC units in operation in the Commonwealth of Puerto Rico.

EPA has evaluated the negative declaration submitted by Puerto Rico for consistency with the Clean Air Act (Act), EPA guidelines and policy. EPA has determined that Puerto Rico's negative declaration meets all the requirements and, therefore, EPA is approving the Commonwealth's certification that there are no existing small MWC units in operation throughout the Commonwealth. Puerto Rico has certified in its negative declaration that it searched island wide all the facilities that operate solid waste combustors. Puerto Rico's search included permits and EPA's Aerometric Information Retrival System (AIRS).

EPA's approval of Puerto Rico's negative declaration is based on the following:

(1) Puerto Rico has met the requirements of § 60.23(b) in Title 40, part 60, subpart B of the Code of Federal Regulations (40 CFR part 60) for submittal of a letter of negative declaration that certifies there are no existing facilities in the Commonwealth. Such certification exempts Puerto Rico from the requirements to submit a plan.

(2) EPA's own source inventory indicates there are no existing small MWC units operating in the Commonwealth of Puerto Rico. During July 1998, EPA compiled an inventory of small MWC units as a required element of the small MWC EG.

Section 60.1530 of 40 CFR part 60, subpart BBBB (page 76386, 65 FR 76378, December 6, 2000) requires that if, after the effective date of today's action, an existing small MWC unit is found in the State, the Federal Plan implementing the EG would automatically apply to that small MWC unit until a State Plan is approved by EPA.

The Federal Plan was proposed on June 14, 2001 (66 FR 32484) and is expected to be promulgated in early 2002. The Federal Plan will apply to small MWCs in states, commonwealths, and territories (1) where the EPA inventory identifies small MWCs and a plan is required and has not been submitted and approved by EPA and (2) where the EPA inventory did not identify any small MWC and a negative declaration has been received and approved by EPA (such as Puerto Rico) and a small MWC is subsequently identified in the State or territory. If and when a State Plan (or in this case a Commonwealth Plan) is submitted and approved that applies to the small MWC, the Federal Plan would no longer apply.

Section 111(d) of the Act requires that pollutants controlled under New Source Performance Standards (NSPS) must also be controlled at existing sources in the same source category. Once an NSPS is issued, EPA then publishes an EG applicable to the control of the same pollutant from existing (designated) facilities. States with designated facilities must then develop State Plans to adopt the EG into their body of regulations.

Under section 129 of the Act, the EG is not federally enforceable. Section 129(b)(2) of the Act requires states to submit State Plans to EPA for approval. State Plans must be at least as protective as the EG, and they become federally enforceable upon EPA approval. The procedures for adopting and submitting State Plans, as well as state requirements for a negative declaration, are in 40 CFR part 60, subpart B.

EPA originally issued the subpart B provisions on November 17, 1975. EPA amended subpart B on December 19, 1995, to allow the subparts developed under section 129 to include specifications that supersede the general provisions in subpart B regarding the schedule for submittal of State Plans, the stringency of the emission limitations, and the compliance schedules (60 FR 65414).

On December 6, 2000, under sections 111 and 129 of the Act, EPA issued the NSPS applicable to new MWC units and the EG applicable to existing small MWC units. The NSPS and EG are codified at 40 CFR part 60, subparts AAAA (65 FR 76350) and BBBB (65 FR 76378), respectively.

A small MWC unit having the capacity to combust at least 35 tons per day of municipal solid waste but no more than 250 tons per day of municipal solid waste or refuse derived fuel that commenced construction on or before August 30, 1999 (“existing small MWC unit”) must comply with these requirements. See § 60.1555 of 40 CFR part 60, subpart BBBB for a list of small MWC units exempt from the federal requirements.

EPA has determined that Puerto Rico's negative declaration meets all the requirements and, therefore, EPA is approving Puerto Rico's certification that no small MWC units are in operation in the Commonwealth of Puerto Rico. If any existing small MWC units are discovered in the future, the Federal Plan implementing the EG would automatically apply to that small MWC unit until the State Plan is approved by EPA.

EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. However, in the proposed rules section of this Federal Register publication, EPA is publishing a separate document that will serve as the proposal to approve the negative declaration should relevant adverse comments be filed. This rule will be effective December 31, 2001 without further notice unless the Agency receives significant, material adverse comments by November 29, 2001.

If EPA receives significant, material adverse comments by the above date, the Agency will withdraw this action before the effective date by publishing a subsequent document in the Federal Register that will withdraw this final action. EPA will address all public comments received in a subsequent final rule based on the parallel proposed rule published in today's Federal Register . EPA will not institute a second comment period on this action. Any parties interested in commenting on this action should do so at this time.

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

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.

This rule is not subject to Executive Order 13045 because it does not involve decisions intended to mitigate environmental health or safety risks.

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(b) 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. Under section 6(c) of Executive Order 13132, EPA 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.

EPA has concluded that this rule may have federalism implications. The only reason why this rule may have federalism implications is if in the future a small MWC unit is found in the Commonwealth of Puerto Rico the unit will become subject to the Federal Plan until a State Plan is approved by EPA. However, it will not impose substantial direct compliance costs on state or local governments, nor will it preempt state law. Thus, the requirements of sections 6(b) and 6(c) of the Executive Order do not apply to this rule.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires EPA 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 rule does not have tribal implications. 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. Thus, Executive Order 13175 does not apply to this rule.

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements 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 not-for-profit enterprises, and small governmental jurisdictions.

This rule will not have a significant impact on a substantial number of small entities because as a negative declaration it is not subject to the small MWC EG requirements. Therefore, because the Federal approval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

Under sections 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate; or to the private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the approval action promulgated does not include a Federal mandate that may result in estimated costs of $100 million or more to either state, commonwealth, local, or tribal governments in the aggregate, or to the private sector. This Federal action approves pre-existing requirements under state or local law, and imposes no new requirements. Accordingly, no additional costs to state, commonwealth, local, or tribal governments, or to the private sector, result from this action.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective December 31, 2001 unless EPA receives material adverse written comments by November 29, 2001.

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 31, 2001. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The NFIP enables property owners to purchase flood insurance which is generally not otherwise available. In return, communities agree to adopt and administer local floodplain management aimed at protecting lives and new construction from future flooding. Section 1315 of the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits flood insurance coverage as authorized under the National Flood Insurance Program, 42 U.S.C. 4001 et seq. ; unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed in this document no longer meet that statutory requirement for compliance with program regulations, 44 CFR part 59 et seq. Accordingly, the communities will be suspended on the effective date in the third column. As of that date, flood insurance will no longer be available in the community. However, some of these communities may adopt and submit the required documentation of legally enforceable floodplain management measures after this rule is published but prior to the actual suspension date. These communities will not be suspended and will continue their eligibility for the sale of insurance. A notice withdrawing the suspension of the communities will be published in the Federal Register .

In addition, the Federal Emergency Management Agency has identified the special flood hazard areas in these communities by publishing a Flood Insurance Rate Map (FIRM). The date of the FIRM if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may legally be provided for construction or acquisition of buildings in the identified special flood hazard area of communities not participating in the NFIP and identified for more than a year, on the Federal Emergency Management Agency's initial flood insurance map of the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Associate Director finds that notice and public comment under 5 U.S.C. 553(b) are impracticable and unnecessary because communities listed in this final rule have been adequately notified.

Each community receives a 6-month, 90-day, and 30-day notification addressed to the Chief Executive Officer that the community will be suspended unless the required floodplain management measures are met prior to the effective suspension date. Since these notifications have been made, this final rule may take effect within less than 30 days.

This rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Considerations. No environmental impact assessment has been prepared.

The Associate Director has determined that this rule is exempt from the requirements of the Regulatory Flexibility Act because the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits flood insurance coverage unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed no longer comply with the statutory requirements, and after the effective date, flood insurance will no longer be available in the communities unless they take remedial action.

This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

This rule does not involve any collection of information for purposes of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

This rule involves no policies that have federalism implications under Executive Order 12612, Federalism, October 26, 1987, 3 CFR, 1987 Comp.; p. 252.

This rule meets the applicable standards of section 2(b)(2) of Executive Order 12778, October 25, 1991, 56 FR 55195, 3 CFR, 1991 Comp.; p. 309.

This Federal Register document is available on the Government Printing Office’s Web site at http://www.access.gpo.gov/su_docs/aces/aces140.html .

The Pacific Coast Groundfish FMP and its implementing regulations at 50 CFR part 660, subpart G, regulate fishing for 82 species of groundfish off the coasts of Washington, Oregon, and California. Annual groundfish specifications and management measures are initially developed by the Pacific Fishery Management Council (Council), and are implemented by NMFS. The specifications and management measures for the current fishing year (January 1 - December 31, 2001) were published at 66 FR 2338 (January 11, 2001), as amended at 66 FR 10208 (February 14, 2001), at 66 FR 18409 (April 9, 2001), at 66 FR 22467 (May 4, 2001), at 66 FR 28676 (May 24, 2001), at 66 FR 35388 (July 5, 2001), at 66 FR 38162 (July 23, 2001), and 66 FR 50851, (October 5, 2001).

Of the 82 species managed under the FMP, seven have been declared overfished under the Magnuson-Stevens Fishery Conservation and Management Act, including bocaccio and canary rockfish. The Council is developing rebuilding plans for these two species. Both bocaccio and canary rockfish are found primarily on the Continental shelf, and are classified as “shelf” rockfish species. They are caught directly and incidentally in the Pacific Coast groundfish (and non-groundfish) fisheries.

Canary rockfish is the most difficult overfished species to manage as its management places great constraint on managing other groundfish species. Its optimum yield (OY) was reduced from 1,045 mt in 1999 to 200 mt in 2000, and to 93 mt for 2001. From the 93 mt OY, 44 mt are set aside for the coastwide recreational catch, with 26 mt (22 mt south of Cape Mendocino, 40°30′ N lat.) of the 44 mt expected to be taken in the California recreational fisheries for rockfish and lingcod.

Bocaccio is another overfished species of concern in the California recreational fisheries for rockfish and lingcod. The bocaccio rebuilding plan applies to bocaccio occurring off California south of Cape Mendocino (40°30′ N lat.). Bocaccio's 2001 OY for that area is 100 mt, with 52 mt expected to be taken as recreational harvest. Bocaccio north of 40°30′ N lat. are included in the OY for minor shelf rockfish north (70 mt).

At its September 10-14, 2001, meeting in Portland, OR, the Council, in consultation with the State of California, recommended closure of the California recreational fisheries in Federal waters when the preseason estimates for recreational harvest are reached, following anticipated action by the California Fish and Game Commission (Commission) at its October 4-5, 2001, meeting to close California state waters.

Currently, recreational catches of both canary and bocaccio rockfish are projected to have exceeded their preseason estimates, based on estimates from the Marine Recreational Fisheries Statistical Survey (MRFSS) through June and on projections of total annual catch based on MRFSS 1999 and 2000 catch levels. The recreational catch of canary rockfish off of California was at 16 mt of the 22 mt preseason estimate through June 2001 and at 22 mt of the 44 mt preseason estimate coastwide. During the remainder of the year (July - December), the recreational fisheries north of Cape Mendocino are expected to stay within the preseason estimate of canary rockfish in that area (22 mt), but the California recreational fishery south of Cape Mendocino is projected to take another 45 mt of canary rockfish.

Bocaccio recreational catch approached the 52-mt preseason estimate in June, weighing in at 50 mt. If current regulations continue, the projected recreational catch alone of bocaccio could reach 111 mt by the end of 2001. By adding the estimated commercial catch of 30 mt through the end of the year, the total bocaccio catch could total 141 mt, 41 mt over the 100 mt OY.

As a result of projections that recreational harvest of canary rockfish and bocaccio will exceed the annual preseason estimates for these species, at its October 4-5, 2001, meeting in San Diego, CA, the Commission closed the California recreational fisheries for rockfish and lingcod (a co-occurring species) in California state waters from October 29 through December 31, 2001, and requested that NMFS also close Federal waters.

NMFS concurs with the Council's and the Commission's recommendations, and hereby announces closure of the recreational fisheries for rockfish and lingcod in Federal waters (3-200 miles offshore) south of 40°10′ N lat. and seaward of the 20-fathom (36.9-m) depth contour off the coast of California from October 29 through December 31, 2001. Fishing for minor nearshore rockfish inside the 20-fathom (36.9 m) depth contour south of 40°10′ N lat. remains open. However, retention of shelf rockfish (including bocaccio and canary rockfish) taken in this area is prohibited. Recreational fishing measures for the areas north of 40°10′ N lat. remain unchanged. ( NOTE : The stock assessment areas for groundfish were modified in 2000 such that the ABCs and OYs apply to areas north and south of 40°30′ N lat. (Cape Mendocino) to better align with the trip limit areas and management actions that apply north and south of 40°10′ N lat.)

Accordingly, at 66 FR 2338, January 11, 2001, as subsequently amended, in Section IV, under D. Recreational Fishery, paragraphs (1)(a)(ii), (1)(a)(iii) and (1)(b)(i) are revised to read as follows:

The reef fish fishery of the Gulf of Mexico is managed under the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP). The FMP was prepared by the Gulf of Mexico Fishery Management Council and approved and implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act by regulations at 50 CFR part 622. Those regulations set the commercial quota for red snapper in the Gulf of Mexico at 4.65 million lb (2.11 million kg) for the current fishing year, January 1 through December 31, 2001. The red snapper commercial fishing season is split into two time periods, the first commencing at noon on February 1 with two-thirds of the annual quota (3.10 million lb (1.41 million kg)) available, and the second commencing at noon on October 1 with the remainder of the annual quota available. During the commercial season, the red snapper commercial fishery opens at noon on the first of each month and closes at noon on the 10th of each month until the applicable commercial quotas are reached.

Under 50 CFR 622.43(a), NMFS is required to close the commercial fishery for a species or species group when the quota for that species or species group is reached, or is projected to be reached, by filing a notification to that effect in the Federal Register . Based on current statistics, NMFS has determined that the available commercial quota of 4.65 million lb (2.11 million kg) for red snapper for this fishing year will be reached when the fishery closes at noon, local time, November 10, 2001. Accordingly, the commercial fishery in the EEZ in the Gulf of Mexico for red snapper will remain closed until noon, local time, on February 1, 2002. The operator of a vessel with a valid reef fish permit having red snapper aboard must have landed and bartered, traded, or sold such red snapper prior to noon, local time, November 10, 2001.

During the closure, the bag and possession limits specified in 50 CFR 622.39 (b) apply to all harvest or possession of red snapper in or from the EEZ in the Gulf of Mexico, and the sale or purchase of red snapper taken from the EEZ is prohibited. In addition, the bag and possession limits for red snapper apply on board a vessel for which a commercial permit for Gulf reef fish has been issued, without regard to where such red snapper were harvested. However, the bag and possession limits for red snapper apply only when the recreational quota for red snapper has not been reached and the bag and possession limit has not been reduced to zero. The prohibition on sale or purchase does not apply to sale or purchase of red snapper that were harvested, landed ashore, and sold prior to noon, local time, November 10, 2001, and were held in cold storage by a dealer or processor.

This action is taken under 50 CFR 622.43(a) and is exempt from review under Executive Order 12866.

Section 648.72(c) of the regulations implementing the Fishery Management Plan (FMP) for the Atlantic Surf Clam and Ocean Quahog Fisheries allows the Administrator, Northeast Region, NMFS (Regional Administrator) to suspend annually, by publication of a notification in the Federal Register , the minimum size limit for Atlantic surf clams. This action may be taken unless discard, catch, and survey data indicate that 30 percent of the Atlantic surf clam resource is smaller than 4.75 inches (12.07 cm) and the overall reduced size is not attributable to harvest from beds where growth of the individual clams has been reduced because of density-dependent factors.

At its July 2001, meeting, the Mid-Atlantic Fishery Management Council (Council) voted to recommend that the Regional Administrator suspend the minimum size limit. Commercial surf clam shell length data for 2001 was analyzed using modified procedures from what was used in 1999 and 2000. The analysis indicated that between 2.1 to 22.2 percent of the samples taken overall were composed of surf clams that were less than 4.75 inches (12.07 cm). Based on these data, the Regional Administrator adopts the Council's recommendation and suspends the minimum size limit for Atlantic surf clams from January 1, 2002, through December 31, 2002.

This action is authorized by 50 CFR part 648 and is exempt from review under Executive Order 12866.